Birla Power Solutions Ltd Management Discussions

a. Industry structure and developments

The Company is engaged in the production of Portable Gensets, Multi Purpose Engines, Pump sets, Sprayers, inverters, power tillers and wind energy. In addition to this the Company is engaged in trading of imported gensets and electrical items.

While the diesel gensets are popular among rural/industrial consumers, urban consumers prefer petrol/kerosene based portable gensets and inverters.

Multi purpose engines manufactured by the Company are useful particularly to small / medium scale farmers having small land holdings. The products are extremely compact, light weight, portable and efficient and are becoming popular in the farming community because of their reliability, low maintenance and low running costs and increased efficiency of man power.

The Company has identified various products operated by easy available cheaper fuel options like diesel which has high demand in the market in various sectors.

Despite cheaper cost of production, wind energy is not very much popular in the Country and the industry is passing through initial years of its evolution.

b. Opportunities and threats

In a power starved developing Country, there is tremendous potential for power generation & storage devices.

It is expected that in liberal economy, due to increased pressure on Governments exchequer, subsidy on petroleum product will be rationalized in near future pushing prices of diesel. Since, pushing the price of petrol & diesel higher but diesel would be still cheaper in the market and easily available. Hence, the company has identified diesel base power products to be launched in the market and there is no direct competition from any branded products in the country in this range.

Wind energy industry is in initial years of its evolution in the Country. Due to comparatively low cost of production there are huge potential for wind energy.

Power Tillers are used by farmers who own small piece of land and face competition from cheaper imported items from China.

c. Segment wise performance

Segment wise performance of the Company during the financial period ended on 31st March, 2013 is given below; PRIMARY SEGMENT (Product Wise)

Particulars	Power & Allied products	Electrical Appliances	Others	Total
Sales (Gross)	2263.73	37859.71	31.55	40154.99

Power & Allied Products	: Manufacturing Portable generators, Engines, Pumps, Inverters and trading of Allied Products
Power Generating Equipment/ Spares	: Trading of Power Generating Equipment and Spares, Electrical appliances and miscellaneous components.
Others	: Wind Mill Energy Generation

d. 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.

e. Risks and concerns

Your Company is exposed to the business and financial risks. Business risks include need for continuous technological up-gradation to meet emission standards/safety requirements, customers higher expectations for better value.

All these risks are continuously addressed in the business plans, functional strategies, management review and acted upon.

Foreign exchange risks are inherent in exports of products, import of materials, capital equipment etc. The Company has a well-defined exposure management system to review its exchange exposure and to take measures to mitigate losses.

f. Internal control systems and their adequacy

Your Company has placed considerable emphasis and effort on internal control systems. On the finance and administrative side, the internal checks and balances are augmented by a formal system of Internal and management audit.

g. Material developments in Human Resources

Your Company continues to lay emphasis on qualitative growth of its human resources by providing congenial and constructive work environment.

h. Financial Highlights

1. Sales

Sales (net of excise) during the financial year ended on 31st March, 2013 was Rs. 40154.99 Lacs as against Rs. 41370.06 Lacs during the last financial period ended on 31^st March, 2012.

2. Profit

During the financial year ended as on 31^st March, 2013 the Company has earned a net profit of Rs. 441.70 Lacs as against Rs. 529.55 Lacs earned during the last financial year ended on 31^st March, 2012.

3. Fixed Assets

For the financial year ended on 31^st March, 2013 the Company had 10,231.08 lacs of gross block of assets

4. Sundry Debtors

Sundry Debtors amounting to Rs.25,207.31 Lacs as at 31^st March, 2013 as compared to Rs. 22,237.12 Lacs as at 31^st March, 2012.

Cautionary Statement

Statements in this report on Managements Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectation of future events. Actual results could however differ materially from those expressed or implied.

The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

To

The Members of

BIRLA POWER SOLUTIONS LIMITED

We have examined the compliance of conditions of Corporate Governance by Birla Power Solutions Limited for the year ended 31^st March 2013 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of corporate governance as mentioned in the above-mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

	For and on behalf of
	For THAKUR, VAIDYANATH AIYAR & CO.
Place: Mumbai	Chartered Accountants
Date: 28.05.2013	Firm Registration No. 000038N
	C.V.PARAMESWAR
	Partner
	M.No.11541