The Directors present the Twenty Second Annual Report of your Company together with theaudited standalone and consolidated financial statements for the financial year endedMarch 31 2017.
1. FINANCIAL RESULTS
The audited standalone and consolidated financial results for the year ended March 312017 are as under:
|Particulars || |
| || |
Rs in Crore
USD in Million
Rs in Crore
USD in Million
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from operations ||9229.21 ||5913.03 ||1423.16 ||892.43 ||12692.53 ||9429.58 ||1957.21 ||1423.17 |
|Other operating income ||16.47 ||29.29 ||2.54 ||4.42 ||21.84 ||53.90 ||3.37 ||8.13 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||1835.16 ||838.98 ||282.99 ||126.62 ||2499.39 ||1101.81 ||385.41 ||166.29 |
|Less: Depreciation and amortisation expense ||413.99 ||420.50 ||63.84 ||63.46 ||389.03 ||391.76 ||59.99 ||59.12 |
|Earnings before interest and tax (EBIT) ||1421.17 ||418.48 ||219.15 ||63.16 ||2110.36 ||710.05 ||325.42 ||107.17 |
|Add: Finance income ||400.97 ||535.27 ||61.83 ||80.79 ||88.82 ||98.38 ||13.70 ||14.85 |
|Less: Finance costs ||930.71 ||776.01 ||143.52 ||117.12 ||1287.59 ||1304.02 ||198.55 ||196.81 |
|Profit/(loss) before tax before exceptional items ||891.43 ||177.74 ||137.46 ||26.83 ||911.59 ||(495.59) ||140.57 ||(74.79) |
|Less: Exceptional items ||535.78 ||(187.25) ||82.62 ||(28.26) ||- ||(1079.56) ||- ||(162.93) |
|Profit/(loss) before tax ||355.65 ||364.99 ||54.84 ||55.09 ||911.59 ||583.97 ||140.57 ||88.14 |
|Less: Tax expense (Net of earlier years tax and MAT credit entitlement) ||(0.05) ||(12.54) || ||(1.89) ||11.70 ||(23.61) ||1.80 ||(3.56) |
|Profit/(loss) after tax ||355.70 ||377.53 ||54.84 ||56.98 ||899.89 ||607.58 ||138.76 ||91.71 |
|Share of profit/(loss) of associates and jointly controlled entities ||N.A ||N.A ||N.A ||N.A ||(48.25) ||(24.48) ||(7.44) ||(3.69) |
|Net profit/(loss) for the year ||355.70 ||377.53 ||54.84 ||56.98 ||851.64 ||583.10 ||131.32 ||88.01 |
|Other comprehensive income/(loss) net of tax ||(9.94) ||(1.07) ||(1.53) ||(0.16) ||(239.68) ||(121.79) ||(36.96) ||(18.38) |
|Total comprehensive income/(loss) net of tax ||345.76 ||376.46 ||53.31 ||56.82 ||611.96 ||461.31 ||94.37 ||69.63 |
1 US$ = Rs 64.8500 as on March 31 2017 (1 US$ = Rs 66.2575 as on March 31 2016)
The financial statements for the year ended March 31 2017 have been prepared under IndAS (Indian Accounting Standards) for the first time by the Company. The financialstatements for the year ended March 31 2016 have been restated in accordance with Ind ASfor comparative information. Further the financial statements for the year ended March31 2017 and March 31 2016 have been updated so as to give effect to the compositeschemes of amalgamation and arrangement for merger and demerger. For details refer Notesto Accounts forming part of this Annual Report.
2. COMPANY'S PERFORMANCE
On a standalone basis the Company achieved revenue from operations of Rs 9229.21Crore and EBIT of Rs 1421.17 Crore as against Rs 5913.03 Crore and Rs 418.48 Crorerespectively in the previous year. Net profit for the year is Rs 355.70 Crore as comparedto Rs 377.53 Crore in the previous year.
On consolidated basis the Group achieved revenue from operations of Rs 12692.53Crore and EBIT of Rs 2110.36 Crore as against Rs 9429.58 Crore and Rs 710.05 Crorerespectively in the previous year. Net profit for the year is Rs 851.64 Crore as comparedto net profit of Rs 583.10 Crore in the previous year.
a) Transfer to reserves
During the financial year under review the Company was not required to transfer anyamount to any reserves.
In view of accumulated losses the Board of Directors has not recommended any dividendon equity shares for the year under review.
c) Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations") the Company has adopted a Dividend Distribution Policy which has beenprovided in an Annexure which forms part of the Directors' Report. The DividendDistribution Policy is also available on the Company's website (www.suzlon.com).
4. MATERIAL DEVELOPMENTS DURING THE YEAR UNDER REVIEW AND OCCURRED BETWEEN THE END OFTHE FINANCIAL
YEAR AND THE DATE OF THIS REPORT
During the year under review and up to the date of this Report certain materialchanges took place the details of which together with their rationale are as under:
a) Sale of Solar SPVs-
During the year under review the Company signed Share Subscription and Shareholders'Agreements by whatever name called in respect of its solar special purpose vehicles("SPVs") the details of which are as under:
- CLP Windfarms (India) Private Limited ("CLP") and SE Solar Limited("SE Solar") for setting-up 100 MW solar power project in the State ofTelangana under SE Solar and eventually sale of SE Solar to CLP;
- Unisun Energy Private Limited ("Unisun") and Vayudoot Solarfarms Limited("Vayudoot") for setting-up 15 MW solar power project in the State of Telanganaunder Vayudoot and eventually sale of Vayudoot to Unisun;
- Canadian Solar Energy Holding Singapore 1 Pte. Ltd. ("Canadian Solar") andAmun Solarfarms Limited ("Amun") and Avighna Solarfarms Limited("Avighna") for setting-up 15 MW solar power project each in the State ofTelangana under Amun and Avighna respectively and eventually sale of the said Amun andAvighna to Canadian Solar;
- AMP Solar India Private Limited ("AMP") and Rudra Solarfarms Limited("Rudra") for setting-up 15 MW solar power project in the State of Telanganaunder Rudra and eventually sale of Rudra to AMP.
- Ostro Energy Private Limited ("Ostro") for setting-up 50 MW solar powerproject in the State of Telengana under Prathamesh Solarfarms Limited("Prathamesh") 20 MW solar power project each under Heramba Renewables Limited("Heramba") and Shreyas Solarfarms Limited ("Shreyas") and 10 MW solarpower project each under Aalok Solarfarms Limited ("Aalok") and Abha SolarfarmsLimited ("Abha") aggregating to 60 MW in the State of Rajasthan and eventuallysale of the said Prathamesh Heramba Shreyas Aalok and Abha to Ostro.
With a view to consolidate the manufacturing activities to optimise on cost and tohave enhanced efficiency the Company had initiated a Composite Scheme of Amalgamation andArrangement (the "Scheme") involving merger of three wholly owned subsidiariesnamely SE Blades Limited SE Electricals Limited and Suzlon Wind International Limitedinto the Company and demerger of tubular tower manufacturing division of another whollyowned subsidiary namely Suzlon Structures Limited (now known as Suzlon Global ServicesLimited) into the Company. The final hearing of the Scheme has been undertaken by theHonourable National Company Law Tribunal Ahmedabad Bench ("NCLT") and the finalorder has been passed on May 31 2017 sanctioning the Scheme which has become effectivefrom June 1 2017 from the respective appointed dates i.e. January 1 2016 for merger andApril 1 2016 for demerger consequent upon filing of the certified copy of the Orderissued by the Honourable National Company Law Tribunal Ahmedabad Bench with theRegistrar of Companies Gujarat.
a) Increase in authorised share capital-The Authorised Share Capital of the Companyhas been increased from Rs 1500.00 Crore divided into 7500000000 Equity Shares of Rs2/- each to Rs 2498.00 Crore divided into 12490000000 Equity Shares of Rs 2/- each byvirtue of Common Final Order passed by NCLT approving the Composite Scheme of Amalgamationand Arrangement.
b) Increase in paid-up share capital-During the year under review the Company hasmade following allotments whose details are as under:
|Date of allotment ||No. of Securities ||Remarks |
|August 23 2016 ||3895536 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 1000 USD 546916000 Step-up Convertible Bonds due 2019 |
|Post March 31 2017 and up to the date of this Report the Company has made following allotments: || || |
|Date of allotment ||No. of Securities ||Remarks |
|April 25 2017 ||16750807 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 4300 USD 546916000 Step-up Convertible Bonds due 2019 |
|May 3 2017 ||13634377 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 3500 USD 546916000 Step-up Convertible Bonds due 2019 |
|May 12 2017 ||73158180 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 18780 USD 546916000 Step-up Convertible Bonds due 2019 |
|June 3 2017 ||56173638 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 14420 USD 546916000 Step-up Convertible Bonds due 2019 |
|June 26 2017 ||7970268 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 2046 USD 546916000 Step-up Convertible Bonds due 2019 |
|July 20 2017 ||98712902 equity shares of Rs 2/- each ||Allotment pursuant to conversion of 25340 USD 546916000 Step-up Convertible Bonds due 2019 |
Accordingly the paid-up share capital of the Company as on the date of this Report isRs 1058.16 Crore divided into 5290799122 equity shares of Rs 2/- each.
c) Global Depository Receipts (GDRs)-
The outstanding GDRs as on March 31 2017 are 2749000 representing 10996000 equityshares of Rs.2/- each. Each GDR represents four underlying equity shares in the Company.
d) Foreign Currency Convertible Bonds ("FCCBs")-During the year underreview the outstanding USD 175000000 5% Convertible Bonds due 2016 worth USD 28.80Million in principal amount along with the applicable 8.7% redemption premium were repaidin cash on April 14 2016. Further during the year under review 3895536 equity sharesof Rs 2/- each have been allotted to the Bondholders pursuant to conversion of 1000 USD546916000 Step-up Convertible Bonds due 2019. The details of outstanding convertiblesecurities as on March 31 2017 are as under:
|Series ||Outstanding Amount (USD) as on March 31 2017 ||Exchange Rate ||Convertible on or before ||Conversion Price |
|USD 546916000 Step-up Convertible Bonds due 2019 (Restructured Bonds) ||247826000 ||60.225 ||July 9 2019 ||15.46 |
Post March 31 2017 and till the date of this Report certain Bondholders forming partof the Restructured Bonds have elected to convert their respective bonds aggregating to68386 Bonds worth USD 68386000 into 266400172 equity shares of the Company andaccordingly the details of outstanding convertible securities as on date of this Reportare as under:
|Series ||Outstanding Amount (USD) as on date of this Report ||Exchange Rate ||Convertible on or before ||Conversion Price |
|USD 546916000 Step-up ||179440000 ||60.225 ||July 9 2019 ||15.46 |
|Convertible Bonds due 2019 (Restructured Bonds) || || || || |
Note: As on date of this Report the Company has received notice(s) for conversion of7438 FCCBs to be converted into 28974999 equity shares at a conversion price of Rs15.46 per equity share.
6. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in Form MGT-9 in terms of Section 92(3) of theCompanies Act 2013 for the financial year under review has been provided in an Annexurewhich forms part of the Directors' Report.
7. NUMBER OF BOARD MEETINGS HELD
The details pertaining to number of Board Meetings held during the financial year underreview have been provided in the Corporate Governance Report forming part of this AnnualReport.
8. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors confirmto the best of their knowledge and belief that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
9. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
In terms of Section 149(7) of the Companies Act 2013 Mr. Vaidhyanathan RaghuramanMr. Marc Desaedeleer Mr. Ravi Uppal Mr. Venkataraman Subramanian Mr. Per HornungPedersen and Mrs. Vijaya Sampath the Independent Directors of the Company have given adeclaration to the Company that they meet the criteria of independence as specified underSection 149(6) of the Companies Act 2013 and the Listing Regulations and there has beenno change in the circumstances which may affect their status as Independent Directors.
10. COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
In accordance with Section 178 of the Companies Act 2013 and the Listing Regulationsthe 'Board Diversity and Remuneration Policy' as approved by the Nomination andRemuneration Committee of the Board of Directors is available on the Company's website(www.suzlon.com). The details of remuneration paid to the Executive and Non-executiveDirectors have been provided in the Corporate Governance Report forming part of thisAnnual Report.
11. AUDITORS AND AUDITORS' OBSERVATIONS
a) Statutory Auditors-M/s. SNK & Co. Chartered Accountants (Firm RegistrationNo.109176W) and M/s. S.R.Batliboi & Co. LLP Chartered Accountants (Firm RegistrationNo.301003E/E300005) the Joint Statutory Auditors of the Company hold office till theconclusion of the ensuing Annual General Meeting of the Company and are liable formandatory rotation in terms of the provisions of the Companies Act 2013. Accordingly theAudit Committee of the Board of Directors of the Company has at its meeting held onFebruary 10 2017 recommended appointment of M/s. Deloitte Haskins & Sells LLPChartered Accountants (Firm Registration No.117366W/W-100018) as the Statutory Auditors ofthe Company to hold office for a period of 5 (Five) years from the conclusion of theensuing Annual General Meeting. The Board of Directors recommends appointment of M/s.Deloitte Haskins & Sells LLP Chartered Accountants (Firm RegistrationNo.117366W/W-100018) in place of M/s. SNK & Co. Chartered Accountants and M/s.S.R.Batliboi & Co. LLP Chartered Accountants to hold office from the conclusion ofthis Annual General Meeting for a period of 5 (Five) consecutive years i.e. till theconclusion of the Twenty Seventh Annual General Meeting of the Company.
Statutory Auditors' Observation(s) in Audit Report and Directors' explanation thereto -
i) In respect of Note 5 of the standalone financial statements regarding accounting offinancial guarantee provided by the Company (along with its six Indian subsidiaries and ajointly controlled entity) in respect of borrowing availed by one of its subsidiary basedin the Netherlands.
Suzlon Energy Limited and its identified subsidiaries and a jointly controlled entity(collectively 'the Group') are obligors under the Onshore SBLC Facility Agreement and haveprovided security under the Offshore SBLC Facility Agreement in connections with a SBLCissued by State Bank of India of USD 655 Million for securing the credit facility andcovered bonds availed by AE Rotor Holding B.V(AERH) a step-down wholly owned subsidiaryof the Company. The Group has classified the Onshore facility availed as a financialguarantee contract. AERH has a borrowing of USD 626 million as at March 31 2017 which isdue for repayment in March 2018 as per original schedule. The Group has obtained NoObjection Certificate from the SBLC lenders as well as approval from Reserve Bank of Indiafor extension of SBLC from April 2018 to April 2023. The Group believes that based on thestrength of extended SBLC the outstanding borrowing of AERH can be extended/refinanced bythe existing lenders or by new lenders. AERH and its subsidiaries are engaged in dealingof WTGs in international markets and the cash-flows generated from these businessactivities will be used for serving the finance cost as well as towards part repayment ofoutstanding debt of AERH. The ability of AERH to repay the outstanding debt is primarilydependent on generation of cash-flows from business operations in overseas market. TheCompany management believes that AERH has reasonable business forecast over the next fewyears and estimates that AERH will be able to refinance the outstanding debt if requiredand meet the debt obligations as and when they fall due and hence they believe that thefinancial guarantee obligation is not required to be recognised in financial statementsand it has been disclosed as contingent liability.
ii) In respect of Note 6 of the consolidated financial statements and Note 7 of thestandalone financial statements regarding issuance of fresh audit report on updatedfinancial statements.
The standalone and consolidated financial statements of the Company for the year endedMarch 31 2017 were earlier approved by the Board of Directors at its meeting held on May19 2017. Those standalone and consolidated Ind AS financial statements have been revisedby the Company so as to give effect to the composite schemes of amalgamation andarrangement approved by the Honourable National Company Law Tribunal Ahmedabad Bench videits order dated May 31 2017 filed by the Company with the Registrar of CompaniesGujarat on June 1 2017 with effect from appointed dates January 1 2016 for merger andApril 1 2016 for the demerger. As a result the standalone and consolidated financialstatements have been updated by the Company to give effect to the said composite schemesof amalgamation and arrangement and fresh audit report has been issued by the auditors onthe updated financial statements. The auditors have issued an Emphasis of Matter paragraphon the same for information purpose.
iii) In respect of Note 8 of the standalone financial statements regarding accountingof goodwill on amalgamation
The Company has recognised goodwill on amalgamation aggregating to Rs.1059.80 Croreand amortised the same in accordance with the composite scheme of amalgamation andarrangement approved by the Honourable National Company Law Tribunal. The Company hasincorporated the accounting effects in its books of accounts as per the accountingtreatment prescribed in the Scheme which is in compliance and accordance with theaccounting standards applicable to the Company as of the appointed date of the Scheme.
b) Secretarial Auditor-
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder Mr. Dinesh Joshi Partner Kanj & Associates Company Secretaries Pune(Membership No.F3752 and C.P.No.2246) has been appointed as a Secretarial Auditor toconduct the Secretarial Audit for the financial year 2016-17. A Secretarial Audit Reportin Form MR-3 given by M/s. Kanj & Associates Company Secretaries Pune has beenprovided in an Annexure which forms part of the Directors Report.
Secretarial Auditors' Observation(s) in Secretarial Audit Report and Directors'explanation thereto
i) As per Regulation 17(1)(b) of LODR the Company had 5 independent directors insteadof 6 independent directors for the period commencing from April 1 2016 till August 112016; however the Company was compliant of Regulation 17 of the Listing Regulations sinceAugust 12 2016.
Mrs. Vijaya Sampath (DIN: 00641110) has been appointed as an Independent Director onthe Board of the Company for a terms of 5(Five) years with effect from August 12 2016.Accordingly the Company is compliant of Regulation 17 of the Listing Regulations witheffect from August 12 2016.
c) Cost Auditor-M/s. D.C.Dave & Co. Cost Accountants Mumbai (RegistrationNo.000611) had been appointed as the Cost Auditors for conducting audit of cost accountingrecords of the Company for the financial year 2016-17. The due date of submitting the costaudit report by the Cost Auditor to the Company for the financial year 2016-17 is within aperiod of one hundred eighty days from the end of the financial year i.e. March 31 2017.Thereafter the Company shall file a copy of the Cost Audit Report in Form CRA-4 within aperiod of thirty days from the date of its receipt. The Cost Audit Report for thefinancial year 2015-16 dated September 13 2016 issued by M/s.N.I.Mehta & Co. CostAccountants Mumbai (Registration No.000023) was filed with the Ministry of CorporateAffairs Government of India on October 6 2016.
Further in terms of Section 148 of the Companies Act 2013 read with the Companies(Audit and Auditors) Rules 2014 and pursuant to the recommendation of the AuditCommittee M/s. D.C. Dave & Co. Cost Accountants Mumbai (Registration No.000611) havebeen appointed as Cost Auditors for conducting audit of cost accounting records of theCompany for the financial year 2017-18 at a remuneration of Rs 500000/- (Rupees FiveLacs Only) which shall be subject to ratification by the shareholders at the TwentySecond Annual General Meeting.
d) Internal Auditor-In terms of Section 138 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 the Company has appointed Mr. Shyamal BudhdevChartered Accountant (Membership No.43952) as the Internal Auditor of the Company in placeof Mr. Sandip Shah Chartered Accountant (Membership no.106157).
12. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments in terms of Section 186 of theCompanies Act 2013 for the financial year under review have been provided in the Notes tothe Financial Statement which forms part of this Annual Report.
13. PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts/arrangements with related parties referred to in Section188(1) entered into during the financial year under review as required to be given in FormAOC-2 have been provided in an Annexure which forms part of the Directors' Report.
14. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The particulars of conservation of energy technology absorption foreign exchangeearnings and outgo for the financial year under review as required to be given underSection 134(3)(m) of the Companies Act 2013 and the Rules made thereunder has beenprovided in an Annexure which forms part of the Directors' Report.
15. RISK MANAGEMENT
In terms of the Listing Regulations though not mandatorily required the Company hasconstituted a Risk Management Committee the details of which have been provided in theCorporate Governance Report forming part of this Annual Report. The Board of Directors hasapproved a Risk Management Policy which is available on Company's website(www.suzlon.com). The Company's risk management and mitigation strategy has been discussedin the Management Discussion and Analysis Report forming part of this Annual Report. TheBoard of Directors have not found any risk which in its view may threaten the existence ofthe Company.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted the CSR Committee in accordance with Section 135(1) of theCompanies Act 2013 the details of which have been provided in the Corporate GovernanceReport forming part of this Annual Report. The Board of Directors has approved the CSRPolicy which is available on the Company's website (www.suzlon.com). The Annual Report onCSR activities as required to be given under Section 135 of the Companies Act 2013 andRule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 has beenprovided in an Annexure which forms part of the Directors' Report.
17. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
The information pertaining to Annual Evaluation of Board's performance as required tobe provided in terms of Section 134(3)(p) of the Companies Act 2013 read with Rule 8(4)of the Companies (Accounts) Rules 2014 have been provided in the Corporate GovernanceReport forming part of this Annual Report.
18. DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE YEAR AND UPTO THEDATE OF THIS REPORT
Appointment/re-appointment of Executive Directors-
In terms of the recommendation of Nomination and Remuneration Committee and approval ofthe Board at their respective meetings held on August 12 2016 the shareholders of theCompany at their Twenty First Annual General Meeting approved the appointment of Mr. VinodR.Tanti (DIN: 00002266) as the Wholetime Director & Chief Operating Officer of theCompany with effect from October 1 2016 for a period of 3 (Three) years i.e. up toSeptember 30 2019. Further in terms of the recommendation of the Nomination andRemuneration Committee of the Board of Directors of the Company at its meeting held onMarch 22 2017 and the Board of Directors of the Company at its meeting held on March 232017 Mr. Tulsi R.Tanti (DIN: 00002283) has been reappointed as the Managing Director ofthe Company with effect from April 1 2017 for a further period of 5 (Five) years i.e. upto March 31 2022 subject to approval of such appointment by the shareholders at theensuing Annual General Meeting of the Company.
Re-appointment of directors retiring by rotation-
Mr. Vinod R.Tanti (DIN: 00002266) the Wholetime Director & Chief Operating Officerand Mr. Rajiv Ranjan Jha (DIN: 03523954) the non-executive director retire by rotation atthe ensuing Annual General Meeting and being eligible offer themselves for re-appointment.
Change in nominee director-During the year under review IDBI Bank Limited hassubstituted its Nominee Director on the Board of the Company by withdrawing nomination ofMrs. Medha Joshi (DIN: 00328174) and instead nominating Mr. Sunit Sarkar (DIN: 02806212)as the Nominee Director of IDBI Bank Limited on the Board of the Company. Accordingly Mr.Sunit Sarkar has been appointed as an Additional Director in the capacity as a NomineeDirector with effect from November 11 2016 to hold office till the conclusion of ensuingAnnual General Meeting and being eligible offers himself for appointment as Director ofthe Company. The
Nomination and Remuneration Committee has recommended the appointment of Mr. SunitSarkar as the Director designated as the "Non Executive Director" who shall beliable to retire by rotation. The Company is in receipt of a notice in writing pursuant toSection 160 of the Companies Act 2013 proposing the candidature of Mr. Sunit Sarkar forthe office of the Director of the Company. Mrs. Medha Joshi ceased to be the NomineeDirector of the Company with effect from November 11 2016. The Board expresses itsappreciation for the valuable services rendered and matured advice provided by Mrs. MedhaJoshi during her association with the Company.
Key Managerial Personnel-
During the year under review Mr. J.P.Chalasani (DIN: 00308931) has been appointed asthe Chief Executive Officer designated as Group Chief Executive Officer with effect fromApril 4 2016 and Mr. Sanjay Baweja (DIN: 00232126) has been appointed as the ChiefFinancial Officer of the Company w.e.f. December 19 2016 in place of Mr. Kirti J.Vagadia(DIN: 00605991).
Profile of Directors seeking appointment/re-appointment-
Profile of the directors seeking appointment/re-appointment as required to be given interms of Regulation 36 of the Listing Regulations forms part of the Notice convening theensuing Annual General Meeting of the Company.
As on March 31 2017 the Company has 65 subsidiaries (including SE Blades Limited SEElectricals Limited and Suzlon Wind International Limited which have been merged with theCompany w.e.f. June 1 2017) and 2 joint ventures in terms of the Companies Act 2013 alist of which is given in Form No.MGT9-Extract of Annual Return forming part of thisAnnual Report. The salient features of the financial statement of subsidiaries /jointventures/associates and their contribution to the overall performance of the Companyduring the period under review have been provided in Form AOC-1 and Notes to Accountsrespectively both forming part of this Annual Report.
a) Companies which became subsidiaries during the year under review
|Sr. No. ||Name of the entity ||Country |
|1. ||Anshuman Renewables Limited ||India |
|2. ||Sharanya Renewables Limited ||India |
|3. ||Suryoday Renewables Limited ||India |
|4. ||Rashmi Renewables Limited ||India |
|5. ||Souravi Renewables Limited ||India |
|6. ||Saroja Renewables Limited ||India |
|7. ||Shanay Renewables Limited ||India |
|8. ||Suyash Renewables Limited ||India |
|9. ||Rajat Renewables Limited ||India |
|10. ||Kanak Renewables Limited ||India |
|11. ||Gale Green Urja Limited ||India |
|12. ||Wharton Wind LLC ||USA |
b) Change of name of subsidiaries during the year under review
|Sr. No. ||Previous name of the entity ||New name of the entity |
|1. ||Gale Solarfarms Private Limited ||Gale Solarfarms Limited |
|2. ||Tornado Solarfarms Private Limited ||Tornado Solarfarms Limited |
|3. ||Abha Solarfarms Private Limited ||Abha Solarfarms Limited |
|4. ||Aalok Solarfarms Private Limited ||Aalok Solarfarms Limited |
|5. ||Shreyas Solarfarms Private Limited ||Shreyas Solarfarms Limited |
|6. ||Heramba Wind Energy Limited ||Heramba Renewables Limited |
|7. ||Sirocco Wind Energy Limited ||Manas Renewables Limited |
|8. ||Vakratunda Wind Energy Limited ||Vakratunda Renewables Limited |
|9. ||Varadvinayak Wind Energy Limited ||Varadvinayak Renewables Limited |
|10. ||Vignaharta Wind Energy Limited ||Vignaharta Renewable Energy Limited |
|11. ||Suzlon Structures Limited ||Suzlon Global Services Limited |
c) Companies which ceased to be subsidiaries during the year under review
|Sr. No. ||Name of the entity ||Country ||Remarks |
|1. ||Rashmi Renewables Limited ||India ||Sold |
|2. ||Souravi Renewables Limited ||India ||Sold |
|3. ||Suzlon Global Services Limited ||India ||Merged with Suzlon Structures Limited now known as Suzlon Global Services Limited |
|4. ||Suzlon Energy PLC ||United Kingdom ||Liquidated |
|5. ||Suzlon Energy Australia RWFD Pty Ltd ||Australia ||Liquidated |
|6. ||Suzlon Energy GmbH ||Germany ||Merged |
|7. ||Suzlon Windenergie GmbH ||Germany ||Merged |
Note: Post March 31 2017 SE Blades Limited SE Electricals Limited and Suzlon WindInternational Limited have been merged with the Company w.e.f. June 1 2017.
d) Rationalisation of international OMS business
The international OMS business of the Group was carried through multiple companies eachhaving a geographical jurisdiction of its own outside India. The shareholding of allthese entities was sought to be rationalized such that international OMS vertical can beidentified separately and the flexibility for any structural initiatives in future isavailable. Pursuant to the above objective during the financial year under review therehas been transfer of investments by the Company and one of the wholly owned subsidiariesto other wholly owned subsidiaries of the Company.
e) Consolidated financial statements
The consolidated financial statements as required in terms of Section 129(3) of theCompanies Act 2013 and the Listing Regulations have been provided along with standalonefinancial statements. Further a statement containing salient features of the financialstatements of the subsidiaries/associate companies /joint ventures in Form AOC-1 asrequired to be given in terms of first proviso to Section 129(3) of the Companies Act2013 has been provided in a separate section which forms part of this Annual Report. Thefinancial statements including the consolidated financial statements financial statementsof the subsidiaries and all other documents have been uploaded on the Company's website(www.suzlon.com).
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant and material orders impacting the goingconcern status and Company's operations in future have been passed by any Regulators orCourts or Tribunals.
21. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The details pertaining to internal financial control systems and their adequacy havebeen disclosed in the Management Discussion and Analysis Report forming part of thisAnnual Report.
22. AUDIT COMMITTEE
The Company has constituted an Audit Committee in accordance with Section 177(1) of theCompanies Act 2013 the details of which have been provided in the Corporate GovernanceReport forming part of this Annual Report. There has been no instance where the Board ofDirectors had not accepted any recommendation of the Audit Committee. The Company hasformulated a Whistle Blower Policy to provide vigil mechanism for employees includingdirectors of the Company to report genuine concerns which is available on the Company'swebsite (www.suzlon.com).
23. PARTICULARS OF EMPLOYEES
a) Statement showing details of employees drawing remuneration exceeding the limitsspecified in Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
A statement showing details of employees in terms of Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has been provided in aseparate Annexure which forms part of the Directors' Report. However in terms of Section136 of the Companies Act 2013 the Annual Report excluding the aforesaid information isbeing sent to all the shareholders of the Company and others entitled thereto. Anyshareholder interested in obtaining a copy of the same may write to the Company Secretaryat the registered office of the Company.
b) Disclosures pertaining to remuneration of directors as required under Schedule V tothe Companies Act 2013
Details pertaining to remuneration of directors as required under Schedule V to theCompanies Act 2013 have been provided in the Corporate Governance Report forming part ofthis Annual Report.
c) Disclosures pertaining to payment of commission from subsidiaries in terms ofSection 197(14) of the Companies Act 2013
During the financial year under review the Managing Director of the Company hasreceived remuneration of USD 83333 from Suzlon Wind Energy Corporation USA("SWECO") in his capacity as Chairman of SWECO. Besides this the ManagingDirector did not receive any commission/remuneration from any other subsidiaries of theCompany during the year under review. Further the Wholetime Director & ChiefOperating Officer was paid remuneration from Suzlon Wind International Limited a whollyowned subsidiary till September 30 2016. Thereafter the Wholetime Director & ChiefOperating Officer did not receive any commission/remuneration from any subsidiary of theCompany.
d) Information pertaining to remuneration to be disclosed by listed companies in termsof Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014
The information/details pertaining to remuneration to be disclosed by listed companiesin terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 have beenprovided in an Annexure which forms part of the Directors' Report.
e) Employees stock option plans
The Company has introduced few Employee Stock Option Plans ("ESOPs") for itsemployees and employees of its subsidiaries (hereinafter referred to as the"Schemes"). The information pertaining to these Schemes as required under Rule12(9) of the Companies (Share Capital and Debentures) Rules 2014 and the Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014 have beenprovided in an Annexure which forms part of the Directors' Report. All the Schemesformulated by the Company are in compliance with the applicable regulations. During theyear under review there was no material change in any of the Schemes. The details of theSchemes are available on the Company's website (www.suzlon.com).
24. RELATED PARTY DISCLOSURES & MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The disclosures pertaining to Related Party Transactions as required to be given interms of Para A of Schedule V of the Listing Regulations have been provided in an Annexurewhich forms part of the Directors' Report. Further the Management Discussion and AnalysisReport on the operations and financial position of the Company has been provided in aseparate section which forms part of this Annual Report.
25. CORPORATE GOVERNANCE
A detailed report on corporate governance has been provided in a separate section whichforms part of this Annual Report. The Company is in compliance with the requirements anddisclosures that have to be made in this regard. The auditors' certificate on compliancewith corporate governance requirements by the Company is attached to the CorporateGovernance Report.
26. BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34 of the Listing Regulations the Business ResponsibilityReport has been provided in a separate section which forms part of this Annual Report.
27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year under review the Company was not required to transfer any unpaid orunclaimed dividend to the Investor Education and Protection Fund (IEPF) set up by theGovernment of India.
28. OTHER DISCLOSURES
a) Deposits-During the year under review the Company did not accept any depositsfalling within the purview of Section 73 of the Companies Act 2013.
b) Equity shares with differential voting rights-
During the year under review the Company has not issued equity shares withdifferential voting rights as to dividend voting or otherwise.
c) Sweat equity shares-
During the year under review the Company has not issued any sweat equity shares.
d) Revision of financial statements and directors report-
The Company was not required to revise its financial statements or directors' reportduring the year under review in terms of Section 131 of the Companies Act 2013.
e) Prevention of Sexual Harassment at Workplace-In terms of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 the Company has aninternal complaints committee in place which entertains the complaints made by anyaggrieved woman. During the year under review there was 1 (one) complaint received whichhas been resolved.
The Directors wish to place on record their appreciation for the co-operation andsupport received from the government and semi-government agencies especially from theMinistry of New and Renewable Energy (MNRE) Government of India all state level nodalagencies and all state electricity boards.
The Directors are thankful to all the Bankers Financial Institutions and the InvestorGroup for their support to the Company. The Board places on record its appreciation forcontinued support provided by the esteemed customers suppliers bankers financialinstitutions consultants bondholders and shareholders.
The Directors also acknowledge the hard work dedication and commitment of theemployees. Their enthusiasm and unstinting efforts have enabled the Company to emergestronger than ever enabling it to maintain its position as one of the leading players inthe wind industry in India and around the world.
| ||For and on behalf of the Board of Directors |
|Place : Pune ||Tulsi R. Tanti |
|Date : August 11 2017 ||Chairman & Managing Director |
| ||DIN.: 00002283 |
Annexure to Directors' report
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Information as required under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 are set out hereunder.
A. Conservation of energy
The Company's Corporate Headquarter in Pune India named 'ONE EARTH' is anenvironmental-friendly campus with a minimal carbon footprint on the surroundingenvironment. As already informed in the previous years the Campus has been awarded thecoveted LEED (Leadership in Energy and Environmental Design) Platinum rating and GRIHA(Green Rating for Integrated Habitat Assessment) green building certifications for itsapproach towards sustainability and green practices towards infrastructure. The Companycontinues its efforts to reduce and optimise the use of energy consumption at itsCorporate Headquarter and at its manufacturing facilities by installing hi-tech energymonitoring and conservation systems to monitor usage minimise wastage and increaseoverall efficiency at every stage of power consumption. The Company is also emphasising toutilise the maximum natural sources of energy instead of using electricity.
Steps taken or impact on conservation of energy-The energy conservation measurestaken are given as under:
|Sr. No. ||Measures Taken |
|l. ||Replaced the existing Bay fittings with LED lights installed solar street lights added capacitor at the work station leading to improved power factor for VPI Air compressor at Coimbatore facility. |
|2. ||Replaced l Star rated AC with 5 star rated AC along with power saver unit at our Daman facility. Further to save the electricity installed poly carbonate sheet at the roof of shop floor installed water level controller for overhead & underground water tanks. |
|3. ||Installed LED flood lights below the EOT cranes in our Chakan facility leading to less consumption of energy |
|4. ||Replaced the existing 400W bulbs by LED high bay lights at the shop floors at our Pondicherry NCU facility |
|5. ||Capacity Enhancement of VPI Phil ovens leading to reduction of cycle time for stator curing yielding saving in energy consumption at our Chakan facility |
The impact of above measures undertaken by the Company result in optimisation of energyconsumption savings in energy cost and environment protection.
Steps taken by the Company for utilising alternate sources of energy-The Companyalong with its subsidiaries being in the business of selling and installing wind turbinegenerators and related equipments it is very active in promoting renewable sources ofenergy and supporting conservation. The Company concentrates on reengineering of processto facilitate optimum utilisation of energy. The Company has further embarked in therenewable sector by venturing into the solar space.
Capital Investment on energy conservation equipments during the financial year2016-17-Rs 0.08 Crore (previous financial year i.e. 2015-16-Rs 0.12 Crore).
B. Technology absorption
Research & Development (R&D) -
Specific areas in which R & D is carried out by the Company are given as under:
Suzlon opened and staffed the new Blade Science Center in Vejle Denmark. Theteam is advancing Suzlon's Computational Fluid Dynamics (CFD) and wind tunnel testingcapabilities to develop the next generation of air foils for Suzlon turbines. Additionalresearch is ongoing to improve current turbine performance by upgrading the blades pitchcontrol software and overall wind park control. The Blade Science Centre is in additionto Suzlon R&D facilities in Germany Netherlands and India.
The Sill turbine was combined with the innovative 120m Hybrid Lattice Tower(HLT) and certified in June 2016. It achieved a full year PLF of 42%. A 140 meter HLTversion is now also in development. The lattice base requires 33% less concrete than atraditional tubular tower.
The Company completed the detailed design of Suzlon's newest turbine the S1282.6MW configured specifically for India conditions. The first machine is being assembledand readied for testing and certification.
The S128 will utilise carbon fibre technology in its 63 meter long blades. Thisallows Suzlon to build lighter stiffer blades that can utilize more slender air foilsthat produce higher lift and lower drag to improve the power curve.
Together the advances in technology continue to drive down the Levelized Costof Energy (LCOE) for our clients. The advent of taller towers and larger rotor diametersallows previously unviable sites to become viable. This is critical in order to helpachieve the nation's renewable energy goals.
Globally the Suzlon 2.1 MW fleet continues to operate at and above 97% in someof hottest and coldest environments on the globe.
Expenditure on R&D -
|Sr. ||Particulars ||2016-17 ||2015-16 |
|No. || ||(Rs in Crore) ||(Rs in Crore) |
|a. ||Capital (including CWIP) ||56.56 ||257.75 |
|b. ||Recurring ||17.38 ||46.57 |
|c. ||Total ||73.94 ||304.32 |
|d. ||Total R & D expenditure as a % of total turnover ||0.79% ||5.13% |
Technology absorption adaption and innovation-The efforts made towards technologyabsorption adaption and innovation and benefits derived are given as under:
Technologies developed in the various offices of the Company are implemented inthe new products leading to improved performance.
New materials are being tested for manufacture of lighter rotor blades.
C. Foreign exchange earnings and outgo
Total foreign exchange used and earned is given as under:
|Sr. ||Particulars ||2016-17 ||2015-16 |
|No. || ||(Rs in Crore) ||(Rs in Crore) |
|i. ||Total foreign exchange earned ||28.41 ||132.54 |
|2. ||Total foreign exchange used ||2694.03 ||2491.07 |
| ||For and on behalf of the Board of Directors |
|Place : Pune ||Tulsi R.Tanti |
|Date : August 11 2017 ||Chairman & Managing Director |
| ||DIN.: 00002283 |