Suzlon Energy Ltd

http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/Suzlon-EnergyLtd/532667
BSE: 532667 | NSE: SUZLON | ISIN: INE040H01021 Market Cap: [Rs.Cr.] 2,462 | Face Value: [Rs.] 2 Industry: Electric Equipment

Company Profile
Suzlon Energy Ltd is India's first home-grown wind technology company and the fifth largest wind power supplier. The company is engaged in the business of design, development, manufacturing and supply of wind turbine generators (WTGs) of a range of capacities and their components. Their operations relate sale of WTGs and allied activities, including sale/sub-lease of land, infrastructure development income; sale of gear boxes, and sale of foundry and forging components. Others primarily include power generation operations. The company is headquartered in Pune. They have their presence in 32 countries namely, India, China, Sri Lanka, Japan, South Korea, Canada, USA, Brazil, Chile, Nicaragua, Belgium, Bulgaria, Denmark, Germany, Italy, Romania, The Netherlands, Turkey, Spain, Sweden, United Kingdom, Austria, Czech Republic, France, Greece, Hungary, Poland, Portugal, Russia, Switzerland, Australia, South Africa. The company's manufacturing facilities are located at Maharashtra, Pondicherry, Gujarat and Daman in India; Tianjin and Inner Mongolio in China; Trampe, Husum and Bremerhaven in Germany; and Oliveria de Frades and Vagos in Portugal. Their R&D facilities are located at Denmark, Germany, India, The Netherlands and China. Suzlon Energy Ltd was incorporated in the year 1995. The company began with a wind farm project in Gujarat with a capacity of just 3 MW. In the year 1997, Det Norse Veritas (DNV) certified Suzlon Group with the coveted ISO 9001/2 certification. In the year 1998, the company formed Suzlon Developers Pvt Ltd and Suzlon Wind Farm Services Pvt Ltd. They bagged their first order of Ghodawat Pan Masala Products in the state of Maharashtra. They made their debut entry in Maharashtra by commissioning their first Wind Turbine in Maharashtra. In the year 1999, the company commissioned their first wind turbine in Tamil Nadu. The company was awarded the prestigious contract from Tata Finance Ltd and Bajaj Auto Ltd, the turnkey wind farm project in Maharashtra. In the year 2000, the company commissioned their first 50 MW at Vankhusavade, Maharashtra and formed the Suzlon Green Power Limited. Also, the company's first megawatt wind turbine generator was commissioned for Niskalp Investments, a Tata Group Company. In the year 2001, the company started one wholly owned subsidiary company under the name of AE Rotor Holding B.V; The Netherlands. In October 2001, they commenced Suzlon Wind Energy Corp, USA a wholly owned subsidiary of the company. In November 2001, they formulated Suzlon Energy GmbH, Germany, a wholly owned subsidiary of the company. In the year 2003, the company commissioned their first Wind Turbine in USA. They opened their representative office in Beijing. Composite Centre International conferred the Export Excellence Award to the company at the International Exposition India Composites 2003 at Hyderabad. In the year 2004, the company set up a wholly owned subsidiary company in Australia under the name of Suzlon Energy Australia Pty Ltd. In March 2004, the company set up their maiden imprint in the state of Karnataka by commissioning 3.75 MW Wind Power Project for MSPL, a major mining company. In August 10, 2005, the company incorporated Suzlon Rotor Corporation, USA. The company bagged the maiden Korean Order by signing the contract for 14.7 MW WPP for Jeju Wind Farm Project by tying up with Unison Co. Ltd, Korea's largest and most experienced developer. In 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 2006, the company made a strategic acquisition of Hansen Transmission International NV, Belgium one of the worlds largest wind energy & industrial Gearbox manufacturer through their subsidiary Rotor Holding B.V. In the year 2006, the company made their maiden foray in Australia by signing the contract to build Australia's largest Wind Farm Project for Australia Gas & Light (AGL) Company. Also, they entered the European market by bagging the Portugal Order and signed the contract for 39.9 MW Wind Turbine Capacity with TECNEIRA - Tecnologias Energeticas, SA in the Penamacor region of Portugal. The company was awarded the Best Manufacturer of the Year 2006, followed by the Best Company in Corporate Social Responsibility Award at the Wind India Conference in Pune. The company was also ranked as the second leading company in the 'Best Service Provider among Manufacturers' in the same conference. In December 2006, the company signed the turnkey contract with British Petroleum for setting up a 40 MW wind power project in Maharashtra whereby becoming the only Indian manufacturer to attract Foreign Direct Investment in the Indian Wind Energy Sector. In March 2007, the company commissioned their first 2.1 MW capacity turbine in 'Down Under' Australia. Also, they completed the V3 S88 Test Turbine installation. The company signed a major new order with DLF Limited, one of India's leading infrastructure companies, for 150 MW wind turbine capacity. They commissioned their first 600 KW turbine at site at Agali, in Kerala. In February 2008, they formed step-down wholly owned subsidiary company, SE Drive Technik GmbH, Germany. Also, they company in joint venture with REpower Systems AG, Germany established a new company, namely, Renewable Energy Technology Centre GmbH in Hamburg, Germany. In April 2008, In June 2008, the company acquired the Areva's total stake of approx 30% in REpower Systems AG of Germany. During the year 2008-09, Suzlon acquired a 37.82% stake of REpower Systems AG ('REpower') thereby

increasing its holding in REpower to 73.65%. The company entered into the Sri Lankan wind energy market by striking a deal with Senok Wind Power Pvt Ltd. The company's China subsidiary, Suzlon Energy (Tianjin) Ltd (SETL) entered into an agreement with Inner Mongolia North Longyuan Wind Power Corporation, for establishing a World Bank funded, 100 MW wind farm project. Also, the company's subsidiary commissioned their first turbine in Brazil for SIIF Cinco Ltd. During the year, the company through their subsidiaries got new orders in Spain from Wigep Andalucia S.A. and in Nicaragua from Arctas Capital Group LP. They commissioned their first Wind Turbine Generator (WTG) using Concrete Tower Technology. They entered into an MoU with TERI University for setting up and offering an M-Tech Programme in Renewable Energy Engineering and Management. During the year, the company's subsidiaries incorporated in special economic zones (SEZ) namely Suzlon Wind International Ltd (Nacelle assembly unit), SE Composites Ltd (Rotor Blade unit), SE Electricals Ltd (previously known as Suzlon Electricals International Ltd) (Generator & Control Panel unit) and SE Forge Ltd (Foundry and Forging unit) commenced their commercial operations. During the year, SE Solar Pvt Ltd became a wholly owned subsidiary of Suzlon Wind International Ltd and in turn became a step-down subsidiary of the company. Sunrise Wind Project Pvt Ltd became a wholly owned subsidiary of Hansen Drives Pte Ltd and in turn, became a step-down subsidiary of the company. Also, the company through their subsidiary sold 67,010,421 shares (10% of the equity base) in Hansen Transmissions International NV (Hansen) to funds managed by Ecofin Ltd (Ecofin), a London based specialized investment firm. Post disposal, Suzlon had a voting and economic interest in Hansen of 61.28%. During the year, the company sold their subsidiary Suzlon Energy GmbH and Suzlon Windpark Management GmbH to its step subsidiary Tarilo Holding B.V. and thereafter merged Suzlon Windkraft GmbH into Suzlon Energy GmbH to facilitate effective management of research and development activities. During the year 2009-10, Shubh Realty (Gujarat) Pvt Ltd became a wholly owned subsidiary of Suzlon Infrastructure Services Ltd and, in turn, became a step-down subsidiary of the company. RPW Investments, SGPS, S.A., Valum Holding B.V., Suzlon Wind Energy Bulgaria EOOD, Suzlon Wind Energy BH Bosnia, Suzlon Energy Australia RWFD Pty Ltd, Einundzwanzigste Vittorio Verwaltungs GmbH, Age Pargue Eolico EL Almendro, S.L. REpower Rep Ventures Portugal S.A. became subsidiaries of the company. The company through their subsidiaries acquired an additional 16.85% stake of REpower Systems AG (REpower) thereby increasing their holding in REpower to 90.50%. The company's share holding through their subsidiary in Hansen Transmissions International NV (Hansen) reduced to 26.06% and Hansen ceased to be a subsidiary of the company, subsequent to sale of 35.22% shareholding. During the year 2010-11, Suzlon Wind Energy South Africa PTY Ltd., Suzlon Energy Australia CYMWFD Pty. Ltd., Sure Power LLC, Renewable Energy Contractors Australia Pty. Ltd., REpower Systems Polska Sp.zo.o, REpower Systems Scandinavia AB, REpower Portugal - Sistemas Eolicos, S.A., Ventipower S.A. and RiaBlades S.A. became step down subsidiaries of the company. Also, Windpark Meckel/Gilzem GmbH & Co KG ceased to be subsidiary of the company and Sister - sistemas e Technologia de Energias renovaveis Lda was liquidated. As per the scheme of arrangement and restructuring between STSL, SISL, SGWPL, SENL, the wholly owned subsidiaries of the company and the Company (SEL) for de-merger and Transfer of Power Generation Division of STSL to SENL, de-merger of Project Execution Division of SISL to SGWPL, Amalgamation of STSL (after the above referred demerger) with the company and Amalgamation of SISL (after the above referred de-merger) with the company with effect from April 1, 2010. In January 2011, the company signed a memorandum of understanding (MoU) with the Government of Gujarat to develop 1,000 megawatt (MW) of new wind power capacity in the state over the next three years. In May 2011, the company signed a contract with African Clean Energy Developments (ACED) for the supply and full EPC for 76 of Sulzon's S88 - 2 MW series turbines, with an option for ACED to acquire an additional 124 turbines for the Cookhouse Wind Energy Facility. In June 2011, the company received a new order from the National Aluminium Company Limited (NALCO) to set up, operate and maintain 50.4 MW of wind energy projects in Andhra Pradesh. In July 2011, the company received a new order from Chennai based Orient Green Power Company Limited (OGPL), for over 100 megawatts (MW) of wind power projects. In August 2011, the company won a second order from the Indian Oil Corporation Ltd to set up, operate and maintain wind energy projects of 48.3 MW in the state of Andhra Pradesh, India. Also, they won a repeat order from the Malpani Group to set up, operate and maintain projects totaling 29.70 MW. In October 2011, the company bagged an order from gas utility major GAIL (India) Limited for its wind energy project to be commissioned in Karnataka in 2012. The order is for 17 units of Suzlon's S82 - 1.5 MW wind turbines. In November 2011, the company received 23 MW order from Gail (India) Ltd. The order consists of 11 units of Suzlon's S88 - 2.1 MW wind turbines, to be commissioned in the states of Tamil Nadu and Karnataka by the end of the financial year 2011-12. In January 2012, the company secured over 1 GW of orders for its S9X suite of wind turbines. In March 2012, the company signed a global strategic partnership agreement with CGN Wind Energy Co Ltd (CGNWE). CGNWE is a wholly owned subsidiary of China Guangdong Nuclear Power Group. The agreement calls for the development of 800 MW of domestic and international projects over the next three years.

AT A GLANCE

Key Historical Facts Year of Formation Initial JV collaborator Chief Promoter of the Company Prior Business Corporate Facts Key Suzlon Group Companies Core Business Area Corporate Headquarters Registered Office Corporate Philosophy Core Values Total Employees Group Order Book**** Global Footprint Geographical Presence Key Markets (Installed presence)

: 10-Apr-1995 : Sudwind GmbH Windkrafttanlagen : Mr. Tulsi Tanti : Textiles : Suzlon Energy Limited, REpower Systems AG, SE Forge : Wind Turbine Manufacturing & Turnkey wind power solutions provider : One Earth Campus, Pune ( Maharashtra ) - India : Ahmadabad ( Gujarat ) - India : "To pursue social, economic and ecological sustainable development for our planet" : Agility, Creativity, Adding Value, Committed Integrity : over 13000 : ~$6.84 Bn

: 33 countries on 6 continents : Asia Pacific (India, China, Australia, Japan, Sri Lanka, Korea)

: Americas (USA, Canada, Brazil, Nicaragua) : Europe (UK, France, Germany, Spain, Portugal, Italy, Belgium, Romania, Poland, Turkey, Hungary, Austria, Bulgaria, Greece, Sweden, Netherlands, Russia, Sweden) : MENA Region, South Africa, South Asian countries, Argentina, Chile, Mexico

Emerging Markets focus Manufacturing and R&D Process

Number of Production Facilities : 30 Location of Global Production Facilities : India, Germany, Portugal, US Key R&D Centres : Germany (Hamburg, Osnabriick, Osterrnfeld, Rostock, Berlin), India (Pune & Vadodara), Denmark (Aarhus), Netherlands (Hengelo), China (Shanghai & Tianjin) Key Components Manufactured : Generator, Rotor Blades, Control Systems, Towers, Nacelle Assy, Hub Castings, Transformers Product and Technology Product applications Product Classes Current Product offerings - Suzlon Current Product offerings - REpower New Product offerings for low wind regimes

: Offshore & Onshore : Sub Megawatt Class, Megawatt Class & Multi Megawatt : 600kW, 1250kW, 1500kW, 2100kW, 2250kW : 2000/2050 kW, 3300/3370 kW, 5000/5075 kW, 6150 kW MM 100 - 1800kW (REpower) & S95/97 2100kW DFIG series(Suzlon)

Projects and Installation (Global)* Total Installed Global : 21,545.88 MW or 21.54 GW operational MW Total number of turbines : 13839 Wind Turbine Generators installed globally Number of project : 30 installed countries Global Cumulative : 7.6% (Ranked 5th)

Market Share (2011)*** Countries over 1 GW : India (~7566 MW), USA(~3481 MW), Germany (~2281 MW), installations / France (~1385 MW), China (~1163 MW) CSR & Sustainable Development** CSR - No. of Villages covered CSR - No. of families directly benefitting CO2 emissions offset by Suzlon WTGs p.a. Coal offset by Suzlon WTGs p.a.

: ~ 841 villages in India : ~71466 families in India : ~13.05 million tonnes : ~11.97 million tonnes

Company History - Suzlon Energy Ltd.

http://economictimes.indiatimes.com/suzlon-energy-ltd/infocompanyhistory/companyid-1209.cms
The Company was incorporated in 1995 by Tulsi Tanti. Tulsi Tanti was primarily in the textile business and was introduced to wind energy through a wind power project that he had commissioned for his textile factory. The first subscribers to the Memorandum were the family members and friends of Tulsi Tanti. The Company entered into a technical collaboration agreement in 1995 with a German company, Sudwind GmbH Windkrafttanlagen to source the latest technology for the production of WTGs in India. Sudwind GmbH Windkrafttanlagen was subsequently taken over by Sudwind Energiesysteme GmbH ("Sudwind"). The parties entered into a fresh agreement dated September 30, 1996, under which Sudwind proposed to share technical knowhow relating to 0.27 MW, 0.30 MW, 0.35 MW, 0.60 MW and 0.75 MW WTGs in consideration for royalty to be paid on the basis of each WTG sold over the course of five years from the date of this agreement. The Company obtained the official non-exclusive, non-transferable license for the manufacturing, marketing, dealing and servicing of APX-60 type blades from the trustee of Aerpac B.V upon its liquidation, for consideration of Euro 200,000 vide an agreement that was entered into between the trustee of Aerpac B.V and the Company dated June 4, 2001. This license is valid for an indefinite period. The Company entered into an agreement dated April 10, 2001 with Enron Wind Rotor Production B.V for the acquisition of the moulds and the production line and technical support and assistance for the production of the rotor blade type APX 60-P in India for total consideration of Euro 500,000. Enron has granted these rights for the manufacturing, marketing and dealing with the products for an indefinite period. The Company introduced the concept of total solutions wherein, in addition to the supplies of equipments, the client is offered project execution work comprising land acquisition, site development, erection and commissioning, foundation and other civil work and O&M services. These services are offered in conjunction with the Associate Companies. SWSL, a subsidiary of the Company, was incorporated in 1998 with the objective of providing O&M for wind power projects set up by the Company. The Company has also set up technological development centres in Germany and The Netherlands through wholly owned subsidiaries. SEG, incorporated in 2001 and earlier known as AX 215 Verwaltungsgesellschaft mbH became a wholly owned subsidiary of the Company in 2002. AERT, a wholly owned subsidiary of AERH, which in turn is a wholly owned subsidiary of the Company, was incorporated in 2001 to engage in the development of technology for rotor blades, a key component of WTGs. Further, Suzlon Energy A/S, a wholly owned subsidiary of the Company was incorporated in August, 2004 to supervise the international marketing activities of the Company. It is proposed that the entire non-India marketing activities of the Company shall be coordinated through Suzlon Energy A/S. SWECO, now a wholly owned subsidiary of the Suzlon Energy A/S, was incorporated in 2001 to market, the WTGs manufactured by the Company in U.S.A. Further, Suzlon Energy A/S has another wholly owned subsidiary, Suzlon Energy Australia Pty Limited, which was incorporated in 2004 to access the wind energy market in Australia. Suzlon Energy B.V. earlier known as AE-Rotor B.V., The Netherlands, a wholly owned subsidiary of AERH, which is a wholly owned

subsidiary of the Company, was incorporated in 2001 to market the rotor blades manufactured by the Company. Cannon Ball Wind Energy Park-I, LLC (Cannon Ball) was incorporated as a limited liability company in July, 2002 for the purpose of setting up a wind power project in North Dakota, USA. Cannon Ball is a wholly owned subsidiary of SWECO which is a subsidiary of Suzlon Energy A/S. Further, a representative office of the Company was also set up in China in 2003 to explore the Chinese market. 2004 -Suzlon Energy Ltd signs up MSPL's 3.75 MW Wind Power Project -Suzlon Energy Ltd opens Representative Office in Beijing -Suzlon Energy Ltd wins Composite Centre International Export Excellence Award at the International Exposition India Composites, 2003 2005 -Suzlon Energy secures maiden contracts in China & South Korea -DEG, Germany signs agreement with Suzlon Energy Ltd to finance US $ 10 million -Suzlon Energy Ltd takes a major vertical integration step by setting up Suzlon Control System - MBU operations at Daman, India 2006 -Suzlon Energy Ltd - Signed a turbine supply agreement with Edison Mission -Suzlon Energy Ltd - Signed with Edison Mission Group -Suzlon gets Rs 620 cr Australian firm project order 2007 - Suzlon Energy Limited has has appointed Mr. Andre Horbach as a global Chief Executive Officer of the Suzlon group. - Suzlon Energy has issued zero-coupon foreign currency convertible bonds worth $300 million to fund its organic growth initiatives. -Suzlon Energy Ltd signed a major new order with ONGC, India's leading Oil & Gas Exploration & Production (E&P) Company, for 51 MW of wing turbine capacity. -Suzlon Energy Ltd wins the Best PE/VC Backed Company Award from Venture Intelligence Apex 2008 - Suzlon Energy Ltd has appointed Mr. Sumant Sinha as Chief Operating Officer (COO) with effect from August 01, 2008. - The Company has splits its face value from Rs10/- to Rs2/-. -Suzlon Energy Ltd enters Kerala with its first Wind Power Project commission of S52-600 kW turbine at Agali -Suzlon Energy Ltd is first S88-2.1 MW wind turbine is commissioned by Deco Light Ceramics Ltd, in Gujarat, India -Suzlon Energy Ltd Signs up with ONGC Limited - for 51 MW wind turbine capacity -Suzlon Energy Ltd signs up with Ayen Enerji Co. Inc. - for 31.5 MW of wind turbine capacity 2009 - Suzlon Energy Ltd has informed BSE that Suzlon Energy Australia Pty Ltd., a step-down wholly owned

subsidiary of Suzlon Energy Ltd has entered into an agreement with AGL Energy Ltd for supply of 54 units of Suzlon's S88-2.1 MW wind turbine generators translating to 113.4 MW capacity in Australia in 2009. - Suzlon Energy Ltd has informed that the Company has appointed Mr. Robin Banerjee as its new Chief Financial Officer (CFO) and who has joined the Company with immediate effect. - Suzlon Energy Ltd has informed about the signing of an agreement by Suzlon with Technomash Bulgarian Industrial Group to deliver 12.6 MW of capacity through six numbers of Suzlon S88-2.1 MW wind turbines. - Suzlon Energy Ltd has signned a repeat order for 57 MW with Ayen Enerji of Turkey. The order will be supplied with 27 units of Suzlon S88-2.1 MW turbine, to be installed at the Seferihisar and Mordogan projects in east Turkey. -Suzlon bags Golden Peacock National Training Award 2008 - 2010 - Suzlon Energy has secured a seventh order from Rajasthan State Mines and Minerals for 31.5 MW of capacity. - Suzlon Energy has signed the repeat orders with ITC Limited, a leading and highly diversified conglomerate, to set up, operate and maintain two new wind power projects in the states of Karnataka and Maharashtra. - Suzlon Energy bagged an order from ITC for supplying 27 MW of wind power turbines to projects in Karnataka and Maharashtra for an undisclosed amount. - Suzlon Energy stated that it has received its first ever order from a subsidiary of Larsen and Toubro (L&T). - Coimbatore: Suzlon Energy Ltd has received an order from L&T Infrastructure Development Projects Limited to set up, operate and maintain 8.7 MW wind project in Tamil Nadu. - Suzlon Energy Limited (SEL) has bagged a repeat order from the Malpani Group in order to set up as well as operate and maintain two new wind power projects totaling 19.8 MW capacity, in Karnataka and Maharashtra. - Suzlon Energy bagged orders worth Rs 118.8 crore from Malpani Group.This is in order to setup, operate and maintain 2 new wind power projects in Karnataka and Maharashtra - Suzlon Energy Ltd stated that it has bagged a 202 MW (megawatt) order worth Rs 1,149-crore from Techno Electric Group, a Kolkata-based engineering firm, for developing 500 MW of new capacity. - Suzlon Energy Ltd has own 74.8 MW order in Germany. -Suzlon Energy Ltd Issues Rights in the Ratio of 2:15 2011 - India's Suzlon Energy Ltd said that it had bagged an order worth $1.28 billion from India unit of Caparo Energy Ltd. Suzlon Energy which is the third-largest wind turbine manufacturer in the world plans to complete the 1000MW wind energy project by 2013. - The shares of Suzlon Energy on Wednesday rose, after the company won order from Gujarat - REpower bagged 47 MW wind projects from France based GDF SUEZ group - REpower inked deal with Swedish Vattenfall for 36 wind turbines - REpower and Alerion CleanPower signed contract for 44 megawatt wind farm project in Italy - REpower and EDF EN Canada Inc. conclude contract for 150-megawatt wind farm in Canada

- Suzlon - REpower signed contract for 12MW turn-key wind project in France - Suzlon Energy Ltd through its subsidiary, acquired stake in REpower Systems AG, Germany ("REpower"), a German stock corporation - Suzlon Group signs MoU with Gujarat Government to develop 1,000 MW of wind power - Suzlon - Suzlon receives 50.4 MW order from National Aluminium Company Ltd - Suzlon Energy Ltd has informed BSE regarding a Press Release dated January 21, 2011 titled "Suzlon secures 218 MW order in Brazil" - Suzlon-subsidiary SEFORGE won Rs. 200 cr wind sector orders. - Suzlon Energy launched new range of wind turbine machines - Suzlon Energy signed South African wind turbine deal - Suzlon Energy signed contract with ACED to set wind turbines 2012 - Suzlon Group entered Romanian wind energy market with 25 MW order win, new subsidiary. - Suzlon - Suzlon Group signed 332 MW offshore contract with RWE Innogy - Suzlon - Suzlon Group signed contract for 131 MW Australian wind farm project - Suzlon - Suzlon Group signed EoI for 2,500 MW of wind power with the Government of Karnataka - Suzlon - Suzlon wins 120 MW order in western USA - Suzlon Energy entered into contract with Continuum Wind Energy - Suzlon Energy's subsidiary bags order of 22MW in Portugal - Wind turbine major Suzlon Energy said its subsidiary REpower Systems has entered into a contract with Austrian operator Windkraft Simonfield AG for delivery of eight 3.2M114 wind turbines. - Suzlon Energys arm SEFORGE inks Rs 367 crore deal with a wind major - Wind turbines major Suzlon Energy said that one of its subsidiary SEFORGE Limited has won an important supply agreement of worth Rs 600 crore with global bearings manufacturing. 2013 - Wind energy major, Suzlon Energy said its subsidiary has secured two new orders totalling 16.4 MW for supplying wind turbines for a new wind farm at Wear Point, Pembrokeshire and Avonmouth, South West England. - Suzlon Group inks 50 MW order with Orange Renewable Power - Suzlon Energy Ltd. - Suzlon Group wins two new UK orders - Suzlon crosses 1,000 MW in Kutch; developing Indias largest wind park

Suzlon Energy Ltd

BSE: 532667 | NSE: SUZLON | ISIN: INE040H01021 Market Cap: [Rs.Cr.] 2,462 | Face Value: [Rs.] 2 Industry: Electric Equipment
Discuss this stock

Management Discussions

http://www.indiainfoline.com/Markets/Company/Fundam entals/Management-Discussions/Suzlon-EnergyLtd/532667
1. WIND ENERGY A MAJOR CONTRIBUTOR TO ENERGY SUPPLY With new installation of 38 GW during the calendar year 2010, worldwide installationsof wind energy generation crossed 197 GW which covers almost 4% of the global electricitysupply. Traditional energy sources such as coal, oil or gas are not only facing limitation ofresources, but they are also causing greenhouse gas emissions and hence cannot be seen assustainable energy sources. At the same time, recent incidents have indicated very clearlythat nuclear power, also due to its big risks and high capex costs, is not a very viableoption economically, socially and environmentally either. Instead, the world has to look for wind energy, in combination with other renewableenergy sources. It is important to underline that wind energy offers a very broad range ofapplications. It is versatile, can serve the needs of rural areas in unserved areas indeveloping countries, and cater to energy intensive industries in industrialised regionsand countries. By 2015, total worldwide installation of wind energy is expected to cross over 442 GWwhich is almost 2.3 times of the current installation. This will cover about 7.5% of theglobal electricity supply by then. 2. SECTOR OUTLOOK The sector outlook is progressively looking bright for the wind industry as it isexploiting an inexhaustible resource (i.e. wind) and is amongst the cheapest sources ofrenewable energy. Improvement in wind powers technical effectiveness, development oflarger wind turbines, and improved knowledge of siting, servicing and maintenance has madewind power a economically viable and competitive source of energy. The other key drivers include climate change, the Kyoto Protocol, the industrysjob creation potential and a desire for greater security of supply for energy.Policy support models like Fixed Tariffs for the feed in of wind poweredelectricity, Renewable Portfolio Standards, price premium, energy taxes and other taxrelated benefits, Investment grants and Green Certificates, continue to boost developmentof wind market across the globe. Wind energy has been accepted as a mainstream renewable technology by utilities acrossthe world, to meet their renewable portfolio targets as mandated international and countrybased targets. During the period 2011-2015, wind power is expected to grow at an annual growth rate ofabout 17%. In Asia strong growth is expected, especially in China. India will continue todemonstrate high level capacity additions approximately to the tune of 3 to 4 GW per year.Growth in emerging markets such as Latin America, Southern and Eastern Europe and Africawill offset probable short-term sluggish growth rates in the mature markets of

the world.
3. SUZLON POSITIONING This year was an important one for the Company, marking 15 years of existence and 17 GWinstallations worldwide. Suzlon has achieved over 6 GW of cumulative installations inIndia , nearly half of the countrys total wind installations. Suzlon is the fifthlargest supplier in the world having a cumulative market share of ~ 9%. Suzlon offers one of the most comprehensive product portfolios, ranging from 0.60 MWonshore turbines to one of the worlds largest commercial 6.15 MW offshore turbines,built on a vertically integrated, low cost manufacturing base. Added to that proventechnology, global R&D centers, 24 X 7 monitoring system with dedicated team focusingeach day on the customer satisfaction, has helped Suzlon to spread its operation across 5continents, 32 countries and more than 1,600 customers across the globe making Suzlon aglobal player. Suzlons contribution towards combating climate change, building a greener andsustainable tom orrow was recognized at the COP16 global submit in Mexico where it waspresented with Gigaton Award for global leadership in emissions control and sustainabilitypractices in the energy category. Mr. Tulsi Tanti, Chairman and Managing Director, was conferred the title WindVisionary of Asia by the Asian Development Bank. The recognition emphasizesSuzlons commitment to build the case for wind across the world and highlights adecade of tremendous work in key markets of Asia. 4. BUSINESS STRATEGY Suzlons strategic intent for its business is enumerated as follows: Increased customer outreach Suzlon operations are now spread across Asia, Australia, Europe, Africa and North andSouth America with operations in 32 countries. Suzlon boosted its customer profiles bysigning biggest contracts from IPP (Independent Power Producer) in the Indian market - a1000 MW order from Caparo Energy and a 202 MW order from the Techno Electric Group. Suzlonalso secured 218 MW order in Brazil from the Martifer Group reinforcing Suzl onspresence in the global market. In the European Onshore segment, the companys international business arm, SuzlonWind Energy A/S, broke new ground with its first order in Sweden. The Company has alsoentered into an agreement with Volkswind Bulgaria, a subsidiary of GermanysVolkswind GmbH. This aims to accelerate the manufacturers growth in the Bulgarianwind energy market and will develop projects exclusively using Suzlon wind turbines. InApril 2011, REpower entered into its biggest onshore framework agreement in Europe withJuwi for 720 MW covering upto 240 wind turbines of 3 MW systems. In the European Offshore segment, REpower has signed a contract with Belgian offshoreproject development company, C-Power for development of 295 MW project in phase II and IIIof the first Belgian offshore wind farm, Thornton Bank. A bank consortium of sevencommercial banks together with European investment bank is providing necessary financingfor the said project. This represents the biggest ever project financing in the offshorewind industry. REpower has also signed another major contract with RWE Innogy fordevelopment of 295 MW project at Nordsee Ost. This is the first supply under the frameworkagreement concluded between REpower and RWE Innogy in February 2009 for the delivery of upto 250 turbines of 5M/6M turbines. Improving product portfolio Suzlon and REpower have R&D and technology centers in Germany, the Netherlands,India and China. Its R&D initiatives have led to the development of Suzlons newS9X suite of turbin es comprising the S88-2.25 MW, S95 and S97 2.1 MW turbines. This suiteof products, is an evolution of Suzlons proven S88 -2.1 MW platform, and is builtaround the core doubly fed induction generator based technology. A compact and modular DFIG design allows ease of serviceability and meets the latestgrid requirements for smoother wind power plant connectivity. New blade designs with rotordiameter of 95 meter and 97 meter offers a larger swept area with greater energy captureand power production from moderate to low wind speeds. To ensure the highest standards inquality, Suzlons blade testing facilities far exceeds industry baseline bysimulating total life cycle of blade ( 1 million cycles) in most extreme onsite conditions. In the onshore segment, REpower has launched two new variant for low wind speedregions. One in its 3XM series3.2M114 and another new MM series turbine, MM100 with ratedoutput of 3.17 MW and 1.80 MW respectively. The construction of 3.2M114 uses theeconomical hybrid tower type of construction with concrete and steel. The manufacturingprinciple also makes it extremely easy to dismantle. The MM100 is specially adapted forthe North American market. In February 2011, REpower received a unit certificate from GLRenewables certification for its 3.4M104 turbines. This confirms that the wind turbinesmeet the technical requirements of the Renewable Energy Act and the System Serviceordinance. In addition to the 3.4M104, the MM82 and MM92 were also certified last year. Asa result REpower is the first wind turbine manufacturer to have received unlimited unitcertificates (EZE) for its onshore turbines.

In the offshore segment, REpower has gained a level of skills that sets it apart frommajority of its competitors. The machine availability of REpower offshore turbines haveshown result at par with onshore turbines despite the adverse conditions in the openocean. Internal Operational Excellence Program Suzlon transformation program christened ACE (Achieving Collective Excellence) startedin June 2009, has brought significant improvements in the areas of manufacturing,technology, product design, market strategy, leadership and the like. Turbine availability(uptime) has been consistently exceeding 97 per cent for its global operating fleet. Newproducts under S9X and 3XM series were timely launched with strong cross functionalcollaborations. Margin improvements were achieved through effective capacity utilisationand value engineering. Efforts are in place to reduce the deployment of working capitalthrough improvement in operational efficiencies. 5. RISK AND RISK MITIGATION Some of the key risks identified and steps taken to mitigate the adverse impact of sameare noted below: 5.1 Operational Risk Technology Wind turbine technology is constantly evolving. A shift towards direct drive turbines,more particularly in large multi MW turbines in commercial market was witnessed last year.The promoters of direct drive concept claims that it is a simpler mechanism no gearboxmeans less maintenance and fewer components and it is likely to become competitive withtraditional drive train machines. Further development of technologically superior turbinesrequires investments, which may not turn out to be a business opportunity. Suzlon believes that traditional drive-train designs with continuous innovations are aproven technology and would continue to be competitive in the years to come. The 97%machine availability of Suzlon models demonstrates the strength of the technology. Therisk of investments in innovation projects are addressed by structured periodic reviews ofall programs and investment by senior management. The research and testing centres atBaroda, India and Netherlands are focussed on WTG performance improvements and developmentof next generation wind turbine generators. Suzlon always believe in providing itscustomers with the best value for their investment, and they would drive theirtechnological work, to provide the same, at all times. Supply Chain Risk Increase in commodity prices has the effect of putting pressure on margins. Alsoshortage of critical components like gear box, slew rings, pitch bearing, towers, controlpanels, glass fibre etc. may affect timely delivery of wind turbines. Suzlon has mitigated supply chain risk to a great extent through its backwardintegration strategy, rate negotiation with vendors, alternative sourcing, indigenisationof critical components and various other measures like part of Copper cables was replacedwith Rubber Cables and Aluminium Cables etc and thereby leveraging Suzlons abilityto t imely source components at competitive prices. 5.2 Financial Risk Foreign Exchange Risk A significant part of Suzlons revenue, costs, assets and liabilities, aredenominated in foreign currency. Unhedged trade and financial exposure thus createspotential to adversely impact our project and overall profitability. Suzlons presence across geographies helps in providing natural hedging byoffsetting purchase and sales transactions amongst various currencies. Risks arerecognized at the contractual juncture and are hedged progressively at various stages ofproject life cycle, depending upon the nature of the transactions and in accordance withthe Hedging Policy of the company. During the year, risk management practices continued tofocus on minimising the economic impact on Company profitability arising from fluctuationsin exchange rates. Interest rate risk Suzlon is exposed to interest rate fluctuation at the group level. The CorporateFinance Team is continuously involved in working out interest rate sensitivity andpropositions to mitigate the interest rate risk. Credit risk Suzlon is exposed to high debt, taken to fund its inorganic growth. With increasedinterest rates and credit squeeze across the globe, funding of Wind Projects still remainsa challenge, leading to slow order inflow in markets like Europe and USA. Suzlon has been able to bring down its net debt - equity ratio to around 1.4. Companyhas also undertaken USD 175mn Foreign Currency Bond issue in April 2011. Focus on costreduction, improved operational efficiencies and reduction in working capital deployment,is expected to help in reducing the liquidity pressure. 6. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY Suzlons internal management audit team periodically undertake independent r eviewsof risks, controls, operations and procedures, identify control and process gaps andrecommend business solutions for risk mitigation. Management has launched ProjectEvolution to assess, evaluate, strengthen and institutionalise the CorporateValue System covering process, people and cultural alignment from ethical businesspractice standpoint.

The Audit Committee of the Board periodically reviews the management audit reports,audit plans and recommendation of the auditors and managements response to thoserecommendations. The Audit Committee met four times during the year under review. Highlights of consolidated results: A. Sources of funds 1. Share capital Rs. in crore Particulars Authorised share capital Subscribed and paid up share capital FY - 2010-11 700 355 FY - 2009-10 445 311

The share capital increased by Rs. 44 crore from Rs. 311 crore as at March 31, 2010 toRs. 355 crore as at March 31, 2011 mainly on account of (1) Issuance of 18.86 crore equity shares of Rs. 2 each @ premium of Rs. 61 each onrights basis to the existing shareholders of the Company. (2) Issuance of 3.20 crore equity shares of Rs. 2 each @ premium of Rs. 58 each onpreferential basis to IDFC Private Equity Fund III (IDFC PE) as aconsideration for acquisition of 4.13 crore e quity shares of Rs. 10 each in SE ForgeLimited (SEFL), a subsidiary of the Company. Consequent to acquisition of IDFC PEsstake in SEFL, SEFL became a wholly owned subsidiary of the Company. 2. Reserves and surplus A summary of reserves and surplus is provided in the table below: Rs. in crore Particulars Capital redemption reserve Unrealised gain on dilution Securities premium account General reserve Capital reserve on consolidation Legal and statutory reserve Minority share of losses Foreign currency translation reserve Profit and loss account Total FY - 2010-11 45 160 5,306 951 0* 142 (38) 137 (553) 6,150 FY - 2009-10 15 295 3,979 951 0* 91 943 6,274

*Less than Rs. 1 crore (a) Capital redemption reserve(CRR) Capital redemption reserve increased by Rs. 30 crore due to redemption of preferenceshares of few subsidiaries during the current year. (b) Unrealised gain on dilution During the year there was a reduction in unrealised gain on dilution by Rs. 135 croredue to acquisition of 17.1% stake back from IDFC Private Equity Fund III (IDFCPE) in SE Forge Limited (SEFL) which was diluted in 2009. (c) Securities premium account The securities premium account increased by Rs. 1,336 crore as a result of issuance ofshares on rights issue and preferential allotment of shares. It reduced by Rs. 9 crore dueto expenses incurred on issuance of shares under rights issue. (d) Foreign currency translation reserve (FCTR) The change in FCTR is due to exchange fluctuation resulting from translation of theaccounts of overseas subsidiaries into reporting currency of the parent company i.e. INR. (e) Profit and Loss account There is debit balance of Rs. 553 crore in profit and loss account as at March 31, 2011after transfer of Rs. 30 crore to CRR and Rs. 142 crore to Legal and statutory reserve. (f) Minority share of losses REpower acquired control of RiaBlades S.A and Ventipower S.A on February 03, 2011 andholds 3% stake. Minority share of losses represents losses of RiaBlades S.A and VentipowerS.A over the minority's share in equity on acquisition.

(g) General reserve and Capital reserve on consolidation There is no movement in General reserve and Capital reserve on consolidation ascompared to previous year. 3. Loan funds Rs. in crore Particulars Secured loans Unsecured loans Total FY - 2010-11 9,257 3,007 12,264 FY - 2009-10 8,123 4,545 12,668

During the current year, the group has availed long term loans of Rs. 1,599 croremainly under debt consolidation and refinancing arrangement and this increase has beenprimarily offset by conversion of unsecured loan from promoters worth of Rs. 1,187 croreinto equity apart from repayment of short term loans of Rs. 726 crore and term loans ofRs. 151 crore. 4. Deferred tax liability (Net) Rs. in crore Particulars Deferred tax Liabilities Deferred tax assets Total (Net) FY - 2010-11 294 161 133 FY - 2009-10 183 86 97

Net increase in deferred tax liability by Rs. 36 crore is on account of changes intemporary allowances and disallowances calculated as per the tax regulations applicable torespective entities within the group. We have assessed the likelihood that our deferredtax assets will be recovered from future taxable profits. B. Application of funds 1. Fixed assets a. Movement in gross block and capital work in progress Rs. in crore Particulars Gross block (Including Goodwill) Less: Accumulated depreciation / amortisation Net block Capital work-in-progress Total FY - 2010-11 12,852 1,933 10,919 419 11,338 FY - 2009-10 11,538 1,377 10,161 413 10,574

Major addition to Gross block is on account of following: (1) Goodwill of Rs. 221 crore primarily due to acquisition of additional stake inRepower and acquisition of balance 50% stake in REpower Portugal - Sistemas Eolicos, S.A(REpower Portugal) by REpower Systems AG. (2) Addition of Rs. 207 crore is on account of acquisition of 50% stake of REpowerPortugal - Sistemas Eolicos, S.A by REpower Systems AG. (3) Net additions to Plant & Machinery stood at Rs. 172 crore, technology relateddesign and drawings at Rs. 163 crore. (4) Increase of Rs. 388 crore is on account of foreign currency translation. b. Capital commitments Capital commitment stands at Rs. 106 crore as at March 31, 2011 as compared to Rs. 115crore as at March 31, 2010. 2. Investments Rs. in crore Particulars Long Term Investment Associates Long Term Investment Non Trade Investment Short Term Investment Total (Net) FY - 2010-11 807 22 138 967 FY - 2009-10 985 7 100 1,092

Reduction in long term investment Associates is primarily on account ofprovision for diminution in value of investment in Hansen Transmissions International NV(Hansen) of Rs. 216 crore. Movement in other investments is mainly due to Investment in mutual funds which arepurely temporary in nature. 3. Current assets, loans and advances Rs. in crore

Particulars Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances Total

FY - 2010-11 5,351 4,237 3,121 1,679 2,366 16,754

FY - 2009-10 5,994 3,174 2,904 3,018 2,108 17,198

a. Inventories During the current year Inventory holding period has reduced from 81 days to 72 daysresulting in better utilisation of net working capital. There is a sizeable reduction ofRs. 643 crore despite targets of higher sale in the forthcoming quarters. All this couldbe made possible through consistent efforts of Supply Chain Management by valueengineering, identification of alternative sources, indigenisation of critical components,reduction in lead time and proper production planning and forecasting. b. Sundry debtors Debtors balance has gone up to Rs. 4,237 crore, as against Rs. 3,174 crore as at theend of previous financial year. This is primarily due to higher proportionate sale inIndia towards end of the year, delayed realisation from a large Chinese customer (sincerealised) and movement from un-billed debtors to billed debtors. c. Cash and bank balances As of March 31, 2011, the cash and bank balance stands at Rs. 3,121 crore as comparedto Rs. 2,904 crore in previous year. Corporate Treasury places the temporary surplus fundswith banks and asset management companies for short term maturities. d. Other current assets Other current assets representing unbilled revenue in relation to constructioncontracts have come down significantly to Rs. 1,679 crore as at March 31, 2011 as comparedto Rs. 3,018 crore last year due to completion of relevant contract billing milestone. e. Loans and advances Rs. in crore Particulars Deposits Advance against taxes MAT credit entitlement Inter Corporate deposits Advances recoverable in cash or in kind or for value to be received Total FY - 2010-11 184 42 167 54 1,919 2,366 FY - 2009-10 168 103 153 152 1,532 2,108

Loans and advances stood at Rs. 2,366 crore and Rs. 2,108 crore as at 31st March 2011and 31st March 2010 respectively. 4. Current liabilities and provisions Rs. in crore Particulars Sundry creditors Other current liabilities Interest accrued but not due Due to customers Advances from customers Provisions Total FY - 2010-11 4,537 1,203 27 157 2,570 1,333 9,827 FY - 2009-10 3,942 1,237 29 484 2,735 995 9,422

There is an overall increase of Rs. 405 crore in current liabilities and provisions.This is primarily on account of the following reasons (a) Increase in sundry creditors is due to higher purchase in last quarter of the yearto meet the demand of increased business volumes. (b) Increase in provision for operation, maintenance & warranty and performanceguarantees.

(C) Decrease in Due to customers on completion of contract milestones. C. Cash Flow Net cash inflow from operating activities amounted to Rs. 1,214 crore is mainly due tooperating profit. Net cash in investing activities amounting to Rs. 828 crore hasprimarily been applied towards purchase of fixed assets and acquisition of stake insubsidiaries. Net cash in financing activities amounting to Rs. 464 crore has been appliedtowards payment of interest. D. Results of operations On November 24, 2009, AE-Rotor Holding B.V. (AERH), a wholly ownedsubsidiary of the Company sold 35.22% of equity stake in Hansen TransmissionsInternational NV (Hansen). Following this disposal, the Group had a voting andeconomic interest in Hansen of 26.06% as a result of which Hansen ceased to be subsidiaryof the Company. Hence, the consolidated financial figures for the year ended March 31,2010 inter alia included the financial figures of Hansen till November 30, 2009, assubsidiary and subsequently as an associate. For management analysis, the element of Hansen has been excluded from FY 2009-10 tohave better analysis with the current year figures. Rs. in crore Particulars FY - 2010-11 FY - 2009-10 (Excl. Hansen) Salesand service income Other operating income EBIDTA Depreciation EBIT Interest Other Income Profit / (Loss) before tax and exceptional items Exceptional items (gain)/ loss Tax Profit / (Loss) after tax 17,879 211 808 658 150 1,136 107 (878) 253 185 (1,317) 18,133 151 703 482 220 1,112 65 (827) (212) 355 (970) FY- 2009-10 (As Reported) 20,620 160 943 663 280 1,195 69 (846) (212) 356 (990)

Principal components of results of operation 1. Sales Sales decreased by Rs. 254 crore ( 1.4%), from Rs. 18,133 crore in FY 2009-10 to Rs. 17,879 crore in FY 2010-11. The decrease was primarily due to the reduction in demand as aresult of financing difficulties faced by our customers caused by ongoing difficulties inthe credit markets, more so in first half of the financial year. However, the sales insecond half of the year picked up. 2. Other income Other income increased by Rs. 102 crore from Rs. 216 crore in FY 2009 10 to Rs. 318crore in FY -2010 -11. This increase was primarily due to increase in interest incomereceived from banks due to increased level of fixed deposits and increase in operatingincome. 3. Cost of goods sold (COGS) COGS as % of sale increased marginally from 68.1% in FY 2009-10 to 69.7% in FY 2010-11.This is primarily due to change in sales mix, increase in commodity prices andcurrency translation impact on COGS of overseas subsidiaries. The overall trend of costper model continues to be under control and consistent efforts being taken to bring thecost down through value engineering, better rate negotiation and expansion of vendor base. 4. Operating and other expenses The operating and other expenses have come down by more than 12% to Rs. 3,152 crore in2010-11 as compared to Rs. 3,599 crore in 2009-10. The effort to bring overheads down ispaying off. 5. Employees remuneration and benefits Employees remuneration and benefit cost has remained almost static in proportionto sales. It has increased marginally from Rs. 1,629 crore in FY 2009-10 to Rs. 1,676crore in FY 2010 -11 representing 9.0% and 9.4% of sales respectively. 6. Interest Interest has remained almost static in proportion to sales representing 6.4% and 6.1%of sales in 2010-11 and 2009-10 respectively. It has marginally increased to Rs. 1,136crore in 2010-11 as compared to Rs. 1,112 crore in 2009 -10. 7. Depreciation

The Group provided a sum of Rs. 657 crore and Rs. 482 crore towards depreciation forthe year ended March 31, 2011 and March 31, 2010 respectively. The current yeardepreciation includes Rs.51 crore provided by REpower towards impairment losses. Increasein depreciation is also on account of additional capitalisation made during the currentand towards the end of the previous year. 8. Exceptional items Charge on account of exceptional items stood at Rs. 253 crore in FY 2010-11 as againstgain of Rs.212 crore in FY 200910. Current year figure includes a) exceptional loss of Rs. 216 crore provided towards diminution in value ofinvestment in 26.06% stake in Hansen Transmissions International NV (Hansen)and b) loss of Rs. 37 crore towards cost incurred for reset of conversion price ofcertain series of foreign currency convertible bonds. In comparison, exceptional gain in the FY 2009-2010 included a) gain of Rs. 252 crore on partial sale of stake in Hansen, b) net gain ofRs. 122 crore from buyback and exchange of foreign currency convertible bonds aftersetting off costs for restructuring and refinancing of financial facilities and c) charge on account of amortization of foreign exchange losses on convertiblebonds amounting to Rs. 162 crore. 9. Profit The consolidated EBIDTA has increased by 15% to Rs. 808 crore as compared to Rs. 702crore in FY 2009-10. The same has arisen primarily on account of better operationalefficiencies in the business. Loss before tax and exceptional items amounted to Rs. 878 crore and Rs. 827 crore forthe FY 2010-11 and FY 2009-10, representing 4.9% and 4.6% of total sales respectively. PBTis negative as EBIDTA for the year has been insufficient to absorb interest anddepreciation. Tax expenses reduced to Rs. 186 crore in FY 2010-11 from Rs. 355 crore in FY 2009-10.In the previous year, a major part of tax expense was on account of re-assessment ofdeferred tax assets. Loss after tax amounted to Rs. 1,317 crore and Rs. 970 crore for the financial year FY2010-11 and FY 2009-10 representing 7.4% and 5.4% of total sales respectively. Losses attributable to minority is Rs. 21 crore in FY 2010-11, as against profit of Rs. 9 crore in FY 2009-10 and share of the company in associate loss after tax recorded at Rs. 28 crore in FY 2010-11 as against profit of Rs. 16 crore in FY 2009-10. As a result of the foregoing factors, net loss increased from Rs. 983 crore in FY2009-10 to loss ofRs. 1,324 crore in FY 2010- 11. Cautionary Statement Suzlon has included statements in this discussion, that contain words or phrases suchas will, aim, will likely result, believe,expect, will continue, anticipate,estimate, intend, plan, contemplate,seek to, future, objective, goal,project, should, will pursue and similar expressionsor variations of such expressions that are forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions thatcould cause actual results to differ materially from those contemplated by the relevantforward-looking statement. Important factors that could cause actual results to differmaterially from Suzlons expectations include: Variation in the demand for electricity; Changes in the cost of generating electricity from wind energy and changes inwind patterns; Changes in or termination of policies of state governments in India thatencourage investment in power projects; General economic and business conditions in India and other countries; Suzlons ability to successfully implement its strategy, growth andexpansion plans and technological initiatives; Changes in the value of the INR and other currencies; Potential mergers, acquisitions or restructurings and increased competition; Changes in laws and regulations; Changes in political conditions; Changes in the foreign exchange control regulations; and Changes in the laws and regulations that apply to the wind energy industry,including tax laws.

SWOT ANALYSIS: AN OVERVIEW

http://www.scribd.com/doc/21972802/Swot-Analysis-of-Suzlon-Energy

Introduction A S W O T a n a l ys i s m a y s o u n d l i k e a f o r m o f m i s s i o n p l a n n i n g for J a m e s B o n d . B u t , S W O T s i m p l y s t a n d s f o r : S t r e n g t h s , W e a k n e s s e s , Opportunities, and Threats. It is a business tool available in the tool box of any small business owner. However, running a business forces one to focuson the issues and fires burning today, not tomorrow; this plays an importantrole to satisfy this requirement.A S W O T a n a l ys i s i s a p l a n n i n g t e c h n i q u e u s e d t o u n d e r s t a n d t h e Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business. It involves stating the objective of the business or project andi d e n t i f yi n g t h e i n t e r n a l a n d e x t e r n a l f a c t o r s t h a t a r e e i t h e r s u p p o r t i v e o r unfavourable to achieving that objective. SWOT is often used as part of a strategic or business planning process, but can be useful in understanding anorganisation or situation and decisionmaking for all sorts of situations.
The Concept The concept of SWOT analysis came from the research conducteda t S t a n f o r d R e s e a r c h I n s t i t u t e f r o m 1 9 6 0 1970. The background toSWOT stemmed from the need to find out why c o r p o r a t e p l a n n i n g failed. The research was funded by the fortune 500 companies to findout what could be done about this failure. The Research Team we reMarion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie.

Any organisation undertaking strategic planning will at some point assess its own strengths and weaknesses. When combined with an inventoryof opportunities and threats in the organisations external environment, the organisation is effectively making a SWOT analysis, that is it is establishingits current position in light of its Strengths, Weaknesses, Opportunities andThreats.W h i l e m o s t o f t h e a n a l y s i s i s s u b j e c t i v e , t h e S W O T c a n p r o v i d e multiple benefits to the business. These benefits can include: Insight into where the business can focus to grow. Understand the industry structure by using a SWOT in the business plan. F o c u s t h e a d v e r t i s i n g a n d m a r k e t i n g o n a r e a s t h a t w i l l g i v e a com petitive advantage in the marketplace. The foresight to see looming threats and react proactively. The SWOT model A S W O T a n a l y s i s p r o c e s s g e n e r a t e s i n f o r m a t i o n t h a t i s h e l p f u l i n matching an organisation or groups goals, programs, and capacities to thesocial environment in which it operates. The SWOT itself is only a data capture exercise . It is a subjective assessment of data which is organized bythe SWOT format into a logical order that helps understanding, presentation,discussion and decision-making.

There are four dimentions of the model namely Strengths, Weaknesses, Opportunities and Threates. The four dimensions are a usefule x t e n s i o n o f a b a s i c t w o h e a d i n g l i s t o f p r o ' s a n d c o n ' s . T h e f o l l o w i n g explanation represents it in a better way.

There are four dimentions of the model namely Strengths, Weaknesses, Opportunities and Threates. The four dimensions are a useful e x t e n s i o n o f a b a s i c t w o h e a d i n g l i s t o f p r o ' s a n d c o n ' s . T h e f o l l o w i n g explanation represents it in a better way. Strengths : D e p i c t t h e p o s i t i v e t a n g i b l e a n d i n t a n g i b l e a t t r i b u t e s , i n t e r n a l t o a n organisation and within the organisations control. These may include; Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness? Innovative aspects? Location and geographical?

 Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Weaknesses : These narrate the internal factors within an organisations control thatdetract from the organisations ability to attain the desired goal. Which areasmight the organisation improve?These may include; Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? A n A s s i g n m e n t o n S W O T A n a l y s i s Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction?

Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession? Opportunities : These attributes forecast the external attractive factors that represent the reason for an organisation to exist and develop. What opportunities existin the environment, which will propel the organisation? Identify them by their time frames.These can be; Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics - surprise, major contracts, etc? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? Threats : These reflect the external factors beyond the organisations controlw h i c h c o u l d p l a c e t h e o r g a n i s a t i o n m i s s i o n o r o p e r a t i o n a t r i s k . T h e organisation may benefit by having contingency plans to address them if t h e y s h o u l d o c c u r . I t i s r e q u i r e d t o c l a s s i f y t h e m b y t h e i r s e v e r i t y a n d probability of occurrence.The threats may be in the following aspect: Legislation could impact. Environmental effects would favour larger competitors. Existing core business distribution risk. Market demand very seasonal.

 Retention of key staff critical. Could distract from core business. Possible negative publicity. Vulnerable to reactive attack by major competitors.It is important to note the strengths and weaknesses are intrinsic valuecreating skills or assets, or the lack of, relative to competitive forces.O pportunities and threats are external factors which are not created by theorganisation, but emerge as a result of the competitive dynamics caused by future gaps in the market.

SWOT ANALYSIS OF SUZLON ENERGY

The SWOT Analysis of Suzlon Energy is explained below through the four indicators: STRENGTHS OF SUZLON 1.Integrated business model Suzlon Energy Ltd. Is having an integrated business model that they dont have to go to other suppliers for raw products. They have very good verticalintegration for supporting there production activities. So they dont have to be dependent for supplies. 2.In house technology and design capabilities They are having enough in -house technology development capabilities asthey have skilled employees so that they can design their products of their own. They dont have to go to outsider experts for designing the products. 3.Market leadership in India and global presence It is the only company of India which is having a global presence and as it isa market leader it can have benefits of its brand image. 4.Prudent acquisitions and alliances S u z l o n h a s e n t e r e d i n t o v e r y p r u d e n t a c q u i s i t i o n w h i c h i s h e l p i n g i t f o r increasing its main strength of vertical integration as well as provides chanceof global expansion also.For example: It has acquired HANSEN which was the worlds second largestmanufacturer of gear boxes. 5.Global Production As Suzlon has a global presence, it produces the products which can be usedglobally. Though it is not that much technically developed as compared to other global players, but its products can work at global level also. 6.Pricing Power As Suzlon is the market leader in India, it can drive the price and others willfollow it. But , it is now necessary for it to produce and sell at low cost andt h e p r o d u c t i o n m u s t b e c o s t e f f e c t i v e , b e c a u s e n e w g l o b a l p l a y e r s a r e entering in to the market. 7.Diversified Product line Suzlon is producing each type of wind turbines working in India. Ithas a wide range of products that has been sufficiently designed to cope with thespecific conditions and to that give optimum results. 8 . S o p h i s t i c a t e d a n d m o d e r n i z e d r e s e a r c h a n d d e v e l o p m e n t facilities 9.Highly qualified and energetic work force

WEAKNESSES OF SUZLON 1.Operational Risk Suzlon as a market leader dont have that much efficient operati o n management team. We can say this because there are many complaints of customers

regarding their operating staffs who provide after sales service and it is also looking up to some extent in operating the business. So proper implementation of strategies is lacking

2.Growth in Assets diminishing Growth in Profits Since last few years, Suzlon has focused more on integration. So it has gonefor acquisition and backward integration which blocks its investments in assets. Thus its growth rate of profits has declined. So, compared to growthin assets the growth in profits is low which is not favourable for the firm. 3.Unsupportive Stock Prices When a companys stock price is more than its book value, it can b e considered as a good sign for investors, but currently due to the unfavour market conditions Suzlons stock prices has fallen below the book value, while other competitors share prices has not declined below than their book value. 4.Unfavourable Ratings B e f o r e s o m e t i m e , o n l y M o o d y , a c r e d i t r a t i n g a g e n c y h a s d o w n - g r a d e d Suzlon Energy Limited due ti its financial weaknesses. They have also foundthe improper operation management at Suzlon. 5.Improper Working capital Management Earlier Suzlon was a financially strong company. But the previous down -turn in the world economy has brought the company in a critical situation. And Suzlon is also facing this problem because of improper working capitalm a n a g e m e n t . M a n y e x p e r t s a l s o t h i n k t h a t S u z l o n h a s p a i d m o r e f o r i t s HANSEN acquisition. 6.Weak Strategic Financial Management S u z l o n w h e n e x p a n d e d i t s b u s i n e s s t h r o u g h R E P o w e r , i t h a s s i g n e d a contract that Suzlon will pay 65 million Euro in December 2007, 30 million Euro in April 2009 and final payment of 175 million Euro will be paid inMay 2009. It can be found out that the cost of acquisition is too high and ith a s b e e n p r o v i d e d t h a t S u z l o n w i l l a r r a n g e t h i s p a y m e n t s f r o m e x t e r n a l sources as well as from working capital which directly affects companies performance domestically as well as globally. Such lacuna in appropriateand timely decision making in finance is the biggest weakness of Suzlon.

OPPORTUNITIES FOR SUZLON 1.Environmental Awareness N o w a d a y s e n v i r o n m e n t a l a w a r e n e s s h a s b e e n i n c r e a s e d a m o n g t h e popul ation of India. They have started saving energy and trying to reduce p o l l u t i o n . T h i s f a c t o r is favourable for the wind power energy as its a n o p t i o n t o t h e r m a l p o w e r , w h i c h i s a l s o r e s p o n s i b l e f o r p o l l u t i n g t h e env ironment. So wind energy is having benefit of no pollution as it produces pollution free wind energy. And Suzlon is the market leader in India in thiss e c t o r w h i c h i s t h e b a c k u p f o r c e f o r i t . T h e r e f o r e , t h e r e i s a h i g h g r o w t h opportunity for Suzlon in future horizon. 2.Government Initiatives As government has also understood the importance of natural resources, thegovt. is in favour for wind energy which uses wind and provide pollutionfree energy. Govt. of India is supporting firms those provide untraditionale n e r g y . A s a p a r t o f t h i s i n d u s t r y s u z l o n c a n g a i n a d v a n t a g e o f g o v t . initiatives. Govt. is also providing tax exemption on their earnings and also providing subsidies for encouraging investment in backward areas of societyto generate employment.

3.Untapped Offshore Market Till no w none of the Indian player other than Suzlon has gone for globalexpansion. So it can have advantage of covering untapped offshore market as an Indian player. Suzlon is also having strong financial backup comparedto its competitors in Indian market. 4.Steady Growth in Demand

A s a w a r e n e s s o f w i n d e n e r g y i s i n c r e a s i n g a n d p e o p l e u n d e r s t o o d t h e impo rtance of renewable energy sources which is cost effective, this leads tosteady growth in demand giving an opportunity to business more. 5.Vast coastlines of India and low cost In India we have a vast coastal line which is very supportive to establish wind mills at lower cost. So this can be a favourable factor for this industryas well as will give an ample opportunity to Suzlon to extract more from thisnatural presence

THREATES TO SUZLON 1.Intense Competition The govt. of India has approved FDI limits up to 74%. This can be a favourable factor for the whole industry, but for Suzlon it is a threat. Thoughi t i s a m a r k e t l e a d e r , i t s technology efficiency is not up to the mark ascompared to global giants like V A S T A S . S o e n t r y o f g l o b a l p l a y e r s w i l l affect Suzlon a lot. 2.Foreign Exchange Risk

As Suzlon is having a global presence, there is default risk of exchange ratefluctuations. As the exchange rates are fluctuating highly since last couple of years, it has become more risky for Suzlon to do business globally. 3.Technology Risk Earlier technology was not become obsolete so fast, but currentl ytechnological development is very fast and new technology is b e e n introducing in to the market very fast. So the company has to implement thenew developed technology to compete in the market where if is having morecorporate customers who generally know the product very well before usingit. 4.Objections to Wind Power T h e m a i n o b j e c t i o n t o w i n d p o w e r i s d u e t o o t h e r e n v i r o n m e n t a l c o s t s . Many wind parks remain shut -down for a part of the year because of birdmigration patterns and numerous turbine related bart -deaths. Furthermore,turbines take up lands; though larger turbines produce more power, they alsotake more land to operate safely and eff ectively, and since any man madei n s t a l l a t i o n c a n h a v e a d v e r s e e f f e c t s o n t e r r e s t r i a l e c o s y s t e m s . H a r d c o r e envir onmentalists may object to the installation of wind parks, lobbing theg o v t . t o l o o k f o r o t h e r s o u r c e s o f e n e r g y . O b v i o u s l y , t h e o i l a n d c o a l i ndustries will lobby against govt. subsidization of clean energy sources. Basing on this industry, effective lobbying could greatly reduce the amountof government support given to the wind power in dustry.

CONCLUSION
From the above SWOT Analysis we can draw a conclusion that the InternalStrengths are sufficient to compensate the Weaknesses as well, but for thisthe management has to take effective and time bound actions. Though therea r e s o m e t h r e a t s t h a t r e s t r i c t i t s g r o w t h , t h e y w i l l n o t f o r m a c o m p o u n d pressure on the development of the company. There is a sky of opportunitiesand it has to reach one by one by defeating the threats and by rooting out theweaknesses that if faces. In a nut-shell it can be said that to start a venture itrequires a little patience and time, but what about a market leader who ahave the experience of 15 years.!! Undoubtedly, there will be a day whent h e e n t i r e w o r l d w i l l b e c o m e h a p p y w i t h o u t a n y p o l l u t i o n a n d h a r m f u l particles with much pleasure and prosperity and the royal-rod will be seen inthe hands of ..yes, SUZLON !!!!

RATIO ANALYSIS
http://www.authorstream.com/Presentation/mrasadiya-1601138-report-ratio-analysis-suzlonenergy-ltd/

http://www.slideshare.net/CMVerma/business-strategy-of-suzlon-energy-ltd

4Ps INFORMATION - http://www.authorstream.com/Presentation/nir62-1082532-suzlon-latest/

HR DEPARTMENT - http://www.scribd.com/doc/46954944/suzlon
BCG MATRIX - http://www.scribd.com/doc/14710916/23/BCG-MATRIX