Final Results

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

3 March 2016

Mytrah Energy Limited

("Mytrah" or the "Company")

Final Results for the year ended 31 December 2015

Power generation capacity increased 10% to 583 MW in 2015 with 33 wind turbines installed

Completed US$380 million refinancing since period end

Mytrah Energy, the India-based renewable focused Independent Power Producer, is pleased to announce its full year results for the year ended 31 December 2015.

2015 has been an important year for Mytrah, delivering capacity expansion ahead of plan and robust financials despite a weak environment. In addition, the company has issued additional Non-Convertible Bonds, delivered a transformational senior debt refinancing and built a new solar business.

Financial Highlights:

· Revenue of USD 74.72m, an increase of 7% over the previous year (2014: USD 69.55 m);

· Underlying EBITDA1 of USD 66.43m up 3% (2014: 64.34m); underlying EBITDA margin of 89%;

· Pre-tax profits of USD 0.47m (2014: USD 2.28m);

· In Indian Rupee terms revenue increased by 13%, underlying EBITDA increased by 9%;

· Cash & cash equivalents of USD 55.58m (including bank deposits of USD 49.67m);

· Post period end, signed a new Rupee Term Loan Agreement of INR 25.8 billion (approx. USD 380 million) to refinance senior loans from 22 banks across 543 MW of operating wind farms, increasing credit rating to A, reducing the interest rate by an average of 140 basis points and extending the average maturity of debt by approximately 3 years;

· Extended existing INR Non Convertible Bond financing facility to access an additional USD 60m, bringing total new finance raised under this structure to USD 130m; USD 70m in 2014 and USD 60m in 2015;

· Secured USD 232.5m senior loans for 250MW projects under construction;

· Post period end, signed a term sheet with a leading Multilateral DFI for USD 175m senior loan to be used across various upcoming wind and solar projects;

Operational Highlights:

· 616.5 MW of revenue generating wind assets operating at present;

· 240MW assets in construction on track for the upcoming wind season, of which Bhesada - 50.4 MW - fully commissioned and connected to the grid post period end;

· Construction underway on an additional 220 MW, bringing total currently in construction to 460 MW;

· Began new wind turbine supply relationships with General Electric and Inox;

· Signed EoI with Government of Karnataka for developing 450MW wind projects;

· Installed 317kW of rooftop solar projects;

· Signed power purchase agreements (PPAs) for 282 MW of solar projects; additional 95 MW PPAs are expected to be signed shortly.

Commenting on the results and refinancing, Ravi Kailas, Chairman and CEO, said:

"In just five years, Mytrah has become one of the largest renewable energy Independent Power Producers in India. The US$380 million refinancing is a great endorsement of Mytrah as a high quality business operating in one of the world's biggest energy markets. 

"Increasing our wind power generation capacity by 10% in 2015 to 583 MW, with 33 wind turbines installed across 3 projects, was a significant feat and this expansion has continued since the year end, reaching 616.5 MW at present. The growth has been delivered on budget and is ahead of schedule so that we now expect to have a capacity of 783 MW at the start of wind season 2016; 40MW ahead of our previous guidance." 

For further information please visit www.mytrah.com or contact:

Chairman and CEO's statement

On behalf of the Board, I am pleased to present the consolidated annual accounts for Mytrah Energy Limited ("Mytrah" or the "Company", and with the subsidiary companies, the "Group") for the year ended 31 December 2015.

Mytrah, which listed in London in October 2010, manages a diversified renewable energy portfolio and is one of India's largest renewable energy Independent Power Producers ('IPP'). During the year to 31 December 2015, Mytrah grew its generation capacity to 583 MW, a 10% increase over the previous year. Additional capacity of 25.2MW was added post year-end, taking the operational wind portfolio to a total capacity of 616.5MW at present, all of which was created within a short time span of five years. When this operational capacity is combined with projects currently under construction, and a successful entry into the solar business, Mytrah now has the ability to reach 1,380 MW (c. 1.40 GW) of renewable electricity production capacity in the next few years.

The Board is delighted to report a set of strong results which demonstrates the quality and maturity of Mytrah's business. The Company continues to pursue a strategy of diversification, and this has allowed Mytrah to remain resilient in a year characterised by variable wind speeds which were generally lower than the historical long term average. The Company delivered robust revenue growth of 13% YoY in rupee terms (7% in USD) during the period. The Company has also increased generating capacity and has executed a transformational refinancing deal post period end which will underpin continued strong capacity expansion.

The refinancing is a first of its kind and the largest in the Indian renewable/wind sector, bringing together 10 operating wind plants into one financial structure with an A rating resulting in interest rate reduction by 140 bps. The new structure greatly simplifies Mytrah's business; replacing 22 separate senior lenders and six loan facilities with just three lenders in a single loan facility.

Operational performance

Electricity generation is influenced by the quality of the wind resource for the year, and the mechanical availability of the wind plants.

During the period under review, wind speeds have been variable from month to month and somewhat below expectations over the entire period. However, the Company's current wind farms are geographically spread across 6 states, covering over 2000km from the northern to southern part of India. This has, to some extent, mitigated the effects of the low wind this year, as some plants experienced slightly better wind conditions than others. This "portfolio effect" has enabled the Company to deliver a profit even in a poor wind year, and also facilitated refinancing of the 543 MW operating portfolio.

Whilst the wind is outside the Company's control, continued focus by the operations team has delivered good availability, with some plants exceeding 99% mechanical availability in the year to 31 December 2015. The depth of capability in Mytrah's operations team is an increasingly important competitive advantage as the Company's operating portfolio expands.

Project Construction

The construction portfolio has increased over the year from 300 MW to 460 MW. From this portfolio, the wind project at Bhesada (50.4MW) is fully commissioned and operational at present and construction of other new projects, including Vajrakarur 2 and Nazeerabad (approximately 150 MW combined) is progressing as planned, targeting for commissioning ahead of the wind season. In addition, Mytrah is pleased to say that construction at the 90MW Nidhi wind farm in Rajasthan has progressed ahead of plan, and c. 40 MW of this project is also now expected to be on stream ahead of the wind season. This brings our expected capacity to 783 MW going into the 2016 wind season. An additional 220 MW of projects are in construction and expected to be commissioned ahead of the 2017 wind season, taking the Company past the 1 GW milestone in operational wind capacity.

In an effort to assist Mytrah's shareholders in understanding the most important stages of the life cycle of a wind project during its development, the Company has provided below a quantified assessment of the progress of its current wind projects as at the current date. This is based on management's experience and not verified by any third party.

Project pipeline

In addition to the projects under construction, Mytrah has an extensive pipeline of wind projects exceeding 3000 MW. With 211 wind masts installed in 8 states, the Company's wind data base continues to provide differentiated access to new project sites. As part of the ongoing pipeline development work, the Company signed a non-binding Expression of Interest (EoI) with the Government of Karnataka to develop 450 MW of renewable projects in Karnataka State during February 2016.

Financing

During the year 2015, the Group has extended the existing bond facility (including India-listed non-convertible bonds issued by Mytrah Energy (India) Limited) by a further USD 60m (2014: USD 70m), bringing the total finance raised under this structure to USD 130m. The Company has also raised over USD 200m of senior debt for new projects and, post period end, secured a USD 380m refinancing of all the senior debt in its 543 MW operating wind portfolio. This new facility will be used to refinance twenty-two existing senior lenders in operating wind projects, reducing the interest rate by an average of 140 basis points and extending the average maturity of debt by approximately 3 years. The re-financing greatly simplifies the Company's debt structure and also provides approximately USD 8 m of additional funds which Mytrah will use to finance further capacity expansion within this group.

These transactions, conducted with sophisticated financial institutions, underline the growing maturity of our business and the quality of our operating asset portfolio.

Macro environment

With a growth of over 7 per cent in the 9 month period ended 31 December 2015, India is considered one of the world's fastest-growing economies. The International Monetary Fund (IMF) predicted that India would retain the status of fastest growing economy until 2020. Both manufacturing and electricity outputs experienced strong growth (3.1 per cent and 4.5 per cent respectively) in the period, boosting overall industry performance.

The renewable energy sector continues to enjoy strong support from the central Government, with the Prime Minister creating a target of 175 GW of renewable capacity installed by 2022. Of this 100 GW is expected to be solar, 60 GW wind, and 15 GW other technologies.

A key outcome of the Government's focus is the "UDAY" (Ujwal DISCOM Assurance Yojana) reform approved in November 2015. The scheme aims at improving the financial health of the state electricity boards (SEBs) which purchase most of Mytrah's electricity under long-term contracts. UDAY aims to reduce the debt burden of the SEBs and is expected to translate to faster and more reliable payments from some of the weaker SEBs.

Solar

2015 has seen rapid development in the solar sector of India. Over 15 GW of capacity auctions have been run across various states, and Mytrah has acquired rights to 377 MW of projects in Telangana (327 MW) and Punjab (50 MW). These projects have long-term power purchase agreements with the state electricity boards, and will be constructed over the next 12 - 18 months, adding to the 1 GW of wind capacity under construction. At present, PPAs have been signed for 282 MW of these projects, with the remaining 95 MW expected to follow shortly.

In addition to the success in large project bids, Mytrah has also installed 317kW of rooftop systems for commercial customers. The solar team has grown rapidly, now numbering over 30 and more details of the company's solar plans will be released to the market at the appropriate time.

Maturing business

Mytrah is a pure-play renewable power generation company with a clear focus on maximising performance of its operating assets, delivering new capacity on time and within budget, and building a sustainable pipeline of future opportunities. The business is growing and maturing in all aspects; setting visible and achievable targets, leading to on time project delivery, continually improving financial structures, experienced management and high quality technical staff, and strong relationships with a diverse group of wind turbine suppliers.

Mytrah will continue to make a significant investment in our people, systems and processes to ensure we have the foundation needed to support sustained growth and an ever-expanding footprint.

Outlook

Following a solid performance in 2015, the Company is focused on continued growth in the renewable energy sector within the wind and solar markets. The Company's diversified portfolio has demonstrated robustness in spite of higher-than-expected seasonal weather volatility during 2015 and this is reinforced by the confidence of lenders which entered into a new refinancing arrangement, underpinning management's belief that the variable wind this year is a temporary limitation and not a routine pattern.

The portfolio exhibits strong diversification benefits with 11 assets across six States. We expect to continue to grow rapidly, entering the 2016 wind season with 783 MW operating, and a further 220MW in construction.

The GoI's focus on the renewable energy sector set to continue through 2016 and beyond. We expect a significant number of investment opportunities for the Company as there is an increased activity across the sector, and a number of States taking positive steps to support renewables. We are currently evaluating a number of potential opportunities for further investment, and will invest selectively, providing the terms are attractive for our shareholders. Safe and efficient management of assets in operation or under maintenance or construction remains our top priority. Mytrah intends to continue to remain active and focused in the renewables space and looks forward to a further year of steady portfolio performance and growth and to further positive engagement with our stakeholders.

Business Review

Revenue

For the year ended 31 December 2015 the Group's revenue has increased by USD 5.17m, reflecting a 7% growth year on year, on account of capacity additions. The increase in revenues is primarily on account of increase in electricity generated during the year due to an increase in the operating capacity by 10% to 583 MW.

EBITDA

Underlying EBITDA for the year 2015 increased to USD 66.43m (2014: USD 64.34m) an increase of USD 2.09m, approximately 3% increase (9% in rupee terms), reflecting a reduction in Non-recurring and non-cash adjustments of USD 1.15m (2014: USD 8.22m). The increase in EBITDA is due to the increase in revenue partly offset by increase in costs of generation as the free O&M period came to an end in some of the assets.

Finance cost

Financing costs at USD 51.76m were USD 8.23m higher than the prior year due to expensing of interest on operating assets commissioned during the current year, which were under construction during the previous year and was capitalised and fair valuation of security deposits (a non-cash impact of USD 1.27 million).

Finance income

Higher finance income of USD 3.35m (2014 : USD 1.05m) was generated due to higher cash balance in the system and resultant increase in Interest on Bank deposits and investment in AAA bonds.

Profit before tax

Profit before tax (PBT) of USD 0.47m for the period 2015 (2014: USD 2.28m). Lower PBT during 2015 is largely on account of higher finance costs and O&M expenses of USD 2.13m (2014: USD 0.72) incurred during the year as the free warranty period in some projects was completed.

Taxation

The tax expense for the year 2015 was USD 0.08m (2014: USD 0.40m).

Earnings per share:

Basic and diluted earnings per share for the year 2015 was USD 0.71 cents (2014 USD: 1.14 cents) and USD 0.71 cents (2014 USD: 1.14 cents) respectively.

Financial position

The net book value of our Property, plant and equipment has increased by USD 270m (increase by 53%), almost all of which relates to investments made during the year in the construction of our new plants and that will start generating revenues in the year 2016. The Company's liquidity, as measured by current ratio (current assets over current liabilities) has improved to 1.67 compared to 0.73 last year.

Capital structure

Strong financial capital management is an integral part of the Directors' strategy to achieve the Group's stated objectives. The Directors review financial capital reports on a quarterly basis and the Group treasury function does the review on a weekly basis, ensuring that the Group has adequate liquidity.

As at 31 December 2015 the Group had gross debt of USD674.2m (2014: USD 456.26m). During the year ended 31 December 2015, additional loans of USD 242.5m (net of repayments) were drawn for the construction of new assets that will start generating revenue in the period ending 2016. The Group continues 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 enabling it to raise further financing on competitive terms.

As the assets under construction start generating revenues in 2016 and 2017, we expect that the Leverage (expressed as Net Debt/EBITDA) position of the Company will improve substantially with the increasing EBITDA.

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 liquidity. A debt maturity profile is also included.

Cash flow

The cash generated from operations during the year was USD 74.64m (2014: inflow USD 50.08m). Investing activities for the current year resulted in a cash outflow of USD 236.62m (2014: outflow of USD 94.69m). Net financing cash inflows were USD 162.72m (2014: inflows of USD 42.04m). The increase in financing cash inflows was mainly due to draw down of loan facilities of USD 370.80m (2014: USD 176.23m) during the current year. At 31 December 2015 the Group had cash and bank balances of USD 55.58m (31 December 2014: USD 14.27m).

The company has effectively managed its receivables position and, despite the increase in revenues, the position is unchanged compared to previous period.

Liquidity and investments

At 31 December 2015 the Group had a strong liquidity position comprising of liquid assets of USD 101.02m and undrawn/committed credit facilities of USD 223.02m, which will be used for financing the projects under construction. The Group's net debt position at 31 December 2015 has increased to USD 618.62 (31 December 2014: USD 441.99m). The increase is mainly on account of drawdown of loan facilities during the year.

Ravi Kailas

Chairman & CEO

Mytrah Energy Ltd

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

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

These consolidated financial statements were approved by the Board of Directors and authorised for use on 25 February 2016.

Signed on behalf of the Board of Directors by:

Ravi Kailas Russell Walls

Chairman and CEO Director

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

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

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

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 Ground Floor, Dorey Court, Admiral Park, St. Peter Port, Guernsey GY1 2HT. Mytrah Energy Limited has the following subsidiary undertakings, (together the "Group" or the "Company"), all of which are directly or indirectly held by the Company, for which consolidated financial statements have been prepared, as set out below:

1 Wound off against application by the Group to concerned authority subsequent to balance sheet date.

2 Acquired by Group on 01 August 2015.

1. General information (continued)

The principal activity of the Group 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.

During the previous year, MEIL has entered into an agreement with MVUPL for transfer of its wind power business. Accordingly, during the current year the assets and liabilities relating to wind power generation business segment in MEIL are transferred to MVUPL on fulfilment of conditions specified in the agreement.

2. Adoption of new and revised accounting standards and interpretations

2.1 New and amended standards adopted during the year

The Group has adopted the following new standards and amendments, including any consequential amendments to other standards with date of initial application of 1 January 2015:

Based on the Group's current business model and accounting policies the adoption of these standards or interpretations did not have a material impact on the consolidated financial statements of the Group.

2.2 New standards and interpretations not yet adopted

At the date of authorisation of these consolidated 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). The Group is in the process of evaluating the impact of the following new standard on its consolidated financial statements.

IFRS 9- Financial instruments

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption period.

IFRS 15, Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.

Further, the following new or amended standards are not expected to have a significant impact on the Group's condensed consolidated financial statements:

· IFRS14: Regulatory deferral accounts.

· Accounting for acquisitions of interest in Joint Operations (amendments to IFRS 11)

· Clarification of acceptable methods of depreciation and amortisation ((amendments to IAS 16 and IAS 38)

· Defined benefit plans: Employee contributions (Amendments to IAS 19)

3. Significant accounting policies

The Group accounting policies are summarized below:

3.1 Basis of accounting

These financial statements comprise of consolidated statement of financial position, consolidated income statement, consolidated statement of other comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows, significant accounting policies and notes to accounts (together referred as "consolidated financial statements").

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standard and its interpretations as adopted by the European Union (EU) ('IFRS').

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

e) Net employee benefit (asset) / liability that is measured based on actuarial valuation.

The Directors have taken advantage of the exemption offered by Section 244 (5) of the Companies (Guernsey) Law, 2008 from preparation of standalone financial statements of the Company as the Company is preparing and presenting consolidated financial statements for the financial year ended 31 December 2015.

The accounting policies set out below have been applied consistently to all years presented in the these consolidated financial statements, except the change in presentation of analysis of expenses in income statement as explained in note 3.17.

3.2 Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) 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.

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. The interests of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity.

3.3 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 are contained in the Directors Report.

3.4 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 as the Company's shares are listed on AIM. The functional currency of the parent company is Pound Sterling ("GBP").

3. Significant accounting policies (continued)

3.4 Foreign currencies (continued)

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in income statement in the period. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into US dollars (USD) using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

The functional currency of all the above subsidiaries is Indian Rupee (INR), except for BVML, MESPL, MECPL and CCSPL which are determined as USD. These financial statements are presented in US dollars (USD).

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

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

3.5 Revenue recognition

Revenue is recognised when it is probable that future economic benefits will flow to the group 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.

Sale of Renewable Energy Certificates (RECs)

Revenue from sale of RECs is recognised after registration of the project with central and state government authorities, generation of power and execution of a contract for sale through recognised exchanges in India.

Sale of Verified Carbon Units (VCUs) and Certified Emission Reductions (CERs)

Revenue from sale of VCUs/CERs is recognized after registration of the project with United Nations Framework Convention on Climate Change (UNFCCC), generation of emission reductions, execution of a firm contract of sale and billing to the customers.

Interest income

Interest income is recognised as it accrues using the effective interest rate method.

3. Significant accounting policies (continued)

3.6 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.

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 initially recognised at fair value plus any directly attributable costs. Subsequent to initial recognition they 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. Deposits with banks and financial institutions maturing after 12 months from the date of balance sheet have been classified under non-current assets as 'other investments'.

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 consolidated profit and loss are carried in the statement of financial position at fair value with gains or losses recognised in the income statement. Directly attributable costs are recognised in profit and loss as incurred.

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 plus any attributable transaction costs. Subsequent to initial recognition they are measured at fair value with changes in fair value being 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.

3. Significant accounting policies (continued)

3.6 Financial instruments (continued)

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. 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.

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. Changes in the carrying amount of the allowance account are recognised in the consolidated income statement.

Impairment of available-for-sale

Impairment losses on available-for-sale financial assets are recognised by classifying the losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously recognized in profit or loss. If the fair value of an impaired available-for-sale debt security subsequently increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed through profit or loss, otherwise, it is reversed through OCI.

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

Non-derivative financial liabilities are initially recognised at fair value less any directly attributable costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using effective interest method.

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 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. Subsequent to initial recognition the liability component of compound financial instrument is measured at amortised using effective interest method. 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.

3. Significant accounting policies (continued)

3.6 Financial instruments (continued)

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

3.7 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 a 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.

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.

3. Significant accounting policies (continued)

3.7 Property, plant and equipment (continued)

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, leasehold improvements and leased assets 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 and adjusted prospectively if appropriate.

Further, the Group has adopted component accounting of depreciation for the plant and machinery class of the property, plant and equipment and accordingly adopted the following useful lives for each of the components:

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. The recoverable amount of an asset is the greater of its value in use and fair value less cost to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

3.8 Intangible assets

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

Application software 4 years

ERP software license 4 years

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

3. Significant accounting policies (continued)

3.9 Taxation 

Income 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, 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.

3.10 Leases

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. At inception or on re-assessment of an arrangement that contains a lease, the Group separates the payment and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as the payments are made and an imputed finance cost on the liability is recognised using the Group's incremental borrowing rate.

Leased Assets

Leases 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.

3. Significant accounting policies (continued)

3.11 Provisions

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

A contingent liability is disclosed where the existence of an obligation will only be confirmed by 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.

A provision for onerous contracts, if any, is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

3.12 Employee benefits

Short 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.

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.

3.13 Share-based payments

Equity-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.

3. Significant accounting policies (continued)

3.14 Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. 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 and Directors, CCPS, CCDs and share warrants issued to investors and lenders.

3.15 Government grants

The 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.

3.16 Finance income and expense

Finance income consists of interest income on funds invested (including available-for-sale financial assets), dividend income and gains on the disposal of available-for-sale financial assets. Interest income is 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. 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.

3.17 Change in presentation and analysis of expenses in the income statement

During the year, the Group has changed the presentation analysis expenses from function to nature by including 'Earnings before interest, tax, depreciation and amortization' (EBITDA) as a separate line item in the income statement to provide more reliable and more relevant information to the users of financial statements. Management believes that disclosure of expenses by nature is meaningful measure for investors because it provides an analysis of our operating results, ability to service debt and performance of the Company. Further EBITDA consider by chief operating decision makers to track business evolution, establish operational and strategic targets and make important business decisions. The Company measures EBIDTA on the basis of profit/(loss) from operations. For EBITDA measurement, the Company has not included the depreciation and amortisation expenses, finance cost, tax expense and other income.

3. Significant accounting policies (continued)

3.17 Change in presentation and analysis of expenses in the income statement (continued)

4. Critical accounting judgements and key sources of estimation uncertainty

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

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

Critical judgements and estimates in applying the Group's accounting policies

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

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.

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

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

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.

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

6. Revenue (continued)

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

Other operating income recognised during the year represents liquidated damages claimed from project suppliers in relation to low machine availability as against the guaranteed machine availability

7. Employee benefits expense

1Includes costs relating to one-off bonus expense of USD Nil (31 December 2014: USD 1,262,650) attributable to successful financing transaction.

8. Other operating expenses include costs relating to write-off of doubtful advances USD Nil (31 December 2014: USD 2,154,881), provision for trade receivables USD 225,991 (31 December 2014: USD Nil), transaction costs of USD Nil (31 December 2014: USD 2,990,977) incurred in relation to raising of long-term finance, un-eliminated indirect tax cost of USD 275,112 (31 December 2014: USD 902,779) on inter-group transactions

9. Auditor's remuneration

The auditor's remuneration is as follows:

10. Finance income

11. Finance costs

1Amounts 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 assets and it represents the actual finance costs incurred on those borrowings, calculated using the effective interest rate method.

2Includes finance cost on finance lease obligations USD 1,272,277 (31 December 2014: USD Nil).

12. Other finance costs on refinancing 

Loan refinancing costs represents the cost of prepayment and unamortized transaction costs incurred upon refinancing the existing senior term loans.

13. Taxation

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 34.61% (31 December 2014:33.99%) 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 5,560,396 (31 December 2014: USD 803,932) as MAT is greater than corporate income tax for the current year. The tax expense represents current tax charge and non-cash net deferred tax liability on timing differences accounted during the year.

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

13. Taxation (continued)

Tax assets / liabilities recognised in the consolidated statement of financial position:

14. Earnings per share

Basic 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.

At 31 December 2015, 46,545,082 potential ordinary shares (includes CCPS, share options and share warrants) (31 December 2014: 29,450,597) were excluded from the diluted weighted average number of shares calculation because their effect would have been anti-dilutive.

The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the year during which the shares and share options were outstanding.

15. Intangible assets

Application software

16. Property, plant and equipment