Panasian Power : Annual Report for 2023/24

Panasian Power PLC

A N N U A L R E P O R T 2 0 2 3 / 2 4

CONTENTS

OVERVIEW

1. About Our Integrated report

1. About Us

1. Project Portfolio

1. Our Journey

1. Awards and accolades
2. Performance Highlights

1. Chairman's Statement

1. Chief Executive Officer's Review

MANAGEMENT DISCUSSION AND ANALYSIS

24 Our Business Model

1. Our Commitment to Sustainability

1. Listening to our stakeholders

1. Determining material matters

1. Operating Environment

1. Financial Capital

1. Manufactured Capital

1. Human Capital

1. Social and Relationship Capital

1. Intellectual Capital

1. Natural Capital

STEWARDSHIP AND GOVERNANCE

68 Board of Directors

1. Board of Directors of Subsidiaries

1. Management Team
2. Corporate Governance

104 Report of the Board Audit Committee Report

107 Report of the Board Remuneration Committee Report

109 Report of the Board Related Party Transactions Review Committee

111 Report of the Board Nominations and Governance Committee

113 Risk Management Report

FINANCIAL REPORTS

1. Financial Calendar
2. Annual Report of the Board Of Directors on the Affairs of the Company

1. Directors' Statement on Internal Control

1. Statement of Directors' Responsibility

1. Responsibility Statement of Chairman, Chief Executive Officer and Finance Manager
2. Independent Auditor's Report

131 Statement of Profit or Loss and Other Comprehensive Income

1. Statement of Financial Position

1. Statement of Changes in Equity
2. Statement of Cash Flows

1. Notes to the Financial Statements

1. Investor Information

1. Ten Years Financials Summary
2. Glossary of Financial Terms
3. Notice of Annual General Meeting

1. Form of Proxy

Inner Back Cover Corporate Information

At Panasian Power PLC we envision a world where energy is a catalyst of sustainable progress, where every unit of electricity generated sparks new possibilities and every electron transmitted carries the promise of a better tomorrow.

With unwavering dedication, we harness the forces of nature - wind, sun, water, and earth - to generate clean, renewable energy. Through state-of-the-art technologies and forward-thinking solutions, we strive to minimise our carbon footprint, safeguarding the environment for future generations.

We recognise the transformative power of energy to uplift communities and drive social change. In every endeavour, we remain guided by our unwavering belief in the power of hope. As we look towards the horizon, we see a future ablaze with possibility, where clean sustainable energy creates a platform for a greener future. In that future, we stand steadfast as a beacon of hope, illuminating the path forward with unwavering resolve.

Panasian Power PLC

Panasian Power PLC | Annual Report 2023/24	2

ABOUTOUR

INTEGRATED

REPORT

Renewable Energy Today's resource for a brighter tomorrow

We are pleased to present our fifth integrated annual report which encompasses the progress and achievements we have made during the financial year ending 31 March 2024. This report aims to provide a concise, holistic, and balanced review of Panasian Power PLC's (herein referred to as 'PAP' or 'the Company') financial, social, environmental and governance performance while providing a fair account of how we directed strategy in the context of our operating environment to create value for our stakeholders. In spite of the economic uncertainty prevalent in the country, PAP has continuously focused on accomplishing it's strategic objectives, while ensuring sound governance and transparent, reliable and timely reporting.

SCOPE AND BOUNDARY

This report covers the financial and non-financial performance of Panasian Power PLC and its subsidiaries, joint ventures located in Sri Lanka, collectively referred to as the Group. These entities are administratively arranged into 03 Sectors. Financial and non-financial reporting boundaries are aligned and extend to the operating environment and external stakeholders. The report sets out how we create, preserve, or erode value through our business activities.

Key changes to the group's organisational structure/supply chain in 2023/2024 were as follows;

• Establishment of PAP SPGM Solar (Pvt) Ltd, PAP MHPL (Pvt) Ltd, PAP EGSS Solar (Pvt) Ltd, PAP PTS Solar (Pvt) Ltd, R-E-D Capital Asia (Pvt) Ltd to undertake new ground mounted 5 Mws solar projects in 07 Locations.

• Signed Master Supplier Agreement with LONGi Solar Technology Co. Ltd in China

External stakeholders

and Operating Environment

01 Company in Overseas

21 Companies in Sri Lanka

Panasian

Power PLC

This integrated report concentrates on the International Integrated Reporting Council's (IIRC) Framework, which encompasses the six capitals:

• Financial Capital
• Manufactured Capital
• Intellectual Capital
• Human Capital
• Natural Capital
• Social and Relationship Capital

The Framework provides a comprehensive and holistic perspective on the Company's activities and their impact on various forms of capital, reflecting its commitment to transparent and integrated reporting practices and by pursuing this framework, the report aims to effectively communicate the Company's advancements in creating value for stakeholders across these diverse capital categories.

While the overall scope and boundary remain consistent with the previous report for the FY 2022/23, this current report emphasizes the company's progress in non-financial aspects. All previous reports, including the recent FY 2022/23 report, are accessible for viewing and download on the corporate website (www.panasianpower. com, investors tab). No changes took place in the Company's size, shareholding, structure or supply chain during the year under review and there are no major restatements made to financial and non-financial information disclosed in the previous Annual Report.

MATERIALITY

Determination of what is material to us includes a systematic, company wide materiality assessment process. The assessment is based on the principle of double materiality which considers potential implications on the organisation as well as impacts on people and the environment. This report discloses our risks, opportunities, macrotrends and other considerations that impact materiality on our six capitals and our ability to create, preserve and minimise erosion of value for our stakeholders.

A comprehensive process has been

implemented to determine the material aspects, which is further elaborated on page 32 to 34 of this report. By focusing on materiality, the Company also aims to drive performance, enhance its sustainability framework, and integrate its corporate governance philosophy across all levels.

REPORTING FRAMEWORKS

The preparation of this integrated annual report is guided by the following statutory provisions, best practices, policies and guidelines by the relevant governing and regulatory bodies.

Panasian Power PLC | Annual Report 2023/24

3

FINANCIAL STATEMENTS

NARRATIVE REPORT

SUSTAINABILITY REPORTING

CORPORATE GOVERNANCE REPORT

• Sri Lanka Financial Reporting Standards
• Companies Act No 7 of 2007
• Listing requirements of Colombo Stock Exchange
• Sri Lanka Accounting Standards

• Integrated Reporting Framework.
• Guideline for the presentation of Annual Reports issued by CA Sri Lanka.

• GRI standard (2021) of the Global Reporting System.
• Non- Financial Reporting Guidelines issued by CA Sri Lanka.
• Sustainable Development Goals. (SDG)
• Gender Parity Reporting Framework of Sri Lanka.

• Listing requirements of the Colombo Stock Exchange.
• Code of Best Practice on Corporate Governance issued by CA Sri Lanka (2017).
  CA Sri Lanka issued an update code of best practice on corporate Governance (2023) in December 2023.The updated code has been revealed and will be adapted to the extend of business exigency and as required by the Panasian Power PLC

REPORTING ENHANCEMENTS

• Improved our ESG reporting
• Improved connectivity throughout the report
• Continued efforts to make the report more concise
• Aligning the Corporate Governance Report to new listing rules

FORWARD LOOKING STATEMENT

This report includes forward looking statements based on external and internal information available at present to facilitate assessment of the Group's prospects. These statements are associated with a high level of uncertainty due to the high levels of uncertainty and volatility in the global and local economic outlook. The outcomes and impacts of some of these statements relate to future events which are beyond our control but can have a significant impact in the Group's ability

to create value. Readers are advised to make their own judgements using the latest information available at the time of assessment due to the elevated levels of

BOARD RESPONSIBILITY STATEMENT

uncertainty in forward looking statements. All forward looking statements are provided without recourse or any liability whatsoever to the Board or other preparers of the Annual Report due to the reasons enumerated above.

ASSURANCE

Assurance for the content embodied in this Integrated Report is reinforced by a carefully vetted combination of internal and external sources. The information included in this report has received approval from the leaders of respective business units, and has been scrutinized by the Corporate Management Team prior to submission to the Board of Directors for final approval. To ensure the accuracy and reliability of PAP's Financial Statements as of 31 March 2024, an independent review was conducted by the company's external auditors, M/S Earnst

• young. The findings of their review are provided in detail on pages 129,130 of this report. This external validation strengthens the credibility and transparency of the financial information presented in the report.

FEEDBACK

Capitals

Financial

Manufactured

Human

Intellectual

Social & Relationship

Natural

Strategic Pillars

Shared Prosperity through portfolio growth

Customer centricity

Inclusive business models

Inspired teams

Preserving and regenerating nature

Stakeholders

Shareholders

Employees

Customers

Suppliers

Business Partners

Communities

Government

The Board acknowledges its responsibility to ensure that the Integrated Annual Report provides a balanced view of its performance

PAP welcomes stakeholder feedback on this report and other matters at [e-mail] as part of its ongoing commitment to enhancing reporting quality.

in 2023/2024 and is of the opinion that it addresses all material issues that it believes may have a bearing on the Company's capacity to create value over the short term. The Corporate Management team prepared and reviewed the Integrated Annual Report and submitted the same to the Board Audit Committee who recommended the reports to the Board for approval in accordance with the delegation of authority. The reports were unanimously approved by the Board on 03 June 2024

www.panasianpower.com

[e-mail]

[phone]

[phone]

[phone]

Level 4,BTL Shipping House, No. 45/2, Braybrooke Street, Colombo 02

www.panasianpower.com		Facebook		instagram

Available Forms

Panasian Power PLC

Annual Report 2023/24

Print	Online
Available on	Available
request	as PDF

Panasian Power PLC | Annual Report 2023/24

4

ABOUT

US

'A transition to clean energy is about making an investment in our future' - Gloria Reuben

Panasian Power PLC (PAP) acclaims the honour of being Sri Lanka's pioneering supplier of clean and renewable energy. The company commenced operations in 2002 under the guidance of Sri Lanka Board of Investment and has since then advanced its operations to become a leader in the renewable energy industry, demonstrating excellence in operating mini hydro, ground and rooftop solar plants.

PAP is dedicated to developing renewable energy solutions that reduce carbon emissions, enhance energy security, and promote economic prosperity, and has adopted an integrated business model through which it builds, owns and operates renewable energy projects as an independent power producer and project developer. With a diversified renewable energy portfolio comprising of over 22.4 MW of generation capacity, PAP remains at the forefront of driving the renewable energy revolution forward.

PAP also reserves the exclusive right as the authorised channel partner for SUNGROW inverters and master supplier agreement with LONGi solar panels in Sri Lanka, offering a wide range of inverters and solar panels to satisfy the growing energy demands.

Mini Hydropower Project

Rooftop Solar Project

Ground Solar Project

Green House Solar Project

Projects In Pipeline

RSD - Thirappane	Anuradhapura
FGR - Thirappane

FGR - Maradankadawala

RSD - Maradankadawala

Maho

Maho

SBSII(90) lMW Solar PV Power Plant

Kurunegala

Melsiripura	Batticaloa
Narammala
Palapathwala

Pannala	Uhumeeya
SBSII(90) lMW
Mawathagama
Solar PV Power
Plant

Kohuwala		Padiyapellala II	Ampara
Boralesgamuwa
Padiyapelella MHP
		Manelwala MHP
		Lower Kothmale
Galle 1	Rathganga MHP
			FGR Gonnoruwa
			FGR Ridiyagama
		Hambantota	FGR Mattala

SBSII(90) IMW Solar

SBSII(90) IMW

OUR VISION

We only have one planet, and the widespread use of fossil fuels has caused irreparable damage to it. We want to protect the environment by becoming a leader in diversified sustainable renewable energy solutions in the Global South.

OUR MISSION

• PAP produces clean renewable energy from hydro, solar and other renewable sources in Asia and Africa.
• We own and manage projects that are best in class from a technology, design and efficiency point of view and provide market leading returns through innovative financing solutions, and are the preferred partner for customers, suppliers, employees and investors
• We value fair compensation, room to grow, training, a healthy, creative work environment, and respect for diversity. We care for our communities and environment actively. We are an innovative dynamic energy solutions provider.

OUR VALUES

ACCOUNTABILITY:	BIAS FOR ACTION:	INTEGRITY: Treat
Responsibility to all	We are driven to get	others with respect
our stakeholders	results, swiftly	and honesty and are
		true ourselves
INNOVATIVE:	PASSION: Passion	QUALITY: What we
Develop outside the	for renewable energy	do, we do well
box solutions	solutions

Manza Mini Hydro Power Project - Zambia

Global Projects

Panasian Power PLC | Annual Report 2023/24

5

GROUP STRUCTURE

PANASIAN POWER PLC

Hydro 3MW Ratnapura

100%

83%

100%

99.75%

93%

100%

100%

100%

100%

100%

100%

Manelwala

Hydropower

(Pvt) Ltd

Hydro 2.4MW

Walapane

100%

Padiyapelella

Hydropower

Limited

Hydro 3.5MW Padiyapelella

100%

		Lower		Kotmale
Panasian
Investments	Oya Power Two
(Pvt) Ltd		(Pvt) Ltd
		EPC			Hydro 2MW
	Company			Medakumbura
100%

Panasian

Power

Zambia Ltd

Zambia Project

Company Hydro

8MW

Finergreen

Gonnoruwa

(Pvt) Ltd

Ground

Solar Project

at Gonnoruwa

10MW

Finergreen

Mattala

(Pvt) Ltd

Ground

Solar Project

at Mattala

10MW

Finergreen

Ridiyagama

(Pvt) Ltd

Ground

Solar Project

at Ridiyagama

10MW

Winsol

Renewables

(Pvt) Ltd

EPC

Company

R-E-D

Capital Asia

(Pvt) Ltd

Solar Investment

Company

Solar One

Asia (Pvt) Ltd

EPC

Company

Solar Power

Generation

Matara (Pvt) Ltd

Ground Solar 2MW at Matara

100%

PAP SPGM

Solar (Pvt) Ltd

5MW Ground Solar

at Matara

Eco Green

Solar Solutions

(Pvt) Ltd

Ground Solar

1MW at Beliatta

100%

PAP EGSS

Solar (Pvt) Ltd

15MW Ground

solar at

Anuradhapura &

Galle (Each 5MW)

PAP

MHPL Solar

(Pvt) Ltd

10 MW ground

solar at Kurunagala

& Ampara

(each 5MW)

50%		100%
Powergen		PAP Solar One
One (Pvt) Ltd		(Pvt) Ltd
Roof Top Solar			Roof Top Solar3.9MWp
(PV) 0.4MWp			Kurunegala, Kohuwala,
Boralesgamuwa			Kolonna, Palapaththala

CREATING VALUE FOR ALL

STAKEHOLDERS

Our mission goes beyond just generating clean energy and we strive to empower communities, create jobs, and foster economic growth through our projects.

GROUP AT A GLANCE

Group	EBIT
Revenue
Rs. 561 Mn
Rs.1.5 Bn

100%	100%
	Finergreen	Rajarata Sustainable
Rajarata (Pvt)	Development (Pvt)
	Ltd		Ltd
	Roof Top & Green		Roof Top Solar &
	House 2MWp		Green House
	Anuradhapura		2MWp
				Anuradhpura

VALUE CREATION DURING 2023/2024

100%

Panthree

Solaro Energy

(Pvt) Ltd

Ground Solar

3x1MW Matara, Maho & Pannala

100%

PAP

PTS Solar (Pvt) Ltd

5MW Ground Solar

at Maho SPV

Profit		EPS
before Tax
	Rs.0.12
Rs. 225 Mn
No of Employee		Funds for community
	developments
74		Rs.6.6 Bn

2024	2023 Variance

Value Generated

Revenue	1,490,346,698	1,104,079,462	47%
Other Income	8,132,933	10,713,266	(24%)
Finance Income	23,826,667	6,920,888	244%
Impairement Loss Reversal	960,976	-	100%
Revaluation Gain	23,965,067	-	100%
Share profit of equity accounted investees	1,798,865	-	100%
Total	1,549,031,206	1,031,713,617	50%
Value Distributed
Operational Cost	665,634,856	719,327,473	-7%
Salary and wages	95,042,897	82,637,960	15%
Payment Made to Fund Providers	361,111,049	422,082,558	-14%
EPF & ETF	8,172,719	7,413,040	10%
Corporate Taxes	119,447,463	49,207,036	143%
Expenses on CSR	6,593,860	2,824,178	133%
Total	1,256,002,844	1,283,492,245	-2%
Value Retained
Depreciation and Amortization	193,368,614	209,170,752	-7%
Profit after Tax	99,659,748	(460,798,622)	122%

Clean energy generated

56,944,421 kWh

Total Installed

Capacity 22.4 MW

Number of trees saved		42,234 MT CO
3,001,842		avoided	2

STRATEGIC DIFFERENTIATORS

Purpose-led business

Extensive and solid partnerships

Diverse businesses and geographical presence

Employee value proposition Robust corporate governance Strong balance sheet

Panasian Power PLC | Annual Report 2023/24

6

PROJECT PORTFOLIO

MINI HYDRO POWER PROJECTS

RATHGANGA MINI HYDROPOWER PROJECT

Year of Commission	2004
Installed Capacity (MW)	3
Annual Expected Energy (GWH)	11
Operational Highlights	2024	2023
Power Generation (kWh)	14,133,148	12,505,807
Plant Factor (%)	54	42.58
Reduction in CO2 (MT)	10,487	9,259
Nos of Tree saving	781,281	681,000
Equivalent hectares in rain forest	521	454

MANELWALA MINI HYDROPOWER PROJECT

Year of Commission	2008
Installed Capacity (MW)	2.4
Annual Expected Energy (GWH)	7.8
Operational Highlights	2024	2023
Power Generation (kWh)	7,416,891	8,781,674
Plant Factor (%)	35.28	41.76
Reduction in CO2 (MT)	5,503	6,502
Nos of Tree saving	409,974	478,470
Equivalent hectares in rain forest	274	319

PADIYAPELELLA MINI HYDROPOWER PROJECT

Year of Commission	2017
Installed Capacity (MW)	3.5
Annual Expected Energy (GWH)	11.9
Operational Highlights	2024	2023
Power Generation (kWh)	14,723,433	17,348,802
Plant Factor (%)	48.02	56.58
Reduction in CO2 (MT)	10,925	12,845
Nos of Tree saving	813,912	945,300
Equivalent hectares in rain forest	543	630

Panasian Power PLC | Annual Report 2023/24

7

GROUND MOUNTED SOLAR POWER PROJECTS

PROJECT LOCATION	Beliatta	Matara 1	Matara 2	Matara 3	Maho	Pannala
Year of Commission	2019	2021	2021	2021	2021	2022
Installed Capacity (MW)	1MW	1MW	1MW	1MW	1MW	1MW
Annual Expected Energy (GWH)			10.43
Operational Highlights			2024
Power Generation (kWh)	1,441,623	1,652,209	1,838,444	1,723,096	1,709,934	1,625,899
Plant Factor (%)	16.46	18.86	20.99	19.67	21.69	20.62
Reduction in CO2 (MT)	1,070	1,226	1,364	1,279	1,269	1,206
Nos of Tree saving	58,833	67,427	75,027	70,320	69,782	66,353
Equivalent hectares in rain forest	39	45	50	47	47	44
PANNALA 1MW			MATARA 3MW

MAHO 1MW

BELIATTA 1MW

Panasian Power PLC | Annual Report 2023/24

PROJECT PORTFOLIO

8

ROOF TOP SOLAR POWER PROJECTS

PROJECT LOCATION

Year of commission

Installed Capacity MW (AC)

Annual Expected Energy GWH

Operational Highlights

Power Generation (kWh)

Plant Factor ( %)

Reduction in CO2 (MT)

Nos of Trees saving

Equivalent Hectares in rain forest

Boralesgamuwa	Kolonna	Kohuwala	Palapathwala	Narammala	Uhumeeya	Melsiripura	Mawathagama ECO	Mawathagama Foundation
2018	2018	2018	2019	2019	2019	2019	2019	2019
300KW	250KW	350KW	600KW	233KW	550KW	300KW	583KW	400KW
				3.97
				2024
348,857	265,148	416,091	721,438	238,363	548,211	411,647	761,270	511,361
13.27	12.11	15.83	13.73	11.68	13.91	15.66	14.91	14.59
258	196	308	534	176	406	305	563	379
19,238	14,622	22,945	39,784	13,145	30,231	22,700	41,980	28,199
13	10	15	27	9	20	15	28	19

BORALESGAMUWA 300KW

KOLONNA 250KW

MAWATHAGAMA ECO 583KW

NARAMMALA 233KW

PALAPATHWALA 600KW

UHUMEEYA 550KW

KOHUWALA 350KW	MAWATHAGAMA FOUNDATION	MELSIRIPURA 300KW
400KW