Debt equity ratio 1.13
Debt service coverage ratio (DSCR) 1.69
Interest Service Coverage Ratio (ISCR) 1.88

Definition for coverage ratio:

1. DSCR = [Profit before interest and exceptional items /(Interest expenses+ Principal repayments of long term debt during the year)]

2. ISCR = [Profit before interest and exceptional items / Interest expenses]

1. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors at its meeting held on June 27, 2009. The Statutory Auditors of the Company have carried out a audit of the above results for the year ended March 31, 2009.

2. On June 6, 2008, the Company, through its subsidiary acquired further 30% stake of REpower Systems AG (‘REpower’) held by Areva. Consequently, REpower has become a subsidiary of the Company with effect from June 6, 2008. Accordingly, the consolidated financial results for the year ended March 31, 2009 are to that extent not comparable with the consolidated financial results of March 31, 2008. Further, pursuant to an agreement dated December 15, 2008 with the Martifer Group to acquire its 22.4% stake in REpower, the Company, through its subsidiary has paid first tranche of Euro 65 Million in December 2008, thereby increasing its holding in REpower to 73.65% as on March 31, 2009. Post balance sheet date, the Company through its subsidiary has acquired additional stake of 17.07% and increased its holding in REpower to 90.72%. In financial year 2007-2008, the financial statements of REpower had been consolidated using equity method of accounting with a three-month time lag to that of the Company and accordingly, the financial statements of REpower for the period June 1, 2007 to December 31, 2007 have been consolidated in the financial statements of the Company for the year ended March 31, 2008. Appropriate entries have been effected in the consolidated financial statements of the Company for the year ended March 31, 2009, wherein the aforesaid three-month time lag on consolidation of REpower financials as at March 31, 2008 has been adjusted.

3. In respect of long-term foreign currency monetary items, the Company earlier followed a policy of recording all exchange differences to the profit and loss account. In line with notification of the Companies (Accounting Standards) Amendment Rules 2006 issued by Ministry of Corporate Affairs on March 31, 2009 amending Accounting Standard – 11 (AS - 11) ‘The Effects of Changes in Foreign Exchange Rates (revised 2003)´, the Company has chosen to exercise the option under para 46 inserted in AS - 11 by the notification. Accordingly with retrospective effect from April 01, 2007, exchange differences on all long term foreign currency monetary items have been amortized over future periods not exceeding March 31, 2011 / adjusted to fixed assets as prescribed by the notification. As a result of change in the accounting policy, the net loss before tax for the quarter and year is lower by Rs 402.52 crore in the standalone financial results and net profit before tax for the quarter and year is higher by Rs 405.04 crore in consolidated financial results.

4. Exceptional items referred to above include the following:

a. The Company has treated the Zero Coupon Convertible Bonds as monetary liability and accordingly restated the liability based on the exchange rate prevailing as at the end of the respective quarter. The Company has amortized the foreign exchange loss as per amended AS - 11 retrospectively and accordingly there is gain of Rs 303.15 crore for the quarter.

b. WTG / Blade restoration & retrofit costs arising out of events like blade failures in Overseas Markets and disruption of WTGs in Dhule and, including their consequential generation / availability provisions. These amounts aggregate Rs 103.74 crore (Rs 182.41 crore) for the quarter ended March 31, 2009 and Rs.411.10 crore (Rs.266.61 crore) for the year ended March 31, 2009.

c. Mark-to-market losses of Rs.128.68 crore (Rs.23.00 crore) for the quarter and Rs.330.71 crore (Rs.23.00 crore) during the year in the standalone financial results and Rs.139.24 crore (Rs.23 crore) for the quarter and Rs.353.54 crore (Rs.23 crore) during the year in the consolidated financial results. The same is in respect of foreign exchange forward / option contracts, taken for hedging purposes.

5. On June 11, 2007 and October 10, 2007, the Company made an issue of USD 300 Million (Rs.1,223.70 crore) and USD 200 Million (Rs.786.20 crore) Zero Coupon Convertible Bonds due 2012, respectively convertible into equity shares. However, in May 2009 and June 2009, the Company has done a restructuring of the Zero Coupon Convertible Bonds, by virtue of which bondholders have been exercised the following options provided to them:

- buy back of the bonds @ 54.55% of the face value
- exchange of new bonds in place of old bonds in the ratio of 3:5
- payment of consent fee to bondholders who agree for relaxation of covenants

The restructuring does not have any impact on the standalone or consolidated results for the quarter and year ended March 31, 2009.

6. The Company has not provided for the proportionate premium on redemption of Zero Coupon Convertible Bonds, due 2012, since the Company believes that the same is contingent in nature. The proportionate premium as at March 31, 2009 is approximately Rs.226.11 crore (Rs.101.08 crore). The auditors have without qualifying their opinion, given a matter of emphasis on non-provision of the proportionate premium in their audit report for the year ended March 31, 2009 

The Company has share premium of Rs 3,465.18 crores, which is adequate to cover the cost of proportionate premium, in case the contingency materialises.

7. On January 26, 2009, AE-Rotor Holding B.V. (“AERH”), a wholly owned subsidiary of the Company has sold 67,010,421 shares (10% equity) in Hansen Transmissions International NV (Hansen) to funds managed by Ecofin Limited (Ecofin), a London based specialized investment firm. Following this disposal, the Suzlon Group has a voting and economic interest in Hansen of approximately 61.28%.

8. The Company has raised Rs.300 crore in December 2008 from The Life Insurance Corporation of India (LIC) vide an issue of 12.50% Secured Redeemable Non-Convertible Debentures (NCDs). These NCDs are listed on the National Stock Exchange of India Ltd.

9. The figures stated above, have been reclassified wherever necessary to confirm with the classification in the financial results for the quarter / year ended March 31, 2009.

Tulsi R Tanti
Chairman & Managing Director