Surana Solar Ltd Management Discussions

Surana Solar Limited (Formerly known as Surana Ventures

Limited) was incorporated in the year 2006, a flagship Com-pany of Surana Group. During the year 2008, the Company entered into the business of manufacture of solar energy systems with focus on solar PV Modules. Pursuant to Scheme of Arrangement the "Solar Undertaking" of Surana Telecom and Power Limited, a Group Company was merged with the Company. The shares of the Company were listed on Stock Exchanges w.e.f 7^th January, 2011. The Company has steadily grown over the years with a continued focus on customer satisfaction, evolving itself into countrys one of the most promising mid cap Companies.

The Company has manufacturing facilities at Cherlapally and

FAB City in Hyderabad which have ISO 9001: 2008 certifica -tion accredited by AQA International LLC, Dubai. The Companys products and systems have been accorded approvals by various test agencies such as EURO TEST Laboratories, TUV INTER CERT and many more. The Company possesses excellent skills and capabilities in providing complete EPC solutions for large, commercial solar power plants of megawatt scale.

A) INDUSTRY STRUCTURE AND DEVELOPMENTS:

Solar Photovoltaic (PV): Rooftop solar capacity addition was at an all-time high at 2.2 GW (up 68% over last year). The increase was predominantly driven by the residential solar segment, which saw 746 MW of new installations. The total project capacity (allocated by the government and public agencies) in the pipeline stood at 67 GW (54 GW of solar and 13 GW wind), with

SECI having the highest offtake share of 60% (40 GW), followed by Discoms (22%, 15 GW). Module prices surged by 34% in the first half (the April-September period) due to supply-side constraints in China but eased slightly in the second half. Year-end imported and domestic module prices at $0.26/watt and $0.32/ watt, respectively, were still about 25% up over the previous year.

The Company has manufacturing units at Fabcity, SEZ, Hyderabad and Cherlapally, Hyderabad. The manufacturing unit at Cherlapally has installed capacity of 40 MW and the manufacturing unit at Fabcity has installed capacity of 20 MW for manufacture of ‘Solar

Photovoltaic Modules". The Companys products are sold under the brand ‘Surana Solar (formerly ‘Surana Ventures) in the domestic market. It has system-driven processes for manufacturing products and operations, following quality process at every stage to ensure delivery of high quality products and services. The Company is manufacturing / assembling the Solar Photovoltaic Modules and installation of rooftop solar for commercial establishments, domestic and industrial units.

B) OPPORTUNITIES AND THREATS:

India has tremendous potential in renewable energy. part of Paris Climate Agreement, India has committed achieve forty percent of its installed electricity capacity from non-fossil fuels by 2030. For achieving this goal, India has set an ambitious target of 175 GW of installed renewable energy (RE) capacity, including 100 GW solar power, by 2024. India has also set a target of GW installed RE capacity by 2030. As per the Central Electricity Authoritys Optimum Energy Mix report, electricity requirement of the country by 2029-30 will 817 GW, including the 450 GW from renewable energy sources, out of which 280 GW would come from energy. To achieve the target of 280 GW, around GW of solar energy capacity is needed to be installed every year, till 2030.

The Government is committed to increased use clean energy sources and is already undertaking various large-scale sustainable power projects promoting green energy heavily with a target to reduce the emissions intensity of GDP by 33% - 35% below the 2005 levels and increase share of non-fossil fuel total capacity to 40% by 2030. The governments of installing 175 GW of renewable energy, 100 GW which is solar capacity, by 2024 looks achievable the right policies and participation of the industry.

C) SEGMENT-WISE OR PRODUCT WISE

PERFORMANCE:

During the year under review, the Company recorded revenue of Rs. 1886.46 Lakhs and made net loss of Rs. 125.89 Lakhs against revenue of Rs

4696.36 Lakhs and net profit of Rs.228.49 Lakhs in the previous financial year 2022-23.

The following segment wise turnover in percentage during the financial year 31.03.2024:

Solar Energy		-		99.66 %
Renewable Energy		-		0.34 %
Trading	-	NIL

D) BUSINESS OUTLOOK:

Solar power in India at current levels is already cheaper than electricity generated through coal, natural gas or other fossil fuel options. Support from various central and states government for solar power industry is continuously increasing. The Government of India has set an ambitious target of achieving 175 GW of renewable energy capacity by 2024. With this the market players in India now have enough incentive to move to clean sources of energy. In view of the huge demand for solar product, sufficient government support, encouraging polices and Company having considerable market in this line of activity, the company expects to benefits by the same.

E) RISKS AND CONCERNS:

Your company being manufacturer of solar modules is having risks with levy of import duty and low tariff rates and the government policies. The Company has sufficient risk management policies in place that act as an effective tool in minimising the various risks that the businesses are exposed to during the course of their day-to-day operations as well as in their strategic actions.

F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate Internal Control Systems and Procedures with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, equipment, sale of goods and other assets. The company has clearly defined roles and responsibilities for all managerial positions and all operating parameters are monitored and controlled. The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets.

The Company has an Internal Audit System commensurate with its size and nature of business.

M/s Sekhar & Co., a firm of Chartered Accountants, are acting as Internal Auditors of the Company. Planned periodic reviews are carried out by Internal Audit.

The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors. Compliance with laws and regulations is also ensured and confirmed by the Internal Auditors of the Company. Standard operating procedures and guidelines are issued from time to time to support best practices for internal control.

G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: i) FINANCIAL PERFORMANCE:

Capital Structure:

The Equity Share Capital of the Company as on 31^st March 2024 is Rs. 24,60,33,000 comprising of 4,92,06,600 Equity Shares of Rs. 5 each fully paid

Other Equity:

The Other Equity of the Company for the 31.03.2024 year is Rs. 3156.43 lakhs as compared to Rs. 3282.31 lakhs in the previous year.

Property, Plant and Equipment:

During the year, the Company has disposed-off wind power plant and assets amounting to Rs.

944 Lakhs making the gross fixed assets as on

31.03.2024 to Rs. 4236.45 Lakhs.

Inventories:

Inventories amounted to Rs. 1807.25 Lakhs as on 31^st March, 2024 and in the previous year was Rs. 1320.95 lakhs.

Trade Receivables:

Trade receivables amounted to Rs. 21.96 Lakhs as on 31^st March, 2024 as against Rs. 33.67 Lakhs in the previous year.

Cash and Bank Balances:

Cash and Bank balances with Scheduled Banks amounted to Rs. 36.03 Lakhs as on 31^st March, 2024 which includes amounts deposited with banks as Security and margin Money Deposit as against Rs. 18.48 lakhs in the previous year. 7.05

Financial Assets – Loans (Non-Current):

Loans amounted to Rs 986.60 Lakhs as on 31^st March, 2024 as against Rs 1001.01 Lakhs in the previous year.

Financial Assets –(Current):

The amount of Loans amounted as on 31^st March, 2024 is 3.47 Lakhs as against Rs. 22.45 lakhs in the previous year.

Other Current Assets:

Other Current Assets amounted to Rs. 826.17 Lakhs as on 31^st March, 2024 as against Rs. 1004.92 lakhs in the previous year.

Current Liabilities:

Current Liabilities amounted to Rs. 233.60 lakhs as on 31^st March, 2024 as against Rs. 151.03 lakhs in the previous year. ii) OPERATIONAL PERFORMANCE: Turnover:

During the year 2023-24 the turnover of the Company (Net of GST) is Rs. 1770.64 Lakhs and Rs. 4218.33 Lakhs in the previous year.

Other Income is Rs. 115.82 Lakhs as on 31^st March, 2024 and Rs. 478.04 Lakhs in the previous year.

Depreciation:

The Company has provided a sum of Rs. 191.10 Lakhs towards depreciation and amortisation for the year and Rs 262.99 Lakhs in the previous year.

Net Profit/Loss:

The Net Loss of the Company after tax is Rs. 125.89 Lakhs and against profit of Rs. 228.49 lakhs for the previous year.

Earnings per Share:

Basic Earnings per Share for the year ended 31^st March, 2024 is Rs. (0.26) per share for Face Value of Rs.5 and Rs 0.46 per share for the previous year.

H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company believes that the quality of its employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunities to equip them with skills, which would enable them to adapt to contemporary technological advancements. Industrial Relations during the year continues to be cordial and the Company is committed to maintain good industrial relations through negotiations, meetings etc.

I) DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Ratios	2024	2023	Change (%)	Notes
Current Ratio	14.98	19.61	645.27	Note (a)
Debt Equity Ratio	-	-	-	-
Interest Coverage Ratio	14.31	32.11	(55.43)	Note (b)
Return on Net Worth	0.02	0.04	(156.33)	Note (c )
Inventory Turnover Ratio	372 days	115 days	645.27	Note (d)
Debtors Turnover Ratio	4 days	2 days	56.04	Note (e)
Trade Payables Turn- over Ratio	5 days	6 days	(24.17)
Net Capital Turnover Ratio	0.54	1.50	(63.87)	Note (f)
Net Profit Margin	(0.07)	0.05	(231.26)	Note (g)
Operating Profit Margin	(0.02)	0.11	(81.90)	Note (h)

Note: a) Change in the ratio is due to Increase in Inventory and increase in temporary investment in Liquid Funds. b) Change in ratio is due to decrease in finance cost and depreciation. c) Change in the ratio is due to decrease in in net profit d) Change in the ratio is due to increase in inventory and decrease in sales. e) Change in the ratio is due to decrease in sales f) Change in the ratio is due to increase in working capital g) Change in the ratio is due to decrease in net profit h) Change in the ratio is due to decrease in capital employed

J) CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Companys Objectives and Expectations may be "Forward-Looking Statements" within the meaning of applicable Securities Laws and

Regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys Operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, technological obsolescence, changes in the Government Regulations and Policies, Tax Laws and other Statutes and other incidental factors.