Veer Energy & Infrastructure Ltd Management Discussions

Industry Structure and Developments

The global wind energy sector has experienced rapid growth in recent decades, with a significant increase in installed capacity. Onshore wind power currently dominates the industry, with a large number of installations worldwide. The wind energy market is experiencing globalization and consolidation, with new markets emerging outside established regions. Wind energy is one of the largest sources of renewable energy.

Continuous innovation in turbine design, materials, and manufacturing processes is driving down costs and improving efficiency. 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. India has the fourth largest installed wind power capacity in the world.

Outlook

The wind power industry is projected to experience substantial growth, with a predicted increase in new capacity additions over the next decade. India has set ambitious targets for renewable energy capacity, including a significant expansion of wind energy. The wind energy sector is expected to create numerous jobs in manufacturing, installation, operation, and maintenance. The future outlook for wind energy is highly positive, with significant growth expected in both global and Indian markets. Advancements in technology, supportive government policies, and the increasing need for renewable energy sources are driving this expansion.

SWOT Analysis

Strengths

• The cost of wind energy has been decreasing, making it more competitive.

• Technologically proven over past 30 years.

• Fast track power project, with low gestation period and a modular concept.

• It is one of the most environment friendly, reliable & clean sources of energy.

• Separate state nodal agencies to support at state level.

• Minimum land area requirement.

• Dedicated Ministry (MNRE) at Central Level.

• Fuel cost is zero and there are no inputs required.

Weaknesses

• Inadequate Grid Infrastructure.

• Operational risk.

• Sudden political changes may affect the policy of its market.

• Less efficient than fossil fuels.

• Potential of Wind Power generation depends on local wind energy resources & availability of good locations.

• Wind speed is variable, leading to fluctuating energy production.

Opportunities

• Ongoing research and development are improving wind turbine efficiency and reducing costs.

• Government promoting this sector and providing incentives.

• Increasing awareness of climate change and the need for sustainable energy sources is driving demand.

• Unique storage techniques and technologies.

• Offshore wind farms offer access to stronger and more consistent wind resources.

Threats

• Wind energy faces competition from fossil fuels and other renewable sources.

• Possibility of Technology becoming obsolete.

• Concerns about environmental impacts can lead to public resistance.

• Changes in government policies can affect the stability of the wind energy market.

Risks

Company classifies the risks broadly into two categories, viz., External Risks and Internal Risks. The external risks mainly comprise 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.

Financial Performance

Veer Energy has been a consistent value creator for all its stakeholders. Details regarding financial performance is published in the Annual Report.

Human Resources

The positive and motivating work environment of the company advances innovation, encourages growth and inculcates a positive spirit among the workforce. Employees are nurtured within the company, which increases their potential and growth in various matters. Working in the company has always made it an enriching experience for the multi-generational, diversified and mobile workforce.

Ratios

Details regarding key financial ratios are disclosed at note no. 44 to the financial statement.

Cautionary Statement

The statements made above may be construed as forward looking statements within the meaning of the applicable laws and regulations. Actual performance of the Company may vary substantially depending upon the business structure and model from time to time.