Annexure-V- Cover Page for Academic Tasks

Course Code: FINM542 Course Title: CORPORATE FINANCE

Course Instructor: Prof. Monika Kalani Total Page Count: - 14

Academic Task No.: CA-2 Academic Task Title: Assignment (Suzlon Energy)

Date of Allotment: 05-10-2021 Date of submission: -18-10-2021

Student’s Roll no: RQ2141A07 Student’s Reg. no: 12103036

Evaluation Parameters:

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any
other students work or from any other source except where due acknowledgement is
made explicitly in the text, nor has any part been written for me by any other person.

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 “Suzlon Energy”

Suzlon Group is a global leader in renewable energy solutions, revolutionising and redefining
how renewable energy sources are harnessed all over the world. Suzlon's strong competences
in renewable energy systems are powering a greener tomorrow in 18 countries across Asia,
Australia, Europe, Africa, and the Americas. Suzlon's broad line of tough and dependable
products, backed by cutting-edge research and development and more than two decades of
experience, are designed to provide clients with optimal performance, increased yields, and
maximum return on investment.

Suzlon's tailored programmes to protect the environment, improve communities, and push
responsible progress are all based on the principle of sustainable development. Suzlon's
headquarters are in One Earth - Pune, a Platinum LEED (Leadership in Energy and
Environmental Design) certified and GRIHA 5 star rated site that is also one of the world's
greenest corporate campuses.

Products & Solutions

Wind Turbine Generators (WTGs) that are injected with state-of-the-art technology from their
blades, nacelle, towers, and foundations provide an all-encompassing solution to wind-energy
projects. These WTGs are known for their dependability and long-term viability, and they have
a track record of helping consumers get the most out of their money.

Suzlon's multi-faceted approach to value engineering and cost reduction delivers superior
margins and a competitive edge to its clients, allowing the company to provide and sustain the
best renewable energy solutions while remaining environmentally conscious.
S111 Wind Turbine Generation

Using award-winning lattice tubular technology, the S111 breaks through height barriers,
reaching a hub height of 140 metres (equal to a 40-story structure). It enables generation even
at low wind sites, such as those classified as IEC Class III.

The S111 has the ability to adapt to changing utility demands and meet a variety of energy
requirements. The S111 suite of WTGs was able to achieve a PLF of 43 percent. More than
645 S111 WTGs have been deployed since its inception, with a total installed capacity of 1354
MW.

S120 Wind Turbine Generation

Suzlon has set a new standard in the wind sector by developing S120m – 2.1 MW, a world-
class product designed exclusively for low-wind settings.

Suzlon's design teams from across the world worked to develop an entirely new individual
pitch control system that permits the 2.1 MW platform to accommodate a 120m rotor. This
results in a vast swept area of 11,225sq.m., like a cricket field, allowing for more energy
collection even in low wind areas.
S128 Wind Turbine Generation

Suzlon's S128 wind turbine generator uses the time-tested Doubly Fed Induction Generator
(DFIG) technology and is the company's newest offering.

It also has a rotor diameter of 128 metres and a blade that measures 63 metres. Suzlon created
and manufactured the SB 63 blade out of carbon fibre, which allows for smaller aerodynamic
profiles. At low-wind locations, this technique performs admirably.

Classic Fleet

Suzlon has developed a range of turbines that can generate 600 kW to 2100 kW of power over
the previous two decades. Suzlon's operations and maintenance services ensure that these
turbines continue to generate power around the world. Suzlon has phased down the
manufacturing of its older WTG (wind turbine generator) models - S97, S88, S82, S66, and
S52 - due to the advent of new, high-yield next-generation wind turbines.
Financial Analysis of Suzlon Energy company
Sources of finance
Equity, debt, debentures, retained earnings, term loans, working capital loans, letter of credit,
euro issue, venture funding, and other types of financing are available to businesses. These
money are used in a variety of situations. They are categorised by time period, ownership and
control, and generation source. Before deciding on a source of capital, it is best to assess it.

It is basically the sources from where the companies are getting funds to run the businesses.

Long term source of finance

Long-term sources of funding refer to monies raised by a corporation for a period of more than
one year.

Equity shares, preference shares, debentures, etc are the example of the long-term source of
finance.

Table for the Long-term Source of Finance of Suzlon Energy Company:

Year 2017 2018 2019 2020 2021

Equity Share Capital 1,004.88 1,063.95 1,063.95 1,063.95 1,701.60
Reserves and Surplus 17.59 -710.34 -8,115.43 -11,370.74 -5,735.07
Long Term Borrowings 4,038.54 3,362.95 1,842.53 653.66 4,292.88
Other Long-Term
Liabilities 241.61 39.47 18.19 68.74 2,120.80

Equity Share Capital:

Ordinary shares, often known as equity shares, reflect a company's ownership capital. The legal
proprietors of the corporation are the holders of these shares. They have an unfettered claim on
the company's profits and assets, as well as complete voting authority.

In fact, a company's primary goal is to maximise the value of its equity shares.

They face the risk of ownership because they are the company's owners. After paying the
preferred dividends, they are entitled to dividends. The dividend rate on these shares is not
fixed and is determined by the availability of divisible profits and the directors' desire.
Graph representation of Equity Share Capital of Suzlon Energy Company (2017-2021):

EQUITY SHARE CAPITAL

1,701.60
2,000.00
1,500.00 1,004.88 1,063.95 1,063.95 1,063.95
AMOUNT

1,000.00
500.00
0.00
2017 2018 2019 2020 2021
Series1 1,004.88 1,063.95 1,063.95 1,063.95 1,701.60

YEAR

▪ Current existing Equity Share Capital in the company is 1701.60

▪ Which is quite high from previous year.
▪ It was low in 2017 comparatively, then it rose by 59.07 (from 1004.88 to 1063.95
(2017-2018))
▪ The Equity Share Capital was constant for three years with 1063.95 of Equity Share
Capital from year 2018 to 2020.
▪ After that the Equity Share Capital rose by 637.65 in 2021 from 1063.95 to 1701.60.
▪ So that means the capital is increasing so it might possible that company is expanding.

Reserves and Surplus:

The term "Reserves and Surplus" refers to a consolidated account that captures the company's
retained earnings throughout time and is included in the shareholders' equity. The sum in
Reserve and surplus is typically separated into various accounts, which are then earmarked for
specific objectives such as the purchase of fixed assets, payment towards legal settlements,
debt repayment, dividend payments, and so on.

A business encounters many unpredictable expenses over the course of a year; therefore, it
builds reserves to be ready to fulfil these bills. These reserves effectively ensure that the
company's financial situation is not jeopardised by the emergence of any unforeseen expenses.
The surplus, on the other hand, is the profit and loss account's remaining balance after
dividends, tax provisioning, and other expenses have been paid. The surplus, like the reserves,
is set aside for different special-purpose expenses.

Here we will analyse the Reserves and Surplus of Suzlon Energy company
Graph representation of Reserves and Surplus of Suzlon Energy Company (2017-2021):

RESERVES & SURPLUS

4000
2000 17.59 -710.34
0
RESERVES & SURPLUS

-2000
-4000 -5,735.07
-6000 -8,115.43
-8000
-10000 -11,370.74
-12000
-14000
-16000
2017 2018 2019 2020 2021
RESERVES & SURPLUS 17.59 -710.34 -8,115.43 -11,370.74 -5,735.07
YEAR

▪ In 2017 the Reserves and Surplus was 17.59 against 4038.54 of long-term borrowings
and 241.61 of long-term liabilities,
▪ Which is quite low,
▪ It shows that the Company is has very less amount left in their reserves
▪ According to the 2018 financial report the reserves and surplus went into negative that
means company has used all their reserves and liabilities and these are the outstanding
or the overdraft amount which company must have to pay so it’s evident that company
has a huge number of borrowings and the negative reserves kept increasing till 2020,
▪ So, the company has used all the reserves and now its in negative so it is possible that
company has invested their money somewhere to expand the business or must have
started some new and big project
▪ But in 2021 the reserve and surplus which was in negative got reduced though it’s still
in negative but according to the data, the company has almost cleared its half of the
overdrafts or outstanding money from reserves so that means company must getting the
profits from the invested capital and now its repaying the debt and the borrowings.
▪ Analysing these data, we can say that company is doing well and soon the reserves will
become 0 from negative and the borrowings will be paid from the benefits.
 Long Term Borrowings (Debentures):
This category includes any loan taken by a corporation from financial institutions or banks
for a term of more than one year.

Debentures are one of the most frequent long-term financing options. They usually have a
fixed interest rate and a set maturity date. Every year, interest must be paid, as well as the
principle on the maturity date. The interest rate on a term loan is fixed, and payments are
made in instalments that include both principal and interest.

Graph representation of long-term borrowings or debentures of Suzlon Energy Company

(2017-2021):

LONG TERM BORROWING

5,000.00 4,292.00
4,038.54
4,000.00 3,362.95

3,000.00
AMOUNT

1,842.53
2,000.00
653.66
1,000.00

0.00
2017 2018 2019 2020 2021
LONG TERM BORROWING 4,038.54 3,362.95 1,842.53 653.66 4,292.00
YEAR

▪ Looking at the data from 2017 the borrowings was too high its was 4038.54 which will
lead company into negative in order to repay it so from this we can say that company
has huge number of long-term borrowings, so it is possible that company is getting
expanded or investing in big projects.
▪ But the borrowings kept decreasing till the year 2020 that means the company was
continuously repaying their borrowings from there benefits of the project in which the
company has invested earlier, but it again rose in 2021 and it is the highest in last 5
years, so it is analysed that the have taken loans to repay and also as it is the hugest
amount of last 5 year so it might possible that company is again investing somewhere .
Other long-term liabilities:
A liability is a debt that a person or company owes to another party, usually in the form of
money. Liabilities are resolved over time by exchanging economic benefits such as money,
products, or services.

Graph representation of other long-term liabilities of Suzlon Energy Company (2017-

2021):

OTHER LONG TERM LIABLITIES

3,000.00
2,500.00 2120.8
2,000.00
1,500.00
LIABLITIES

1,000.00
500.00 241.61
39.47 18.19 68.74
0.00
-500.00
-1,000.00
2017 2018 2019 2020 2021
OTHER LONG TERM LIABLITIES 241.61 39.47 18.19 68.74 2120.8
YEAR

▪ So as we can see the graph here the liabilities is 241.61 in 2017 but after that it dropped
by a huge number and it kept dropping till 2019 and then it rose in 2020 by a slightest
amount and them again in 2021 it got a hike by a really huge number that is 2120.8 so
again the same thing is happening that company has definitely invested a very big
amount of money in some project or the expansion of the business.

Short term Source of finance:

Loans that are repaid in less than a year are referred to as short-term finance. A company's
current assets, such as raw material and finished goods inventories, debtors, minimum cash and
bank balances, and so on, require short-term financing. Working capital financing is another
word for short-term financing.
 Table for the Short-term Source of Finance of Suzlon Energy Company:

Year 2017 2018 2019 2020 2021

Short Term Borrowings 1,975.70 3,766.74 3,257.98 8,260.69 200
Trade Payables 4,654.64 2,434.08 1,793.34 1,157.86 1,372.45
Other Current Liabilities 1,547.88 2,100.62 3,966.13 5,202.70 850.40

Short term borrowings:

Short-term borrowings are interest-based loans obtained by a firm for a duration of less than
one year.

Graph representation of short-term borrowings of Suzlon Energy Company (2017-2021):

Short Term Borrowings

10,000.00
8,260.69
8,000.00
6,000.00
3,766.74 3,257.98
4,000.00
1,975.70
2,000.00 200
0.00
2017 2018 2019 2020 2021

2017 2018 2019 2020 2021

Short Term Borrowings 1,975.70 3,766.74 3,257.98 8,260.69 200

▪ As we can see the graph and analyse the short term borrowing the company is that in
year 2017 the borrowings was 1975.70 but it rose in 2018 by a good diffrence of then
dropped a bit in 2019 and again went to a huge hike that is in 2020 with the amount
8260.69 and dropped in 2021 and it became almost the negligible so we can say that
the fluctutaion was there in short-term borrowings so the company kept taking the
short term loans and keep paying it also.
Trade Payables:
Creditors to the company are known as trade payables. Companies borrow monies from
creditors for shorter than a year to pay their existing obligations.

Graph representation of Trade Payables of Suzlon Energy Company (2017-2021):

TRADE PAYABLES
5,000.00
4,500.00
4,000.00
3,500.00
AMOUNT

3,000.00
2,500.00
4,654.64
2,000.00
1,500.00 2,434.08
1,000.00 1,793.34
500.00 1,157.86 1372.45
0.00
2017 2018 2019 2020 2021
TRADE PAYABLES 4,654.64 2,434.08 1,793.34 1,157.86 1372.45
YEAR

▪ In this section we will get to know about the creditors of the company to pay their
obligations
▪ So, as we can see that the payables trades kept decreasing from the past 5 years but in
this year the amount was a bit high than the previous year, but it is very low if we
compare it to the 5th year that is 2017
▪ It means that the company is getting good with the speed of paying the vendors and
suppliers and creditors YoY.

Other Current Liabilities:

The commitments or debts owed by a company that are due within a year or during the usual
operating cycle are referred to as current liabilities. Furthermore, current obligations are settled
with a current asset, which can be either a new current liability or cash.

Accounts payable, accrued obligations, short-term debt, and other comparable debts are
examples of current liabilities that appear on a company's balance sheet.
Graph representation of Trade Payables of Suzlon Energy Company (2017-2021):

OTHER CURRENT LIABLITIES

7,000.00
6,000.00 5,202.70
5,000.00
3,966.13
AMOUNT

4,000.00
3,000.00 2,100.62
2,000.00 1,547.88
850.44
1,000.00
0.00
2017 2018 2019 2020 2021
OTHER CURRENT LIABLITIES 1,547.88 2,100.62 3,966.13 5,202.70 850.44
YEAR

As we can see in this graph that the highest current liabilities has recorded in year 2020 that
was 5202.70 and the lowest in 2021 so we can say that the company has paid the short term
debt using the assets and has paid the account payables and the short term debt on time in year
2021.

Note:
▪ The interest coverage ratio of the company is low.
▪ In comparison to the previous quarter, promoter holding has declined by -0.65 percent.
▪ Over the last five years, the company has had a terrible revenue growth of -18.81
percent.
▪ Promoter retention is low: Promoters have pledged 88.54 percent of their holdings,
amounting to 16.52 percent.
▪ Other income of Rs.924.86 crore is included in earnings.
▪ The company's debt has been lowered.
▪ The company is predicted to deliver a strong quarter.
Comparative Analysis of source of finance with the peer companies:

Peer competitors:

▪ Havells
Havells India Limited is a prominent power distribution equipment manufacturer with
a strong global presence and a leading Fast Moving Electrical Goods (FMEG)
company. It has enviable market share in a variety of products, including Industrial and
Domestic Circuit Protection Devices, Cables & Wires, Motors, Fans, Modular
Switches, Home Appliances, Air Conditioners, Electric Water Heaters, Power
Capacitors, and Luminaires for Domestic, Commercial, and Industrial Applications.
▪ Siemens ltd.
Siemens Limited provides products, integrated solutions for industrial applications,
drives for process industries, intelligent infrastructure and buildings, efficient and clean
power generation from fossil fuels and oil & gas applications, transmission and
distribution of electrical energy for passenger and freight transportation, including rail
vehicles, rail automation, and other services.

Long Term Sources

Equity Reserves
Name of the Current
Share and
Company Liabilities
Capital Surplus Other Liabilities (Rs.in Cr.)
(Rs.in
(Rs.in (Rs.in
Cr.)
Cr.) Cr.)
Suzlon
1701 -5099 3813 6184
Energy
Havells 62 5113 2777 899
Siemens ltd. 71 9420 5858 509

Graph representation of Analysis of Peer Companies (2021):

Comparison with Peeers

Suzlon Energy Havells Siemens ltd.

15000

10000

5000

0
Equity Share Capital Reserves and Surplus Current Liablities (Rs.in Other Liabilities (Rs.in
-5000 (Rs.in Cr.) (Rs.in Cr.) Cr.) Cr.)

-10000
By analysing theses data, I have come to know that:

If we talk about the equity share capital of all the company including Suzlon Energy, Havells
and Siemens ltd. The equity share capital of Suzlon Energy is quote high according to the
annual report of March 2021 so that means we can say that the expansion of the Suzlon Energy
is quite good as well as the worthy of the company is really high.

Reserves and Capital of Siemens ltd. Is quite high it is more 3 times more than the Suzlon
Energy and almost 2 times more than the Havells that means we can say that the Siemens ltd.
Is not using their reserves and surplus so that means they are not investing in big projector not
expanding their business and the Suzlon’s Energy reserves and surplus are in negative, so it
means it have used all the reserves and surplus while investing in company and the Havells is
in between of the both the company.

The current liabilities and other liabilities ae quite less than Suzlon Energy because again it is
nit working on a project like Suzlon’s, so they dint need any debt or loans or any kind if there’s
things. Also, we can say that the havells and the Siemens is debt free and Suzlon’s have a lot
of debt to pay

▪ Havells has been paying out a strong 36.25 percent dividend.

▪ Siemens ltd. has been maintaining a healthy dividend pay-out of 27.58%