MANAGEMENT DISCUSSION & ANALYSIS Forward-looking statements The report contains forward-looking statements, identified by words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' and so on. All statements that address expectations or projections about the future, but not limited to the Company's strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot assure that these are accurate or will be realized. The Company's actual results, performance or achievements could thus differ from those projected in any forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Overview Wind farms are essentially a large-scale grouping of turbines, which can vary in number from one or two to hundreds of turbines and generate power from as low as 50 kilowatts to several hundred megawatts. Currently the world's fastest growing renewable power source, wind energy is the transformation of the wind's kinetic force into mechanical power through a turbine. The mechanical power can be used for such tasks as grinding grain or pumping water, or converted into electricity through a generator for use by homes and businesses. During recent years, the amount of energy produced by wind-driven turbines has increased rapidly due to considerable advancement in turbine technologies, making wind power economically compatible with conventional sources of energy. The use of wind power in India has been gaining importance with rapid installation in the last few years. SWOT Analysis Strengths • Technologically proven over past 30 years. • Clean, renewable, zero-emission source of electricity and therefore not subject to potential price on carbon. • It is one of the most environment friendly, reliable & clean sources of energy. • Wind projects under stable policy frameworks are less affected by the credit crunch than higher risk investments. • Favorable government policies & subsidies to promote renewable sources of energy. • It has the lowest gestation period as compared to conventional energy. • No fuel inputs and therefore no fuel costs. Weaknesses • Intermittent resource (difficult to brdict when wind will blow). • Potential of Wind Power generation depends on local wind energy resources & availability of good locations. • Operational risk. • Less efficient than fossil fuels. • Though wind energy is non-polluting, the turbines may create a lot of noise. • Market is driven in large part by policy, making it subject to sudden political changes. • Lack of long-term policy in India for spurring investor confidence. Opportunities • Renewable energy is a distributed and scalable resource making it well suited to meet the need for power in remote areas which lack grid & road infrastructure. • Government support in future in the form of various incentives and tax holidays to encourage the development and use of renewable energy sources. • Vast untapped potential: India has abundant untapped renewable energy resources, extensive coastline & high wind velocity in many areas. • Wind energy development is booming around the world, especially in India. • Positive demand for wind energy. • Larger, more efficient turbines to generate larger amounts of wind at lower cost. • Direct drive wind turbines that could potentially reduce O&M costs. • Unique storage techniques and technologies. Threats • Changes in Regulations and Policies. • Offshore wind deemed too difficult or too expensive. • Intense competition by existing players and new entrants in the market. • Technology may become obsolete. • Public loses concern about carbon emissions, making it more difficult to maintain supportive policies and incentives. Risks Your Company classifies the risks broadly into two categories, viz., External Risks and Internal Risks. The external risks mainly comprises of business risks on various fronts. The identified business risks and opportunities are deliberated in detail and thereafter considered in the business plan of the Company along with the mitigation plan. The internal risks identified by the Board are systematically addressed on a continuous basis across the locations. Internal control systems and their adequacy Our governance and compliance processes, which include the review of internal control over financial reporting ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported. It also conducts regular internal audits to test compliance with the statutory requirements. Audits are led by professional audit managers and supported by experienced personnel drawn from across the organization. Audit results are used by management to create detailed action plans where the businesses have not yet achieved full compliance with the requirements. Key findings are reported to senior management and summary reports are considered by the Audit Committee of the Board. The nature of the industries in which the company operates means that many of its activities are highly regulated by health, safety and environmental norms while maintaining operational integrity. |