Notes to Accounts of Birla Power Solutions Ltd.

Mar 31, 2013

Contingent Liabilities

I The outflow of resources in respect of pending matters with respect to Sales Tax & Excise Duty would depend on the ultimate outcome of the dispute lying before various Authorities amounting to Rs. 318.71 Lacs (Previous Year Rs. 696.14 Lacs). The Company has taken legal & other steps necessary to protect its position in respect of these claims.

II. The Company has recoverable aggregating Rs.489.48 Lacs (Previous Year Rs.472.22 Lacs) from Birla TransAsia Carpets Limited (BTCL), a sick industrial undertaking. BTCL has made a reference to the Board for Industrial and Financial Reconstruction (BIFR).

The management relies on the estimations made by an independent valuer in respect of the realizable values of assets viz. land, buildings and plant and machinery of BTCL and accordingly considers its exposures to be good and adequately covered and expects full realisability of the same in future.

III. Trade receivables include Rs.. 410.09 Lacs (Previous years Rs.843.00Lacs) for which the company has entered into agreements of assignment for transfer of debts outstanding and receivable by the company, to the purchaser of the debts.

IV. The Company during March, 2006 had a public issue of Equity Shares, which was oversubscribed. As per SEBI rules, refund orders were issued to the subscribers in respect of the excess amounts. An amount of Rs..14.41 (Previous Year Rs. 14.41 Lacs) is pending for encashment as at 31st March, 2013

V A. Earnings Per Share (Basic and Diluted)

V B. Other payable under Note 9 "Other Current Liabilities" includes statutory dues of Rs.. 610.58 Lacs (Previous Year Rs. 558.11 Lacs) & other payable against Acceptances of Rs. 3451.91Lacs (Previous Year Rs. 3737.80 Lacs).

V C. In accordance with Accounting Standard – 17 "Segment Reporting", segment information has been given in the consolidated financial statement of the Company and therefore, no separate disclosure on segment information is given in these financial statements.

V D. Expenses incurred amounting to Rs. Nil (Rs. 1240.45 lacs), as GDR Issue Expenses, on issuance of Global Depository Receipts in the year 2010-2011 have been adjusted against Securities Premium received against these GDR''s.

VI Balances with banks includes Rs. 9, 92,745.00 with a bank for which statement of account / confirmation of balance as on 31.03.2013 is awaited.

VII Party balances are subject to confirmation / reconciliation.

VIII In the opinion of the management, the current assets, loans & advances and current liabilities are approximately of the value stated, if realized / paid in the ordinary course of business. The provision for all known liabilities are adequate and is not in excess of the amounts considered reasonably.

IX On 09.06.2011 the Company issued and allotted 213,519,690 convertible share warrants to Promoter Group Companies at a price of Rs. 2.10 per share. 25% of the issue price amounting to Rs. 11,20,97,837.26 due on allotment was received at the time of allotment. The balance 75% was due at the time of conversion on or before 08.12.2012. As the warrant holders have not exercised the option of conversion, the Company has forfeited the amount received on allotment of the warrants.

X Previous year figures have been regrouped and re-arranged wherever considered necessary.

XI The Company has incurred expenditure aggregating to Rs. 4148.62 lacs towards capital work in progress. There has been delayed in the implementation of the project and accordingly the advances made to the suppliers have not been entirely appropriated towards the supplies. No provision for impairment is considered necessary by the management at this stage.

XII The Company has not be able to service the repayment of deposits to the deposit holders as well as interest on the deposit due for payment and comply with the order of the Company Law Board for refund of deposits, due to cash flow limitation and the extent of the outstanding as of 31.03.2013 is interest of Rs. 1,26,02,594/- and principal amount of Rs. 11,91,80,000/- on the Fixed Deposits matured and presented for repayments.

However, the company is paying the amounts in staggered manner and hopes to clear the outstanding in due course of time.

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Mar 31, 2012

1.1 355,865,955 Equity Shares out of the Issued, Subscribed and Paid up Share Capital were alloted as Bonus Shares in the last five years by capitalisation of Securities Premium and Reserves.

1.2 On 09.06.2011 the company issued and alloted 213,519,690 Convertible Share Warrants to the Promoter Group Companies. These warrants are convertible into 1 Equity Share of Re. 1/-each, at a price (calculated in accordance with SEBI regulations) of Rs. 2.10 per share. 25% of the issue price amounting to Rs. 112,097,837.26 due on allotment has been received. The Balance 75% is due at the time of conversion on or before 08.12.2012.

As at As at 31 March, 2012 31 March, 2011 (Rs. In Lacs) (Rs. In Lacs)

2 Contingent Liabilities and Commitments (to the extent not provided for)

Disputed Sales Tax Liablity 823.79 1,021.82

Claim against the company not acknowledged as debts 12.31 164.58

Estimated amount of Contracts remaining to be executed on Capital - 2.45

Account and not provided for

Total 836.10 1.188.85

I The outflow of resources in respect of pending matters with respect to Sales Tax & Excise Duty would depend on the ultimate outcome of the dispute lying before various Authorities amounting to Rs. 696.14 lacs (Previous Year Rs. 1021.82 lacs). The Company has taken legal & other steps necessary to protect its position in respect of these claims.

Note: The estimates of future salary increases, considered in actuarial valuation, take account of inflation seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(b) Defined Contribution Plan:

An amount of Rs 152.59 Lacs (Previous Year Rs 140.07 Lacs) is recognized as an expense and included in Note 25 "Contribution to Provident and other Funds" with Statement of Profit and Loss.

II. The Company has recoverable aggregating Rs 472.22 Lacs (Previous Year Rs. 471.67 lacs) from Birla TransAsia Carpets Limited (BTCL), a sick industrial undertaking. BTCL has made a reference to the Board for Industrial and Financial Reconstruction (BIFR).

The management relies on the estimations made by an independent valuer in respect of the realizable values of assets viz. land, buildings and plant and machinery of BTCL and accordingly considers its exposures to be good and adequately covered and expects full realisability of the same in future.

III. Trade receivables include Rs.843.00 lacs (Previous years Rs. 1376.90 lacs) for which the company has entered into agreements of assignment for transfer of debts outstanding and receivable by the company, to the purchaser of the debts.

IV. The Company during March, 2006 had a public issue of Equity Shares, which was oversubscribed. As per SEBI rules, refund orders were issued to the subscribers in respect of the excess amounts. An amount of Rs 14.41 (Previous Year Rs 14.41 Lacs) is pending for encashment as at 31st March, 2012.

V. Micro, Small and Medium Enterprise Dues:

Sundry Creditors includes Rs 42.04 Lacs (Previous Year Rs 42.58 Lacs) due to Micro, Small and Medium Enterprises.

Following is the information, required to be furnished as per Section 22 of the Micro, Small and Medium Enterprise Development Act 2006.

Above disclosures have been made based on information available with the Company, for suppliers who are registered as Micro, Small and Medium Enterprise under "The Micro, Small and Medium Enterprise Development Act, 2006" as at 31st March, 2012. .

VI. Other payable under Note 9 "Other Current Liabilities" includes Statutory dues of Rs. 558.11 lacs (Previous Year Rs. 621.32 lacs) & other payable against Acceptances of Rs. 3737.80 lacs (Previous Year Rs. 4301.98 lacs).

VII. The Company has issued and allotted 1,062,192,350 Equity Shares of the face value of Re 1 per Share at a premium of Rs 1.35 per Share under the GDR Offer aggregating Rs. 24961.52 lacs on 9th.July, 2010. The proceeds are intended to be utilized for General Corporate Purpose and long term Working Capital requirements. Pending full utilization, the balance amount is held in current /fixed deposit / loans accounts.

VIII. Expenses incurred amounting to Rs. 1240.45 lacs, as GDR Issue Expenses, on issuance of Global Depository Receipts in the year 2010-2011 have been adjusted against Securities Premium received against these GDR's.

IX Other Non-operating Income under Note 22 "Other Income" includes Rs. 620.00 lacs towards Technical knowhow & Consultancy charges.

X. In accordance with Accounting Standard - 17 "Segment Reporting", segment information has been given in the consolidated financial statement of the Company and therefore, no separate disclosure on segment information is given in these financial statements.

XI. Till the year ended 31st March,2011, the company was using pre - revised Schedule VI of the Companies Act, 1956, for preparation & presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The company has reclassified previous year figures to conform to this year's classifications.

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Mar 31, 2011

1. Contingent liabilities not provided for: - (Rs. in Lacs)

Nature of Liability As at 31st March, 2011 As at 31st March, 2010

(i) Disputed Sales Tax liabilities 1021.82 1088.16

(ii) Claims against the Company not acknowledged as debts 164.58 164.58

Total: 1186.40 1252.74

Note: The Company has contested the above demands and claims at various levels. Future cash outflows in respect of these are determinable only upon judgments/decisions at various forums.

2. The Company has other recoverables aggregating Rs. 471.67 Lacs (Previous Year Rs. 721.76 lacs) from Birla TransAsia Carpets Limited (BTCL), a sick industrial undertaking. BTCL has made a reference to the Board for Industrial and Financial Reconstruction (BIFR).

The management relies on the estimations made by an independent valuer in respect of the realizable values of assets viz. land, buildings and plant and machinery of BTCL and accordingly considers its exposures to be good and adequately covered and expects full realisability of the same in future.

3(a) The Company had entered into an agreement with Blue Bird India Limited, to recover its debts amounting to Rs. 4318.68 Lacs, under an arrangement, during the accounting year 2007-08. The Company has recovered Rs. 4095.19 Lacs up to the period 31 -03-11. The balance outstanding amount of Rs. 223.49 Lacs is expected to be recovered by end of the Current Financial Year 2011-12.

(b) The Company had entered into an agreement with Dee Square Technologies Pvt. Ltd., to recover its debts amounting to ^ 1158.52 Lacs, under an arrangement during the Accounting Year 2009-10. The Company has recovered Rs. 365.36 lacs during the Year 2010-11. The Balance outstanding amounts of Rs. 793.16 lacs are expected to be recovered by March, 2013, as per the Agreement.

4. The Company had entered into an agreement with Mona Futuristic Telecom Private Limited, to recover its advances amounting to Rs. 3205.22 Lacs, under an arrangement during the Accounting Year 2009-10. The Company has recovered the entire amount during the Year 2010-11.

5. The Company has, during the year, given Loans amounting to * 760.00 lacs to M/s Shearson Investment & Trading Company Pvt. Ltd. and Rs. 1011.00 lacs M/s Godavari Corporation Pvt. Ltd. in which Directors are interested. The Company had not sought permission from the Central Government as required under section 295 ( 1 ) of the Companies Act, 1956 for these transactions. Accordingly, the Company has filed suomoto compounding application with the Registrar of Companies, Mumbai.

6. The Company during March, 2006 had a public issue of Equity Shares, which was over subscribed. As per SEBI rules, refund orders were issued to the subscribers in respect of the excess amounts. An amount of Rs. 14.41 Lacs (Previous Year Rs. 14.41 Lacs) is pending for encashment as at 31st March, 2011.

(b) Defined Contribution Plan:

An amount of Rs. 140.07 Lacs (Previous Year Rs. 131.58 Lacs) is recognized as an expense and included in Schedule 18 "Contribution to Provident and other Funds" to the Profit and Loss Account.

1. The Primary Segment identifiable is as follows:

(i) Power and Allied Products: Manufacturing HKVA and Portable Generators, Engines, Pumps, Power Tillers, Inverters and Trading of Allied Products.

(ii) Power Generating Equipment / Spares: Trading of Power Generating Equipment and Spares, Electrical appliances & Miscellaneous Components.

(Hi) Others: Wind Mill energy Generation.

(iv) Previous year figures have been regrouped/ rearranged wherever considered necessary.

2. Company's major revenue are from Domestic Market so disclosure of Secondary Segment Information as per geographical customers has not been considered necessary.

3. Previous year figures have been regrouped/rearranged wherever considered necessary. ,

4. The figures in brackets indicate the previous year figures.

7. Taxation:

(a) Provision for Income Tax for the current year has been made under normal provision of the Income Tax Act, 1961.

8. Micro, Small and Medium Enterprise Dues:

Sundry Creditors includes Rs. 42.58 Lacs (Previous Year Rs. 94.88 Lacs) due to Micro, Small and Medium Enterprises.

9. The Company has issued and allotted 1,062,192,350 Equity Shares of the face value of Re 1 per Share at a premium ofRs. 1.35 per Share under the GDR Offer aggregating Rs. 24961.52 lacs on 9th.July, 2010. The proceeds are intended to be utilized for General Corporate Purpose and long term Working Capital requirements. Pending utilization, the amounts are held in deposit account with a bank.

10. The figures of the previous year have been rearranged and/ or regrouped wherever considered necessary to facilitate comparisons.

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Mar 31, 2010

1. Contingent liabilities not provided for:- (Rs In Lacs)

Nature of Liability As at 31st March, As at 31st March, 2010 2009

(i) Disputed Sales Tax liabilities 1088.16 998.81

(ii) Claims against the Company not acknowledged as debts 164.58 131.04

Total: 1252.74 1129.85



Note: The Company has contested the above demands and claims at various levels. Future cash outflows in respect of these are determinable only upon judgments/decisions at various forums.

2. The Company has loans and other recoverables aggregating Rs 721.76 Lacs from Birla Transasia Carpets Limited (BTCL), a sick industrial undertaking. BTCL has made a reference to the Board for Industrial and Financial Reconstruction (BIFR).

The management relies on the estimations made by an independent valuer in respect of the realizable values of assets viz. land, buildings and plant and machinery of BTCL and accordingly considers its exposures to be good and adequately covered and expects full reusabilit. of the same in future. The Company has, after the close of the year, received an amount of Rs 250 Lacs from BTCL

3(a) The Company had entered into an agreement with Blue Bird India Limited, to recover its debts amounting to Rs 4318.68 Lacs, under an arrangement, during the accounting year 2007-08. The Company has, during the year 2008- 09 and 2009-10 recovered Rs 1376.96 Lacs and Rs 1238.23 Lacs respectively. The balance outstanding amount of Rs 1703.49 Lacs is expected to be recovered by June, 2011, under the said arrangement.

3(b) The Company has, during the year, entered into an agreement with Mind Tree Mercantile Company Private Limted, to recover its debts amounting to Rs 1158.52 Lacs, under an arrangement. The amounts are expected to be recovered by March, 2013 and the first installment is due in September, 2010, under the arrangement. The Company has, after the close of the year, received an amount of Rs. 50.08 Lacs.

4. The Company has, during the year, entered into an agreement with Mona Futuristic Telecom Private Limited, to recover its advances amounting to Rs 3205.22 Lacs, under an arrangement. The amounts are expected to be recovered over a period from July,2010 to September,2012. The Company has, after the close of the year, already received an amount of Rs 963.27 Lacs as per the agreement.

5. The Company during March, 2006 had a public issue of Equity Shares, which was over subscribed. As per SEBI rules, refund orders were issued to the subscribers in respect of the excess amounts. An amount of Rs 14.41 Lacs (Previous Year Rs 14.71 Lacs) is pending for encashment as at 31st March, 2010.

6. (a) The Company has, with effect from 14th April 2009, split one Equity Share of Rs 10each into 10 Equity Shares of Re 1 each.

(b) The Company issued and allotted 29,25,00,000 Equity Shares of the face value of Re 1 per Share at a premium of Rs 2.20 per Share under the GDR Offer aggregating Rs 9239.23 Lacs on 27th January, 2010. The proceeds are intended to be utilised for General Corporate Purpose and long term Working Capital requirements. Pending utilisation, the amounts are held in deposit account with a bank.

7. The figures of the previous year have been rearranged and/or regrouped wherever considered necessary to facilitate comparisons.