Directors Report of Birla Power Solutions Ltd.

Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting their Twenty Seventh Annual Report together with the audited statement of accounts of the Company for the financial year ended on 31st March, 2013.

INANCIAL RESULTS

(Rs. in lacs)

Standalone Consolidated For the For the For the For the year ended year ended year ended year ended 31.03.2013 31.03.2012 31.03.2013 31.03.2012

Sales & Other Income 39461.75 41961.81 70438.45 65,550.58

Profit before interest and depreciation 5125.09 5254.16 5084.58 5,048.65

Interest (Net) 2957.80 2,826.99 3658.37 2,829.73

Profit before depreciation 2167.29 2427.17 1426.23 2,218.92

Depreciation 353.65 364.25 353.65 364.25

Profit after depreciation but before Tax 988.31 861.19 1428.47 1,854.67

Provision for taxation 45.18 168.83 45.18 168.83

Adjustment of provision for earlier years 0.51 0.51

Tax adjustment for the earlier years 501.43 162.81 501.43 162.81

Profit after tax 441.70 529.55 881.80 1,522.52

STANDALONE RESULTS

During the financial year under review, the total revenue for the financial year ended 31st March, 2013 was Rs. 39461.75 lacs as against Rs. 41961.81 lacs during the previous financial year ended 31st March, 2012 showing a decrease of 6.34 %. Similarly, profit after tax for the same periods were Rs 441.70 lacs and Rs.529.55 lacs respectively showing a decrease of 20%. This is because of increase in cost of overheads,interest and tax adjustment of earlier years.

CONSOLIDATED RESULTS

The consolidated Financial statements comprising the accounts, of your Company and its subsidiaries are appended in the Annual report. On a consolidated basis, the total turnover for the year financial year 2012-13 was Rs. 70438.45 lacs as against Rs 65550.58 Lacs during the financial year 2011-12 showing an increase of 7% and the profit after tax for the same periods were Rs. 881.80 Lacs and Rs. 1522.52 lacs respectively showing a decrease of 72.66%.

FUTURE OUTLOOK

The Company has been dealing in portable power & power backup products and now has been to diversify its activities, by introducing power portable products in four different segments viz., Power & Power back up, Construction Industry, Agricultural Industry and Marine Industry. The Company also plans to introduce fuel efficient diesel operated products to the markets.

DIVIDEND

Keeping in view the tight liquidity position in the market and in order to conserve funds for working capital needs, your directors do not recommend any dividend for the Financial Year 2012-13.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the current year, the Company has transferred Dividend (for the Year 2004-2005) amounting Rs.2,48,788/- to Investor Education and Protection Fund (IEPF), which was due and payable and remained unclaimed and unpaid for a period of seven years, as provided in Section 205C(2), of the Companies Act, 1956.

DIRECTORS

During the period under review, Mr. Manish Malani was appointed as an Additional Director by the Board of Directors of the Company on 07.11.2012, Mr. RamPrakash Mishra was appointed as an Additional Director by the Board of Directors of the Company on 14.08.2013 and Mr. Jignesh Mehta was appointed as an Additional Director by the Board of Directors of the Company on 14.08.2013. Their office expires at the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956, a member has proposed his candidature for appoinment as a Director. Your Directors recommend their reappoinment. Mr. Mahinder Singh Arora resigned from the Board w.e.f. 27.09.2012, Mr. Y.P. Trivedi resigned from the Board w.e.f. 18.10.2012, Mr. Yashovardhan Birla resigned from the Board w.e.f. 27.12.2012, Mr. Upkar Singh Kohli resigned from the Board w.e.f. 06.05.2013, Mr. Rajesh Shah resigned from the Board w.e.f. 08.07.2013, Mr. P.V.R. Murthy resigned from the Board w.e.f. 14.08.2013. The Board placed on record its appreciation of the valuable services rendered by them.

SUBSIDIARY COMPANIES

During the year under review, the Company has disinvested shares of its subsidiary viz., Vijay Puranjay Minerals Private Limited and accordingly, the relation between Holding Company and Subsidiary has ceased. At present, the Company has two subsidiaries viz., Birla Urja Limited and Birla Power Solutions Limited FZE.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT, 1956

In terms of General Circular No. 2/2011 dated February 8, 2011, of the Ministry of Corporate Affairs, Government of India, the Company has availed the exemption from compliance with Section 212 of the Companies Act, 1956. Accordingly, the consolidated financial statements of the Company and its subsidiaries for the year ended 31st March, 2013 together with reports of Auditor thereon and the statement pursuant to Section 212 of the Companies Act, 1956 form part of the Annual Report.

Information required to be provided in respect of subsidiary companies has been disclosed separately in the Annual Report. The Financial Statements of the Subsidiary Companies are available for inspection by the shareholders at the Registered Office of the Company.

REPORT ON CORPORATE GOVERNANCE

Your Company is following corporate governance norms of highest standards. As required under clause 49 of the listing agreement, a report on corporate governance forms part of this annual report.

FIXED DEPOSITS

In view of severe liquidity faced by the Company, the overdue fixed deposits & Interest thereon as on 31st March, 2013 was Rs. 5992.28 Lacs. Directors are endeavour to repay overdue deposits and interest thereon durig the year under review.

AUDITORS

M/s Thakur Vaidynath Aiyar & Co. Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. They have expressed their willingness to be reappointed for a further term. And they confirmed that their appointment, if approved by the shareholders, will be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

INDUSTRIAL RELATIONS

The Company enjoyed harmonious relations with workmen and employees through out the period under review. Agreeement has been signed by the Company and Labour Union on 1st January, 2013 for the period of five years valid till 31st December, 2018.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars of energy conservation as prescribed have not been provided, as the Company''s industry is not specified in the schedule.

The Details regarding Technology Absorption as per Form ''B'' are enclosed.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in the annexure to the Directors Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

- that in preparation of the annual accounts for the period ended on 31st March, 2013 the applicable accounting standards have been followed along with proper explanation relating to material departures;

- that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period ended on 31st March, 2013 and of the profit of the Company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the directors had prepared the annual accounts for the period ended on 31st March, 2013 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the continuing co- operation and assistance rendered by the Central Government, State Government, Financial Institutions, Banks, suppliers and other organisations in the working of the Company.

The Directors also wish to place on record their deep sense of appreciation for dedicated services rendered by officers, staff and workmen of the Company.

The Board takes this opportunity to express its gratitude for the continuous support received from shareholders.

For and on behalf of the Board Of Directors

Manish Malani Ramprakash Mishra

Director Director

Place: Mumbai

Date: 14th August, 2013

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Mar 31, 2012

The Directors have pleasure in presenting their Twenty Sixth Annual Report together with the audited statement of accounts of the Company for the financial year ended on 31st March, 2012.

FINANCIAL RESULTS

(Rs. in lacs)

Standalone Consolidated

For the For the For the For the year ended year ended year ended year ended 31.03.2012 31.03.2011 31.03.2012 31.03.2011

Sales & Other Income 42,076.87 30,406.40 65,550.58 36,889.29

Profit before interest and depreciation 4,052.94 3,733.79 5,048.65 3,965.70

Interest (Net) 2,826.99 2,347.61 2,829.73 2,348.20

Profit before depreciation 1,225.95 1,386.18 2,218.92 1,617.50

Depreciation 364.25 378.02 364.25 378.02

Profit after depreciation but before Tax 861.70 1,008.16 1,854.67 1,239.48

Provision for taxation 168.83 260.98 168.83 260.98

Adjustment of provision for earlier years 0.51 (1.57) 0.51 (1.57)

Tax adjustment for the earlier years 162.81 (6.90) 162.81 (6.90)

Profit after tax 529.55 755.65 1,522.52 986.97

STANDALONE RESULTS

During the financial year under review, the total revenue for the financial year ended 31st March, 2012 was Rs. 42,076.87 lacs as against Rs. 30,406.40 lacs during the previous financial year ended 31st March, 2011 showing an increase of 38%. Similarly, profit after tax for the same periods were Rs 529.55 lacs and Rs.755.65 lacs respectively showing a decrease of 29.92%. This is because of increase in cost of overheads, interest and tax adjustment.

CONSOLIDATED RESULTS

The Consolidated Financial Statements comprising the accounts, of your Company and its subsidiaries are appended in the Annual report. On a consolidated basis, the total turnover for the financial year 2011-12 was Rs. 65,550.58 lacs as against Rs 36,889.29 Lacs during the financial year 2010-11 showing an increase of 77.70% and the profit after tax for the same periods were Rs. 1,522.52 Lacs and Rs.986.97 lacs respectively showing an increase of 54.26%.

FUTURE OUTLOOK

Your Company has followed up its plans to launch Diesel Pump Set and Power Tiller, and firmed up the launches during the current financial year and your management expects that these launches will boost your company's strength in agrisector. Efforts are under way to rationalise the input costs in order to improve profitability.

Birla Power has expanded its business horizon. Keeping in view the rapidly growing energy requirements of the country, your Company has forayed into Solar Power through its Subsidiary / Joint Venture Companies, details whereof are given elsewhere in the Report.

DIVIDEND

Keeping in view the tight liquidity position in the market and in order to conserve funds for working capital needs, your directors do not recommend any dividend for the Financial Year 2011-12.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the current year, the Company has transferred Dividend (for the Year 2003-2004) amounting Rs.1,83,410/- to Investor Education and Protection Fund (IEPF), which was due and payable and remained unclaimed and unpaid for a period of seven years, as provided in Section 205C(2), of the Companies Act, 1956.

DIRECTORS

Pursuant to Article 150 of the Articles of Association of your Company and Section 256 of the Companies Act, 1956 Mr. Upkar Singh Kohli retires by rotation at the ensuing Annual General Meeting and is eligible for re- appointment.

Your Directors recommend the reappointment of Mr. Upkar Singh Kohli.

SUBSIDIARY COMPANIES

Your Company has three subsidiaries as follows. .

(a) Birla Urja Limited

The Company has registered a 50 MW PV Solar Project with Government of Gujarat during Vibrant Gujarat Summit 2011 and the management expects allotment of minimum 20 MW. Necessary steps will be taken after allotment to set up the project.

The Company is exploring the possibility of setting up a Solar Project in Gujarat or Kutch or Surendranagar region which has high solar radiation.

The Company is also actively following up 50 MW Solar Thermal Project in Rajasthan and 10 MW PV Solar Project in Bihar.

(b) Birla Power Solutions Limited FZE

The Company has made good progress during the financial year 2011-2012. During this period, the Company has achieved a turnover of AED 18,02,62,731 (equivalent to Rs. 2,34,73,71,228) and made a net profit of AED 72,22,650 ( equivalent to Rs.10,03,56,431).

(c) Vijay Puranjay Minerals Pvt. Ltd.

During the year under review, your Company has made a strategic investment in Vijay Puranjay Minerals Pvt. Ltd. by acquiring its entire paid up equity capital making it 100% subsidiary of your Company. The subsidiary holds a mining license to exploit high grade silica in Andhra Pradesh covering an area of 123 hectares. Silica is a valuable raw material for manufacturing Float Glass and Polysilicon. Polysilicon is the raw material for producing Solar Photovoltaic Wafers & Cells for which an integrated Solar Project is being set up by an associate Company viz. Birla Surya Limited. The investment is expected to give attractive returns in the years to come.

JOINT VENTURE COMPANY

BIRLA TERRAJOULE PVT LTD

During the year your Company has formed a 50:50 Joint Venture Company with Terrajoule Corporation, USA, by the name Birla Terrajoule Pvt. Ltd. Terrajoule Corporation are pioneers in developing 24X7 solar power plants based on Solar Thermal Concept. This technology will not only electrify those areas where there is no power connectivity but will also make available solar power during the night time. This Joint Venture Company will design manufacture and assemble such solar power plants upto 300KW which shall be ideally suited for remote villages, islands, agriculture, industries, etc.

This technology has received tremendous response from various Governmental agencies.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

In terms of General Circular No. 2/2011 dated February 8,2011, of the Ministryof Corporate Affairs, Government of India, the Company has availed the exemption from compliance with Section 212 of the Companies Act, 1956. Accordingly, the consolidated financial statements of the Company and its subsidiaries for the year ended 31st March, 2012 together with reports of Auditor thereon and the statement pursuant to Section 212 of the Companies Act, 1956,form part of the Annual Report.

Information required to be provided in respect of subsidiary companies has been disclosed separately in the Annual Report. The Financial Statements of the Subsidiary Companies are available for inspection by the shareholders at the Registered Office of the Company.

REPORT ON CORPORATE GOVERNANCE

Your Company is following corporate governance norms of highest standards. As required under clause 49 of the listing agreement, a report on corporate governance forms part of this annual report.

FIXED DEPOSITS

The total fixed deposits amount outstanding as on 31st March, 2012 is Rs. 5,792.01 lacs. There are no defaults in repayment of matured deposits and payment of interest. There are no unpaid deposits other than those unclaimed.

AUDITORS

M/s Thakur, Vaidynath & Aiyar Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. They have expressed their willingness to be reappointed for a further term. And they confirmed that their appointment, if approved by the shareholders, will be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

EXPLANATION TO AUDITOR'S REPORT AS REQUIRED UNDER SECTION 217(3) OF COMPANIES ACT, 1956.

Clause No. in Auditor's Directors' Reply Annexure to Qualification the Auditors' Report

6 We have to state The Company could that the company not deposit Rs. 9.31 has invested Rs. lacs in liquid assets 283.55 lacs out as it was facing of the amount of severe financial Rs. 292.86 lacs, crunch, in liquid assets. As far as issuing Further there Fixed Deposit has been delay Receipts to the of some days in extent of Rs. 105.98 obtaining the said lacs, during January assets. There and February 2012, has also been the small delay a small delay in was due to change issue in Fixed of the Registrar to Deposit Receipts the Fixed Deposit to the extend of Schemes. Rs. 105.98 lacs However, the during January company has not and February defaulted in payment 2012 consequent of any deposit to the change in or interest. The the Registrar of Company will deposit the company. the shortfall amount in liquid assets as soon as the financial position improves.

9 (a) The extent of the The Company could arrears of Income not pay the Dividend Tax and Sales tax Distribution Tax of dues outstanding Rs. 261.54 lacs and as at March 31, the arrears of Sales 2012, for a period Tax due of Rs. 23.64 of more than six lacs due to severe months from the financial crunch, date they became The Company will payable are: pay these dues as soon as the financial 1) Dividend Distribution Tax position improves, of Rs. 261.54 lacs.

2) Sales Tax of Rs. 23.64 lacs.

INDUSTRIAL RELATIONS

The Company enjoyed harmonious relations with workmen and employees through out the period under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars of energy conservation as prescribed have not been provided, as the Company's industry is not specified in the schedule.

The Details regarding Technology Absorption as per Form 'B' are enclosed.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(1) Activities Relating to Export

The Company is pursuing various possibilities to export its products to African Countries, and Middleeast. However the company is facing stiff competition from cheap products of China. However the company is trying to penetrate these markets with some innovative products.

(2) Initiatives taken to increase exports

The company is exploring the possibility of selling its products through its subsidiary company situated in Dubai.

(3) Development of New Export Markets for Products and Services

The company is developing new markets in Africa and Middle East.

(4) Export Plans

The company will continue its efforts to export its products wherever possible.

Foreign exchange Earning and Outgo:

Particulars 2011-2012 2010-2011 (Rs. in Lacs) (Rs. in Lacs)

Total Foreign exchange NIL 7.09 earnings

Total Foreign Exchange 61.23 92.76 outgo

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in the annexure to the Directors Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

- that in preparation of the annual accounts for the period ended on 31st March, 2012 the applicable accounting standards have been followed along with proper explanation relating to material departures;

- that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period ended on 31st March, 2012 and of the profit of the Company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the directors had prepared the annual accounts for the period ended on 31st March, 2012 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the continuing co-operation and assistance rendered by the Central Government, State Government, Financial Institutions, Banks', Suppliers and other organisations in the working of the Company.

The Directors also wish to place on record their deep sense of appreciation for dedicated services rendered by officers, staff and workmen of the Company.

The Board takes this opportunity to express its gratitude for the continuous support received from shareholders.

For and on behalf of the

BOARD OF DIRECTORS

Place: Mumbai Yashovardhan Birla

Date: 14th August, 2012 Chairman

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their Twenty Fifth Annual Report together with the audited statement of accounts Of the Company for the financial year ended on 31st March, 2011.

FINANCIAL RESULTS

(Rs. in Lacs)

For the For the

year ended year ended

31.03.2011 31.03.2010

Sales & Other Income 30406.40 24014.88

Profit before interest arid 3733.79 2277.79 depreciation

Interest (Net) 2347.61 1633.33

Profit before depreciation 1386.18 644.46

Depreciation 378.02 346.66

Profit after depreciation but 1008.16 297.80 before Tax

Provision for taxation 260.98 95.78

Adjustment of provision (1.57) 45.93 for earlier years

Tax adjustment for the earlier (6.90) 21.49 years

Profit after tax 755.65 134.60

OPERATIONS

During the financial year under review the total revenue for the financial year ended 318l March, 2011 was Rs. 304,06.40 lacs as against Rs. 240,14.88 lacs during the previous financial year ended 31st March, 2010 showing an increase of 26.61 "/©.Similarly profit after tax for the same periods were Rs. 755.65 lacs and Rs.134.60 lacs respectively showing an increase of 461.4%. This was possible due to better management of working capital funds and cutting costs.

During this financial year, the Company has worked with various prestigious customers in the field of Education, Defence, Financial Services, various e-Governance programmes, etc. One of these successfully executed orders included a significantly large order for an Education Project in Bihar.

FUTURE OUTLOOK

Recognizing the need of the market, we are working towards introducing newer products with specific emphasis on agricultural segment. In the financial year 2011-12, we are expecting to launch Diesel Pump Set and Power Tiller. We realize, with government's initiatives on farm mechanization, these products will be in great demand with high growth rates.

We are building on the strength of last year's introduction of LED business unit. In some of the government agencies, our products have passed the testing parameters and we expect order flow to start during current financial year.

Eurther the company recognizes that employees are key strength and has lately been on a drive to induct young and bright sales force. This is to ensure that we are closer to customer and helps us identify products that they need.

DIVIDEND

Keeping in view the tight liquidity position in the market and in order to conserve funds for working capital needs, your Directors do not recommend any dividend for the Financial Year 2010-11.

BONUS ISSUE

Pursuant to the approval granted by the shareholders in the previous Annual General Meeting, on 25th October, 2010, the company has issued and allotted 35,58,65,995 fully paid bonus equity shares of Re 1/- each.

As a result of the bonus issue, the paid up share capital, has increased to Rs. 213,51,96,905.00 The new bonus Equity shares have been listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

ISSUE OF SHARE WARRANTS TO PROMOTER GROUP

COMPANIES

On 9th June, 2011, in accordance with applicable SEBI (ICDR) Regulations, the company has issued and allotted 21,35,19,690 convertible share warrants to the promoter group companies. These companies can exercise option to convert warrants into equal number of equity shares of Re 1/- each within a period of 18 months from the date of allotment at a price of Rs. 2.10/- per share.

DIRECTORS

Mr. Kalyan Bhattacharya has resigned as Whole Time Director and Director with effect from 12* November, 2010 The Board placed on record its deep sense of appreciation of the services rendered by Mr.Bhattacharya to the company during his tenure Mr. P.V.R. Murthy was appointed as Managing Director by the Board with effect from 12th November, 2011 for a period of three years and the members approval was obtained by postal ballot on 23rt December 2011. Mr. M. S. Arora was appointed as an Additional Director by the Board of Directors on 12th November, 2011 and he holds office up to the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956, a member has proposed his candidature for appointment as Director. Pursuant to Article 150 of the Articles of Association of your Company and Section 256 of the Companies Act, 1956 Mr. Rajesh V. Shah retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Your Directors recommend reappointment of Mr M. S. Arora and Mr. Rajesh V. Shah.

SUBSIDIARY COMPANIES

Your Company has two subsidiaries as follows.

(a) Birla Urja Limited

The company is actively exploring various possibilities for setting up power projects based on renewable and non renewable sources in the country. The company has been registered with Gujarat government for 50 MW Solar PV project under "VIBRANT GUJARAT 2011". The company has also been registered with Government of Rajasthan for 50 MW thermal project and 5 MW solar PV project and the company is aggressively pursuing these projects and your directors are hopeful of firming up these projects in the near future.

(b) Birla Power Solutions Limited FTZ

The Company was incorporated on 8th December, 2010 in Hamriyah Free Trade Zone, U.A.E. to undertake the business of General trading. The company has commenced business and for the period 8th December, 2010 to 31st March 2011, the company has achieved a turnover of AED 53,015,566 equivalent to Rs. 6482.89 Lacs and made a net profit of AED 1,949,944. equivalent to Rs. 232.47 Lacs.

CONSOLIDATED ACCOUNTS

The consolidated accounts comprising the accounts of the Company and the above subsidiaries are appended. On a consolidated basis, the total turnover for the year ended on 31st March, 2011 was Rs. 35,682.10 Lacs and the profit after tax for the same period was Rs. 978.50 Lacs.

The audited accounts of these companies have been received and the statement purusnat to Section 212 of the Companies Act, 1956 forms part of the Accounts.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011, has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. The financial data of the subsidiaries have been furnished under 'Details of Subsidiaries'forming part of the Annual Report. Consolidated Financial Statements of the Company and its subsidiaries for the year ended March 31, 2011, together with reports of Auditors thereon and the statement pursuant to Section 212 of the Companies Act, 1956, form part of the Annual Report. The Annual Accounts and the related detailed information of subsidiary companies will be made available to the Members of the Company seeking such information at any point of time and they will I also be available for inspection by any member at the Registered/Head Office of the Company and that of the subsidiary concerned.

REPORT ON CORPORATE GOVERNANCE

Your Company is following corporate governance norms of highest standards. As required under clause 49 of the listing agreement, a report on corporate governance forms part of this annual report.

FIXED DEPOSITS

The total fixed deposits amount outstanding as on 31st March, 2011 is Rs. 5190.89 lacs. There are no defaults in repayment of matured deposits and payment of interest. There are no unpaid deposits other than those unclaimed .

AUDITORS

M/s Thakur, Vaidynath Aiyer and Company, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. They have expressed their willingness to be reappointed for a further term. And they confirmed that their appointment, if approved by the shareholders, will be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

INDUSTRIAL RELATIONS

The Company enjoyed harmonious relations with workmen and employees through out the period under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars of energy conservation as prescribed have not been provided, as the Company's industry is not specified in the schedule.

The Details regarding Technology Absorption as per Form 'B' are enclosed.

Foreign exchange Earning and Outgo:

Particulars 2010-2011 2009-2010

(Rs. in Lacs) (Rs. in Las)

Total Foreign Exchange 7.08 NIL

earnings

Total Foreign Exchange 92.76 57.81

outgo

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in the annexure to the Directors Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

- that in preparation of the annual accounts for the period ended on 31" March, 2011 the applicable accounting standards have been followed along with proper explanation relating to material departures;

- that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period ended on 31st March, 2011 and of the profit of the Company for that period;

- that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- that the Directors had prepared the annual accounts for the period ended on 31st March, 2011 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the continuing co-operation and assistance rendered by the Central Government, State Government, Financial Institutions, Banks, suppliers and other organisations in the working of the Company.

The Directors also wish to place on record their deep sense of appreciation for dedicated services rendered by officers, staff and workmen of the Company.

The Board takes this opportunity to express its gratitude for the continuous support received from shareholders.

For and on behalf of the

BOARD OF DIRECTORS

Place : Mumbai Yashovardhan Birla

Date : 11th August, 2011 Chairman

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Mar 31, 2010

The Directors have pleasure In presenting their Twenty Fourth Annual Report together with the audited

FINANCIAL RESULTS (Rs. in lacks)

For the For the year ended year ended 31.03.2010 31.03.2009

Sales & Other Income 24202.92 22803.55

Profit before Interest and 2465.83 2590.23

depreciation

Interest (Net) 1821.37 1462.18

Profit before depreciation 644.46 1128.04

Depreciation 346.66 345.77

Profit after depreciation but 297.80 782.27

before Tax

Provision for taxation 95.78 374.46

Adjustment of provision 45.93 13.38

for earlier years

Tax adjustment for the 21.49 77.14

Profit after tax 134.60 317.28

OPERATIONS

During the year under review, the operations of the Company remained flat, mainly because the Company scaled down substantially, the manufacture of higher KVA generators which constituted a bulk of sales. As a result, the total revenue for the financial year ended 31- March 2010 was 24202.92 lacs as against Rs. 22803.55 Lacs during the previous financial year ended 31st March, 2009showing a slight increase of 6.14 %. The profit after tax for the same periods were Rs. 134.60 lacs and Rs.317.28 lacs respectively showing a decline of 57.58%. The sharp decline In profit is due to increase in input costs and exchange fluctuation loss caused on account of foreign exchange funds raised by the Company from an issue of Global depository Receipts aggregating to US$ 20.07 million.

FUTURE OUTLOOK

Your Company is expanding foray by supplying portable gensets to a large number of schools In Bihar in association with a leading education service provider. This initiative will enable the Company to establish in the education field also.

Your Company is also partnering reputed Non Governmental Organizations (NGOs) in setting up common service centers across a number of states.

Birla Power has expanded its business horizon. In the rapidly growing economy, the countrys energy requirement is growing exponentially. The Industrial and Infrastructure sectors are looking for energy solutions.

BPSL, like i did 25 years back, when i became the first Company to come out with power solutions to bridge the demand-supply gap, is moving into the space of Energy Solutions by getting the latest technology and the widest choice in LED (Light Emitting Diodes) Lamps and Heat Sinks from one of the global leaders, Srlghtnte Systems Limited, Singapore.

BONUS AND DIVIDEDND

To commensurate the completion of 25 years of operations of your Company, your Directors have decided to reward the shareholders by:

1. Recommending a Payment of dividend at the rate of 7.5% (i.e. seven and half paisa per share of a face value of Re. 1 each) for the financial year 2009-2010.

2. Approving, subject to the approval of shareholder* In the Annual General Meeting, bonus Issue of 1:5, i.e. one Equity share of face value of Re.1A each for every five Equity shares of face value of Rs.1/- each held in the Company.

INCREASE IN AUTHORISED CAPITAL

During the year under review, the authorized share capital of the company was increased from Rs 65.00 crores to Rs. 100.00 crores by creation of additional 35.00 crores equity shares of Re 1/- each ranking parl passu In all respects with the existing equity shares.

In the current financial year, the capital was further increased from Rs. 100.00 crores to Rs.300.00 crores by creation of additional 200.00 crores equity shares of Re,1/- each ranking par! passu with the existing equity shares on 4th June, 2010 with the approval of the shareholders by way of Postal Ballot.

GLOBAL DEPOSITORY RECEIPTS (QDR) ISSUE

During the year, the Company has Issued and allotted 58,50,000 GDRs at a price of US$ 3.42 per GDR aggregating to US$ 20,007,000 represented by underlying 29,25,00,000 Equity shares of Re.1/- each Issued at a premium of Rs.2.20 per share on 27th January, 2010.

Further on 9th July, 2010, in the second tranche of GDR issue, the Company has Issued and allotted 2,12,43,847 GDRs at a price of US$ 2.52 per GDR aggregating to US$ 53,534,494 represented by underlying 106,21,92,350 Equity shares of Re. 1 /- each issued at a premium of Rs. 1.35 per share.

As a result of these allotments, the paid up share capital, as on date, stands at Rs. 177,93,30,910.

The Equity shares allotted in both the issues are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) and the GDRs are listed on Luxemburg Stock Exchange.



DIRECTORS

Pursuant to Article 150of the Articles of Association of your Company and Section 256 of the Companies Act, 1956 Mr. P. V. R. Murthy retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment

Mr. Upkar Singh Kohli was appointed as an additional Director by the Board of Directors of the Company on 09.09.2009. His office expires at the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956, a member has proposed his candidature for appointment as Director.

Your Directors recommend his reappointment.

SUBSIDIARY COMPANIES

Your Company has incorporated two subsidiaries as follows.

(a) Birla Urja Limited

The Company was incorporated on 19th March, 2010. The Company has been set up to develop utility scale Thermal Power plant based on coal or gas. It will also invest in setting up renewable energy power plants based on solar, wind, hydro and biomass etc. to meet its commitment towards cleaner environment.

(b) Birla Energy infra Ltd.

The Company was incorporated on 22nd March, 2010. The Company has been formed to provide full fledged engineering, procurement, construction and commissioning of power generation plants using various renewable energy primary sun wind, hydel and biomass.

The Company will design, calibrate and integrate systems that will be required for achieving grid-parity for power plants using the above options.

NOTE ON CORPORATE GOVERNANCE

Your Company is following corporate governance norms of highest standards. As required under clause 49 of the listing agreement, a report on corporate governance forms part of this annual report.

FIXED DEPOSITS

During the period under review your Company has accepted deposits from the public amounting to Rs 875.36 lacs as on 31stMarch, 2010.

AUDITORS

M/s Dalai & Shah, Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing annual General Meeting. The Company has received a letter from them expressing their unwillingness to be re-appointed as Statutory Auditors for the Finanacial Year 2010-2011.

Based on the recommendation of Audit Committee, the Board of Directors proposes appointment of M/s. Thakur, Vaidyanath Aiyer & Co., Chartered Accountants, as the Statutory Auditors of the Company for financial year 2010-2011.

M/s. Thakur, VaidyanathAiyer&Co.,Chartered Accountants, have confirmed that their appointment, if approved by the shareholders, will be in conformity with the provisions of Section 224 (1B)of the Companies Act, 1956.

EXPLANATION TO AUDITORS REPORT AS REQUIRED UNDER SECTION 217(3) OF COMPANIES ACT 1956.

Clause Qualification in Directors Reply No. of the Auditors Report

6 (i) The Company The Company has has, during large No. of Fixed the year, upto Deposit agents/Brokers 16th December, all over India who 2009 accepted canvass and mobilize deposits the fixed deposits for aggregating the Company. The Rs 157.73 Company had filed the Lacs without advertisement with the issuing any ROC in accordance with advertisement/ the relevant provisions Statement in lieu of the Companies of advertisement (Acceptance of Deposit) as required Rules, 1975 on 5th under Section October, 2009 but 58(2) (b) of the some of the agents/ Act, brokers had inadvertently accepted the Fixed Deposits, before the filing of the statement of advertisement.

6 (ii) The Company There was an inadvertent has invested small delay in investing amounts in the designated amount in liquid assets liquid assets as specified after the period under Rule 3A of the specified under Rules. However, the Rule 3A of the delay was regularized Rules immediately.

6 (iii) The Company The funds borrowed has borrowed by the Company from funds certain parties are aggregating Rs well within the limits 3852.80 Lacs specified in Rule 3 of the (outstanding as Companies (acceptance at 31 st March, of Deposit) Rules, 1975. 2010) from certain parties viz. Individuals, Hindu Undivided Families, Partnership Firms and Trusts, under financing arrangements which is not in compliance with the Rules.



INDUSTRIAL RELATIONS

The Company enjoyed harmonious relations with workmen and employees through out the period under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars of energy conservation as prescribed have not been provided, as the Companys industry is not specified in the Schedule.

The Details regarding Technology Absorption as per Form B are enclosed.



Foreign exchange Earning and Outgo:

Particulars 2009-2010 2008-2009 (Rs. in Lacs) (Rs. in Lacs)

Total Foreign exchange NIL 39.89 earnings

Total Foreign Exchange 57.81 9.08 outgo

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is given in the annexure to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956with respect to Directors Responsibility Statement, it is hereby confirmed:

* that in preparation of the annual accounts for the period ended on 31- March, 2010 the applicable accounting standards have been followed along with proper explanation relating to material departures;

* that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period ended on 31st March, 2010 and of the profit of the Company for that period;

* that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

* that the directors had prepared the annual accounts for the period ended on 31st March, 2010 on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the continuing co-operation and assistance rendered by the Central Government, State Government, Financial Institutions, Banks, suppliers and other organisations in the working of the Company.

The Directors also wish to place on record their deep sense of appreciation for dedicated services rendered by officers, staff and workmen of the Company.

The Board takes this opportunity to express its gratitude for the continuous support received from shareholders.

For and on behalf of the

BOARD OF DIRECTORS

Place: Mumbai Yashovardhan Birla

Date :30th August, 2010 Chairman