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Suzlon Energy Ltd.

BSE: 532667 Sector: Engineering
NSE: SUZLON ISIN Code: INE040H01021
BSE 00:00 | 19 Apr 11.71 -0.17
(-1.43%)
OPEN

12.00

HIGH

12.00

LOW

11.66

NSE 00:00 | 19 Apr 11.70 -0.20
(-1.68%)
OPEN

11.95

HIGH

12.00

LOW

11.60

OPEN 12.00
PREVIOUS CLOSE 11.88
VOLUME 1323805
52-Week high 22.25
52-Week low 10.63
P/E 30.03
Mkt Cap.(Rs cr) 6,229
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.00
CLOSE 11.88
VOLUME 1323805
52-Week high 22.25
52-Week low 10.63
P/E 30.03
Mkt Cap.(Rs cr) 6,229
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suzlon Energy Ltd. (SUZLON) - Auditors Report

Company auditors report

To

The Members of

Suzlon Energy Limited

Report on the Standalone Ind AS Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of SuzlonEnergy Limited ("the Company") which comprise the Balance Sheet as at March312017 the Statement of Profit and Loss (including other comprehensive income) CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information in which areincorporated the returns for the year ended on that date audited by the branch auditor ofthe Company's branch at Germany and also the financial information of Suzlon WindInternational Limited ('SWIL') SE Blades Limited ('SEBL') SE Electricals Limited('SEEL') [SWIL SEBLand SEEL together referred to as merged entities] and tower businessof Suzlon Structures Limited ('tower business') for the year ended on that dateconsequent to obtaining necessary regulatory approvals for their merger into the Company(hereinafter reference to the Company includes merged entities and tower business) witheffect from January 12016 incase of merged entities and for demerger with effect fromApril 1 2016 in case of tower business (hereinafter referred to as 'the standalone Ind ASfinancial statements'). This report is issued in supersession of our earlier report datedMay 192017 to the extent of matters stated in emphasis of matters paragraph 7 below.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withaccounting principles generally accepted in India including the Indian AccountingStandards ('Ind AS) specified under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended ("the Rules"). Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit in accordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India as specified under Section 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the standalone Ind AS financial statementsare free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Opinion

5. In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fairview in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312017 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Emphasis of Matter

6. We draw attention to Note 6 of accompanying standalone Ind AS financial statementsin relation to accounting of financial guarantee provided by the Company (along with itsthree Indian subsidiaries and a jointly controlled entity) in respect of borrowing availedby one of its subsidiary based in The Netherlands and disclosure of the same as contingentliability as more fully described therein. Our opinion is not qualified in respect of thismatter.

7. We draw attention to Note 5 of the accompanying standalone Ind AS financialstatements. The standalone Ind AS financial statements of the Company for the year endedMarch 312017 were earlier approved by the Board of Directors at its meeting held on May19 2017. Those standalone Ind AS financial statements have been revised by the Company soas to give effect to the composite schemes of amalgamation and arrangement for mergerunder Sections 391 to 394 and other applicable provisions of the Companies Act 1956 andCompanies Act 2013 of SWIL SEBL and SEEL (wholly owned subsidiaries) and for demergerof tower business of Suzlon Structures Limited (a wholly owned subsidiary now known asSuzlon Global Services Limited) into the Company consequent to obtaining approvals fromHonourable National Company Law Tribunal Ahmedabad Bench vide its order dated May 312017 filed by the Company with the Registrar of Companies Gujarat on June 1 2017 witheffect from appointed dates January 12016 for the merger and April 1 2016 for thedemerger. As a result the aforesaid standalone Ind AS financial statements have beenrevised by the Company to give effect to the said composite schemes of amalgamation andarrangement. Accordingly we are issuing this revised report on the revised standaloneInd AS financial statements of the Company for the financial year ended March 31 2017 insupersession of the original report dated May 19 2017 which hereby stands withdrawn.Ouropinion is not modified in respect of these matters.

8. We draw attention to Note 7 of the accompanying standalone IndAS financialstatements whereby the Company has recognised goodwill on amalgamation aggregating to Rs.1059.80 Crore and amortised the same in accordance with the composite scheme ofamalgamation and arrangement approved by the National Company Law Tribunal. Thisaccounting treatment is different from that prescribed under Indian Accounting Standard(IND AS) 103-Business Combinations in case of common control business combinations as ismore fully described in the aforesaid note. Ouropinion is not qualified in respect of thismatter.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the Annexure 1a statement on the matters specified in paragraphs 3and4 of the Order.

10. As required by section 143 (3) of the Act we reportthat:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit has been received from branch not visitedbyus;

(c) The report on the accounts of the branch office of the Company audited undersection 143 (8) of the Act by branch auditor has been sent to us and has been properlydealt by us in preparing this report;

(d) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account and with the returnreceived from branch not visited byus;

(e) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended;

(f) On the basis of written representations received from the directors as on March312017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of section164(2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report dated August 112017 in "Annexure 2" to this report;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements-Refer Note 42 to the standalone IndAS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts-Refer Note 24 to the standalone IndAS financial statements;

iii. There were noamounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in Note 19 (a) to these financialstatements as to the holding of Specified Bank Notes on November 8 2016 and December 302016 as well as dealings in Specified Bank Notes during the period from November 82016 toDecember 302016. Based on our audit procedures and relying on the managementrepresentation regarding the holding and nature of cash transactions including SpecifiedBank Notes we report that these disclosures are in accordance with the books of accountsmaintained by the Company and as produced to us by the Management.

Other Matter

11. We did not audit the financial statements and other financial information of abranch included in the accompanying standalone Ind AS financial statements of the Companywhose financial statements and other financial information reflect total assets of Rs.32.87 Crore as at March 312017 total revenues of Rs. Nil and loss before tax of Rs 5.90Crore for the year ended on that date. The financial statements and other financialinformation of this branch has been audited by the branch auditor whose report has beenfurnished to us and ouropinion in so far as it relates to the amounts and disclosuresincluded in respect of this branch is based solely on the report of such branch auditor.Ouropinion is not modified in respect of this matter.

For SNK & CO. For S.R. Batliboi & CO. LLP
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 109176W ICAI Firm registration number: 301003E/E300005
per Sanjay Kapadia per Shyamsundar Pachisia
Partner Partner
Membership No.: 038292 Membership No.: 049237
Place : Mumbai Place : Mumbai
Date : August 11 2017 Date : August 11 2017

Annexure 1-Annexure referred to in paragraph 9 of our report of even date under heading"Report on Other Legal and Regulatory Requirements"

Re: Suzlon Energy Limited

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment/fixed assets.

(b) All property plantand equipment/fixed assets have not been physically verified bythe managementduring the year but there is a regular programme of verification which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the management the title deeds of immovable properties included in property plant andequipment/fixed assets are held in the name of the company except for one factorybuilding for which the Company has obtained approval for local panchayat and it is in theprocess of obtaining the approval from the local town planning authority.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) (a) According to the information and explanations given to us the Company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3 (iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced loans to directors/ to a company in which the Director isinterested to which provisions of section 185 of the Companies Act 2013 apply and hencenot commented upon. In our opinion and according to the information and explanations givento us provisions of section 186 of the Companies Act 2013 in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the company.

(v) The Company has not accepted any deposits from the public. Accordingly theprovisions of clause 3 (v) of the Order are not applicable to the Company and hence notcommented upon.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture or service of windturbine generators and are of the opinion that prima facie the specified accounts andrecords have been made and maintained. We have not however made a detailed examinationof the same.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax cess and other statutory dues have generally been regularly deposited with theappropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax wealth-taxservice tax sales-tax duty of custom duty of excise value added tax cess and othermaterial statutory dues were outstanding at the year end fora period of more than sixmonths from the date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax wealth-tax service tax duty of custom duty of excise value added tax andcess on account of any dispute are as follows:

Name of the Statute Nature of dues Amount (in Rs. Crore)** Period to which the amount relates Forum where dispute is pending
Customs Act 1962 Customs duty 0.72 2008-09 2012-13 to 2014-15 CESTAT
Customs Act 1962 Customs duty 0.31 2012-13 Commissioner of Customs (Appeals)
Finance Act 1994 Service tax 82.18 1999-2000 to 2000-03 2007-08 to 2011-12 CESTAT
Tamil Nadu Value Added Tax Act 2006 Value added tax 0.04 2015-16 Joint Commissioner (Appeals)
Maharashtra Value Added Tax Act 2002 Value added tax 0.08 2010-11 Joint Commissioner (Appeals)
Andhra Pradesh Value Added Tax Act 2005 Value added tax 0.00* 2015-16 Deputy Commissioner (Appeals)
Karnataka Value Added Tax Act 2003 Value added tax 0.55 2008-09 Karnataka Appellate Tribunal
Gujarat Value Added Tax Act 2003 Value added tax 1.85 2006-07 and 2007-08 Joint Commissioner (Appeals)

* amount less than Rs. 0.01 Crore

** amount deposited under protest Rs. 0.19 Crores

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or dues to debenture holders. The Company did not have anyoutstanding dues payable to the government during the year.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilised the monies raised by way of term loans for thepurposes for which they were raised. According to the information and explanations givenby the management the Company has not raised any money way of initial publicoffer/further public offer/debt instruments.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud on or by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that the managerial remuneration has been paid/providedin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3 (xii) of the order are not applicable to the Company and hence not commentedupon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence not commented upon.

Based on our audit procedures performed for the purpose of reporting the true and fairview of the financial statements and according to the information and explanations givenby the management we report that out of the amounts of Rs. 1800 Crore raised by theCompany through private placement of equity shares during the year ended March 312016 anamount of Rs. 405 Crore was available with the company as part of its treasury balancesand was pending utilization as on March 312017.

(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him as referred to in Section 192 of the Act.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company

For SNK & CO. For S.R. Batliboi & CO. LLP
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 109176W ICAI Firm registration number: 301003E/E300005
per Sanjay Kapadia per Shyamsundar Pachisia
Partner Partner
Membership No.: 038292 Membership No.: 049237
Place : Mumbai Place : Mumbai
Date : August 11 2017 Date : August 11 2017

Annexure 2: Annexure referred to in paragraph 10 (g) of our Independent Auditor'sReport of even date on the Revised standalone Ind AS financial statements of Suzlon EnergyLimited

Report on the Internal Financial Controls underClause (i) ofSub-section 3 of Section143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of SuzlonEnergy Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

2. The Company's Management is responsible forestablishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records andthetimelypreparation of reliablefinancial information as required undertheAct.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing as specified under section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor'sjudgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls systemoverfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control overfinancial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control overfinancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls overfinancialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud mayoccurand not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system overfinancial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

Other Matter

9. Our report under Section 143(3) (i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting of the Companyinsofar as it relates to the branch in Germany which is one of the branch outside Indiais based solely on the report of such branch auditor. Our opinion is not modified inrespect of this matter.

For SNK & CO. For S.R. Batliboi & CO. LLP
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 109176W ICAI Firm registration number: 301003E/E300005
per Sanjay Kapadia per Shyamsundar Pachisia
Partner Partner
Membership No.: 38292 Membership No.: 049237
Place : Mumbai Place : Mumbai
Date : August 11 2017 Date : August 11 2017