New Delhi - Azure Power Global Limited (NYSE: AZRE) ('Azure' or the 'Company') announced key updates following its previous related announcement, dated August 29, 2022.
Given the delay in filing of the Company's annual report on Form 20-F for fiscal year ended March 31, 2022 ('Fiscal 2022'), this update is being made to: provide key unaudited financial and operating information; inform on developments relating to whistle-blower complaints and investigations; disclose progress on the review of the internal controls and processes of the Company and its subsidiaries (the 'Group'); provide other updates, such as key appointments, projects under execution, and legal matters; and disclose material risks that have emerged because of the delay in filing of the Company's Form 20-F for Fiscal 2022 (the 'Form 20-F'), investigations and other developments.
Annual Report on Form 20-F for Fiscal 2022
As of the date of this press release, the Company has not yet completed the audited consolidated financial statements for Fiscal 2022 or filed the Form 20-F with the U.S. Securities and Exchange Commission (the 'SEC'). The Company is working to complete its audited consolidated financial statements for Fiscal 2022, including its review of internal control issues and findings of certain whistle-blower and special committee investigations. See, 'Whistle-blower Allegations and Special Committee Investigation' below. While the Company is working to close remaining open issues, it is unable to provide a timeline (or any assurance) as to when the Form 20-F will be completed and filed with the SEC. Accordingly, the Company will file the Form 20-F as soon as practicable. The Company's inability to file the Form 20-F and finalize the audited consolidated financial statements of the Group and the audited financial statements of its subsidiaries (collectively, the 'Fiscal 2022 Audited Financial Statements') in a timely manner has subjected the Group to substantial risks, including those that are set forth below under 'Certain Risks - Risks Related to the Delay in Filing the Form 20-F for Fiscal 2022'.
Financial and Operational Update
The Company is today releasing key unaudited financial and operating information for Fiscal 2022 and the six months ended September 30, 2022. Unaudited consolidated operating revenue for Fiscal 2022 was INR 18,499 million, up 21.4% on the previous fiscal year, while unaudited consolidated operating revenue for the six months ended September 30, 2022 was INR 10,577 million, up 19.8% on the six months ended September 30, 2021.
Unaudited Financial Information
The Company is providing certain unaudited financial and operating information with respect to Fiscal 2022 and for the six months ended September 30, 2022. Such financial information, together with the comparable information for the fiscal year ended March 31, 2021 ('Fiscal 2021') and for the six months ended September 30, 2021, was prepared in accordance with accounting principles generally accepted in the United States of America ('US GAAP'). The Company believes that the unaudited financial information for Fiscal 2022 and for the six months ended September 30, 2022, includes all material adjustments necessary to fairly present such information.
Readers are cautioned that the financial and operating information that will be included in the Form 20-F, when filed with the SEC, will be audited and consequently may differ from the financial and operating information presented here in ways that could be material. Moreover, the Company will include in the Form 20-F more information in respect of Fiscal 2022 and for subsequent periods than it is including in this press release. Consequently, readers are cautioned that the financial and operating information provided in this press release is not complete and should be read in conjunction with the Form 20-F, including the audited consolidated financial statements for Fiscal 2022 that will be included in the Form 20-F, as well as other information that the Company may furnish on Form 6-K.
Exchange Rates
The translation of Indian rupee amounts into U.S. dollars at specified rates in this press release is solely for the convenience of the reader. Unless otherwise stated, the Company has converted Indian rupees into U.S. dollars for amounts pertaining to period ended September 30, 2022, and March 31, 2022, at INR 81.37 to US$1.00 and INR 75.87 to US$1.00, respectively, which is the noon buying rate in New York City for cable transfer in non-U.S. currencies as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2022 and March 31, 2022, respectively. The Company makes no representation that the Indian rupee or U.S. dollar amounts referred in the press release could have been converted into U.S. dollars or Indian rupees, as the case may be, at any particular rate or at all.
Accounting for Rooftop Asset Sale
In relation to the sale of the rooftop portfolio to Radiance Renewables Private Limited ('Radiance'), as of the date of this release, the Group has transferred to Radiance 66.5 MWs (wholly or in part) out of the total 153 MWs portfolio subject to the sale. Of this 66.5 MWs transferred to Radiance, the Group transferred a 48.6% shareholding to Radiance relating to 33 MWs from RG-II entities in compliance with the terms of the Bond Indentures and will transfer the remaining 51.4% at the time of refinancing of the RG-II bonds. In respect of 16 MWs (of the 66.5 MWs transferred) relating to the Delhi Jal Board rooftop project, the Group transferred 49% shareholding to Radiance and will transfer the remaining 51% in 2024 after compliance with equity lock-in conditions under the applicable Power Purchase Agreement ('PPA'). Since, the transfer of ownership of these portfolios is not anticipated to occur within 12 months due to aforesaid restrictions; the Group does not present the assets and liabilities of these subsidiaries as 'assets classified as held for sale' and instead continues to classify them within the respective balance sheet captions in its consolidated financial information. The Group is also in the process of transferring its shareholding of the remaining 86.5 MWs to Radiance and expects to do so within 12 months. Accordingly, the Group continues to show the assets and related liabilities of these subsidiaries separately as 'Assets classified as held for sale' in its consolidated financial information. Additionally, there is a contract dispute between the Group and Radiance, for more information, see 'Update on Rooftop Asset Sale' below.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and the US Private Securities Litigation Reform Act of 1995, including statements regarding completion of the Fiscal 2022 Audited Financial Statements and the filing of the Form 20-F, defaults under the Group's indebtedness, any actions that may be taken by lenders in respect of such defaults, internal investigations currently underway, current and future regulatory actions and litigation the Group may face, the Group's future financial and operating guidance, operational and financial results such as estimates of nominal contracted payments remaining and portfolio run rate, and the assumptions related to the calculation of the foregoing metrics. The risks and uncertainties that could cause the Group's results to differ materially from those expressed or implied by such forward-looking statements include: the timing of the completion of the Fiscal 2022 Audited Financial Statements ; actions that may be taken by the Group's lenders in respect of defaults under the Group's indebtedness; the results of on-going investigations and litigation; the availability of additional financing on acceptable terms; changes in the commercial and retail prices of traditional utility generated electricity; changes in tariffs at which long term PPAs are entered into; changes in policies and regulations including net metering and interconnection limits or caps; the availability of rebates, tax credits and other incentives; curtailment; the availability of solar panels and other raw materials; its limited operating history, particularly as a new public company; its ability to attract and retain its relationships with third parties, including its solar partners; its ability to meet the covenants in its debt facilities; meteorological conditions and such other risks identified in the registration statements and reports that the Company files with the SEC. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and the Company assumes no obligation to update these forward-looking statements.
About Azure
Azure is a leading independent sustainable energy solutions provider and renewable power producer in India. Azure developed India's first utility scale solar project in 2009, and since then has grown rapidly to become a leader in developing and operating large utility-scale renewable energy projects in the country.
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E: ir@azurepower.com
AZURE POWER GLOBAL LIMITED 
