The Board of Directors present the Twenty Fifth Annual Report of yourCompany together with the audited standalone and consolidated Ind AS financial statementsfor the financial year ended March312020.
1. Financial results
The audited standalone and consolidated Ind AS financial results forthe financial year ended March 31 2020 are as under:
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from operations ||300.29 ||2471.08 ||2933.20 ||4978.46 |
|Other operating income ||75.66 ||72.42 ||39.65 ||46.23 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||(897.39) ||(184.02) ||(859.73) ||(8.75) |
|Less: Depreciation and amortisation expense (including impairment losses) ||682.15 ||438.91 ||418.61 ||341.85 |
|Earnings before interest and tax (EBIT) ||(1579.54) ||(622.93) ||(1278.34) ||(350.60) |
|Add: Finance income ||236.18 ||435.98 ||27.57 ||49.95 |
|Less: Finance costs ||1140.57 ||943.65 ||1367.29 ||1269.91 |
|Loss before tax before exceptional items ||(2483.93) ||(1130.60) ||(2618.06) ||(1570.56) |
|Less: Exceptional items ||792.05 ||6281.38 ||65.89 ||(27.57) |
|Loss before tax ||(3275.98) ||(7411.98) ||(2683.95) ||(1542.99) |
|Less: Tax expense ||0.65 ||1.35 ||7.44 ||(11.90) |
|Loss after tax ||(3276.63) ||(7413.33) ||(2691.39) ||(1531.09) |
|Share of profit / (loss) of associates and jointly controlled entities ||N.A. ||N.A. ||(0.45) ||(6.10) |
|Net loss for the year ||(3276.63) ||(7413.33) ||(2691.84) ||(1537.19) |
|Other comprehensive income/ (loss) net of tax ||5.11 ||0.54 ||140.69 ||(39.78) |
|Total comprehensive income/ (loss) net of tax ||(3271.52) ||(7412.79) ||(2551.15) ||(1576.97) |
2. Company's performance
On a standalone basis the Company achieved revenue from operationsof T 300.29 Crore and EBIT of T (1579.54) Crore as against T 2471.08 Crore and T(622.93) Crore respectively in the previous year. Net loss for the year is T 3276.63Crore as compared to T 7413.33 Crore in the previous year.
On consolidated basis the Group achieved revenue from operationsof T 2933.20 Crore and EBIT of T (1278.34) Crore as against T 4978.46 Crore and T(350.60) Crore respectively in the previous year. Net loss for the year is T 2691.84Crore as compared to T 1537.19 Crore in the previous year.
a. Dividend - In view of accumulated losses the Board of Directorshas not recommended any dividend on equity shares for the financial year under review.
b. Transfer to reserves - During the financial year under reviewthe Company was not required to transfer any amount to any reserves.
c. Dividend distribution policy - In terms of Regulation 43A of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (the Listing Regulations) the Company has adopted adividend distribution policy which has been provided in an annexure which forms part ofthe Directors' Report. The dividend distribution policy is also available on theCompany's website (www.suzlon.com).
4. Material developments during the financial yearunder review and occurred between the end of the financial year and the date of thisReport
During the financial year under review and up to the date of thisReport the following material events took place:
a. FCCB default and subsequent restructuring - The Company wasunable to make the last payment of interest and redeem the outstanding principal amountworth USD 172002000 under the USD 546916000 Step-up Convertible Bonds due 2019 in July2019. Post March 312020 in terms of approval of the Board of Directors shareholdersbondholders and Reserve Bank of India the Company has restructured the outstanding FCCBsby providing two options to the Bondholders (i) to accept equity shares in lieu ofexisting bonds at a revised conversion price of T 6.77 (Option A - Mandatory Conversion)or (ii) to accept new bonds in lieu of their existing bonds (Option B - Bond Exchange).Accordingly as on date of this Report the outstanding FCCBs have been restructured. Thedetails of restructuring have been provided under capital and debt structure.
b. Debt Resolution Plan - The Company and its certain specifiedsubsidiaries namely Suzlon Global Services Limited (SGSL) Suzlon PowerInfrastructure Limited (SPIL) Suzlon Gujarat Wind Park Limited(SGWPL) and Suzlon Generators Limited (SGL) (hereinaftercollectively referred to as the STG) had proposed a debt resolution plan tothe lenders for restructuring of the debt of the STG (Resolution Plan) underthe Reserve Bank of India (Prudential Frame workfor Resolution of Stressed Assets)Directions 2019 issued by Reserve Bank of India vide its circular dated June 72019(the RBI Circular). On March 27 2020 the Resolution Plan was approved by100% of the consortium lenders subject to certain conditions precedent. Subsequently onJune 5 2020 the STG has entered into Framework Restructuring Agreement (FRA) to giveeffect to the Resolution Plan. On June 30 2020 the Resolution Plan was implemented uponcompletion of compliance of all the conditions precedent to the satisfaction of theconsortium lenders and the Resolution Plan is effective from June 302020 (Effectivedate). The key features of the Resolution Plan have been provided in detail in the notesto the financial statements and the details of securities allotted in terms of theResolution Plan have been provided below under Capital and debt structure.
5. Capital and debt structure
a. Authorised share capital - During the financial year underreview there is no change in the authorised share capital of the Company. The authorisedshare capital of the Company as on March 31 2020 is f 2498.00 Crore divided into12490000000 equity shares off 2/-each.
Post March 312020 in terms of the special resolution dated May182020 passed by the shareholders of the Company by way of postal ballot conducted videPostal Ballot Notice dated April 182020 and the results of which were declared on May192020 the authorised share capital of the Company has been increased from f 2498.00Crore divided into 12490000000 equity shares of f 2/- each to f 9200 Crore dividedinto 46000000000 equity shares of f 2/- each by creation of additional 3351.00 Croreequity shares of f 2/- each in the authorised share capital of the Company.
b. Paid-up share capital - During the financial year under reviewthere is no change in the paid-up share capital of the Company. The paid-up share capitalof the Company as on March 312020 is f 1063.96 Crore divided into 5319774121 equityshares off 2/-each.
Post March 312020 and up to the date of this Report the Company hasallotted the following securities:
i. Preferential allotment of equity shares and compulsorily convertibledebentures (CCDs) of the Company to certain persons / entities (includingPromoters) under Chapter Vof the ICDR Regulations:
|Date of allotment ||Details of securities allotted ||Other terms ||Remarks |
|June 27 2020 ||1396579500 fully paid up equity shares having a face value of f 2/- each for cash at an issue price off 2.45 per equity share aggregating to f 342.16 Crore ||- ||Out of total equity shares allotted 408077000 equity shares have been allotted to one of the Promoter Group entities. |
| || || Nature - Unsecured Unlisted Unrated Compulsorily Convertible || |
|June 27 2020 ||4998 fully paid up CCDs having a face value of f 100000/- each for cash at par aggregating to f 49.98 Crore. || Interest-The CCDs shall carry Nil interest. || |
| Convertibility option - At the option of CCD holders each CCD shall be convertible into 40816 equity shares at a conversion price of f 2.45 on or before December 26 2021. || |
ii. Preferential allotment of equity shares optionally convertibledebentures (OCDs) and convertible warrants of the Company to the lenders in terms of theResolution Plan in part conversion of their existing debt:
|Date of allotment ||Details of securities allotted ||Other terms ||Remarks |
|June 27 2020 ||997176872 fully paid up equity shares of Rs 2/- each aggregating to Rs 16/- i.e. at an aggregate consideration of Rs 1/- per lender for 16 lenders ||-- || |
| || || Nature - Secured Unlisted Unrated Optionally Convertible Redeemable || |
| || || Interest - 0.01% p.a. payable annually || |
| || || Redemption-As per terms of OCDs. || |
|June 27 2020 ||410000 fully paid up 0.01% OCDs of Rs 100000/- each aggregating to Rs 4100.00 Crore || Convertibility option - In case of default in redemption of OCDs pursuant to its terms the OCD holders shall have the option to convert the defaulted redemption amount into equity shares of the Company and/or in case of default in servicing OCDs the OCD holders shall have an option to convert OCDs into equity shares of the Company. || |
| || || Conversion Price of the OCDs shall be determined at the time of conversion as per applicable laws. The initial tenor of the OCDs is up to 10 years from the date of allotment i.e. June 262030. || |
| || || Nature - Unsecured Unlisted Unrated Convertible || |
|June 27 2020 ||498588439 fully paid up Warrants of Rs 2/- each aggregating to Rs 16/- i.e. at an aggregate consideration of Rs 1/- per lender for 16 lenders. || Convertibility option - In case Part A Facilities under the Debt Resolution Plan are not classified as Standard as per the IRAC norms by March 31 2022 then each Warrant shall be converted into 1 equity share of a face value of Rs 2/- each of the Company aggregating to 498588439 equity shares of the Company. In case Part A Facilities are upgraded as Standard on or before March 31 2022 then all the Warrants shall expire. || |
Note: In terms of Regulation 158(6) of the ICDR Regulations the issueprice/conversion price for debt has been certified by two independent valuers appointed bythe Board of Directors namely (i) Mr. Amrish Garg Registered Valuer Securities orFinancial Assets # 342 Delhi Apartment Plot No.15C Sector 22 Dwarka NewDelhi-110077; (ii) Mr. Mahim Singh Mehta ACA CMA Registered Valuer (Securities orFinancial Assets) D-21 Geetanjali Enclave New Delhi-110017.
iii. Allotment pursuant to restructuring of USD 172002000 Bonds underthe USD 546916000 Step-up Convertible Bonds due 2019 inJuly2019:
|Date of allotment ||Details of securities allotted ||Remarks |
|July 14 2020 ||511992560 equity shares of Rs 2/- each allotted pursuant to conversion of 57554 USD 546916000 Step-up Convertible Bonds due2019 ofUSD1000 each at a revised conversion price of Rs 6.77 ||Allotment of equity shares pursuant to Mandatory Conversion of FCCBs to bondholders who elected Option A (Mandatory Conversion). |
|August 17 2020 ||112285 Restructured Bonds having a face value of USD 320 in exchange of Existing Bonds of USD 1000 each ||Allotment of Restructured Bonds to bondholders who elected Option B (Bond Exchange). |
Accordingly the paid-up share capital of the Company as on the date ofthis Report is Rs 1645.10 Crore divided into 8225523053 equity shares of Rs 2/-each.
c. Global Depository Receipts (GDRs) - The Company had issuedGlobal Depository Receipts (GDRs'); however the Company has terminated the GDRprogram with effect from February182020. Accordingly as on March 312020thereare nooutstanding GDRs.
d. Foreign Currency Convertible Bonds (FCCBs) - Duringthe financial year under review there was no conversion of FCCBs into equity shares. Thedetails of outstanding FCCBs asonMarch312020are asunder:
|Series ||Outstanding amount (USD) ||Exchange rate ( Rs ) ||Convertible on or before ||Conversion price ( Rs ) |
|USD 546916000 step-up convertible bonds due 2019 (Existing Bonds) ||172002000 ||60.225 ||July 9 2019 ||15.46 |
The Company was unable to make the last payment of interest and redeemthe outstanding principal amount under the USD 546916000 Step-up Convertible Bonds due2019 in July 2019. Post March 312020 the Company has restructured its FCCBs as under:
|Particulars ||No. of Bonds |
|i. Existing Bonds (USD 1000 each) ||172002 |
|ii. Mandatory Conversion of Bonds (USD 1000 each) into equity shares at revised conversion price of Rs 6.77 per share (Option A) ||59717 |
| Bonds which have already been converted into equity shares on July 14 2020 in terms of Mandatory Conversion Notice issued by the Company ||57554 |
| Bonds for which conversion instructions are awaited from the Bondholders ||2163 |
|iii. Bond exchange - Existing Bonds (USD 1000 each) which have been exchanged with Restructured Bonds having reduced face value of USD 320 on August 17 2020 (Option B) ||112285 |
The details of outstanding FCCBs as on date of this Report are asunder:
|Series ||Outstanding amount (USD) ||Exchange rate ( Rs ) ||Convertible on or before ||Conversion price ( Rs ) |
|USD 546916000 step-up convertible bonds due 2019 (Existing Bonds) ||2163000 ||60.225 ||July 9 2019 ||6.77 |
|USD 35931200 Restructured Bonds due 2032 (Restructured Bonds) ||35931200 ||74.8464 ||August 17 2032 ||2.61 |
6. Extract of the annual return
The extract of the annual return in Form No.MGT-9 in terms of Section92(3) of the Companies Act 2013 for the financial year under review has been provided inan annexure which forms part of the Directors' Report.
7. Number of board meetings held
The details pertaining to number and dates of board meetings heldduring the financial year under review have been provided in the Corporate GovernanceReport forming part of this Annual Report.
8. Director's responsibility statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors confirm to the best of their knowledge and belief that:
a. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
b. the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for that period;
c. the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d. the Directors had prepared the annual accounts on a going concernbasis;
e. the Directors in the case of a listed company had laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and were operating effectively; and
f. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
9. A statement on declaration given by IndependentDirectors
In terms of Section 149(7) of the Companies Act 2013 Mr. MarcDesaedeleer Mr. Per Hornung Pedersen Mr. Sameer Shah Mrs. Seemantinee Khot and Mr.Gautam Doshi the Independent Directors of the Company have given a declaration to theCompany that they meet the criteria of independence as specified under Section 149(6) ofthe Companies Act 2013 and the Listing Regulations and there has been no change in thecircumstances which may affect their status as Independent Directors. Further they havealso given a declaration that they have complied with the provisions of the Code of Ethicsfor Directors and Senior Management (including Code of Conduct for Independent Directorsprescribed in Schedule IV to the Companies Act2013) to the extent applicable during thefinancial year under review.
10. Company's policyon director's appointment andremuneration
In accordance with Section178 of the Companies Act2013and the ListingRegulations the Board Diversity and Remuneration Policy' as adopted by theBoard of Directors of the Company is available on the Company's website(www.suzlon.com). The details of remuneration paid to the Executive Directors andNon-executive Directors have been provided in the Corporate Governance Report forming partof this Annual Report.
11. Auditors and auditors' observations
a. Statutory auditor - M/s. Deloitte Haskins & Sells LLPChartered Accountants (Firm Registration No.117366W/W-100018) were appointed as thestatutory auditors of the Company to hold office from the conclusion of the Twenty Secondannual general meeting till the conclusion of the Twenty Seventh annual general meeting ofthe Company i.e. for a period of five years.
Statutory auditors' observation(s)in audit report and directors'explanation thereto -
i. In respect of Note 5 of the standalone financial statements and theconsolidated financial statements regarding use of going concern assumption for thepreparation of Ind AS financial statements due to existence of default in repayment ofprincipal and interest payable to lenders (including FCCB) notices and insolvencyproceedings against the Company with the National Company Law Tribunal (NCLT) and overdueamounts payable to certain creditors due to liquidity issues -
It is clarified that subsequent to balance sheet date the debtamounting to Rs 11367 Crore has been restructured with the unanimous approval of thelenders which includes waiver of all the past events of default under the existingagreements and conversion of debt into new term loan and various other financialinstruments as described in more detail in Note 21 to the Ind AS financial statements.Further the FCCB holders also have agreed to restructure the bonds on the terms as agreedunder the Consent Solicitation Information Memorandum ("IM"). The Company isalso taking various other steps to reduce costs and accordingly the financial statementshave been prepared on the basis that the Company is a going concern.
ii. In respect of Note 2.5 of the standalone financial statements andNote 2.6 of the consolidated financial statements regarding COVID19 pandemic and itsimplications on the management's assessment of the Company's ability to generatesufficient cash flows to meet its financial obligations in the foreseeable future undersuch undetermined circumstances.
It is clarified that the Company has considered the possible effectsthat may result from the pandemic relating to COVID-19 on the carrying amounts of propertyplant and equipment intangible assets inventories receivables investments otherassets and liabilities. In developing the assumptions relating to the possible futureuncertainties in the global economic conditions because of this pandemic and impact of thesame on future performance the Company has used available information from internal andexternal sources to assess the impact of COVID-19 on the standalone and consolidatedfinancial statements. However given the undetermined circumstances due to the pandemicthe actual outcome may differ from what has been estimated. The Company will continue tomonitor the future developments and update its assessment.
iii. In respect of auditors' observation in standalone financialstatements and consolidated financial statements regarding certain default in payment ofinterest and repayment of dues to financial institutions and banks and delay in depositingstatutory dues.
It is clarified that the delay arose on account of liquidity shortagedue to losses delay in timely realisation of certain receivables from the customers andprevailing uncertain economic environment that adversely impacted the sales volumes.
b. Secretarial auditor - Pursuant to the provisions of Section 204of the Companies Act 2013 and Rules made thereunder Mr. Kuldeep D. Ruchandani PartnerKPRC & Associates Company Secretaries Pune (Membership No.F7971 and C.P.No.8563)has been appointed as the secretarial auditor to conduct the secretarial audit for thefinancial year 2019-20. A secretarial audit report in Form No.MR-3 given by thesecretarial auditor has been provided in an annexure which forms part of the DirectorsReport.
Secretarial auditors' observation(s)in secretarial audit report anddirectors' explanation thereto-
i. In respect of observation that the composition of the board ofdirectors was not in compliance with Regulation 17 and 25 of the Listing Regulations andSection 149(3) of the Companies Act 2013 and that the composition of Audit Committee wasnot in compliance with Regulation 18 of the Listing Regulations
It is clarified that considering the stressed situation of the Companyit was difficult to find suitable persons as Independent Directors and with theappointment of new independent directors (including one woman independent director) theCompany is compliant with Regulation 17 and 25 of the Listing Regulations and Section149(3) of the Companies Act 2013 with effect from March 16 2020. Further due toresignation of two independent directors who were also Audit Committee members thecomposition of Audit Committee was not in compliance of Regulation 18 of the ListingRegulations for a period from September 27 2019 till October 14 2019. Withreconstitution of Audit Committee w.e.f. October 15 2019 this non-compliance has beenrectified.
ii. In respect of observation that the Risk Management Committee of theCompany comprised of 50% of the members who were directors of the Company which was not incompliance of Regulation 21 of the Listing Regulations
It is clarified that 50% of the members were directors only however asa stricter compliance the composition of the Risk Management Committee further standsrectified w.e.f October 12019.
iii. In respect of observation pertaining to non-appointment of ChiefFinancial Officer (CFO) in compliance with Section 203(4) of the Companies Act 2013
It is clarified that the Company all along had a Group Chief FinancialOfficer. The Company appointed CFO w.e.f. June 12019 and accordingly the same standsrectified.
c. Cost auditor - The Company is required to maintain cost recordsas specified by the Central Government under Section 148(1) of the Companies Act 2013 andaccordingly such accounts and records are made and maintained by the Company for thefinancial year under review.
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 2019-20. The due date of submitting the costaudit report by the cost auditor to the Company for the financial year 2019-20 is within aperiod of one hundred eighty days from the end of the financial year i.e. March 31 2020.Thereafter the Company shall file a copy of the cost audit report in Form No.CRA-4 withina period of 30 (thirty) days from the date of its receipt. The cost audit report for thefinancial year 2018-19 dated August 14 2019 issued by M/s. D. C. Dave & Co. CostAccountants Mumbai (Registration No.000611) was filed with the Ministry of CorporateAffairs Government of India on September102019.
Further in terms of Section 148 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 and pursuant to the recommendation of theAudit Committee M/s. D. C. Dave & Co. Cost Accountants Mumbai (RegistrationNo.000611) have been appointed as cost auditors for conducting audit of cost accountingrecords of the Company for the financial year 2020-21 at a remuneration of Rs 500000/-which shall be subject to ratification by the shareholders at the ensuing annual generalmeeting.
d. Internal auditor- In termsofSection138 of the Companies Act2013 read with the Companies (Accounts)Rules2014theCompanyhas appointed Mr. ShyamalBudhdev Chartered Accountant (Membership No.43952) as the internal auditor of theCompany.
During the financial year under review there was no instance of fraudrequired to be reported to Central Government Board of Directors or Audit Committee asthe case may be by any of the auditors of the Company in terms of Section 143(12) oftheCompaniesAct2013.
12. Particulars of loans guarantees andinvestments
The particulars of loans guarantees and investments if any in termsof Section 186 of the Companies Act 2013 for the financial year under review have beenprovided in the notes to the financial statements which forms part of this Annual Report.
13. Particulars of contracts/arrangements withrelated parties
The particulars of contracts/arrangements with related parties referredto in Section 188(1) entered into during the financial year under review as required to begiven in Form No.AOC-2 have been provided in an annexure which forms part of theDirectors' Report.
14. Particulars of conservation of energytechnology absorption foreign exchange earnings and outgo
The particulars of conservation of energy technology absorptionforeign exchange earnings and outgo for the financial year under review as required to begiven under Section 134(3)(m) of the Companies Act 2013 and Rule 8(3) of the Companies(Accounts) Rules 2014 has been provided in an annexure which forms part of theDirectors' Report.
15. Risk management
The Company has constituted a Risk Management Committee the details ofwhich have been provided in the Corporate Governance Report forming part of this AnnualReport. The Board of Directors has approved a risk management policy which is available onCompany's website (www.suzlon.com). The Company's risk management and mitigationstrategy has been discussed in the Management Discussion and Analysis Report forming partof this Annual Report. The Board of Directors have not found any risk which in its viewmay threaten the existence of the Company.
16. Corporate social responsibility(CSR)
The Company has constituted the CSR Committee in accordance withSection 135(1) of the Companies Act 2013 the details of which have been provided in theCorporate Governance Report forming part of this Annual Report. The Board of Directors hasapproved the CSR policy which is available on the Company's website (www.suzlon.com).The Annual Report on CSR activities as required to be given under Section 135 of theCompanies Act 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy)Rules 2014 has been 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 the performance ofthe Board its Committees and individual directors as required to be provided in terms ofSection 134(3)(p) of the Companies Act2013 read with Rule 8(4) of the Companies(Accounts) Rules 2014 has been provided in the Corporate Governance Report forming partof this Annual Report.
18. Directors/key managerial personnel appointed /resigned during the financial year under review and up to the date of this Report
Re-appointment of directors retiring by rotation- Mr. Tulsi R.Tanti(DIN: 00002283) the Chairman & Managing Director and Mr. Vinod R.Tanti (DIN:00002266) the Wholetime Director & Chief Operating Officer retire by rotation at theensuing annual general meeting and being eligible offer themselves for re-appointment.
Re-appointment of executive director- During the financial yearunder review Mr. Vinod R.Tanti (DIN: 00002266) has been re-appointed as Whole timeDirector & Chief Operating Officer w.e.f October 12019 for a period of three yearsi.e. up to September 302022 on same terms and conditions in terms of approval grantedby the shareholders of the Company at the Twenty Fourth Annual General Meeting held onSeptember 20.2019.
Change in nominee director- During the financial year under reviewpursuant to withdrawal of nominee director by IDBI Bank Limited (IDBI) Mr. Biju GeorgeKozhippattu (DIN: 02405333) the Nominee Director appointed by IDBI ceased to be theDirector of the Company w.e.f. August
28.2019. State Bank of India has substituted its nominee director onthe Board of the Company by withdrawing nomination of Mrs. Pratima Ram (DIN: 03518633) andinstead nominating Mr. Rakesh Sharma (DIN: 06695734) as the Nominee Director of State Bankof India on the Board of the Company. Accordingly Mrs. Pratima Ram has ceased to be theDirector of the Company w.e.f. October 312019 and Mr. Rakesh Sharma has been appointed asan additional director in the capacity as a Nominee Director with effect from December192019 to hold office till the conclusion of ensuing annual general meeting and beingeligible offers himself for appointment as Director of the Company. The Nomination andRemuneration Committee has recommended the appointment of Mr. Rakesh Sharma as theDirector designated as the Non-executive Director who shall not be liable toretire by rotation. The Board expresses its appreciation for the valuable servicesrendered and matured advice provided byMr. Biju George Kozhippattu and Mrs. Pratima Ramduring their association with the Company.
Appointment/re-appointment/resignation of in dependent director-
During the financial year under review Mr. Marc Desaedeleer (DIN:00508623) Mr. Ravi Uppal (DIN: 00025970) and Mr. Venkataraman Subramanian (DIN: 00357727)were appointed as the Independent Directors of the Company for a second term of five yearsi.e. for the period from September 252019 till September 242024 in terms of specialresolution passed by the shareholders at the annual general meeting held on September202019.
During the financial year under review the following IndependentDirectors resigned from the directorship of the Company:
Mr. Ravi Uppal (DIN: 00025970) resigned from the directorship ofthe Company with effect from September 272019 since he was unable to devote time for theCompany on account of his personal reasons;
Mrs. Vijaya Sampath (DIN: 00641110) resigned from thedirectorship of the Company with effect from September 27 2019 with intent to reduce herexposure in energy related companies and focus more of her attention on the companies inwhich she continues to be an independent director;
Mr.Venkataraman Subramanian (DIN: 00357727) resigned from thedirectorship of the Company with effect from October42019 due to his increasedcommitments on the Boards of various other companies as well as his family commitments.
As confirmed by the Independent Directors there was no other materialreason for their resignation. The Board expresses its appreciation for
the valuable services rendered and matured advice provided by Mr. RaviUppal Mrs. Vijaya Sampath and Mr. V. Subramanian during their association with theCompany.
During the financial year under review and upto the date of thisReport the following Independent Directors were appointed on the Board of the Companysubject to approval of shareholders at the ensuing Annual General Meeting of the Company:
Mr. Sameer Shah (DIN: 08702339) was appointed as an AdditionalDirector in the capacity as an Independent Director of the Company for aperiod of five years w.e.f. February 272020 till February 262025;
Mrs. Seemantinee Khot (DIN: 07026548) was appointed as anAdditional Director in the capacity as an Independent Director of the Companyfor a period offive years w.e.f. March 162020 till March 152025;and
Post March 31 2020 Mr. Gautam Doshi (DIN: 00004612) wasappointed as an Additional Director in the capacity of an Independent Directorfor a term of three years w.e.f. May42020 till May32023.
The Nomination and Remuneration Committee of the Board of Directors andthe Board of Directors of the Company have recommended appointment of Mr. Sameer Shah andMs. Seemantinee Khot as Independent Directors for a period of five years and Mr. GautamDoshi as an Independent Director for a period of three years for approval of shareholdersat the ensuing Annual General Meeting of the Company. They have given a declaration to theBoard that they meet the criteria for independence as provided under Section 149(6) of theCompanies Act 2013 and the Listing Regulations. In the opinion of the Board of Directorsof the Company Mr. Sameer Shah Mrs. Seemantinee Khot and Mr. Gautam Doshi fulfil theconditions specified in the Companies Act 2013 and the Listing Regulations forappointment as Independent Directors and are independent of the management of the Company.
Mr. Per Hornung Pedersen was appointed as an Independent Director ofthe Company for a term of five years and whose term expires on September 272020. In termsof Section 149(10) of the Companies Act 2013 and the Listing Regulations Mr. Per HornungPedersen iseligible for appointment as an Independent Director for a second term of fiveyears subject however to approval of the shareholders by way of a special resolution. Onthe basis of the performance evaluation the Nomination and Remuneration Committee of theBoard of Directors and the Board of Directors of the Company have recommended appointmentof Mr. Per Hornung Pedersen as an Independent Director of the Company for a second term offive years i.e. for the period from September 28 2020 till September 27 2025. Mr. PerHornung Pedersen has given a declaration to the Board that he meets the criteria forindependence as provided under Section 149(6) of the Companies Act2013 and the ListingRegulations. In the opinion of the Board of Directors of the Company Mr. Per HornungPedersen fulfil the conditions specified in the Companies Act 2013 and the ListingRegulations for appointment as Independent Director and is independent of the managementof the Company. Further it is felt that the Company would continue to be benefitted byhis rich experience and expertise if he is re-appointed for a second term of five years.
Appointment/resignation of key managerial personnel - During thefinancial year under review and upto the date of the Report following changes took placein key managerial personnel of the Company:
Mr.Swapnil Jainwas appointed as the Chief Financial Officer oftheCompanyw.e.f.June12019;
Mr. Hemal A. Kanuga resigned as the Company Secretary andCompliance Officer of the Company w.e.f. December 282019;
Mrs. Geetanjali S. Vaidya was appointed as the Company Secretaryand Compliance Officer of the Company w.e.f. December 282019;and
Post March 312020Mr.J.P.Chalasani resigned asthe Group ChiefExecutive Officer of the Company w.e.f July 72020.
Profile of directors seeking appointment / re-appointment - Profileof the directors seeking appointment / re-appointment as required to be given in terms ofRegulation 36 of the Listing Regulations forms part of the Notice convening the ensuingannual general meeting of the Company.
As on March 312020 the Company has 41 subsidiaries and1 joint ventureand 5 associate companies in terms of the Companies Act2013 a list of which is given inForm No.MGT-9-ExtractofannualreturnformingpartofthisAnnualReport.Thesalientfeaturesof thefinancial statement of subsidiaries/joint ventures/associates and their contribution tothe overall performance of the Company during the financial year under review have beenprovided in Form No.AOC-1 and notes to accounts respectively both forming part of thisAnnual Report.
a. Companies which became subsidiaries during the financial year underreview: None
b. Change of name of subsidiaries during the financial year underreview:
|Sr. No. Previous name of the entity ||New name of the entity |
|1. Anshuman Renewables Limited ||SWE Renewables Limited |
|2. Sharanya Renewables Limited ||SWE Wind Project Services Limited |
c. Companies which ceased to be subsidiaries/ joint ventures during thefinancial year under review:
|Name of the entity ||Country ||Remarks |
|1. Aalok Solar farms Limited ||India ||Partially sold. Ceased to be subsidiary however continue |
|2. Abha Solar farms Limited || ||to be associate companies as per Companies Act 2013. |
|3. Heramba Renewables Limited || || |
|4. Shreyas Solar farms Limited || || |
|5. Jawbone Holdings LLC ||USA ||Sold |
|6. Lacy Creek Wind power LLC || || |
|7. Lane City Wind LLC || || |
|8. Seventus Development Holdings LLC || || |
|9. Wharton Wind LLC ||USA ||Sold |
|10. Parque Eolico El Almendro S.L. ||Spain ||Sold |
d. Consolidated financial statements
The consolidated financial statements as required in terms of Section129(3) of the Companies Act 2013 and the Listing Regulations have been provided alongwith standalone financial statements. Further a statement containing salient features ofthe financial statements of the subsidiaries/associate companies/joint ventures in FormNo.AOC-1 as required to be given in terms of first proviso to Section 129(3) of theCompanies Act 2013 has been provided in a separate section which forms part of thisAnnual Report. The financial statements including the consolidated financial statementsfinancial statements of the subsidiaries and all other documents have been uploaded on theCompany's website (www.suzlon.com).
20. Significant and material orders passed by theregulators
During the financial year under review no significant and materialorders impacting the going concern status and Company's operations in future havebeen passed by any Regulators or Courts or Tribunals.
21. Internal financial controls and their adequacy
The details pertaining to internal financial control systems and theiradequacy have been disclosed in the Management Discussion and Analysis Report forming partof this Annual Report.
22. Audit Committee
The Company has constituted an Audit Committee in accordance withSection 177(1) of the Companies Act 2013 the details of which have been provided in theCorporate Governance Report forming part of this Annual Report. There has been no instancewhere the Board of Directors had not accepted any recommendation of the Audit Committee.The Company has formulated a whistle blower policy to provide vigil mechanism foremployees including Directors of the Company to report their genuine concerns aboutunethical behaviour actual or suspected frauds or violation of the Company's code ofconduct for directors and senior management and the code of conduct for prevention ofinsider trading and which also provides for safeguards against victimisation. The whistleblower policy is available on the Company's website (www.suzlon.com).
23. Particulars of employees
a. Statement showing details of employees drawing remunerationexceeding the limits specified in Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014
A statement showing details of employees in terms of Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has beenprovided in a separate annexure which forms part of the Directors' Report. Howeverin terms of Section 136 of the Companies Act 2013 the Annual Report excluding theaforesaid information is being sent to all the shareholders of the Company and othersentitled thereto. Any shareholder interested in obtaining a copy of the same may write tothe Company Secretary at the corporate office or registered office of the Company.
b. Disclosures pertaining to remuneration of directors as requiredunder Schedule V to the Companies Act 2013
Details pertaining to remuneration of Directors as required underSchedule V to the Companies Act 2013 have been provided in the Corporate GovernanceReport forming part of this Annual Report.
c. Disclosures pertaining to payment of commission from subsidiaries interms of Section 197(14) of the Companies Act 2013
During the financial year under review the Managing Director of theCompany has received remuneration of USD 116667 from Suzlon Wind Energy CorporationUSA(SWECO) in his capacity as Chairman of SWECO. Besides this the ManagingDirector or the Wholetime Director did not receive any commission / remuneration from anyother subsidiaries of the Company during the financial year under review.
d. Information 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
The information / details pertaining to remuneration to be disclosed bylisted companies in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014have been provided in an annexure which forms part of the Directors' Report.
e. Employees stock option plan(ESOP)
The Company had in past introduced ESOP for its employees and employeesof its subsidiaries. As on March 312020 and as on date of this Report there are noemployee stock option plans/ schemes in force.
24. Related party disclosures & managementdiscussion and analysis report
The disclosures pertaining to related party transactions as required tobe given in terms of Para A of Schedule V of the Listing Regulations have been provided inan annexure which forms part of the Directors' Report. Further the ManagementDiscussion and Analysis Report on the operations and financial position of the Company hasbeen provided in a separate section which forms part of this Annual Report.
25. Corporate governance report
A detailed report on Corporate Governance has been provided in aseparate section which forms part of this Annual Report. The Company is in compliance withthe requirements and disclosures that have to be made in this regard. The auditors'certificate on compliance with corporate governance requirements by the Company isattached to the Corporate Governance Report forming part of this Annual Report.
26. Business responsibility report
In terms of Regulation 34 of the Listing Regulations the BusinessResponsibility Report has been provided in a separate section which forms part of thisAnnual Report.
27. Transfer to invest or education and protectionfund
During the financial year under review the Company was not required totransfer any unpaid or unclaimed dividend to the investor education and protection fund(IEPF)setup by the Government of India.
In terms of the provisions of the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund)Rules2019(the IEPFRules) Mrs. Geetanjali S.Vaidya the Company Secretary and Compliance Officer ofthe Company has been designated as Nodal Officer of the Company for the purpose of IEPFRules.
28. Other disclosures
a. Details of deposits in terms of Rule 8(5) of the Companies(Accounts) Rules 2014 - During the financial year under review the Company did notaccept any deposits falling within the purview of Section 73of the Companies Act2013.
b. Details of equity shares with differential voting rights in terms ofRule 4(4) of the Companies (Share Capital and Debentures) Rules 2014 - During thefinancial year under review the Company has not issued equity shares with differentialvoting rights as to dividend voting or otherwise.
c. Details of sweat equity shares in terms of Rule 8(13) of theCompanies (Share Capital and Debentures) Rules 2014- During the financial year underreview the Company has not issued any sweat equity shares.
d. Details of shares held in trust for the benefit of employees wherethe voting rights are not exercised directly by the employees in terms of Section 67 ofthe Companies Act2013 - Not applicable
e. Detailed reasons for revision of financial statements and report ofthe Board in terms of Section 131(1) of the Companies Act
2013 - The Company was not required to revise its financialstatements or Directors' Report during the financial year under review in terms ofSection 131 of the Companies Act2013.
f. Disclosures in terms of sexual harassment of women at workplace(Prevention Prohibition and Redressal) Act 2013 - The
Company has in place an Internal Complaints Committee constitutedunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 which entertains the complaints made by any aggrieved woman. During thefinancial year under review there has been 1 case reported in this regard.
g. Disclosures pertaining to compliance with Secretarial Standards - Duringthe financial year under review the Company has complied with applicable SecretarialStandards.
h. Disclosures pertaining to credit rating - Details pertaining tovarious credit ratings obtained by the Company have been provided in the CorporateGovernance Report forming partof this Annual Report.
The Directors wish to place on record their appreciation for theco-operation and support received from the government and semi-government agenciesespecially from the Ministry of New and Renewable Energy (MNRE) Government of India allstate level nodal agencies and all state electricity boards. The Directors are thankful toall the bankers financial institutions and the investor group for their support to theCompany. The Directors place on record their appreciation for continued support providedby the esteemed customers suppliers bankers financial institutions consultantsbondholders and shareholders. The Directors also acknowledge the hard work dedication andcommitment of the employees. Their enthusiasm and unstinting efforts have enabled theCompany to emerge stronger than ever enabling it to maintain its position as one of theleading players in the wind industry in India and around the world.
| ||For and on behalf of the Board of Directors |
|Place : Pune ||Tulsi R.Tanti |
|Date : August 24 2020 ||Chairman & Managing Director |
| ||DIN : 00002283 |