MIRA
INFORM REPORT
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Report Date : |
20.11.2008 |
IDENTIFICATION DETAILS
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Name : |
SUZLON ENERGY LIMITED |
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Registered Office : |
Suzlon 5, Shrimali Society, Near Shri Krishna Complex, Navarangpura, Ahmedabad
- 380 009, |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
10.04.1995 |
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Com. Reg. No.: |
04-25447 |
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CIN No.: [Company
Identification No.] |
L40100GJ1995PLC025447 |
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IEC No.: |
2495002021 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
AHMS03088B |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on
the stock exchanges. |
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Line of Business : |
Manufacturer, Importer and Exporter of Wind Mills, Wind Turbines and
Generators. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Maximum Credit Limit : |
USD 350000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established Wind Power Energy company having satisfactory trade. The company faces
liquidity problems and its recent performance was very unsatisfactory. Trade relations
are fair. However its payments are very slow. The company has
to pay huge external loans when rupee is weak. Thus company is expected to
face difficult times in near to medium term. Hence, it would
be advisable to do business with the company with some caution in a current
difficult scenario. |
LOCATIONS
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Registered
Office : |
‘Suzlon House’,
5, Shrimali Society, Near Shri Krishna Complex, Navrangpura,
Ahmedabad-380009, |
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Tel. No.: |
91-79-26471100 |
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Fax No.: |
91-79-26471200 /
26565540 |
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E-Mail : |
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Website : |
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Area : |
361.33 Sq. Mtrs. |
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Premises : |
Owned |
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Head /
Corporate Office : |
2nd
and 5th Floor, Godrej Millennium, 9, Koregaon Park Road, Pune – 411001, Maharashtra, India |
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Tel. No.: |
91-20-26202000 /
24022000 / 24015760 / 24022204 / 40122000 |
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Fax No.: |
91-20-24022100 /
40122100 |
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E-Mail : |
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Area : |
20137 sq. mtrs. |
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Location : |
Owned |
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Factory 1 : |
Plot No. 77/13,
Opposite G.D.D.I.D.C. Office, Malala, Diu – 362520, |
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Tel. No.: |
91-2875-252541 /
5242 |
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Fax No.: |
91-2875-252281 |
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Area : |
3000 sq.mtrs |
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Factory 2 : |
Survey No. 306/1
and 306/3, Opposite Carrier Aircomp Limited, Near Panchal Industrial Estate,
Bhimpore, Nani Daman – 396210, |
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Area : |
6,400 sq.mtrs |
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Factory 3 : |
Plot No. H-24/25,
Mahatma Gandhi Udhyog Nagar, Near Water Tank, Dabhel, Nani Daman – 396210, |
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Tel No : |
91-260-2253673/2253674 |
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Factory 4 : |
Plot No. 57/3, (2 and 3), Dunetha, |
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Factory 5 : |
Survey No. 86/3-4, 87/1-3-4, 88/1-2-3, 89/1-2, Kadaiya, |
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Factory 6 : |
Survey No. 588,
Paddhar (Village),Taluka Bhuj, District |
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Factory 7 : |
Survey No: 282, Chhadvel (Korde), Sakri,
Dhule-424305 |
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Factory 8 : |
Survey No. 42/ 2 and 3, 54, 1 to 8, |
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Factory 9 : |
Block No. 93, |
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Factory 10 : |
Survey No. 574, 59, Thiruvandarkoil, |
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Factory 11 : |
Vimannagar, Pune – 411014, |
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Branches : |
Located at : ·
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Chennai ·
Jaipur ·
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Kolkata ·
Thiruvananthapuram ·
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Mumbai ·
Vadodara ·
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Overseas
Offices : |
Located at ·
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DIRECTORS
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Name
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Mr. Tulsibhai
Ranchodbhai Tanti |
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Designation |
Chairman and
Managing Director |
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Address |
C-501, |
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Date of Birth |
02.02.1958 |
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Qualification |
B.Com, Diploma in
Mechanical Engineering |
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Date of
Appointment |
10.04.1995 |
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Email |
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Other
Directorship |
Group Chairman of
Suzlon Group of Companies viz. Suzlon Developers Private Limited, Sarjan
Fealities Private Limited, AE Rotor Holding BV, Suzlon Wind Energy
Corporation, Suzlon Windfarm Services Private Limited, SNS Textiles Limited,
Suzlon Energy GmbH, Suzlon Green Power Limited |
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Name
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Mr. Girishbhai
Ranchodbhai Tanti |
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Designation |
Director
(International Operation) |
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Address |
C-401, |
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Date of Birth |
08.02.1970 |
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Qualification |
B. E. (Elec.), Management
Graduate from |
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Experience |
10 years |
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Name
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Mr. Balrajsinh A.
Parmar |
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Designation |
Director
(Projects) |
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Address |
301, Samrajya,
Near Manav Mandir, Ahmedabad – 380 052, |
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Date of Birth |
28.05.1957 |
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Date of
Appointment |
04.12.1995 |
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Name
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Mr. Vinodbhai
Ranchodbhai Tanti |
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Designation |
Director
(Operation) |
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Address |
15, Amrakadamb,
Ramdevnagar, Satellite, Ahmedabad - 380 054, |
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Date of Birth |
29.06.1952 |
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Date of
Appointment |
10.04.1995 |
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Name |
Mr. Ajay Relan |
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Designation |
Director (Nominee
Citycorp International Finance Corporation Inc.) |
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Address |
Citi Bank N. A.
Jeevan Vihar, Sansad Marg, New Delhi-110001 |
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Date of
Birth/Age : |
53 Years |
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Qualification |
M B A from IIM-A;
B. A. Honours (Economics) from St. Stephen’s College, |
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Name |
Mr. Pradip Kumar
Khaitan |
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Designation |
Director |
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Address |
B-103, Rai
Enclave, 7/1A, Sunny Park, Kolkata-700019 |
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Date of Birth/Age
: |
65 Years |
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Qualification |
B. Com., L. L. B.
Attorney-at-law |
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Name |
Mr. Ashish Dhawan
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Designation
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Director (Nominee
Chrys Capital III, LLC, |
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Address |
55A, Jor Bagh,
New Delhi-110001 |
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Date of Birth |
37 Years |
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Qualification |
M. B. A. from |
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Name |
Mr. Vidhyanathan
Raghuraman |
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Designation
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Director |
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Address |
20, Kallol Apartments,
I P Extension, Pratap Ganj, Delhi-110095 |
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Date of Birth |
63 years |
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Qualification |
M. Tech (Chemical
Engineering) |
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Name |
Mr. V Raghuraman |
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Designation
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Independent
Diretor |
KEY EXECUTIVES
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Name : |
Mr. Hemal A.
Kanuga |
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Designation : |
Company Secretary |
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Name : |
Mr. Asit Badve |
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Designation : |
Vice President
(Human Resource and Administration) |
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Name : |
Mr. P. C. Mehta |
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Designation : |
General Manager
(Purchase) |
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Name : |
Mr. Kirit Vagadia |
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Designation : |
General Manager
(Finance) |
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Name : |
Mr. B. N. Shah |
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Designation : |
General Manager
(Marketing) |
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Name : |
Mr. VKR Kutty |
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Designation : |
General Manager
(Foreign Trade) |
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Name : |
Mr. R. Sridharan |
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Designation : |
General Manager
(Works) |
BUSINESS DETAILS
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Line of
Business : |
Manufacturer,
Importer and Exporter of Wind Mills, Wind Turbines and Generators. |
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Products : |
·
Wind
Energy, Solar Energy System and Assembling ·
Operation
and Maintenance Contract ·
Electricity
Generators Generic Names of Principal Products /
Services of the company is as under :
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Brand Names : |
‘Suzlon’ |
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Exports: |
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Countries: |
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Imports: |
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Countries: |
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Terms : |
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Selling : |
Cash and Credit |
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Purchasing : |
Cash (30 days),
Credit (30 days) and L/C |
PRODUCTION STATUS
Product |
Units produced |
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(in Nos.) |
(in MW’s) |
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Wind Turbine
Generators Upto 1 MW |
197 |
114.45 |
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Wind Turbine
Generators Above 1MW and Upto 2 MW |
631 |
901.50 |
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Wind Turbine
Generators Above 2 MW |
463 |
972.30 |
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Total |
1291 |
1988.25 |
GENERAL INFORMATION
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Suppliers : |
·
Sudwind ·
L. M. Glassfibre, ·
·
·
·
Mukesh Engineers, |
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Customers : |
· Bajaj Auto Limited · Tata Group ·
· Manickchand Group · Ajanta Group · Dhariwala Group · Ghodavat Group · Verroc Group |
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No. of Employees : |
11000 |
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Bankers : |
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State Bank of Specialized Commercial Branch, ·
Axis Bank of Ground Floor, ·
IDBI Bank Limited (Cons. Leader) Dyaneshwar Paduka Chowk, ·
IndusInd Bank Limited ·
Bank of 1183-A, Sadashiv Vilas, ·
Standard Chartered Bank 90, ·
Deustsche Bank AG. DB House, Hazarimal Somani Marg, Fort, Mumbai ·
State Bank of ·
ING Vysya Bank Limited F.C. Road, Pune ·
State Bank of Mittal Court, D Wing, Ground Floor, Nariman Point, Mumbai ·
Punjab National Bank International Banking Branch, Road, ·
Indian Overseas Bank 7, ·
State Bank of ·
Bank of 2, ·
Citi Bank Citibank N. A. Parmar House, 2413, ·
HDFC Bank Limited ·
The HSBC Limited ·
ICICI Bank Limited ·
State Bank of ·
The Hongkong and ·
Banking Corporation Limited ·
Industrial Development ·
Bank of India Limited ·
Axis Bank Limited |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
· SNK and Company Chartered Accountants E-2-B, The Pune – 411001, · S.R. Batliboi and Company Chartered Accountants The Metropole, F-1, 1st Floor, |
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Memberships : |
Confederation of
Indian Industry |
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Associates |
· Suzlon Developers Private Limited · Sarjan Realities Private Limited · Suzlon Green Power Limited · SNS Textiles Limited · Suzlon Wind Farm Services Limited · Godrej Millennium, 5th Floor,9, Koreaon park Road, Pune-411001 · Providing Oand M services for ETGs · Suzlon Structures Private Limited ‘Suzlon”5, Shrimali Society, near Shri Krishna Complex, Navarangpura, Ahmedabad-380009 · Manufacturing Tubular Tower · Suzlon Generators Private Limited · Godrej Millennium, 5th Floor,9, Koreaon park Road, Pune-411001 · Manufacturing generators · Sarjan Infrastructure Finance Limited IL and FS Financial Centre, 6th
Floor, East Quadrant, Plot no 22, ‘G’ Block, Bandra-Kurla Complex, Bandra
(East), Mumbai-400051 Financing infrastructure activities · Suzlon Infrastructure Limited Godrej Millennim, 5th Floor, 9,
Civil work, erection, installation and
commissioning of WTGs · Sarjan Realities Limited 285/10, Acquiring land for setting up wind-farms |
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Subsidiaries : |
·
AE-Rotor Holding B.V., ·
AE-Totor Techniek B.V., ·
Suzlon Energy B.V., ·
Suzlon Wind Energy Corporation, ·
Suzlon Wind Farm Services Limited, ·
·
Suzlon Energy ·
Suzlon Energy Australia Pty Limited, · Suzlon Energy A/S · Suzlon Structures Private Limited ·
· Suzlon Windkraft GmbH (Formerly Constellation GmbH) · Suzlon Generators Private Limited · Windpark Olsdorf WATT GmbH and Co KG · Suzlon Windpark Management GmbH · Suzlon Rotor Corporation · Suzlon Power Infrastructure Private Limited ·
Suzlon Energy ( · SE Drive Techniek GmbH · Suzlon Gujarat Wind Park Limited · Suzlon Engitech Private Limited (Formerly Sarjan Engitech Private Limited) ·
Suzlon Energy Limited, |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2225000000 |
Equity Shares |
Rs.2/- each |
Rs.4450.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1496934400 |
Equity Shares |
Rs.2/- each |
Rs.2993.900 millions |
Of the above equity shares 1259276500 of Rs.2 each
(251855300 of Rs.10 each) shares were allotted as fully paid bonus shares by
utilization of Rs.1740.400 millions (Rs.1740.400 millions) from general
reserve, Rs.10.300 millions (Rs.10.300 millions) from capital redemption
reserve and Rs.768.000 millions (Rs.768.000 millions) from securities premium
account)
(Outstanding Employee Stock Options
exercisable into 246000 equity shares of Rs.2 each fully paid (49200 equity
shares of Rs.10 each fully paid)
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
2993.900 |
2877.600 |
3025.300 |
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2] Employee stock options |
0.000 |
117.100 |
103.600 |
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3] Shares application moneys pending allotment |
0.000 |
0.200 |
0.000 |
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4] Reserves & Surplus |
66380.500 |
34138.200 |
25093.600 |
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NETWORTH
|
69374.400 |
37133.100 |
28222.500 |
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LOAN FUNDS |
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1] Secured Loans |
6722.600 |
7717.800 |
2766.100 |
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2] Unsecured Loans |
24124.800 |
3648.600 |
587.600 |
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TOTAL
BORROWING |
30847.400 |
11366.400 |
3353.700 |
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Deferred Tax Liabilities |
0.000 |
0.000 |
0.000 |
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TOTAL
|
10221.800 |
48499.500 |
31576.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
5122.200 |
3884.700 |
2956.800 |
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Capital work-in-progress |
1346.300 |
927.100 |
762.500 |
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INVESTMENTS |
49194.800 |
8052.600 |
2927.400 |
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DEFERREX TAX ASSETS |
0.000 |
708.800 |
580.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
14832.300 |
13752.500 |
11044.900 |
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Sundry Debtors |
33065.900 |
19707.800 |
15839.100 |
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Cash & Bank Balances |
8755.000 |
3513.900 |
3162.400 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
16834.200 |
12971.900 |
6911.300 |
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Total Current Assets |
73487.400 |
49946.100 |
36957.700 |
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Less : |
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Current Liabilities & Provisions |
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Current Liabilities
|
19568.800
|
11084.700
|
8583.200
|
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Provisions
|
9360.100
|
3935.100
|
4025.000
|
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Total Current Liabilities
|
28928.900
|
15019.800
|
12608.200
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Net Current Assets |
44558.500 |
34926.300 |
24349.500 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL
|
100221.800 |
48499.500 |
31576.200 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
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Sales Turnover |
69260.100 |
53803.700 |
37884.600 |
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Other Income |
1256.100 |
881.000 |
692.800 |
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Total Income
|
70516.200 |
54684.700 |
38577.400 |
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Profit/(Loss) Before Tax
|
15069.600 |
11195.800 |
9026.600 |
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Provision for Taxation
|
900.800 |
584.400 |
814.700 |
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Profit/(Loss) After Tax
|
14168.800 |
10611.400 |
8211.900 |
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Earnings in Foreign Currency : |
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Export Earnings |
27968.300 |
17589.100 |
2115.300 |
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Interest on loans |
237.200 |
75.700 |
13.000 |
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Other Earnings |
162.300 |
110.600 |
0.000 |
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Profit on export of Mould |
9.700 |
110.600 |
0.000 |
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Total Earnings |
28377.500 |
17775.400 |
2128.300 |
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Imports : |
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Raw Materials |
24275.500 |
18719.400 |
14637.900 |
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Stores & Spares |
51.900 |
43.400 |
10.700 |
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Capital Goods |
237.200 |
178.400 |
281.700 |
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Total Imports |
24564.600 |
18941.200 |
14930.300 |
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Expenditures : |
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Cost of Goods Sold |
42269.900 |
32324.700 |
22822.100 |
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Operating and other expenses |
9525.100 |
8300.000 |
5094.800 |
|
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Employees’ remuneration and benefits |
1393.400 |
1114.600 |
629.600 |
|
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Financial charges |
1396.100 |
1014.700 |
545.600 |
|
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Depreciation & Amortization |
862.100 |
734.900 |
458.700 |
Total Expenditure
|
55446.600 |
43488.900 |
29550.800 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 |
30.09.2008 |
|
Type |
1st Quarter |
2nd Quarter |
|
Sales
Turnover |
14705.900 |
22262.500 |
|
Other
Income |
256.900 |
384.100 |
|
Total
Income |
14962.800 |
22646.600 |
|
Total
Expenditure |
13173.700 |
21178.500 |
|
Operating
Profit |
1789.100 |
1468.100 |
|
Interest |
382.000 |
766.900 |
|
Gross
Profit |
1407.100 |
701.200 |
|
Depreciation |
217.100 |
244.900 |
|
Tax |
309.600 |
286.500 |
|
Reported
PAT |
880.400 |
169.800 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.40 |
0.23 |
0.18 |
|
Long Term Debt-Equity Ratio |
0.20 |
0.05 |
0.08 |
|
Current Ratio |
1.88 |
2.12 |
2.2 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed Assets |
10.29 |
11.12 |
12.25 |
|
Inventory |
4.85 |
4.34 |
4.74 |
|
Debtors |
2.62 |
3.03 |
3.35 |
|
Interest Cover Ratio |
11.82 |
12.03 |
17.54 |
|
Operating Profit Margin(%) |
25.06 |
24.06 |
26.48 |
|
Profit Before Interest And Tax
Margin(%) |
23.82 |
22.69 |
25.27 |
|
Cash Profit Margin(%) |
21.74 |
21.09 |
22.89 |
|
Adjusted Net Profit Margin(%) |
20.49 |
19.72 |
21.68 |
|
Return On Capital Employed(%) |
22.2 |
30.58 |
43.52 |
|
Return On Net Worth(%) |
26.68 |
32.61 |
45.39 |
LOCAL AGENCY FURTHER INFORMATION
NOTE:
The company’s
registered office situated at
HISTORY
Subject has its roots dating back to when it sets up in 10th
April of the year 1995. Subject began with a wind farm project in the Gujarat
state of
Det Norse Veritas (DNV) certifies Suzlon Group with the coveted ISO 9001/2
certificate in the year of 1997. In 1998, the company formed Suzlon Developers
Private Limited and Suzlon Wind Farm Services Private Limited; both are in under
the group of the company. In the same year 1998, Subject bagged its first order
of Ghodawat Pan Masala Products in the state of
In the year 2001, Subject started one wholly owned subsidiary company under the
name of AE Rotor Holding B.V; The Netherlands. In the month of October of the
same year 2001, commenced Suzlon Wind Energy Corp,
Subject opened its Initial Public Offer (IPO) for 29.34 million shares in 23rd
September 2005. The issue was closed in 29th Sep 2005 with an overwhelming over
subscription and was successfully listed in both the BSE and NSE. During the
year 2006, the company signed the Framework Agreement with Edison Mission Group
to supply 157.5 MW whereby securing a major International repeat Order. This
consists of 75 m/cs of the S-88 - 2.1 MW turbines. In March of the same year
2006, the company made a strategic acquisition of Hansen Transmission
International NV, Belgium one of the worlds largest wind energy &
industrial Gearbox manufacturer through its subsidiary Rotor Holding B.V.Truly
trailblazing for the fact that this was the second largest foreign acquisition
by an Indian Company. Subject made its maiden foray in
In March of the year 2007, Subject commissions its first 2.1 MW capacity
turbine in 'Down Under' -
Subject is today a major force in the global wind industry, from humble
beginnings to ranking 5th in worldwide. With this, the company moving to be a
technology leader, to be among the top 3 wind energy companies in the world by
leveraging technological leadership and commercial acumen to exceed customer
expectations and be the most respectable brand which grows fast and is the most
profitable company employing the best team in the sector.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Global
Wind Energy Demand:
Growing energy demand, heightened environmental awareness and concerns over
energy security have resulted in increased demand for 'green' power in
developing as well as developed countries.
Incremental wind turbine capacity installed stood at a record 19,791 MW
globally and resultantly the cumulative installed capacity was 94,005 MW at the
end of CY 2007.
Demand was led by the American markets on account of the Production Tax Credit
(PTC) as well as
Offshore sector appears to be going through a period of readjustment with
installations during CY 2007 reported at 200MW, taking the cumulative installed
offshore capacity to 1077MW by the end of CY 2007.
Wind power installations are heavily concentrated in Europe,
the
As per, the ten largest national markets in global wind
power installations accounted for 89.2%. of new installations in 2007.
The increased demand for wind energy has resulted in
capacity expansion by existing players and entry of new players in the market.
POLICY
SUPPORT IN KEY MARKETS AND SUZLON STANDING:
One of the support mechanisms to the wind energy industry in the
Renewable Portfolio Standard (RPS) is also facilitating development of wind
industry. This system uses market tools to ensure that a certain percentage of
electricity generated in a state comes from renewable energy sources.
Currently, there is no RPS at the federal level, but 25 states and the
RPS goals and targets, it is widely expected that more states will join in.
Thus, wind projects will become more attractive and expand its base to other
parts of the country.
Subject enjoys a strong position in the
The 3rd of December was a historic day for the movement against global warming.
At the United Nations Framework for Climate Change Convention summit in Bali,
the Australian Prime Minister Mr. Kevin Rudd announced
Subject ranks as
The European Union (EU) has set itself an ambitious target of collectively
generating 20% of its electricity from renewable sources. Further, the EU hopes
that wind energy will contribute 12% of its electricity mix by 2020, of which
4% is expected to come from offshore wind.
The third phase of the European Emissions Trading Scheme (ETS) as well as the
second phase of National Allocation Plan (NAP) of emissions permits, have both
been far more stringent than the last time around. This indicates the
seriousness with which the EU is approaching its renewable energy targets. With
heavy investments being made in transmission and distribution networks
(T&D) as well as allying grid infrastructure, the EU as well as the rest of
Subject, though a relative new entrant in the European market has enjoyed
successes in key markets such as
Subject has secured several major orders over the past year, the most recent
for 100 MW of capacity with the Jingneng Group,
The Indian government has set specific targets for new and renewable energy
through its Eleventh Five Year Plan. It expects renewable energy to contribute
10% of total power generation capacity by 2012 and have a 4- 5% share in the
electricity mix. This implies that renewable energy will make up 20% of the
70,000MW of total additional energy planned from 2008-2012. By that period the
renewable energy market is estimated to reach USD 19 billion with about 15GW of
renewable energy capacity being added to the present installed capacity.
Subject has maintained its market leadership in the home market with over 50%
market share for yet another year. Over the past year, Subject has expanded
existing relationships and brought on board major new customers. Subject
received a key new order from ONGC,
Rest of the world:
With the increasing acceptance of wind energy worldwide, Subject has looked to
expand its business into new and emerging markets. Subject has secured
breakthrough orders in several markets such as
SECTOR OUTLOOK:
As per the BTM Consult ApS-World Market Update 2007 Report, the cumulative
installed capacity for wind power is expected to grow from 94,005MW in 2007 to
287,940MW by 2012. It estimates that South and
Emergence of utilities
and developers:
Utilities are emerging as a force to be reckoned within the field of renewable
energy generation. This is particularly true of the utilities in
Further, investing in renewable energy is an increasingly viable option,
especially for those utilities faced with large emission reduction targets and
renewable energy regulatory objectives in the
Financial viability of wind energy on an
uptrend:
Besides easing energy concerns and reducing emissions, renewable energy
projects are proving increasingly competitive in comparison to conventional
sources. Chief among these is wind power generation. As compared to escalating
price of other resources, wind offers major advantages through zero-fuel costs
and low maintenance costs.
Offshore Market:
The offshore WTG market presents a new opportunity for wind power, especially
in
RISKS RELATING TO THE WIND POWER
INDUSTRY:
The viability of wind power
projects is dependent on the price at which they can sell electricity:
The viability of wind power and wind power projects is dependent on wind
patterns The decrease in or elimination of government initiatives and
incentives The viability of wind power projects is dependent on the price at
which they can sell electricity as well as the cost of wind-generated
electricity compared to electricity generated from other sources of energy.
Governments in certain jurisdictions have introduced pricing incentives to
encourage generation of electricity from renewable sources. The cost of oil,
coal and other fossil fuels are key factors in determining the effectiveness of
wind power from an economic perspective, as cheaper and large supplies of
fossil fuels favour non-wind power generation, while more expensive and limited
supplies of fossil fuels favour wind power generation. Though continued
investment in product techniques and technical advances in WTG design have led
to an overall reduction in the cost per kWh of power from wind energy over a
period of time,an increase in cost competitiveness or significant developments
in technology for other sources of power generation, the discovery of new and
significant oil, gas and coal deposits or a decline in the global prices of
oil, gas and coal and other petroleum products could result in lower demand for
wind power projects.
The Viability of wind power projects is
dependent on wind patterns:
The viability and level of generation of wind power is dependent on wind
patterns, although subject conducts wind resource assessments based on
long-term wind patterns at identified sites, there can be no assurance that
wind patterns at a particular site will remain constant. Any changes in wind
patterns at particular sites, which have previously been identified as suitable
for wind power projects could affect the Company's ability to sell WTGs to
potential customers.
Wind Power cannot be considered as base
load source of electricity:
While wind energy demand is expected to increase, it appears unlikely that it
can substitute for fossil fuel generated power or other renewable energy on a
very large scale. Although the demand is expected to rise steadily, in a very
long term the growth prospects may be adversely affected.
The decrease on or elimination of
government intitatives and incentives:
Government incentives have been the major growth driver for the industry,
globally. Support for investments in wind power is provided through fiscal
incentive schemes or public grants to the owners of wind power systems, for
example through preferential tariffs on power generated by WTGs or tax
incentives promoting investments in wind power. In addition, the government of
some countries also prescribe specified levels of electricity that utilities
are required to obtain from renewable energy sources. With increased emphasis
on environmental energy sources, various duties have been applied on energy
generated through conventional energy sources which cause pollution which provided
an impetus to the wind energy sector.
In the past, the decrease in or elimination of direct or indirect government
support schemes for renewable energy including wind power in a country has had
a negative impact on the market for wind power in that country. There can be no
assurance that government support will continue at the same level or at all
exist.
POSITIONING:
Subject is
As part of the strategy to be a leading provider of complete wind energy
solutions in the world, the clients are now spread across various parts of the
world thereby mitigating the chance of a slow-down in any particular part of
the world.
COMPETITIVE STRENGTHS:
Strong management team:
Subject senior management has extensive experience in the wind energy industry.
It is predominantly moving towards an organisation consisting of empowered
functions and business units. All functions are seamlessly connected with each
other; harmonized by a Group Executive Council (GEC) headed by the Company's
CEO.
Global production platform and access to
an integrated manufacturing base:
With production facilities in
COMPANY'S BUSINESS
STRATEGY:
Transaction overview:
· Subject through its subsidiaries purchased 33.85% stake for a consideration of approximately Euro 453 million on June 6, 2007.
· Agreement with Martifer for its approximate 23.08% stake with acquisition cost payable only after May, 2009.
· Agreement with Areva for its approximate 30.17% stake with acquisition cost payable only after May, 2008.
· Deal partially financed in tranches with loan repayment upto 7 years, which got partly refinanced through convertible bonds issue and follow-on equity offering proceeds.
· Subject was awarded the Euromoney-Ernst and Young global renewable energy award for 'M&A of the Year' for the successful acquisition of a stake in REpower.
RISK MANAGEMENT AND INTERNAL
CONTROL ADEQUACY:
Acquisition risk:
Subject's acquisition of Hansen and of a stake in REpower may negatively impact
its financial condition and results of operations. The acquisitions resulted in
subject recognising a significant amount of debt and goodwill in its books.
Subject has increased its outstanding long-term debt in order to finance the
offer for the outstanding equity share capital of REpower. In addition, Subject
has potential future commitments to purchase REpower shares from Martifer and
Areva pursuant to option arrangements.
Subject believes that it has proven management resources and sound corporate
governance framework to address risks associated with acquisition of Hansen and
REpower. The successful Hansen listing has shown that the acquisition has been
a wealth creator for the shareholders.
OPERATIONS REVIEW:
During the year, the Company has posted an impressive performance.
On a standalone basis, the Company achieved a turnover of Rs 69260.100 millions
as against Rs 53803.700 millions in the previous year registering a growth of
28.73%. The net profit after tax stood at Rs 12657.100 millions compared to
Rs.10611.400 millions in the previous year registering a growth of
19.28%.
On a consolidated basis, the turnover is Rs 136794.300 millions as against
Rs.79857.300 millions in the previous year registering a growth of 71.30%. The
profit after tax, share in associate's profit and minority interest is Rs
10301.000 millions compared to Rs 8640.300 millions in the previous year,
registering a growth of 19.22%.
In keeping with its vision of becoming a truly global player, the Company
through its subsidiaries purchased approximately 33.85% stake in REpower
Systems AG (REpower), third largest manufacturer of wind turbine generators
(WTGs), for a consideration of approximately Euro 453 million and
simultaneously also has voting pooling agreements with Areva and Martifer
(subject to certain minority protection and other rights) who, in aggregate,
hold approximately 53.25% stake in REpower as on June 6, 2007.
The Company maintained its position as the fifth largest wind turbine
manufacturer with world market share increasing to 10.5% in CY 2007 from 7.7%
in CY 2006. Along with REpower, the Company achieved a market share of 13.9% in
CY 2007. The Company also maintained its market leadership in
CAPITAL AND FINANCE:
Sub-division of face value of equity shares:
In terms of the recommendation of the board of directors and pursuant to the
approval received from the members, each equity share of the Company of the
face value of Rs 10 has been sub-divided into 5 equity shares of the face value
of Rs 2 each (share split) with effect from January 28, 2008.
Further, consequent to the said share split, new International Securities
Identification Number (ISIN) INE040H01021 has been created for the Company's
shares in dematerialised form.
SUBSIDIARIES:
The Company has 44 subsidiaries, a list of which is given in the note to
accounts. The existing domestic and international subsidiaries continued to
perform satisfactorily during the year.
The name of Suzlon Towers International Limited has been changed to SE
Composites Limited which is now engaged in manufacturing of rotor blades,
whereas name of Suzlon Rotor International Limited has been changed to Suzlon
Electricals International Limited which is now engaged in manufacturing of
generators.
Hansen Transmissions International N.V. which was acquired in May 2006, listed
its equity shares on London Stock Exchange on December 11, 2007. The net
proceeds received through the offer were approximately Euro 440 million
(gross). Post IPO, holding of the Company in Hansen stands at 71.28%.
Domestic subsidiaries incorporated during the year:
Hansen Drives Limited was incorporated on December 20, 2006 in the state of
Tamil Nadu,
Overseas subsidiaries incorporated /acquired during the year:
Suzlon Wind Energy Espana, S.L. was incorporated on June 5, 2007 as a
wholly-owned subsidiary of Suzlon Wind Energy A/S,
On October 9, 2007, Hansen Transmissions International N.V. acquired Lommelpark
N.V.,
GROUP:
Persons forming part of the Group coming within the definition of 'Group' as
defined in the Monopolies and Restrictive Trade Practices Act, 1969 for the
purpose of inter-se transfer of shares of the Company under regulation
3(1)(e)(i) of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 are disclosed in a separate section of the annual
report.
Conservation of energy:
The operations of the Company are not energy-intensive. However, energy
conservation is a priority area for the Company. The Company's continued
efforts to reduce and optimise the use of energy consumption have shown
positive results. Better controls are planned to achieve further reduction in energy
consumption. All the new manufacturing facilities of the Company are equipped
with hi-tech energy monitoring and conservation systems to monitor usage,
minimise wastage and increase overall efficiency at every stage of power
consumption.
Future plan of action:
1. Continued efforts on aerodynamic performance enhancements to make next
generation blades.
2. New product and variant developments as per the requirements of the
market.
FIXED ASSETS
·
·
·
Buildings
·
Plant and
Machinery
·
Wind
research and measuring equipments
·
Computers
and office equipments
·
Furniture
and Fixtures
·
Vehicles
·
Intangible
assets
o
Designs
and drawings
o
SAP
software
TRADE REFERENCE:
·
·
ASVG,
· L. M. Glasfibre
·
Siemens
WEBSITE DETAILS
The world of wind power is growing at a phenomenal pace. Projections put
the average growth of the industry at 24% for the next five years.
Subject continued its upward growth trend during the quarter ended March 31,
2008, driven by mounting climatic concerns leading to the need for wind energy
solutions globally.
Subject reported a
strong consolidated order book position of USD 4,304 million (3,454 MW); with
USD 208 million (160 MW) in domestic orders, and USD 4,096 million; (3,294 MW) in
international orders, as on May 19, 2008.
The company reported a 71% growth in
its consolidated turnover and a 59% growth in MW sales over the financial year
'07.
In terms of market
developments, Subject made its maiden entry into the southern Indian state of
Kerala, with the commissioning of its first turbine there. This was another
major step forward in Subject’s endeavors to expand the market and harness the
power of wind for the nation’s economical growth. Subject has, in the past year
also added several of
The Company has
made a major investment to take advantage of the vast opportunity in the wind
energy sector, by initiating the setting up of 3,000 MW of integrated
manufacturing capacities, and further backward integration into cast and forged
steel components through a 120,000 MT foundry and 70,000 MT forging unit,
complete with machining facilities. Work on establishment of these facilities
is in the advanced stages of execution and production is expected to commence
in separate phases beginning from July 2008, and to reach full utilization
levels by March 2009.
The
Company has, as a follow-up to its global expansion strategy, successfully
entered into new markets such as Spain, Nicaragua and Turkey with substantial
orders, and consolidated its position in other important markets such as the
US, Australia and Brazil with large and repeat orders, over the last year,
which has taken subject’s presence into 20 countries.
The group sales in 2008, estimated at approximately 2,311 MW, has been
one of subject’s best performances
with a significant improvement from approximately 1,456 MW sold in the previous
year.
There is today a clear recognition of the
challenge the world faces, such as seen in the award of the Nobel Peace Prize
to former US vice-President Al Gore and UN Intergovernmental Panel on Climate
Change (IPCC) for their efforts to build up and disseminate greater knowledge
about man-made climate change, and to lay the foundations for the measures that
are needed to counteract such change.
Subject has set itself well on the course to
be part of the solution to the crisis–by becoming a strategic partner to the
world’s industry. Subject provides innovative, efficient and customized wind
power solutions that drive economic development, while preserving nature and
mitigating the effects of unbridled development – creating a more sustainable,
greener tomorrow.
Clients
Subject today
develops and manufactures technologically advanced, high-performance and
cost-efficient wind turbines. These services are developed to specifically meet
the diverse needs of customers all around the world.
Subject offers
customers' end-to-end wind energy solutions, including wind resource mapping,
site development and installation, and finally operations and maintenance
services in
Subject’s order book
position is a reflection of its strong market position and consistency in
delivering to their customers. The order book stands at around USD 4,335
million. The domestic order book position is for a capacity of 441 MW and
international orders for 3,726 MW.
The primary
customers in
Subject has driven
a focused effort to make wind turbines more reliable, consistently delivering
availability rates to customers, beating global standards higher than 95% on an
average.
Subject has set
new standards with record breaking contracts that have been signed with top
wind energy companies around the world. Majority of the orders have been signed
with top wind energy companies in the
Suzlon Wind Energy
Corporation has signed agreements with Edison Mission Group (EMG) of
Subject has
successfully entered the Chinese market, which is one of the world’s fastest
growing economies, with five important contracts with a total of 233.75 MW, of
which 12MW are installed and 221MW are planned installations in 2007. A
contract with Australian Gas and Light marked Subject’s entrance into the
Australian market.
Subject has also entered into the emerging wind energy market in Europe with
orders from Maestrale Green Energy, in
Another key
high–growth wind energy market subject has entered into is Brazil through a
contract signed with – SIIF Energies do Brazil Ltda.The project is poised to
double Brazil’s current installed capacity of 200 MW.
Subject has adopted an innovative approach to its value chain, enabling the
company to deliver customized solutions to a variety of customer needs across
the world. Subject has developed a fully integrated value chain with control
over all critical components – gearbox and generator technology, to towers,
rotor blades and in the end the complete wind turbine. This visionary approach
has had given us a major advantage in today’s supply restricted environment,
allowing the company to respond more flexibly to market dynamics, and provide
tailor made solutions to each individual customers’ needs.
Investor Relations
As the
requirements of disclosure, transparency and corporate governance continue to
grow and evolve, the role of IR becomes increasingly critical in helping
companies to manage these issues and to communicate more effectively with the
investment community. Today leading organizations around the world have
embraced the concept of IR in a big way.
This function
plays a pivotal role by being the ‘bridge’ between the Company and its
stakeholders, leading to a positive effect on the market’s assessment of the
Company’s value relative to that of the overall market.
At Subject, the IR
team works very closely with the management to implement programs that are
consistent with its corporate objectives. IR preserves the veracity, relevance
and quality of the information distributed to the market through a homogenous
presentation of the information. It is a reflection of the company’s brand and
has an intangible effect on the success of its business.
At Subject, they
believe that IR is a long- term relationship with its stakeholders, much as
running a business is a long-term relationship with its customers, suppliers
and business partners.
Press Release
Thursday, November
06, 2008
TrustPower opens
Snowtown, Australia, windfarm
Stage-I powered
with 47 Suzlon S88 turbines
Pune: New Zealand based TrustPower Limited on 2nd November, 2008
held the official public opening of Stage 1 of its first Australian wind farm,
located at Snowtown 170km north of Adelaide. The $220 million project, using 47
Suzlon S88 turbines, is expected to produce in excess of 380 GWh of electricity
each year, saving more than 345,000 tonnes of greenhouse gas emissions
annually, and powering the equivalent of 70,000 average Australian homes.
The public opening, which took the form of a community event with food
and produce stalls, entertainment, displays and public wind farm bus tours, saw
the unveiling of a commemorative plaque and permanent wind turbine blade and
information display in Snowtown, by the Premier of South Australia the
Honourable Mike Rann and TrustPower Chairman Mr Bruce Harker.
Other distinguished guests included the Federal Member for Grey Mr Rowan
Ramsey, the State Member for Frome the Honourable Mr Rob Kerin, the Mayor of
Wakefield Mr. James Maitland, Toine van Megen, Global CEO of Suzlon, Dan
Hansen, CEO of Suzlon Energy Australia, and members of the TrustPower board and
management team including Chief Executive Officer, Keith Tempest.
The Snowtown wind farm site spreads more than 20km along the Hummocks
and Barunga ranges, allowing for significant future expansion and is equipped
with 47 Suzlon S88 wind turbines to produce a peak output of 98.7 MW. The
Suzlon wind turbines have a rotor diameter of 88 metres and a tower height of
80m.
Construction of Stage 1 of the Snowtown Windfarm involved 350 escorted truck
journeys from
Suzlon Energy
TrustPower Chief Executive Keith Tempest says the opening of the Snowtown
Wind Farm marks another important milestone for TrustPower, which has a
portfolio of 100 percent sustainable hydro and wind generation facilities.
"We are proud of our investments in sustainable generation in
"The wind farm will help develop a positive new image for the
town," said the Chairperson of the Snowtown Community Management
Committee, Paul McCormack.
"The local community has taken a strong interest in the project,
and appreciates it being named the Snowtown Wind Farm," Mr McCormack said.
"It’s a good news story for this community."
Mr McCormack is particularly enthusiastic about the 44 metre wind
turbine blade which is on permanent display in the middle of town. "It is
a fantastic tourist attraction and it allows people to stop off in Snowtown and
get a sense of the turbines up close."
Mr McCormack, who has one of turbines on his land, said lightheartedly:
"Every morning I walk to the chook house to collect an egg for breakfast,
and I look up at my turbine on the hill to ensure that it’s still spinning. I
think it’s a beautiful beast, and it makes me greener and greener each
day."
While addressing the gathering, Suzlon's Global CEO, Toine van Megen
said that the Australia market is a focus market for Suzlon and congratulated
the Australian Suzlon Team for delivering the project in time and within budget
and to the entire satisfaction of TrustPower.
"Suzlon is committed to the Australian market for the long term and
we look forward to realising more projects with TrustPower. I congratulate the
Snowtown community with the wholehearted support that they have given to
TrustPower and Suzlon. Without your support this project would not have been
realised. Suzlon is in
Mr. Dan Hansen, CEO of Suzlon Australia thanked TrustPower for the close
and open cooperation between the two companies throughout the construction of
the project and thanked the local community of Snowtown for their support and
participation, which we trust will continue through the long term operation,
service and maintenance of the wind farm.
* BTM Consult ApS – World Market Update 2007
About Suzlon Energy Limited
Suzlon Energy Limited is one of the world’s leading players in wind
energy. The company has come to the fore of the business by strategically
focusing on R&D, innovation, an integrated value chain, and entering into
emerging and high growth markets to drive sustainable growth.
Suzlon has its corporate offices in
Suzlon’s R&D effort includes a highly successful practice of
leveraging skill and knowledge pools in the industry and allied areas the world
over. This has resulted in a R&D network located across geographies known
for their leadership in the field – Suzlon today drives turbine development
from
Suzlon is a vertically integrated wind turbine manufacturer – with
manufacturing capability along the full value chain – ranging from components
to complete wind turbine systems. The company has established manufacturing
facilities in
The success of the company’s strategy is seen in its growing market
share, repeat orders, and breakthroughs into new markets. Suzlon ranked as the world’s
fifth leading wind turbine manufacturer with over 10.5 % of global market share
in 2007. The company has ranked as the leading manufacturer in the Indian
market for nine consecutive years, maintaining over 50% market share.
Suzlon’s true strength is seen not only in its technology, quality and
market share – but also its people. The Suzlon Group boasts one of the largest
teams in the wind energy business, totaling over 13,000 people from over a
dozen nationalities in operations around the world. Suzlon in its vision for
future growth aims to rank among the top three wind turbine manufacturers
worldwide, maximizing growth while maintaining margins to generate maximum
value for all stakeholders.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.49.74 |
|
|
1 |
Rs.74.37 |
|
Euro |
1 |
Rs.62.78 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
1 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
36 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|