Notes to Accounts for Suzlon Energy Limited:

Note 5: Share Capital

The authorized capital of Suzlon Energy Limited was Rs. 700 crores divided into 3,500,000,000 equity shares of Rs.2/- per share. The issued share capital was Rs. 359.26 crores divided into 1,796,297,624 equity shares of Rs. 2/- each where in the subscribed and fully paid-up capital was Rs. 355.47 crores divided into 1,777,365,647 equity shares of Rs. 2/- each. This suggests that the issue was fully subscribed but due to some default in payment by applicants fully paid-up capital was Rs.355.47 crores.

Reconciliation of Equity shares outstanding at the beginning and at the end of the reporting period: In the previous financial year 2010-11 the company raised Rs. 1188.39 crores by Right Issue of equity shares to the existing shareholders. The company allotted 188,633,322 equity shares of Rs. 2/- each at a premium of Rs. 61 per equity share. The company issued and allotted 31,992,582 equity shares of Rs. 2 each at a price of Rs. 60/- per share on preferential basis to IDFC Trustee Company Ltd A/c, IDFC Infrastructure Fund A/c and IDFC Private Equity Fund as a consideration for acquisition of 41, 254,125 equity shares of Rs. 10/- each in SE Forge Limited (SEFL), a subsidiary of the Company. Consequent to acquisition of IDFC PEs stake in SEFL, SEFL became a wholly owned subsidiary of the company. This suggests that the company raised a total of nearly 22.07 crores of equity shares amounting to Rs. 44.12 crores at Rs. 2/- per share in the previous year. However in the financial year 2011-12 the company did not raise any further capital thereby showing the balance at the

beginning of the year which accounts to approximately Rs. 355.47 crores divided into 177.74 crores of equity shares which was the closing balance of the previous financial year. This suggests that all the procedure regarding the right issue of equity of shares is completed during the previous year and no pending amount is left to be collected and provided for the current financial year. In addition the company has also issued 2,573,500 shares during the period of 5 years immediately preceding the reporting date on exercise of options granted under the Employee Stock Option Plan where in part consideration was received in the form of employee services.

Details of Shareholders holding more than 5% shares in the Company

Name of the Shareholder

As at 31st March, 2012

No. of Shares (Crores) % Holding 6.53%

As at 31st March, 2011

No. of Shares (Crores) 11.61 % Holding 6.53%

(Equity Shares of Rs.2 11.61 each fully paid) Mr. Girish Tanti Sanman Holdings Private Limited Tanti Holdings Private 23.73 Limited

13.35%

17.27 13.03

9.72% 7.33%

Note a:The shareholding of Tanti Holdings Private Limited for the financial year ended on March 31, 2012 includes shares held by Sanman Holdings Private Limited which has since been

merged with Tanti Holdings Private Limited by virtue of orders passed by the Honourable High Courts. The scheme has become effective from the appointed date i.e. April 1, 2010. Note 6: Reserves and Surplus Capital Reserves: The amount of capital reserve arrived from the merger and amalgamation of Suzlon Towers and Structures Limited (STSL) and Suzlon Infrastructures Services Limited (SISL) with the company where the excess of net book value of assets over the liabilities of amalgamating companies were categorized under the head capital reserves where as the capital redemption reserve remained the same as the company did not issue any shares during the year. Securities Premium Account: There was an increase in the securities premium account in the previous financial year 2011-12 due to the issue of right equity shares at premium of Rs. 60/- per shares which is reflected in the increase in the year 2011-12. There is also an additional increase under this head in current year on account of merger which resulted into an increase of Rs. 115.17 crores. However due to the redemption of some FCCBs the premium payable as well as the expenses incurred for the same are deducted from this head shows the final amount of Rs. 4477.60 crores as compared to the last years amount of Rs. 5306.09 crores. This suggests that some of the FCCBs of the company have attained the maturity during the financial year 2011-12.

The company also a deferred employee stock option outstanding amount of Rs. 0.61 crores for the year 2011-12 as compared to Rs. 3.03 crores for the previous years. This

suggests that company has defaulted less as compared to the previous year.

General Reserves and Surplus/Deficit in the Profit and Loss Account: The amount to the extent of Rs. 51.34 crores from General Reserves have been utilized for the mergers and amalgamations for the current year 2011-12. The company had net deficit of Rs. 114.04 as compared to the surplus of Rs. 200.34. Although the company had the advantage of some reserves on account of mergers it was not able to post profits due to an heavy increase in cost of raw materials consumed. This suggests that company is responsible to pay the dividends to its shareholders but the performance dissatisfies its shareholders.

Note 7: Long Term Borrowings: The long term borrowings are classified as secured and unsecured where the Secured Loans include loans from a. Banks b. Financial Institutions c. Others d. Vehicle Loans The Unsecured Loans include: a. Foreign Currency Convertible Bonds b. Loans and Advances from related Parties The company is liable to pay for the Foreign Currency Convertible Bonds due to their maturity in current year which shows a balance of Rs. 1348.29 as compared to Rs. 2136.27 in

the previous year. As the company is not making profits and not performing well, it has threat in future of paying its liability of secured loans having maturity of 2 to 5 years which alarms the company for a turnaround.

Note 8: Advance from Customers: The company has not raised any money through accepting advances from the customers for the current year showing the balance of Rs. 100 crores the same as previous year although it is liable to pay for the same.

Note 9: Provisions The provisions of the company are categorized as Long Term and Short Term Provisions. As far as long term borrowings are concerned there is an increase to Rs. 228.8 crores for the current financial year 2011-12 as compared to 2010-11 amounting to Rs. 79.51 crores. The major reason of such an increase is due to provision for the redemption of FCCB which are issued during the year have been provided for. As far as short term borrowings are concerned there is an immense increase of Rs. 1249.20 crores as compared to Rs. 312.18 crores due to the maturities of FCCBs in the current year which were issued in the year 2007 and had a maturity date June, 2012 and October, 2012. (Phase 1 and Phase 2 bonds).

Note 10: Short term Borrowings: The company had an increased secured working capital loans from banks amounting to Rs. 1888.76 crores for the current financial year in comparison to Rs. 1175.52 crores for previous year. The short term loans are secured by an arrangement of first charge on all present and future tangible/intangible assets.

Note 11: Other Current Liabilities: The amount of current liabilities has increased immensely amounting Rs. 2985.61 for the current year in comparison to the previous year current liabilities amounting to 395.58. This is mainly due to 2 reasons: a. The company has an increased current maturity of long term borrowings this year. b. The company has an increased advances from customer This suggests that company is not only liable to pay its debts from the long term perspective but also is liable to pay its dues from the short term perspective which the company needs to address in the upcoming year.