Offering life to ideas that will shape the future…..Offering life to ideas that will shape the future…..
Vision/mission from the ppt
Dear Valued Shareholders,
I am delighted to report an extremely successful year for your company in which we have made significant progress towards achieving our vision of becoming a ‘fully integrated global renewable energy conglomerate’. The dedication and hard work of our team has resulted in strong financial performance. Your company has attained impressive growth during the current year, registering a net profit of Rs 128.2mn and net sales of Rs 1,971.9mn - an increase of 547.5% and 472.4%, respectively, over the previous year.
We are well poised to continue the growth momentum in future with incremental revenue streams from the two high value ongoing projects – the Rs 22.54n Shree Maheshwar Hydel Power Project and the Rs 10bn Delhi IT project - expected to start over the next 1-2 years coupled with ourand a focused strategy to capture the growth opportunity in the renewable energy development, where we have already made a significant headway.
The 400MW run-of-the-river Shree Maheshwar Hydel Power Project promoted by your company at a total cost of Rs 22.54bn is well on track and we expect to see the first turbine going on stream by December 2008. The project will be fully commissioned by April 2009. As per the hydrology study by Lehmeyer India, the project has energy generation potential of 1,500mn units per annum.
We are developing an 83- acre property located on at NH 24 with a frontage of 670 meters on the highway. The property is situated just 35kms from the prime business centre of, Connaught Place in New Delhi and the area is already witnessing development of Hi-Tech City nearacross the site whichand is surrounded by many educational institutions. We would be developing an IT Software facility, IT Tower, Exhibition Centre, Shopping Mall with Multiplex, Business Centre and Service Complex at a total cost of Rs 10bn.
Our future strategy is focused on capturing the growth opportunity in the area of renewable energy development.
Harnessing the power of green
Today, there is a global consensus on the need to reduce reliance on fossil fuels on priority basis. This is imperative if we have to save our future generations from the destructive impact of climate change and global warming. A recent report by the Intergovernmental Panel on Climate Change (IPCC) has also insisted on the increased use of renewable energy sources that offer energy diversity and have the potential to act as a major solution in mitigating the dire consequences of global warming. In India, the new RE policy envisages enhancing power to 15,000MW through renewable and non-conventional sources by 2012 from 10,000MW as on March 2007. Your company plans to leverage its strong execution experience in one of the country’s largest Hydro Power projects to grow in the area of renewable energy development.
Production of bio-fuel from non-food crops is an idea that is catching the world’s attention and the jatropha plant, which is currently used for making bio-diesel in India, is gaining ground as the most suitable option. The plant's rugged nature (it can grow in wastelands and even deserts) makes it particularly well suited for harsh climates in developing countries. Also it is high yielding -- it offers four times as much fuel per hectare as soybean and more than ten times that of corn. Your company has ambitious plans to develop jatropha-based bio-fuel and has already tied up 50,000 hectares of land with the Madhya Pradesh government on long term lease for a Bio-Diesel plant with a capacity of 100,000 TPA.
Your company is also playing a leading role in promoting Energy-smart technologies for buildings in the country that help the environment while cutting down energy costs. During the year, your company embarked on its first project in urban areas with the setting up of a world class standard Solar Water Heating Systems/ Small Wind Turbine for a building tower at Worli, Mumbai, with an estimated cost of Rs 300mn. Entegra has started marketing Solar Heating Systems for hot water requirement which has a low pay back of 2 years and have already received contracts from a Military Hospital and Sultania Infantry and EME Centre.
Your company is also implementing solar thermal and Biomass projects in Madhya Pradesh, Maharashtra, Karnataka and other parts of the country. These investments are intended to meet our commitment to our customers and will, to the best of our abilities, be designed to honor our obligations to the environment and future generations.
Building for the future
During the past year, your company has embarked upon an organization strengthening exercise. It has put in place professional teams with rich experience in every strategic business unit. These teams will have the responsibility for executing your company’s future projects.
Your company is also continuously exploring mutually beneficial partnerships with global industry leaders to strengthen its capabilities across different verticals. Your company has already established rRelationships have already been established with reputed industry names like with Borawind AG from Switzerland which is one of the largest wind energy firms in Europe, E.D.I.G Construction Management, a reputed R&D company from Israel, and IREDA, a government entity, set up under Ministry of Renewable Energy (MRE). Your Company has also established relationships with Pirelli & C. Ambiente Renewable Energy S.p.A., Italy for providing a cost-competitive & reliable renewable power supply through the development of Refuse Derived Fuels (RDF) using Pirelli’s technologies and Solar Heating and Power Company S.p.A., Italy for new solar collector & conversion designs and, new combustion designs like fluidized bed boilers including new prime-mover designs.
As proposed in the Annual General Meeting held in April’06, your company has filed with Sebi for a rights issue in the ratio of 1:1 to raise resources for future business growth.
I am very confident that your company is set to achieve robust business growth in the future and is well on its way to take a quantum leap and ENERGISE THE FUTURE.
Thanks & Best regards,
Yours sincerely,
Mukul Kasliwal
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
CAUTIONARY STATEMENT
Statements made in this report in describing the Company’s objectives, estimates and expectations are “Forward looking Statements” within the meaning of applicable laws and regulations. They are based on certain assumptions and expectations of future events but the Company, however, cannot guarantee that these assumptions are accurate or will be materialized by the Company. Actual results may vary from those expressed or implied, depending upon the economic conditions, Government policies and /or other related factors.
An insight into the Company’s business
INDUSTRY STRUCTURE AND DEVELOPMENTS
Renewable Energy – tThe World is Going Green
Today, there is a global urgency to move towards cleaner and greener energy. The recent Intergovernmental Panel on Climate Change (IPCC) has underlined the need to develop renewable energy (RE) as the major solution in mitigating climate changes and preventing global warming. At present, only 14% or 160GW of world’s total energy demand is met through renewable energy. The fact that between now and 2030 global energy demand is expected to increase from 1,400 Mtoe to 2,200 Mtoe – an increase of 60% further adds to the magnitudedimensions of the problem. Responding to the call, governments world over have shown their support to renewable energy through favorable policies such as fixed tariffs for renewable powered electricity, Renewable Portfolio Standards (RPS), tax incentives, investment grants, Carbon credit mechanisms, etc.
As per Indian government data, renewable energy constitutes only 7.9% (10,407MW) of India’s overall installed capacity. To promote the sector, the Indian government has drafted a new RE policy, aimed at generating 15,000MW of power through renewable and non-conventional sources by 2012. The government has also set a medium scale goal of: electrification of 24,000 remote villages; deployment of solar water heating systems in 1mn homes, manufacturing 5mn solar lanterns and 2mn solar home lighting systems; and setting up an additional 3mn family size biogas plants. It is anticipated that the private sector will play a pioneering role in the Indian RE sector. Investment from the private sector in the renewable energy sector is expected to be in the tune of $8.48bn during the 11th Five Year Plan.
As an established player in domestic renewable energy market, your company is well poised to take advantage of these growth opportunities.
RENEWABLE ENERGY IN INDIA: HUGE GAP BETWEEN CURRENT CAPACITY AND POTENTIAL
Source / Capacity as on March 2007 / PotentialWind (MW) / 7092.0 / 45000
Small Hydro (up to 25MW) / 1975.6 / 15000
Biomass Power (MW) / 524.8 / 19500
Solar Photo Voltaic Power (MW/sq. km) / 2.7 / 20
Solar Water Heating systems
(mn. Sqsq. mtrs collectors area ) / 1.5 / 140
Biomass gasifiers (MW) / 86.5 / 16000
Biogas plants in Nos. (mn) / 3.8 / 12
TARGET CAPACITY ADDITION IN THE 11TH FIVE YEAR PLAN (2007-2012)
Source / Target in MWSmall Hydro power / 1,400
Wind Power / 3,500
Biomass power, Co-generation/gasification / 1,725
Solar Power / 25
Solar Thermal Power / 110
Energy from urban industrial waste / 140
Total Funds Required / $8.96bn
- Budgetary support from Govt. / $0.48bn
- Private Sector Investment / $8.48bn
Source: MNES
Wind Energy: India is today the world's fourth-largest market for wind energy in terms of annual installations with a global market share of 10.9%. But despite technological evolutions, the country was able to add only 902MW of wind power capacity in 2007, compared to its total potential estimated at 45,000MW. Government of India has embarked upon the world's largest wind resource assessment program comprising wind monitoring, wind mapping and complex terrain projects. This program covers 800 stations in 24 states with 193 wind monitoring stations already in operation. Such projects indicate positive signals for the industry and companies operating in wind energy vertical.
Hydel Power: India has a hydroelectric potential of about 150,000MW, however, only 17% of it has been harnessed so far. Indian Government is targeting an additional 50,000 MW of hydro capacity within the next 15-20 years at an estimated cost of Rs 2,000bn. It has taken up various policy measures to liberalize hydel power projects, including the revised hydro policy expected to be unveiled soon. Hydro projects of 20,928MW are at various stages of execution, while projects of 38,731MW are yet to be awarded/under approval.
Biomass Energy: The total potential of Biomass power in India is estimated at 5216,000MW, compared to miniscule current installed capacity of 86.5234MW. This new source of renewable energy has so far got very little attention from the government. That is changing now as for this sector to show significant growth, innovations in fuel supply chain is crucial. Sourcing of agricultural residues and wastes and optimizing the logistics cost are the dual requirements for growth of this sector.
Solar Power: In India, we usually have 300 clear sunny days in a year in most parts of the country. This is equal to over 5,000tn kWh/year, which is far more than the total energy consumption of the country in a year. This underlines the scope of generating power and thermal applications using solar energy. In terms of numbers, India has a total potential of producing 160MW/Sq. km in Solar Energy (Solar Photovoltaic and Solar Thermal), but unfortunately only 4.2MW/ sq. km has been harnessed till now.
Bio-Diesel: Worldwide, Jatropha oil is a potential substitute for diesel, providing cheap and renewable source of energy for transport & power. The plant can grow in wastelands, and it yields more than four times as much fuel per hectare as soybean, and ten times as much as about half as much as corn. Also, Jatropha is a one-stage conversion to bio-diesel. It does not require any engine modification upto 20% blend with petroleum diesel and a minor modification for higher percentage blend. During the year, Government of India has mandated the blending of 10% Jatropha ethanol in 90% gasoline. This mandate has created approximately demand for approximately Rs 3.6bn worth bio-diesel for the entire country, creating tremendous potential for Jatropha in India. Other potential biomass-derived liquid fuels produced and used in India consist of edible and non-edible oils such as Curcas, Karanje and Honge.
Energy-smart technologies for buildings: According to New Energy Finance, a renewable energy investment research company, energy consumption for residential and commercial buildings lies between 35% and 45% of total global energy consumption, higher than both industry and transport. In the US, 35% of total energy demand is from heating and cooling. Lighting takes up another 33%. So two-thirds of all energy in commercial buildings is accounted for by heating/cooling and lighting. Indian commercial buildings too are likely to consume a lot of energy even though they don’t require heating. This presents a big opportunity.
Entegra - Energised Growth:
Overall Performance
The year 2006-07 saw your company meet its twin key objectives: to be progress as a fully integrated Global Renewable Energy Enterprise Conglomerate infrastructure conglomerate with special focus on renewable energy and to achieve significant financial growth. During the year, yYour company has taken a landmark step decision to to lleverage its strong experience of successfully promoting one of the largest hydro power projects in the country – “Maheshwar” by expanding into t to development of renewable energy sources like bio-fuels, solar and wind energy. Simultaneously, y With the strategic divestment of part of your company’s holding in Shree Maheshwar Hydel Power Corporation Ltd complete, your company is poised to leverage its Rs 11.48bn investment in the project and pursue other strategic investments.
Your company has shown a quantum growth in business operations during the year;. tThe Sales and Net profits figures have grown by 472.4% and 547.5%, respectively. Further, with your company looking to harness its true potential with diversified and high value projects, we are actively working towards achieving sustainable growth in the future.