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Suzlon Energy Ltd.

BSE: 532667 Sector: Engineering
NSE: SUZLON ISIN Code: INE040H01021
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VOLUME 1390040
52-Week high 22.25
52-Week low 12.47
P/E 6.87
Mkt Cap.(Rs cr) 8,219
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.40
Sell Qty 148780.00
OPEN 15.75
CLOSE 15.55
VOLUME 1390040
52-Week high 22.25
52-Week low 12.47
P/E 6.87
Mkt Cap.(Rs cr) 8,219
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.40
Sell Qty 148780.00

Suzlon Energy Ltd. (SUZLON) - Director Report

Company director report

Dear Shareholders

The Directors present the Twenty First Annual Report of your Company together with theaudited standalone and consolidated financial statements for the financial year endedMarch 31 2016.

1. FINANCIAL RESULTS

The audited standalone and consolidated financial results for the year ended March 312016 are as under:

Particulars Standalone Consolidated
Rs in Crore USD in Million Rs in Crore USD in Million
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Revenue from operations 5930.64 2261.49 895.09 361.84 9508.45 19836.68 1435.08 3173.87
Other operating income 8.72 8.81 1.32 1.41 54.11 117.76 8.17 18.84
Earnings before interest tax depreciation and amortization (EBITDA) 853.89 (380.98) 128.87 (60.96) 968.58 315.74 146.18 50.52
Less: Depreciation and amortization expense 165.49 157.81 24.98 25.25 403.26 808.77 60.86 129.40
Earnings before interest and tax (EBIT) 688.40 (538.79) 103.89 (86.21) 565.32 (493.03) 85.32 (78.88)
Add: Finance income 500.67 333.69 75.57 53.39 65.54 53.30 9.89 8.53
Less: Finance costs 686.94 1219.39 103.68 195.10 1226.12 2064.69 185.05 330.35
Profit/(loss) before tax before exceptional items 502.13 (1424.49) 75.78 (227.92) (595.26) (2504.42) (89.84) (400.70)
Less: Exceptional items 455.31 4607.85 68.71 737.25 (1064.13) 6311.66 (160.61) 1009.87
Profit/(loss) before tax 46.82 (6032.34) 7.07 (965.17) 468.87 (8816.08) 70.77 (1410.57)
Less: Current tax 0.07 - 0.01 - (12.44) 289.81 (1.88) 46.37
(Net of earlier years tax and MAT credit entitlement)
Less: Deferred tax - - - - 1.47 27.47 0.23 4.40
Profit/(loss) after tax 46.75 (6032.34) 7.06 (965.17) 479.84 (9133.36) 72.42 (1461.34)
Add / (Less): Share of loss / (profit) of minority N.A. N.A. N.A. N.A. 2.75 (24.33) 0.42 (3.89)
Net profit/(loss) for the year 46.75 (6032.34) 7.06 (965.17) 482.59 (9157.69) 72.84 (1465.23)
Add: Balance brought forward (10060.65) (4028.31) (1518.42) (644.53) (18464.62) (9306.93) (2786.80) (1489.11)
Less : Transferred to legal and statutory reserve - - - - 35.91 - 5.42 -
Less : Appropriations - - - - 0.02 - 0.00* -
Surplus / (deficit) carried to balance sheet (10013.90) (10060.65) (1511.36) (1609.70) (18017.96) (18464.62) (2719.38) (2954.34)

1 US$ = Rs 66.2575 as on March 31 2016 (1 US$ = Rs 62.5000 as on March 31 2015) *Lessthan USD 0.01 million

Note - The consolidated financial results for the year ended March 31 2016 are notcomparable with the year ended March 31 2015 (refer Note 6 of consolidated financialstatement).

2. COMPANY’S PERFORMANCE

On a standalone basis the Company achieved revenue from operations of Rs 5930.64Crore and EBIT of Rs 688.40 Crore as against Rs 2261.49 Crore and Rs (538.79) Crorerespectively in the previous year. Net profit for the year is Rs 46.75 Crore as comparedto net loss of Rs 6032.34 Crore in the previous year. The improved performance is onaccount of strong operational performance including volume growth and tight control overfixed costs.

On consolidated basis the Group achieved revenue from operations of Rs 9508.45Crore and EBIT of Rs 565.32 Crore as against Rs 19836.68 Crore and Rs (493.03) Crorerespectively in the previous year. Net profit for the year is Rs 482.59 Crore as comparedto net loss of Rs 9157.69 Crore in the previous year.

3. APPROPRIATIONS a) Transfer to reserves

During the financial year under review the Company was not required to transfer anyamount to any reserves. b) Dividend

In view of accumulated losses the Board of Directors expresses its inability torecommend any dividend on equity shares for the year under review.

4. MATERIAL DEVELOPMENTS DURING THE YEAR UNDER REVIEW AND OCCURRED BETWEEN THEEND OF THE 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) Acquisition of 25% stake in Suzlon Structures Limited ("SSL") from KalthiaGroup pursuant to which SSL became a wholly owned subsidiary of the Company.

b) Transfer of entire equity shareholding in Suzlon Gujarat Wind Park Limited (SGWPL)a wholly owned subsidiary of the Company to Suzlon Power Infrastructure Limited (SPIL)another wholly owned subsidiary of the Company -

Pursuant to this transfer SGWPL has become a wholly owned subsidiary of SPIL andcontinues to be a step down wholly owned subsidiary of the Company.

Balance of Parts (‘BOP’) business of the Group is being carried on by andbetween SGWPL and SPIL. With a view to create an independent vertical within the Group tohandle the value chain of BOP / Balance of Systems (‘BOS’) for wind / solarsectors which in turn would help the Group in coping with the possible changes in theinfrastructure industry SPIL in addition to its current activities will also act as aholding company for BOP / BOS business and will hold SGWPL and certain other companies infuture which may be required to be set up as joint ventures with the third parties forthe purpose of building up resources around land for consents / approvals for powerevacuation facilities to cater effectively to the business opportunities and competitivebusiness scenario.

c) Transfer of entire 98% equity shareholding in Suzlon Global Services Limited (SGSL)to Suzlon Structures Limited (SSL) another wholly owned subsidiary of the Company - Pursuantto this transfer SGSL has become a wholly owned subsidiary of SSL and continues to be astep down wholly owned subsidiary of the Company.

The operation maintenance and services (OMS) business was separated from the Companyto achieve a strategic and operational focus on the business and development of aqualitative enterprise and a sector leader for OMS operations. The said business hasgathered required critical mass and has good and sustainable operating margins sinceseparation from the Company. Thus with a view to rationalise the OMS business to optimisefuture fund raising or capital raising activities this transfer has been effected.

d) Venturing into Solar business - During the year under review the Companydecided to embark further into the renewable energy sector by venturing into solar space.The Company has won bids for 515 MW solar power projects across four states namelyTelangana Maharashtra Rajasthan and Jharkhand out of which power purchase agreementsfor 340 MW have been signed. Post March 31 2016 the Company signed a Share Subscriptionand Shareholders Agreement with CLP Windfarms (India) Private Limited ("CLP) and SESolar Limited a subsidiary of the Company for setting up 100 MW solar power project inthe State of Telangana and eventually sale of SE Solar Limited to CLP.

e) Amalgamation / Merger / Demerger

Post March 31 2016 the Board of Directors of the Company has approved subject toapproval of jurisdictional High Court Composite Scheme of merger and demerger for: -merger of SE Blades Limited (SEBL) SE Electricals Limited (SEEL) and Suzlon WindInternational Limited (SWIL) the wholly owned subsidiaries of the Company into theCompany; and - demerger of the tubular tower manufacturing division of Suzlon StructuresLimited (SSL) the wholly owned subsidiary of the Company into the Company.

Such consolidation of the above referred manufacturing companies will result inachieving business and administrative synergies for the Group like increased competitivestrength; improved productivity and efficiency resulting in cost reduction; optimisationof working capital; pooling of managerial and technical resources etc.

Additionally Suzlon Global Services Limited a step down wholly owned subsidiary ofthe Company is being merged with SSL another wholly owned subsidiary of the Company.

5. CAPITAL a) Increase in paid-up share capital - During the year underreview the Company has made various allotments whose details are as under:

Date of allotment No. of Securities Remarks
April 18 2015 105249608 equity shares of Rs 2/- each Allotment pursuant to conversion of 27018 USD 546916000 Step-up Convertible Bonds due 2019
May 15 2015 10704934 equity shares of Rs 2/- each Allotment pursuant to conversion of 2748 USD 546916000 Step-up Convertible Bonds due 2019
May 15 2015 1000000000 equity shares of Rs 2/- each Preferential allotment to the Investor Group being Dilip Shanghvi Family and Associates in terms of ICDR Regulations
June 25 2015 2088007 equity shares of Rs 2/- each Allotment pursuant to conversion of 536 USD 546916000 Step- up Convertible Bonds due 2019
August 21 2015 47276233 equity shares of Rs.2/- each Allotment pursuant to conversion of 12136 USD 546916000 Step-up Convertible Bonds due 2019
September 16 2015 35309144 equity shares of Rs.2/- each Allotment pursuant to conversion of 9064 USD 546916000 Step-up Convertible Bonds due 2019
October 20 2015 65250241 equity shares of Rs.2/- each Allotment pursuant to conversion of 16750 USD 546916000 Step-up Convertible Bonds due 2019
November 18 2015 15582147 equity shares of Rs.2/- each Allotment pursuant to conversion of 4000 USD 546916000 Step-up Convertible Bonds due 2019
December 14 2015 358388 equity shares of Rs.2/- each Allotment pursuant to conversion of 92 USD 546916000 Step- up Convertible Bonds due 2019
January 6 2016 11686610 equity shares of Rs.2/- each Allotment pursuant to conversion of 3000 USD 546916000 Step-up Convertible Bonds due 2019
February 8 2016 19282907 equity shares of Rs.2/- each Allotment pursuant to conversion of 4950 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 1004.10 Crore divided into 5020503414 equity shares of Rs 2/- each.

b) Global Depository Receipts (GDRs) – The outstanding GDRs as on March 312016 are 2710731 representing 10842924 equity shares of Rs 2/- each. Each GDRrepresents four underlying equity shares in the Company.

c) Foreign Currency Convertible Bonds ("FCCBs") – During the yearunder review 312788219 equity shares of Rs 2/- each have been allotted to theBondholders pursuant to conversion of 80294 USD 546916000 Step-up Convertible Bonds due2019. The details of outstanding convertible securities as on March 31 2016 are as under:

Series Outstanding Amount (USD) as on March 31 2016 Exchange Rate Convertible on or before Conversion Price
USD 546916000 Step-up Convertible Bonds due 2019 248826000 60.225 July 9 2019 15.46
(Restructured Bonds)
USD 175000000 28800000 44.5875 April 6 2016 54.01
5% Convertible Bonds due 2016
(5% April 2016 Bonds)

Post March 31 2016 and upto the date of this Report the Company has not made anyallotments pursuant to conversion of FCCBs. Further the outstanding USD 175000000 5%Convertible Bonds due 2016 worth USD 28.8 million in principal amount along with theapplicable 8.7% redemption premium were repaid in cash on April 14 2016. Accordingly thedetails of outstanding convertible securities as on date of this Report are as under:

Series Outstanding Amount (USD) as on date of this Report Exchange Rate Convertible on or before Conversion Price
USD 546916000 Step-up Convertible Bonds due 2019 (Restructured Bonds) 248826000 60.225 July 9 2019 15.46

Note: As on date of this Report the Company has received notice(s) for conversion of1000 FCCBs to be converted into 3895536 equity shares at a conversion price of Rs 15.46per 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 Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations") and there has been no change in the circumstances which may affecttheir 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 Nomination and Remuneration Committee of the Board of Directors has approved the‘Board Diversity and Remuneration Policy’ which is available on theCompany’s website (www.suzlon.com). The details of remuneration paid to the executiveand non-executive directors have been provided in the Corporate Governance Report formingpart of this Annual Report.

11. AUDITORS AND AUDITORS’ OBSERVATIONS

a) Statutory Auditors - M/s. SNK & Co. Chartered Accountants (FirmRegistration No.109176W) and M/s. S.R.Batliboi & Co.

LLP Chartered Accountants (Firm Registration No.301003E/E300005) were appointed as theJoint Statutory Auditors of the Company to hold office from the conclusion of theNineteenth Annual General Meeting till the conclusion of the Twenty Second Annual GeneralMeeting of the Company i.e. for a period of three years (subject to ratification of theirappointment at every annual general meeting). The Board of Directors recommendratification of appointment 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 till the conclusion of the Twenty Second Annual GeneralMeeting of the Company.

Statutory Auditors’ Observations in Audit Report and Directors’ explanationthereto –

i) In respect of Note 5 of the standalone financial statements and consolidatedfinancial statements regarding amount payable towards recompense in lieu of banksacrifice.

The recompense amount payable in lieu of bank sacrifice is contingent on variousfactors including improved performance of Borrowers and various factors the outcome ofwhich currently is materially uncertain. The recompense amount due to the date of thisbalance sheet is not ascertainable.

b) Secretarial Auditor – Pursuant to the provisions of Section 204 of theCompanies Act 2013 and Rules made thereunder Mr. Dinesh Joshi Partner Kanj &Associates Company Secretaries Pune (Membership No.F3752 and C.P.No.2246) has beenappointed as a Secretarial Auditor to conduct the Secretarial Audit for the financial year2015-16. A Secretarial Audit Report in Form MR-3 given by M/s. Kanj & AssociatesCompany Secretaries Pune has been provided in an Annexure which forms part of theDirectors Report.

Secretarial Auditors’ Observations in Secretarial Audit Report and Directors’explanation thereto -

i) In respect of observation pertaining to requisite number of Independent Directors asrequired under the Listing Regulations:

As on March 31 2106 the Board of Directors of the Company consists of elevenDirectors. Of the said eleven Directors three Directors are Promoter-Directors of whichonly one is an Executive Director and rest two are Non-executive Directors. As regard thebalance eight directors are non-promoter / non-executive and unrelated directors withthree being the nominee directors of various lenders in terms of the CDR arrangements andfive are Independent Directors i.e. more than 2/3rd are non-promoter / non-executive andunrelated directors and more of the nature of independent directors only.

In terms of Regulation 17(1)(b) of the Listing Regulations at least half of theCompany’s Board shall consist of Independent Directors which the Company wascomplying with till September 30 2014. However due to change in the definition of"independent director" by excluding the "nominee director" outside thepurview of the definition of the "independent director" with effect fromOctober 1 2014 the composition of the Board of the Company required change in terms ofthe then revised Clause 49 of the Listing Agreement as well as the Listing Regulations.The Nominee Directors fulfil all other criteria of independence as specified in theListing Regulations and they are more of the nature of independent directors only.Accordingly in spirit the Company does comply with the requirements of the Boardcomposition with more than 2/3rd directors being non-promoter / non-executive andunrelated directors. Irrespective of the above the Company has been making its bestendeavour to find appropriate persons as independent directors on its Board.

Irrespective of above post March 31 2016 and as on date of this Report Mrs. VijayaSampath (DIN: 00641110) has been appointed as an Independent Director on the Board of theCompany for a term of five years with effect from August 12 2016. Accordingly as on dateof this Report the Company is compliant with Regulation 17(1)(b) of the ListingRegulations.

ii) In respect of observation pertaining to delay in filing of monthly ECB-2 returns infew cases beyond prescribed statutory period: It is clarified that the delay was due toclerical oversight.

iii) In respect of observation pertaining to non-disclosure of the criteria forperformance of evaluation of independent directors in the annual report for the financialyear 14-15: It is clarified that the performance was evaluated on the basis of thecriteria such as the composition attendance participation quality and value ofcontributions knowledge skills experience staying abreast of governmental / regulatorypolicy developments developments in industry and market conditions etc. The performanceevaluation form containing criteria of evaluation has been placed on the theCompany’s website. The non-disclosure of the same was unintentional.

c) Cost Auditors – In terms of Section 148 of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 and pursuant to the recommendation ofAudit Committee the Company has appointed M/s. D.C.Dave & Co. Cost

Accountants Mumbai (Registration No.000611) as a Cost Auditor for conducting audit ofcost accounting records of the Company for the financial year 2016-17 at a remuneration ofRs.500000/- (Rupees Five Lacs Only) which shall be subject to ratification by theshareholders at the Twenty First Annual General Meeting. The due date of filing the costaudit report for the financial year 2016-17 is within a period of one hundred eighty daysfrom the end of the financial year i.e. March 31 2017.

d) Internal Auditor – In terms of Section 138 of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 the Company has appointed Mr. Sandip ShahChartered Accountant (Membership no.106157) as the Internal Auditor of the Company.

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 beendiscussed in the Management Discussion and Analysis Report forming part of this AnnualReport. The Board of Directors have not found any risk which in its view may threaten theexistence of the 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 AnnualReport on CSR activities as required to be given under Section 135 of the Companies Act2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 hasbeen provided 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 requiredto be stated 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 UPTOTHE DATE OF THIS REPORT

Appointment of Independent Directors – Mr. Per Hornung Pedersen has beenappointed as an Additional Director in the capacity of an Independent Director on theBoard of the Company for a term of five years with effect from September 28 2015 to holdoffice up to the ensuing Twenty First Annual General Meeting of the Company and then tillSeptember 27 2020 subject to regularisation of such appointment by the shareholders ofthe Company. Post March 31 2016 Mrs. Vijaya Sampath (DIN: 00641110) has been appointedas an Additional Director in the capacity as an Independent Director on the Board of theCompany for a term of five years with effect from August 12 2016 to hold office up to theensuing Twenty First Annual General Meeting of the Company and then till August 11 2021subject to regularisation of such appointment by the shareholders of the Company.

The Nomination and Remuneration Committee and the Board has recommended appointment ofMr. Per Hornung Pedersen and Mrs. Vijaya Sampath as Independent Directors of the Companyto hold office till September 27 2020 and August 11 2021 respectively in terms ofSection 149 of the Companies Act 2013 read with the Rules made thereunder. In the opinionof the Board Mr. Per Hornung Pedersen and Mrs. Vijaya Sampath fulfil the conditionsspecified in the Companies Act 2013 and Rules made thereunder for appointment asIndependent Directors and are independent of the management of the Company. The Company isin receipt of a notice in writing pursuant to Section 160 of the Companies Act 2013proposing the candidature of Mr. Per Hornung Pedersen and Mrs. Vijaya Sampath as theIndependent Directors of the Company.

Appointment of Executive Director - In terms of the recommendation of theNomination and Remuneration Committee and approval of the Board at their respectivemeetings held on August 12 2016 it has been proposed to appoint Mr. Vinod R.Tanti (DIN:00002266) as the Wholetime Director & Chief Operating Officer of the Company witheffect from October 1 2016 for a period of three years i.e. upto September 30 2019subject to approval of such appointment by the shareholders at the ensuing Annual GeneralMeeting of the Company.

Re-appointment of directors retiring by rotation – Mr. Girish R.Tanti (DIN:00002603) the non-executive director and Mr. Tulsi R.Tanti (DIN: 00002283) the Chairman& Managing Director retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for re-appointment.

Key Managerial Personnel – Mr. Kirti J.Vagadia (ICAI Membership No.042833) hasbeen appointed as the Chief Financial Officer designate as Group Chief Financial Officerwith effect from August 1 2015. Post March 31 2016 Mr. J.P.Chalasani (DIN: 00308931)has been appointed as the Chief Executive Officer designate as Group Chief ExecutiveOfficer with effect from April 4 2016.

Profile of Directors seeking appointment / re-appointment – Profile of thedirectors seeking appointment / re-appointment as required to be given in terms ofRegulation 36(3) of the Listing Regulations forms part of the Notice convening the ensuingAnnual General Meeting of the Company.

19. SUBSIDIARIES

As on March 31 2016 the Company has sixty subsidiaries and two joint ventures a listof which is given in the notes to the financial statements.

a) Companies which became subsidiaries during the year under review

Name of the entity Country
1. Amun Solarfarms Limited India
2. Avighna Solarfarms Limited India
3. Prathamesh Solarfarms Limited India
4. Rudra Solarfarms Limited India
5. Vayudoot Solarfarms Limited India
6. Gale Solarfarms Private Limited India
7. Tornado Solarfarms Private Limited India
8. Abha Solarfarms Private Limited India
9. Aalok Solarfarms Private Limited India
10. Shreyas Solarfarms Private Limited India
11. Heramba Wind Energy Limited India
12. Sirocco Renewables Limited India
13. Sirocco Wind Energy Limited India
14. Vakratunda Wind Energy Limited India
15. Varadvinayak Wind Energy Limited India
16. Vignaharta Wind Energy Limited India

b) Change of name of subsidiaries during the year under review

Previous name of the entity New name of the entity
1. Amun Solarfarms Private Limited Amun Solarfarms Limited
2. Avighna Solarfarms Private Limited Avighna Solarfarms Limited
3. Prathamesh Solarfarms Private Limited Prathamesh Solarfarms Limited
4. Rudra Solarfarms Private Limited Rudra Solarfarms Limited
5. Vayudoot Solarfarms Private Limited Vayudoot Solarfarms Limited
6. Senvion Energy PLC Suzlon Energy PLC

c) Companies which ceased to be subsidiaries during the year under review

Name of the entity Country Remarks
1. RPW Investments SGPS S.A. Portugal Merged with SE Drive Technik GmbH
2. Suzlon Energy Australia CYMWFD Pty. Ltd. Australia Liquidated
3. Senvion SE and its subsidiaries Pursuant to 100% stake sale of Senvion SE to Centerbridge Partners Senvion SE and its subsidiaries ceased to be subsidiaries of the Company w.e.f. April 29 2015

d) 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 financialstatement 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’swebsite (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 Regulatorsor Courts 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 theCompany’s website (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 ofSection 136 of the Companies Act 2013 the annual report excluding the aforesaidinformation is being sent to all the shareholders of the Company and others entitledthereto. Any shareholder interested in obtaining a copy of the same may write to theCompany Secretary at 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) Payment of commission from subsidiaries - The Managing Director of the Companyhas been appointed as a Chairman in Suzlon Wind Energy Corporation the USA a subsidiaryof the Company at a remuneration of USD 200000 per annum.

Besides this the Managing Director did not receive any commission / remuneration fromany other subsidiaries of the Company during the year under review.

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 listedcompanies in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (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 Plan(s) ("ESOPs") forits employees 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 the terms of Special ESOP 2014 were modified by extending the exerciseperiod of the options granted under Special ESOP 2014 by two years i.e. extending the enddate from March 31 2017 to March 31 2019 in terms of the recommendation of theNomination and Remuneration Committee and as approved by the shareholders at the TwentiethAnnual General Meeting of the Company held on September 28 2015. The details of theSchemes are available on the Company’s website (www.suzlon.com).

24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the operations and financial positionof the Company has been provided in a separate section which forms part of this AnnualReport.

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 except Regulation 17(1)(b) of the ListingRegulations. Post March 31 2016 and as on date of this Report Mrs. Vijaya Sampath hasbeen appointed as an Independent Director on the Board of the Company for a term of fiveyears with effect from August 12 2016. Accordingly as on date of this Report theCompany is compliant with Regulation 17(1)(b) of the Listing Regulations. Theauditors’ certificate on compliance with corporate governance requirements by theCompany is attached to the Corporate Governance Report.

26. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

During the year under review the Company has transferred the unpaid or unclaimed finaldividend for the financial year 2007-08 aggregating to Rs.0.10 Crore to the InvestorEducation and Protection Fund (IEPF) set up by the Government of India.

27. OTHER DISCLOSURES

a) Deposits - During the year under review the Company did not accept anydeposits falling within the purview of Section 73 of the Companies Act 2013.

b) Equity shares with differential voting rights - During the year under reviewthe Company has not issued equity shares with differential voting rights as to dividendvoting or otherwise.

c) Sweat equity shares - During the year under review the Company has notissued any sweat equity shares.

d) Revision of financial statements and directors report - The Company was notrequired to revise its financial statements or directors’ report during the yearunder review.

e) Prevention of Sexual Harassment at Workplace – In terms of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 theCompany has an internal complaints committee in place which entertains the complaintsmade by any aggrieved women. There have been no cases in this regard during the year underreview.

28. ACKNOWLEDGEMENT:

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 : Mumbai Tulsi R.Tanti
Date : August 12 2016 Chairman & Managing Director
DIN.: 00002283