To

The Members,

Your Directors have pleasure in presenting the Second Annual Report and Audited Statement of Accounts for the period from April 1, 2012 to March 31, 2013.

FINANCIAL HIGHLIGHTS

During the financial year company has incurred a net Profit/ (loss) of Rs. (2,17,154)/-. The financial results are summarized here under:

(Amount in Rupees)

Dividend

Since the Company is under implementation phase and does not have any distributable profits, hence the Board is not in a position to recommend any dividend for the year ended March 31, 2013.

Authorised share capital

The Authorised Capital of the Company as on date is Rs. 5,00,000/- (Rupees Five Lac) divided into 50,000/- (Fifty Thousand) Equity Shares of Rupees 10/- (Rupees Ten) each.

Paid-up Share Capital:

The paid up share capital of the Company is Rs. 5,00,000/- (Rupees Five Lac) divided into 50,000/- (Fifty Thousand) Equity Shares of Rupees 10/- (Rupees Ten) each fully paid up.

• Background

The power sector is one of the fastest growing sectors in the world. World's current manufacturing capacity for all types of power plants, excluding Chinese suppliers, put together is over 150GW per annum. For sustainable growth of an emerging economy, growth of power generation should be about twice that of GDP. In India, GDP (~9%) is growing faster than the power generation (~6%). From adding 25GW in Five year, few years ago, India need to add even larger capacity in an Year i.e. 25GW to 30GW per year to have the estimated ~900GW capacity by 2030 (under a moderate growth scenario). While main plant manufacturing capacity is being enhanced in quantitative and qualitative terms i.e. from some 7GW to 30GW, similar effort is essential in BoP space-especially in critical BoP and components' space.

The world market space, emerging and developing economies excluding China are expected to increase their generation capacities by at least three times on an average over next 20-25 years. More than 50% of this would be coal fired power plants and BoPs constitute over 25% of EPC cost of setting up a plant.

There are few vendors in India having well recognized credentials in each of the BoP segments i.e. pumping systems, piping system, efficient water purification and recycling systems, etc. Most of these Vendors are system integrators are not manufacturers and source smaller components from certain set of sub vendors mostly small in size, traditional in technology with limited capacity and capability to expand on technology, engineering and manufacturing. In similar markets elsewhere situation is equally or more challenging. This is the opportunity your Company is targeting.

On account of superior level of skills and knowledge levels and engineering man hour cost arbitrage, engineering and manufacturing from India who posses and or develop capability to continually keep pace with technology and keep evolving the Value offerings can reach these boundary less markets. That is the second dimension of opportunity.

To create capability and capacity from scratch to engineer, manufacture and supply these critical BoP equipments is seen to have taken in excess of 5-7 years by many leading suppliers in the world. Your company's team is set out to achieve this in less than half this period.

• Incorporation and setting up of Company

BF Power Equipment Limited (BFPEL) is 100% subsidiary company of one of the world's largest forging giant- Bharat Forge Limited. BFPEL has emerged out of the diversification scheme of Kalyani Group company - Bharat Forge Limited, BF Power Equipment Limited, to identify, carry on and acquire/invest in business/companies and enterprises including forming joint venture, consortiums and act as a Holding Company in businesses in India or abroad of in various kinds of components and equipment relating to generation of electricity including castings and forgings, fittings and high pressure pipes, valves, pumps, balance of plants, ancillary parts and components, associated infrastructure, transmission and distribution systems Castings, Pumps, valves and Piping Solutions. Consequently, your company was incorporated as a public limited company on December 20, 2010 and its registered office is at Pune.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Kishore Saletore, Director of the Company, retire by rotation and, being eligible, offer himself for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, with respect to Director's responsibility statement, your Directors confirm that:

a. In the preparation of the annual accounts for the Financial year ended March 31, 2013, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b. The accounting policies selected have been applied consistently and made judgments and estimates that were 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 year of the Company for the year under review;

c. Proper and sufficient care has been taken 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; and

d. The annual accounts for Financial Year ended March 31, 2013 had been prepared on a going concern basis.

AUDITORS

M/s RMA & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received the letter pursuant to Section 224(1B) of the Companies Act, 1956 from M/s RMA & Associates, Chartered Accountants, regarding their eligibility for re-appointment as Auditors of the Company.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

SUBSIDIARY COMPANY

The Company does not have any subsidiary Company during the period under review.

APPOINTMENT OF KEY PERSONNEL

During the financial year the company was not having any employee on the roll. The company has identified key positions and it was planned to appoint all the key personnel at the earliest.

FIXED DEPOSIT

Your company has not accepted any deposits from public and as such, no amount of principal or interest thereon was outstanding as on the date of the Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The particulars prescribed Details of energy conservation and research and development activities undertaken by the Company along with the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in 'Annexure A' to the Directors' Report.

PARTICULARS OF EMPLOYEES

As there was no employees drawing remuneration more than the limit prescribed under Section 217 (2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, Statement under section 217(2A) is not annexed.

APPRECIATION

The Board of Directors takes this opportunity to thank its stakeholders including the promoter (BFL Group) and Government for their continued support to the Company.

a. Energy Conservation measures taken during 2012-2013

The project is under implementation; however, the employees were adequately trained to conserve energy.

b. Impact of above measures for reduction of energy consumption and consequent impact on cost of production of goods.

N.A.

(1) Efforts made towards technology absorption, adaptation and innovation

The project was under implementation; the benefits shall be ascertained only after the commercial operation of the project.

(2) Benefits derived as a result of above efforts

The project was under implementation; the benefits shall be ascertained only after the commercial operation of the project.

(C) Foreign Exchange Earnings and Outgo Total foreign exchange used and earned: