DRAFT LETTER OF OFFERDated: [�]

For Private Circulation to the Equity Shareholdersof the Company only

GENERAL RISKSInvestments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they canafford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision inthis Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the offer including the risks involved.The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracyor adequacy of this document. Investors are advised to refer to the section titled “Risk Factors” beginning on page XIII of this DraftLetter of Offer before making an investment in this Issue.

OUR COMPANY’S ABSOLUTE RESPONSIBILITYThe Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all informationwith regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offeris true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein arehonestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such information or theexpression of any such opinions or intentions misleading in any material respect.

LISTING ARRANGEMENTSThe existing Equity Shares of our Company are listed on Bombay Stock Exchange Ltd (BSE) (the designated stock exchange) and The NationalStock Exchange of India Limited (NSE). Our Company has received in-principle approvals from the Bombay Stock Exchange Ltd by its letterdated [�] and The National Stock Exchange of India Limited by its letter dated [�] for listing the Equity Shares arising from this Issue.

LEAD MANAGER TO THE ISSUE

TRANSWARRANTY CAPITAL PVT. LTD.403, Regent Chambers,Nariman Point, Mumbai – 400 021Tel No: +91-22-4001-0800/900Fax No: +91-22-4001-0888/999E Mail: ael.rights@transwarranty.comInvestor Grievance E-mail: customercare@transwarranty.comContact Person: Mr. D. SubrahmanyamSEBI Regn. No.: 1NM 000010965Website: www.transwarranty.com

LINK INTIME INDIA PVT. LTD.Unit: Asian Electronics Limited – Rights IssueC-13 Pannalal Silk Mills Compound,L.B.S Marg, Bhandup (West), Mumbai – 400 078Tel No: +91-22 25960320 Fax No: +91-22 25960329Contact Person: Mr. Pravin KasareEmail: ael.rights@linkintime.co.inSEBI Registration No : INR 000004058Website : www.linkintime.co.in

REGISTRAR TO THE ISSUE

ISSUE OF 1,53,59,139 EQUITY SHARES OF RS. 5/- EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS.20/- EACH (INCLUDINGSHARE PREMIUM OF RS. 15/-) PER EQUITY SHARE AGGREGATING TO AN AMOUNT OF RS. 3071.83 LAKHS BY ASIAN ELECTRONICSLIMITED (THE “COMPANY” OR THE “ISSUER”) TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF ONE EQUITYSHARE FOR EVERY TWO EQUITY SHARES HELD ON THE RECORD DATE i.e. [•] (THE “ISSUE”).

THE ISSUE PRICE OF EACH EQUITY SHARE IS 4 TIMES THE FACE VALUE OF THE EQUITY SHARE.

ASIAN ELECTRONICS LIMITED(Our company was originally incorporated as Asian Electronics Limited on January 21, 1964 in Mumbai under the

Companies Act, 1956 vide Registration no. 12835 of 64-65; (CIN: L99999MH1964PLC012835)Registered Office: D-11, Road No. 28, Wagle Industrial Estate, Thane - 400 604, Maharashtra, India.

Tel No: +91 22 2583 5500/4/5; Fax N o: +91 22 2582 7636; E-mail: rights@aelgroup.com; Website: www.aelgroup.comContact Person: Mr. R.D. Goradia – Sr. Vice President Finance, Company Secretary & Compliance officer.

(For details of changes in Registered office, see section titled “History and Other Corporate Information”beginning on page 81 of this Draft Letter of Offer)

PROMOTER OF OUR COMPANY: MR. ARUN B. SHAHDRAFT LETTER OF OFFER

LAST DATE FOR RECEIVING REQUESTSFOR SPLIT APPLICATION FORMS

ISSUE PROGRAMME

ISSUE OPENS ON ISSUE CLOSES ON

[●] [●] [●]

Payment Method* Amount payable per Equity Share (Rs.) ^Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 1.25 3.75 5.00First Call 1.25 3.75 5.00Second Call 1.25 3.75 5.00Third and Final Call 1.25 3.75 5.00Total 5.00 15.00 20.00

* Please refer to risk factor nos. 39 and 40 in “Risk Factors” on page XIII for risks associated with the payment method. For details on the payment method see“Terms of the Present Issue” on page 192.^ NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to besubmitted along with the Composite Application Form (“CAF”).

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TABLE OF CONTENTS

SECTION PAGE SECTION I – DEFINITIONS AND ABBREVIATIONS DEFINITIONS AND ABBREVIATIONS III CONVENTIONAL / GENERAL TERMS V NOTICE TO OVERSEAS SHAREHOLDERS VIII PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA IX CURRENCY OF PRESENTATION X FORWARD LOOKING STATEMENTS XI EXCHANGE RATES XII SECTION II – RISK FACTORS INTERNAL RISK FACTORS XIII EXTERNAL RISK FACTORS XXIV NOTES TO RISK FACTORS XXVI SECTION III – INTRODUCTION SUMMARY 1 THE ISSUE 5 SUMMARY OF FINANCIAL INFORMATION 6 GENERAL INFORMATION 9 CAPITAL STRUCTURE 17 OBJECTS OF THE ISSUE 26 BASIS FOR ISSUE PRICE 31 STATEMENT OF TAX BENEFITS 33 SECTION IV – ABOUT US INDUSTRY OVERVIEW 41 OUR BUSINESS OVERVIEW 49 KEY INDUSTRY REGULATIONS AND POLICIES 77 HISTORY AND OTHER CORPORATE INFORMATION 81 OUR MANAGEMENT 85 ORGANISATIONAL CHART 91 CORPORATE GOVERNANCE 91 PROMOTER 100 PROMOTER GROUP 104 DIVIDEND POLICY 108 SECTION V- FINANCIAL STATEMENTS FINANCIAL INFORMATION 109 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS

148

FINANCIAL INDEBTEDNESS 160 DEFAULT 161 SECTION VI- LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENT 162 GOVERNMENT/ STATUTORY APPROVALS 176 SECTION VII- OTHER REGULATORY AND STATUTORY DISCLOSURES OTHER REGULATORY AND STATUTORY DISCLOSURES 180 TERMS OF THE ISSUE 192 SECTION VIII - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY 220 SECTION IX – OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 268 DECLARATION 270

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SECTION I – DEFINITIONS AND ABBREVIATIONS

DEFINITIONS AND ABBREVIATIONS

In this Draft Letter of Offer, the terms “we”, “us”, “our”, “the Company”, “our Company” or “AEL”, unless the context otherwise implies, refer to Asian Electronics Limited. All references to “Rs.” or “INR” refer to Rupees, the lawful currency of India, “USD” or “US$” refer to the United States Dollar, the lawful currency of the United States of America, references to the singular also refers to the plural and one gender also refers to any other gender, wherever applicable, and the words “Lakh” or “Lac” means“100 thousands” and the word “million” or “mn” means “10 lakhs” and the word “crore” means “10 millions” or “100 lakhs” and the word “billion” means “1000 millions” or “100 crores”. Any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off.

DEFINITIONS Unless the context otherwise requires, the following terms have the following meanings in this Draft Letter of Offer.

Term Description “The Issuer” or “The Company” or “Asian Electronics Limited” or “AEL” “We” or “us” or “our” “our company”

Unless otherwise specified, these references mean Asian Electronics Limited , a public limited company incorporated under the Companies Act, 1956

Joint Ventures Asian Retail Lighting Ltd, Home Lighting India Limited and Midcom Magnetics Management Pvt. Ltd.

Promoter Mr. Arun B. Shah Promoter Group Companies

M/s. Pranamghar (India) Private Limited and M/s. ARSH Advisors and Owners Limited

COMPANY / ISSUE RELATED TERMS Term Definition Act The Companies Act, 1956 and amendments thereto from time to time Abridged Letter of Offer The abridged letter of offer to be sent to our Equity Shareholders as on the Record

Date with respect to this Issue in accordance with SEBI (ICDR) Regulations 2009. AS Accounting Standards issued by the Institute of Chartered Accountants of India Application Supported by Blocked Amount/ ASBA

The application (whether physical or electronic) used by an Investor to make an application authorizing the SCSB to block the amount payable on application in their specified bank account

ASBA Investor

An applicant who intends to apply through ASBA process and: a) holds the shares of the Company in dematerialized form as on the record date and has applied for entitlements and / or additional shares in dematerialized form; b) has not renounced his/her entitlements in full or in part; c) is not a Renouncee; d) is applying through a bank account maintained with SCSBs.

Articles Articles of Association of our Company, as amended from time to time Auditors Refers to our statutory auditors, M/s. Sorab S. Engineer & Co., Chartered Accountants,

unless otherwise specified Bankers to the Issue The Hongkong & Shanghai Banking Corporation Limited (HSBC) Bankers to the Company Bank of India (BOI), HDFC Bank Ltd. (HDFC), UCO Bank, The Hongkong &

Shanghai Banking Corporation Limited (HSBC), IDBI Bank Limited (IDBI) and State Bank of India (SBI)

Board of Directors Board of Directors of our Company or a Committee(s) thereof Collection Centre As defined in SEBI (ICDR) Regulations, 2009 and amended thereafter, and mentioned

in the CAF CSOS Chairman Stock Option Scheme, 2009

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Consolidated Certificate In case of physical certificate, our Company would issue one certificate for the Equity Shares allotted in one folio.

Designated Branches

Such branches of the SCSBs which shall collect CAF from ASBA investor and a list of which is available on http://www.sebi.gov.in/pmd/scsb.pdf

Designated Stock Exchange

Bombay Stock Exchange Limited, Mumbai, India

Draft Letter of Offer / DLOO

Draft Letter of Offer of our Company.

ECS / NECS Electronics Clearing Services / National Electronic Clearing Services Equity Share(s) or Share(s)

Equity shares of our Company which are listed on BSE and NSE and having a face value of Rs. 5/- each unless otherwise specified in the context thereof.

Equity Shareholders/Investors

Investors holding the Equity Shares of our Company as on the Record Date i.e. [�] and Renouncees

ESOP – 2005 Employees Stock Option Plan, 2005 ESOP – 2009 Employees Stock Option Plan, 2009 Fiscal/FY Financial Year ending March 31 of that year Indian GAAP Generally Accepted Accounting Principles in India ISIN International Security Identification Number Issue Issue of 1,53,59,139 Equity shares of Rs. 5/- each (“Equity shares”) for cash at a Price

of Rs.20/- each (including share premium of Rs. 15/-) per Equity share aggregating to an amount of Rs. 3071.83 Lakhs by Asian Electronics Limited (the “company” or the “Issuer”) to the equity shareholders on Rights Basis in the ratio of One equity share for every two equity shares held on the record date i.e. [•] (the “issue”).

Issue Account Account opened with the Banker(s) to the Issue to receive monies from the Escrow Account for the issue on the designated date

Issue Closing Date [�] Issue Opening Date [�] Issue Price Rs. 20/- per Equity Share Investor(s) Equity Shareholders as on Record Date and/or Renouncees applying in the Issue. IT Act The Income-tax Act, 1961 and amendments thereto Lead Manager / Manager to the Offer

M/s. Transwarranty Capital Private Limited

Letter of Offer / LoO Letter of Offer circulated to the Shareholders of our company MOA/Memorandum Memorandum of Association of our company Record Date [�] Refund through electronic transfer of funds

Refunds through ECS / NECS, Direct Credit, RTGS or NEFT, as applicable.

Registrar to the Issue or Registrar / Transfer Agent

Link Intime India Private Limited

Registrar of Companies / RoC

100, Everest Building, Marine Drive, Mumbai – 400 002, Maharashtra, India

Renouncees The persons who have acquired Rights Entitlements from Equity Shareholders Relevant Stock Exchange “Relevant Stock Exchange” shall mean the recognised Stock Exchange on which the

Equity Shares of our Company are listed, and on which highest trading volume has been recorded during the preceding 90 working days period prior to the Relevant Date.

Rights Entitlement The number of securities that a shareholder is entitled to in proportion to his/her existing shareholding in our Company

Rights Issue The issue of Equity Shares on rights basis based on terms of this Draft Letter of Offer. Self Certified Syndicate Bank or SCSB

The banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offers services of ASBA, including blocking of bank account and a list of which is available on http://www.sebi.gov.in/pmd/scsb.html.

SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto

v

SEBI ICDR The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and any amendments thereto.

SEBI DIP Guidelines

SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on January 19, 2000 and amendments thereto. The SEBI DIP Guidelines have been repealed and have been replaced by the SEBI ICDR Regulations, 2009.

SEBI (SAST) Regulations / SAST / SEBI Takeover Code / Takeover Code

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto

Share Certificate The certificate in respect of the Equity Shares allotted to a folio with a split performance.

Stock Exchange(s) BSE and NSE where the Equity Shares are presently listed. CONVENTIONAL / GENERAL TERMS

Term Definition Act/ Companies Act The Companies Act, 1956 and amendments thereto from time to time BIFR Board for Industrial and Financial Reconstruction Cenvat The Central Value Added Tax CESTAT The Customs, Excise, Service Tax Appellate Tribunal CLRA The Contract Labour (Regulation and Abolition Act), 1970 and amendments thereto Depositories Act The Depositories Act, 1996 and amendments thereto EPS The Earnings Per Share IAS International Accounting Standards IFRS International Financial Reporting Standards IT Act The Income Tax Act, 1961 and amendments thereto Indian GAAP Generally Accepted Accounting Principles In India IPO Initial Public Offer Modvat The Modified Value Added Tax NAV Net Asset Value NRE Account Non-Resident External Account NRO Account Non-Resident Ordinary Account PAT Profit After Tax SICA The Sick Industrial Companies (Special Provisions) Act, 1985 and amendments thereto Securities Act The United States Securities Act of 1933, as amended Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations1997 and

amendments thereto U. S. GAAP Generally Accepted Accounting Principles in the United States of America Wealth-Tax Act The Wealth-Tax Act, 1957 and amendments thereto. BUSINESS / INDUSTRY RELATED TERMS

Term Definition A/c Account ALMS Automatic Load Management System APDRP Accelerated Power Development and Reforms Project BIS Bureau of Indian Standards. BEE Bureau of Energy Efficiency BPLR Bank Prime Lending Rate. CAGR Compound Annual Growth Rate CFL Compact Fluorescent Lamp CBM Cubic Meter. DIST District DSM Demand Sale Management ELCOMA Electric Lamp and Component Manufacturers Association of India

vi

EOU Export Oriented Unit ESCO Energy Savings Company GDP Gross Domestic Product FTL Fluorescent Tube Light GEM EL Global Energy Management Europe Limited GEM LLC Global Energy Management, LLC GIR General Index Registration GLS General Lighting Service Bulbs HID High Pressure Discharge IEEMA Indian Electrical and Electronics Manufacturers Association ILS Intelligent Lighting Solutions IREDA Indian Renewable Energy Development Agency ISO International Standards Organisation LED Light Emitting Diodes KWH Kilowatts Per Hour MSEB Maharashtra State Electricity Board MIDC Maharashtra Industrial Development Corporation MW Mega Watt SAARC South Asian Association of Regional Cooperation SEBs State Electricity Boards SICOM State Industrial and Investment Corporation of Maharashtra SMD Surface Mounted Device T&D Transmission and Distribution UK United Kingdom US$ United States Dollar US United States of America USPTO United States Patent and Trademark Office WIP Work in Progress WLC Westinghouse Lighting Corporation ABBREVIATIONS

Abbreviation Description AGM Annual General Meeting ARLPL Asian Raymold Lighting Private Limited ARLL Asian Retail Lighting Limited AS Accounting Standards, as issued by the Institute of Chartered Accountants of India. BSE Bombay Stock Exchange Limited CAF Composite Application Form CAGR Compounded Annual Growth Rate CEPS Cash Earnings Per Share. CFO Chief Financial Officer CDSL Central Depository Services (India) Limited DP Depository Participant ECS / NECS Electronic Clearing Service / National Electronic Clearing Services EGM Extraordinary General Meeting EPS Earning Per Share ESI Employee State Insurance. FCCB Foreign Currency Convertible Bonds. FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 FII(s) Foreign Institutional Investors registered with SEBI under applicable laws FIPB Foreign Investment Promotion Board, Ministry of Finance, Government of India GOI Government of India

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HUF Hindu Undivided Family HSRIL Home Solutions Retail (India) Limited ICAI Institute of Chartered Accountants of India ITAT Income Tax Appellate Tribunal MD Managing Director MoU Memorandum of Understanding NOC No Objection Certificate NR Non Resident NRI(s) Non Resident Indian(s) NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited OCB Overseas Corporate Bodies PAN Permanent Account Number RBI The Reserve Bank of India RoC Registrar of Companies Re./Rs./Rupees/INR Indian Rupees SAF Split Application Form SCB Scheduled Commercial Banks SEBI Securities and Exchange Board of India YoY Year on Year Notwithstanding the foregoing, (i) In the section titled ‘Main Provisions of the Articles of Association of our Company’ beginning on page 220

of this Draft Letter of Offer, defined terms shall have the meaning given to such terms in that section; (ii) In the section titled ‘Financial Information’ beginning on page 109 of this Draft Letter of Offer, defined

terms shall have the meaning given to such terms in that section; (iii) In the paragraphs titled ‘Disclaimer Clause of Securities and Exchange Board of India (SEBI)’; ‘Disclaimer

Clause of Bombay Stock Exchange Limited’ and ‘Disclaimer Clause of National Stock Exchange of India Limited’ beginning on page nos. 180 and 183 respectively of this Draft Letter of Offer, defined terms shall have the meaning given to such terms in those paragraphs.

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NOTICE TO OVERSEAS SHAREHOLDERS The distribution of this Draft Letter of Offer and the Issue to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. The Company will dispatch the Draft Letter of Offer/Abridged Letter of Offer and CAFs to such shareholders who have an Indian address. This Draft Letter of Offer does not constitute and may not be used for in connection with an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has been or will be taken by our Company or the Lead Manager to permit an offering of Equity Shares or distribution of this Draft Letter of Offer in any jurisdiction, other than India, where action for that purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and neither this Draft Letter of Offer nor any offering material in connection with the Equity Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. Persons receiving a copy of this Draft Letter of Offer should not distribute or send the same in any jurisdiction where to do so would or may contravene local laws or regulations. If this Draft Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the rights entitlements referred to in this Draft Letter of Offer. The Rights Entitlement and the Equity Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, or any other securities laws of the United States of America (“United States” or “US”) and may not be offered, sold, resold, or otherwise transferred within the United States of America or the territories or possessions thereof, except in a transaction exempt from the registration requirement of the United States Securities Act of 1933, as amended. The Rights Entitlement referred to in this Draft Letter of Offer is being offered in India but not in the United States of America. The offering to which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any shares or rights for sale in the United States, or as a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Draft Letter of Offer should not be forwarded to or transmitted in or into the United States by any person other than our Company at any time. None of our Company, the Lead Manager or any person acting on their behalf will accept subscriptions from any person, or his agent, who appears to be, or who our Company has reason to believe is, a resident of the United States and to whom an offer, if made, would result in requiring registration of this Draft Letter of Offer with the United States Securities and Exchange Commission. We are informed that there is no objection to a shareholder, resident of the United States, selling its Rights Entitlement in India.

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Unless stated otherwise, the financial data in this Draft Letter of Offer is derived from our restated standalone financial information which has been prepared in accordance with Indian GAAP and restated in accordance with SEBI (ICDR) Regulations 2009. Our current financial year commenced on April 1, 2009 and will end on March 31, 2010. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off, and unless otherwise specified, all financial numbers in parenthesis represent negative figures. Unless stated otherwise, industry data used throughout this Draft Letter of Offer has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Draft Letter of Offer is reliable, it has not been independently verified.

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CURRENCY OF PRESENTATION

In the Draft Letter of Offer, all reference to the word “Lac/Lacs” means “one hundred thousand” and “million/mn./millions” means “ten lacs”, “Crore” means “ten millions” and “billion/bn./billions” means “one hundred crores”. Further, any discrepancies in any table / this draft letter of offer between the total and the sum of the amounts are due to rounding-off. Throughout the Draft Letter of Offer, currency figures have been expressed in “Lakhs /Lacs /Lac” except those, which have been reproduced/ extracted from sources as specified at the respective places. All references to “India” contained in this Draft Letter of Offer are to the Republic of India. All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official currency of the Republic of India.

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FORWARD LOOKING STATEMENTS All the statements contained in this Draft Letter of Offer which contain words or phrases such as “will”, “may”, “aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are “forward-looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to:

� General economic and business conditions in the markets in which our company operate and in the local, regional, national and international economies;

� Changes in laws and regulations relating to the sectors/areas in which our company operates;

� Increased competition in the sectors/areas in which our company operates;

� Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch

and implement various projects and business plans for which funds are being raised through this Issue;

� Our ability to meet our capital expenditure requirements;

� Fluctuations in operating costs;

� Our ability to attract and retain qualified personnel;

� Changes in political and social conditions in India or in countries that our company may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

� The performance of the financial markets in India and globally; and

� Any adverse outcome in the legal proceedings in which our company is involved.

Neither the company, our Directors, the Lead Manager, nor any of its affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, the Lead Manager will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges for the Equity Shares being offered on a rights basis. For a further discussion of factors that could cause our actual results to differ, see the chapters titled “Risk Factors” “Business Overview” and “Management Discussion and Analysis” beginning on pages XIII, 49 and 148 of this Draft Letter of Offer respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated.

xii

EXCHANGE RATES The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and the US dollar (in Rupees per US dollar). The exchange rate as at March 31, 2009 was Rs. 50.95 = U.S. $ 1. No representation is made that the Rupee amounts actually represent such US dollars amounts or could have been or could be converted into US dollar at the rates indicated, any other rate or at all.

Rupee and US Dollars Exchange Rates

(Source: www.rbi.org.in)

Year ended March 31, Period End Average High Low 2005 43.75 44.95 46.46 43.36 2006 44.61 44.28 46.33 43.30 2007 43.59 45.29 46.95 43.14 2008 39.97 40.24 43.15 39.27 2009 50.95 45.91 52.06 39.89

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SECTION II – RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all of the information in this draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our Company’s Equity Shares. To obtain a complete understanding of our business, you should read this section in conjunction with “Our Business” on page 49 and “Management’s Discussion and Analysis on Results of Operations and Financial Conditions” on page 148. Any of the following risks as well as other risks and uncertainties discussed in this draft Letter of Offer could have a material adverse impact on our business, financial condition and results of our operation and could cause the trading price of our Equity Shares to decline which could result in the loss of all or part of your investment. The Draft Letter of Offer also contains forward looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in this draft Letter of Offer. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any of the risks described in this section. Materiality: The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining their materiality: 1. Some events may not be material individually but may be found material collectively. 2. Some events may have an impact which is qualitative instead of quantitative. 3. Some events may not be material at present but may have material impacts in the future. Internal Risk Factors 1. We are involved in legal proceedings which, if determined against us, could affect our business and financial conditions. We are party to various legal proceedings. No assurances can be given as to whether these matters will be settled in our favour or against us. If a claim is determined against us and we are required to pay all or a portion of the disputed amount, it could have an adverse effect on our results of operations and cash flows. A classification of the legal proceedings instituted against us and the monetary amount involved in these cases are mentioned in brief below:

S. No.

Particulars Total number of pending cases/ disputes

Amount (Rs. In Lacs) *

A) Litigations filed against our company 1. Litigation involving Civil Laws 9 52468.21 2. Litigation involving Criminal Laws 5 1.62 3. Litigation involving Securities Laws NIL NIL 4. Litigation involving Statutory Laws

� Income Tax � Central Sales Tax Act – 1956

4 232.87

5. Litigation Involving Labour Laws 1 10.81 B) Litigations filed by our company 1. Litigation involving civil Laws 8 17788.34 2. Litigation involving Criminal Laws 11 94.79 3. Litigation involving Securities Laws NIL NIL 4. Litigation involving Statutory Laws

� Income Tax � Central Sales Tax Act – 1956

2

118.38 5. Litigation Involving Labour Laws 1 10.81

* - Amount does not include liability which cannot be quantified

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i. Outstanding Litigations involving our Promoter of the Issuer Company

� Litigation involving Criminal Offences

� Paresh Kapadia, Proprietor of Kalindi Enterprises has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing No. 3301084/SS/2009 in 14th Girgaum Court, Mumbai for dishonour of cheque amounting to Rs.5.21 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Paresh Kapadia, Proprietor of Kalindi Enterprises has filed Criminal Case under Section 138 of the

Negotiable Instruments Act, 1981 bearing No. 3301085/SS/2009 in 14th Girgaum Court, Mumbai for dishonour of cheque amounting to Rs.7.29 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Renu Ashar has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing No.

3301086/SS/2009 in 14th Girgaum Court, Mumbai for dishonour of cheque amounting to Rs.2.60 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Paresh Kapadia has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing

No. 3300991/SS/2009 in 14th Girgaum Court, Mumbai for dishonour of cheque amounting to Rs.9.68 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Sicom Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing No.

2300458/SS/09 in 23rd Esplanade Court, Mumbai for dishonour of cheque amounting to Rs.3000.00 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Sicom Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing No.

2301326/SS/09 in 23rd Esplanade Court, Mumbai for dishonour of cheques amounting to Rs.96.72 lacs, Rs.97.76 lacs and Rs.95.47 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Emkay Financial Services Ltd has filed Criminal Case under Section 138 of the Negotiable Instruments Act,

1981 bearing No. 1834/SS/09 in 23rd Esplanade Court, Mumbai for dishonour of cheques amounting to Rs.10.12 lacs and Rs.0.56 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� DBS Bank Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981 bearing

No. 3307900/SS/2009 in 33rd Court, Ballard Pier, Mumbai for dishonour of cheque amounting to Rs.145.00 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Peddar Johnson Finance Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments Act,

1981 bearing No. 5294/SS/2009 in 33rd Court, Ballard Pier, Mumbai for dishonour of cheque amounting to Rs.25.66 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Streamline Shipping Co. Pvt. Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments

Act, 1981 bearing No. 2301857/SS/09 in 23rd Esplanade Court, Mumbai for dishonour of cheque amounting to Rs.19.35 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Indusind Bank Ltd. has filed Criminal Case under Section 138 of the Negotiable Instruments Act, 1981

bearing No. 447/SS/09 in 14th Girgaum Court, Mumbai for dishonour of cheque amounting to Rs.1000.00 lacs against Indage Group and Directors of the Company including Mr. Arun B. Shah.

� Cases Filed by Promoter of the Company: NIL

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ii. Outstanding Litigations involving our Directors of the Issuer Company

A. Litigation against Directors of the Company � Pertaining to Criminal Laws: NIL � Pertaining to Civil Laws: NIL � Statutory Dues: NIL � Defaults with Banks: NIL � Economic Offence: NIL

B. Cases Filed by Directors of the Company: NIL

For further details on these proceedings, please refer to the section “Legal and Other Information - Outstanding Litigation” on Page 162 of the Draft Letter of Offer 2. We have applied for the following statutory approvals with respective statutory authorities and are yet to

receive the approval. Any delay or inability to obtain or renew our licences could impact our operations adversely.

S. No. Location of the Factory Approvals to be received Present Status

1. Hadbast No. 932, Khasra No. 228, Dist. Solan, Himachal Pradesh

Factory License and Himachal Pradesh Pollution Control Board

Applied and Renewal to be granted

2. Plot No. 2, Survey No. 1B/2C, Near Octroi Naka, Vilholi, Nashik – 422 010

Factory License and Maharashtra Pollution Control Board

Applied and Renewal to be granted

3. Survey No. 15, Plot No. 1, Nashik

Factory License Applied and Renewal to be granted

4 Application for Renewal for Registration under Contract Labor (Regulation & Abolition) Act, 1970 – bearing Registration No: 09/2005 from Registering Officer, Contract Labour (R & A) Act, 1970, Nashik

Contract Labour Applied and Renewal to be granted

Our company has submitted the requisite applications / fees / necessary documents / information / undertaking to the respective Local Authorities for their approval and doesn’t foresee any problems for getting approval. 3. The below mentioned equity shares are yet to be listed on the Stock exchanges Particulars’ No of shares Stock exchange In-

Principle approval Stock exchange Listing &

Trading approval Equity shares allotted pursuant to ESOS 2005 8,50,000 BSE – Received

NSE – Received BSE – Pending NSE – Pending

Conversion of warrants into Equity shares 12,00,000 BSE- Received NSE - Received

BSE- Pending NSE - Pending

Conversion of Equity share warrants into Equity shares

8,33,333 BSE- Received NSE - Received

BSE- Not Applied as yet NSE - Not Applied as yet

4. The Sales and profit of our company is posing a declining trend and may continue to pose a declining

trend in the future also. (Rs. in Lacs)

Particulars 30.09.2009 31.03.2009 31.03.2008 31.03.2007

Sales 7444.48 20894.04 21104.25 33738.84 % Change NA (1.00)% (37.45)% 192.90%

Profit After Tax 116.59 (195.51) (14866.38) 6816.50 % Change NA (98.69)% (318.09)% 171.00%

For details see “Financial Statements” on page 109 of this Draft Letter of Offer.

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5. Our Statutory Auditors had qualified their audit report on our financial statements for the period ended 31st March 2009.

Our Statutory auditors had qualified their report on our financial statements. Brief details of the area of audit qualifications are set forth below: Years Area of Audit Qualification 31.3.2005 Adjustments on account of Impairment Loss whereby Profit for the Year would have been Rs.464.39

Lacs as against the reported Profit of Rs. 1077.34 Lacs 31.3.2007 Non provision in respect of outstanding Debtors and Assets on operating Lease aggregating to Rs. 3753

Lacs 31.3.2008 Non provision in respect of outstanding Debtors, outstanding Advances and Assets on operating Lease

aggregating to Rs. 3652 Lacs 31.3.2009 Non provision in respect of amounts receivable from Maharashtra State Electricity Distribution Co.

Ltd., aggregating to Rs. 4114.09 Lacs. (Grouped under Sundry Debtors and Loans and Advances) For further details see “Financial Statements” on page 109 of this Draft Letter of Offer. 6. Our Company has reported the Negative Cash Flows in the last five years

(Rs. In Lacs) Particulars 30.09.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005 Net cash generated from operating activities

(2400.06) (2,541.44) 4,839.20 (13,882.78) (3,330.24) (1,265.13)

Net cash used in investing activities 300.97

2,004.69

(2,699.04)

(1,188.30)

(4,179.53)

120.27

Net cash generated from financing activities 2084.76

(47.85)

(1,388.75)

14,404.33

7,651.84

1,131.74

Net cash flow for the year 14.33 (584.60) 751.41 (666.75) 142.07 (13.12)

For details see “Financial Statements” on page 109 of this Draft Letter of Offer. 7. Contingent liabilities The details of contingent liabilities not provided for the period ended 30/09/2009 and 31/03/2009 is as follows:

(Rs. In Lacs) Particulars 30.09.2009 2008-09 Claims against the Company not acknowledged as debts 676.46 633.16 Guarantees given by the bankers on behalf of the Company 2800.00 3045.04 Bills/LC discounted with banks Nil 1574.81 Outstanding Letters of credit 3480.00 5961.87 Disputed income tax demand 232.87 232.87 Disputed Sales tax demand 118.37 118.37 Total 7307.70 11566.12 In the event any of the contingent liabilities materialize, it may have an adverse effect on the company’s financial condition and future financial performance. For details see “Financial Statements” on page 109 of this Draft Letter of Offer. 8. Our Company has yet to pay the dues to various statutory authorities / Banks/ Financial Institutions and the total default up to 30th November, 2009 was Rs.7134.70 lacs. Due to the change in management and financial constraints, the company has yet to pay Rs. 7134.70 lacs to the various statutory authorities / Banks/ Financial Institutions. Our company has taken the adequate steps to clear these overdues. For further details, see “Default” on page 161 of this Draft Letter of Offer

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9. Name of our company is appearing on the Reserve Bank of India’s list of wilful defaulters i.e. Credit Information Bureau (India) Limited (CIBIL) for suit filed of Rs. 100 lacs and above as on 30th September 2009. The details are as under: -

(Rs. In Lacs) Name of Credit Grantors Branch Amount Global Trade Finance Limited (GTF) Bandra 247.00

GTF has filed a Winding up Petition against AEL in the Honourable Bombay High Court. However, on 2nd May 2008, the Honourable Bombay High Court has dismissed the Winding up Petition. GTF also sent letters (February 2008) to AEL’s bankers and Mumbai Stock Exchange allegingg AEL’s failure and neglect to pay its dues. AEL, in consultation with its Advocates, has filed 2 Criminal complaints against GTF for defamation and a counter claim of Rs. 5190.00 lacs. Under the advice of the Company’s Solicitors, the said Criminal complaints have been withdrawn. 10. Our Promoter group companies have made losses in the past 3 years, the details are as under:-

(Rs. In Lacs) Name of the Company 2009-08 2008-07 2007-06 Pranamghar (India) Private Limited (32.66) (69.67) 14.23 ARSH Advisors & Owners Limited (24.21) 0.10 NA

11. Our funding requirements and the deployment of the proceeds of the Issue are based on management

estimates and have not been independently appraised by any banks/ Financial Institutions, any deviation in the actual performance could adversely impact of our operations.

The objects of the issue requirements have not been appraised by any of the external agency. Our management has prepared an internal business plan and investment proposal based on estimates derived from past experience of the Promoter. There is no guarantee that our estimates will prove to be accurate in the coming years and any significant deviation in our estimates could adversely impact our operations and sustainability. However, we confirm that issue proceeds shall be utilized within the objects specified under the section titled "Objects of the Issue" on page no. 26 of this Draft Letter of Offer. 12. In future, our company may launch new products and we can give no assurance that our new products

will be commercially successful

We may launch our new products in future to customers, whether our new products will be accepted by and be successful in the market and whether we would be able to recoup the costs of manufacturing such new products cannot be assured. For various reasons, the success of our new products cannot be predicted with a reasonable certainty. There can be no guarantee that we will be able to succeed in introducing new products in a timely manner or at all and that the products we introduce will be accepted in the market or that such acceptance will continue for any period of time. Failure to generate new products and/or the ability to maintain the quality and durability of our products and/or to maintain top-of-the mind recall for our brands might weaken our product portfolio, negatively impact our brand, adversely affect our reputation and result in loss of our market share to our competitors.

13. Our operating results may fluctuate significantly rendering it difficult to predict and could therefore fall below the expectations of the investors

There are a number of factors affecting the future operating results of the Company, many of which are beyond the control of the Company. The operating results during any fiscal year and from one period to another are difficult to predict. Further, the Company’s past performance should not be relied upon to predict its future performance as there are several factors that may have an adverse effect on the Company’s business, results of operations and financial condition such as changes in growth and demand for the Company’s products; a shift in consumer preferences; changes in government policies, especially in relation to energy efficiency, either in India or globally; a decrease in selling prices or an increase in the prices of raw materials and other inputs; an increase in Indian import tariffs or domestic duties on raw materials and other inputs; changes in tax and excise policies or changes in other incentives applicable to the Company or its products; an increase in rate of interest on debt financing; adverse fluctuations in the exchange rate of the Rupee versus major international currencies; increasing transportation costs or non-availability of transportation due to strikes, shortages or for any other reason; strikes or work stoppages by the Company’s employees or by employees of supporting manufacturers; accidents, natural disasters, outbreak of diseases or heavy rains.

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14. Tender programs of our potential customers could affect the revenues generated by the Company The Company sells its energy efficient solutions to a number of large institutions, shopping malls, industrial complexes, civic bodies and other groups, through the tendering process. Such tender programs may not always favour what, in the Company’s view, is an optimum mix of technical quality, durability, costs savings and price and therefore the Company may be at risk of losing these tenders to other market participants. If a large number of the tenders do not favour the Company, it could have a material adverse effect on the Company’s financial condition and operating results. 15. We are subject to restrictive covenants in certain short-term and long term debt facilities provided to us

by our lenders We have taken long term and short term loans from Banks. As per the signed loan agreements with them, there are certain standard restrictions imposed on us regarding change in capital structure, payment of dividend out of reserves, formulate any scheme of amalgamation or reconstruction, undertake any new project, implement any scheme of expansion or acquire fixed assets; invest by way of share capital in or lend or advance funds to or place deposits with any other concern (including group companies); normal trade credits or security deposits in the normal course of business or advances to employees can however, be extended; enter into borrowing arrangement either secured or unsecured with any other bank financial institution, company or otherwise or accept deposits apart from the arrangement indicated in the funds flow statements submitted to the Bank from time to time and approved by the Bank; undertake any guarantee obligation on behalf of any other company (Group Companies); sell assign, mortgage or otherwise dispose off any of the fixed assets charged to the Bank; permit any transfer of the controlling interest or make any drastic change in the management set-up and other such matters. We are required to obtain their prior approval before initiating such changes. There can be no assurance that we will be able to obtain lender consents on time or at all. This may limit our ability to pursue our growth plans and limit our flexibility in planning for, or reacting to, changes in our business or industry. For more information please refer to “Financial Indebtedness” on page no 160 of this Draft Letter of offer. 16. We may be unable to seek compensation from our suppliers for defective components or raw materials. We are required to source components and raw materials from suppliers for which advances and even prompt payments may have to be made. We cannot assure you with a reasonable certainty that the raw materials that we would procure in the future will not be defective. Further should we receive any defective raw materials, we may not be in a position to recover advance payments or claim compensation from our suppliers consequently increasing the manufacturing costs or reducing the realisation of our finished products, it could have a material adverse effect on the Company’s financial condition and operating results. 17. We may be unable to negotiate favourable credit terms from our suppliers; it could have a material

adverse effect on the Company’s financial condition and operating results. While we have maintained a long term relationship with many of our suppliers and we have been able to negotiate favourable credit terms from them due to increased order sizes and timely payments, we cannot assure you that we shall be able to maintain such favourable credit terms in future. Although we have long term relationship with our suppliers, we do not have a formal written agreement with any of them. We get longer credit periods based on our relationship with the suppliers established over a period of time primarily because of continuity of orders placed with them, size of the order and timely payments made to suppliers. 18. Our Company’s operates into the retail segment which is affected by customer preferences and

perceptions. Any change in these preferences or inability of our company to meet these preferences could adversely affect our operations and financial condition.

Traditionally the Company has focused on institutional and project-related sales, and has built up a strong distribution network of over 450 distributors & over 130 marketing consultants for this purpose. However, going forward, the Company also proposes to increase its market share in the growing retail segment of the market. This operation carries the risk that product offerings in the retail segment may not be as successful as expected as retail customers may have a different approach regarding initial layout costs, ongoing costs, energy efficiencies or technical preferences. This could affect the Company’s results of operations and financial condition.

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19. The Company is partially dependent on joint ventures to derive its revenues and if the joint venture fails or if the joint venture partners fail to perform or alter the conditions of the agreement, our company’s future operations and therefore the financial results could be adversely impacted The Company has entered into joint ventures with namely Asian Retail Lighting Limtied, Midcom Magnetics Management Private Limited and Home Lighting India Limited, to penetrate specific markets. If the joint venture partners fail to perform as anticipated or if the joint venture fails, it could have an adverse effect on the Company’s results of operations and financial condition. 20. Our production and utilisation capacity at Nashik plant and Dadra & Nagar Haveli plant which is less

than 25% of its licensed and installed capacity As on the date of filing the Draft Letter of Offer, our manufacturing units are located at Nashik, Silvassa and Solan. Our management took a strategic decision to get the maximum production from the Solan unit at Himachal Pradesh, due to availability of the benefits of Excise Duty on the final product, Central Sales Tax, Income Tax. Moreover, we derive 60% of our sales from Northern & Eastern parts of the country, hence Himachal Pradesh unit gives additional benefit of savings in logistics cost. Keeping the above facts in place, our over all capacity utilisation of the company is well maintained to the extant of business and management requirement, though on face of it, it looks like under utilisation of capacity. 21. There are no supply agreements for the raw materials required for manufacturing of our products.

Volatility in the prices of the raw material may have an adverse impact on our business and financial operations.

No long term contract has been entered with any supplier. The price of raw materials may fluctuate depending upon supply & demand of the raw material, availability of producer or distributor in the market. In case of escalation in price, the company’s financials may be affected. 22. Failure to keep abreast with the latest trends in technology may adversely affect our cost competitiveness

and may affect our financial condition adversely. Our Company cannot ensure that it will successfully implement new technology effectively or adapt the processing system to emerging industry standards. If our company is unable due to technical, financial, legal and/or other reasons to adapt in timely manner to the changing market conditions, its business, financial performance and the market price of its equity shares could be adversely affected. 23. Technological innovation may affect the Company’s product offering and substantial reduction in the

rates charged for electricity could have an adverse effect on the Company’s revenues from energy saving devices

Changes in technology may impact the Company’s business by making its plants less competitive. The Company, being in the lighting industry, is required to keep itself abreast with the latest technology and in order to do so may require additional capital expenditure from time to time for upgrading its manufacturing facilities. Failure on its part to do so could make it lose its competitiveness. The demand for energy saving devices is to some extent dependant on the market price for electricity. A substantial decline in electricity rates could adversely affect the demand for energy saving devices by potential customers.

24. The Company’s lighting and capacitor business may be materially adversely affected by changes in prices of raw materials or components

The prices of Company’s primary raw materials or components particularly metals and plastics, are volatile and fluctuate based on a number of factors outside the Company’s control. The Company sources raw materials such as electronic components and fluorescent lamps from various suppliers on a contract-by-contract basis and is dependent on external suppliers for its raw material requirements. The Company has estimated that raw materials and components comprise around half of its production costs. Any failure on the part of the Company to achieve an increase in sales price in response to an increase in costs of basic raw materials or any sales price erosion without a corresponding reduction in raw material costs could have a material adverse effect on the Company’s business, its financials and results of operations.

xx

25. The loss of major suppliers could adversely affect the operations of the Company The Company relies on a number of suppliers to supply materials such as electronic components and fluorescent lamps. The Company’s failure to make alternate supply arrangements on acceptable terms in the event of any interruption in their supply or the loss of major suppliers could materially affect its business, results of operations and/or financial condition. 26. Any future issuance of Equity Shares may dilute investors’ shareholding and any sale of our Company’s

Equity Shares by the Promoter or other major shareholders may adversely affect the trading price of Equity Shares

If we do not have sufficient internal resources to fund our investment requirements or working capital needs in the future, we may need to raise funds through equity financing. As a purchaser of the Equity Shares in the Issue, you could experience dilution to your shareholding in the event that we conduct future equity offerings. Such dilution can adversely affect the market price of the Equity Shares and could impact our ability to raise capital through an offering of our equity securities. In addition, any perception by investors that such issuance or sales will occur could also affect the trading price of the Equity Shares. 27. Our company is not paying dividends in the last two years and the possibility that dividend may not be

payable in the near future. Our company is not paying dividends in the last two years and our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures. The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. There can be no assurance that we will be able to pay dividends. 28. Our Factory Land is on Leasehold Property. Any non-renewal of such lease after its expiry period may

have a material adverse effect on our financial condition and results of operations. Our Company has taken various premises on lease from below mentioned parties and non renewal of such lease after its expiry period may have a material adverse effect on our financial condition and results of operations.

S.No. Date of

Deed/ Agreement

Name of the Lessor/ Licensor

Name of the Lessee/ Licensee

Location & Area Existing Usage Tenure Consideration

1. 09.01.1992 MIDC Asian Electronics Ltd.,

Plot No. 68, MIDC Industrial Area, Satpur, Nashik – 422 007. Total Area 10,224 sq meters

Manufacturing Unit for electronics goods

95 years

Consideration of Rs.0.41 Lacs and Rental of Re.1/- per month

2. 01.05.2005 M/s Accurete Warehouse

Asian Electronics Ltd.,

Plot No. 1, Survey No. 15, Warehouse No. 2 & 3, Mumbai-Agra Road, Near Octroi Naka, Vilholi, Nashik amounting to 10,000 sq.ft area

Usage only for stocking the goods.

10 years

Security Deposit of Rs. 2.50 lacs and Rental of Rs. 0.45 Lacs per month

3. 20.07.2008 Mr. Rajindersingh Pratapsingh Rekhi

Asian Electronics Ltd.,

Plot No. 2, Survey No. 1B/2C, Near Octroi Naka, Vilholi, Nashik – 422 010 manufacturing with a total area of 14,000 sq.ft.

Manufacturing, Storing and shipment of Consumer and Industrial Electronics Products

3 years

Security Deposit of Rs. 2.00 lacs and Rental of Rs. 1.02 Lacs per month

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4 01.12.2007 Mr. Kishorilal Asian Electronics Ltd.,

Hadbast No. 932, Khasra No. 228, Village Jakhroda, Pargana Nali Dharthi, Tehsil Kasauli, Dist. Solan, Himachal Pradesh, Total area of 5000 sq.ft

Storing goods for industrial and factory purpose

5 years

Rental of Rs. 0.15 lacs per month

5 23.08.1996 MIDC Asian Electronics Ltd.,

Plot No: F-4/15, Village Kolwade, Tarapur Industrial Area, Tarapur Total area of 1470 sq.mtr

Factory Since Closed

95 years

Consideration Rs.0.29 Lacs and lease rent of Re. 1/- per annum

6 04.05.1965 MIDC Asian Electronics Ltd.,

D-11, Road No:28, Wagle Industrial Estate, Thane –West Total Area 4,567 sq. meter.

Factory and Business Purpose

99 years

Consideration of Rs.1.70 Lacs and a Rental Re. 1/- per annum

29. The Company may face conflict of interest in transactions with related parties The Company maintains trade accounts receivable and short and long-term payables with some of its affiliates. These accounts receivable and accounts payable balances are mainly due to for the purchase and sale of goods at prices and on terms equivalent to the terms and prices at which similar transactions are entered into by the Company with third parties. Commercial transactions between the Company and these affiliates could result in conflicting interests. For more details in relation to related party transactions for the year ended March 31, 2009 and period ended September 30, 2009, please refer to Page 141 of the Draft Letter of Offer. 30. The company faces stiff Competition from both existing players and from Chinese players, whose

products are becoming increasingly popular. This exposes the company’s products to the risk of competition from trades and unorganized segments.

The company may face competition from other existing players and potential entrants to the industry which may affect the competitive position and profitability of the company. Loss of market share due to competition may adversely affect the profitability. Our inability to compete successfully in our industry would materially affect our business prospects and financial condition. Although there is a perceived threat of increased compitetion, we are confident that the quality of our products and the brand image that has been built up by us over the years will help us counter the competition. Besides, our emphasis on ESCO model of business will give us an edge over other competitors. 31. Our Company’s success largely depends on the ability of its management team and our ability to attract

and retain them. Any loss of the services of our management and the key managerial persons could have an adverse effect on the business.

Our ability to meet future business challenges depends on our ability to attract, recruit and retain talented and skilled personnel. We are highly dependent on our senior management, our Directors and other key personnel, including skilled project management personnel. A significant number of our employees are skilled engineers and we face strong competition to recruit and retain skilled and professionally qualified staff. Due to the limited pool of available skilled personnel, competition for senior management and skilled engineers in our industry is intense. We may experience difficulties in attracting, recruiting and retaining an appropriate number of managers and engineers for our business needs. We may also need to increase our pay structures to attract and retain such personnel. Our future performance will depend upon the continued services of these persons. The loss of any of the members of our senior management, our Directors or other key personnel or an inability to manage the attrition levels in different employee categories may materially and adversely impact our business and results of operations.

xxii

32. Our Insurance coverage may not adequately protect us against certain operating risks and this may have a material adverse impact on our business.

We believe that the Insurance coverage maintained, would reasonably cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be met fully, in part or on time. To the extent that we suffer loss or damage that is not covered by insurance or exceeds our insurance coverage, or the insurance policy covering such risk is not met, our results of operations and cash flow may be adversely affected. 33. Competition from other manufacturers / marketers may adversely affect the competitive position and

profitability of the company. The company may face competition from other existing players and potential entrants to the industry which may affect the competitive position and profitability of the company. Loss of market share due to competition may adversely affect the profitability. Our inability to compete successfully in our industry would materially affect our business prospects and financial condition. 34. Our business depends on our manufacturing facility and the loss of or shutdown of operations of the

manufacturing facility on any grounds could adversely affect our business or results of operations Our manufacturing facility is subject to operating risks, such as breakdown or failure of equipment, interruption in power supply or processes, performance below expected levels of output or efficiency, natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities. Manufacturing of the electronics components requires expensive and delicate machines which is subject to normal wear and tear and therefore require lots of maintenance. Breakdown of any of the machines may also affect our business or results of operation. 35. There has been a Change in the Statutory Auditors of our Company in the last five years The details of the changes in statutory auditors of our Company for the last five years are as follows: -

36. Our operations may be subject to labour unrest, slowdowns and increased wage costs, which could

adversely impact our operations and financial condition.

Our employees are not currently unionised, it is not sure that they will not unionise in future. Moreover, whether or not our employees unionise, we may be subject to industrial unrest or slowdown. In future, our employees may unionise and we may experience unrest or slowdown, and it may become difficult for us to maintain flexible labor policies and control wage costs. 37. Grants of stock options under our employee stock option plans will result in a charge to our profit and

loss account and our results of operations will be negatively affected to that extent. We have various employee stock option plans, under which eligible employees and Directors of our Company can participate. Under Indian GAAP, the grant of stock options will result in a charge to our profit and loss account based on the difference between the fair value of shares determined at the date of grant and the exercise price.

S. No Name of the Statutory Auditor Date of Appointment

Date of Cessation

1. M/s RSM & Co., Chartered Accountants, Mumbai 19.08.2004 23.12.2006 2. M/s S. R. Batliboi & Co., Chartered Accountants, Mumbai 23.12.2006 29.11.2008 3. M/s Sorab S. Engineer & Co., Chartered Accountants, Mumbai 29.11.2008 NA

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38. Our business is subject to regulation by several authorities, which could have an adverse effect on our business and our results of operation.

Our Company has to comply with the regulations under FEMA Regulations; The Companies Act, 1956; The Income-Tax Act, 1961; The Central Excise Act, 1944; The Customs Act, 1962; The Central Sales Tax Act, 1956; The Electricity Act, 2003; The Industries Development and Regulations Act, 1951; The Contract Labour (Regulation) Act, 1970; The Employees Provident Fund Act, 1948; The Employees State Insurance Act, 1948; The Maharashtra General Sales Tax Act; The Foreign Trade (Development and Regulation) Act, 1992; The Factories Act, 1948; The Patents Act, 1970; The Bureau of Indian Standards Act, 1986 and The Finance Act, 1994. Further, our business operations are subject to strict regulations by environmental regulations, Trade Mark Act, Factories Act, etc. We incur costs to comply with requirements of environmental laws and regulations. Any lapses or non-compliance of any laws or regulations or rules or acts or policies by us may adversely affect our business and / or financial operations. For more details on the regulations and policies, please refer to the section titled "Key Industry Regulations or Policies" beginning on page no. 77 of this Draft Letter of Offer 39. If you are a non-resident shareholder, your ability to participate in this Rights issue is subject to your

obtaining applicable regulatory approvals. The Issue Price of our Equity Shares is Rs. 20/- per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on the First Call and the balance 25% and 25% of the Issue Price on the Second Call and the Third and Final Call, respectively. However, NRIs, FIIs and others nonresidents can only participate in this Issue if they have obtained requisite approval from the RBI for the partly paid-up Equity Shares to be issued to them. We cannot provide any assurance if such approval will be granted by the RBI. If such non-resident shareholders do not receive such approval and are, therefore, unable to participate in this Issue, their holding in our Company will be diluted as a result of this Issue. 40. Investment in partly paid-up Equity Shares in the Issue is exposed to certain risks. The Issue Price of our Equity Shares is Rs. 20/- per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on the First Call and the balance 25% and 25% of the Issue Price on the Second Call and the Third and Final Call, respectively, provided that NRIs, FIIs and non-residents have obtained requisite approval from the RBI for the partly paid-up Equity Shares to be issued to them. The partly paid-up Equity Shares offered under the Issue will be traded under separate ISINs for the period as may be applicable prior to the record date for the First Call and Final Call. An active trading may not develop for the partly paid-up Equity Shares and therefore, the trading price of the partly paid-up Equity Shares may be subject to greater volatility than our fully-paid Equity Shares. Further, Investors in this Issue will be required to pay the money due on the First Call and the Final Call even if, at that time, the market price of our Equity Shares is less than the Issue Price. If the Investor fails to pay the balance amount due with any interest that may have accrued thereon after notice has been delivered by our Company, then any of our Equity Shares in respect of which such notice has been given may, at any time thereafter, before payment of the call money and interest and expenses due in respect thereof, be forfeited by a resolution of our Board to that effect. Such forfeiture shall include all dividends declared in respect of such forfeited Equity Shares and actually paid before such forfeiture. Additionally, Investors are only entitled to dividend in proportion to the amount paid up and the voting rights exercisable on a poll by Investors shall also be proportional to such Investor’s share of the paid-up equity capital of our Company.

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EXTERNAL RISK FACTORS 41. After this Issue, the price of our Equity Shares may be volatile, or an active trading market for our

Equity Shares may not develop. The trading price of our Equity Shares may fluctuate after this Issue due to a variety of factors. There can be no assurance that an active trading market for our Equity Shares will develop or be sustained after this Issue, or that the price at which our Equity Shares are initially issued will correspond to the prices at which they will trade in the market subsequent to this Issue 42. Hostilities with neighboring countries and civil unrest in India may have material adverse impact on the

market for securities in India. India has from time to time experienced instances of hostilities from neighboring countries, including Pakistan and China. In recent years, military confrontations between India and Pakistan have occurred in Kashmir and along the India-Pakistan border, although the Governments of India and Pakistan have recently engaged in conciliatory efforts. Military activity or terrorist attacks in the future could influence the Indian economy by disrupting communications and making travel more difficult. Such political tensions could create a greater perception that investments in Indian companies involve a high degree of risk. Events of this nature in the future, as well as social and civil unrest, could influence the Indian economy and could have material adverse effect on the market for securities of Indian companies. 43. Any downgrading of India’s debt rating by an international rating agency could have a negative impact

on our business. Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares. 44. The Company is required to maintain a positive ‘Net Foreign Exchange’ to retain Export Oriented Unit

(“EOU”) status for one of its units One of the units of the Company at Nashik in Maharashtra is an EOU and, in order to maintain its status, the Company is required to be a positive net foreign exchange earner (calculated in blocks of five years) under the foreign trade policy of the Government of India. Failure to maintain positive net foreign exchange position in any block of time renders the unit liable to penal actions under the applicable laws, and may also entail cancellation or revocation of the letter of permission / intent granted to the EOU by the concerned authority. The Company believes that its exports will meet this obligation over the next few years, but there can be no assurance that this will be the case. 45. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could

adversely affect financial markets and our business.

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, making travel and other services more difficult and ultimately adversely affecting our business. India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on our business. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of our Equity Shares. Other acts of violence or war outside India, including those involving the United States, the United Kingdom or other countries, may adversely affect worldwide financial markets and could adversely affect the world economic environment, which could adversely affect our business, results of operations, financial condition and cash flows, and more generally, any of these events could lower confidence in India. South Asia has, from time to time, experienced instances of civil unrest and hostilities among other neighbouring countries.

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46. Changes in Indian Government policies could adversely affect economic conditions in India, and thereby adversely impact our results of operations and financial condition.

All of our production facilities are located in India, and a significant portion of its revenue is derived from sales of its products in the Indian market. Consequently, our Company, and the market price and liquidity of the Equity Shares, may be affected by changes in the policy of the Government of India. For example, the imposition of foreign exchange controls, rising interest rates, inflation, increases in taxation or the creation of new regulations could have a detrimental effect on the Indian economy generally and us in particular. The Indian Government has in recent years sought to implement economic reforms, and the current Indian Government has implemented policies and undertaken initiatives that continue the economic liberalization policies pursued by previous Indian Governments. For example, the Indian Government has announced its general intention to continue India’s current economic and financial sector deregulation policies and encourage infrastructure Projects. However, the roles of the Indian Government and the state governments in the Indian economy as producers, consumers and regulators have remained significant and there can be no assurance that liberalization policies will continue in the future. Any significant change in such liberalization and deregulation policies could adversely affect business and economic conditions in India generally and our results of operations and financial condition in particular. 47. India is vulnerable to natural disasters that could severely disrupt our normal operations of business and

adversely affect our earnings. India is susceptible to tsunamis and earthquakes. On December 26, 2004, Southeast Asia, including the Eastern coast of India, experienced a tsunami that caused significant loss of life and property damage. On January 26, 2001, the Kutch region in the State of Gujarat suffered a major earthquake causing significant loss of life and property. Substantial portion of our facilities and employees are located in India. If our facilities are damaged by an earthquake, tsunami or other natural disaster, its global capability could be interrupted or delayed. As a result, a natural disaster in India could have a material adverse effect on our financial condition and results of operations. 48. An active market for our Equity Shares may not be sustained, which may cause the price of our Equity

Shares to fall. While our Equity Shares are traded on the Stock Exchanges, there can be no assurance regarding the continuity of the existing active or liquid market for our Equity Shares, the ability of investors to sell their Equity Shares or the prices at which investors may be able to sell their Equity Shares. In addition, more recently the Indian markets have been subject to disruptions that have caused volatility in the prices of securities similar to our Equity Shares. There can be no assurance that the market for the Equity Shares offered hereunder will not be subject to similar disruption. Any disruption in these markets may have an adverse effect on the market price of our Equity Shares. 49. There is no guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or

at all, and any trading closures at the Stock Exchanges may adversely affect the trading price of our Equity Shares.

In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted until after those Equity Shares have been issued and allotted. Approval will require all other relevant documents authorizing the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the Stock Exchanges. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares. The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in Europe and the U.S. The Stock Exchanges have in the past experienced problems, including temporary exchange closures, broker defaults, settlement delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic and international markets. A closure of, or trading stoppage on, any of the Stock Exchanges could adversely affect the trading price of the Equity Shares. Historical trading prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the future.

xxvi

50. Currency exchange rate fluctuations may affect the value of the Equity Shares The exchange rate between the Rupee and other foreign currencies, including the U.S. Dollar, the British Pound, the Euro, the Emirati Dirham, the Hongkong dollar, the Singapore dollar and the Japanese Yen, has changed substantially in recent years and may fluctuate substantially in the future. If the investor purchases Rupees to purchase the Company’s Equity Shares, fluctuations in the exchange rate between the foreign currencies with which the investor purchased the Rupees may affect the value of the investor’s investment in the Company’s Equity Shares. Specifically, if there is a change in relative value of the Rupee to a foreign currency, each of the following values will also be affected:

1. the foreign currency equivalent of the Rupee trading price of the Company’s Equity Shares in India; 2. the foreign currency equivalent of the proceeds that the investor would receive upon the sale in India of any

of the Company’s Equity Shares; and 3. the foreign currency equivalent of cash dividends, if any, on the Company’s Equity Shares, which will be

paid only in Rupees. The investor may be unable to convert Rupee proceeds into a foreign currency of its choice or the rate at which any such conversion could occur could fluctuate. In addition, the Company’s market valuation could be seriously harmed by the devaluation of the Rupee if investors in jurisdictions outside India analyze the Company’s value based on the Rupee equivalent of such other currency and the financial condition and results of operations of the Company converted into such foreign currency. 51. A slowdown in economic growth in India could cause the business of the Company to suffer Company’s performance and growth is dependent on the health of the Indian economy. The economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalisation policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the Indian economy may adversely impact our business and financial performance and the price of our Equity Shares. NOTES TO RISK FACTORS:

� Issue of 1,53,59,139 fully paid Equity Shares of Rs. 5/- each at a price of Rs. 20/- (including share premium of Rs. 15/-) per fully paid Equity Share aggregating Rs. 3071.83 lakhs on rights basis to the existing Shareholders of our Company in the ratio of one Equity Shares for every two shares held as on Record Date [�]. For more details, see “Terms of the Issue” on page 192 of this draft Letter of Offer.

� Pre-Issue net worth of the Company was as on March 31, 2009 is Rs. 21,755.92 Lacs & as on September

30, 2009 is Rs. 22187.00 Lacs. � Investors are advised to refer to “Basis for Issue Price” before investing in this Issue. � Investors are advised to refer to “Notes on Financial Statements” before investing in this issue. � The Net Asset Value per Equity Share of Rs.5/- each as on March 31, 2009 is Rs. 72.80 per share & as on

September 30, 2009 is Rs.73.19. � The Average cost of acquisition per Equity Share allotted to our Promoter is as follows:

Name of Promoter Cost per Equity Share Rs.

Mr. Arun B. Shah Nil

� Our Company has not issued any Equity Shares for considerations other than cash, except as stated under the head “Capital Structure” beginning on Page 17 of this draft Letter of Offer.

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� For details on Related Party Transactions and Loans and Advances made to any company in which our Directors are interested please, refer to the section titled “Financial Information” beginning on page 109 of this draft Letter of Offer.

� Our company has not revalued its assets since incorporation.

� Trading in Equity Shares of our Company for all investors shall be in dematerialised form only.

� The Lead Manager and our Company shall make all information available to the investors at large and no

selective or additional information would be available only to a section of the investors in any manner whatsoever.

� There has been no financing arrangement whereby the Promoter Group, the Directors of the Company and

their relatives have financed the purchase by any other person of securities of the Company other than in the normal course of business of the financing entity during the period of six months immediately preceding the date of filing of the Draft Letter of Offer with SEBI

� All legal requirements applicable till the filing of the Draft Letter of Offer with the Stock Exchanges have

been complied with.

� Financials of Issuer Company has been disclosed as per the SEBI (ICDR) Regulations, 2009.

� The investors may contact the Lead Manager or the Compliance officer for any complaint/ clarification/information pertaining to the Issue. For contact details of the Lead Manager and the Compliance Officer, please refer to “General Information” beginning on page 9 of this Draft Letter of Offer.

� Our Promoter / Promoter group / Directors have not purchased / sold shares of the company in the last six

months except as disclosed in the Draft Letter of Offer.

� Before making an investment decision in respect of this Issue, investors are advised to review the entire Draft Letter of Offer, please also refer to the section titled “Basis for Issue Price” on page 31 of this Draft Letter of Offer.

� Refer to the section titled “Terms of the Issue – Basis of Allotment” on page 215 of this Draft Letter of

Offer for details of the basis of allotment.

� Refer to the section titled “Related Party Transactions” on page 141 of this Draft Letter of Offer.

� Our Company and the Lead Manager are obliged to keep this Draft Letter of Offer updated and inform investors in India of any material developments until the listing and trading of the Equity Shares offered under the Issue commences.

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SECTION III - INTRODUCTION

SUMMARY The information in this section is derived from various government publications and other industry sources. Neither we nor any other person connected with the Issue have verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and accordingly, investment decisions should not be based on such information Global Lighting Industry The global lighting fixtures industry is currently valued at approximately $70 billion and is expected to grow to about $90 billion in 2010. Lighting fixtures can be classified into four categories i.e. residential lighting, commercial lighting, industrial lighting and outdoor lighting. The modern products offered by the lighting industry include the following:

� Electronic Ballasts – These are electrical components, which provide the required voltage to kick-start a fluorescent lamp and then regulate the flow of current. They are an efficient substitute for magnetic ballasts since they help in reduction of consumption of energy and thereby lower electricity costs for consumers.

� Compact Fluorescent Lamps (CFLs) – These are efficient substitutes for incandescent sources of light i.e.

mainly light bulbs used in the household sector. On an average, a CFL can save approximately 100 kWh per annum as compared to traditional incandescent sources of light

� Fluorescent Tube Lighting (FTLs) – FTLs are considered as the most efficient light producing mediums.

The traditional T12 fluorescent tube was introduced in 1936 followed by the T8 fluorescent tube in 1971. T8 and T12 lamps are similar in length, interchangeable and can work on the same magnetic ballast. In 1997, the T5 fluorescent tube which operates on electronic ballast was introduced with savings of up to 45% in electricity as compared to T12 tubes. Customers have been slow to accept the T5 technology despite its superior energy efficiency due to their incompatibility with older fixtures as T5 lamps are 2 inches shorter in length and can only be used with electronic ballasts. This has created a need for retrofitting in existing fixtures without any change in wiring or fittings.

� Intelligent Lighting Systems – This is a revolutionary technology which enables operation of lighting

fixtures through dimmers, motion sensors, daylight sensors, smoke detectors and also enables operations through computers and mobile phones.

� ESCO Lighting – An Energy Savings Company undertakes projects involving installation, maintenance and

financing of lighting facilities with a view to improve energy efficiency, and reduce operations and maintenance costs for consumers. The ESCO would typically assume the technical and performance risk associated with a project. The contract is performance-based whereby the ESCO receives compensation based on the quantum of energy savings through utilization of its products vis-à-vis conventional lighting systems.

Accelerating world economic growth is expected to spur construction and manufacturing activity which are the two principal drivers of demand for lighting fixtures. Although majority of the current demand emanates from industrially advanced countries i.e. USA and Western Europe, the key drivers of future growth will be the rapidly growing economies of Asia, Africa, Eastern Europe, Middle-East and Latin America, with India and China emerging as significant beneficiaries due to their rapidly growing economies. Besides, integration of the global economy and increasing outsourcing trends are expected to engulf the lighting industry as well. Low cost manufacturers with the ability to meet international quality standards are increasingly being looked upon to source electronic products and components. India and China, with their competitive advantages, are definitely in the fray to grab a fair portion of the emanating demand.

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In an era of increasing economic growth driven by investment and consumption, it becomes absolutely critical to conserve energy given the rising demand for energy and depleting natural resources. As a result of several studies conducted and analyses performed, several countries across the world have initiated measures to conserve and optimize the utilization of energy. For instance, China had a high lighting load in the 1990’s (similar to what India has today i.e. 18% of power generation), but as a result of rigorous implementation of its energy conservation strategies, it has brought down lighting load to under 10% of power generation. In USA, Star ratings are not only given to products but also to buildings. In U.K., the “Best Practices” in energy efficiency are widely publicized to encourage others to emulate the same. In Australia, they have a Smart Business Program for energy savings. Simultaneously, it has also been discovered that energy efficient lighting products and solutions bring about significant savings in energy consumption and thereby reduce costs dramatically. For instance, the cumulative energy savings attributable to use of electronic ballasts in the period 1988 to 1995 has been valued at US$ 1 billion. This is expected to grow to US$ 13 billion for ballasts installed through the year 2015. Based on this, it is expected that electronic ballasts will replace magnetic ballasts in more than 75% of the applications by 2015. Indian Lighting Industry Lighting is the single most important element in the visual environment. Over the last few years, the Indian Lighting Industry has seen phenomenal growth, upgradation in technology, products, product design and most importantly, a huge growth and diversification in application.

Effective lighting improves productivity and strengthens security. Lighting can consume up to 40 percent of the energy used in our buildings. A well designed lighting system reduces energy, maintenance, and potential liability costs. Both public and private interests are served by more effective lighting and reduced operating costs. Rapid improvements in lighting systems and equipment offer potential solutions, yet they have also made lighting practice more complex. On the other hand, the use of inefficient light sources and controls, and the wasteful usage of lighting results in polluting the environment leading to global warming. The need was therefore being felt for more interaction between the manufacturers and suppliers of lighting, and the user / specifier community, more specifically architects and interior designers.

(Source: www.isleind.org) Lighting Industry Overview:-

(Source: www.indiamarkets.com)

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HISTORY & BUSINESS OVERVIEW Our Company was incorporated in the year 1964 by Mr. S. Nuruddin, Dr. Y. Najmuddin and Mr. Q. Hakimuddin to manufacture electronic components including Resistors and Capacitors. In the year 1980 Mr. Suresh H. Shah had took controlling interest and started concentrating on the manufacturing of Capacitors. To make cost effective the company operates from Nasik to manufacture Plastic Film Capacitors, Power Capacitors and L T Switched Capacitor panels. The company is a pioneer in the manufacture of capacitors with Metallised Polypropylene Films as dielectric. During 2001-2002, we shifted focus to energy-efficient lighting solutions as it anticipated a growing demand for energy-efficient lighting solutions from Indian municipalities and consumers. Leveraging on its core competences and manufacturing expertise in electronics and passive components, AEL entered the energy-efficient lighting market with a view to becoming an Energy Services Company (“ESCO”). AEL has developed a wide range of energy-efficient lighting solutions, and has an installed base of over 30 lacs fixtures. Our historical business model comprised both, an outright sale of its products as well as operating leases for ALMS. Operating leases enabled electricity utilities to take advantage of our energy-efficient products/technology without significant upfront capital investment. This model is undergoing a change as the financial condition of the utilities has improved, enabling them to spend on energy-efficient equipment. Going forward, we are increasingly using the ESCO model, under which we provide our products to customers without any initial investment by them, but is entitled to a share of the savings in cost that result from the use of its products along with a periodic maintenance fee. The ESCO model is based on a “pay-for-performance” concept, under which our products generate demonstrable cost savings for the customer, which are then shared between the customer and us in a pre-determined ratio. Business Model: AEL's business model in the past included an outright sale of its products as well as operating leases for ALMS. Going forward, AEL is increasingly using ESCO model, wherein AEL provides its products to customers without any initial investment by them and derives revenue out of the cost savings that result from the use of its products along with a periodic maintenance fee. The ESCO model is based on a 'pay-for-performance' concept, generating demonstrable cost savings for the customer, which is then shared between the customer and AEL in a predetermined ratio. In FY07, the company ventured into a new segment by manufacturing plant and machinery promoting green fuels i.e. to generate power from plastic/ refinery waste (p2p).

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Competitive Strengths We believe our operational excellence, strong brand equity and differentiated product offerings will enable us to deliver high-quality products in a cost-efficient and timely manner. Our key strengths include: Innovative Products/Technology: We have a history of innovation and a strong track record of assessing market needs and addressing them with quality products. Earlier, we were an innovator in using capacitor-based solutions for reducing transmission and distribution energy losses on power lines. Today, our company has a variety of innovative lighting solutions, which it believes, gives it a competitive advantage over other market participants. ESCO Lighting Business to Drive Growth: We operate as an ESCO in India and have taken a lead in promoting energy-efficient lighting in India. The ESCO industry is still very nascent in India and AEL is among the 11 BEE empanelled ESCO companies in India. AEL undertakes an ESCO project, its compensation flows from the cost of energy actually saved. To operate successfully under the ESCO model, vendors have to produce consistently reliable products and provide accurate and verifiable measurements of the power savings generated by their products. This is a costly and time consuming process. Our company, , through its earlier capacitor based solutions and now through its energy efficient lighting solutions, is established as a quality service provider and has the ability to take on and effectively deliver on ESCO projects. Brand Recognition: Based on its long history of innovation, international and domestic patents, and high quality products, AEL has gained recognition in domestic and international markets. Leading companies such as Big Bazaar, Tesco’s and Italian Railways (tunnel lighting) are regularly supplied by AEL, either directly or through its joint venture partners/associates. Our Business Strategy Our strategic objective is to Standardize on the opportunities that are available in the domestic and global lighting industry, including ESCO Lighting business. At the same time, we will continue to improve production processes and reduce costs to stay competitive. AEL has set for itself the following longer-term business strategic.

a. To continue brand building and strengthening of the distributor network We seek to capture a greater market share in this environment and it is important to invest in the brand to strengthen the top of the mind recall and consequently we shall continue to invest in our brands. Since the industry is highly organized, a good distribution network is essential in this industry. We are focusing on expanding on our distributorship network by opening new marketing offices or by way of appointment of new distributors, including smaller towns and rural areas. We believe that smaller towns in suburban India would be the new emerging realty hubs for development of residential and commercial complexes and intend to position ourselves to capitalize on these emerging opportunities.

b. Tapping large developers and corporate bodies As organized real estate development started growing in India, we realized that it was imperative to tap large real estate players. Since the buyers in organized real estate market are more sophisticated with better understanding of the market and pricing, a direct marketing approach to them will be adopted. We approach large corporate houses to market our products and ensure secondary sales through our dealers and distributors.

c. Outsourcing of Manufacturing and Product Servicing: We outsource manufacturing of several of our components/products to dedicated units. As we are the only customer to these units, it reduces any potential conflicts and ensures a steady supply of high quality products at a reasonable cost. We also outsource installation and maintenance of our ESCO assets.

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THE ISSUE

Equity Shares proposed to be issued by our Company 1,53,59,139 Equity Shares.

Rights Entitlement One Equity Share for every two Equity Shares held on Record Date

Record Date [�]

Issue Price per Equity Share Rs. 20/- Equity Shares outstanding prior to the Rights Issue 3,07,18,277

Equity Shares outstanding after the Rights Issue of Equity Shares.

4,60,77,416 Equity Shareholders subscribe to all the Equity Shares offered

Terms of the Issue For more information, refer to Section titled “Terms of the Present Issue” beginning on page 192 of this Draft Letter of Offer.

Terms of Payment The payment terms available to the Investors are as follows:

Amount payable per Equity Share (Rs.)^ Payment Method* Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 1.25 3.75 5.00 First Call 1.25 3.75 5.00 Second Call 1.25 3.75 5.00 Third and Final Call 1.25 3.75 5.00 Total 5.00 15.00 20.00

* Please refer to risk factor nos. 39 & 40 in “Risk Factors” on page XIII for risks associated with the payment method. For details on the payment method, see “Terms of the Present Issue” on page 192. ^ NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the Composite Application Form (“CAF”).

The Issue Price of our Equity Shares is Rs. 20/- per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on the First Call and the balance 25% and 25% of the Issue Price on the Second Call and the Third and Final Call, respectively. However, NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the CAF.

While making an application, the Investor shall make a payment of Rs. 5.00 per Equity Share.

� Out of the amount of Rs. 5.00 paid on application, Rs. 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

� Out of the amount of Rs. 5.00 paid on the First Call, Rs. 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

� Out of the amount of Rs. 5.00 paid on the Second Call, 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares

� Out of the amount of Rs. 5.00 paid on Third and Final Call, 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

� Notices for the payment of call money for the First Call, the Second Call and the Third and Final Call shall be sent by our Company to the Equity Shareholders of the partly paid-up Equity Shares on the record dates fixed for the respective calls. Equity Shares in respect of which the balance amount payable remains unpaid may be forfeited by the Company, at any time after the due date for payment of the balance amount due after giving a prior notice of at least 14 days, as provided under the Articles of Association.

For further details, see “Terms of the Present Issue” on page192.

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SUMMARY FINANCIAL AND OPERATIONAL INFORMATION

SUMMARY OF ASSETS AND LIABILITIES (Rs. in lacs)

Particulars As at

30.9.09 As at

31.3.09 As at

31.3.08 As at

31.3.07 As at

31.3.06 As at

31.3.05 A Fixed Assets Gross block 9,976.68 9,977.31 14,828.77 13,224.72 11,766.98 11,431.69 Less: Depreciation 5,954.09 5,741.42 8,594.45 8,160.69 7,422.11 6,581.92 Net Block 4,022.59 4,235.89 6,234.32 5,064.03 4,344.87 4,849.77 Capital work in progress 1,100.07 1,100.02 347.26 3,347.64 1,031.54 75.28 Total 5,122.66 5,335.91 6,581.58 8,411.67 5,376.41 4,925.05B Investments 4,783.47 4,783.47 5,059.06 422.86 166.27 27.45

C Current Assets, Loans and Advances

Inventories 9,393.61 8,346.95 9,451.38 10,453.12 6,756.73 4,650.40 Sundry debtors 34,707.22 34,081.71 23,187.17 34,033.86 9,565.48 5,677.09 Cash and bank balances 553.00 567.19 1,071.05 333.89 3,295.23 768.19 Loans and Advances 7,961.26 7,807.29 8,095.92 7,146.99 9,229.74 6,821.07 52,615.09 50,803.14 41,805.52 51,967.86 28,847.18 17,916.75 TOTAL ASSETS (A + B + C) 62,521.22 60,922.52 53,446.16 60,802.39 34,389.86 22,869.25D Liabilities and Provisions Secured Loans 23,211.40 18,406.39 14,792.85 11,504.19 9,746.28 8,323.63 Unsecured Loans 4,322.52 5,478.89 6,009.77 4,997.29 6,133.00 140.00 Current liabilities 12,688.23 15,194.74 10,642.08 7,079.19 3,573.57 2,562.90 Provisions 112.08 86.58 78.47 1,086.25 296.04 183.51

Deferred Tax Liabilities (Net) - - - 642.36 640.87 1,118.79

TOTAL LIABILITIES AND PROVISIONS 40,334.23 39,166.60 31,523.17 25,309.28 20,389.76 12,328.83

E Networth (A)+(B)+(C)-(D) 22,187.00 21,755.92 21,922.99 35,493.11 14,000.10 10,540.42F Represented by: Preference Shares - - - - - 87.62 Equity Shares 1,453.37 1,453.37 1,451.75 1,391.75 894.25 850.25 Equity Share Warrants 314.50 - - 144.00 280.80 - Reserve and surplus 20,381.14 20,381.19 20,354.81 24,474.81 8,645.82 7,427.18

Balance in Profit and Loss Account 37.98 (78.64) 116.88 9,483.26 4,179.23 2,175.37

Total 22,187.00 21,755.92 21,923.44 35,493.82 14,000.10 10,540.42

Miscellaneous Expenditure to the extent not Written Off

- - (0.45) (0.71) - -

Net worth 22,187.00 21,755.92 21,922.99 35,493.11 14,000.10 10,540.42 Note: The above statement should be read with the Significant Accounting Policies and selected notes to accounts for Restated Standalone Financial information.

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SUMMARY OF PROFIT AND LOSS (Rs. In Lacs)

Particulars As at 30.9.09 As at 31.3.09 As at 31.3.08 As at 31.3.07 As at 31.3.06 As at 31.3.05INCOME Sales Manufactured Products 6669.22 18,516.38 19,282.46 33,450.91 8,886.65 3,830.57 Less: Excise duty 97.05 1,049.86 2,183.42 2,776.92 1,004.31 476.52 6572.17 17,466.52 17,099.04 30,673.99 7,882.34 3,354.05 Traded Products 872.31 3,427.52 4,005.21 3,064.85 3,636.74 2,429.82 7444.48 20,894.04 21,104.25 33,738.84 11,519.08 5,783.87 Add: Inventory Capitalised - - - - 43.69 47.90 Add: Rent and maintenance charges 68.44 285.25 539.75 3,005.78 4,091.84 4,468.96 Other Income 98.41 223.78 364.64 871.08 432.87 380.89 7611.33 21,403.07 22,008.64 37,615.70 16,087.48 10,681.62 Increase / (Decrease) in inventories 1179.05 (703.80) 5,748.82 1,136.92 1,245.52 617.40 Total 8790.38 20,699.27 27,757.46 38,752.62 17,333.00 11,299.02 EXPENDITURE Material Consumed 5313.87 12,706.98 14,775.29 18,951.50 8,929.40 4,653.10 Personnel Expenses 527.59 1,341.18 1,700.12 1,388.11 643.15 557.09

Manufacturing, Administrative and Other Expenses

1042.17 4,222.65 5,596.65 8,536.71 4,016.49 3,462.91

Financial Expenses (Net) 1573.45 2,130.12 2,112.21 1,272.70 648.83 570.60 Depreciation 216.71 460.82 480.04 745.19 840.19 772.25 Total 8673.79 20,861.75 24,664.31 30,894.21 15,078.06 10,015.95 Profit/(Loss) before tax and exceptional Items 116.59 (162.48) 3,093.15 7,858.41 2,254.94 1,283.07

Provisions: Current tax - - - 1,012.00 189.87 87.85 Deferred Tax - - 42.72 1.49 (477.92) (45.05)Fringe Benefit Tax - 33.04 39.26 28.42 27.72 - Total - 33.04 81.98 1,041.91 (260.33) 42.80 Profit/(Loss) After tax but before Exceptional items 116.59 (195.52) 3,011.17 6,816.50 2,515.27 1,240.27

Exceptional Items (Net of Taxes) - - (17,881.80) - - (162.74)

Excess provision of Tax for earlier year written back

- - 4.25 - - -

Profit after tax and exceptional items 116.59 (195.52) (14,866.38) 6,816.50 2,515.27 1,077.53

Balance brought forward (78.64) 116.88 9,483.26 4,179.23 2,175.37 1,366.35 Add: As per scheme of arrangement 0 - - 5.55 - - Transfer from general reserve 0 - 5,500.00 - - - Profit available for appropriation 37.95 (78.64) 116.88 11,001.28 4,690.64 2,443.88 APPROPRIATION Proposed Dividend on Equity - - - 651.91 223.56 153.05 Tax On Equity Dividend - - - 110.60 31.36 21.46 Preference Dividend - - - - 3.94 7.89 Tax On Preference Dividend - - - - 0.55 1.11 Transfer to General Reserve - - - 755.51 252.00 85.00 Surplus Carried to Balance sheet 37.95 (78.64) 116.88 9,483.26 4,179.23 2,175.37 37.95 (78.64) 116.88 11,001.28 4,690.64 2,443.88

8

Earning Per share Basic 0.39 (0.65) (50.15) 32.78 29.16 12.58

Diluted 0.39 (0.65) (50.15) 26.68 24.28 12.58

9

GENERAL INFORMATION Dear Equity Shareholder(s), Pursuant to the resolution passed at the meeting of Board of Directors of our Company held on Thursday, 14th May 2009 & 1st December, 2009 and the resolution of the shareholders passed under Section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting held on Monday, 6th July 2009 it has been decided to make the following offer to the Equity Shareholders of our Company. ISSUE OF 1,53,59,139 EQUITY SHARES OF RS. 5 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS.20/- EACH [INCLUDING SHARE PREMIUM OF RS. 15/-] PER EQUITY SHARE AGGREGATING TO AN AMOUNT OF RS. 3071.83 LAKHS BY ASIAN ELECTRONICS LIMITED (THE “COMPANY” OR THE “ISSUER”) TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY TWO EQUITY SHARES HELD ON THE RECORD DATE I.E. [•] (THE “ISSUE”). THE ISSUE PRICE OF EACH EQUITY SHARE IS 4 TIMES THE FACE VALUE OF THE EQUITY SHARE. For details of payment method, see “The Issue” on page 5. Important

a. This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners in respect of the Equity Shares held in the electronic form and on the Register of Members of our Company in respect of the Equity Shares held in physical form as on [�] i.e. the Record Date fixed in consultation with the Designated Stock Exchange i.e., BSE.

b. Your attention is drawn to “Risk Factors” appearing on page no. XIII of this Draft Letter of Offer.

c. Please ensure that you have received the Composite Application Form (‘CAF’) along with this Draft Letter

of Offer. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID/client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

d. Please read this Draft Letter of Offer and the instructions contained therein and in CAF carefully, before

filling in the CAF. The instructions contained in the CAF are an integral part of this Draft Letter of Offer and must be carefully followed. Application is liable to be rejected for any non-compliance with the terms of this Draft Letter of Offer or the CAF.

e. All enquiries in connection with this Draft Letter of Offer or CAF should be addressed to the Registrars to

the Issue, Link Intime India Pvt Limited, quoting the registered folio number / Depository Participant (DP) Number and Client ID Number and the CAF numbers, as mentioned in the CAF.

f. The Issue will be kept open for a minimum period of fifteen days. If extended, it will be kept open for a

maximum period of thirty days.

g. Lead Manager and our Company shall update this Draft Letter of Offer and keep the public informed of any material changes till the listing and trading commences for Equity Shares offered through this Issue.

Registered Office: D-11, Road No: 28, Wagle Industrial Estate, Thane – 400 604, Maharastra, India Tel No: 91 22 2583 5500/4/5 Fax No: 91 22 2582 7636 Website: www.aelgroup.com

10

Registration No: 12835 of 64-65 Corporate Identification No: L99999MH1964PLC012835 Registrar of Companies, Mumbai 100, Everest Building, Marine Drive, Mumbai – 400 002, Maharashtra, India. Board of Directors Our Board of Directors as on the date of filing this Draft Letter of Offer with SEBI is as follows: Name of Director Designation Nature of Directorship Mr. Arun B. Shah Executive Chairman Executive and Non Independent Mr. Haresh G. Desai Director Independent and Non - Executive Dr. Deepakraj Divan Director Independent and Non - Executive Mr. Suresh Sharma Alternate Director to Dr. Deepakraj Divan Independent and Non - Executive Mr. Dipankar De Director – Nominee IDBI Independent and Non - Executive Mr. D.G.Prasad Director Independent and Non - Executive Brief Profile of Our Board of Directors Mr. Arun B. Shah, Executive Chairman Mr. Arun B. Shah, aged 53 years, S/o Mr. Babulal Shah, is the Executive Chairman of Asian Electronics Limited, a Thane based Company specializing in manufacture and marketing of Energy Efficient Lighting Products and Systems. Mr. Arun B. Shah is a Chartered Accountant by profession and has a reputation of Management Buy Out (‘MBO’) type restructuring operations. Mr. Arun B. Shah was in practice before he got associated with the Indage Group of Companies and played a key role in setting up pioneering wine-producing business in India. The company now controls substantial market share of the wine producing and marketing business in India and has a presence globally. Mr. Arun B. Shah took over the management of Asian Electronics Limited; a BSE & NSE listed Company, after the erstwhile Chairman and Managing Director, Mr. Suresh H. Shah, resigned on the grounds of failing health. He became the Non-Executive Chairman of Asian Electronics Limited. Soon, he was appointed as the Executive Chairman of the Company and started looking after the day to day operations of the Company. At Asian Electronics Limited, Mr. Arun B. Shah is leading a team of highly qualified professionals, having rich and varied experience in multifarious fields like Finance, Risk Management, Forex management etc. Mr. Haresh G. Desai, Director Mr. Haresh G. Desai, aged 54 years, S/o Mr. Gunvantrai Manibhai Desai is a Bachelor of Commerce and a member of the Institute of Chartered Accountants of India. He is an Independent Director of our Company as well as a Promoter and Director of A. V. Rajwade & Co. a pioneer in the field of rendering advisory services in foreign exchange risk management. He has worked with the firm since its inception in 1981. He has spent nearly two decades in counseling Indian corporate on Foreign Exchange Risk Management. He has seen the emergence of the risk management function among Indian corporate from virtually the initial period to its current state and advised the corporate at every phase of advancement. Advising corporate on the management of foreign currency loans and usage of derivatives has been his core skill. He has conducted over 300 training programmes on foreign exchange risk management, training a large number of Indian treasury personnel at banks as well as corporate, and non-treasury senior staff in the country. He was a Visiting Faculty at the Management Development Institute, Gurgaon, and the Jawaharlal Nehru Institute of Development Banking, Hyderabad and now is a faculty for CRISIL Executive training programmes.

11

Dr Deepakraj Divan, Director Dr. Deepakraj Divan, aged 55 years, S/o Mr. Malhar Shivram Divan is a B.Tech from IIT Kanpur in 1975 and holds a MS and Ph.D degree from the University of Calgary, Canada, in 1979 and 1983 respectively. He is founder and chairman of Innovolt Inc., an Atlanta, U.S.A, based company specializing in power protection and energy management products. He is also chairman of Integral Technologies, Pune, India, a subsidiary of Innovolt that specializes in energy efficient lighting solutions using LEDs. Dr. Divan is also a professor of Electrical Engineering and Director of the Intelligent Power Infrastructure Consortium at the Georgia Institute of Technology in Atlanta, one of the leading engineering schools in the world. From 1995-2004, he was founder, chairman and CEO/CTO of Soft Switching Technologies, a company in the industrial power quality market. From 1985-95, he was a professor in Electrical Engineering at the university of Wisconsin-Madison. Mr. Suresh Sharma, Alternative Director to Dr. Deepakraj Divan Mr. Suresh Sharma, aged 56 years, S/o Mr. Mahadeo Prashad Sharma is a M.S. (Aerospace) from University of Florida, Gainesville FL (U.S.A.), Management of Technology Courses with British Aerospace (U.K) and a B.E. (Honors) in Mechanical from BITS, Pilani (India). He is an internationally acknowledged business leader known for his vision, operational excellence and entrepreneurial successes. A former executive at GE Energy (General Electric), he is a GE-Certified Six-Sigma Master Black Belt. His 25 years of multi-functional industry experience includes working with GE Corporate R&D center at Schenectady NY, NASA Langley at Hampton VA, British Aerospace & Rolls-Royce in England, and MATRA in France. He started his early career as a Naval officer. Mr. Dipankar De, Nominee Director, IDBI Mr. Dipankar De, aged 54 years, S/o Mr. Digindra Narayan De, is a MA Economics from Jadavpur University, Kolkata and Certified Associate of the Indian Institute of Bankers (CAIIB). He is a Deputy General Manager of IDBI. He has 3 decades of knowledge and experience in the fields of industrial promotion & development financing, corporate banking, economic & industrial research, grassroot socio-economic development for the benefit of the downtrodden and underprivileged. Mr. D.G.Prasad - Director Mr. D.G. Prasad aged 61 years; S/o D. Purushothama Prasad is a Chartered Accountant and had been a banker for over 33 years. After being with Canara Bank for over 8 years, Mr. Prasad served Exim Bank for over 25 years having joined in 1983, in its formative phase. In Exim Bank, he held various positions including as the Chief General Manager heading Corporate Banking, Agri Business and SME Business Groups of the Bank. He holds considerable expertise in trade finance, international finance, merchant banking, corporate strategies, mergers and acquisitions, loan syndications, forfaiting, international negotiations and co-financing with multilateral agencies. He was trained in ‘Treasury Management’ at Credit Suisse, Switzerland; ‘International Banking and Development’ at the International Development Ireland at Dublin and London and ‘Advanced Agribusiness Management’ at Cornell University, Ithaca, New York, USA. He is also a Director on the Boards of various other companies in India and on the Board of a Singapore based company. He has been a guest faculty at business schools on international finance and international marketing. Company Secretary and Compliance Officer Mr. Rasik D. Goradia Sr. Vice President, Company Secretary and Compliance Officer Asian Electronics Limited D-11, Road No: 28, Wagle Industrial Estate, Thane – 400 604 Tel: +91 22 2583 5500/4/5; Fax: +91 22 2582 7636 E-mail: rights@aelgroup.com All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked, ASBA Account number and the Designated Branch of the SCSB where the CAF was submitted by the ASBA Investors.

12

The Equity Shares of Our Company are listed on Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). ISSUE MANAGEMENT TEAM Lead Manager to the Issue Transwarranty Capital Private Limited 403, Regent Chambers, Nariman Point Mumbai – 400 021 Tel No: +91-22-4001-0800/900 Fax No: +91-22-4001-0888/999 E Mail: ael.rights@transwarranty.com Investor Grievance E-mail: customercare@transwarranty.com Contact Person: Mr. D.Subrahmanyam SEBI Regn. No. 1NM 000010965 Website: www.transwarranty.com Registrars to the Issue Link Intime India Pvt. Ltd., Unit: Asian Electronics Limited – Rights Issue C-13 Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai – 400 078 Tel No: +91-22 25960320 Fax No: +91-22 25960329 Contact Person: Mr.Pravin Kasare Email: ael.rights@linkintime.co.in SEBI Registration No: INR 000004058 Website: www.linkintime.co.in Note: Investors are advised to contact the Registrars to the Issue or the Compliance Officer Mr. Rasik D Goradia in case of any pre-issue / post-issue related problems such as non-receipt of Draft Letter of Offer / Letter of Allotment / Share Certificate(s) / Refund Orders / Demat Credit. Legal Advisors to the Issue J.J. Bhatt B.Com; LLB – Advocate High Court Mumbai 209, Blue Moon Chambers, 2nd floor, 25, Nagindas Master Road, Fort, Mumbai Tel No: +91-22-2265-8615 Contact Person: Mr. J.J.Bhatt Email: jjbhattadv@hotmail.com Bankers to our Company State Bank of India Commercial Branch, Code No: 04268 118-121, Swastika Chambers, Sion-Trombay Road, Chembur, Mumbai – 400-071 Tel No: +91-22-2527-3906/ 4225-4001 Fax No: +91-22-25274524

HDFC Bank Process House, 2nd floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 Tel No: +91-22-2496-1616/2498-8484 Fax No: +91-22-2496-3994

13

The Hongkong and Shanghai Banking Corporation Limited 52/60, Mahatma Gandhi Road, P.O.Box No: 128, Mumbai – 400-001 Tel No: +91-22-2267-4921 Fax No: +91-22-2265-8309

Bank of India Mumbai Corporate Banking Branch, Mezanine Floor, 70/80, MG.Road, Mumbai – 400-001 Tel No: +91-22-2262-3656/2265-1625/2263-3063 Fax No: +91-22-2269-2196

IDBI Bank Limited IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400-005 Tel No: +91-22-2278-9111 Fax No: +91-22-2218-0412

UCO Bank Flagship Corporate Branch, First floor, Mafatlal Centre, Nariman Point, Mumbai – 400-021 Tel No: +91-22-4054-9191 Fax No: +91-22 -4054-9122

Bankers to the Issue The Hongkong and Shanghai Banking Corporation Limited Shiv Building, Plot No: 139-140B, Western Express Highway Sahar Road Junction, Vile Parle - East Mumbai – 400-057 Tel No: +91-22-4035-7458 Fax No: +91-22-4035-7657 Contact Person: Mr. Swapnil Pavale Email id: swapnilpavale@hsbc.co.in Self Certified Syndicate Bankers The list of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the ASBA Bid cum Application Form, please refer the above mentioned SEBI website. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked, ASBA Account number and the Designated Branch of the SCSB where the CAF was submitted by the ASBA Investors. Auditors to our Company M/s. Sorab S. Engineer & Co., Chartered Accountants Ismail Building, 381, Dadabhai Naoroji Road, Mumbai – 400 001 Tel No: +91-22-2204-1789/0861 Fax No: +91-22-2284-6319 Email: contact@sorabsengineer.com Website: www.sorabsengineer.com FRN: 110417W Statement of Inter se allocation of responsibility Transwarranty Capital Private Ltd., being the sole Lead Manager to this Rights Issue, there is no inter-se allocation of responsibility.

14

Credit Rating Details This being an Issue of Equity Shares on rights basis, no credit rating is required. IPO Grading This being Rights Issue of Equity Shares, IPO grading is not applicable. Debenture Trustees Since this is an issue of Equity Shares on a rights basis, there is no requirement for the appointment of debenture trustees. Monitoring Agency As per Regulation 16(1) of the SEBI (ICDR) Regulations, 2009 the requirement of Monitoring Agency is not mandatory if the Issue size is below Rs. 50,000 lacs. Since the Issue size is less than Rs. 50,000 lacs, the Company has not appointed any monitoring agency for this Issue. However, as per the Clause 49 of the Listing Agreement to be entered into with the stock exchanges upon listing of the equity shares and the Corporate Governance Requirements, the Audit Committee of the company, would be monitoring the utilization of the proceeds of the issue Appraising Entity The requirement of funds has not been appraised by any Bank/ Financial Institution. Minimum Subscription This Issue has not been underwritten and we have not made any standby arrangements for the Issue. If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date), our Company will pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act. Subscription to the Issue by the Promoters and the Promoter Group Promoter, Mr. Arun B. Shah & Promoter Group have confirmed vide letter dated 1st December 2009 that they will subscribe the extent of any unsubscribed portion of the Issue. Such subscription and acquisition of additional equity shares by our Promoter, if any, will not result in change of control of the management of our Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Other than meeting the requirements indicated in Objects of the Issue, there is no other intention/purpose for the Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoter through the Issue, the promoter shareholding in the Company exceeds their current shareholding. However, the Promoter have confirmed that in case the Rights Issue of the Company is completed with their subscribing to equity shares and as a result, if the public shareholding in the Company after the Issue falls below the permissible minimum level as specified in the listing condition or listing agreement, they will undertake to maintain the minimum public shareholding in such manner and within such period as specified in Clause 40A of the Listing Agreement.

15

Underwriting/ Standby Support This issue of equity shares is not being underwritten and/or no standby support is being sought for the said issue. However, the Promoter & Promoter Group have confirmed that they intend to subscribe to the extent of any unsubscribed portion of the Issue. Promoter & Promter Group intends to apply for additional equity shares in the issue such that at least 90% of the Issue size is subscribed. If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date), our Company will pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act. Issue Schedule The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below:

Issue Opening Date: [•], 2010 Last date for receiving requests for CAFs: [•], 2010Issue Closing Date: [•], 2010

The Board or a duly authorised committee thereof may however decide to extend the Issue period, as it may determine from time to time, but not exceeding 30 days from the Issue Opening Date. Impersonation As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act which is reproduced below: “Any person who makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares therein, or otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”. Allotment Letters / Refund Orders The Company will issue and dispatch allotment advice/ share certificates / demat credit and/or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the date of closure of the Issue. If such money is not repaid within eight days from the day our Company becomes liable to pay it, our Company shall pay that money with interest as stipulated under section 73 of the Companies Act. Applicants residing at centers where clearing houses are managed by the Reserve Bank of India (RBI) will get refunds through ECS only (Electronic Clearing Service) except where Applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS provided that the MICR details are recorded with the depositories or our Company. In case of those Applicants who have opted to receive their Equity Shares in dematerialized form using electronic credit under the depository system, and advice regarding their credit of the Equity Shares shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within fifteen (15) working days of closure of the Issue.

16

In case of those Applicants who have opted to receive their Equity Shares in physical form and our Company issues an allotment advice, the corresponding share certificates will be dispatched within one month from the date of allotment. For more information please refer to section titled “Allotment and Refund” on page 216 of this Letter of Offer. In case of ASBA Investors, the Registrar to the Issue shall instruct the SCSBs to unblock the funds in the relevant ASBA Account to the extent of the refund to be made within 15 days of the Issue Closing Date. The refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first Applicant’s registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first Applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose.

17

CAPITAL STRUCTURE Our share capital as on the date of filing of this Draft Letter of Offer with SEBI is set forth below:

Particulars Aggregate Value

(Rs. Lakhs) A. Authorised Capital

8,00,00,000 Equity Shares of Rs. 5/- each 4,000.00B. Issued Capital before the Issue

3,07,19,377 Equity shares of Rs. 5/- each 1535.97 Subscribed and Paid-up Capital 3,07,18,277 Equity shares of Rs. 5/- each * 1535.91

C. Rights issue of existing equity shareholders in terms of this Draft Letter of Offer

1,53,59,139 Equity Shares of Rs. 5/- each, at a premium of Rs. 15/- each for cash being allotted for Equity Shares

3071.83

D. Paid-Up Capital after the Rights Issue^ 4,60,77,416 Equity Shares of Rs. 5/- each fully paid-up 2303.87

E. Share Premium Account Existing Share Premium Account 20605.38 Share Premium Account after the issue assuming allotment of all Equity Shares

Offered 22909.25

*Right Issue of 24,000 equity shares of Rs. 100/- each made on 7th November, 1973, only 23,945 equity shares have been allotted. Hence a difference of 55 shares of Rs.100/- each (subsequently split into 550 shares of Rs.10/- each w.e.f. 16/4/1992 and 1,100 equity shares of Rs. 5/- each w.e.f. 27/9/2007) arises between no of Shares issued and no of shares subscribed and paid up. ^ Post Issue Shareholding is based on the assumption that all shareholders will subscribe in full to their entire Rights entitlement. 1. Notes to the Capital Structure: Details of changes in Authorised Share Capital since incorporation

Date of Change Particulars AGM/

EGM Face Value

(In Rs.)

Increased Authorised Capital

(No. of shares) 21.01.1964

(Incorporation) 75,000 Equity shares of Rs. 100 each 25,000 Unclassified shares of Rs. 100 each N.A 100/- 1,00,000

28.09.1990 3,00,000 Equity shares of Rs. 100 each EGM 100/- 3,00,000 04.09.1993 50,00,000 Equity shares of Rs. 10 each EGM 10/- 50,00,000

11.01.1996 100,00,000 Equity shares of Rs. 10 each 150,00,000 Unclassified shares of Rs.10 each EGM 10/- 2,50,00,000

23.09.1999 150,00,000 Equity shares of Rs. 10 each 10,00,000 Preference shares of Rs.100 each EGM 10/- 2,50,00,000

27.09.2007 8,00,00,000 Equity shares of Rs. 10 each AGM 5/- 4,00,00,000

18

2. Equity Share Capital Build Up:

Date of Issue/ Allotment

No. of Equity Shares

Face Value (Rs.)

Issue Price (Rs.)

Nature of payment of

consideration

Nature of Allotment Cumulative Issued Capital

(Rs.) 21.01.1964 90 100 100 Cash Subscription to Memorandum of

Association 9000

NA* 29910 100 100 Cash IPO 30,00,000 15.10.1969 6000 100 - Consideration

other than cash

Bonus issue out of free reserves in the ratio of One share for five

shares held

36,00,000

07.11.1973 24000 100 100 Cash Rights Issue 60,00,000 Split of face value of from Rs. 100/- to Rs. 10/- each w.e.f. 16/4/1992

01.04.1993 7,20,000 10 50 Cash Conversion of FCDs issued 1,32,00,000 08.03.1994 60,000 10 425 Cash Preferential Allotment to Morgan

Stanley Growth Fund 1,38,00,000

01.07.1994 7,19,725 10 - Consideration other than

cash

Bonus issue out of free reserves in the ratio of One share for two

shares held

2,09,97,250

01.07.1994 8,01,903 10 75 Cash Rights Issue of Equity Shares 2,90,16,280 02.11.1994 60000 10 440 Cash Preferential Allotment to Morgan

Stanley Emerging Markets Fund 2,96,16,280

01.01.1995 5,25,000 10 175 Cash Conversion of warrants issued to Promoter into Equity Shares

3,48,66,280

04.06.1996 2,47,000 10 520 Cash Preferential Allotment to FIIs & MFs

3,73,36,280

15.10.1996 37,33,078 10 10 Consideration other than

cash

Bonus out of free reserves in the ratio of 1:1

7,46,67,060

10.09.1997 10,36,316 10 190 Cash Preferential Allotment to IFC, Washington

8,50,30220

05.01.2006 4,40,000 10 240 Cash Preferential Allotment to Promoter 8,94,30,220 16.10.2006 21,00,000 10 460 Cash Qualified Institutional Placement

under Chapter XIIIA of DIP Guidelines to 7 QIBs

11,04,30,220

04.01.2007 19,05,000 10 240 Cash Conversion of FCD allotment into Equity Shares

12,94,80,220

22.02.2007 4,00,000 10 75 Consideration other than

cash

Allotted to Shareholders of Asian Raymold Lighting Pvt Ltd., under a

Scheme of Arrangement ^^

13,34,80,220

30.03.2007 5,70,000 10 240 Cash Conversion of warrants allotted on Preferential basis to Promoter

13,91,80,220

31.03.2007 4,25,000 10 173 Cash Allotment under ESOP Scheme to Asian Employees Welfare Trust

14,34,30,220

14.06.2007 6,00,000 10 240 Cash Conversion of warrants allotted on Preferential basis to Promoter

14,94,30,220

27/9/2007 sub division of 1,49,43,022 equity shares of Rs. 10/- each into 2,98,86,044 Equity shares of Rs. 5/- each 01.12.2009 8,33,333 5 35 Cash Conversion of warrants allotted on

Preferential basis to Investor 30,71,93,770

* As certified by the management since, on Saturday 16th October 1982, our company’s Registered office premises at Handloom House, 221, Dr DN Road, Fort, Mumbai – 400-001 encountered a devastating fire and this resulted in the total destruction of all our records, account books, statutory records, documents, agreements, fixtures, furniture’s and fittings etc. ^^ As per a Scheme of arrangement, as approved by the Hon’ble High Court of Mumbai and Hon’ble High Court of Madras, the company has allotted 4,00,000 Equity Shares of Rs. 10/- (8,00,000 of Rs. 5/- each w.e.f. 27.9.2007) to the shareholders of Asian Raymold Lighting Pvt Ltd., at price of Rs.75/-, on February 22, 2007.

19

3. The following is the history of the Preference Share Capital of our Company: Date of allotment

No. of Cumulative Redeemable Preference

Shares and Face Value (Rs.)

Issue Price (Rs.)

Consideration (Cash, bonus, other than Cash etc)

Reasons for allotment

Cumulative No. of Preference Shares

Cumulative Paid-up Preference Share capital Rs.)

18.12.2003 87,622 – 9% Cumulative Redeemable Preference Shares of Rs. 100 each

100

Other than Cash (Scheme of Arrangement)

Allotted to Shareholders of Asian Electronics Components Ltd., under a Scheme of Arrangement at 7 fully paid-up 9% cumulative Redeemable Preference shares of Rs.100/- each for every 2 fully paid-up equity shares of Rs.100/- each.

87,622 87,62,200

4. The details of shares issued as Bonus out of free reserves of our Company

Date of Issue/ Allotment

No. of Equity Shares

Face Value (Rs.)

Issue Price (Rs.)

Nature of payment of

consideration

Nature of Allotment

15.10.1969 6000 100 - Consideration other than

cash

Bonus issue out of free reserves in the ratio of One share for five

shares held 01.07.1994 7,19,725 10 - Consideration

other than cash

Bonus issue out of free reserves in the ratio of One share for two

shares held 15.10.1996 37,33,078 10 10 Consideration

other than cash

Bonus out of free reserves in the ratio of 1:1

5. The details of shares issued as per Section 391 – 394 of the Companies Act, 1956. i.e. as per scheme of arrangements etc of our Company

Date of Issue/ Allotment

No. of Shares Face Value (Rs.)

Nature of payment of

consideration

Nature of Allotment

18.12.2003

87,622 – 9% Cumulative Redeemable Preference Shares of Rs. 100 each

100

Other than Cash (Scheme of Arrangement)

Allotted to Shareholders of Asian Electronics Components Ltd., under a Scheme of Arrangement at 7 fully paid-up 9% cumulative Redeemable Preference shares of Rs.100/- each for every 2 fully paid-up equity shares of Rs.100/- each.

22.02.2007 4,00,000 Equity shares

[8,00,000 of Rs. 5/- each w.e.f. 27.9.2007]

10 Consideration other than

cash

Allotted to Shareholders of Asian Raymold Lighting Pvt Ltd., under a Scheme of Arrangement

For further details, please refer “Collaborations/Tie-up/Association/Other agreements” on page 70 of this Draft Letter of Offer. 6. Lock in shares � 8,00,000 Equity Shares allotted to Asian Raymold Lighting Pvt. Ltd under the Scheme of Arrangement which

are under lock-in up to June 14, 2010. � 8,33,333 Equity shares allotted to Ritika Gems Private Limited pursuant to conversion of equity shares warrants

under preferential allotment are under lock-in up to November 30, 2010

20

7. Outstanding Instruments

� Allotment of Warrants on a Preferential Basis:- At the Extra-Ordinary General meeting of our company was held on Monday, the 6th July, 2009 at the Registered Office of the Company, it was resolved that the Board of Directors, to issue and allot, in one or more tranches, on a preferential basis, upto 60,00,000 Equity Share Warrants (hereinafter referred to as “Warrants”), each carrying an entitlement to subscribe to an equivalent number of Equity Shares of Rs 5/- each at Rs 40/- (including premium of Rs 35/- each) to Investors viz. Ritika Gems Private Limited (a Body Corporate), Asian Sirius Energy Limited (a Body Corporate) and Mr. Navin Khandelwal, (Resident Individual). Our Company is in receipt of ‘In-Principle Approval’ letter from BSE vide letter no: DCS/PREF/SR/PRE/ 615/09-10; dated 20th July 2009 and NSE vide letter no: NSE/LIST/114268-5; dated 29th July 2009. S.No Name of the Investor No. of

Warrants Allotted

No. of Warrants Converted

No. of Warrants pending for conversion

Category

1 Ritika Gems Private Limited 31,45,000 8,33,333 23,11,667 A Body Corporate Our Company has allotted 31,45,000 share warrants to Ritika Gems Private Limited (a Body Corporate) on Preferential basis at a price of Rs. 40/- per warrant and our company is in receipt of Rs.10/- per equity share warrant (25%) towards the upfront application money and having option to convert into equivalent number of equity shares upon payment of remaining amount of Rs.30/- per warrant (75%) into equity share of Rs.5/- each at a premium of Rs.35/- per equity share warrant on or before February 12, 2011 (i.e. within 18 months from the date of allotment). On 1st December 2009, Our Board has approved the allotment of 8,33,333 equity shares of Rs. 5/- each to Ritika Gems Private Limited (a Body Corporate) pursuant to exercise of option to convert the share warrants into to Equity shares of Rs.5/- each at a price of Rs. 40/- per share (including Rs.35/- of share premium). Our company is in the process of making the listing application to the Stock exchanges for listing of these shares. As on date, 23,11,667 share warrants issued to Ritika Gems Pvt Ltd., is pending for conversion

� Brief details of warrants issued / converted as on date of filing the Draft Letter of Offer for listing with the stock exchange & trading approval

Particulars No of shares Stock exchange In-Principle

approval Stock exchange Listing & Trading

approval Conversion of warrants into Equity shares

12,00,000 BSE- Received NSE - Received

BSE- Pending NSE - Pending

Allotment of warrants on Preferential basis

23,11,667 BSE- Received NSE - Received

BSE- Not Applicable NSE - Not Applicable

Conversion of Equity share warrants into Equity shares

8,33,333 BSE- Received NSE - Received

BSE- Not Applied as yet NSE - Not Applied as yet

We further confirm that we have complied with all the provisions of Chapter XIII of the erstwhile SEBI (DIP) Guidelines, 2000 that was applicable to these preferential issues.

21

8. Pre issue and Post issue Shareholding of the Company is as follows: -

Pre Issue Post Issue S.No Particulars No of shares Percentage % No of shares Percentage %

1 Indian (a) Individuals/ Hindu Undivided Family 0 0.00 0 0.00 (c) Bodies Corporate 0 0.00 0 0.00 Sub Total(A)(1) 0 0.00 0 0.00 2 Foreign a Individuals (Non-Residents Individuals/

Foreign Individuals) 0 0.00 0 0.00 b Bodies Corporate 0 0.00 0 0.00 Sub Total(A)(2) 0 0.00 0 0.00

Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

0 0.00 0 0.00

(B) Public shareholding 1 Institutions

(a) Mutual Funds/ UTI 3200 0.01 4800 0.01 (b) Financial Institutions / Banks 10140 0.03 15210 0.03

(c) Central Government/ State Government(s) 0 0.00 0 0.00 (d) Venture Capital Funds 0 0.00 0 0.00 (e) Insurance Companies 0 0.00 0 0.00 (f) Foreign Institutional Investors 9000 0.03 13500 0.03 (g) Foreign Venture Capital Investors 0 0.00 0 0.00 (h) Any Other (specify) 0 0.00 0 0.00 Sub-Total (B)(1) 22340 0.07 33510 0.07

B 2 Non-institutions (a) Bodies Corporate 15525504 50.54 23288256 50.54 (b) Individuals

I i. Individual shareholders holding nominal share capital upto Rs. 1 lakh.

1856215 6.04 2784323 6.04

II ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.

12054869 39.24 18082303 39.24

(c-i) Non-Resident Indians 409349 1.33 614024 1.33 (c-ii) Trustee : Asian Electronics Ltd.-Employees

Welfare Trust (Not Listed) 850000 2.77 1275000 2.77

Sub-Total (B)(2) 30695937 99.93 46043906 99.93

(B) Total Public Shareholding (B)= (B)(1)+(B)(2)

30718277 100.00 46077416 100.00 TOTAL (A)+(B) 30718277 100.00 46077416 100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

0 0.00 0 0.00

GRAND TOTAL (A)+(B)+(C) 30718277 100.00 46077416 100.00 *Post Issue shareholding is based on the assumption that all the shareholders will subscribe to the full extent of their Rights Entitlement in this Issue.

8. Pre issue and Post issue Shareholding of the Company is as follows: -

Pre Issue Post Issue S.No Particulars No of shares Percentage % No of shares Percentage %

1 Indian (a) Individuals/ Hindu Undivided Family 0 0.00 0 0.00 (c) Bodies Corporate 0 0.00 0 0.00 Sub Total(A)(1) 0 0.00 0 0.00 2 Foreign a Individuals (Non-Residents Individuals/

Foreign Individuals) 0 0.00 0 0.00 b Bodies Corporate 0 0.00 0 0.00 Sub Total(A)(2) 0 0.00 0 0.00

Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

0 0.00 0 0.00

(B) Public shareholding 1 Institutions

(a) Mutual Funds/ UTI 3200 0.01 4800 0.01 (b) Financial Institutions / Banks 10140 0.03 15210 0.03

(c) Central Government/ State Government(s) 0 0.00 0 0.00 (d) Venture Capital Funds 0 0.00 0 0.00 (e) Insurance Companies 0 0.00 0 0.00 (f) Foreign Institutional Investors 9000 0.03 13500 0.03 (g) Foreign Venture Capital Investors 0 0.00 0 0.00 (h) Any Other (specify) 0 0.00 0 0.00 Sub-Total (B)(1) 22340 0.07 33510 0.07

B 2 Non-institutions (a) Bodies Corporate 15525504 50.54 23288256 50.54 (b) Individuals

I i. Individual shareholders holding nominal share capital upto Rs. 1 lakh.

1856215 6.04 2784323 6.04

II ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.

12054869 39.24 18082303 39.24

(c-i) Non-Resident Indians 409349 1.33 614024 1.33 (c-ii) Trustee : Asian Electronics Ltd.-Employees

Welfare Trust (Not Listed) 850000 2.77 1275000 2.77

Sub-Total (B)(2) 30695937 99.93 46043906 99.93

(B) Total Public Shareholding (B)= (B)(1)+(B)(2)

30718277 100.00 46077416 100.00 TOTAL (A)+(B) 30718277 100.00 46077416 100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

0 0.00 0 0.00

GRAND TOTAL (A)+(B)+(C) 30718277 100.00 46077416 100.00 *Post Issue shareholding is based on the assumption that all the shareholders will subscribe to the full extent of their Rights Entitlement in this Issue.

22

� As on 30th September 2009, there are 13,09,206 equity shares held by shareholders in physical form. � As on 30th September 2009, there are 44,052 shareholders in our Company � All shares issued since the date of incorporation of the Company are fully paid up.

Note: � Post Issue Shareholding is based on the assumption that Promoter & Promoter Group will subscribe the

balance un-subscribed portion, if any. � Presently our Company is complying with Clause 40A of the Listing Agreement and the minimum public

shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital 9. Details of our Shareholders holding more than one per cent of the share capital of our company as on 15th December, 2009 is as follows: S. No Name of Shareholder No of Shares % age holding

1 Shah Investments Financials Developments & Consultants Private Limited 6528200 21.25

2 Trustee of Asian Electronics Ltd.-Employees Welfare Trust (Not Listed) 850000 2.77

3 Ritika Gems Private Ltd. 833333 2.71 4 Raymold Lighting Pvt Ltd 800000 2.60 5 Infinity.Com Financial Securities Limited 1150125 3.74 Total 10161658 33.08

10. Shareholding of the Promoter As on date of filing the Draft Letter of Offer, Our Promoter does not hold any equity shares of our company. Undertaking from Promoter & Promoter Group Promoter, Mr. Arun B. Shah & Promoter Group have confirmed vide letter dated 1st December 2009 that they will subscribe the extent of any unsubscribed portion of the Issue. Such subscription and acquisition of additional equity shares by our Promoter, if any, will not result in change of control of the management of our Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. 11. Promoters’ Contribution and Lock-in The present issue being a rights issue, provisions of Promoters’ contribution and lock-in are not applicable. 12. Details of Purchase and Sale of securities of our Company by the Promoter and Directors, in the last 6 months

Name of the Promoter,

relatives, Group Company/ Director

Allotment of shares

Purchase Sale Price (Rs.)

Name of the Transferor/transferee

Date of Allotment/ Transfer

Final Shareholding

U.S. Instruments Pvt. Ltd.

- - 4,00,000 20.35 Arun B. Shah 28.02.2009 12,80,544

Arun B. Shah - 4,00,000 - 20.35 U.S. Instruments Pvt Ltd 28.02.2009 4,00,000Arun B. Shah - - 4,00,000 19.16 Body Corporate / Public 19.06.2009 NilDG.Prasad - 500 250 39.16 Open Market 24.7.2009 250

Except as mentioned above, no Promoter / Director of the Company, their relatives and associates, promoter group have not purchased or sold directly or indirectly, any equity shares during a period of 6 months proceeding the date on which this Draft Letter of Offer is filed with Stock Exchanges.

23

13. Details regarding Top 10 Shareholders: A. As on date of filing the Draft Letter of Offer with Stock Exchange S. No Name of Shareholder No of Shares % age holding

1 Shah Investments Financials Developments & Consultants Private Limited 6528200 21.25

2 Trustee of Asian Electronics Ltd.-Employees Welfare Trust (Not Listed ) 850000 2.77

3 Ritika Gems Private Ltd. 833333 2.71 4 Raymold Lighting Pvt Ltd 800000 2.60 5 Infinity.Com Financial Securities Limited 1150125 3.74 6 Angel Broking Limited. 280016 0.91 7 Religare Securities Ltd 276795 0.90 8 Dr Ramesh Chimanlal Shah 150000 0.49 9 Kokila Anil Kothari 144936 0.47

10 Mangal Keshav Securities Limited 133020 0.43 Total 11146425 36.29

B. As on 10 days before the date of filing the Draft Letter of Offer with Stock Exchange: S. No Name of Shareholder No of Shares % age holding

1 Shah Investments Financials Developments & Consultants Private Limited 7928200 25.81

2 Trustee of Asian Electronics Ltd.-Employees Welfare Trust (Not Listed ) 850000 2.77

3 Ritika Gems Private Ltd. 833333 2.71 4 Raymold Lighting Pvt Ltd 800000 2.60 5 Angel Broking Limited 299678 0.98 6 Religare Securities Ltd 295316 0.96 7 Dr Ramesh Chimanlal Shah 150000 0.49 8 Kokila Anil Kothari 144936 0.47 9 Mangal Keshav Securities Limited 131920 0.43

10 Pramodchandra Gordhandas Mehta 124232 0.40 Total 1155615 37.62

C. Two years prior to filing the Draft Letter of Offer with the Stock Exchange S. No Name of Shareholder No of Shares % age holding

1 Shah Investments Financials Developments & Consultants Private Limited 7928200 26.53

2 Usha Suresh Shah 1705846 5.71 3 HSBC Financial Services (Middle East) LLC 1319806 4.42 4 Citigroup Global Markets Mauritius Private Ltd 1189907 3.98 5 Lehman Brothers Asia Limited a/c LB India 981820 3.29 6 Carlson Fund Equity - Asian Small Cap 900000 3.01

7 Trustee of Asian Electronics Ltd.-Employees Welfare Trust (Not Listed ) 850000 2.84

8 Merrill Lynch Capital Markets Espana S.A 800000 2.68 9 Raymold Lighting Pvt Ltd 800000 2.68

10 Arun B Shah 650000 2.18 Total 17125579 57.31

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14. Our Company presently does not have any intention or proposal to alter its capital structure within a period of six months from the date of opening the Issue, except by way of issue/allotment of Equity share warrants made pursuant to conversion of Outstanding Equity share warrants; Exercise of options under the pending Stock option schemes; by way of split/consolidation of the denominations of Shares or further issue of shares whether preferential or otherwise. However, if business needs of our Company so require, our Company may alter the capital structure by way of split / consolidation of the denomination of the Equity Shares / issue of Equity Shares on a preferential basis or issue of bonus or rights or public or preferential issue of Equity Shares or any other securities during the period of six months from the date of opening of the Issue or from the date the application moneys are refunded on account of failure of the Issue, after seeking and obtaining all the approvals which may be required 15. Our Company has 44,052 Equity Shareholders as on 30th September 2009. 16. At any given point of time there shall be only one denomination for the Shares of our Company and we shall comply with such disclosure and accounting norms as may be prescribed by SEBI. 17. Our Company has not raised any bridge loan against the proceeds of the current issue. 18. Except as disclosed in the Draft Letter of Offer, there are no outstanding warrants, options or rights to convert debentures, loans or other financial instruments into our Equity Shares. 19. We have not issued any Equity Shares out of revaluation reserves 20. The Equity Shares of our Company are fully paid up and there are no partly paid up Shares as on the date of this Draft Letter of Offer. 21. Our Promoters or promoter group entities, our Directors or the Lead Manager have not entered into any buy-back, standby or similar arrangements for any of the securities being issued through the Draft Letter of Offer. 22. The Issue will remain open for 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date. 23. The Promoter, Directors and Lead Manager to the Issue have not paid any amount, whether direct or indirect and in cash or kind, in the nature of discount, commission, allowance or otherwise to any person. 24. The Company has complied with the provisions of Clause 35, 40A, 41 & 49 of the Listing Agreement. 25. The Company has complied with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992, with respect to reporting in terms of Regulation 13. 26. The calls shall be structured in such a manner that the entire call money is called and will be payable within 12 months from the date of allotment of Equity Shares in this Issue. If the Investors fail to pay the call money within 12 months, the application money already paid may be forfeited. 27. The Lead Managers to the issue and their associates do not hold any shares in the issuer company. 28. Employees Stock Option Scheme, 2005 (AEL-ESOS-2005) During the financial year 2005-2006, the Company had instituted a Employees’ Stock Option Plan as recommended by the Compensation Committee of the Board The particulars of option granted during the financial year 2005-06 and outstanding as at 31st March, 2009 are as under:

Particulars Shares arising out of options Outstanding at the beginning of the year 8,50,000 Forfeited during the year Nil Options exercised during the year Nil Outstanding at the end of the year 8,50,000

25

Our company modified the Scheme in terms of the provisions of the SEBI ESOP Guidelines and Scheme. Accordingly a Trust called “Asian Electronics Limited Employees’ Welfare Trust” has been constituted vide Trust Deed dated 25th January, 2007 to administer the Scheme under the directions of the Compensation Committee. For the purpose of constitution of the Trust and issue of Equity Shares to the Trust, the current 8,50,000 options granted to the employees have been temporarily relinquished by the employees, to be re-granted with effect from original date of grant, and provisions have been made in the Scheme to that effect. Our company has already allotted 8,50,000 Shares to the Trust on 31st March, 2007 at a price of Rs. 86.50 per Equity Share to be eventually allotted to the employees of the Company on exercise of option by them in due course of time. The Company has also given advance of Rs. 735.25 lacs to the Trust for the purpose.

29. Employee Stock Option Scheme – 2009 (AEL-ESOP-2009) During the financial year 2008-2009, the Company has instituted an Employees’ Stock Option Plan, which has been approved by the shareholders in their Extra-Ordinary General Meeting on February 12, 2009. The shareholders have authorized the company to create, issue and allot such number of shares not exceeding 51,80,057 fully paid equity shares of the face vale of Rs.5/- each to a trust constituted for the benefit of the employees, titled, “AEL-ESOS Trust 2009, under the Scheme titled “ Asian Electronics Ltd – Employees Stock Option Scheme 2009”. Shares allotted to this trust would be allotted to the employees of AEL,. No shares have been allotted to this Trust till date. 30. Chairman Stock Option Scheme – 2009 (AEL CSOS-2009) Extra-Ordinary General of our company meeting was held on Monday, 12th February 2009 at the Registered Office of the Company and approved the Chairman Stock Option Scheme – 2009, to issue and allot upto 33,20,549 equity shares of Rs. 5/- each aggregating to 10% of the fully diluted equity share capital of the company at an exercise price of Rs. 5/- per option which if exercised would entitle the Chairman to one equity shares of the company for every option exercised, in such manner, during a period of three years in one or more tranches, having a vesting period of one year from the date of grant and an exercise period of one year from the date of vesting. Our company is in receipt of ‘In-Principle Approval’ letter from BSE vide letter no: DCS\IPO\NP\ESOP-IP\545\2009-10; dated 02nd September 2009 and NSE vide letter no: NSE/LIST/117723-2; dated 04th September 2009.

26

OBJECTS OF THE ISSUE We intend to deploy the proceeds from the present Rights Issue are as follows: -

� To improve the Long Term Debt Equity Ratio of the Company � To meet the Rights issue expenses

The Main Object clause and the objects incidental or ancillary to the main object clause of the Memorandum of Association enables the Company to undertake the existing activity and the activities for which the funds are being raised by the Company through the present rights issue. Notes:

� No part of the issue proceeds will be paid as consideration to Promoter, Directors, Key Managerial Personnel or Promoter Group companies.

� In case there is any shortfall in the issue proceeds to meet the objects of the issue, the improvement in the

Long Term Debt Equity Ratio of our company will not be to the level desired.

� Promoter, Mr. Arun B. Shah & Promoter Group have confirmed vide letter dated 1st December 2009 that they will subscribe the extent of any unsubscribed portion of the Issue. Such subscription and acquisition of additional equity shares by our Promoter, if any, will not result in change of control of the management of our Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997.

� Other than meeting the requirements indicated in Objects of the Issue, there is no other intention/purpose

for the Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoter through the Issue, the promoter shareholding in the Company exceeds their current shareholding. However, the Promoter have confirmed that in case the Rights Issue of the Company is completed with their subscribing to equity shares and as a result, if the public shareholding in the Company after the Issue falls below the permissible minimum level as specified in the listing condition or listing agreement, they will undertake to maintain the minimum public shareholding in such manner and within such period as specified in Clause 40A of the Listing Agreement.

Break Up of Utilization of Issue Proceeds is as under: -

� The Long Term Debt Equity Ratio of the Company for the period ending 30th September 2009 is 1.24 while the Total Debt Equity Ratio adjusted after the present Rights Issue is 1.08. The discontinuation of the business of plant and machinery division has created a drop in our projected future cash earnings to service the debt. The Company thus needs to raise resources to meet its obligations and improve the debt equity ratio to a healthy level of less than 1. The proposed equity issue is to meet with this objective.

(Rs. In lacs) Particulars Pre Issue as at

30.09.2009 Post Rights issue

Borrowings: Long Term 23,211.40 23,211.40 Short Term 4,322.52 4,322.52 Total Debts 27,533.92 27,533.92 Shareholders Fund: Equity Share Capital 1,453.37 2,263.00 Equity Share Warrants 314.50 231.17 Reserves & Surplus General Reserves - - Capital Redemption Reserves 87.62 87.62 Profit and Loss Account 37.93 37.93

27

Securities Premium Account 19,647.35 22,242.88 Capital Reserves 321.23 321.23 Special Reserves 325.00 20,419.13 325.00 23,014.67 Total Shareholders Funds 22,187.00 25,508.84 Long Term Debt/Equity Ratio 1.24 1.08

Notes:-

a) Post Issue position in respect of Borrowings is based on assumptions made by the Management b) The above ratio has been calculated on the basis of statement of Assets and Liabilities as restated as at 30th

September 2009 c) The capitalization statement, adjusted for Rights issue is prepared on the assumption that the proposed

rights issue of 1,53,59,139 Equity Shares @ Rs.20 per share will be fully subscribed. d) On 1st December 2009, the company has allotted 8,33,333 equity shares pursuant to conversion of warrants

on exercise of options by an Investor at Rs. 40/- per warrants which has resulted in reduction in amount of equity share warrants from Rs. 314.50 lacs to Rs. 231.17 lacs and consequently the share capital has increased by Rs. 41.67 lacs and securities premium has increased by Rs. 291.67 lacs.

2. Rights Issue expenses The expenses of this Issue include, among others, management fees, printing and distribution expenses, legal fees, advertisement expenses and listing fees. The estimated Issue expenses are as follows:

Nature of Expenses Amount in (Rs. Lakhs)

% of total expenses of the issue

% of total issue size

Lead Management fees and Legal Counsel charges [�] [�] [�] Registrars, Auditors, Printers, Postage, Dispatch expenses, Advertisement & publicity expenses, travelling & conveyance [�] [�] [�]

SEBI, Listing Expenses, Contingencies & Other Expenses [�] [�] [�] Total [�] [�] [�] Means of Finance

(Rs. In Lacs) Particulars AmountProceeds from Rights Issue 3071.83Total 3071.83

Appraisal The fund requirement is not appraised by any Bank or Financial Institution. Schedule of Implementation

(Rs. In Lacs) Particulars Already

Deployed Fiscal 2010 Total Amount

Deployment in the Long Term Debt Equity Ratio of the Company

- [•] [•]

Deployment in the Issue Expense 2.20 [•] [•] Total 2.20 3071.83 3071.83

28

Deployment of Issue Proceeds: As per Certificate from our Statutory Auditors, M/s. Sorab S Engineer & Co., Chartered Accountants, dated December 01, 2009, we have incurred an expenditure of Rs. 2.20 Lacs (Rupees Two lakh twenty thousand and six hundred only) towards the objects of the proposed Rights issue up to December 1, 2009. The break up of the expenditure incurred till date is given as under:

(Rs. In Lacs) Particulars Amount

Rights Issue Expenses 2.20

Total 2.20

Sources of financing of Funds already Deployed:

(Rs. In Lacs) Particulars Amount Internal accruals of the company 2.20 Total 2.20 Monitoring of Utilization of Funds There is no requirement for a monitoring agency in terms of Regulation 16 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. The audit committee appointed by the Board of Directors will monitor utilization of Issue proceeds. The company will disclose the utilization of the proceeds of the issue under a separate head in the balance sheet clearly specifying the purpose for which such proceeds have been utilized. The company will also, in the balance sheet provide details, if, any, in relation to all such proceeds of the issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the issue. However, at any point of time the proceeds of the Issue will not be used for any other purposes, except as those stated in the Memorandum of Association of our Company. Other Confirmations No part of the Rights Issue proceeds, will be paid by our Company, as consideration to Directors, our Company’s key managerial personnel or our Promoter Group Entities.

Interim Use of Funds The deployment of funds raised through the rights issue would be mainly for the purposes of improving the Long Term Debt Equity Ratio of the Company.

29

BASIC TERMS OF ISSUE Pursuant to the resolution passed at the meeting of Board of Directors of our Company held on Thursday 14th May 2009 & 1st December 2009 and the resolution of the shareholders passed under Section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting held on Monday 6th July 2009 it has been decided to make the following offer to the Equity Shareholders of our Company. Basis of the Offer: The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear on the Register of Members of the Company and the names of the beneficial Equity Owners as provided by the Depositories at the close of business hours on Record Date i.e. [•] being the Record Date fixed in consultation with Bombay Stock Exchange Ltd., (The Designated Stock Exchange). The equity shares are being offered for subscription in the ratio of One Equity Shares for every Two Equity Share held. Rights Entitlement As your name appears on the Register of Members of the Company as an Equity Shareholder on [•], being the Record Date, you are being offered equity shares of the Company in the ratio of One Equity Shares for every two Equity Share held as shown in Part A of the enclosed Composite Application Form. Face Value & Premium The Equity Shares of the issuer Company is of face value of Rs 5/- and is being offered at a Premium of Rs. 15/- per share. Terms of Payment The payment terms available to the Investors are as follows:

Amount payable per Equity Share (Rs.)^ Payment Method* Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 1.25 3.75 5.00 First Call 1.25 3.75 5.00 Second Call 1.25 3.75 5.00 Third and Final Call 1.25 3.75 5.00 Total 5.00 15.00 20.00

* Please refer to risk factor nos. 39 & 40 in “Risk Factors” on page XIII for risks associated with the payment method. For details on the payment method, see “Terms of the Present Issue” on page 192. ^ NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the Composite Application Form (“CAF”). The Issue Price of our Equity Shares is Rs. 20/- per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on the First Call and the balance 25% and 25% of the Issue Price on the Second Call and the Third and Final Call, respectively. However, NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the CAF. Market Lot The market lot for Equity Shares in dematerialized mode is 1 (one). In case of holding of Equity shares in physical form, our Company would issue to the allottees one (1) certificate for the Equity Shares allotted to one (1) folio (“Consolidated Certificate”).

30

Fractional Entitlements On applying the rights ratio, the rights entitlement may contain certain fractional entitlements, in such case the fractional entitlement shall be rounded off to the next higher integer. Ranking of Equity Share The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari- passu in all respects including dividends with the existing Equity Shares of the Company. Despatch of Refund Orders Refund orders above the value of Rs.1,500 will be dispatched by Registered Post/ Speed Post to the sole/ first applicant’s registered address. However, refund orders for value not exceeding Rs.1,500 shall be sent to the applicants under Postal Certificate. Further, adequate funds would be made available to the Registrar to the Issue for the dispatch of Letters of allotment/ securities certificates and refund orders Interest in Case of Delay in Dispatch of Allotment / Refund Orders

� As far as possible allotment of securities offered to the public shall be made within 15 days of the closure of the rights issue

� It shall pay interest @15% per annum if the allotment has not been made and the refund orders have not been dispatched to the investors within 15 days from the date of the closure of the issue.

31

BASIS FOR ISSUE PRICE

The Issue Price has been determined in consultation with Lead Manager to the Issue considering following qualitative and quantitative factors. Investors should also refer to the section “Risk Factors” and “Financial Information” at pages XIII and 109 respectively to get a more informed view before making the investment decisions. Qualitative Factors: 1. Presence of the company in the ESCO segment 2. Strategic geographical location of our current projects 3. Strong Brand Creations and repeat orders from existing customers 4. Ownership by acquiring the latest technology for converting waste plastic to generate power (p2p). Quantitative Factors The information presented in this section is derived from our restated financial statements prepared in accordance with Indian GAAP. Earnings per Share (EPS)

Particulars EPS (Rs.) Weight 31-Mar-07 26.68 1 31-Mar-08 (50.15) 2 31-Mar-09 (0.65) 3

Weighted Average EPS

� Our Company had a basic EPS of Rs. (0.65) and a diluted EPS of Rs. (0.65) for the year ended March 31, 2009.

� Since Earnings per share is Negative, P/E based on these earnings is not a meaningful quantitative measure. � The Earning Per Share (EPS) has been computed on the basis of Restated Profits & Loss after Tax for the

respective years. Price Earnings (P/E) ratio of the industry

Highest 53.80 Low 7.40 Average 30.60

Return on Net Worth (RoNW)

Particulars RONW (%) Weights 31-Mar-07 19.28 1 31-Mar-08 (67.81) 2 31-Mar-09 (0.90) 3

Weighted Average RONW

� Minimum Return on Total Net Worth needed after the Issue to maintain pre-Issue EPS at Rs. (0.65) per Equity Share is not meaningful since it is a negative quantity.

32

Net Asset Value (Rs.)

As on March 31, 2009 72.80As on September 30, 2009 73.19After the Rights Issue 53.44Issue Price – per share 20/-

Comparison of Accounting Ratios with Peer Group Companies

Particulars

EPS (Rs.) P/E Ratio

RONW (%)

NAV (Rs.)

Havells India Limited 23.80 12.30 18.10 154.88* Surya Roshini Limited 8.00 6.80 11.30 77.26* Asian Electronics Limited (0.65) NA (0.90) 72.80*

* Figures are based on financial statements for the year ended March 31, 2009 (Source: Capital Market, Volume XXIV/20, Nov 30 -Dec 13, 2009)

� The face value of our shares is Rs.5/- per share and the Issue Price of Rs. 20/- is 4 times of the face value of our Equity Shares.

� The Lead Manager believes that the Issue Price of Rs. 20/- per share is justified in view of the above

qualitative and quantitative parameters. The investors may also want to peruse the risk factors and our financials as set out in the Auditors Report in the Draft Letter of Offer to have a more informed view about the investment proposition.

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STATEMENT OF TAX BENEFITS

To The Board of Directors Asian Electronics Limited Registered Office: D-11, Road No. 28, Wagle Industrial Estate, Thane - 400 604, Maharashtra Dear Sirs, We hereby report that the enclosed annexure states the tax benefits available to Asian Electronics Limited (the “Company”) and to the Shareholders of the Company under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India subject to the fact that several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in future, the Company may or may not choose to fulfill. The benefits discussed in enclosed annexure are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and changing tax laws, each investor is advised to consult his or her own tax consultant with respect to specific tax implications arising out of their participation in the issue, particularly in view of the fact that there could be different interpretations of legislation. Unless otherwise specified, sections referred to in the annexure are sections of Income Tax Act, 1961. All the provisions set out in the annexure are subject to conditions specified in the respective sections. We do not express any opinion or provide any assurance as to whether:

� The Company or its shareholders will continue to obtain these benefits in future; or

� The conditions prescribed for availing of these benefits have been or would be met with. The contents of this Annexure are based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and interpretations of the current tax laws. While all reasonable care has been taken in preparation of this statement, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it. Yours faithfully, For Sorab S. Engineer & Co Chartered Accountants M. P. Antia (Partner) Membership No.7825 FRN: 110417W Place: Mumbai. Date: 1st December 2009

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STATEMENT OF TAX BENEFITS To The Board of Directors Asian Electronics Limited Registered Office: D-11, Road No. 28, Wagle Industrial Estate, Thane - 400 604, Maharashtra Dear Sirs, Sub: Statement of Tax Benefits for your Proposed Rights Offer of 1,53,59,139 Equity shares of Rs.5 each, at a premium of Rs. 15 per share.

I. SPECIAL TAX BENEFITS A. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY There are no special tax benefits available to the Company. B. SPECIAL TAX BENEFITS AVAILABLE TO THE SHAREHOLDERS OF THE COMPANY There are no special tax benefits available to the shareholders of the Company.

II. GENERAL TAX BENEFITS The Income Tax Act, 1961 (provisions of Finance Act, 2009), Wealth Tax Act, 1957 and the Gift Tax Act, 1958, presently in force in India, make available the following general tax benefits to companies and to their shareholders. Several of these benefits are dependent on the companies or their shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. (A) Benefits to the Company under the Income Tax Act, 1961 (the IT Act) Dividends exempt under section 10(34) and 10(35) of the IT Act. Dividend (whether interim or final) received by the Company from its investment in shares of another domestic Company would be exempted in the hands of the Company as per the provisions of section 10(34) read with section 115-O of the IT Act. In terms of section 10(35) of the IT Act, any income received from units of a Mutual Fund specified under section 10(23D) of the IT Act is exempt from tax, subject to such income not arising from the transfer of units in such Mutual Fund. Computation of capital gains Capital assets are to be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets except shares held in a Company or any other security listed in a recognized stock exchange in India or units of Unit Trust of India (‘UTI’) or Mutual Fund units specified under section 10(23D) of the IT Act or zero coupon bonds are considered to be long-term capital assets, if they are held for a period exceeding thirty-six months. Shares held in a Company or any other security listed in a recognised stock exchange in India or UTI or Mutual Fund units specified under section 10(23D) of the IT Act or zero coupon bonds are considered as long-term capital assets, if these are held for a period exceeding twelve months. As per the provisions of section 10(38) of the IT Act, long term capital gain arising to the Company from transfer of a long term capital asset being an equity share in a Company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to Securities Transaction Tax (‘STT’). As per the provisions of section 112 of the IT Act, long-term capital gains other than those covered under section 10(38) of the IT Act are subject to tax at a rate of 20% (plus applicable surcharge and cess). However, proviso to

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section 112(1) specifies that if the long-term capital gains other than those covered under section 10(38) of the IT Act arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and education cess). However, from Assessment Year 2007-2008, such long-term capital gains will be included while computing book profits for the purpose of payment of Minimum Alternate Tax (“MAT”) under the provisions of section 115JB of the IT Act. As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a Company or a unit of an equity oriented mutual fund shall be taxable at the rate of 15% (plus applicable surcharge and education cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT. Securities Transaction Tax (STT) In terms of STT, transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder will be chargeable to STT. As per the said provisions, any delivery based purchase and sale of equity share in a Company through the recognized stock exchange is liable to securities transaction tax @ 0.125% of the value payable by both buyer and seller individually. The non-delivery based sale transactions are liable to tax @ 0.025% of the value payable by the seller. Depreciation Subject to compliance with certain conditions laid down in Section 32 of the IT Act, the Company will be entitled to deduction for depreciation: In respect of tangible assets (being buildings, machinery, plant or furniture) and intangible assets (being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st day of April, 1998) at the rates prescribed under the Income-tax Rules, 1962; MAT Credit In terms of section 115JAA(1A), the Company is eligible to claim credit for any tax paid as MAT under section 115JB of the IT Act for any Assessment Year commencing on or after April 1, 2006 against income tax liabilities incurred in subsequent years as prescribed. MAT credit eligible in subsequent years is the difference between MAT paid and the tax computed as per the normal provisions of the IT Act. Such MAT credit will be available for set-off up to ten years succeeding the year in which the MAT credit initially arose. (B) Benefits to the Resident shareholders of the Company under the IT Act Dividends exempt under section 10(34) of the IT Act Dividend (whether interim or final) received by a resident shareholder from his investment in shares of a domestic Company would be exempt in the hands of the resident shareholder as per the provisions of section 10(34) read with section 115-O of the IT Act. Computation of capital gains Capital assets are to be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets [except shares held in a Company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds] are considered to be long-term capital assets, if they are held for a period exceeding thirty-six months. Shares held in a Company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds are considered as long-term capital assets, if these are held for a period exceeding twelve months. As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by deducting from the sale consideration, the cost of acquisition and expenses incurred in connection with the transfer of a capital asset. However, in respect of long-term capital gains arising to a resident shareholder, a benefit is permitted to substitute the cost of acquisition/ improvement with the indexed cost of acquisition/ improvement. The indexed cost of acquisition/ improvement, adjusts the cost of acquisition/ improvement by a cost inflation index, as prescribed from time to time.

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As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a resident shareholder from transfer of a long term capital asset being an equity share in a Company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT. As per the provisions of section 112 of the IT Act, long-term capital gains [other than those covered under section 10(38) of the IT Act] are subject to tax at a rate of 20% (plus applicable surcharge and cess). However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered under section 10(38) of the IT Act] arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and education cess). As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a Company or a unit of an equity oriented mutual fund shall be taxable @ 15% (plus applicable surcharge and education cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT. Exemption of capital gains arising from income tax As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital gains arising to a resident shareholder on transfer of a long-term capital asset other than those covered under section 10(38) of the IT Act shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of such capital gain is invested, the exemption shall be proportionately reduced. However, if the resident shareholder transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. The bonds specified for this section are bonds issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the maximum investment in such bonds up to Rs 5 million per assessee during any financial year. Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein, long- term capital gains other than a capital gain arising on sale of resident house and those covered under section 10(38) of the IT Act arising to an individual or Hindu Undivided Family (‘HUF’) on transfer of shares of the Company will be exempted from capital gains tax, if the net consideration from such shares are used for either purchase of residential house property within a period of one year before or two years after the date on which the transfer took place, or for construction of residential house property within a period of three years after the date of transfer. However, if the resident shareholder transfers the residential house property within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. (C) Benefits to the Non-resident shareholders of the Company other than Foreign Institutional Investors and Foreign Venture Capital Investors Dividends exempt under section 10(34) of the IT Act Dividend (whether interim or final) received by a non-resident shareholder from his investment in shares of a domestic Company would be exempt in the hands of the non-resident shareholder as per the provisions of section 10(34) read with section 115-O of the IT Act. Computation of capital gains Capital assets are to be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets [except shares held in a Company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds] are considered to be long-term capital assets, if they are held for a period exceeding thirty-six months. Shares held in a Company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds are considered as long-term capital assets, if these are held for a period exceeding twelve months.

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As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by deducting from the sale the consideration, the cost of acquisition and expenses incurred in connection with the transfer of a capital asset. Under first proviso to section 48 of the IT Act, the taxable capital gains arising on the transfer of capital assets being shares or debentures of an Indian Company need to be computed by converting the cost of acquisition, expenditure in connection with such transfer and full value of the consideration received or accruing as a result of the transfer into the same foreign currency in which the shares were originally purchased. The resultant gains thereafter need to be reconverted into Indian currency. The conversion needs to be done at the prescribed rates prevailing on dates stipulated. Hence, in computing such gains, the benefit of indexation is not available to non-resident shareholders. As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a nonresident shareholder from transfer of a long term capital asset being an equity share in a Company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October1, 2004, and the transaction is chargeable to STT. As per the provisions of section 112 of the IT Act, long-term capital gains (other than those covered under section 10(38) of the IT Act) are subject to tax at a rate of 20% (plus applicable surcharge and cess). However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered in second proviso to section 48 and under section 10(38) of the IT Act] arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and education cess). As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a Company or a unit of an equity oriented mutual fund shall be taxable @ 15% (plus applicable surcharge and education cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT. Exemption of capital gain from income-tax As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital gains arising to a non-resident shareholder on transfer of a long-term capital asset (other than those covered under section 10(38) of the IT Act) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of such capital gain is invested, the exemption shall be proportionately reduced. However, if the non-resident shareholder transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. The bonds specified for this section are bonds issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the maximum investment in such bonds up to Rs 5 million per assessee during any financial year. Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein, long-term capital gains (other than a capital gains arising on sale of resident house and those covered under section 10(38) of the IT Act) arising to an individual or HUF on transfer of shares of the Company will be exempted from capital gains tax, if the net consideration from such shares are used for either purchase of residential house property (subject to prior approval from Reserve Bank of India) within a period of one year before or two years after the date on which the transfer took place, or for construction of residential house property within a period of three years after the date of transfer. However, if the non-resident shareholder transfers the residential house property within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. Tax Treaty Benefits As per section 90(2) of the IT Act, where the Central Government has entered into an agreement with the Government of any country outside India for granting relief of tax or for avoidance of double taxation then in relation to the non resident shareholders to whom such agreement applies, the provisions of the IT Act would apply to the extent they are more beneficial to the non resident shareholder.

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Non resident taxation Under section 115-I of the IT Act, the non-resident Indian shareholder has an option to be governed by the provisions of Chapter XIIA of the IT Act viz. “Special Provisions Relating to Certain Incomes of Non- Residents” which are as follows: a) Under section 115E of the IT Act, where shares in the Company are acquired or subscribed to in convertible foreign exchange by a non-resident Indian, capital gains arising to the non-resident on transfer of shares held for a period exceeding 12 months, will [in cases not covered under section 10(38) of the IT Act], be concessional taxed at the flat rate of 10% (plus applicable surcharge and cess) (without indexation benefit but with protection against foreign exchange fluctuation). b) Under provisions of section 115F of the IT Act, long-term capital gains [in cases not covered under section 10(38) of the IT Act] arising to a non-resident Indian from the transfer of shares of the Company subscribed to in convertible foreign exchange will be exempt from income tax, if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption will be proportionately reduced. However the amount so exempted will be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition. c) Under provisions of section 115G of the IT Act, non-resident Indians are not required to file a return of income under section 139(1) of the IT Act, if their only income is income from forex asset investments or long-term capital gains in respect of those assets or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the IT Act. d) Under section 115H of the IT Act, where the non-resident Indian becomes assessable as a resident in India, such person may furnish a declaration in writing to the Assessing Officer, along with the return of income for that year under section 139 of the IT Act to the effect that the provisions of the Chapter XIIA will continue to apply to such person in relation to the investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money. (D) Benefits to Foreign Institutional Investors (‘FII’) Dividends exempt under section 10(34) of the Act Dividend (whether interim or final) received by a FII from its investment in shares of a domestic Company would be exempt in the hands of the FII as per the provisions of section 10(34) read with section 115-O of the Act. Long term capital gains exempt under section 10(38) of the Act As per the provisions of section 10(38) of the Act, long term capital gain arising to the FII from transfer of a long term capital asset being an equity share in a Company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT. Capital gains As per the provisions of section 115AD of the Act, FIIs are taxed on the capital gains income at the following rates: Rate of tax Nature of Income (%)* Long-term capital gains 10 Short-term capital gains 30 * Plus applicable surcharge and cess The benefits of foreign currency fluctuation protection and indexation as provided by section 48 of the Act are not available to a FII. As per the provisions of section 10(38) of the Act, long term capital gain arising to FII from transfer of a long term capital asset being an equity share in a Company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT.

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As per provisions of section 111A of the Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a Company or a unit of an equity oriented mutual fund shall be taxable at the rate of 15% (plus applicable surcharge and education cess), if such sale is entered into on or after October 1, 2004 and is chargeable to STT. Tax Treaty Benefits As per section 90(2) of the IT Act, where the Central Government has entered into an agreement with the Government of any country outside India for granting relief of tax or for avoidance of double taxation then in relation to the Foreign Institutional Investors (FII) to whom such agreement applies, the provisions of the IT Act would apply to the extent they are more beneficial to the FII. (E) Benefits to the Mutual Funds Dividends exempt under section 10(34) of the Act Dividend (whether interim or final) received by a Mutual Fund from its investment in shares of a domestic Company would be exempt in the hands of the Mutual Fund as per the provisions of section 10(34) read with section 115-O of the Act. As per the provisions of section 10(23D) of the Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 (‘SEBI’) or regulations made there under, Mutual Funds set up by public sector banks or public financial institutions or Mutual Funds authorised by the Reserve Bank of India, would be exempt from income tax, subject to the prescribed conditions. (F) Benefits to the Venture Capital Companies / Funds Dividends exempt under section 10(34) of the Act Dividend (whether interim or final) received by a Venture Capital Company (‘VCC’)/ Venture Capital Funds (‘VCF’) from its investment in shares of another domestic Company would be exempt in the hands of the VCC/VCF as per the provisions of section 10(34) read with section 115-O of the Act. Income exempt under section 10(23FB) of the Act As per the provisions of section 10(23FB) of the Act, any income of VCC/VCF registered with the SEBI, set up to raise funds for investment in a venture capital undertaking (‘VCU’) would be exempt from income tax, subject to the conditions specified. The Finance Act 2007 has restricted the definition of venture capital undertaking (‘VCU’) to mean such domestic Company whose shares are not listed on a recognized stock exchange in India and which is engaged in the following specified business viz:

� Nanotechnology; � Information technology relating to hardware and software; � Seed research and development; � Bio-technology; � Research and development of new chemical entities in the pharmaceutical sector; � Production of bio-fuels; � Building and operating composite hotel-cum-convention centre with seating capacity of more than 3,000; � Developing or operating and maintaining or developing, operating and maintaining any infrastructure

facility as defined in Explanation to clause (i) of sub-section (4) of section 80-IA and � Dairy or poultry industry.

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(G) Benefits available under the Wealth-tax Act, 1957 (Common to all) Asset as defined under section 2(ea) of the Wealth-tax Act, 1957 does not include shares in companies and hence, shares are not liable to wealth tax. Notes: 1. All the above benefits are as per the current tax law. 2. The stated benefits will be available only to the sole/first named holder in case the shares are held by joint holders 3. In respect of non-residents, the tax rates and the consequent taxation mentioned above will be further subject to any benefits available under the relevant DTAA, if any, between India and the country in which the non-resident has fiscal domicile. 4. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of his/her participation in the scheme. For Sorab S. Engineer & Co Chartered Accountants CA M. P. Antia Partner [Membership No. 7825] Place: Mumbai Dated: 1st December 2009 FRN: 110417W

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SECTION IV – ABOUT US

INDUSTRY OVERVIEW The information in this section is derived from various government publications and other industry sources. Neither we nor any other person connected with the Issue have verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and accordingly, investment decisions should not be based on such information Global Lighting Industry The global lighting fixtures industry is currently valued at approximately $70 billion and is expected to grow to about $90 billion in 2010. Lighting fixtures can be classified into four categories i.e. residential lighting, commercial lighting, industrial lighting and outdoor lighting. The modern products offered by the lighting industry include the following:

� Electronic Ballasts – These are electrical components, which provide the required voltage to kick-start a fluorescent lamp and then regulate the flow of current. They are an efficient substitute for magnetic ballasts since they help in reduction of consumption of energy and thereby lower electricity costs for consumers.

� Compact Fluorescent Lamps (CFLs) – These are efficient substitutes for incandescent sources of light i.e.

mainly light bulbs used in the household sector. On an average, a CFL can save approximately 100 kWh per annum as compared to traditional incandescent sources of light

� Fluorescent Tube Lighting (FTLs) – FTLs are considered as the most efficient light producing mediums.

The traditional T12 fluorescent tube was introduced in 1936 followed by the T8 fluorescent tube in 1971. T8 and T12 lamps are similar in length, interchangeable and can work on the same magnetic ballast. In 1997, the T5 fluorescent tube which operates on electronic ballast was introduced with savings of up to 45% in electricity as compared to T12 tubes. Customers have been slow to accept the T5 technology despite its superior energy efficiency due to their incompatibility with older fixtures as T5 lamps are 2 inches shorter in length and can only be used with electronic ballasts. This has created a need for retrofitting in existing fixtures without any change in wiring or fittings.

� Intelligent Lighting Systems – This is a revolutionary technology which enables operation of lighting

fixtures through dimmers, motion sensors, daylight sensors, smoke detectors and also enables operations through computers and mobile phones.

� ESCO Lighting – An Energy Savings Company undertakes projects involving installation, maintenance and

financing of lighting facilities with a view to improve energy efficiency, and reduce operations and maintenance costs for consumers. The ESCO would typically assume the technical and performance risk associated with a project. The contract is performance-based whereby the ESCO receives compensation based on the quantum of energy savings through utilization of its products vis-à-vis conventional lighting systems.

Accelerating world economic growth is expected to spur construction and manufacturing activity which are the two principal drivers of demand for lighting fixtures. Although majority of the current demand emanates from industrially advanced countries i.e. USA and Western Europe, the key drivers of future growth will be the rapidly growing economies of Asia, Africa, Eastern Europe, Middle-East and Latin America, with India and China emerging as significant beneficiaries due to their rapidly growing economies. Besides, integration of the global economy and increasing outsourcing trends are expected to engulf the lighting industry as well. Low cost manufacturers with the ability to meet international quality standards are increasingly being looked upon to source electronic products and components. India and China, with their competitive advantages, are definitely in the fray to grab a fair portion of the emanating demand.

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In an era of increasing economic growth driven by investment and consumption, it becomes absolutely critical to conserve energy given the rising demand for energy and depleting natural resources. As a result of several studies conducted and analyses performed, several countries across the world have initiated measures to conserve and optimize the utilization of energy. For instance, China had a high lighting load in the 1990’s (similar to what India has today i.e. 18% of power generation), but as a result of rigorous implementation of its energy conservation strategies, it has brought down lighting load to under 10% of power generation. In USA, Star ratings are not only given to products but also to buildings. In U.K., the “Best Practices” in energy efficiency are widely publicized to encourage others to emulate the same. In Australia, they have a Smart Business Program for energy savings. Simultaneously, it has also been discovered that energy efficient lighting products and solutions bring about significant savings in energy consumption and thereby reduce costs dramatically. For instance, the cumulative energy savings attributable to use of electronic ballasts in the period 1988 to 1995 has been valued at US$ 1 billion. This is expected to grow to US$ 13 billion for ballasts installed through the year 2015. Based on this, it is expected that electronic ballasts will replace magnetic ballasts in more than 75% of the applications by 2015. Indian Lighting Industry Lighting is the single most important element in the visual environment. Over the last few years, the Indian Lighting Industry has seen phenomenal growth, upgradation in technology, products, product design and most importantly, a huge growth and diversification in application.

Effective lighting improves productivity and strengthens security. Lighting can consume up to 40 percent of the energy used in our buildings. A well designed lighting system reduces energy, maintenance, and potential liability costs. Both public and private interests are served by more effective lighting and reduced operating costs. Rapid improvements in lighting systems and equipment offer potential solutions, yet they have also made lighting practice more complex. On the other hand, the use of inefficient light sources and controls, and the wasteful usage of lighting results in polluting the environment leading to global warming. The need was therefore being felt for more interaction between the manufacturers and suppliers of lighting, and the user / specifier community, more specifically architects and interior designers.

(Source: www.isleind.org) With energy prices on the rise and natural resources receding, it has become more important to conserve power for the brighter life of our future generation. Small steps at the individual level can really change the way we utilize electricity at homes or even outside. A good supply of light does not necessarily mean the consumption of a great deal of electricity. If the right lamp is selected for the right type of function, it is possible to save electricity. Till date, we have been used to five basic types of lighting: incandescent, fluorescent, high intensity discharge, low pressure sodium and compact fluorescent lamp (CFL). Incandescent lamps are the least expensive to buy but are the most expensive to operate. They have the shortest lives and are inefficient compared with other lighting types. Fluorescent lighting is used mainly indoors and is about three to four times as efficient as incandescent lighting. They last about ten times longer than the incandescent types. High Intensity Discharge lamps or the HID provide the longest service life and the highest quality of any lighting type. They are extensively used for outdoor lighting and in large indoor applications. The three most common types of HID lamps are the mercury vapour, metal halide, and high-pressure sodium lamps. Low pressure sodium lamps are the artificial lighting. They work in some ways like fluorescent lights and are used where colour is not so important. Its typical applications include highways and security lighting. Compact fluorescent lamps (CFLs) were considered till date to be the most significant lighting devices for homes but these lights are sensitive to the fluctuation and inconsistent power supply in India. On the other hand, Solid-state lighting or Light Emitting Diodes (LED) are rugged, sustains power surges, shocks and vibrations. LEDs are easy to install and have long span of life - 50,000+ hrs (10+ years). The advantages of LED lighting, besides lower power consumption, reduces the worlds carbon footprint and are easily recyclable - thus considerate to be absolute green technology.

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There are no starting problems in cold environments because LED’s are “Instant on” with no warm up time needed as seen in conventional CFL lighting. In addition, LED lighting solutions do not contain environmentally hazardous metals such as mercury or sodium and do not emit potentially harmful Ultraviolet radiation or Infrared radiation like Halogen lamps. Another benefit is the extremely long life cycle lowers maintenance costs in the long term. Unlike the CFLs, LEDs can illuminate your houses as well as streets and even the outdoors replacing the HIDs, at a fraction of cost. Until recently, LEDs were limited to single-bulb use in applications such as instrument panels, electronics, pen lights and, more recently, strings of indoor and outdoor Christmas lights, but now these small bulbs are ready to take the place of the established technologies for the better of the human beings. In many green conscious states, government is enforcing LED bulbs for street lighting and other public areas to bring savings to bloated energy bills. LED is surely a drive towards green earth. (Source: www.indiaprwire.com) The Lighting consumes around 18 to 20% of the total power consumption in India. Thus Lighting Industry has thus emerged as one of the most important segments in energy conservation. The industry has played a leading role in introducing a range of energy efficient products, systems and designs to reduce consumption without making a compromise on light output. With the internationalization of standards for lighting design objectives, and product range, it has become necessary to familiarize specifiers and users with the latest not only in concepts but also in the range availabilities in the Indian market. (Rs. In Lacs) Category 2005 2006 2007 2008 GLS Lamps 60000 69000 72500 69000 FTL 110000 121000 127000 123100 CFL 70000 83000 116200 151000 Special Lamps 40000 44000 56000 59600 Other Lamps (incl Mini/Auto, solar, etc) 20000 22000 23000 25000 Luminaires 90000 100000 112000 140000 Control Gears and High Masts 20000 21000 24800 35000 Accessories 20000 20500 23600 25500 Components 20000 22000 26000 28500 Total 450000 506000 571100 656700 (Source: Elcoma India) Annual Manufacturing Trends in India by Lamps Category

(Quantity in Lacs Pieces) Category 2005 2006 2007 2008 Incandescent Lamps 7110 7570 7790 7340 Fluorescent Lamps 1800 1860 1900 1860 Compact Fluorescent Lamps 670 1000 1400 1990

Special Lamps 100 140 170 210 (Source: Elcoma India) LIGHT CONCEPT Light is so common that it is taken for granted. It is a basic requirement for the visual perception. For the human eye light is a very narrow band of electromagnetic radiation, from 0.38 microns to 0.78 microns. In this narrow range of 0.4 microns the human eye perceives all the colours, ranging from violet around 0.4 microns (or 400 nanometers) to deep red above 0.7 microns (or 700 nanometers) with the colours such as blue, green, yellow, orange and red in between. Sensitivity of the human eye peaks at 0.555 microns and drops to zero below 0.38 microns (termed as the ultraviolet range) and above 0.78 microns (known as the infrared range). The amount of light produced by a light source is measured in lumens and when one lumen of light uniformly lights up a square metre area, the illumination level is one lux. The quality of light is determined by the distribution of

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energy over the visible range, i.e. 0.38 to 0.78 microns. One of the important features of light is the way colours are perceived under it. The ability of any light source to bring out the natural colour of objects is rated on scale of 0 to 100, and is referred to as Colour Rendering Index (CRI). Light from incandescent lamps and sun light are able to bring out true colours of objects and their CRI is rated as 100. Many other light sources, particularly discharge lamps, mayor may not bring out true colours of objects. When a black body is heated to increasingly higher temperature, the light emitted by it changes slowly from cherry red to white and then to bluish white. Colour temperature of a light source represents the temperature of black body which gives the same overall colour impression as that of the light source. Colour temperature of commonly used light sources range from 2700"K for a GLS lamp to 6500" K for the cool day light Fluorescent Lamp. All electric lamps could be broadly classified into two categories: Incandescent and Discharge. In an incandescent lamp a tungsten filament is sealed in vacuum or inert atmosphere and heated to high temperature by passage of electric current and the hot filament emits light. In a discharge lamp, current is passed through a gas sealed in a tube and the gas atoms emit their characteristic radiation in the visible range and also outside the visible range. In a fluorescent lamp, the emitted radiation is predominantly ultra violet which is converted into visible light by a phosphor coating inside the tube. Incandescent lamps can be grouped into vacuum lamps and gas filled lamps, and the latter is further classified into halogen and non-halogen lamps. Discharge lamps can be grouped into low pressure discharge lamps (such as fluorescent lamps - FTL) and high pressure discharge (HID) lamps (such as high pressure mercury, high pressure sodium, metal hillide etc). HID Lamps are commonly used for out door applications, such as street lighting, while FTL and incandescent (GLS - General Lighting Service) lamps are more commonly used for indoor lighting. Efficacy of an electric lamp is expressed in terms of the amount of light (lumens) it produces for each unit of power (watt) and is expressed as lumen/watt. In general, discharge lamps are significantly more energy efficient as compared to incandescent lamps. All lamps are generally operated inside a fitting or a luminaire which directs the light in the desired fashion. The overall efficiency of a lighting system is dependent on the efficacy of the lamps and luminaries combination. Comparison of Various Light Sources

Type of Lamp Luminous Efficacy

(lm/W) Colour Rendition Properties

Remarks

Incandescent 10-15 Im/W Excellent Due to poor luminous efficiency, it has restricted use

Halogen 17-33 Im/W Excellent Used in flood lighting installations and in projectors & motorcar headlamps.

Fluorescent 65 Im/W Good-depending on the fluorescent coating

Popular for indoor lighting.

Compact Fluorescent 55-65 Im/W Very good Tremendous potential for energy savings. High Pressure Mercury Vapour

58 lm/W Fair Streetlighting, highway lighting

Metal Halide 90 Im/W Excellent High luminous efficiency. High Pressure Sodium Vapour

145 lm/W Fair Suitable when colour rendering is not important.

Low Sodium Vapour Pressure

200 Im/W Poor Energy saving but poor colour rendition

Induction Lamp 65-70 lm/W Excellent Due to extremely long life, ideal for use in installation where relamping and maintenance are difficult or expensive.

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LIGHT SOURCES - FUTURE TRENDS The business of Energy Efficiency has become one of the most important issues of the century to curb the greenhouse gases to tackle the global climate changes. Inspite of fast track power projects etc., the power crisis in the country is worsening by the day. The lighting load in the country is approximately 17% of the total connected load which is likely to be approximately 180000 MW by the year 2010 against an average lighting load of approximately 8% worldwide. If the lighting load is reduced from 17% to 10% by the use of energy efficient light sources and control systems, the country will save 12600 MW which is equivalent of approximately 22500 MW of generating capacity. The solution therefore lies in the Demand Sale Management (DSM).

1. Compact Fluorescent Lamps (CFLs): Although it is difficult to visualise the world without the common incandescent GLS bulb in spite of its being grossly inefficient and short life, the ever increasing energy costs and the growing environment concerns will force the changeover to CFLs because these save upto 80% on electricity when compared to ordinary incandescent GLS bulbs for the same light output. For example a 20W CFL will replace with l00W incandescent GLS bulb resulting in 80% saving in electricity bills. Moreover CFLs have longer life of 12000 burning hours against less than 1000 burning hours for the ordinary incandescent bulb. Because of very long life of CFL far fewer lamps are required with further savings in power, raw material and transport. The CFL are easy to install because the lamps with the integral retrofit Electronic Ballast have the same cap as the incandescent GLS bulb.

2. Fluorescent Tubes Lighting (FTLs): The growth in the Fluorescent lamps will and must continue but the emphasis must shift to energy efficient Triphosphor lamps of lesser diameter. Indeed in other parts of the world the 40W Fluorescent lamps of 38mm diameter became obsolete in the early 1980's. India also must follow the International trend because the advantages ofthe slim line Triphosphor lamps over the 40W 3 8mm tubes are many. First and foremost the Triphosphor lamps are 50% to 60% more energy efficient. Against 290 gms. of glass used for the conventional 40W tube, the new generation of lamps use much less for example only 183 gms for 36W 26mm (T8) lamp and only 100 gms for the 28W 16 mm (T5) lamp resulting in significant savings in energy and raw materials in glass production. Also, the Triphosphor lamps bave lumens depreciation of less than 5% even after 18,000 burning hours. Diversity of colour temperature of these lamps permit tailor made solutions for a variety of applications. The modern Triphosphor lamps have a life of over 20000 burning hours against only 5000 burning hours of the conventional 40W tubes and therefore greatly reducing the quantity of replacement lamps resulting in enormous savings in raw materials, energy and transport and recurring costs to the consumer.

3. Electronic Control Gear (ECG): Increasing energy and maintenance cost and serious concerns in respect of safety, is resulting in growing realisation that the ECG must replace the conventional Electro Magnetic Copper/Aluminum Ballast. Indeed in some countries the use of Electro Magnetic Ballast is no longer permitted. In the near distant future we expect and hope that the use of ECG will be made mandatory in high rise buildings, schools, cinemas, hospitals, hotels and public places where large number of people is likely to congregate for reasons of safety and minimizing the fire hazard. The major advantages of ECG are:

� Greater fire protection because lamp operates at lower temperature and automatic shut down of defective lamp.

� Operation at very high frequency (25-40 KHZ) ensures smooth, flicker free light with no stroboscopic effect.

� High power factor> 0.92.

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4. High Intensity Discharge Lamps: The trend here will be improvement in energy efficiency, luminous efficacy, colour rendering and compactness. In case of the Metal Halide Lamps improvements are taking place progressively in terms of their photometric properties such as luminous efficacy, their colour rendering and their constant colour throughout their entire life, low thermal output and long life. The Metal Halide Lamps are also becoming more and more compact, making them ideal for indoor lighting, sales areas, shop windows, hotels, restaurants, offices and outdoor lighting such as lighting of buildings and monuments. Higher wattage Metal Halide Lamps have become a standard for sports stadiums, flood light systems, solar simulation etc. Indeed, we should see an enormous growth for Metal Halide in the next decade.

5. Automotive Lamps: The car manufacturers have long wanted their headlights to be more and more compact while at the same time producing even more light. Conventional car Lamp technology was simply unable to meet these requirements. The latest type ZENARC high pressure gas discharge lamp based on xenon is likely to revolutionize the headlights in the 21st Century. The use of neon, inert gas which gives out a red light when energized by an electric field in miniaturized tubes in a variety of shapes, will give a new freedom of expression to designers and stylists of Automobiles. Also in 21st Century we will witness ever increasing use of Fibre Optics in Automotive Lighting. GROWTH OF LIGHTING INDUSTRY IN INDIA

45005060

57116450

0

2000

4000

6000

8000

2005 2006 2007 2008

Sale (Value Rs. In Cr.)

IN INDIA – LIGHTING CONSUMES 18% OF TOTAL POWER

Segment Consumption (%)

Incandescent Lamp 61% Fluorescent Lamp 28% Compact Fluorescent Lamp 10% Other Lamps 1% (Source: Elcoma India)

1.4 Billion US$

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Lighting Industry: Overview

o Rs. 125000 lacs industry (US $ 290 mn) in 98-99, with 20% of turnover coming from the standardization sector.

o Imports < 5%. Around Rs. 5000 lacs (US $ 11 mn) in 97-98. Exports around Rs. 3000 lacs (US $ 7 mn) in 97-98

o Technological sophistication is still in its infancy stage o Lighting industry in India is seven decades old and has gone through a period of transition and growth o Lighting load is approximately 17% of the total connected load – around 100,000 MW for the year 2000 o The industry has developed from being an importer of lighting systems to a self sufficient, indigenous

producer of lighting systems Source: www.indiamarketsonline.com Markets & Products

o There has been effective widening of locally produced range of lamps along with advent of electronics in lighting thereby supplying better, more efficient and cheaper lighting with improved aesthetics.

o In incandescent lamp a tungsten element is sealed in vacuum or inert atmosphere and heated to high temperature by passage of electric current and the hot filament emits light.

o In fluorescent lamps the emitted radiation is predominantly ultra violet which is converted into visible light. CFL a relatively recent introduction in this category.

o In discharge lamps current is passed through gas sealed in a tube and the gas atoms emit their characteristic radiation.

Markets o Incandescent lamps account for over 70% of the market, fluorescent tubes for 20 – 25% of the market in

value terms. o HID lamps for the balance

Industry Structure

o GLS: Around 12 players in the Standardize sector; > 100 manufacturers in the Standardization sector o Fluorescent lamps: Around 14 manufacturers in the Standardize sector – 6 of them account for a

major share of this market. Most of these players have technology tie-ups Concerns Key Success Factors

o Backward integration and / or mergers will be a key for survival o Wide distribution network and reach critical to success o Export market to be seriously pursued o Development of energy efficient lighting sources & control systems

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Business Concerns

o Lack of economies of scale in most units o High input costs of new materials & components resulting in non competitive prices and poor exports o CFL which offer significant energy savings are still not competitive, as incandescent lamps in the 25 –

100W range continue to dominate the domestic & commercial lighting o Over capacities have resulted in price wars & commission wars, profitability of players have eroded o Cheap imports from China and Korea a serious issue

Demand Drivers

o Massive rural electrification programme which is underway will increase the demand o Growing middle class will add to the existing demand o Industrial lighting demand directly related to industry growth

Source: www.Indianmarketsonline.com

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OVERVIEW OUR BUSINESS Asian Electronics Limited (AEL), incorporated in 1964, is one of the early entrants to manufacture passive components in India. In the 1980s, AEL entered into capacitor-based energy conservation solutions and since then established itself as one of the major player in the segment. However, subsequently, the company sold its capacitor business. AEL entered into the energy-efficient lighting market with a view to become an Energy Services Company (ESCO) in 2001-02. AEL is presently one of the few ESCO companies in India empanelled with Bureau of Energy Efficiency. During FY07, the company acquired the technology to convert the plastic waste to power (p2p) from Dr. Alka Zadgaonkar. AEL formed 50:50 JV with Midcom Magnetics Management (P) Ltd. to source key electronic components for its products. AEL also entered into two JVs with Future Group (Pantaloon) viz. Asian Retail Lighting Limited (ARLL) [50:50] and Home Lighting India Limited (HLIL) [42:58] and made investments to the tune of Rs.150 lacs and Rs.126 lacs, respectively for selling its lighting products in the retail segment. AEL is involved in the business of manufacturing, installing and operating lease of energy saving/ conservation products, mainly consisting of both high tension / low tension Automatic Load Monitoring Systems (ALMS) and manufacturing of lighting products with focus on energy efficient lighting systems. AEL has five manufacturing facilities located at Nasik (Maharashtra), Silvassa (Dadra and Nagar Haveli), and Solan (Himachal Pradesh). The principal raw material includes various electronic and electrical items. AEL's sources these products locally from several vendors and does not depend on any single supplier for a significant amount of its supplies, except in the case of fluorescent lamps. The main customers of the company for lightning and energy efficient products are Government, industrial, commercial and retail outfits. AEL's marketing department, headquartered at New Delhi, is supported by zonal, regional and branch offices as well as a network distributors/dealers and marketing consultants. AEL's business model in the past included an outright sale of its products as well as operating leases for ALMS. Going forward, AEL is increasingly using ESCO model, wherein AEL provides its products to customers without any initial investment by them and derives revenue out of the cost savings that result from the use of its products along with a periodic maintenance fee. The ESCO model is based on a 'pay-for-performance' concept, generating demonstrable cost savings for the customer, which is then shared between the customer and AEL in a predetermined ratio. In FY07, the company ventured into a new segment by manufacturing plant and machinery promoting green fuels i.e. to generate power from plastic/ refinery waste (p2p). Our Business Model

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Change in Management of our Company: In 12th February 2009, the shareholders of our company approved a change in management and control of our company, in terms of provisos 1 & 2 of Regulation 12 of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulation 1997 by passing a special resolution by Postal Ballot. Accordingly, in the Extra Ordinary General Meeting of the Shareholders held on February 12, 2009, a new management team headed by Mr. Arun B. Shah took over the management of the company. Mr. Arun B. Shah was appointed as the Non Executive Chairman and Director of the company with effect from April 23, 2009 and now he has taken over as the Executive Chairman of the company. The current Promoter of our Company is Mr. Arun B. Shah. International Standards:

� Our company has been awarded ISO 9001:2008 Certificate from Euro Veritas Quality Assurance Private Limited accreditation by the Joint Accreditation system of Australia and New Zealand. The certification No: EV/08/103. Registration period form 31st December 2008 to 30th December 2011 for Nashik site, for Design, Development, and Manufacturing and supply of Customised / Tailored Energy Efficient products and systems, statics and dynamics VAR compensation system, with Wire / Wireless Intelligent Controls, Sensors and supported by Electronic / software based / electrical control Gear or systems.

� Received a certificate dated 14th July 2006 from Verband Der Elektrotechnik Elektronik

Informationstechnik e.V. Our Strengths We believe our operational excellence, strong brand equity and differentiated product offerings will enable us to deliver high-quality products in a cost-efficient and timely manner. Our key strengths include:

� Innovative Products/Technology: We have a history of innovation and a strong track record of assessing market needs and addressing them with quality products. Earlier, we were an innovator in using capacitor-based solutions for reducing transmission and distribution energy losses on power lines. Today, our company has a variety of innovative lighting solutions, which it believes, gives it a competitive advantage over other market participants.

� ESCO Lighting Business to Drive Growth: We operate as an ESCO in India and have taken a lead in promoting energy-efficient lighting in India. The ESCO industry is still very nascent in India and AEL is among the 11 BEE empanelled ESCO companies in India. AEL undertakes an ESCO project, its compensation flows from the cost of energy actually saved. To operate successfully under the ESCO model, vendors have to produce consistently reliable products and provide accurate and verifiable measurement of the power savings generated by their products. This is a costly and time consuming process. Our company, , through its earlier capacitor based solutions and now through its energy efficient lighting solutions, is established as a quality service provider and has the ability to take on and effectively deliver on ESCO projects.

� Brand Recognition: Based on its long history of innovation, international and domestic patents, and high quality products, AEL has gained recognition in domestic and international markets. Leading companies such as Big Bazaar, Tesco’s and Italian Railways (tunnel lighting) are regularly supplied by AEL, either directly or through its joint venture partners/associates.

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Infrastructure facilities & utilities Location of our factories Nasik (Maharashtra)

o Plot No. 68, MIDC Industrial Area, Satpur, Nashik – 422 007 o Plot No. 2, Survey No. 1B/2C, Near Octroi Naka, Vilholi, Nashik – 422 010 – (DTA Unit)

Silvassa (Dadra & Nagar Haveli)

o Survey No. 113/6, Tirupati Industrial Estate, Near 66 KV Road, Amli, Silvassa – 396 230 Solan (Himachal Pradesh)

o Hadbast No. 932, Khasra No. 228, Village Jakhroda, Pargana Nali Dharthi, Tehsil Kasauli, Dist. Solan, Himachal Pradesh,

Technology Our Company is equipped with state-of-the-art technology. In house R&D is set up to cater the need of process development in Energy Saving components. The benefits derived from R & D are:

� Productivity and quality improvement � Improved process performance and better – cost management � Enhancement of safety and better environmental protection

Experienced Management Team The Company is managed by a team of experienced and professional managers with abundant experience of different aspects of electronic industry including production, quality control, sales, marketing and finance. The Promoter and management are well qualified and having good hand experience in the current industry of around 30 years in industry which give them an edge to manage their existing manpower. Location advantage Our manufacturing facilities are located at Nasik in Maharashtra, Silvassa in Dadra and Nagar Haveli and at Solan in Himachal Pradesh. Raw Materials The raw materials and components for AEL’s products are supplied by several vendors. Hence, the Company is not dependent on any single supplier for a significant amount of its supplies, except in the case of fluorescent lamps. The Company also tries to have multiple suppliers for the same items to further reduce dependence, ensure stock availability and obtain the best prices. The Company is also actively considering sourcing its products/components from various international markets, including China. All the above mentioned raw materials are procured either from domestic market or are imported from various suppliers. Currently, 60% of our raw material requirements are met indigenously while about 40% are imported.

Raw Material Major Suppliers IMPORTED Lamp/Cap/Ballast, LED, Transformers, Cables, Passive and Active Electronic Components

Leedarson, CREE, Tamura, Philips, Osram, Cinetech, EPCOS, Fluxlite, More Than All, Amber, Xiamen Sets, Relaytronics,

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DOMESTIC; Press Parts, Plastic Parts, Packaging, Solder, PCBs, Active Component.

See-Megh Industries, Kevlin, Pankaj Extrusions, Precision UPVC, Ashwamegh, Print Art, Flexible, Swami Samarth, Ashoka Industries, Cookson, Standard Impex, Duggad Aluminium, Standard Conduit, Crescent Chemicals, Multiline, Gujrat Poly, DEKI

Power Our Company has adequate power load connections from various Electricity Boards to carry out our present manufacturing activities. The details are mentioned below Particulars Nasik Factory Silvassa Factory Solan Factory Name of Electricity Board Maharastra State

Electricity Board Administration of Dadra & Nagar Haveli, UT Electricity Department, Silvassa

Himachal Pradesh State Electricity Board

Connected Load 1900 KW 3000 kw 1900 kw Sanctioned Load 1900 KW 3000 kw 1900 kw Fuel Our Company does not require fuel in the manufacturing process except for running the D.G. Sets. The requirement of fuel for D.G. Sets is met from local suppliers. Water Our company does not require water for manufacturing activities. At present for our Nasik factory we are procuring from Maharastra Industrial Development Corporation and our requirement is around 1900 cubic meters per month. Manpower We currently have a total of 309 employees. The detailed break-up of our employees is as under: S. No. Category Total

1 Managerial 23 2 Skilled 40

Production Unskilled 50 3 Quality Control 5 4 Technical 9 5 Clerical 0

Sr. No. Category Finance & A/c Admin & HR 1 Factory Premises 6 4 2 Corporate Office 18 1 Marketing Employees all over India 153 TOTAL 309

Our Products & Services We produce a range of energy saving and lighting products for industrial, commercial and domestic use. Starting in the 1980s, we focused on capacitor-based energy conservation solutions and in 2001–02 diversified into energy efficient lighting products. We are in the production of capacitor-based ALMS and have installed over 35,000 LT switched capacitor systems for electricity distribution companies across India. We have successfully implemented 11KV and 33KV load management systems in more than 550 Indian substations. We have a significant share of energy-efficient street lighting operations in India and have started providing street lights to various municipalities and civic bodies. Our Company’s CFL business is leveraging the current international trend of replacing incandescent general lighting service bulbs (“GLS”) with more energy-and-cost efficient CFLs.

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CFLs have revolutionized energy-efficient lighting. We have also developed the retrofit-fixing concept for fluorescent tube lights, effectively using energy efficient T5 lamps with sophisticated electronic ballast in place of conventional T8 and T12 lamps with a magnetic choke. We can categorise our products as under:

1. Retrofits: These products, based on the T5 Fluorescent Tube Light design (“T5 FTL”), enable replacement of conventional FTLs without changing the fixture or wiring, thereby reducing installation costs, time and effort. It helps to reduce energy consumption by up to 45% due to replacement of the magnetic chokes (in traditional FTLs) with electronic ballasts.

2. Street Lighting & Project Lighting: AEL’s street lighting products provide an energy-efficient alternative

to the sodium vapour or metal halide lamps traditionally used for street lighting. With savings of up to 60% of the energy consumption, this product is targeted at local municipal corporations;

3. Intelligent Lighting Solutions: AEL’s Intelligent Lighting Solutions (“ILS”) product line utilizes a series

of lighting controls such as occupancy sensors, daylight sensors and programmable lighting systems to improve energy efficiency and reduce wastage. AEL has successfully commissioned ILS for a multi-storied car park in Belgium and Malta as well as radio-controlled, software driven, ILS at Goodyear depots, USA.

4. Compact Fluorescent Lighting: Compact Fluorescent Lighting (“CFL”) is an energy-efficient lighting

solution used to replace traditional lighting solutions such as incandescent light bulbs and offer significant energy savings over traditional products.

5. ESCO Lighting: A variety of AEL’s products are sold through the ESCO model. Although ESCO Lighting

is currently a relatively small portion of AEL’s revenue, it expects ESCO lighting to be a significant source of revenue in the future. The ESCO model focuses on three target markets: (a) government institutions, which are seeking more energy efficient solutions (b) factories/industrial premises which are proposing to improve their profitability through energy savings, and (c) domestic consumers, to whom based on the energy savings generated for the customers, while the electric utility is responsible for billing the customer and collecting the funds from the customer for onward transmission to AEL.

6. Automatic Load Monitoring Systems and Capacitor- Based Solutions: AEL’s ALMS solutions using

capacitor based applications help reduce transmission and distribution losses over power lines. The target market for these solutions is the electric utilities and State Electricity Boards (“SEBs”). Historically, AEL offered capacitor-based solutions on an operating lease basis, but could move to an outright sale model due to the improved financial condition of the SEBs.

Major Products manufacture by our company:

Product Descriptive

Asian E+®

Most energy users look at payback period as a method of calculating economic viability for energy efficient lighting systems. More often, installation time and cost, lamp change frequency and difficulty in maintenance are not taken into considerations. Feature of the Product o Asian E+® is a unique method to convert existing T12 and T8 installations into the next 0generation of T5 tube light technology. o Asian E+® range of tube light system is an integrated assembly of the latest generation T5 triphosphor lamps and state of the art electronics control gear assembled in a sleek aesthetically appealing plastic fitting. o Asian E+® is ideal for retrofitting in existing installation without any change in fittings or wiring. Asian E+ saves upto 50% electricity vis-à-vis 40W (T12) installations and upto 30% vis-à-vis 36W (T8) installations

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Retrolux™

Retrolux™ is a unique and innovative method to convert existing T12 and T8 installations into the next generation dimming technology featuring PC enabled wireless dimming. Feature of the Products o Retrolux™ is a premium version of Asian E+® with an additional feature of dimming using a PC and state of the art wireless technology. o Retrolux™ also features unique switch on/off facility from a PC. o Retrolux™ is ideal for retrofitting in existing installation without any change in fittings or wiring. o Retrolux™ saves upto 70% electricity vis-à-vis 40W (T12) installations and upto 30% vis-à-vis 36W (T8) installations

Asian Street Light

The Asian Street Light gives Low power consumption, Higher burning hours against conventional lighting, Saves energy upto 60%, Operating voltage range 160V to 280V.

Feature of the Products

o All electrical accessories such as electronic ballast, lamp holders are pre wired to a terminal block and mounted on a easily detachable gear plate. o Hanging arrangement for acrylic bowl for ease of maintenance. o Conformance to IS 10322 specification. o High Power factor >0.95

Lumini T8

Lumini range of fitting is an Asian brand state of the art electronic control gear housed in a plastic extrusion, suitable for slim line 36W T8 lamps. Ideal for homes, offices, shops, auditoriums, halls, schools, hospitals or wherever energy saving is required. Lumini can be used in New Constructions or where existing conventional tube light fixture fitted with conventional ballast has been installed. Feature of the Product o Ballast has long life of 50,000 hours o Starts even at low voltages o No Flicker during starting or during operation o Very high power factor – 0.95 o Operating voltage range – 130 V to 300 o Attractive Plastic Body o Built in Low Loss Electronic Ballast o Safe from Electronic shocks o Easy to install, No Special wiring required o No blackening on wall surfaces o 2 years unconditional guarantee

Dualite

Dualite Luminaire is a version of Asian E+® suitable for new installations. Combined with unique retrofit reflectors it can also be used as a lighting fixture. Rich with features like 50% savings over conventional lighting system, flicker free start, reduced maintenance expenditure, better efficiency and efficacy, state of the art power saving electronic ballast

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Reflector

Retrofitting energy efficient lighting systems has been our philosophy. Feature of the Product o Our accessories feature unique reflector system which can be installed easily in existing T8 or Asian E+ range of lighting systems. Available in simple snap fit and slide through concept make them easy and simple to install. o The excellent reflective surface enables a substantial increase in lux levels which translates into further reduction in energy consumption or direct reduction in the number of luminaries for required lux level. o These reflectors are manufactured using engineering grade plastic component with metalised aluminum surface making them easy to clean.

Branch Network Marketing Head Quarters 50, Community Center, 2nd floor, Naraina Industrial Area, Phase -1, New Delhi – 110 028 Telephone: 91-11-2589-4910/912 Fax: 91-11-25859-4911 Ahmedabad: 11-14, Tej Complex, Near Lions Hall, Mithakhali, Ellisbridge, Opp. Ashoka Chambers, Ahmedabad – 380 006

Delhi Godown B-52, Mayapuri Indl. Area, Phase – 1, New Delhi – 110 064.

Indore Office 425, Amitesh Nagar, 1st Floor, IDA Scheme No. 59, Nr. Choithram Hospital Junction, Indore – 452 914

Pune Ashirwad, Plot No. 7, Tejas Co-op Hsg., Society, Behind Kothrud Bus Depot, Pune – 411 038.

Bangalore: No. 1115, 11th Main, 10th, Cross, 2nd Stage, West of Chord Road, Bangalore – 560 086

Eranakulam: No. 40/8552, Kamath Building, Gopala Prabhu Road, Ernakulam – 682 035

Indore Godown C/o, Indore Ice & Cold Storage, 17, Tejpur, Galbadi Pool, A.B. Road, Indore (MP) 452 014.

Patna: 35, MIG, Lohia Nagar, Kankarbagh, Patna – 800 020

Bhubaneswar: 3198, Gauri Bihar, Lewis Road, Bhubaneswar – 751 002

Ghaziabad: III-M-30/C, Nehru Nagar, Ghaziabad (UP)

Jaipur: H-8/23,24, Jagan Path, Chomu House, C-Scheme, Jaipur – 384 002

Raipur: Gawri Bhawan, 7/619, Fafadih Naka, Raipur, Chattisgarh.

Chennai 41/1, Karambakkam, Main Road, Porur Chennai – 600 116

Gurgaon: V-20A/6,7,8 DLF Phase-III, Near Kinder Land School, Gurgaon-122 002, Haryana

Jamshedpur: Chandra Kunj, G-1, 27, New Baradwari, Sakchi, Jamshedpur – 831 001

Surat 3/1881, A-1/9-B, Opp. Nima Appartment, Near Bardoli Pitha, Salabatpura, Surat- 395 003.

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Dehradun: Sandhu Business Center, Transport Nagar, Saharanpur Road, Dehradun – 248 171

Guwahati: Dugar Building, 2nd Floor, Kamrum Chamber Road, Fancy Bazar, Guwahati – 781 001.

Kolkata: 142, Jodhpur Park, Kolkata – 700 068.

Zirakpur: Ma Durga Complex Opp. Hotal Mayur, Chandigarh Ambala Road, Zirakpur, Punjab.

Delhi 50, Community Center, 2nd floor, Naraina Industrial Area, Phase -1, New Delhi – 110 028

Hyderabad 16-11-740/1, G2- Shailaja Estates, Gaddiannaram, Dilsukhnagar, Hyderabad – 500 060.

Lucknow M-10052, Ashiana, Lucknow

Bhiwandi Godown Unit No. M-07-08, Rajlaxmi Commercial Complex, Agra Road, Village – Kalher, Taluk – Bhiwandi Dist. Thane

Process Flow Chart - Streetlight Assembly

RECEIVE WORK ORDER FROM PLANNING DEPARTMENT

DOCUMENTATION DESIGNATION

PRODUCTION MANAGER WORK ORDER

OPERATOR

OPERATOR

START

STOP

RECEIVE COMPONENT KIT & ALLOCATE COMPONENTS TO ASSEMBLY LINES

U GASKET ASEEMBLY ON

SHELL

TERMINAL BLOCK SUB-ASSEBLY FITTMENT TO SHELL

SUB ASSEMBLY

OPERATOR

BASE SUB ASSEBLY FITTMENT IN SHELL

SUB ASSEMBLY

OPERATOR

ALUMINIUM REFLECTOR FITTMENT TO BASE SUB-ASSEMBLY & REMOVAL OF

PROTECTIVE COVER

OPERATOR

TUBE FITTMENT TO LAMP HOLDERS & TESTING

OK / REJ

REWORK& FAILURE ANALYSIS

OUT OF BOX AUDIT

OK / REJ

DISPATCH TO STORES

ACRYLIC COVER ASSEBLY, CLEANING, INSPECTION,

BURNING & PACKING

OPERATOR

OPEARTOR

QA OPERATOR

OPERATOR

INSPECTION REPORT

INSPECTION REPORT

SYSTEM OPERATOR

STASTICAL QUALITY CHECK F-QA-022

SHELL SUB ASSEMBLY

TERMINAL BLOCK SUB- ASSEMBLY

PREWIRED BASE SUB ASSEMBLY

NO

YES

ACRYLIC COVER SUB ASSEMBLY

MEMO

57

Process Flow Chart - PCB Assembly

RECEIVE WORK ORDER FROM PLANNING DEPARTMENT

DOCUMENTATION DESIGNATION

PRODUCTION MANAGER WORK ORDER

SUPERVISOR & MACHINE OPERATOR

JOB CARD PCBA-PRO-01

MACHINE OPERATOR

START

STOP

INSPECTION REPORT PCBA-PRO- 14,15,19,20, FEEDER LOADING RPORT PCBA-PRO-12, COMPONENT LOADING REPORT PCBA-PRO-13

RECEIVE COMPONENT KIT & ALLOCATE COMPONENTS TO PREFORMATION, AUTO INSERTION, MANUAL INSERTION LINES

SET PROGRAM FOR AUTO INSERTION STATIONS – GLUE DISPENSING, SMT

MACHINES, REFLOW OVENS, ETC

PERFORM OPERATION FOR EACH PROCESS & INSPECT SAMPLES ON FREQUENT BASIS.

INSPECTION OPERATOR PRODUTION FLOOR UTILISATION REPORT PCBA-PRO-16,17

PERFORM MANUAL INSERTION &

STUFFING INSPECTION

STUFFING OPERATOR, INSPECTION OPERATOR

COMPONENT LOADING REPORT PCBA-PRO-11, FIRST PCB INSPECTION APPROVAL REPORT PCBA-PRO-02, DAILY INSP.REPORT STUFING PCBA-PRO-03, PROD.FLOOR UTILISATION REPORT PCBA-PRO-05

PERFORM WAVE SOLDERING, LEAD CUTTING, TOUCH UP & CLEANING PROCESS

ASSEMBLY OPERATOR

PERFORM VISUAL INPSECTION & TESTING

OK / REJ

REWORK & FAILURE ANALYSIS

OUT OF BOX AUDIT

OK / REJ

DISPATCH TO STORES

COATING

OPERATOR

OPEARTOR

QA OPERATOR

OPERATOR

PREFORMED COMPONENT

WSM PROCESS REPORT PCBA-PRO-35

DAILY VI DATA SHEET PCBA-PRO-06, DAILY TESTING REPORT PCBA-PRO-10

REPAIRING SHEET PCBA-PRO-04

STATASTICAL QUALITY CHECK F-QA-22,DAILY OUTGOING QUALITY SHEET PCBA-PRO-08

SYSTEM OPERATOR

C&P ACTION REPORT PCBA-PRO-07, DAILY PROD.REPORT PCBA-PRO-09, PROCESS FLOW CHART PCBA-PRO-21,ORG.CHART PCBA-PRO-22, WORK INSTRUCTIONS PCBA-PRO-WI-24 TO 34, WIP INDEX PCA-PRO-18, LINE WISE FLOW CHART PCBA-PRO-23,DAILY INSPECTION REPPORT INPROCESS F-QA-006

NO

YES

NO

YES

58

Process Flow Chart - Lumini Assembly

RECEIVE WORK ORDER FROM PLANNING DEPARTMENT

DOCUMENTATION DESIGNATION

PRODUCTION MANAGER WORK ORDER

OPERATOR JOB CARD F-MINT-003

OPERATOR

START

STOP

RECEIVE COMPONENT KIT & ALLOCATE COMPONENTS TO ASSEMBLY & PACKING

LINES

LAMP HOLDER FITTMENT TO FIRST ENDPART

PCBA INSERTION IN TO EXTRUSION & FITTMENT OF FIRST ENDPART TO EXTURUSION

OPERATOR

LAMP HOLDER FITTMENT TO SECOND ENDPART & FITTMENT OF SECOND ENDPART

TO EXTRUSON

OPERATOR

PERFORM VISUAL INSPECTION OPERATOR

ELECTRICAL PARAMETER TESTING

OK / REJ

REWORK & FAILURE ANALYSIS

OUT OF BOX AUDIT

OK / REJ

DISPATCH TO STORES

BURN-IN, TESTING & PACKING

OPERATOR

OPEARTOR

QA OPERATOR

OPERATOR

DAILY ELECTRICAL TEST REPORT F-MINT-005, DATA LOGGING REPORT F-MINT-004

SYSTEM OPERATORDAILY PRODUCTION PLAN F-MINT-001, HOURLY REPORT F-MINT-002

DAILY BURN-IN TESTING REPORT FMT-PQC-001

STASTICAL QUALITY CHECK F-QA-002

NO

YES

NO

YES

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FITTINGS & LUMINAIRES SECTION ACTIVITY FLOW CHART

RECEIVE WORK ORDER/CHECK LIST FROM PPC

COLLECT MATERIAL FROM STORES

FRAME ASSEMBLY

BALLAST MOUNTING

BALLAST WIRING

ELECTRICAL TESTING

REFLECTOR FIXING

PACKING

Q.A INSPECTION

DESPATCH

H. V. TEST AT 1.5KV AT 230 Vac. PARAMETERS TO BE CHECKED. VOLTAGE. CURRENT. WATTAGE P.F.

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Future Prospects Till date, we have been used to five basic types of lighting: incandescent, fluorescent, high intensity discharge, low pressure sodium and compact fluorescent lamp (CFL). The Indian lighting industry is growing at an annual rate of 15 percent. The environmental concerns and awareness for energy conservation have brought about radical changes in the industry which is riding on a wave of energy efficiency. The new trend to save energy and improve illumination has ushered in a wide range of CFL lamps and Luminaries. LED lights offer the following advantages and benefits compared to traditional globes (Filament) and compact fluorescent Lamp (CFL) products, such as directional lighting, which is ideal for torches (Flashlights) and spotlights. There are no starting problems in cold environments because LED's are “Instant on” with no warm up time needed as seen in conventional CFL lighting. LED product range offers considerable power savings while extending long product life cycles under normal conditions. The advantages of LED lighting adding to the lowering of the world's carbon footprint cannot be under estimated. Our goal is to increase the efficiency of our LEDs lighting products to incorporate all possible aspects and dimensions. We believe that our holistic and intuitive approach to technology gives the advantage to our customers when compared with worldwide LEDs lighting vendors. The global emerging lighting technologies market is expected to be worth US$109.2 billion by 2014, growing at an estimated CAGR of 8.1% from 2009 to 2014. Fluorescent lighting forms the largest market segment; and is expected to reach US$82.6 billion by 2014 at a CAGR of 7.9% for the same period. North America is the largest emerging lighting market; and is expected to be worth US$42.8 billion by 2014, accounting for nearly 39% of the total revenues. Europe is the second largest segment and is expected to reach US$36.9 billion by 2014. However, Asia is the fastest growing market and is poised for a high growth of 8.9% for the next five years. Approach to Marketing and Marketing Set-up We currently target three distinct and expanding markets for its products: India, USA and Europian countires. Accelerating world economic growth is expected to spur construction and manufacturing activity which are the two principal drivers of demand for lighting fixtures. Although majority of the current demand emanates from industrially advanced countries i.e. USA and Western Europe, the key drivers of future growth will be the rapidly growing economies of Asia, Africa, Eastern Europe, Middle-East and Latin America, with India and China emerging as significant beneficiaries due to their rapidly growing economies. Besides, integration of the global economy and increasing outsourcing trends are expected to engulf the lighting industry as well. Low cost manufacturers with the ability to meet international quality standards are increasingly being looked upon to source electronic products and components. India and China, with their competitive advantages, are definitely in the fray to grab a fair portion of the emanating demand As one of the leading producers of energy efficient products, we market, sell and distribute our products across various market segments. The main target customers of the Company are government, industrial, commercial and retail outfits. The Company, in order to address the needs of each of these segments, employs a variety of marketing, sales and distribution networks. Our marketing department, headquartered at New Delhi, is supported by zonal, regional and branch offices as well as a network of over 450 distributors/dealers and over 130 marketing consultants, located all over the country to ensure a strong coverage of the Indian market. The marketing team aims at forging long-term relationships with customers to ensure repeat business. This wide network enables our sales force to work with its customer’s onsite, understand their needs and recommend appropriate solutions for their lighting and energy saving needs. Through our two major international joint ventures, GEM LLC registered in the United States and GEM Europe incorporated in the United Kingdom, we supply our products to the United States and to Europe. Export Possibility & Obligation Our Company is currently exporting to various countries like United State of America (USA) and Europian countries etc. We are constantly tapping new markets to have tie ups with reputed distributors in view of long term relationship. The Company’s drive is to expand its business and provide the best to many other countries of the world.

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Business Strategy Our strategic objective is to Standardize on the opportunities that are available in the domestic and global lighting industry, including ESCO Lighting business. At the same time, AEL Standardize that it must continue to improve production processes and reduce costs to stay competitive. AEL has set for itself the following longer-term strategic Focus on Financial Performance: AEL has undertaken several measures to achieve this objective:

1. Outsourcing of Manufacturing and Product Servicing: We outsource manufacturing of several of our components/products to dedicated units. As we are the only customer to these units, it reduces any potential conflicts and ensures a steady supply of high quality products at a reasonable cost. We also outsource installation and maintenance of our ESCO assets.

2. Location Planning: We have set up our manufacturing units in zones with lower tax rates or tax exemptions, e.g. Silvassa in the Union territory of Dadra and Nagar Haveli and Solan in Himachal Pradesh with a view to make its operations cost effective and competitive.

3. Focus on Increasing Maintenance Revenue While ensuring a strong maintenance management is in place, we typically outsource activities in maintenance to further improve the cost competitiveness of these services. The ESCO model lends itself to on-going maintenance contracts, and we are looking to expand on this opportunity.

4. Leverage Government’s Focus on Energy Efficiency As a part of its drive to reduce energy consumption, the Government of India has also enacted The Energy Conservation Act, 2001, proposing that factories, offices and industrial premises must reduce energy consumption. The Government has called on all government Standardization, including Public Sector Undertakings, the Railways, Airports, Ports and Defense establishments, which are the largest consumers of energy in the country, to reduce their energy consumption by 30% by end of 2007. We believe we can leverage these favourable energy policies and its strong portfolio of energy-efficient products would help rapidly grow sales in the domestic market. Further, the ‘Action Plan for Energy Conservation and Efficient Use of Power’, drawn up by the Bureau of Energy Efficiency Standardize on promoting widespread use of energy-efficient lighting solutions in industrial, commercial and residential sectors including government buildings/ institutions/establishments through the delivery mechanism of performance contracting by ESCOs. Hence, ESCOs will have a significant role in aiding reduction in energy consumption through supply of energy saving products at flexible and affordable payment plans.

5. Access Growth Opportunities in International / Export Markets We are actively targeting the US and European markets to expand sales, as these represent mature economies, conscious of reducing energy consumption due to environmental and cost concerns. AEL believes that there is a significant opportunity to rapidly gain market share in these regions. The construction industry in the United States is going through a period of expansion and new construction projects are increasingly Standardize energy-efficient lighting solutions. Additionally, since magnetic ballasts are being phased out in the United States and Europe, AEL believes there is a significant opportunity to grow sales in this area as well as for retrofitting existing T12 FTLs with T5 FTLs.

6. Leverage Strong Manufacturing and Marketing Capabilities The lighting industry in India comprises of large Standardize players as well as numerous small, local, Standardization players. While some of these smaller vendors are innovative, they lack the strong distribution and marketing capabilities of AEL, which has also built significant brand awareness over time, based on its track record

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of innovation, successful product introductions, and customer loyalty. This provides us with strong marketing capability combined with its manufacturing expertise. We are also a manufacturer for several leading lighting players and believe that its marketing and manufacturing capabilities place it in a strong position for continued growth.

7. Environment friendly operations We have already set up systems in the existing business which not only meet the present environment norms but are also geared to face the stricter environmental norms when enforced and thereby enabling us to leverage newer business opportunities.

8. Experienced Management Team

The Company is managed by a team of experienced and professional managers with abundant experience of different aspects of electronics & electrical industry including production, quality control, sales, marketing and finance. The promoter and management are professionally qualified and have an experience of around 25 years in the industry which give them an edge to manage their existing manpower. Competition

� Lighting segment Despite having entered the lighting market in 2001, we believe that we have acquired a strong position in the market. The merger of the lighting business of Asian Raymold Lighting Pvt. Ltd., which has a significant share of the lighting projects market for the retail and office sectors, has consolidated the Company’s position in this area. Competitors in this market include large players like Philips, GE, Bajaj Electricals Limited, Osram and Tridonic. We have also acquired a reputation for our CFL and TFL products and services. Competitors in this market segment include Philips, Osram and Bajaj.

� Energy-Efficient Street Lighting Although we are a new and late entrant in this segment of the market, we have already got significant orders from customers like municipal corporations of Amritsar and Latur. Also, the presence of fewer competitors in the market has enabled us to capture a larger share of this market. We however expect to face stiff competition in this segment in future.

� ESCOs Domestically, the ESCO industry is in a nascent stage but has received strong support from the Indian Government with a number of key energy saving policies including a commitment to reduce energy consumption in government establishments. Currently there are approximately 11 empanelled ESCO companies in India, and we, being an early entrant to this market, believe that we are well positioned to benefit from these energy saving initiatives. The majority of ESCOs are small participants with the exception of Honeywell which holds a strong share of the market. Internationally, companies like Johnson Controls, Sylvania International and Honeywell International are said to be leaders in this area of the industry.

� Chinese Players The company faces stiff Competition from both existing players and from Chinese players, whose products are becoming increasingly popular. This exposes the company’s products to the risk of competition from trades and unorganized segments. Research & Development The Strong focus on product development by constantly focusing on R&D has enabled the company to develop high quality products. It also helps the company in attaining an optimum product mix which in turn leads to a better realization.

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Capacity and Capacity Utilization Utilization capacity at Nasik Unit for the last years:-

Particulars 31.03.2007 31.03.2008 31.03.2009 Licensed & Installed Capacity Nos 175 Lacs 175 Lacs 175 Lacs Total Production in Nos. 2495480 12384577 2654665 Capacity Utilisation (%) 14.26% 70.77% 15.17%

Utilization capacity at Dadra & Nagar Haveli Unit for the last years:-

Particulars 31.03.2007 31.03.2008 31.03.2009 Licensed & Installed Capacity Nos

Ballast, E+ Tubelight, Retrofit,

Starter 196 Lacs

Ballast, E+ Tubelight, Retrofit Starter

196 Lacs

Ballast,E+ Tubelight,Retrofit Starter

196 Lacs

Total Production in Nos. 1932669 2997668 1009012

Capacity Utilisation (%)

9.86% 15.29% 5.15%

Utilization capacity at Solan Unit for the last years

Particulars 31.03.2007 31.03.2008 31.03.2009 Licensed & Installed Capacity Nos CFL, Streetlight

& Tube lights :- 24 Lacs

CFL, Streetlight & Tube lights:-

48 Lacs

CFL, Streetlight & Tube lights:-

160 Lacs Total Production in Nos. 1643147 3949470 4079939 Capacity Utilisation (%) 68.46% 82.28% 25.50%

Projected Capacity Utilization at Nasik

Particulars 31.03.2010 31.03.2011 31.03.2012 Licensed & Installed Capacity Nos 176 Lacs 177 Lacs 178 Lacs Total Production in Nos. 3244121 4217357 5482564 Capacity Utilisation (%) 18.43% 23.83% 30.80%

Projected Capacity Utilization at Dadra & Nagar Haveli

Particulars 31.03.2010 31.03.2011 31.03.2012 Licensed & Installed Capacity Nos 196 Lacs 196 Lacs 196 Lacs Total Production in Nos. 2512469 3266211 4246074 Capacity Utilisation (%) 12.82% 16.66% 21.66%

Projected Capacity Utilization at Solan

Particulars 31.03.2010 31.03.2011 31.03.2012 Licensed & Installed Capacity Nos 160 Lacs 160 Lacs 160 Lacs Total Production in Nos. 2136091 2776918 3609994 Capacity Utilisation (%) 13.35% 17.35% 22.56%

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Intellectual Property Patents The Company has the following patents/patent applications in its name: Patent Valid for 20 years S. No. Country Patent Number Grant Status Renewal Paid till Renewal to be paid

1. India 193488 Granted 20th year Nil 2. Brazil PI0007495-0 Pending 7th January 2010 11th year 3. Hongkong HK1042198 Granted 7th January 2010 2nd Year 4. Korea 0460344 Granted 7th January 2010 6th year 5. Mexico 223429 Granted 7th January 2010 15th-18th year 6. South Africa 2001/6277 Granted 7th January 2010 9th year

Eurpoean Union S. No. Country Patent Number Grant Status Renewal Paid till Renewal to be paid

1. Austria 1142453 Granted 31st January 2010 11th year 2. Belgium 1142453 Granted 31st January 2010 11th year 3. Switzerland 1142453 Granted 31st January 2010 11th year 4. Germany 1142453 Granted 31st January 2010 11th year 5. Denmark 1142453 Granted 31st January 2010 11th year 6. Spain 1142453 Granted 31st January 2010 11th year 7. France 1142453 Granted 31st January 2010 11th year 8. United Kingdom 1142453 Granted 07th January 2010 11th year 9. Ireland 1142453 Granted 31st January 2010 11th year 10. The Netherlands 1142453 Granted 31st January 2010 11th year 11. Portugal 1142453 Granted 07th January 2010 11th year 12. Sweden 1142453 Granted 31st January 2010 11th year

Patent filed in the name of “ASIAN ELECTRONICS LIMITED” Title: Semilamp for electronic operation with integrated ballast for accommodating a high performancefluorescent lamp S. No. Country Patent Number Grant Status Renewal Paid till Renewal to be paid 1. India 193436 Granted 20th year Nil In-Active Patent Applications Title: Conversion Kit to Change the Fluorescent Lighting Units from Inductive Operation to Electronic Operation S. No. Country Patent Number Granted Status1. Singapore SG82212 Granted 2. Indonesia ID 0010259 Granted 3. Russia 2001122587 Granted 4. U.S.A. 09/271,480 Granted 5. Germany 19900889.2 Granted 6. China 00802716.1 Abandoned 7. Japan 2000-593118 Abandoned

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European Union S. No. Country Patent Number Granted Status1. Monaco 1142453 Granted 2. Finland 1142453 Granted 3. Greece 1142453 Granted 4. Cyprus 1142453 Granted 5. Italy 1142453 Granted 6. Luxemberg 1142453 Granted Patent filed in the name of Asian Electronics Limited Title: Semi-lamp of electronic operation with integrated ballast for accommodation a high performance fluorescent lamp for retrofitting of lamps with inductive ballasts S. No. Country Patent Number Granted Status1. Hongkong HK1042168 Abandoned 2. China 00803254.8 Abandoned 3. USA 6168289 Granted 4. Germany 19900888 Granted Patent filed in the name of Asian Electronics Limited Title: Flat Reflector Lamp for Fluorescent Tubes S. No. Country Patent Number Granted Status1. China 00803253.x Abandoned 2. Hongkong 02103216.0 Abandoned 3. U.S.A 69903994 Granted List of Certificates

S. No Name of the Institution Test Conducted

1 United States Patent & Trademark Office, USA

Patent No. 6, 100,638 dated August 8, 2000 – Kit for converting lighting units employing Fluorescent lamps from inductive operations to Electronic operation

2 United States Patent & Trademark Office, USA

Patent No.6, 168,289 dated January 2, 2001 – Straight Fluorescent tube that has electronic ballast housed in the sockets on both sides.

3 42 Partners Ltd, UK Report No.42/42731a/05.01 for Photometric Test for Comparative Lumen Output

4 ETDC, Pune Report No.0904 [00-01] dated 11.12.2000 for E+ Ballast Limited Electrical Performance and Environmental Test

5 ETDC, Pune Report No.105[01-02] dated 15.05.01 for limited performance testing of E+ Ballast

6 ERTL, Mumbai Report No. ERTL [W]/99E&S99 dated 17.11.99 for Temperature Cycling test, Open Circuit switching test and Endurance test for E+ tube light.

7 Erda, Vadodara Report No. INS/09/L&L/3414 dated 29.2.2000 for Harmonic Distortion test for E+ tube light

8 ERDA, Vadodara Report No. INS/09//L&L/3607 dated 30.03.2000 for Endurance test for E+ tube light

9 ERDA, Vadodara Report No. INS/09/L&L/3416 dated 29.02.2000 for Photometry test for E+ tube light

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10 SAMEER, Chennai Report No. S-CEM/EMCD/TR/2000-2001/63 dated 24.07.2000 for Emission Test for E+ Retrofit Tube

11 SAMEER, Chennai Report No. S-CEM/EMCD/TR/2000-2001/63 dated 30.11.2000 for Radiated Emission Test for E+ Electronic Ballast

12 SAMEER, Chennai Report No. S-CEM/EMCD/TR/2000-2001/243 dated 15.05.2001 for Electrostatic Discharge Immunity Test, Radiated Susceptibility Test, Electrical Fast Transient Immunity Test, High Energy Surge Immunity Test, Voltage Dips and Interruptions Immunity Test, Power Frequency Magnetic Field Immunity Test and Voltage Fluctuations Immunity Test.

13 ERTL, New Delhi Report No. ERTL{n}/90(4)-2K1/C1655 dated 4.10.2001 for Emission Test

14 Angelo Brothers Company, USA

Letter dated 7th June 2001 for marketing our tube light under Westinghouse brand US.

15 ERKA Consulting AG, Switzerland

Letter dated 22nd May 2001 confirming that they have applied for GS-mark for our Tube Light

16 CLIPSAL Singapore Pte. Ltd, Singapore

Letter dated 21st June 2001 addressed to our Franchisee, Yantra Electronics, Confirming that they are ready to market our product in their brand name.

INSURANCE We maintain various insurances which provides insurance cover against loss or damage by fire, explosion, riot and strikes, terrorism, burglary, theft and robbery, which we believe is in accordance with customary industry practices.However, the amount of our insurance coverage may be less than the replacement cost of all covered property and may not be sufficient to cover all financial losses that we may suffer should a risk materialize. Further, there are many events that could cause significant damages to our operations, or expose us to third-party liabilities, whether or not known to us, for which we may not be adequately insured. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our results of operations and financial position. The details of our insurance polices are as under: Policy type Burglary & House Breaking Insurance

Property insured Stocks of Street lights, Lighting systems, Spares & any other items Pertaining to ESCO Projects.

Coverage Burglary & Housebreaking, Floater cause to burglary, Extension to cover theft. Policy no. Policy no. PBG-0014061-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 3149.00 Lacs Total premium Rs. 0.38 Lacs Claim, if any Nil From April – 22 – 2009 Valid up to April – 21- 2010 Policy type Money Insurance Property insured Cash in Safe Coverage Cash Insurance, Money Definition , Extension to cover RSMD perils Policy no. Policy no. PMI-00002442-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 287.50 Lacs Total premium Rs. 0.08 Lacs Claim, if any Nil From April – 01 – 2009 Valid up to March – 31 – 2010

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Policy type All Risk Insurance Property insured Various Laptop Computers

Coverage Miscellaneous All Risk cover, Indemnity clause, Terrorism Damage cover endorsement.

Policy no. Policy no. SAR-00003846-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs. 17.57 Lacs Total premium Rs. 0.11 Lacs Claim, if any Nil From April – 01 – 2009 Valid up to March – 31- 2010 Policy type Fire and Special Perils

Property insured Installed street lights – ESCO projects for Lighting systems, Installed at Pune and Amritsar.

Coverage Fire and Special Perils, Earthquake Policy no. Policy no. PSP-00061229-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 730 Lacs Total premium Rs. 0.29 Lacs Claim, if any Nil From June – 20– 2009 Valid up to June – 19- 2010 Policy type Group Personal Accident Policy Property insured 535 employees are covered under this policy

Coverage The insurer’s liability in any one incident/ accident (cumulatively limited to Rs 800 Lacs) & Claims arising out of Terrorism or Terrorist Acts shall be covered.

Policy no. Policy no. APG-00005275-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 3916 Lacs Total premium Rs. 1.34 Lacs Claim, if any Nil From June – 12 – 2009 Valid up to June – 11- 2010 Policy type Fire And Special Perils Property insured Solar Power Generating systems and related accessories pertains to insured tradeCoverage Fire and Special Perils, Earthquake Policy no. Policy no. PSP-00059090-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 420 Lacs Total premium Rs. 0.12 Lacs Claim, if any Nil From April – 01 – 2009 Valid up to March – 31- 2010 Policy type Marine Cargo Open Policy Property insured Transportation for every shipment Coverage Shipment Policy no. Policy no. MO-0006293-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 5000 Lacs

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Total premium Rs. 3.03 Lacs Claim, if any Nil From April – 19 – 2009 Valid up to April – 18 – 2010 Policy type Special Contingency Insurance Policy

Property insured 6000 Street lights installed/ to be installed at Pimpri, Chinchwad Municipal Corp, Pune.

Coverage Fire and allied perils ( Earthquake, flood, storm, riot, burglary) Policy no. Policy no. 122201/48/2010/896 Agency The Oriental Insurance Company Limited Sum insured Rs 420 Lacs Total premium Rs. 0.79 Lacs Claim, if any Nil From June – 04 – 2009 Valid up to June – 03 – 2010 Policy type Fire and Special Perils

Property insured Office equipments, furniture & fixtures and fittings, building including compound wall, transformer and plant & machinery

Coverage Fire and special Perils, Earthquake Policy no. Policy no. PSP-00061997-000-00 Agency Cholamandalam MS General Insurance Company Ltd. Sum insured Rs 3621 Lacs Total premium Rs. 1.99 Lacs Claim, if any Nil From July 1-2009 Valid up to June 30-2010 Property Our Company does not propose to purchase any property consideration for which is to be paid for wholly or partly out of the proceeds of the issue. We have various owned/leased properties used for commercial purposes, details of which are given below: Owned Property Silvassa Factory

S.

No. Date of

Purchase Name of the

Vendor Particular Area Consideration Nature of

Ownership 1. 7th May 1994 Tirupati

Developers, Silvasa

Works situated at Survey No. 113/2/06, Tirupati Industrial Estate, Near 66 KV Road, Amli, Silvassa – 396 230

Land Area measuring 1200 square meters

Rs.2.70 lacs Owned

Lease / Rented Property

S.No. Date of Deed/ Agreement

Name of the Lessor/ Licensor

Name of the Lessee/ Licensee

Factory Location & Area

Existing Usage Tenure Consideration

1. 09.01.1992 MIDC Asian Electronics Ltd.,

Plot No. 68, MIDC Industrial Area, Satpur, Nashik – 422 007. Total Area 10,224 sq meters

Manufacturing Unit for electronics goods

95 years Bank Payment

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2. 01.05.2005 M/s Accurete Warehouse

Asian Electronics Ltd.,

Plot No. 1, Survey No. 15, Warehoused No. 2 & 3, Mumbai-Agra Road, Near Octroi Naka, Vilholi, Nashik amounting to 10,000 sq.ft area

Usage only for stocking the goods.

10 years Bank Payment

3 20.07.2008 Mr. Rajindersingh Pratapsingh Rekhi

Asian Electronics Ltd.,

Plot No. 2, Survey No. 1B/2C, Near Octroi Naka, Vilholi, Nashik – 422 010 manufacturing with a total area of 14,000 sq.ft.

Manufacturing, Storing and shipment of Consumer and Industrial Electronics Products

3 years Bank Payment

4 01.12.2007 Mr. Kishorilal Asian Electronics Ltd.,

Hadbast No. 932, Khasra No. 228, Village Jakhroda, Pargana Nali Dharthi, Tehsil Kasauli, Dist. Solan, Himachal Pradesh, Total area of 5000 sq.ft

Storing goods for industrial and factory purpose

5 years Bank Payment

5 23.08.1996 MIDC Asian Electronics Ltd.,

Plot No: F-4/15, Village Kolwade, Tarapur Industrial Area, Tarapur Total area of 1470 sq.mtr

Factory and Business Purpose

95 years

Bank payment

6 04.05.1965 MIDC Asian Electronics Ltd.,

D-11, Road No:28, Wagle Industrial Estate, Thane –West Total Area13,607 sq. yards

Factory and Business Purpose

99 years

Bank payment

Collaborations/Tie-up/Association/Other agreements: Scheme of Arrangement of Asian Electronic Components Ltd. with Asian Electronics and their respective Shareholders:- Pursuant to the Scheme of Arrangement between Asian Electronic Components Ltd. (AECL) with the Company and for other consequent changes as specified in the Scheme as approved by the Shareholders of the Company at the Court convened meeting held on 4th February, 2003 and subsequently sanctioned by the Honourable High Court of Bombay on 18th August, 2003.

i. Assets and liabilities of AECL were transferred to and vested in the Company with retrospective

effect from 1st October, 2002. ii. The operations of AECL include processing of capacitors. iii. The amalgamation has been accounted for under the “purchase” method as prescribed by

Accounting Standards (AS-14) issued by the Institute of Chartered Accountants of India. Accordingly, all the assets and liabilities of AECL were transferred to and vested in the Company at their book values with effect from the close of business hours on 30th September, 2002.

iv. Pursuant to the Scheme of Arrangement, 87,622, 9% Redeemable Preference Shares of Rs.100/- each fully paid up of the Company are to be issued to the Shareholders of AECL in the ratio of 7, 9% Redeemable Preference Shares of Rs.100/- each fully paid up of the Company, for 2 Equity Shares of Rs.100/- each fully paid up of AECL.

v. The difference of Rs.34.49 lacs between the book value of net assets of AECL transferred and vested in the Company and the amount credited by the Company to Preference Share Capital Account has been credited to General Reserve.

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� Scheme of Arrangement between Asian Electronics Limited and Asian Raymold Lighting Private

Limited Asian Raymold Lighting Private Limited specializes in the manufacturing & sale of luminaries’ & light fixtures as products sales and also in the form of Engineered Solution to the requirements of customers in the retail segment, buildings, pharma establishments etc. The Scheme of Arrangement filed by AEL and ARLPL before the High Courts of Mumbai and Chennai, for the merger of the lighting division of ARLPL with AEL has been approved by the Hon’ble High Courts of Mumbai vide their Order dated 28th July 2006 and Chennai vide their Order dated 25th January 2007 in respect of the company petition (C.P.No.235/ 2006) and company application no 517 of 2005 for the transfer of lighting division of Asian Raymold Lighting Private Limited to Asian Electronics Limited. As per the said Scheme of Arrangement 4,00,000 Equity shares of Rs.10/- each were issued and allotted to the shareholders of ARLPL on February 22,2007 at a price of Rs.75/- per share in consideration for the acquisition of the property and Goodwill of ARLPL. The Shares so called are under lock-in till June 14, 2010. Salient features of the Scheme: The principal terms of the Scheme, as sanctioned by the High Court of Mumbai, are set forth below:

� The Scheme that is with effect from the Appointed Date the whole of the Lighting Division undertaking, business and properties, whether movable or immovable, real or personal, corporal or incorporal, material or intellectual, present and contingent including but without being limited to all assets, fixed assets, currents assets, investments, reserves, provision, funds immovable properties and all utilities including electricity, telephones, telexes, facsimile connections, installations and utilities, benefits of agreements and arrangements, powers, authorities, allotments, approvals, authorizations, licenses, registrations, consents, privileges, liberties, reserves, provisions, funds, benefits of all agreements and all the rights, title, interest, benefit and advantage of whatsoever nature and wheresoever’s situate belonging to or in the possession of or granted in favour of or enjoyed by the Asian Raymold Lighting Private Limited as on effective date shall be transferred of and vested in the Asian Electronics Limited Company pursuant to all the applicable provisions of the Act including Section 394.

� Asian Raymold Lighting Private Limited shall transfer its 81% shareholding to Asian Electronics Limited

or its Nominees.

� All debts, liabilities, duties, outstanding and receivables pertaining to the Lighting Division Undertaking of the Asian Raymold Lighting Private Limited shall accordingly on and from the Appointed Date stand transferred to and vested in the Asian Electronics Limited without any notice or other intimation to the debtors and the debtors shall be obliged to make payment to the Asian Electronics Limited on and after the appointment date.

� Asian Electronics Limited agrees to pay to Asian Raymold Lighting Private Limited a consideration by way

of issue of 4,00,000 (Four Lacs) equity shares of Rs. 10/- each at a premium of Rs 65/- per equity share agreegating to Rs. 300 lacs, based on the valuation report given by independent valuers and accepted by both the parties.

� On and from the appointed date all debts, liabilities, duties and obligations of every kind, nature and

description of the Lighting Division Undertaking of the Asian Raymold Lighting Private Limited shall stand transferred to and be deemed to stand transferred to the Asian Electronics Limited without any further act, instrument or deed under the provision of Section 394 of the Act so as to become the debts, liabilities, duties and obligation of Asian Electronics Limited.

� All the permanent employees of the Lighting Division Undertaking of the Asian Raymold Lighting Private

Limited on the effective date on the terms and conditions not less favourable than those on which they were

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engaged on the effective date, without any interruption of service as a result of the transfer. The Asian Electronics Limited agree that the services of all such employees with the Transferor company up to the effective date will be taken into account for the purposes of all retirement benefits to which they may be eligible in the Lighting Division Undertaking of the Asian Raymold Lighting Private Limited on the effective date. The Asian Electronic Limited further agrees that for the purposes of payment of any retrenchment compensation, such past services of the Lighting Division Undertaking of the Asian Raymold Lighting Private Limited

Joint Venture Agreements:- 1. Home Light India Limited (HLIL)

Asian Electronics Limited has a joint Venture with Home Light India Limited (HLIL) on dated April 20, 2007, which has been incorporated under the Company Act, 1956. AEL holds 42% of the issued and paid up capital of HLIL. HLIL is engaged in selling of home lighting products in organized retail sector which include designer ambience and mood lighting. The scope of Joint Venture shall establish on an exclusive basis a chain of dedicated retail stores for providing home lighting solutions and retail the home lighting solutions through retails outlets on street locations or otherwise as mutually decided by and amongst the parties. Salient features of the agreement:

1. The Joint Venture have entered into discussions concerning engagement into a long term partnership and carefully assessed the expertise and interest of each other to come to the conclusions that it would be mutually beneficial and effective if they cooperate with each other in the establishment and operation of a JV company in India which shall aim to provide home lighting solutions like CFL bulbs, Light Fittings, Lamps, etc on the terms and conditions hereinafter contained. Accordingly, the parties have agreed to subscribe for shares in the company and to enter into certain commitments and to regulate their respective rights and obligations in relation to the company in the manner hereinafter appearing.

2. AEL holds 8,40,000 equity shares of Rs 10/- comprising 42% of the issued and paid up capital of HLIL, aggregating to Rs. 84,00,000/-.

3. AEL is in design and manufacturing for Energy Efficient Products, specializing in lighting solutions. It has six manufacturing units in India where it manufactures quality lighting solutions meeting international standards.

4. AEL has agreed to bring its product sourcing and manufacturing expertise to the company.

5. The parties shall agree on the Annual Budget for each Financial Year in advance and on the operation systems that the company will use for importation, logistics, purchasing, advertising and promotion, human resource management and training, monthly information systems, accounting and other activities consistent with the best interests of the company.

6. AEL had received all necessary approvals from its Board of Directors / Shareholders as may be required for the execution and performance of this Agreement.

7. HLIL shall issue and allot the shares to AEL against the receipt of subscription money.

8. The Shareholders of the HLIL agree that they shall use all their bargaining power with landlords, vendors and builders to negotiate and make available the best rental and business terms for the company.

9. AEL and their respective affiliates shall use their expertise in respective field to assist the company in setting up its business and commence operations.

10. AEL agree that they shall not enter into any Joint Venture / agreement with any other person / organization / entity for establishing on an exclusive basis a chain of dedicated retail stores for providing home lighting solutions and retail the home lighting solutions through other retail outlets on high street locations. AEL agree that this agreement shall restrict AEL from doing any business in the home lighting solutions area other than through the company. However the restriction does not apply to the ongoing business of AEL being carried out through dealer channels and direct marketing channels.

11. Shares are not to be transferred, directly or indirectly to any third party for atleast 3 years.

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� Asian Retail Lighting Limited (ARLL) Asian Retail Lighting Limited (ARLL), which has been incorporated on January 10, 2007 under the Company Act, 1956. AEL holds 50% of the issued and paid up capital of ARLL. ARLL is engaged in providing lighting solutions to the retails industry. The scope of Joint Venture shall provide lighting solutions specifically to the retail industry any where or any other related business as mutually decide between the parties. Salient features of the agreement:

1. AEL holds 5,00,000 equity shares of Rs. 10/- each, comprising 50% of the issued and paid up capital of the ARLL, aggregating to Rs. 50,00,000/-.

2. AEL is leading lighting solutions provided and shall bring its product design, sourcing and manufacturing expertise to the company.

3. The Parties shall agree on the Annual Budget for each Financial Year in advance and on the operating systems that the company will use for importation, logistics, purchasing, advertising and promotion, human resource management and training, monthly information systems, accounting and other activities consistent with the best interests of the company.

4. The shareholders shall also forecast and prepare mid-range business plans for a rolling period of 3 years to guide the business and maintain continuity of the business.

5. AEL and their respective affiliates shall use their expertise in respective field to assist the company in setting up its business and commence operations.

6. The Shareholders of the ARLL agree that they shall use all their bargaining power with landlords, vendors and builders to negotiate and make available the best rental and business terms for the company.

7. Shares are not to be transferred, directly or indirectly to any third party for atleast 3 years.

� Midcom Magnetics Management Pvt. Ltd. (Midcom Magnetic) Midcom Magnetics Management Private Limited (“Midcom Magnetic”) was incorporated on 21st July 2005 under the Companies Act, 1956. AEL holds 50% of the issued and paid up capital of Midcom Magnetic, which is a key electronic component manufacturer for its products. The company is involved in the business of manufacturing, assembling, trading, purchasing, and selling. Letting on lease, importing, exporting, marketing, promoting, processing of magnetic devices including transformers, chokes, inductors and ballasts and all kind of such equipments, instruments, systems and own license, manage and develop innovation and pattern related to all the products as mentioned above and other intellectual properties. Salient features of the agreement:

1) Assist with the company’s marketing, distribution and sales efforts and shall if requested, make its personnel available for any assistance in connection with all matters related to this Agreement for which the company shall pay the actual out of pocket expenses of any such party.

2) Manufacture the Products under such trademarks, trade names and logos as determined by the Company from time to time. Notwithstanding the foregoing, in the event that the company is permitted to use any trademarks, trade names and logos of either party or its Affiliates, the company and its Members acknowledges and agree that any such trademarks, trade names and logos shall remain the exclusive property of original party and its Affiliates.

3) Except for the royalty fees required to be paid herein, it is the intention of the parties to this Agreement, that the amounts paid to the members shall be equal to the actual costs incurred by the members for the performance of such services or the costs of the products and that the members shall not make any profit for the performance of such services or supplying products.

4) The initial capital of the company shall be the aggregate amount of the capital contributions contributed by the members, as provided hereto.

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5) Additional Capital Contributions

� In no event shall any member be required to contribute additional capital other than the initial capital contribution. Absent approval of the members (by unanimous consent of the members), no member shall have the right to make capital contributions beyond that member’s initial capital contribution. Additional capital requirements of the company may be requested by the parties applying commercially reasonable business judgement and based on the reasonable needs of the company. In no event shall any member be required to make additional capital contributions.

� In the event the company requires additional funds to continue to operate and the members do not consent to contribute additional capital, then any member may lend such funds required by the company. Such member loan shall be paid in full within 6 months of the date of the loan and the company shall pay interest at the interest rate. If such loan is not paid by the company when due, such member may, at its option, treat such loan as a capital contribution.

6) No withdrawal of capital contributions – Except upon the dissolution and liquidation of the company, no member shall have the right to withdraw such member’s capital contribution, and, in any such event, the rights of the members shall be as set forth in this agreement.

7) No Interest; No Guarantees on the capital contribution – The members shall not receive interest on any capital contributions at any time made to the company or on the balance of their respective capital accounts. In addition neither party shall be obligated to guarantee and debt or other obligation of the company.

8) Allocation

� Profits – Subject to the allocation of profits for any fiscal year shall be allocated among the members in the following order of priority:

� If losses have previously been allocated to one or more members, then profits shall be allocated to the members who have previously been allocated losses, in proportion to and to the extent of such losses, until the aggregate amount of profits allocated to each member under this section equals the aggregate amount of losses allocated to each member.

� Thereafter, any remaining profits shall be allocated to the members in proportion to their percentage interests.

� Losses – Subject to the allocation of losses for any fiscal year shall be allocated amount the members in the following order of priority:

� The members in proportion to their percentage interests; provided, however, that no losses shall be allocated to a member under this section to the extent that such allocation would cause such member to have deficit balance in its adjusted capital account or increase the amount of any such deficit balance.

Any losses not allocated, under this section shall be allocated to members with positive balances in their adjusted capital accounts, in proportion to such positive balances.

� Memorandum of Understanding between Asian Electronics Limited, Integral Technologies Limited – Pune and Innovolt Inc LED Company Intl., L.L.C.

LED Company Intl., L.L.C. (“LED”) had signed an Agreement dated July 21, 2009 with Asian Electronics Limited (“AEL”) under the laws of the State of Delaware and the laws of India for the Joint Venture to form AELED Company, L.L.C. The percentage interest of LED and AEL in the company shall be 50% and contribute Fifty Thousands Dollars each for its proportionate ownership interest in the Company. LED is interested in developing and building the Company’s business worldwide, starting in the United States and Europe, dedicated to the manufacturing of light emitting diodes technology lighting bulbs and fixtures for the global marketplace (the “Business”) with a partner that has the manufacturing capability for light emitting diodes technologies necessary to launch a business centric to the lighting industry and in support of the entire portfolio of light emitting diode technology customers and distributors.

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AEL is in the business of lighting manufacturing in India and has the necessary capital, technical expertise and resources that enable AEL to manufacture LED lighting products in large volumes for LED customers and distributors in the global lighting market place, and can provide leadership and guidance for the development and management of the Company (“AEL Expertise”). The term of the Joint Venture shall be indefinite, unless earlier terminated in the accordance with the provisions of this Agreement or the Operating Agreement. Joint Venture Contribution by LED shall provide the company with all of its rights to the LED expertise as set forth in the Sub-License Agreement and in arranging for a letter of credit in obtaining bank financing in an amount of up to $15,000,000 (the “Bank Guarantee”). Joint Venture Contribution by AEL shall provide the company with all of its rights to the AEL expertise, bank guarantee, manufacturing the light emitting diodes technology for the business, represent the global market place and shall provide competitive cost pricing for its products to the LED to sell and market to its respective customers and distributors

� Memorandum of Understanding between Asian Electronics Limited, Integral Technologies Limited – Pune and Innovolt Inc.

Our company has entered into Memorandum of Understanding (MOU) with Integral Technologies Limited –Pune and Innovolt Inc – a Delaware Company located in Atlanta, GA, USA for the development, manufacture and sale of various products in lightning, power protection, energy management and other area for India and global market. Salient features of the agreement are as follows: o Asian will have exclusive access to SPV products for sale in India. Innovolt will have exclusive access to

SPV products for North American markets and first right of refusal in other global markets with exclusions for current Asian sales activities overseas.

o Asian will be free to offer SPV products under energy services or carbon trading model. Innovolt and Asian will cooperate on creating financial model to offer energy service or carbon trading based SPV products sales in global markets.

o The pricing structure for SPV products would be as follows. Transfer price from integral to Asian would include 25% overhead and 5% margin on raw material cost, plus and R&D, excise, transportation and cost of capital.

o Asian would set transfer price for the product or system to the SPV that would include selling overhead of 10% plus 5 % margin. The difference between the final sale price to customer and the transfer price to the SPV would be the profit for SPV.

This profit would be parked in the SPV and would be disbursed periodically to Asian and integral on 50/50 basis after adjustment of ongoing cost of financial transactions

� Memorandum of Understanding between Asian Electronics Limited and Cimelia Resource Recovery Pte Limited.

Our Company has entered into Memorandum of Understanding with Cimelia Resource Recovery Pte Ltd, on June 26, 2007 for all associated infrastructure like the Civil, Mechanical, Electrical and Instrumentation works for the installation of the Pilot Plant in Singapore and the other associate machinery not supplied by AEL. After execution of the agreement Cimelia shall take all necessary steps required for the incorporation of a company (hereinafter called JV Company), including, application for such approvals from Registrar of Companies in Singapore and Government Authorities that are necessary or desirable to incorporate the company in the manner contemplated in the terms of this Agreement. The JV Company shall be known as “Green hydrocarbon Pte Ltd” or such other name as may be approved by the Registrar of Companies and mutually acceptable to both the Parties with its registered office at Singapore.

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Silent features of Joint Ventures o All the employees and/or consultants of the JV Company who are responsible for the erection and

construction of the Plant in Singapore will be trained by AEL in India during construction in Singapore and if necessary, AEL shall provide 2 engineers during the erection period.

o Cimelia has the exclusive right to market and sell the Plant in all countries for a period of two from the date

of successful commissioning of the Pilot Plant in Singapore. o JV shall be responsible for the construction, erection, testing, delivering and commissioning of the Pilot

Plant in Singapore in accordance with local (Singapore) Ministry of Environment requirement on a Turn-key basis including Manning, Operation, Maintenance, Technical Services and After-sales Service of the Plant for the entire lease period of the agreement.

o The JV Company shall have a minimum initial issued and paid-up share capital of $2,000,000 comprising of

20 lacs on shares with the par value of $1.00 per share. The Parties agree that at the time of estrablishment of the JV, AEL shall hold 50% and Cimelia shall hold 50% of the paid up equity share capital of the JV.

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KEY INDUSTRY REGULATIONS AND POLICIES The following description is a summary of various sector-specific laws and regulations in India prescribed by the GoI and various State Governments, which are applicable to our Company. The information contained in this chapter has been obtained from publications in the public domain. The regulations set out below may not be exhaustive, and are only intended to provide general information to the Investors and are neither designed nor intended to substitute for professional legal advice. The Government of India has over the years formulated various regulations and policies for the development of the energy and power sector in India. Some of regulations and policies applicable to the Company are discussed below. Regulations for Foreign Investment FEMA Regulations As laid down by the FEMA Regulations, no prior consents and approvals are required from the Reserve Bank of India, for Foreign Direct Investment under the ‘automatic route’ within the specified sectoral caps. In respect of all industries not specified as FDI under the automatic route, and in respect of investment in excess of the specified sectoral limits under the automatic route, approval may be required from the FIPB and/or the RBI. Presently, investments in companies engaged in the textile sector fall under the RBI’s ‘automatic route’ for FDI/NRI investment of up to 100%. The RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (“FEMA Regulations”) to prohibit, restrict or regulate, transfer by or issue security to a person resident outside India. Foreign investment in India is governed primarily by the provisions of the FEMA which relates to regulation primarily by the RBI and the rules, regulations and notifications there under, and the policy prescribed by the Department of Industrial Policy and Promotion, Government of India, which is regulated by the FIPB. Certain other laws and regulations that are relevant to the operation of our Company’s business include the following: 1. The Companies Act, 1956 The Companies Act consolidates and amends the law relating to companies and certain other associations. This Act regulates the functioning of a Company and also specifies the various provisions which a company has to comply with. 2. The Income-Tax Act, 1961 The purpose of this Act is to consolidate and amend the Law relating to income and super-tax. 3. The Central Excise Act, 1944 and the Rules framed there under The Central Sales Tax Rules are made in exercise of the powers conferred by sub-section (10) of Section 13 of the Central sales Tax Act, 1956. The Act aims to formulate policies for determining when sale or purchase of goods takes place in the course of inter-state trade or commerce or outside a state or in the course of imports from India. The Act also provides the levy, collection and distribution of taxes on sales of goods in the course of Inter-state trade or commerce and it also declares certain goods to be of special importance in Inter-state trade or commerce and specify the restrictions and conditions to which the State laws imposing taxes on the sale or purchase of such goods of special importance shall be subject. 4. The Customs Act, 1962 This is an Act to consolidate and amend the law relating to Customs. This Act aims to regulate all provisions relating to Customs.

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5. The Central Sales Tax Act, 1956 The Act aims to formulate policies for determining when sale or purchase of goods takes place in the course of inter-state trade or commerce or outside a state or in the course of imports from India. The Act also provides the levy, collection and distribution of taxes on sales of goods in the course of Inter-state trade or commerce and it also declares certain goods to be of special importance in Inter-state trade or commerce and specify the restrictions and conditions to which the State laws imposing taxes on the sale or purchase of such goods of special importance shall be subject. The objective of this Act is to protect the environment and prevent environmental hazards. This Act enables co-ordination of Activities o the various regulatory agencies, creation of an authority or authorities with advocate powers or environmental protection, regulation of discharge of handling of hazardous substances environmental pollutants. 6. The Electricity Act, 2003 The purpose of this Act is to regulate law relating to generation, transmission, distribution, trading, and use of Electricity and generally for taking measures conductive to development of the electricity industry. The act also endeavors to protect the interest of consumers and supply of Electricity to all area, rationalization of Electricity tariff, ensuring transparent policies regarding subsidies. 7. The Industries Development and Regulations Act, 1951 The object of the Act is to bring under Central Control, development and regulation of a number of important industries the activities of which affect the Country as a whole. The development of these industries must be governed by economic factors of all India import. 8. The Contract Labour (Regulation) Act, 1970 The Contract Labour (Regulation and Abolition) Act, 1970 (“CLRA”) has been enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. The CLRA applies to every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour. The CLRA vests the responsibility on principal employer of an establishment to make an application to the registered officer in the prescribed manner for registration of the establishment. Likewise, every contractor to whom the CLRA applies is required to obtain a license and not to undertake or execute any work through contract labour except under and in accordance with the license issued. To ensure the welfare and health of the contract labour, the CLRA imposes certain obligations on the contractor in relation to establishment of canteens, rest rooms, drinking water, washing facilities, first aid, other facilities and payment of wages. However, in the event the contractor fails to provide these amenities, the principal employer is under an obligation to provide these facilities within a prescribed time period. 9. The Employees Provident Fund Act, 1948 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPFA”) was introduced with the object to institute provident fund for the benefit of employees in factories and other establishments. The EPFA empowers the Central Government to frame the “Employee’s Provident Fund Scheme”, Employee’s Depositlinked Insurance Scheme’ and the “Employees’ Family Pension Scheme” for the establishment of provident funds under the EPFA for the employees. The EPFA also prescribes that contributions to the provident fund are to be made by the employer and the employee. 10. The Employees State Insurance Act, 1948 The Employee State Insurance Act, 1948 (“ESIA”) aims to provide benefits for employees or their beneficiaries in case of sickness, maternity, disablement and employment injury and to make provision for the same. Every factory or establishment to which the ESIA applies is required to be registered in the manner prescribed in the ESI Act. Under the ESIA every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages up to Rs. 0.065 lacs per month is entitled to be insured. The ESIA contemplates a contribution payable by the principal employer in the first instance and contribution payable by the

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employee in respect of an employee to the Employee State Insurance Corporation. The ESIA further states that a principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer. 11. The Maternity Benefit Act, 1961 The purpose of the Maternity Benefit Act, 1961, is to regulate the employment of pregnant women and to ensure that they get paid leave for a specified period during and after their pregnancy. It provides, inter-alia, for payment of maternity benefits, medical bonus and enacts prohibitions on dismissal and reduction of wages paid to pregnant women. 12. The Maharastra General Sales Tax Act The Act aims to formulate policies for determining when sale or purchase of goods takes place in the course of trade or commerce in Maharastra. The Act also provides the levy, collection and distribution of taxes on sales of goods in the course of trade or commerce and it also declares certain goods to be of special importance in trade or commerce. 13. The Foreign Trade (Development and Regulation) Act, 1992 This Act aims to provide for the development and regulation of foreign trade by facilitating imports into, and augmenting exports from, India and for matters connected therewith or incidental thereto. 14. The Factories Act, 1948 The Factories Act, 1948 (“Factories Act”) seeks to regulate labour employed in factories and makes provisions for the safety, health and welfare of the workers. The Factories Act defines a ‘factory’ to cover any premises, which employs ten or more workers and in which manufacturing processes are carried on with the aid of power, and to cover any premises, where there are at least 20 workers who may or may not be engaged in an electrically aided manufacturing process. Each State Government has set out rules in respect of the prior submission of plans and its approval for the establishment of factories and registration and licensing of factories. 15. The Bureau of Indian Standards Act, 1986 The Act provides for the establishment of a Bureau for the harmonius development of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto. 16. The Finance Act, 1994 The Act gives effect to the financial proposal of the Central Government for the Financial Year. The list set out above is by way of an illustration and is not an exhaustive list of all statutes applicable to the Company’s operations. 17. The Payment of Bonus Act, 1965 Under the Payment of Bonus Act, 1965, a minimum prescribed bonus has to be paid to eligible employees. The minimum bonus to be paid to each employee must be paid irrespective of the existence of any allocable surplus. If the allocable surplus exceeds minimum bonus payable, then the employer must pay bonus proportionate to the salary or wage earned during that period, subject to a maximum of twenty percent of such salary or wage. ‘Allocable surplus’ is defined as a pecified percentage of the available surplus in the financial year, before making arrangements for he payment of dividend out of profit of our Company. 18. Payment of Gratuity Act, 1972 Under the Payment of Gratuity Act, 1972, as amended (the “Gratuity Act”), an eligible employee who has been in continuous service for a prescribed period is eligible for gratuity upon his retirement or resignation, superannuation or death or disablement due to accident or disease, subject to a prescribed maximum amount. The entitlement to gratuity in the event of death or disablement will not be contingent upon an employee having completed the prescribed years of continuous service.

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Environmental Related Statutes Manufacturing units must ensure compliance with environmental legislation, such as the Water (Prevention and Control of Pollution) Act 1974, (“Water Act”), the Air (Prevention and Control of Pollution) Act, 1981, (“Air Act”), and the Environment Protection Act, 1986, (“EPA”). The basic purpose of these statutes is to control, abate and prevent pollution. In order to achieve these objectives, Pollution Control Boards (“PCBs”), which are vested with diverse powers to deal with water and air pollution, have been set up in each state. The PCBs are responsible for setting the standards for maintenance of clean air and water, directing the installation of pollution controlling devices in industries and undertaking inspections to ensure that industries are functioning in compliance with prescribed standards. These authorities also have the power of search, seizure and investigation. All industries are required to obtain and regularly renew consent orders from the PCBs, which are indicative of the fact that the industry in question is functioning in compliance with applicable pollution control norms. The Hazardous Wastes (Management and Handling) Rules, 1989 The Hazardous Wastes (Management and Handling) Rules, 1989 stipulates the manner in which the occupier and the operator of a facility that treats hazardous wastes, properly collects, treats, stores or disposes of hazardous wastes. When an accident occurs in a hazardous site or during transportation of hazardous wastes, then the relevant State PCB has to be immediately alerted. If, due to improper handling of hazardous waste, any damage is caused to the environment, the occupier or the operator of the facility and are liable to pay certain remedial expenses and/or penalties.

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HISTORY AND OTHER CORPORATE INFORMATION History Our Company was incorporated on January 21, 1964, as a public limited company vide certificate No. 12835 of 64-65 under the provisions of the Companies Act with its registered office at Handloom Office, 221, Dr. D. N. Road, Fort, Mumbai 400 001. We received the certificate for commencement of business from the Registrar of Companies, on January 21 1964. Originally promoted by Dr Y Najmuddin, Q Hakimuddin and S Nuruddin, our Company started its operations in the year 1964 with the object of engaging in the business of Carbon Film Resistors, Styroflex capacitors & ceramic cores Change in Management In the year 1980, Mr. Suresh H Shah and his Team taken over the company from the Original Promoter i.e. Dr Y Najmuddin, Q Hakimuddin and S Nuruddin. The Registered office of the company was shifted from Handloom Office, 221, Dr. D. N. Road, Fort, Mumbai 400 001 to D-11, Road No: 28, Wagle Industrial Estate, Thane – 400 604, Maharashtra. In the 1980s, AEL started focusing on capacitor-based energy conservation solutions and over the past two decades has established itself as a market leader in this segment. AEL’s capacitor-based Automatic Load Monitoring Systems (“ALMS”) enabled a reduction in transmission and distribution losses along with an increase in energy efficiency for electricity utilities. These were widely deployed by electricity utilities as part of their power transmission and distribution infrastructure. During 2001-2002, AEL shifted focus to energy-efficient lighting solutions as it anticipated a growing demand for energy-efficient lighting solutions from Indian municipalities and consumers. Leveraging on its core competence and manufacturing expertise in electronics and passive components, AEL entered the energy-efficient lighting market with a view to becoming an Energy Services Company (“ESCO”). AEL has developed a wide range of energy-efficient lighting solutions, and has an installed base of over 30 lacs fixtures. We have further agreed with Westinghouse Lighting Corporation’s (“WLC”) main shareholders and/or other investors to set up joint venture companies in the United States and in Europe. Under the terms of the joint venture, AEL owns 19% of the issued share capital of Global Energy Management, LLC, a private limited company incorporated in the United States (“GEM LLC”). GEM LLC markets, distributes and sells lighting products in the United States under the ‘Westinghouse’ brand. AEL holds 19% of the issued and paid up capital of Global Energy Management Europe Limited (“GEM Europe”), which markets AEL’s products under the ‘Westinghouse’ brand in Europe. In Europe, over 200,000 of AEL’s fixtures marketed under the “Westinghouse” brand have been successfully commissioned in the UK, Germany, Italy, France, Dutch and Maltese markets. The “Westinghouse” brand gives international recognition to AEL’s products and provides a strong platform to capitalize on opportunities in the global energy efficient lighting market.

We have two divisions, the lighting division and the plant and machinery division. The initiative taken by our company in the plant and machinery division on a technology developed by Unique Waste Plastic Management & Research Co. Pvt. Ltd in the financial year 2007-08 had to be suspended due to the objection by the minority shareholders of the company which was selling the technology and also due to an accident in the Research & Development department of our company. Due to the advantages in this technology, we have decided to buy at cost, 49% of equity of Unique Waste Plastic Management & Research Co. Pvt. Ltd., purchased by the erstwhile Promoter as a part of business arrangement with them. As a major shareholder of Unique, the Company will have control over this technology and will be able to reap the benefits of technology at appropriate time. During the year 2006-2007, we made an investment in Shares of STS PCB Ltd., an Irish company, equivalent to 49% stake. However, with passage of time, it was observed that the performance of the said company in terms of achieving budgeted sales and absorbing the Company’s technology was not matching with the projections and it was considered necessary to divest the investment and settle the accounts. STS PCB Ltd., ceased to be an associate company with effect from 31st March, 2008.

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In February 2009, the shareholders of our company approved a change in management and control of our company, in terms of provisos 1& 2 of Regulation 12 of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulation 1997 by passing a special resolution by Postal Ballot. Accordingly, in the Extra Ordinary General Meeting of the Shareholders held on February 12, 2009, a new management team headed by Mr. Arun B. Shah took over the management of the company. Mr. Arun B. Shah was appointed as the Non Executive Chairman and Director of the company and with effect from April 23, 2009; he took over as the Executive Chairman of the company. Key Events and Milestones Year Key Events, Milestones and Achievements 1964 Incorporated as Public Limited Company 1964 Received Commencement of business certificate from Registrar of Companies 1964 Company has started its operations 1973 Come with a Rights issue 1980 Change in management from Dr Y Najmuddin, Q Hakimuddin and S Nuruddin to Mr. Suresh H Shah

and his team 1992 Split of face value of equity share from Rs.100/- to Rs.10/- each 1994 Rights Issue of 8,01,903 equity shares of Rs. 10/- each at a premium of Rs. 65/- per share 2000 Test report on Limited Electrical, Electrical performance and environmental testing of E+ Ballast from

Electronics Test & Development Centre, Pune under STQC Directorate Department of Electronics, Government of India

2000 EMI/EMC Test report on Electronics Ballast manufactured by AEL – Chennai from SAMEER – Centre for Electro Magnetics, an Institution set up by Ministry of Information Technology, Government of India

2001 Successfully passed all the relevant Safety test from ERKA Consulting AG, Schweiz 2005 Joint Venture agreement with Midcom Magnetics Management Pvt Ltd and Asian Electronics Limited 2005 Approval for energy efficient tube light system with T-5 lamp from Municipal corporation of Greater

Mumbai 2006 Scheme of amalgamation for the transfer of the lighting division of Asian Raymold Lighting Private

Limited into Asian Electronics Limited 2006 Approval of “Energy efficient tube light system with T-5 lamp from Municipal corporation of Greater

Mumbai 2007 Joint Venture agreement between Asian Retail Lighting Ltd and Asian Electronics Limited 2007 Joint Venture agreement with Home Lighting India Ltd and Asian Electronics Limited 2007 Split of face value of equity share from Rs.10/- to Rs.5/- each 2008 The Company has successfully developed energy efficient retrofit lighting systems, which is protected by

Patents registered in U.S.A. and under registration in Europe as also in India. 2008 The Company has introduced various new and improved models of Electronic Ballasts for different

applications. 2008 The Company has launched different products with separate designs of Ballasts for different market

segments, thus enhancing its product range offered to its customers. 2008 Central Power Research Institute (CPRI) – Electrical Appliances Technology Division, Banglaore for 15

w, 220-240 V, 50/60 Hz, Colour F-2700, Colour Temperature 2720K, (Warm white), PF> 0.9, Lamp type 2 U, B22 for self ballasted lamps (SBL) for general lightning services / compact fluorescent lamps.

2008 Awarded ISO 9001:2008 Certificate from Euro Veritas Quality Assurance Private Limited accreditation by the Joint Accreditation system of Australia and New Zealand. The certification No: EV/08/103. Registration period form 31st December 2008 to 30th December 2011 for Nashik site, for Design, Development, and Manufacturing and supply of Customised / Tailored Energy Efficient products and systems, statics and dynamics VAR compensation system, with Wire / Wireless Intelligent Controls, Sensors and supported by Electronic / software based / electrical control Gear or systems.

2009 Change in management and control of our company, in terms of provisos 1& 2 of Regulation 12 of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulation 1997 by passing a special resolution by Postal Ballot.

2009 Mr. Arun B. Shah was appointed as the Non Executive Chairman and Director of the company

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Change in the Registered Office

Date of change Previous Address New Address September 24, 1994 Handloom Office, 221, Dr. D. N. Road,

Fort, Mumbai 400 001 D-11, Road No: 28, Wagle Industrial Estate, Thane – 400 604, Maharashtra,

Main Objects of our Company 1. To adopt and carry into effect the agreement entered into between P.A. Bhat & Co. of the one part and Asian Industries Corporation and others of the other part as the Promoter to promote and to undertake the manufacture of Carbon Film Resistors, Styroflex Capacitors and Ceramic Cores of every description. 2. To carry on in India or elsewhere the trade or business of manufacturers, constructors or assemblers of, dealers in, and contractors for, repairers of or maintainers of and importers and exporters of radio, radio products, radio apparatus, records, storage, batteries, wet and dry, wireless apparatus and all kinds of electronic equipment, tubes, telephones or telegraphic apparatus, transistors and television apparatus and all kinds of machinery, tools, instruments and apparatus in connection with radio radar and television and in connection with transmission by any means of messages or communications of any kind, and the business of contractors, engineers, constructors of and dealers in motors, motor machinery and hirers of and suppliers of any of the foregoing things and to carry on in India or elsewhere the business of merchants and manufacturers of and wholesale and or retail dealers in produce, products, manufactured or partly manufactured goods, merchandise, machinery and stores of any and every kind. 3. To manufacture, buy, sell or deal in any articles or things which can be conveniently dealt in, in connection with any class of the Company’s business and in connection with electronics, electricity, ultrasonics and to act and carry on business as commission agents for any purpose for promoting industries, purchase of patents, rights, selling of patents. 3A. To design, develop, manufacture, sell, import, export, lease, hire and otherwise deal in computers, computer peripherals, modules, communication systems including fibre optic systems, instruments, hardware, software, all types of digital data storage and media transfer systems, microcontroller hardware & software, microprocessors, mini processors, display equipments, Application Specific Integrated Circuits (ASIC), electronic control systems, inspection instruments, components, peripherals and parts thereof. 3b) To set up thermal, solar, hydroelectric or any other type of power plants and to carry on the business of generating, producing and distributing electricity and any other form of energy. 3c) To carry on the business of purchasing, selling, hiring and letting on lease or sub-lease or hire in any part of India or abroad, whether directly or acting in the capacity of an intermediary severally or jointly with anyone or otherwise, all kinds of immovable and movable properties including lands, buildings, machinery, whether manufactured by the Company or otherwise, plants, tools, jigs and fixtures, agricultural machinery, ships, trawlers, vessels, barges, automobiles and vehicles of every kind and description, computers, furniture and fixtures and office equipments of every kind and description, construction machinery of all types and descriptions, air conditioning, plants, aircrafts and electronic and/or electrical equipments of all kind and all consumer, commercial and industrial items and to deal with them in any manner whatsoever including resale or lease back thereof regardless of whether the property purchased and leased be new or used. 4. To carry on business as manufacturers of and dealers in fibres and films and all kinds of organic and inorganic chemical products. 5. To carry on business as manufacturers of and dealers in the compounds, derivatives, intermediates and by-products of all or any of the foregoing. 6. To produce, manufacture, sell, distribute, deal in and dispose of and/or to engage in the business of manufacturing and selling the raw materials of every class and description capable of being used in the aforesaid business of the Company, or deemed to be necessary or desirable in the conduct of its business or any part thereof.

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7. To carry on the business of manufacturers of and dealers in bottles, containers, tubes, wrapping materials, toys, insulating materials, and all other blown, moulded, formed or extruded goods and such articles of ceramic, glass and metals. The main objects clause and the objects incidental or ancillary to the main objects of the Memorandum of Association of our Company enable us to undertake our existing activities and the activities for which the funds are being raised through this Issue. Changes in the Memorandum of Association since Incorporation:

Date of Change

Remarks

28.09.1990 The authorised share capital of our Company was increased from Rs. 100 lacs comprising of 1,00,000 Equity Shares of Rs. 100/- to Rs. 300 lacs comprising of 3,00,000 Equity Shares of Rs. 100/- each.

16.04.1992 Split of face value of from Rs. 100/- each to Rs.10/- each 04.09.1993 The authorised share capital of our Company was increased from Rs 300 lacs comprising of 30,00,000

Equity Shares of Rs. 10/- to Rs. 500 lacs comprising of 50,00,000 Equity Shares of Rs. 10/- each. 11.01.1996 The authorised share capital of our Company was increased from Rs. 500 lacs comprising of 50,00,000

Equity Shares of Rs. 10/- to Rs. 2500 lacs comprising 100,00,000 equity shares of Rs. 10/- each and 150,00,000 unclassified shares of Rs. 10/- each

11.01.1996 Additional sub clauses 3 (a) & 3 (b) were added to the existing object clause in the Memorandum of Association.

23.09.1999 The equity share part of the authorized share capital was increased from 100,00,000 equity shares of Rs. 10/- each to 150,00,000 equity shares of Rs. 10/- each and unclassified part of the authorized share capital was altered from 150,00,000 unclassified shares of Rs. 10/- each to 10,00,000 cumulative redeemable preference shares of Rs. 100/- each

23.09.1999 An additional sub clause of 3. (c) was added to the existing object clause in the Memorandum of Association.

27.09.2007 Split of face value of from Rs. 10/- each to Rs.5/- each 27.09.2007 The authorised share capital of our Company was increased from Rs. 2500 lacs comprising of 250,00,000

Equity Shares of Rs. 10/- to Rs. 4000 lacs comprising of 800,00,000 Equity Shares of Rs. 5/- each. Subsidiaries As on the date of filing the Draft Letter of Offer, our Company does not have any Subsidiary Company. Collaborations Our Company has not entered into any collaboration with any third party as per regulation (VIII) (B) (1) (c) of Part A, Schedule VIII of the SEBI (ICDR) Regulations 2009. For details regarding Joint Venture and other agreements, please refer to page 70 of the Draft Letter of Offer. Shareholders Agreement There are no subsisting shareholders’ agreements among our shareholders in relation to our Company, to which our Company is a party or otherwise has notice. Other Agreements As on the date of filing this Draft Letter of Offer with SEBI, we are not a party to any material contract:

� not being a contract entered into in the ordinary course of our business carried on or intended to be carried on by us; or

� Which was entered into more than two years before the date of filing of this Draft Letter of Offer with SEBI Strategic Partner The Company does not have any Strategic Partner as on the date of filing of this Draft Letter of Offer. Financial Partner The Company does not have any Financial Partner as on the date of filing of this Draft Letter of Offer.

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OUR MANAGEMENT Board of Directors As per the Articles of Association, the Company cannot have less than three directors and more than twelve directors. The Board of Directors comprises of 6 Directors. Mr Arun B. Shah is the Chairman of our Company. Our Chairman is in-charge of the overall management of our Company subject to the supervision and control of the Board. He is ably supported by professional and technically qualified team of executives. The following table sets forth the details regarding our Board of Directors as on the date of filing of this Draft Letter of Offer with SEBI: S. No

Name, Address, Age, Fathers Name, Qualification, Designation, Status, DIN, Nationality & Occupation and Tenure

Other Directorships/Trustee Date of Appointment / no

of share held 1) Mr. Arun B. Shah

Address: Pranam Ghar, Malviya Road, Opp. Nehru Road Post Office, Vile Parle, Mumbai – 400 057. Age: 53 years Father’s Name: Mr. Babulal Shah Qualification: B.Sc., CA Designation: Chairman Status: Executive and Non Independent DIN: 00007254 Nationality: Indian Occupation: Business Term: Re-appointed as Executive Chairman with effect from 23rd April, 2009 for a period of five years

1. Indage Vintners Limited. 2. Sirius Capital Services Ltd. 3. Indage Hotels Ltd. 4. Himachal Indage Limited 5. Prime Securities Ltd. 6. Prime Broking Company (India) Limited 7. Cyber Tech Systems & Software Limited 8. Seabuckthorn Indage Limited. 9. Prime Commodities Broking Co. (India) Ltd. 10. ARSH Advisors and Owners Ltd. 11. Asian Retail Lighting Limited 12. Home Lighting India Limited 13. Indian Institute of Vine & Wine (Section 25 Company) 14. Indage Restaurants & Leisure Limited. (Formerly Known as Champagne Vineyards Limited). 15. Pranamghar (India) Private Limited 16. Indage Engineering Pvt. Ltd. 17. Indage Investments Pvt. Ltd. 18. Napashavya Financial Consultants Pvt. Ltd. 19. Indage Vineyards Private Limited 20. A. V. Rajwade & Co. Pvt. Ltd. 21. Legasis Services Pvt. Ltd. 22. Cyber Tech Systems & Software Inc (USA) 23. Dalal Desai & Kumana 24. Sugun Trust 25. Kashyap Foundation 26. Arun & Co.

23.12.2006 Nil

2) Mr. Haresh G Desai Address: F-50, Venus Apartment, 13th Floor, R. G. Thadani Marg, Worli Sea Face, Mumbai – 400 025. Age: 54 years Father’s Name:

1. Indage Vintners Ltd. 2. Indage Restaurants & Leisure Ltd. 3. Asian Retail Lighting Ltd. 4. Home Lighting India Ltd. 5. Pranamghar (India) Ltd. 6. A. V. Rajwade & Co. Pvt. Ltd. 7. Napashavya Financial Consultants

05.11.2008 Nil

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Mr. Gunvantrai Manibhai Desai Qualification: B.Com, CA Designation: Director Status: Executive and Independent DIN: 00048112 Nationality: Indian Occupation: Business Term: liable to retire by rotation

Pvt. Ltd. 8. Sugun Consultants Pvt. Ltd.

3) Dr Deepakraj Divan Address: 2371, Monte Villa CTS, Marietta GA 30062-2897 Georgia – 30062. Age: 55 years Father’s Name: Mr. Malhar Shivram Divan Qualification: B.Tech., IIT Kanpur M.S., Ph.D Designation: Additional Director Status: Independent Director DIN: 02657439 Nationality: Non Resident Indian Occupation: Business Term: liable to retire by rotation

1. Integral Technologies Private Ltd.

2. Innovlt Inc., Atlanta, USA 3. Intelligent Power Infrastructure

Consortium (Trustee)

14.05.2009 Nil

4) Mr. Dipankar De Address: B-43, Maker Kundan Gardens, Juhu Road, Santracruz – West, Mumbai – 400049. Age: 54 years Father’s Name: Mr. Digindra Narayan De Qualification: MA, CAIIB Designation: Nominee Director – IDBI Status: Non Executive and Independent DIN: 00493663 Nationality: Indian Occupation: Business Term: will continue till withdrawn by IDBI

NIL

26.05.2009 Nil

5) Mr. Suresh Sharma Address: 6640, Akers Mill Road, #302, Atlanta, GA – 030339. Age: 56 years Father’s Name: Mr. Mahedeo Prashad Sharma Qualification: B.E. (Honors) in Mechanical from BITS, Pilani (India), M.S. (Aerospace), from University of Florida (U.S.A.), Management of Technology Courses with British Aerospace (U.K.) Designation: Alternative Director Status: Independent Director DIN: 00183845 Nationality: Non Resident Indian Occupation: Business Term: will co-terminate with that of Dr. Deepakraj Divan

1. Accel Frontline Public Limited 2. Integral Technologies Pvt. Ltd. 3. BITS-75 Charitable Trust

(Trustee)

14.05.2009 Nil

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6) Mr. D.G. Prasad Address: A-8, Madhuranagar, Ameerpet, Hyderabad Age: 61 years Father’s Name: Mr. Dasu Purushothama Prasad Qualification: CA Designation: Additional Director Status: Independent Director DIN: 00160408 Nationality: Indian Occupation: Professional Term: liable to retire by rotation

1. Gokak Textiles Limited 2. Suven Life Sciences Limited 3. Apollo Solar Energy Pte Limited

– Singapore

29.08.2009

250 shares of Asian Electronics

Limited

None of the Directors are related to each other. There are no arrangements or understanding with major shareholders, customers, suppliers or others, pursuant to which any of the Directors were selected as a Director or member of the senior management. Brief Profile of Our Board of Directors Mr. Arun B. Shah, Executive Chairman Mr. Arun B. Shah, aged 53 years, S/o Mr. Babulal Shah, is the Executive Chairman of Asian Electronics Limited, a Thane based Company specializing in manufacture and marketing of Energy Efficient Lighting Products and Systems. Mr. Arun B. Shah is a Chartered Accountant by profession and has a reputation of Management Buy Out (‘MBO’) type restructuring operations. Mr. Arun B. Shah was in practice before he got associated with the Indage Group of Companies and played a key role in setting up pioneering wine-producing business in India. The company now controls substantial market share of the wine producing and marketing business in India and has a presence globally. Mr. Arun B. Shah took over the management of Asian Electronics Limited; a BSE & NSE listed Company, after the erstwhile Chairman and Managing Director, Mr. Suresh H. Shah, resigned on the grounds of failing health. He became the Non-Executive Chairman of Asian Electronics Limited. Soon, he was appointed as the Executive Chairman of the Company and started looking after the day to day operations of the Company. At Asian Electronics Limited, Mr. Arun B. Shah is leading a team of highly qualified professionals, having rich and varied experience in multifarious fields like Finance, Risk Management, Forex management etc. Mr. Haresh G. Desai, Director Mr. Haresh G. Desai, aged 54 years, S/o Mr. Gunvantrai Manibhai Desai is a Bachelor of Commerce and a member of the Institute of Chartered Accountants of India. He is an Independent Director of our Company as well as a Promoter and Director of A. V. Rajwade & Co. a pioneer in the field of rendering advisory services in foreign exchange risk management. He has worked with the firm since its inception in 1981. He has spent nearly two decades in counseling Indian corporate on Foreign Exchange Risk Management. He has seen the emergence of the risk management function among Indian corporate from virtually the initial period to its current state and advised the corporate at every phase of advancement. Advising corporate on the management of foreign currency loans and usage of derivatives has been his core skill. He has conducted over 300 training programmes on foreign exchange risk management, training a large number of Indian treasury personnel at banks as well as corporate, and non-treasury senior staff in the country. He was a Visiting Faculty at the Management Development Institute, Gurgaon, and the Jawaharlal Nehru Institute of Development Banking, Hyderabad and now is a faculty for CRISIL Executive training programmes.

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Dr Deepakraj Divan, Director Dr. Deepakraj Divan, aged 55 years, S/o Mr. Malhar Shivram Divan is a B.Tech from IIT Kanpur in 1975 and holds a MS and Ph.D degree from the University of Calgary, Canada, in 1979 and 1983 respectively. He is founder and chairman of Innovolt Inc., an Atlanta, U.S.A, based company specializing in power protection and energy management products. He is also chairman of Integral Technologies, Pune, India, a subsidiary of Innovolt that specializes in energy efficient lighting solutions using LEDs. Dr. Divan is also a professor of Electrical Engineering and Director of the Intelligent Power Infrastructure Consortium at the Georgia Institute of Technology in Atlanta, one of the leading engineering schools in the world. From 1995-2004, he was founder, chairman and CEO/CTO of Soft Switching Technologies, a company in the industrial power quality market. From 1985-95, he was a professor in Electrical Engineering at the university of Wisconsin-Madison. Mr. Suresh Sharma, Alternative Director to Dr. Deepakraj Divan Mr. Suresh Sharma, aged 56 years, S/o Mr. Mahadeo Prashad Sharma is a M.S. (Aerospace) from University of Florida, Gainesville FL (U.S.A.), Management of Technology Courses with British Aerospace (U.K) and a B.E. (Honors) in Mechanical from BITS, Pilani (India). He is an internationally acknowledged business leader known for his vision, operational excellence and entrepreneurial successes. A former executive at GE Energy (General Electric), he is a GE-Certified Six-Sigma Master Black Belt. His 25 years of multi-functional industry experience includes working with GE Corporate R&D center at Schenectady NY, NASA Langley at Hampton VA, British Aerospace & Rolls-Royce in England, and MATRA in France. He started his early career as a Naval officer. Mr. Dipankar De, Nominee Director, IDBI Mr. Dipankar De, aged 54 years, S/o Mr. Digindra Narayan De, is a MA Economics from Jadavpur University, Kolkata and Certified Associate of the Indian Institute of Bankers (CAIIB). He is a Deputy General Manager of IDBI. He has 3 decades of knowledge and experience in the fields of industrial promotion & development financing, corporate banking, economic & industrial research, grassroot socio-economic development for the benefit of the downtrodden and underprivileged. Mr. D.G.Prasad - Director Mr. D.G. Prasad aged 61 years; S/o D. Purushothama Prasad is a Chartered Accountant and had been a banker for over 33 years. After being with Canara Bank for over 8 years, Mr. Prasad served Exim Bank for over 25 years having joined in 1983, in its formative phase. In Exim Bank, he held various positions including as the Chief General Manager heading Corporate Banking, Agri Business and SME Business Groups of the Bank. He holds considerable expertise in trade finance, international finance, merchant banking, corporate strategies, mergers and acquisitions, loan syndications, forfaiting, international negotiations and co-financing with multilateral agencies. He was trained in ‘Treasury Management’ at Credit Suisse, Switzerland; ‘International Banking and Development’ at the International Development Ireland at Dublin and London and ‘Advanced Agribusiness Management’ at Cornell University, Ithaca, New York, USA. He is also a Director on the Boards of various other companies in India and on the Board of a Singapore based company. He has been a guest faculty at business schools on international finance and international marketing. Borrowing Powers of the Board The Board of Directors of our Company has power to borrow up to Rs. 1,00,000 lacs as per the members’ resolution passed in the Extra Ordinary General Meeting of our Company held on May 06, 2006 The extract of the resolution of our Company authorizing the Board’s borrowing powers is reproduced: “Resolved that the Board of Directors (hereinafter referred to as the Board which term shall be deemed to include any Committee which the Board may constitute for this purpose) be and is hereby authorized in accordance with Section 293(1)(d) of the Companies Act, 1956 (including any statutory modifications or re-enactment thereof for the time being in force) and the Articles of Association of the Company, to borrow any sum or sums of money (including non-fund based facilities) from time to time at their discretion, for the purpose of the business of the Company, from any one or more banks, financial institutions and other person, firms bodies corporate,

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notwithstanding that the monies to be borrowed together with the monies already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) may at any time, exceed up to a sum of Rs.1,00,000 lacs (Rupees One Thousand Crores Only) over and above the aggregate of the then paid up capital of the Company and its free reserves (that is to say reserves not set apart for any specific purpose) and that the Board of Directors be and is hereby authorized to arrange or fix the terms and conditions of all such monies to be borrowed from time to time as to interest, repayment, security or otherwise as they may in their absolute discretion, think fit. Compensation Mr. Arun B. Shah- Executive Chairman The remuneration of our Executive Chairman, Mr. Arun B. Shah as per resolution passed in the Board of Directors meeting held on 23rd April 2009 is detailed hereunder: “Resolved that as Executive Chairman of the company, Mr. Arun B. Shah shall be reimbursed expenses incurred by him for official work such as travelling, conveynance, telephone, entertainment etc subject to a limit of Rs. 1.00 lacs per month” Further, by virtue of the resolution of the Board of Directors dated 29th August, 2009 and the resolution of the Annual General Meeting dated 30th September, 2009, Mr. Arun B. Shah was appointed as the Executive Chairman of the Company, with remuneration, and the Compensation Committee of the Board of Directors was authorized to determine the terms and conditions of his appointment including remuneration. The Compensation Committee has not yet met and decided the terms and conditions of his appointment including remuneration and no sooner shall the Compensation Committee decide on the same, Mr. Arun B. Shah will be remunerated accordingly. Terms and Conditions of Employment of Non-Executive Directors We have not entered into any formal arrangements with our Non-Executive Directors. We pay our Non-Executive Directors a sitting fee of Rs. 0.05 lacs per Board meeting. We also pay sitting fees of Rs. 0.05 lacs to all the members of our Audit Committee, and Rs. 0.05 lacs to all the members of the Shareholders/ Investors Grievance Committee and Remuneration/ Compensation Committee per meeting. Directors Remuneration and sitting fees paid for the year ended March 31, 2009 Details of Sitting Fees paid to the Directors of the Company for attending Meetings of Share Transfer Committee, Shareholders'/Investors' Grievances Committee, Audit Committee and Board of Directors for the period from 1st April, 2008 to 31st March, 2009.

(Rs. Lacs) Name of the Director Sitting Fees Salaries /

Perquisites Commission Total

Mr. Arun B. Shah 2.15 -- -- 2.15 Mr. Haresh Desai 0.35 -- -- 0.35 Mr. Sushil Jiwarajka 0.30 -- -- 0.30 Mr. S. Padmanabhan 0.40 -- -- 0.40 Mr. Suhas Tuljapurkar 0.35 -- -- 0.35 Mr. Sanjay Asher 0.30 -- -- 0.30 Total 3.85 -- -- 3.85 Policy on Disclosures and Internal Procedure for Prevention of Insider Trading The provisions of Regulation 12 (1) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 are be applicable to our Company and we have complied with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Our Board of Directors have approved and adopted the policy on insider trading in view of the proposed public issue.

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Mr. Rasik D. Goradia, Company Secretary and Compliance Officer is responsible for setting forth policies, procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the implementation of the code of conduct under the overall supervision of the board. Shareholding of our Directors As per the Article of Association of our Company, a Director is not required to hold any shares in our Company to qualify him for the office of Director of our Company. None of our directors are holding the shares in our company in their personal capacity and either as sole or first holder, as at the date of this Draft Letter of Offer, Except Mr. D.G.Prasad who holding 250 equity shares of our company. Interest of Directors All the Directors of our Company may be deemed to be interested to the extent of sitting fees and/or other remuneration if any, payable to them for attending meetings of the Board or a committee thereof as well as to the extent of reimbursement of expenses if any payable to them under the Articles of Association. The Chairman and Managing Director will be interested to the extent of remuneration, if any, paid to him for services rendered by him as an officer or employee of our Company. All the Directors may also be deemed to be interested in the Equity Shares of our Company, if any, held by them, their relatives or by the companies or firms or trusts in which they are interested as directors / members / partners or that may be subscribed for and allotted to them, out of the present Issue in terms of the Draft Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. All the Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by our Company with any other company in which they have direct /indirect interest or any partnership firm in which they are partners. Except as stated otherwise in this Draft Letter of Offer, our Company has not entered into any contract, agreements or arrangement during the preceding two years from the date of this Draft Letter of Offer in which the Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Interest as to Property Except as stated otherwise in this Draft Letter of Offer, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of the Draft Letter of Offer in which the directors are directly or indirectly interested and no payments have been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them. Changes in the Board of Directors in the last three years Name Date of Appointment Date of Cessation Reasons Mr. Suresh H Shah 05.09.1979 05.11.2008 Due to pre occupation Mr. Jinendra Shah 04.05.1996 03.05.2009 Personal Reasons Mr. K U Mada 23.09.1999 27.09.2007 Did not seek reappointment Mr. Ashok Sharma 01.04.2000 15.06.2007 Due to pre occupation Mr. V Rajagopal 01.09.2003 15.06.2007 Due to pre occupation Mr. S Padmanabhan 25.11.2003 05.11.2008 Due to pre occupation Mr. G.S.Dahotre 18.12.2003 23.03.2006 Personal Reasons Mr. K.C.Narang 20.08.2004 23.12.2006 Due to pre occupation Mr. Sanjay Asher 23.12.2006 05.11.2008 Due to pre occupation Mr. Arun B. Shah 23.12.2006 NA Appointed as Director Mr. Richard Saldhana 30.07.2007 06.03.2008 Due to pre occupation Mr. Sushil Jiwarajka 30.07.2007 05.11.2008 Due to pre occupation

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Mr. Haresh G Desai 05.11.2008 NA Appointed as Director Mr. Suhas R Tulijapurkar 05.11.2008 30.09.2009 Due to pre occupation Dr Deepakraj Divan 14.05.2009 NA Appointed as Additional Director Mr. Suresh Sharma 14.05.2009 NA Appointed as alternate Director to

Dr. Deepakraj Divan Mr. Dipankar De 26.05.2009 NA Appointed as Nominee Director of

IDBI Bank Limited Mr. D.G.Prasad 29.08.2009 NA Appointed as Director

ORGANISATION CHART

Head – Special Projects (Chairman’s

Office)

Advisor Utilities & Contracts

Marketing Head – West Zone

Marketing Head –East Zone

Marketing Head –North Zone

Vice President Commercial Operations

Vice President Purchases

National President Marketing

Sr. VP (Finance) & Company Secretary

& Compliance Officer

BOARD OF DIRECTORS

President Manufacturing

Operations

Executive Chairman

Joint Chief Financial Officer

Nashik

Silvasa

Solan

Exports

Research & Development

Marketing Head –South Zone

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CORPORATE GOVERNANCE (Pursuant to Clause 49 of the Listing Agreement)

The Company has complied with SEBI Guidelines, in respect to Corporate Governance especially with respect to composition of its Board of Directors and setting up of necessary committees such as Audit Committee, Shareholders/ Investor Grievance Committee and Remuneration Committee. COMPOSITION OF THE BOARD OF DIRECTORS The Board of Directors of our Company has an optimum combination of executive and non-executive Directors as envisaged in Clause 49 of the Listing Agreement. Our Board has 6 Directors out of which 5 are independent directors in accordance with the requirement of clause 49 of the listing agreement of the stock exchanges. The Executive Chairman of the Board is Mr. Arun B. Shah. S. No. Name of the Director Designation Category

1. Mr. Arun B. Shah Executive Chairman Executive & Non Independent 2. Mr. Haresh G Desai Director Independent 3. Mr. Dipankar De Nominee Director –IDBI Independent & Non Executive 4. Dr. Deepakraj Divan Director Independent & Non Executive 5. Mr. Suresh Sharma Alternate Director to Dr Deepakraj Divan Independent & Non Executive 6. Mr. D.G. Prasad Director Independent & Non Executive

AUDIT COMMITTEE Constitution of Committee Our Company has constituted an Audit Committee, as per the provisions of Section 292A of the Companies Act. Mr. Rasik D Goradia, Company Secretary of our Company acts as the Secretary of the Committee. Seven meetings were conducted during the FY 2008-09. The terms of reference of Audit Committee complies with the requirements of Clause 49 of the listing agreement, which will be entered into with the Stock Exchange in due course. The Audit committee consists 2/3rd of its members as Non-Executive and Independent Directors. Mr. Haresh G Desai is the Chairman of Audit Committee. Composition

S. No. Name of the Director Nature of Directorship 1 Mr. Haresh G Desai – Chairman Independent & Non Executive 2 Dr. Deepakraj Divan – Member Independent & Non Executive 3 Mr. D.G.Prasad- Member Independent & Non Executive

Role of Audit Committee The Terms of reference of the Audit Committee are given below: 1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular references to;

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� Matters, required to be included in the Director’s Responsibility statement be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956. � Changes, if any, in accounting policies and practices and reasons for the same Major accounting entries involving estimates based on the exercise of judgment by management. Significant adjustments made in the financial statements arising out of audit findings. � Compliance with listing and other legal requirements relating to financial statements Disclosure of any related party transactions. Qualifications in the draft audit report. 5. Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval. 6. Reviewing, with the Management, the statement of uses/application of funds raised through an issue (public issue, right issue, preferential issue, etc) the statement of funds utilized for purposes other than those stated in the offer document /prospectus /notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. 7. Reviewing with the Management, performance of statutory and internal auditors, and adequacy of the internal control systems. 8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. 9. Discussion with internal auditors any significant findings and follow up there on. 10. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the Matter to the board. 11. Discussion with the statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 12. To look in to the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. 13. To review the functioning of the Whistle Blower mechanism. Number of Meetings The details of meetings of the Audit Committee held in the financial year 2008 – 2009 are as follows: The Audit Committee met seven times during the year 2008-2009 on 29th May, 2008, 30th June, 2008, 29th July, 2008, 25th October, 2008, 30th October, 2008, 4th/5th November, 2008 and 23rd January, 2009. The attendance of each Audit Committee member is as under: Name of the Audit Committee Members No. of meetings attended Mr. Arun Shah * 6 Mr. S. Padmanabhan ** 5 Mr. Sanjay Asher ** 3 Mr. Haresh G. Desai @ 1 Mr. Suhas R. Tuljapurkar @@ 1

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* Ceased to be Chairman of the Audit Committee w.e.f. 5th November, 2008. ** Ceased to be a Member of the Audit Committee w.e.f. 5th November, 2008. @ Appointed as an Audit Committee Member and Chairman of the Audit Committee w.e.f. 5th November, 2008. @@ Appointed as an Audit Committee Member w.e.f. 5th November, 2008. SHAREHOLDERS / INVESTOR GRIEVANCE COMMITTEE Constitution of Committee Our Company has constituted an Investor Grievance Committee. Mr. Haresh G Desai is the chairman of the Committee. The details of committee members are as under:-

S. No. Name of the Director Nature of Directorship 1 Mr. Haresh G Desai – Chairman Non Executive & Independent 2 Mr. Arun B. Shah – Member Executive & Non Independent

The terms of reference of the Investor Grievance Committee are as follows: The Shareholders / Investor’s Grievance Committee of the Board looks into the redressal of investor’s complaints viz. non-receipt of annual report, dividend payment etc. and matters related to share transfer, issue of duplicate share certificate, dematerializations and also delegates powers to the executives of the Company to process transfers etc. The status on various complaints received / replied is reported to the Board of Directors as an Agenda item. The Board of Directors of the Company have delegated the powers of approving transfer of securities to the Company’s Registrars under the supervision and control of Compliance Officer, subject to placing of summary statement of Transfer / Transmission etc., of securities of the Company at the meetings of the said Committee. Details of Complaints received for the period April 1, 2008 to March 31, 2009 are as follows: S.No Details of Investor Complaints No. of Complaints 1. Complaints pending as on April 01, 2008 Nil 2. Complaints received from April 01, 2008 to March 31, 2009 152 3. Complaints redressed during the period 152 4. Complaints pending at the end of period Nil Details of Complaints received for the period April 1, 2009 to June 30, 2009 are as follows: S.No Details of Investor Complaints No. of Complaints 1. Complaints pending as on April 01, 2009 Nil 2. Complaints received from April 01, 2009 to 30th June 2009 13 3. Complaints redressed during the period 13 4. Complaints pending at the end of period Nil Details of Complaints received for the period July 01, 2009 to September 30, 2009 are as follows: S.No Details of Investor Complaints No. of Complaints 1. Complaints pending as on July, 01, 2009 Nil 2. Complaints received from July, 01, 2009 to 30th September 2009 20 3. Complaints redressed during the period 20 4. Complaints pending at the end of period Nil Number of Meetings During the year 2008-2009, the shareholder’s /Investor Grievances Committee met once ie. 12th February 2009.

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Compensation Committee Our Company has constituted a Compensation Committee, details of which are given below. Mr. Haresh G. Desai is the Chairman of the committee. The Compensation Committee met once Time in the financial year 2008-09

S. No. Name of the Director Nature of Directorship 1 Mr. Haresh G Desai – Chairman Non Executive & Independent 2 Mr. Arun B. Shah – Member Executive & Non Independent 3 Mr. D. G. Prasad – Member Independent & Non Executive

Number of Meetings: The details of meetings of the Shareholder’s /Investor Grievances Committee held in the financial year 2008 – 2009 are as follows Number of Meetings During the year 2008-2009, the Compensation Committee met once ie. 12th February 2009. Number of Board Meetings: During the year, the Board of Directors met eleven times (11) on the following dates:-

29th May, 2008 30th June, 2008 31st July, 2008 14th October, 2008 25th October, 2008 4th/5th November, 2008 26th November, 2008 4th December, 2008 5th January, 2009 23rd January, 2009 30th March, 2009

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Key Managerial Personnel The Key Managerial Personnel of our Company other than our executive Directors as on the date of filing of the Draft Letter of Offer are as follows.

Name Designation &Experience

Duties Age in years

Qualifications Date of Joining

Gross Salary Rs. In Lacs Per Annum

Previous Employment

Mr. M. M. Pangarkar

Technical Advisor – 45 Years

In-charge of Tender Project in India

75 B.E - Electrical

01st May 2002

9.00 Maharashtra State Electrical Board

Mr. Neelakanta Iyer

President – Manufacturing Operation 25 years

Management of Production department

51 BE (E & TC) 2nd April 2007

24.57 M/s. Jabil Circuits, Mumbai

Mr. Subhash Soni

National President Marketing & Distribution - 30 Years

Marketing management Distribution network

54 B.A. 2nd February 2002

18.00 M/s. Osram India Ltd.

Mr. R. D. Goradia

Senior Vice President Finance & Company Secretary 45 Years

Secretarial, Finance & Legal compliances

70 B.Com. (Hons), F.C.A., F.C.S.

05th November 1997

10.20 M/s. Indokem Ltd.

Mr. Snehal Shah

Joint Chief Financial Officer – 25 years

Finance & Accounts

48 B.Com. (Hons), PGDBM, S.A.S.

16th June 2006

15.01 Engaged in Finance and Management Consulting Practice Mumbai

Mr. Anil Vaidya

Vice President – Purchase 20 Years

Purchase department

45 Graduate in Electronics and Diploma in Material Management

18th August 2008

10.84 M/s. Rishab Instruments Pvt. Ltd.- Nashik

Mr. Vishvesh Raval

Head Special Projects – Chairman’s Office 25 Years

Commercial Operations

48 M.Sc. (Electronics), MBA

17th July 2009

9.00 Self Employment

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Profile of our Key Managerial Persons Mr. M. M. Pangarkar, Technical Advisor

Mr. M.M. Pangarkar, aged 75 years is a qualified Electrical Engineer and has been with the Company for the last 8 years as a Technical Advisor. Prior to joining AEL, he was Technical Director with Maharashtra State Electricity Board. He is responsible for AEL’s APDRP projects with State Electricity Board. Mr. Neelakanta Iyer Mr. Neelakanta Iyer, aged 51 years is the President –Manufacturing Operations of our company. He has completed his bachelors’ degree in engineering with specialisation in the field of Electrical and Telecommunication. He has 25 years of experience in the field of manufacturing. Before joining our company, he worked with M/s. Jabil Circuits, Mumbai. Mr. Subhash Soni Mr. Subhash Soni, aged 54 years, is the National President in Marketing & Distribution department. He has completed his Bachelors degree in arts. His expertise is in the field of Marketing & Distribution with 30 years of experience. He is basically looking after the Marketing and Distribution operations in our company. Previously, he worked with M/s. Osram India Limited in the Marketing & Distribution channel. Mr. R.D. Goradia, Sr. Vice President Finance, Company Secretary & Compliance Officer Mr. R.D. Goradia aged 70 years, is the Senior Vice-President Finance & Company Secretary & Compliance Officer in our company. He is a Commerce Graduate, qualified Chartered Accountant and Company Secretary. He has over 45 years of experience in commercial, secretarial and legal areas. He handles finance, legal and secretarial matters and is also the designated Compliance Officer. Previously he was employed with M/s Indokem Limited. Mr. Snehal Shah Mr. Snehal Shah, aged 48 years, is the Joint Chief Financial Officer in our Organisation. He has completed his graduation in Commerce and Post Graduate Diploma Business Management and SAS Examination of the Comptroller and Audit General of India. He has 25 years of experience in the field of finance, accounts and audit in various Public Sector and Private sector listed companies. Previously, he was self-employed and engaged in Finance and Management Consulting Practice. He is basically looking after the financial operations in our company. Mr. Anil Vaidya Mr. Anil Vaidya, aged 45 years, is the Vice-President in our Purchase Department. He has completed his Graduation in Electronics and Diploma in Material Management. He has 20 years of experience in the field of purchase and marketing and distribution. He worked with M/s. Rishab Instruments Pvt. Ltd., Nashik, before joining our company. Mr. Vishvesh Raval Mr. Vishvesh Raval, aged 48 years, is the Head for Special Projects. He has completed his M.Sc in Electronics and MBA from Mumbai University. He has 25 years of rich experience in commercial operations. He is basically looking after the commercial operations in our company. NOTES: � All the employees have adequate experience to discharge the responsibilities assigned to them. � All key managerial personnel are on the rolls of our Company as permanent employees and not related to each

other � The Key Management Personnel mentioned above are not related parties as per the Accounting Standard 18. � There is no understanding with major shareholders, customers, suppliers or any others pursuant to which any of

the above mentioned personnel have been recruited. � As on date of this Draft Letter of Offer, none of our key managerial personnel are holding the Equity shares of

our company except Mr. Snehal Shah, who is holding 100 equity shares, and Mr. R.D. Goradia, who is holding (jointly with his wife) 10 equity shares of AEL.

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EMPLOYEES STOCK OPTION PLAN Employee Stock Option Plan– 2005 (ESOP-2005) During the financial year 2005-2006, the Company had instituted an Employees’ Stock Option Plan as recommended by the Compensation Committee of the Board and has allotted 8,50,000 Equity Shares to the Trust formed in this regard. Our company has obtained listing approval from the Bombay Stock Exchange Limited (BSE) vide letter no: DCS/IPO/RD/ESOP-TP/429/2009-10 and dated August 7, 2009 and we are waiting listing approval from the National Stock Exchange of India Limited (NSE) for listing of 8,50,000 equity shares allotted pursuant to ESOS 2005. The Company modified the Scheme in terms of the provisions of the SEBI ESOP Guidelines and Scheme. Accordingly a Trust called “Asian Electronics Limited Employees’ Welfare Trust” has been constituted vide Trust Deed dated 25th January, 2007 to administer the Scheme under the directions of the Compensation Committee. For the purpose of constitution of the Trust and issue of Equity Shares to the Trust, the current 8,50,000 options granted to the employees have been temporarily relinquished by the employees, to be re-granted with effect from original date of grant, and provisions have been made in the Scheme to that effect. Employee Stock Option Scheme – 2009 (AEL-ESOP-2009) During the financial year 2008-2009, the Company has instituted an Employees’ Stock Option Plan, which has been approved by the shareholders in their Extra-Ordinary General Meeting on February 12, 2009. The shareholders have authorized the company to create, issue and allot such number of shares not exceeding 51,80,057 fully paid equity shares of the face vale of Rs.5/- each to a trust constituted for the benefit of the employees, titled, “AEL-ESOS Trust 2009, under the Scheme titled “ Asian Electronics Ltd – Employees Stock Option Scheme 2009”. Shares allotted to this trust would be allotted to the employees of AEL,. No shares have been allotted to this Trust till date. The Company has made applications to Stock Exchanges for in-principle approval for listing of the shares. The in-principle approval is awaited. No shares have been allotted to this Trust till date. Please refer to the section titled “Capital Structure” beginning on page 17 of the Draft Letter of Offer. Chairman Stock Option Scheme – 2009 (AEL CSOS-2009) Extra-Ordinary General of our company meeting was held on Monday, 12th February 2009 at the Registered Office of the Company and approved the Chairman Stock Option Scheme – 2009, to issue and allot upto 33,20,549 equity shares of Rs. 5/- each aggregating to 10% of the fully diluted equity share capital of the company at an exercise price of Rs. 5/- per option which if exercised would entitle the Chairman to one equity shares of the company for every option exercised, in such manner, during a period of three years in one or more tranches, having a vesting period of one year from the date of grant and an exercise period of one year from the date of vesting. Our company is in receipt of ‘In-Principle Approval’ letter from BSE vide letter no: DCS\IPO\NP\ESOP-IP\545\2009-10; dated 02nd September 2009 and NSE vide letter no: NSE/LIST/117723-2; dated 04th September 2009. Interest of Key Managerial Personnel The key managerial personnel of our Company do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business and to the extent of the Equity Shares held by them in our Company, if any. Bonus or Profit sharing plan for the Key Managerial Personnel We do not have any specific bonus or profit sharing plan for our key managerial personnel.

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Changes in the Key Managerial Personnel in the last Three Years Following are the changes in Key Managerial Personnel in the last three years: S. No.

Name Designation Date of Joining Relieving Date Reasons

1 Ashok Sharma CEO - LG 08/01/88 31/03/09 Resigned 2 Pradeep Visal Head (Finance & Accounts) 19/04/93 30/09/08 Resigned 3 Madhav Baburao

Sayanakar Executive Vice President 14/02/97 30/09/07 Resigned

4 Siddheshwar G. Sakhare Vice President 16/02/99 30/09/07 Resigned 5 Pankaj Sharma Sr. VP 08/02/99 31/03/09 Resigned 6 B L Malani Vice President 01/10/01 30/09/07 Resigned 7 V. Rajagopal Executive Director 01/06/02 31/03/08 Resigned 8 Suraj S Jhawar Head Engineering &

Documentation 01/11/03 01/07/07 Resigned

9 Lalit Bhatia Head Material Management 10/02/03 13/10/07 Resigned 10 Milind Suresh Jadhav Head Commerce 07/06/04 23/10/07 Resigned 11 Monoj Ramesh Rele Vice President 08/01/04 06/08/07 Resigned 12 Rajesh Kumar Jha Vice President Production 27/12/05 07/02/07 Resigned 13 Ratnakar Pundlik Morade V P Product Support 03/02/06 01/06/08 Resigned 14 M K Subramanaya Vice President PPC 13/04/06 05/02/09 Resigned* 15 Jaydeep S Thosar Vice President PLG Mumbai 17/04/06 30/09/07 Resigned 16 A V Anantharaman Executive Vice President 17/04/06 31/03/08 Resigned 17 Snehal Shah Finance & Accounts 16/06/06 NA Appointment18 Aravind N Sharma Vice President Commercial 09/03/06 12/12/08 Resigned ^ 19 Keshav D Limaye Vice President 19/12/06 23/05/07 Resigned 20 Neelakanta Iyer Management of Production

department 02/04/07 NA Appointment

21 R Madhavan President 04/01/07 31/03/09 Resigned 22 Rajesh Jha Vice President Production 09/03/07 24/09/07 Resigned 23 Narayan Iyer Chief Finance Officer 15/10/07 23/01/09 Resigned 25 Anil Vaidya Purchase department 18/08/08 NA Appointment26 Vishvesh Raval Commercial Operations 17/06/09 NA Appointment

* - Rejoined w.e.f. 9.6.2009 ^ - Rejoined w.e.f. 19.5.2009 Interest of Employees Our Company has made an application to BSE and NSE for its in-principal approval for issue and allotment of 8,50,000 Equity Shares to Asian Electronics Employees’ Welfare Trust. Our company has obtained listing approval from the Bombay Stock Exchange Limited (BSE) vide letter no: DCS/IPO/RD/ESOP-TP/429/2009-10 and dated August 7, 2009 and we are waiting listing approval from the National Stock Exchange of India Limited (NSE) for listing of 8,50,000 equity shares allotted pursuant to ESOS 2005. The beneficiaries under the Asian Electronics Employees’ Welfare Trust include the employees and Directors of our Company, and the Equity Shares may be transferred to such employees and Directors at the discretion of the trustees of the Trust, at such price as may be decided by them. Non salary related payment or benefit to our employees / key managerial personnel There has been no other payment or benefit given to the employees / key managerial personnel of our Company other than in accordance with their respective terms of employment.

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OUR PROMOTER Individual Promoter Mr. Arun B. Shah – Individual

Driving License No 02/92/6267 Pass Port No G0450953 PAN No AADPS3674B Voter Identification No N.A. Name of the Bank & Branch HDFC Bank, Worli Branch, Mumbai Bank Account No 00801000050243

DIN No 00007254

Mr. Arun B. Shah, aged 53 years, S/o Mr. Babulal Shah, is the Executive Chairman of Asian Electronics Limited, a Thane based Company specializing in manufacture and marketing of Energy Efficient Lighting Products and Systems. Mr. Arun B. Shah is a Chartered Accountant by profession and has a reputation of Management Buy Out (‘MBO’) type restructuring operations. Mr. Arun B. Shah was in practice before he got associated with the Indage Group of Companies and played a key role in setting up pioneering wine-producing business in India. The company now controls substantial market share of the wine producing and marketing business in India and has a presence globally. Mr. Arun B. Shah took over the management of Asian Electronics Limited; a BSE & NSE listed Company, after the erstwhile Chairman and Managing Director, Mr. Suresh H. Shah, resigned on the grounds of failing health. He became the Non-Executve Chairman of Asian Electronics Limited and started looking after the entire day to day operations of the Company. Soon, he was appointed as the Executive Chairman of the Company. At Asian Electronics Limited, Mr. Arun B. Shah is leading a team of highly qualified professionals, having rich and varied experience in multifarious fields like Finance, Risk Management, Forex management etc.

SEQUENCE OF EVENTS AS TO HOW MR. ARUN B. SHAH HAS BECOME A PROMOTER OF OUR COMPANY

� On 5th November 2008 Mr. Suresh H. Shah (erstwhile promoter) resigned from the post of Director as well

as Chairman & Managing Director of the Company in view of his failing health and his resignation was accepted by the Board and Mr. Arun B. Shah was appointed as the Chairman of the Company to takeover the management of the Company with the immediate effect.

� The new Management team headed by Mr. Arun Shah took over the management of affairs of the

Company subject to approval of the Shareholders of the company. � At the time of change of management, Mr. Suresh Shah, along with Persons Acting in Concert held

1,00,09,190 Equity Shares equivalent to 33.44% of the Paid-up equity share capital of the company, agreed to continue to hold the said Equity Shares of the Company and also continue to remain as “Promoters / Promoter Group” of the Company.

� The Shareholders of the Company at the Extraordinary General Meeting held on 12th February 2009

approved the appointment of Mr. Arun B. Shah as Non-Executive Chairman of the Company pursuant to the provisions of Regulation 12 and other applicable provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and amendments thereto.

� During the period i.e. 5th November, 2008 to 12th February 2009, Executive Director, Mr. Jinendra Shah

was taking care of the day to day management of the affairs of the Company. On 3rd May, 2009, Mr. Jinendra Shah ceased to be Executive Director of the Company consequent to conclusion of his Agreement with the Company.

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� In view of the resignation of Mr. Jinendra Shah, there was no Executive Director to attend to the day to day affairs of the Company. Therefore, the Board of Directors pre-empting such a scenario, at its Meeting held on 23rd April, 2009 appointed Mr.Arun B. Shah as the Executive Chairman of the Company to look after the management of day to day affairs of the Company.

� During the intervening period i.e. 5th November, 2008 to 23rd April 2009, Mr. Arun B. Shah had acquired

sufficient control over the management of the affairs of the Company. Mr. Suresh Shah along with Persons Acting in Concert informed to the Company that they would like to cease to be Promoters / Promoters’ Group Company immediately vide their letters dated 25th September, 2009. Accordingly, they ceased to be Promoters / Promoter’s Group Companies with effect from 26th September, 2009 as informed to the Stock Exchanges on the same date.

� Mr. Arun B. Shah shall be treated or regarded as a Promoter of the Company for all practical purposes. As

on date of filing the Draft Letter of Offer, he is not holding any Equity shares of the company. Change in Management On February 12, 2009, the shareholders of the company approved a change of management control of the company, in terms of provisos 1& 2 of Regulation 12 of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulation 1997 by passing a special resolution. The said resolution was also confirmed by Postal Ballot. Accordingly, a new management team headed by Mr. Arun B. Shah took over the management of the company. Mr. Arun B. Shah was appointed as the Non Executive Chairman and Director of the company and with effect from April 23, 2009; he took over as the Executive Chairman of the Company. For further details, please refer the section titled “History and Other Corporate Information” beginning on page 81 of this Draft Letter of Offer Other Confirmations We confirm that the details of the permanent account numbers, bank account numbers, and passport numbers of our Individual Promoter have been submitted to the Stock Exchanges at the time of filing this Draft Letter of Offer with the Stock Exchanges. Further, save and except as stated otherwise in the chapters titled ‘Business Overview’ and ‘Our Management’ and the section titled ‘Financial Statements’ beginning on page nos. 49, 85 and 109 respectively, of this Draft Letter of Offer, and to the extent of Equity Shares held by them, our Promoter do not have any other interests in our Company as on the date of filing of this Draft Letter of Offer with SEBI. Our Promoters, Promoter Group and Group Companies have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI or any other authorities. None of our Promoter was or also is a promoter, director or person in control of any other company which is debarred from accessing the capital market under any order or directions made by the SEBI Further, our Promoter have not been identified as wilful defaulters by Reserve Bank of India or any other Government Authority and there are no violations of securities laws committed by our Promoter in the past or any such proceedings are pending against our Promoter. Payment or Benefit to our Promoter No payment has been made or benefit given to our Promoter in the two years preceding the date of this Draft Letter of Offer except as mentioned/referred to in this chapter and in the chapter titled ‘Our Management’ and in the section titled ‘Financial Statements’ beginning on pages 85 and 109 respectively, of this Draft Letter of Offer.

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Sales or Purchase between the companies in the Promoter Group There have been no sales or purchases between companies in the Promoter Group of our Company exceeding in value in the aggregate 10% of the total sales or purchases of our Company. Common Pursuits Except as disclosed in this Draft Letter of Offer, none of our Promoter or group companies has an interest in any venture that is involved in any activities similar to those conducted by our Company, or any member of our group companies. We shall adopt the necessary procedures and practices as permitted by law to address any conflict situations, as and when they may arise. For, further details on the related party transactions, to the extent of which our Company is involved, see “Related Party Transactions” on page 141 of this Draft Letter of Offer. Interests of our Promoter The aforementioned Promoter of our Company are interested to the extent of their shareholding in us and the dividend they are entitled to receive, if declared, by our Company. Further, our Promoter who are also the Directors of our Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration if any, reimbursement of expenses payable to them. Our Promoter may also be deemed to be interested to the extent of Equity Shares, if any, already held by their relatives in the Company, and that may be subscribed for and allotted to them, out of the present Issue in terms of this Draft Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said equity shares. Further, our Promoter are also directors on the boards of our group companies and they may be deemed to be interested to the extent of the payments made by our Company, if any, to these group companies. For the payments that are made by our Company to certain group companies, see “Related Party Transactions” on page 141 of this Draft Letter of Offer. Interest in any property acquired by our Company within two years of the date of this Draft Letter of Offer The Promoter is not interested in any property that has been acquired by our Company within two years from the date of filing of this Draft Letter of Offer. PROMOTER GROUP ENTITIES

The natural persons who are part of our Promoter Group (due to the relationship with our Promoter), other than the Promoter named above are as follows: Promoter Name of the Relative Relationship with Promoter Mr. Arun B. Shah Mrs. Ramila Shah Wife Mr. Babulal Shah Father Mr. Nemchand Shah Father’ Father Mrs. Ambaben Shah Father’s Mother Mrs. Jeeviben Desai Mother’s Mother Mr. Kalidas Desai Mother’s Father Mrs. Shantaben Shah Mother Mr. Naman Shah Son Ms. Avni Shah Daughter Ms. Pankti Shah Daughter Mr. Harnish Shah Brother Mrs. Deepika Shah / Mrs. Chandrika Shah Brother’s Wife Mr. Kishore Brother Mrs. Surekha Shah Brother’s Wife

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Ms. Minaxi Sister Mr. Ramesh Sister’s Husband Ms. Ila Sister Mr. Bharat Sister’s Husband b. Companies, firms HUFs and Trusts which form part of our Promoter Group are as follows: Companies

a. Pranamghar (I) Private Limited b. ARSH Advisors and Owners Limited

Partnership Firm

� Nil

HUFs � Nil

Trusts

� Nil

Other Information Other than those stated above, there are no partnership firms, trusts, HUFs, Proprietorships or other entities that are part of the Promoter Group. Sick Companies: None of the companies forming part of our Promoter or group companies have become sick companies within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and none of them is under winding up.

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PROMOTER GROUP The below mentioned companies form part of the Promoter Group

1. M/s. Pranamghar (India) Private Limited (PIPL) Pranamghar (India) Private Limited was incorporated in the State of Maharastra at Mumbai dated 27th March 2000 and Company Identification Number (CIN) U70100MH2000PTC125354. The registered office of PIPL is situated at #F/50, Venus Apartment, 13th floor, R.G.Thadani Marg, Worli Sea Face, Mumbai – 400018 and the corporate office is at Pranamghar, Malviya Road, Opp. Nehru Post Office, Vile Parle (East), Mumbai – 400-057. The authorised share capital of PIPL is Rs.30,00,000 divided into 3,00,000 equity shares of Rs.10/- each and the paid up capital is Rs.1,50,200 divided into 15,020 equity shares of Rs.10/- each as on 1st December, 2009. (A) The main objects of the company to be pursued by the company on its incorporation:-

1. To carry on business of builders, contractors, land & property developers, dealers, brokers, consultants, estate agent and to buy, sell, deal, hold, take or give on lease, develop, reclaim, land or any interest in land whether leasehold or freehold or whether agricultural or non-agricultural and to construct, erect, build, re-build, repair, remodel, demolish, develop, improve, enlarge, grades curve, pave, macadamize and maintain buildings, whether, residential, commercial, or industrial and flats, tenements, towares, structures, houses, apartments, bunglows, offices, godowns, warehouses, Industrial Galas, Hotels, places of worship, and other similar constructions, leveling or paving works and for this purposes to purchase, acquire, hold take an lease any area, land, building, structures, or other construction of any nature.

(B) Objects incidental or ancillary to the attainment of the main objects:-

2. To equip the construction of the Company and/or part there of with all or any amenities or conveniences,

drainage facility, electric, telephonic, television installations and other interior decorations and to deal with the same in any manner whatsoever, and by advancing money to and entering into contracts and arrangement of all kinds with builders, tenants and others.

3. To finance, or assist in sale of houses, buildings, flats, either furnished or by similar transactions and to

institute, enter into, carry on the transaction by subsidise finance or assist in or financing the sale and maintenance of any such houses, buildings, furnished or unfurnished and to act as property agents to undertake work or transaction usually undertaken by auctioneers, or valuers or which might advantageously be carried on by them.

4. To hold, maintain and give right of occupancy or sell, allot houses, apartments, flats, sheds, shops, offices,

godown, premises or parts thereof to the shareholders, debenture holders and depositors or any other person on such terms and conditions as may be deemed fit.

5. To act as agent for the investment, loan, payment, transaction and collection of money and for the purchase,

sale and improvement and management of flats, properties and other immovable properties for individuals, companies and other sanction of society.

Board of Directors: The Board of Directors of PIPL as on 1st December, 2009 are as follows:- S.No Name of Director Designation 1 Mr. Arun B. Shah Director 2 Mr. H.G.Desai Director

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Shareholding Pattern The shareholding pattern of PIPL as on 1st December, 2009 is stated hereunder:- No. Name of Shareholder No. of Shares (%) 1 Arun B. Shah 10,510 69.97 2 Haresh Gunvantrai Desai 4,510 30.03 Total 15,020 100.00 The financial highlights for the last three years are as follows:

(Rs. In lakhs except per share data) Particulars 2008-09 2007-08 2006-07 Equity Capital 1.50 1.50 1.50Reserves & Surplus (89.59) (52.93) 16.74Sales / Income 26.39 3.33 64.83Profit After Tax (32.66) (69.67) 14.23EPS (Rs.) Nil Nil 94.74NAV / per share (Rs.) Nil Nil 120.86

� The equity shares of PIPL are not listed on any stock exchange and it has not made any public or rights issue in the preceding three (3) years. It is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor it is under winding up.

� Further PIPL is not detained as a willful defaulter by the Reserve Bank of India or any other Government

authority and there are no violations of securities laws committed by it in the past or are pending against it. � There are no litigations pending by or against PIPL. Further, no notices were issued against PIPL. � There are no purchases or sales between PIPL and the Company.

2. M/s. ARSH Advisors and Owners Limited (AAOL)

ARSH Advisors and Owners Limited was incorporated in the State of Maharastra at Mumbai dated 1st November 2007 and Company Identification Number (CIN) U74140MH2007PLC175609. The registered office of AAOL is situated at Pranamghar, Malviya Road, Opp. Nehru Post Office, Vile Parle – East, Mumbai – 400-057. As on date of filing the Draft Letter of Offer, the authorised share capital of AAOL is Rs.1250.00 lacs divided into 1,25,00,000 equity shares of Rs.10/- each and the Issued, subscribed and paid up capital is Rs.682.20 lacs divided into 68,22,000 equity shares of Rs.10/- each. The main objects of AAOL are stated hereunder:

� To promote, own, advice, and act as consultant on financial, management, industrial and technical matters. � To conduct the business consultancy including but not limited to the filed of finance, accounting, foreign,

exchange and treasury management, risk management Objects incidental or ancillary to the attainment of main objects:

� To adopt such means of making known the business of this Company as may be considered necessary and in particular by advertising in all forms of media including the press, cinema, wireless, television, broadcasting, books, periodicals, photography, cinematography, exhibition and show-room and any other means of advertising and by granting prizes, rewards and donations and creating trusts for this purpose.

106

� To form, incorporate or promote any Company, Corporate Body or any other entity, to purchase, acquire, undertake or takeover, the whole or any part of the business, profession, goodwill, assets, properties (movable or immovable), contracts, agreements, rights, privileges, interests, effects, obligations and liabilities of any person, firm or Company or Companies carrying on or proposing to carry on any business, profession or activities which the Company is authorized to carry on and/or which in the opinion of the Company could or might directly or indirectly be beneficial or advantageous to this Company and to pay consideration for such formation, promotion, incorporation, purchase, acquisition, takeover in cash or issue and allotment of shares, securities and/or other debt instruments as may be permitted under the Companies Act, 1956.

� To sell, dispose of or transfer the business, property and undertaking or assets of the Company or any part

thereof with or without any consideration which the Company may deem fit to accept and in particular for shares, debentures, debenture stocks, bonds or securities of the other Company or Companies for the purpose of its or their acquiring all or any of the property rights or liabilities of this Company.

� To guarantee the due performance and discharge by committees, guardians, executors, administrators,

trustees, brokers and agents of their respective duties and obligations.

� Subject to the compliance of relevant laws, to accept gift and to give gift, in or outside India, of properties, immovable and movable including but not limited to cash, shares, debentures, units, securities, assigning of insurance policies and the likes, from and to individuals, firms, companies, bodies corporate and trusts with or without conditions as the Board of Directors may deem fit.

Board of Directors: The Board of Directors of AAOL as on 1st December, 2009 are as follows:- S.No Name of Director Designation 1 Mr. Arun B. Shah Director 2 Mr. H.G.Desai Director 3 Mr. Ganapati Jambekar Director Shareholding Pattern The shareholding pattern of AAOL as on 30th November, 2009 is stated hereunder:- No. Name of Shareholder No. of Shares (%) 1 Arun B.abulal Shah 4,940,000 72.41 2 Haresh Gunvantrai Desai 10,000 0.15 3 Ramila Arun Shah 10,000 0.15 4 Smita Haresh Desai 10,000 0.15 5 Avni Arun Shah 10,000 0.15 6 Pankti Arun Shah 10,000 0.15 7 Naman Arun Shah 10,000 0.15 8 Shivanand Shankar Mankekar 838,000 12.28 9 Laxmi Shivanand Mankekar 984,000 14.42 Total 6,822,000 100.00 The financial highlights for the last three years are as follows:

(Rs. In lakhs except per share data) Particulars 2008-09 2007-08 Equity Capital 682.20 669.34Reserves & Surplus 493.81 412.77Sales / Income 6.47 7.00Profit After Tax (24.21) 0.10EPS (Rs.) NA 0.001NAV / per share (Rs.) NA 10.80

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� The equity shares of AAOL are not listed on any stock exchange and it has not made any public or rights issue in the preceding three (3) years. It is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor it is under winding up.

� Further AAOL is not detained as a willful defaulter by the Reserve Bank of India or any other Government

authority and there are no violations of securities laws committed by it in the past or are pending against it. � There are no litigations pending by or against AAOL. Further, no notices were issued against AAOL. � There are no purchases or sales between AAOL and the Company.

Defunct Promoter Group companies There are no defunct Promoter Group Companies. Disassociation by the Promoter in the last three years Our Promoter have not disassociated with any of the companies in the last three years. Related Party Transactions For further details on related party transactions, please refer the Financial Statements beginning on page 109 of this Draft Letter of Offer. Currency of Presentation

In this Draft Letter of Offer, all references to “Rupees” “Rs.” are to the legal currency of India, All reference to “US $”or “U.S. Dollars” are to United States Dollars, the official currency of the United states of America. All references to “£” or “GBP” are to Pounds, the official currency of United Kingdom. All references to “€” are to Euro, the official currency of European Union. All references to “RM” or “MYR” are to Malaysian Ringgit, the Official Currency of Malaysia. Any percentage amounts, as set forth in “Risk Factors”, “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Draft Letter of Offer, unless otherwise indicated, have been calculated on the basis of our financial statements prepared in accordance with Restated Financial Statements prepared as per Indian GAAP. For the convenience of investors, as far as possible the reporting unit has been maintained as Rupees in Lacs.

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DIVIDEND POLICY

The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders of our Company, at their discretion, and will depend on a number of factors, including but not limited to the earnings, capital requirements and overall financial condition. The Board may also from time to time pay interim dividend. The summary of dividends declared by Asian Electronics Limited is as follows: Statement of Dividend Dividend on Preference Shares

(Rs in Lacs) Year Ended No. of Preference Shares of

Rs. 100 each Rate of

Dividend Amount of Dividend

Tax on Dividend

31-Mar-09 Nil Nil Nil Nil 31-Mar-08 Nil Nil Nil Nil 31-Mar-07 Nil Nil Nil Nil 31-Mar-06 87622 (Repaid during the year) 9% 3.94 0.55 31-Mar-05 87622 9% 7.89 1.11

Dividend on Equity Shares

(Rs in Lacs) Year Ended No. of Equity Shares Rate of

Dividend Amount of Dividend

Tax on Dividend

31-Mar-09 2,98,84,944 of Rs. 5 Each Nil Nil Nil 31-Mar-08 2,98,84,944 of Rs. 5 Each Nil Nil Nil 31-Mar-07 1,43,42,472 of Rs 10 Each 45% 651.91 110.60 31-Mar-06 89,42,472 of Rs. 10 Each 25% 223.56 31.36 31-Mar-05 85,02,472 of Rs. 10 Each 18% 153.05 21.46

The amounts paid as dividend in past is not indicative of the company’s dividend policy in the future.

109

SECTION V - FINANCIAL INFORMATION

AUDITORS REPORT To The Board of Directors Asian Electronics Limited D-11, Road No. 28, Wagle Industrial Estate, Thane 400 604 Dear Sirs,

Sub: Your Proposed Rights Offer of 1,53,59,139 Equity shares of Rs.5 each, at a premium of Rs. 15/- per share 1. We have been engaged to examine and report on the financial information of Asian Electronics Ltd. (“the

Company”) annexed to this Report. The said financial information has been prepared by the Company in accordance with the requirements of paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 (the Act) and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“SEBI Guidelines”) issued by the Securities and Exchange Board of India in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992, and in terms of our engagement agreed with you in pursuance of Company’s letter dated August 3, 2009. The financial information is proposed to be included in the Offer Document of the Company in connection with its proposed Rights Issue of Equity Shares.

2. The financial information has been prepared by the Company’s Management from the audited financial

statements for the years ended March 31, 2005, 2006, 2007, 2008 and 2009, which were prepared in accordance with the provisions of the Companies Act, 1956. The preparation and presentation of this financial information is the responsibility of the Company’s Management and has been approved by the Board of Directors.

3. The financial statements of the Company for the year ended March 31, 2009 were audited by us, and the

unaudited financial statements for the six months’ period ended September 30, 2009 were subjected to limited review and reported upon by us in accordance with the Standard on Review Engagement (SRE) 2400, Engagements to Review Financial Statements issued by the Institute of Chartered Accountants of India (ICAI). The financial statements included in this report were audited by RSM & Co., Chartered Accountants for the financial years ended March 31, 2005 and March 31, 2006 and by S.R. Batliboi & Co., Chartered Accountants for the financial years ended March 31, 2007 and March 31, 2008 and accepted by us as correct.

4. The financial information for the above periods was examined to the extent practicable, for the purpose

of audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement. We have reported on the above statement on the basis of information and explanations provided by the management, books and records produced before us and such other tests and procedures, which in our opinion, were necessary for our reporting. These procedures included comparison of the attached financial information of the Company with the respective audited / reviewed financial statements.

5. In accordance with the terms of our engagement with the Company, we have also examined the

following other financial information set out in the following annexures prepared by the Management and approved by the Board of Directors for the purpose of inclusion in the Letter of Offer:-

i. The Restated Summary Statement of Assets and Liabilities of the Company, as at September 30, 2009,

March, 31, 2009, 2008, 2007, 2006 and 2005 as set out in Annexure I to this Report are after making adjustments and regroupings as in our opinion were appropriate. (Refer Annexure – I).

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ii. The Restated Summary Statement of Profit and Loss of the Company, for the half year ended September 30, 2009, and for each of the financial years ended on March, 31, 2009, 2008, 2007, 2006 and 2005 as set out in Annexure II to this Report are after making adjustments and regroupings as in our opinion were appropriate. (Refer Annexure II).

iii. The Restated Cash Flow Statement of the Company for the half year ended September 30, 2009 and

for each of the financial years ended on March 31, 2009, 2008, 2007, 2006 and 2005 as set out in Annexure III to this Report are after making adjustments and regroupings as in our opinion were appropriate. (Refer Annexure III).

As a result of these regroupings, the amounts reported in the summarized financial information may not necessarily be the same as those appearing in the audited/reviewed financial statements for the relevant years/period.

iv. Based on our examination of these Summary Statements we confirm that:-

a. There are no changes in accounting policies adopted by the Company during the period

covered under this report, except that in the year 2007-08, the Company had changed the Accounting Policy on ‘Employee Benefits’ to be in line with the revised Accounting Standard – 15 (AS 15);

b. The exceptional items which need to be disclosed separately in the summary statements, are

appropriately disclosed;

c. Prior years’ profits have been restated for Provision for Depreciation of earlier years written back amounting to Rs. 698.29 Lacs as disclosed in Annexure V for the year ended 31.3.2009. We are unable to express any opinion on the same.

d. No adjustments have been made in the summary statements for qualifications in the Auditors’

Reports of the following years:

� Year ended 31.3.2005 regarding adjustments on account of Impairment Loss whereby Profit for the Year would have been Rs.464.39 Lacs as against the reported Profit of Rs.1077.34 Lacs for the year ended on that date.

� Year ended 31.3.2007 regarding non provision in respect of outstanding Debtors and Assets on operating Lease aggregating to Rs. 3753 Lacs.

� Year ended 31.3.2008 regarding non provision in respect of outstanding Debtors, outstanding Advances and Assets on operating Lease aggregating to Rs. 3652 Lacs.

� Year ended 31.3.2009 regarding non provision in respect of amounts receivable from Maharashtra State Electricity Distribution Co. Ltd., aggregating to Rs. 4114.09 Lacs. (Grouped under Sundry Debtors and Loans and Advances).

The impact on the Profits for the years ended 31.3.2007, 31.3.2008 and 31.3.2009 is presently unascertainable as the amount is under dispute as disclosed in Note 9 of Annexure IV.

v. The Summary of Significant Accounting Policies consistently adopted by the Company, together with

Notes on Accounts for the period ended 30th September, 2009 are enclosed as per Annexure IV to this Report.

vi. The Summary position of Share Capital, Investments, Sundry Debtors, Increase/(Decrease) in Inventory, Loans and Advances and Current Liabilities and Provisions, as at September 30, 2009, March, 31, 2009, 2008, 2007, 2006 and 2005 are enclosed in Annexure XIII to this Report.

vii. The summary statements do not take into account or make any adjustments for the events subsequent to the Audit Reports dated 29th June, 2005, May 17, 2006, July 5, 2007, October 25, 2008 and June 30, 2009.

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6. Other Financial Information

We have also examined the following Other Financial Information prepared by the Management and approved by the Board of Directors relating to the Company for the half year ended September 30, 2009, and for each of the Financial Years ended on March 31, 2009, 2008, 2007, 2006 and 2005 proposed to be included in the Offer Document and annexed to this Report:

i. Statement of Dividends paid (Annexure VI) ii. Statement of Accounting Ratios (Annexure VII)

iii. Statement of Capitalisation as at September 30, 2009 and projected position after Rights Issue (Annexure VIII).

iv. Statement of Secured and Unsecured Loans outstanding as on September 30, 2009, March 31, 2009, 2008, 2007, 2006 and 2005 (Annexure IX).

v. Details of Other Income (Annexure X) vi. Details of Related Party Transactions (Annexure XI)

vii. Statement of Tax Shelter (Annexure XII) In our Opinion, the Financial Information contained in Annexure to this Report read along with the Significant Accounting Policies and Notes to the Accounts and after making adjustments and regroupings as considered appropriate have been prepared in accordance with Part II B of the Act and the SEBI Guidelines. 7. This Report is intended solely for use of the Management and for inclusion in the Offer Document in

connection with the proposed Rights Issue of Equity Shares of the Company and should not be used, referred to or distributed for any other purpose without our prior written consent.

8. This report should neither in any way be construed as a re-issuance or redrafting of any of the previous Audit /

Review Reports issued by us or by other firms of Chartered Accountants nor construed as a new opinion on any financial statements referred to herein.

Yours faithfully, For SORAB S. ENGINEER & CO Chartered Accountants M.P. Antia Partner (Membership No. 7825) Place: Mumbai Date: 1st December 2009 FRN: 110417W

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ANNEXURE I RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES

(Rs. in lacs)

Particulars As at 30.9.09

As at 31.3.09

As at 31.3.08

As at 31.3.07

As at 31.3.06

As at 31.3.05

A Fixed Assets Gross block 9,976.68 9,977.31 14,828.77 13,224.72 11,766.98 11,431.69 Less: Depreciation 5,954.09 5,741.42 8,594.45 8,160.69 7,422.11 6,581.92 Net Block 4,022.59 4,235.89 6,234.32 5,064.03 4,344.87 4,849.77 Capital work in progress 1,100.07 1,100.02 347.26 3,347.64 1,031.54 75.28 Total 5,122.66 5,335.91 6,581.58 8,411.67 5,376.41 4,925.05B Investments 4,783.47 4,783.47 5,059.06 422.86 166.27 27.45

C Current Assets, Loans and Advances

Inventories 9,393.61 8,346.95 9,451.38 10,453.12 6,756.73 4,650.40 Sundry debtors 34,707.22 34,081.71 23,187.17 34,033.86 9,565.48 5,677.09 Cash and bank balances 553.00 567.19 1,071.05 333.89 3,295.23 768.19 Loans and Advances 7,961.26 7,807.29 8,095.92 7,146.99 9,229.74 6,821.07 52,615.09 50,803.14 41,805.52 51,967.86 28,847.18 17,916.75 TOTAL ASSETS (A + B + C) 62,521.22 60,922.52 53,446.16 60,802.39 34,389.86 22,869.25D Liabilities and Provisions Secured Loans 23,211.40 18,406.39 14,792.85 11,504.19 9,746.28 8,323.63 Unsecured Loans 4,322.52 5,478.89 6,009.77 4,997.29 6,133.00 140.00 Current liabilities 12,688.23 15,194.74 10,642.08 7,079.19 3,573.57 2,562.90 Provisions 112.08 86.58 78.47 1,086.25 296.04 183.51

Deferred Tax Liabilities (Net) - - - 642.36 640.87 1,118.79

TOTAL LIABILITIES AND PROVISIONS 40,334.23 39,166.60 31,523.17 25,309.28 20,389.76 12,328.83

E Networth (A)+(B)+(C)-(D) 22,187.00 21,755.92 21,922.99 35,493.11 14,000.10 10,540.42F Represented by: Preference Shares - - - - - 87.62 Equity Shares 1,453.37 1,453.37 1,451.75 1,391.75 894.25 850.25 Equity Share Warrants 314.50 - - 144.00 280.80 - Reserve and surplus 20,381.14 20,381.19 20,354.81 24,474.81 8,645.82 7,427.18

Balance in Profit and Loss Account 37.98 (78.64) 116.88 9,483.26 4,179.23 2,175.37

Total 22,187.00 21,755.92 21,923.44 35,493.82 14,000.10 10,540.42

Miscellaneous Expenditure to the extent not Written Off

- - (0.45) (0.71) - -

Net worth 22,187.00 21,755.92 21,922.99 35,493.11 14,000.10 10,540.42 The accompanying significant accounting policies and notes (Annexure IV) are an integral part of this statement

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ANNEXURE II RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS

(Rs. In Lacs) Particulars As at 30.9.09 As at 31.3.09 As at 31.3.08 As at 31.3.07 As at 31.3.06 As at 31.3.05

INCOME Sales Manufactured Products 6,669.22 18,516.38 19,282.46 33,450.91 8,886.65 3,830.57 Less: Excise duty 97.05 1,049.86 2,183.42 2,776.92 1,004.31 476.52 6,572.17 17,466.52 17,099.04 30,673.99 7,882.34 3,354.05 Traded Products 872.31 3,427.52 4,005.21 3,064.85 3,636.74 2,429.82 7,444.48 20,894.04 21,104.25 33,738.84 11,519.08 5,783.87 Add: Inventory Capitalised - - - - 43.69 47.90 Add: Rent and maintenance charges 68.44 285.25 539.75 3,005.78 4,091.84 4,468.96 Other Income 98.41 223.78 364.64 871.08 432.87 380.89 7,611.33 21,403.07 22,008.64 37,615.70 16,087.48 10,681.62 Increase / (Decrease) in inventories 1,179.05 (703.80) 5,748.82 1,136.92 1,245.52 617.40 Total 8,790.38 20,699.27 27,757.46 38,752.62 17,333.00 11,299.02 EXPENDITURE Material Consumed 5,313.87 12,706.98 14,775.29 18,951.50 8,929.40 4,653.10 Personnel Expenses 527.59 1,341.18 1,700.12 1,388.11 643.15 557.09

Manufacturing, Administrative and Other Expenses

1,042.17 4,222.65 5,596.65 8,536.71 4,016.49 3,462.91

Financial Expenses (Net) 1,573.45 2,130.12 2,112.21 1,272.70 648.83 570.60 Depreciation 216.71 460.82 480.04 745.19 840.19 772.25 Total 8,673.79 20,861.75 24,664.31 30,894.21 15,078.06 10,015.95 Profit/(Loss) before tax and exceptional Items 116.59 (162.48) 3,093.15 7,858.41 2,254.94 1,283.07

Provisions: Current tax - - - 1,012.00 189.87 87.85 Deferred Tax - - 42.72 1.49 (477.92) (45.05)Fringe Benefit Tax - 33.04 39.26 28.42 27.72 - Total - 33.04 81.98 1,041.91 (260.33) 42.80 Profit/(Loss) After tax but before Exceptional items 116.59 (195.52) 3,011.17 6,816.50 2,515.27 1,240.27

Exceptional Items (Net of Taxes) - - (17,881.80) - - (162.74)

Excess provision of Tax for earlier year written back

- - 4.25 - - -

Profit after tax and exceptional items 116.59 (195.52) (14,866.38) 6,816.50 2,515.27 1,077.53

Balance brought forward (78.64) 116.88 9,483.26 4,179.23 2,175.37 1,366.35 Add: As per scheme of arrangement 0.00 - - 5.55 - - Transfer from general reserve 0.00 - 5,500.00 - - - Profit available for appropriation 37.95 (78.64) 116.88 11,001.28 4,690.64 2,443.88 APPROPRIATION Proposed Dividend on Equity - - - 651.91 223.56 153.05 Tax On Equity Dividend - - - 110.60 31.36 21.46 Preference Dividend - - - - 3.94 7.89 Tax On Preference Dividend - - - - 0.55 1.11 Transfer to General Reserve - - - 755.51 252.00 85.00 Surplus Carried to Balance sheet 37.95 (78.64) 116.88 9,483.26 4,179.23 2,175.37

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37.95 (78.64) 116.88 11,001.28 4,690.64 2,443.88 Earning Per share Basic 0.39 (0.65) (50.15) 32.78 29.16 12.58

Diluted 0.39 (0.65) (50.15) 26.68 24.28 12.58

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ANNEXURE III RESTATED CASH FLOW STATEMENT

(Rs in Lacs) Particulars As at

30.9.09 As at

31.3.09 As at

31.3.08 As at

31.3.07 As at

31.3.06 As at

31.3.05 A. CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES:

Profit before tax 116.54 (162.48) (15,473.73) 7,858.41 2,254.94 1,120.33

Adjustments for:

Depreciation / Amortization 216.71 460.82 480.04 745.19 840.19 772.25 Foreign exchange Loss / (Gain) (Net) 22.95 170.89 125.66 (32.94) - -Misc Expenditure written off 0.45 0.26 0.36 - -Loss on sale of fixed assets 0.38 3.41 2.14 0.59 - 6.89 Dividend Income - - - (20.77) - -Interest expenses 1,878.38 3,158.53 2,031.77 1,388.35 779.63 627.39 Interest Income (304.93) (1,028.40) (227.79) (389.96) (98.05) -Exceptional items - 19,377.24 - - 162.74 Sundry credit balances written back (6.93) (3.66) (10.10) (18.04) (58.71) -Bad debts written off 0.86 7.80 269.36 383.50 - -Provision for doubtful debts / advances - 510.79 123.06 120.45 50.00 10.45 Income from investment activities - - - - - (67.35)Operating profit before working capital changes 1,923.96 3,118.14 6,697.91 10,035.14 3,768.00 2,632.70

Movement in working capital: (Increase) / Decrease in Inventories (1,046.66) 1,104.45 (4,611.26) (3,696.39) (2,106.33) (1,196.92)(Increase) / Decrease in Sundry Debtors / Other Receivables (134.76) (11,577.89) (2,347.24) (24,939.38) (3,888.39) (916.82)

(Increase) / Decrease in Loans and Advances (661.59) 426.86 (1,574.99) 1,628.84 (1,947.63) (1,565.77)Increase in Current Liabilities / Provisions (2,481.01) 4,564.43 7,713.47 3,577.74 1,110.50 (63.92)

Cash generated from operations (2,400.06) (2,364.01) 5,877.88 (13,394.06) (3,063.85) (1,110.73)

Direct Taxes paid (net) 0 (177.43) (1,038.69) (488.72) (266.39) (154.40)

Net cash generated from operating activities (2,400.06) (2,541.44) 4,839.19 (13,882.78) (3,330.24) (1,265.13)B. CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of fixed assets (5.46) (996.13) (1,153.04) (3,782.06) (1,300.22) 174.34 Refund of advance given for purchase of property - - 2,498.26 - - -

Proceeds from sale of fixed assets 1.50 1,777.57 2.81 1.02 - 3.93 Purchase of investments in Joint venture Companies - - (276.00) - - -

Purchase of investments - - (4,360.20) (275.59) (138.82) (23.54)Sale of Investments - 275.59 - 19.00 - - Maturity of fixed deposits (net) - (80.74) 14.25 2,294.59 (2,384.97) (91.73)Interest received 304.93 1,028.40 252.17 430.59 38.90 - Dividend received - - - 20.77 - - Deposits with other companies - - 322.71 103.38 (394.42) (10.08)Income from investment - - - - 67.35

Net cash used in investing activities 300.97 2,004.69 (2,699.04) (1,188.30) (4,179.53) 120.27

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C. CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of share capital 314.50 28.00 1,296.00 15,432.34 1,291.44 -Proceeds from issuance of unsecured non convertible debentures 4,574.33 5,000.00 - - -

Repayment of unsecured non convertible debentures - (5,000.00) - - -

Proceeds from borrowings 4,805.01 3,613.55 2,126.85 2,075.62 8,866.66 6,479.12 Repayment of borrowings (1,156.37) (5,105.21) (2,024.73) (1,453.43) (1,451.01) (4,401.40)Interest paid (1,878.38) (3,158.52) (2,031.77) (1,388.35) (779.63) (627.39)Dividend paid - - (755.10) (261.85) (188.00) (155.85)Repayment of preference capital - - (87.62) -Premium on revision of interest - - - (162.74)

Net cash generated from financing activities 2,084.76 (47.85) (1,388.75) 14,404.33 7,651.84 1,131.74 Net increase / (decrease) in cash and cash equivalents (A+B+C) (14.33) (584.60) 751.41 (666.75) 142.07 (13.12)

Cash and cash equivalents at the beginning of the year 240.21 824.81 73.41 740.16 598.09 611.21

Cash and cash equivalents at the end of the year 225.88 240.21 824.81 73.41 740.16 598.09

Reconciliation of cash and cash equivalents

Cash in hand 12.55 95.45 27.19 24.97 23.07 10.53 Balance with scheduled banks - Current account 182.19 32.92 784.15 35.30 675.22 -

- Deposit account 327.23 326.97 246.23 260.48 2,555.07 170.10 - On Margin accounts 19.30 100.00 - - 28.63 565.75 - On unpaid dividend accounts 11.72 11.72 13.35 13.02 12.54 21.68 Balance with Nonscheduled banks National Co-Operative Bank Ltd. 0.12 0.12 0.12 0.12 0.70 0.13 Cash and bank balances as per Balance Sheet 553.11 567.18 1,071.04 333.89 3,295.23 768.19 Less, Long term deposits considered in investing activities (327.23) (326.97) (246.23) (260.48) (2,555.07) (170.10)

Cash and cash equivalents considered for cashflows 225.88 240.21 824.81 73.41 740.16 598.09

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ANNEXURE IV SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2009 1. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Asian Electronics Limited (AEL), established in 1964, is involved in design and manufacturing of Energy Conservation products – specializing in energy efficient lighting solutions. Basis of Preparation The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles, Accounting Standards issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956. The significant accounting policies followed by the Company are stated below: Use of Estimates The preparation of financial statements is in conformity with generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. 1.1. Method of accounting

a. Revenues and Costs are recognized on accrual basis. b. Capital issue expenses are charged to Securities Premium Account. c. Warranty period maintenance cost, being insignificant, is accounted when incurred.

However, in case of ESCO assets, relevant portion of income is accounted net of the warranty costs as estimated.

1.2. Fixed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation & impairment losses, if any. Cost comprises of all expenses attributable for bringing the assets to their working condition for intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

b) Depreciation on fixed assets, other than leased assets, is provided as per useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher as under : - on the fixed assets acquired upto 31.12.1988, on written down value as appearing in the books on

1.1.1989. - on the fixed assets acquired after 31.12.1988 on straight line basis, other than assets lying at Chennai

Division, which are depreciated on written down value method. - assets costing less than Rs.5,000 acquired after 15.12.93 are depreciated at 100%

c) Leased assets are depreciated on straight line basis over the period of lease. d) Patents and Trade marks are amortized over a period of ten years. e) Miscellaneous expenditure is written off over a period of five years. f) Product Development expenditure are amortized over a period of 3-7 years. g) Software is written off over a period of five years. h) Goodwill is amortized using straight line method over a period of five years.

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However, no costs are incurred in respect of para (c) to (h) during the year, and are applicable for historical assets only.

1.3. Impairment a) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. b) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. c) A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. 1.4. Lease rental Where the Company is the lessee Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized. These assets are depreciated on the straight line method over the period of lease. Where the Company is the lessor Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account. Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account. However, upon termination of operating lease, the assets are removed from the fixed assets and reflected under appropriate head of receivables in accordance with the nature of claim and amount. 1.5. Investment Investments are divided in the following segments: i) Investments in subsidiaries and associate business entities made with a view to long term business benefit. ii) Other investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

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1.6. Inventories Inventories are valued as under: � Raw materials, Components, stores and spares: Lower of cost and net realizable value. However, materials

and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on FIFO basis.

� Finished goods: at lower of cost and net realizable value � Work in progress: at lower of cost and net realizable value � Cost in relation to finished goods and work in progress includes cost of material and appropriate share of

maufacturing overheads and includes excise duty payable on uncleared finished goods and excise duty paid on goods cleared but unsold.

� Cost of consumable spares purchased during the year is charged to the profit and loss account. � Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of

completion and estimated costs necessary to make the sale. 1.7. Revenue recognition 1.7.1. ESCO: The Company’s business includes supplies of products and/or services and contracts in the nature of energy savings and linked payments over long term in excess of a year. The contracts involve supply, installation and future maintenance of lights at locations. They are more popularly known as ESCO contracts. The contracts are generally with Municipal Corporations and Government Bodies. The nature of contracts involves free replacements in case of defects. Considering the various implications, the Company accounts for the transactions in the following manner:

a) Sales: Equipment manufactured and supplied under the above contracts is recognized as sales at Net Present Value (NPV) by discounting the future receivables for interest and maintenance.

b) Future Maintenance Expenses: The expenses are accounted for as and when they are incurred. c) Interest Income: Interest income (i.e. the difference between the Contract Value and the Sales at NPV) is

accounted on accrual basis over the tenure of the contract. d) Liabilities: Any specific term loan taken is shown separately under the head of Secured Loan. e) Assets: Any amounts receivable under the above contracts are shown under a separate head. The assets

include rights over products and receivables. 1.7.2. Others

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

a) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and on completion of installation. Sales are recorded net of sales tax but include excise duty.

b) Income from annual maintenance service contract is recognized on a straight line basis over the period of contracts. Income from other service contracts is recognized on completion of the service rendered.

c) Income in respect of goods sold on deferred sales basis is recognized as sales at normal sale price. Finance income is recognized over the terms of the payment.

d) Income from supply/erection of equipments/systems is recognized based on dispatches to customer/work done at project site.

e) Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

f) Dividend is recognized when the shareholders’ right to receive payment is established by the balance sheet date.

g) Revenue from projects is recognized on acceptance of the work under the project by the respective project authorities.

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1.8. Retirement and other employee benefits

a) Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

b) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

c) Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

d) Actuarial gains / losses are immediately taken to profit and loss account and are not deferred. 1.9. Foreign currency translation

a) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

b) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

c) Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise except those arising from investments in non-integral operations. Forward Exchange Contracts are not intended for trading or speculation purposes The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

1.10. Taxes on Income Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets on unabsorbed depreciation and unabsorbed tax losses are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. 1.11. Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 1.12. Provisions A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. 1.13. Cash and Cash Equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 1.14. Contingent Liabilities, if any, are disclosed by way of notes to accounts. 2. Adjustments/ restatements in financial information Statement of adjustments / restatements made in the financial information is set out in Annexure V. 3. Scheme of Arrangement between Asian Electronics Limited and Asian Raymold Lighting Pvt. Ltd. During the Financial Year 2005 – 06, the company has approved the Scheme of Arrangement (the Scheme) between Asian Raymold Lighting Pvt. Ltd. (ARLPL) and Asian Electronics Limited (the Company) vide Board Resolution dated June 29, 2005 and shareholders approval dated September 26, 2005. Pursuant to the Scheme of Arrangement as approved by the Shareholders at the Court convened meeting held on 26th September 2005 and subsequently sanctioned by the Honorable High Court of Bombay and Honorable High Court of Chennai respectively, a. Assets and Liabilities of Lighting division of ARLPL were transferred to and vested in the Company with

retrospective effect from 1st April 2005, being the appointed date.

b. The operations of ARLPL include manufacture and sale of Lighting fixtures.

c. The amalgamation has been accounted for under the purchase method as prescribed by Accounting Standards (AS – 14) issued by the Institute of Chartered Accountants of India. Accordingly, all the assets and liabilities of

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ARLPL were transferred and vested in the Company at their book values with effect from the appointed date i.e. 1st April 2005.

d. Pursuant to the Scheme, 4,00,000 Equity Shares of Rs. 10/- each fully paid up of AEL have been issued in the financial year 2006-07 to the Shareholders of ARLPL other than the Company at a premium of Rs. 65/- per Equity Share as and by way of consideration.

e. The difference between the book value of the net assets of ARLPL transferred and vested in the Company and the amount credited by the Company to Share Capital Account including premium has been debited to Goodwill Account.

f. Goodwill is amortized using a straight line method over a period of five years.

4. Contingent Liabilities (Rs. in Lacs)

Particulars As at 30.9.09 As at 31.3.09 As at 31.3.08 As at 31.3.07 As at 31.3.06 As at 31.3.05Claims against the Company not acknowledged as debts – Refer Note (a) 676.46 633.16 546.55 452.33 481.15 1224.15Guarantees given by the bankers on behalf of the Company 2800 3045.04 2949.56 2,659.36 1314.62 1213.46Guarantee given by the company on behalf of Creditors 0 0 0 0 2100 0Bills/LC discounted with banks 0 1574.81 0 0 0 0Outstanding Letters of credit 3480 5961.87 3264.85 266.00 628.31 510.43Disputed income tax demand – Refer Note (b) 232.87 232.87 232.87 169.15 169.15 123.70Disputed Sales tax demand – Refer Note (c) 118.37 118.37 118.37 118.37 132.70 31.93

Total 7307.70 11566.12 7112.20 3,665.21 4825.93 3103.81 Notes: a. The above claims include a dispute with a finance company relating to lease transactions entered in the year 1997. These disputes were under arbitration. During the year 2005-2006, awards were given by the arbitrator directing the Company to compensate the finance company for the losses suffered by them due to disallowances of certain claims. The award also stipulated that the finance company should refund the amount to the Company on succeeding in further appeals. The Company’s Arbitration Petition in the High Court of Bombay for setting aside the award passed by the Honourable Arbitrator on 23rd March 2006 has been dismissed. Aggrieved by the said order the Company has preferred an appeal in the Second Bench of the Honourable High Court of Mumbai, which was also dismissed. Aggrieved by the said order of the 2nd Bench of the High Court, the Company has filed Special Leave Petitions (Civil) No. 14865/2007 and No. 15093/2007. The Honourable Supreme Court granted an interim stay on the impugned orders on deposit of Rs.200 lacs with the Supreme Court Registry which the Company has deposited. The matter is pending in the Supreme Court. b. The Company has not provided for disputed tax liability of Rs. 232.87 Lacs (Previous year - Rs. 232.87 Lacs) arising from disallowances made in assessments which are pending with Appellate Authorities for its decision. Against this, the Company has made advance payments of Rs. Nil (Previous year - Rs. NIL) c. The Company has not provided for disputed sales tax liability of Rs. 118.37 Lacs (Previous year - Rs. 118.37 Lacs) arising from disallowances made in assessments which are pending with Appellate Authorities for its decision. 5. Capital Commitments

(Rs. in Lacs) Particulars As at 30.9.09 As at 31.3.09 As at 31.3.08 As at 31.3.07 As at 31.3.06 As at 31.3.05

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances).

Nil Nil Nil 1,031.75 60.82 7.61

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6. Deferred Taxation Deferred Tax Liability on account of

(Rs. in Lacs) Particulars As at

31.03.2008 As at

31.03.2007As at

31.03.2006As at

31.03.2005 Difference of Book Depreciation & Tax Depreciation

711.75 747.31 996.64 1231.99

Others 0 0 0 1026.59 Total Deferred Tax Liability 711.75 747.31 996.64 2258.58

Deferred Tax Assets on account of Particulars As at

31.03.2008 As at

31.03.2007As at

31.03.06 As at

31.03.2005Provision for doubtful debts / advances 685.08 75.38 32.94 15.80Effect of expenditure debited to profit and loss account in the current year but allowed for tax purposes in following years

26.67 29.57 0 10.34

Carried forward Losses/unabsorbed Depreciation 322.83 1113.65Total Deferred Tax Assets 711.75 104.95 355.77 1139.79Net Deferred Tax Liabilities - 642.36 640.87 1118.79 In terms of the provisions of the Accounting Standard – 22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India, there is a net deferred tax asset on account of accumulated losses and unabsorbed depreciation in the year ended 31st March 2009 and half year ended 30th September 2009. In compliance with the provisions of the Accounting Standard and based on General Prudence, the company has not recognized the deferred tax asset while preparing the accounts for the year ended 31st March 2009 and half year ended 30th September 2009. 7. Particulars of Unhedged Foreign Currency Exposures as at Balance Sheet Date

Particulars INR Rs. in Lacs USD EURO POUND

2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07

Imports 2298.36 259.33 5397681.50 5,87,420.89 43190.39 3,384.57 - -

Exports 2956.56 2846.01 3813656.35 42,46,917.99 2311002.97 17,74,507.11 - -

Investments 283.36 283.36 10000.00 10,000.00 4,80,457.65 4,80,457.65 4,750.00 4,750.00

Bank Balance 9.87 10.61 1627.54 1832.54 14765.23 17147.63 - -

There were no unhedged foreign currency exposures as at 31st March 2009 and 30th September 2009. 8. The Company has given certain assets on operating lease, other than those assets given to Maharashtra State Electricity Distribution Company Ltd. (‘MSEDCL’) which are in dispute as explained in Note no. 9 below, some of which are acquired on lease. Future lease rentals receivable against the said assets on lease as on September 30, 2009 is Rs.122.26 Lacs ( March 31, 2009 Rs. 185.18 Lacs). The Company has not considered the future lease rentals receivable on these leased assets in the current financial statement. 9. During the financial year 2006-07, the contract for Lease Equipment with Maharashtra State Electricity Distribution Company Ltd. (‘MSEDCL’) had been terminated w.e.f. 18th December, 2006 in view of the breach of the terms of the said contract by MSEDCL. The Company had initiated arbitration proceedings under the agreement, and arbitration proceedings are in progress. The company has lodged a claim of Rs. 15709 lacs including the value of Leased Equipments. Consequently, during the year, the Company has treated the book value (as at 1st April, 2008) of

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the Leased Equipments, being Fixed Assets, amount outstanding for Lease Rent and Advances up to the date of termination aggregating to Rs. 4114.08 Lacs as Claims Receivables from MSEDCL and shown separately under Current Assets considering it as good and recoverable. The difference between the book value of Leased Equipments as at 1st April 2008 and that as on the date of termination i.e. 18th December 2006 amounting to Rs. 698.29 Lacs is attributable to depreciation charged after the date of termination. (Refer Annexure V) The Company has not recognized income from the operating lease under the said contract after 18th December, 2006. The total amount of such lease rentals not recognized by the Company for the half year ended 30th September, 2009 is Rs. 828 lacs (for the year ended 31st March, 2009 is Rs. 2166.30 lacs), amount not recognized as revenues from the date of dispute till 30th September, 2009 is Rs. 6518.37 lacs, (till 31st March, 2009 is Rs.5690.37 lacs). Total rental recoverable from MSEDCL under dispute is Rs. 11,369.67 Lacs. 10. During the financial year 2005-2006, the Company has instituted Employees’ Stock Option Plan. The Compensation Committee of the Board evaluates the performances and other criteria of employees and approves the grant of options. These options vest with employees over a specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company’s Shares at a price determined on the date of grant of options. The particulars of option granted during the financial year 2005-06 and outstanding as at 30th September, 2009 are as under:

Particulars Shares arising out of options Outstanding at the beginning of the year 8,50,000Forfeited during the year NILOptions exercised during the year NILOutstanding at the end of the year 8,50,000

The Company modified the Scheme in terms of the provisions of the SEBI ESOP Guidelines and Scheme. Accordingly a Trust called “Asian Electronics Limited Employees’ Welfare Trust” has been constituted vide Trust Deed dated 25th January, 2007 to administer the Scheme under the directions of the Compensation Committee. For the purpose of constitution of the Trust and issue of Equity Shares to the Trust, the current 8,50,000 options granted to the employees have been temporarily relinquished by the employees, to be re-granted with effect from original date of grant, and provisions have been made in the Scheme to that effect. The Company has already allotted 8,50,000 Shares to the Trust on 31st March, 2007 at a price of Rs. 86.50 per Equity Share to be eventually allotted to the employees of the Company on exercise of option by them in due course of time. The Company has also given advance of Rs. 735.25 Lacs to the Trust for the purpose. The balance outstanding as on 30th September, 2009 is Rs. 707.25 Lacs (31st March, 2009 Rs.707.25 lacs) which is adjusted against Share Capital and Securities Premium Account. The Company has received an in-principle approval for listing of the shares from Stock Exchanges where the securities are listed on 29th May 2009. 11. The Company had entered into the business of manufacture and sale of plant and machinery in the earlier years for converting Waste into Energy and had also agreed to issue shares in lieu of certain exclusive and perpetual rights. Some minority shareholders of the company, which owns the technology, have challenged the rights of the Company before Company Law Board and the matter is pending. Also, there was an accident in the Research & Development in the previous year where a plant was under modification. The Company called back the plants supplied so far and pending resolution of such dispute decided to suspend the business of manufacture of plant and machinery and withdraw the scheme of arrangement wherein further issue of shares of the Company was contemplated. As a result, the net assets (net of tax effect) of the Oil business amounting to Rs. 17,881.80 Lacs was provided in 2007-08 as an exceptional item. 12. The Company’s products have warranty clause for a period of 24 months. Provision for warranty claims has not been considered as the amount of claim on sale under warranty is estimated to be not material.

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13. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of the business. The provisions for all known liabilities are adequate. 14. Balances of Sundry Debtors, Loans and Advances and Sundry Creditors are subject to confirmations, reconciliation and consequential adjustments, if any. 15. Employee Benefits – Gratuity Till March 31st, 2007, the company was providing for retirement benefits based on actuarial valuation. In the Financial Year 2007 – 08 the Company has gone for the adoption of the Accounting Standard – 15 (Revised) which is mandatory from accounting periods starting from December 7th, 2006. Accordingly, the Company has provided for Gratuity and Leave Encashment based on actuarial valuation done as per projected unit credit method. Although this was a change in the accounting policy, the effect of transitional provision, being not material, was given in the Profit and Loss Account for the Financial Year 2007 – 08 and consequently no restatement for the same has been given in respect of the earlier years. Defined Benefit Plans – The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed five years or more of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The Company has provided for gratuity and leave encashment based on actuarial valuation done as per Projected Unit Credit Method. The following tables summarise the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans. Profit and Loss account

Particulars 2008-09 2007-2008 Net employee benefit expense (recognized in Employee Cost) (Rs. in Lacs) (Rs. in Lacs) Current service cost 13.27 12.45Interest cost on benefit obligation 6.85 5.59Expected return on plan assets (7.42) 3.82Net actuarial Losses / (Gains) recognized in the year (12.29) (5.56)Past service cost - -Net benefit expense 0.41 8.66Actual return on plan assets (11.09) 3.82

Balance Sheet

Particulars 31.03.2009 31.03.2008 Details of benefit obligation: Rs. In Lacs Rs. In Lacs Defined Benefit Plan obligations 52.77 81.26Fair value of plan assets 71.56 55.30 (18.79) 25.96Less – Unrecognized past service cost - -Plan Liability (18.79) 25.96

Particulars 2008-2009 2007-2008 Changes in the present value of the defined benefit obligation are as follows:

Rs. In Lacs Rs. In Lacs

Opening defined benefit obligation 81.26 69.86Current service cost 13.27 12.45Interest cost 6.85 5.59Benefits paid (17.81) 1.08

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Actuarial Losses / (Gains) on obligations (30.80) (5.56)Closing defined benefit obligation 52.77 81.26

Changes in the fair value of plan assets are as follows:

Particulars 31.03.2009 31.03.2008 Rs. In Lacs Rs. In Lacs Opening fair value of plan assets 55.30 45.30Expected return 7.42 3.82Contributions by employer 45.16 7.27Benefits paid (17.81) 1.08Actuarial gains / (Losses) (18.51) -Closing fair value of plan assets 71.56 55.30

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows.

Particulars 31.03.2009 31.03.2008 Category of Assets % % Investment with Insurer 100% 100%

The principal assumptions used in determining benefit obligations are shown below:

Particulars 31.03.2009 31.03.2008 Discount 8.00% 8.00% Expected rate of return on plan assets 8.00% 8.42% Expected rate of salary increase 5.00% 5.00% Mortality Pre-retirement Indian Assured

Lives Mortality (1994-96)

Indian Assured Lives Mortality

(1994-96) 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. 16. Interest in Joint Ventures ii) The Company has a 50% interest in a Joint Venture Company, Midcom Magnetics Management Pvt. Ltd., incorporated in India, which is involved in research and development of imaging system. The Company’s proportionate share of the assets, liabilities, expenses and income of the jointly controlled entity as per Unaudited Accounts as at 31st March 2009 are as follows: (Rs. Lacs)

Particulars 31.03.2009 31.03.2008 Assets 157.65 153.90Liabilities 7.86 7.31Income 133.27 156.10Expenses 127.95 151.76

There are no contingent liabilities and capital expenditure commitments of the Joint Venture. iii) The Company has a 42% interest in a Joint Venture Company, Home Lighting India Ltd., incorporated in India, which is involved in selling of home lighting products in organized retail sector which include designer ambience and mood lighting. The Company’s proportionate share of the assets, liabilities, expenses and income of the jointly controlled entity as per Unaudited Accounts as at 31st March 2009 are as follows:

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(Rs. Lacs) Particulars 31.03.2009 31.03.2008 Assets 444.55 223.58Liabilities 317.04 97.19Income 597.37 250.62Expenses 595.98 239.69

There are no contingent liabilities and capital expenditure commitments of the Joint Venture. iv) The Company has a 50% interest in a Joint Venture Company, Asian Retail Lighting Ltd., incorporated in India, which is involved in providing lighting solution to retail industry. The Company’s proportionate share of the assets, liabilities, expenses and income of the jointly controlled entity as per Unaudited Accounts as at 31st March 2009 are as follows:

(Rs. Lacs) Particulars 31.03.2009 31.03.2008 Assets 674.33 604.50Liabilities 478.48 409.52Income 1301.37 1578.78Expenses 1297.68 1539.24

There are no contingent liabilities and capital expenditure commitments of the Joint Venture. Accounts of the above three entities as on 30th September, 2009 are not available. 17. Segment Information Upto the Financial Year 2007 – 08 the Company was disclosing the information as required under Accounting Standard – 17 i.e. Segment Reporting. However in the Financial Year 2008 – 09, Segment reporting is not applicable, as more than 90% of the revenue comes from a single business segment i.e. Manufacture of Lighting Products which provides Energy Efficient Lighting. There is only one geographical segment. 18. Consolidation Upto the Financial Year 2007 – 08, the Company was having a subsidiary Asian Electronics LLC, USA and a step down subsidiary Asian Electronics LUX LLC, USA. Asian Electronics LLC ceased to be a Subsidiary from 30th March 2008 whereas Asian Electronics LUX LLC, USA ceased to be a step down subsidiary from 30th September 2007. As on 30th September, 2009 the Company did not have any Subsidiaries. Consequently neither the restated standalone Financial Statements of the erstwhile Subsidiaries nor the restated Consolidated Financial Statements for the earlier years have been given. 19. Figures for the previous years have been regrouped and reclassified wherever necessary. 20. Related Parties Disclosure Name of the related parties where control exists irrespective of whether transactions have occurred or not: a. Subsidiary

� Asian Electronics LLC, USA (Upto 30.03.2008) � Asian Electronics LUX LLC, USA (Upto 30.09.2007) (Step down subsidiary) � Indicos Information Technology Pvt. Ltd. (upto 31.03.2005)

b. Joint Venture:

� Midcom Magnetics Management Private Limited

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� Asian Retail Lighting Limited � Home Lighting India Limited

c. Associate

� STS PCB, Ireland (Upto 31.03.2007) d. Key Management Personnel

� Mr. Arun Shah, Chairman (From 4.11.2008) � Mr. Suresh Shah (Chairman upto 4.11.2008) � Mr. Jinendra Shah, Executive Director (up to 3. 5. 2009) � Mr. Ashok Sharma, Executive Director (upto 15.06.2007) � Mr. V. Rajagopal, Executive Director (upto 15.06.2007)

e. Relatives of Key Management Personnel

� Ms. Usha Shah, wife of Mr. Suresh Shah � Ms. Harshada Shah wife of Mr. Jinendra Shah

f. Enterprises over which any person specified in (c) or (d) above is able to exercise significant influence. This

includes enterprises owned by directors or major shareholders of the reporting enterprise and enterprises that have a member of key management in common with the reporting enterprise

� Shah Investments Financial Developments & Consultants Private Limited � U. S. Instruments Private Limited � K. Virji & Company Pvt. Ltd. � Indage Vintners Limited � Sirius Capital Services Limited � Indage Restaurants and Leisure Limited � Pranamghar (India) Private Limited � ARSH Advisors and Owners Limited � MNR Engineering Private Limited � Dalal Desai and Kumana (Partnership Firm) � Monal Plastics & Chemicals Pvt. Ltd. (upto 31.03.2007)

Note: Related Party relationship is as identified by the Company and relied upon by the Auditors.

Refer Annexure XI for Related Parties Transactions.

129

Annexure - V Statement of adjustments/restatements in the financial information

(Rs. Lacs)

Particulars 30.09.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005 Remarks

Profit / (Loss) after Tax as Per Audited / reviwed Financial Statements

116.59 502.77 (15,410.99) 6,662.82 2,515.27 1,077.53

Depreciation Impact Nil (698.29) 544.61 153.68 - -

The difference between the book value of Leased Equipments as at 1st April, 2008 and that as on the date of termination i.e. 18th December, 2006 amounting to Rs. 698.29 Lacs is attributable to depreciation charged after the date of termination. Accordingly this amount is shown as an Exceptional Item (Refer Note No. 9 of Annexure IV)

Restated Profit / (Loss)

116.59

(195.52)

(14,866.38)

6,816.50

2,515.27

1,077.53

130

ANNEXURE VI A) Statement of Dividend Dividend on Preference Shares

Year Ended No. of Preference Shares of Rs.

100 each Rate of

Dividend

Amount of Dividend

(Rs in Lacs) Tax on Dividend 30-Sep-09 Nil Nil Nil Nil 31-Mar-09 Nil Nil Nil Nil 31-Mar-08 Nil Nil Nil Nil 31-Mar-07 Nil Nil Nil Nil 31-Mar-06 87,622 (Repaid during the year) 9% 3.94 0.55 31-Mar-05 87622 9% 7.89 1.11

Dividend on Equity Shares

Year Ended No. of Equity Shares Rate of

Dividend

Amount of Dividend

(Rs in Lacs) Tax on Dividend 30-Sep-09 2,98,84,944 of Rs. 5 Each Nil Nil Nil 31-Mar-09 2,98,84,944 of Rs. 5 Each Nil Nil Nil 31-Mar-08 2,98,84,944 of Rs. 5 Each Nil Nil Nil 31-Mar-07 1,43,42,472 of Rs 10 Each 45% 651.91 110.60 31-Mar-06 89,42,472 of Rs. 10 Each 25% 223.56 31.36 31-Mar-05 85,02,472 of Rs. 10 Each 18% 153.05 21.46

13

1

AN

NEX

UR

E V

II

Stat

emen

t of A

ccou

ntin

g R

atio

s S N

o Pa

rtic

ular

s U

pto

Sept

. 09

200

8-09

2

007-

08

200

6-07

2

005-

06

200

4-05

1 R

esta

ted

Prof

it / (

Loss

) Aft

er ta

x be

fore

Exc

eptio

nal

item

R

s. In

Lac

s

116.

59

(1

95.5

2)

3,01

1.17

6,81

6.50

2,51

5.27

1,24

0.27

Pref

eren

ce D

ivid

end

Rs.

In L

acs

-

- -

-

3.94

7.89

Tax

on P

refe

renc

e D

ivid

end

Rs.

In L

acs

-

- -

-

0.55

1.11

2

Res

tate

d N

et P

rofit

/(Lo

ss) a

fter

tax

befo

re E

xcep

tiona

l ite

m

Rs.

In L

acs

11

6.59

(195

.52)

3,

011.

17

6,

816.

50

2,

510.

78

1,

231.

27

Ex

cept

iona

l Ite

ms (

Net

of T

axes

)

- -

(1

7,88

1.80

) -

-

(162

.74)

Ex

cess

pro

visi

on o

f Tax

for e

arlie

r yea

r writ

ten

back

- -

4.

25

- -

-

3 R

esta

ted

Prof

it/(L

oss)

ava

ilabl

e fo

r E

quity

Sha

reho

lder

s (F

or B

asic

EPS

) R

s. In

Lac

s

116.

58

(1

95.5

2)

(14,

866.

38)

6,

816.

50

2,

510.

78

1,

068.

53

4

Adj

ustm

ents

on

acco

unt o

f con

vers

ion

of D

eben

ture

s in

to e

quity

shar

es a

nd ta

x sa

ving

on

inte

rest

ther

eon

Rs.

In L

acs

- -

- -

42

.88

-

R

esta

ted

Prof

it/(L

oss)

ava

ilabl

e fo

r E

quity

Sha

reho

lder

s (F

or D

ilute

d E

PS)

Rs.

In L

acs

11

6.58

(195

.52)

(1

4,86

6.38

)

6,81

6.50

2,55

3.66

1,06

8.53

5

Wei

ghte

d A

vera

ge n

umbe

r of

Equ

ity S

hare

s out

stan

ding

at

the

end

of Y

ear

for:

a)

Bas

ic E

PS

Num

bers

29

8849

4429

8849

4429

6449

4420

7961

4917

2249

4417

0049

44

b) D

ilute

d EP

S N

umbe

rs

2988

4944

2988

4944

2964

4944

2550

1716

2103

4944

1700

4944

6 N

umbe

r of

Equ

ity S

hare

s Out

stan

ding

at t

he y

ear

end

Num

bers

29

8849

4429

8849

4429

8849

4428

6849

4417

8849

4417

0049

447

Net

wor

th in

clud

ing

War

rant

s R

s in

Lacs

22,1

86.9

9

21,7

55.9

1

21,9

22.9

9

35,4

93.1

1

14,0

00.1

0

10,5

40.4

2 8

Equi

ty W

arra

nts

Rs i

n La

cs

31

4.50

-

-

144.

00

280.

80

-

9 N

etw

orth

exc

ludi

ng W

arra

nts

Rs i

n La

cs

21

,872

.49

21,7

55.9

1

21,9

22.9

9

35,3

49.1

1

13,7

19.3

0

10,5

40.4

2

13

2

10

Acc

ount

ing

Rat

ios

a) B

asic

EPS

A

fter E

xcep

tiona

l Ite

m (3

)/(5)

(a)

Rup

ees

0.

39

(0

.65)

(50.

15)

32

.78

14

.58

6.

28

B

efor

e Ex

cept

iona

l Ite

m (2

)/(5)

(a)

Rup

ees

0.

39

(0

.65)

10.1

6

32

.78

14.5

8

7.24

b) D

ilute

d EP

S

A

fter E

xcep

tiona

l Ite

m (3

)/(5)

(b)

Rup

ees

0.

39

(0

.65)

(5

0.15

)

26.7

3

12

.14

6.

28

B

efor

e Ex

cept

iona

l Ite

m

Rup

ees

0.

39

(0

.65)

10.1

6

26

.73

12.1

4

7.24

c)

Net

Ass

et V

alue

(9)/(

6)

Rup

ees

73

.19

72

.80

73.3

6

123.

23

76

.71

61.9

8

d)

Ret

urn

on N

etw

orth

(3)/(

9)

0.

53%

-0.9

0%-6

7.81

%19

.28%

18.3

0%10

.14%

Con

sequ

ent u

pon

the

stoc

k sp

lit e

ffec

ted

durin

g th

e ye

ar 2

007-

08, b

y th

e co

mpa

ny b

y su

b-di

vidi

ng e

ach

equi

ty sh

are

of R

s. 10

/- in

to 2

equ

ity sh

are

of R

e.5/

- eac

h, th

e nu

mbe

r of e

quity

sh

are

for t

he p

revi

ous y

ears

has

bee

n re

stat

ed a

s per

the

requ

irem

ents

of A

ccou

ntin

g St

anda

rd 2

0- “

Earn

ings

per

shar

e”.

133

ANNEXURE VIII (Rs. in Lakhs)

Capitalization Statement Particulars Pre Issue as at 30 September 2009 Adjusted for issue Borrowings: Long Term 23,211.40 23,211.40 Short Term 4,322.52 4,322.52Total Debts 27,533.92 27,533.92 Shareholders Fund: Equity Share Capital 1,453.37 2263.00Equity Share Warrants 314.50 231.17Reseves & Surplus General Reserves - - Capital Redemption Reserves 87.62 87.62 Profit and Loss Account 37.93 37.93 Securities Premium Account 19,647.34 22,242.88 Capital Reserves 321.23 321.23 Special Reserves 325.00 20,419.13 325.00 23014.67Total Shareholders Funds 22,187.00 25,508.84Long Term Debt/Equity Ratio 1.24 1.08

Notes:-

a) Post Issue position in respect of Borrowings is based on assumptions made by the Management b) The above ratio has been calculated on the basis of statement of Assets and Liabilities as restated as

at 30th September 2009 c) The capitalization statement, adjusted for Rights issue is prepared on the assumption that the

proposed rights issue of 1,53,59,139 Equity Shares @ Rs.20 per share will be fully subscribed. d) On 1st December 2009, the company has allotted 8,33,333 equity shares pursuant to conversion of

warrants on exercise of options by an Investor at Rs. 40/- per warrants which has resulted in reduction in amount of equity share warrants from Rs. 314.50 lacs to Rs. 231.17 lacs and consequently the share capital has increased by Rs. 41.67 lacs and securities premium has increased by Rs. 291.67 lacs.

134

ANNEXURE IX

STATEMENT OF SECURED AND UNSECURED LOANS (Rs. in Lakhs)

PARTICULARS As at 30.09.09

As at 31.3.09

As at 31.3.08

As at 31.3.07

As at 31.3.06

As at 31.3.05

A) DETAILS OF SECURED LOANS Term loans from

Financial institution 437.69 431.04 677.43 923.83 3,870.22 1,416.63

Banks 10,490.51 9,566.88 7,378.00 7,025.00 4,500.00 5,700.00 Interest Accrued and Due 167.08 14.13 Vehicle loan from Banks 3.74 5.17 46.25 48.93 19.32 7.61 Interest free sales tax loan from SICOM - - - - - 1.36 Vehicle loan from Financial Institutions - - 1.05 2.85 - - Cash credit from Banks 12,112.39 8,389.17 6,690.12 3,503.58 1,356.74 1,198.03 Total 23,211.40 18,406.39 14,792.84 11,504.19 9,746.28 8,323.63 B) DETAILS OF UNSECURED LOANS Short term loan - From Banks - 900.00 6,005.21 4,300.00 - - 19,05,000 6 % Fully convertible Debentures - - - - 4,572.00 - 50, 9.90% Redeemable Non Convertible Debentures 4,125.00 4,125.00 Add : Interest accrued and due 197.52 453.89 Short term loan - From Others 4.56 697.29 1,561.00 140.00 Total 4,322.52 5,478.89 6,009.77 4,997.29 6,133.00 140.00

13

5

Ter

m L

oan

From

Ban

ks/F

inan

cial

Inst

itutio

n

L

ende

r

Sanc

tion

Let

ter

Dat

e

Sanc

tione

d A

mou

nt

(Rs i

n L

acs)

D

ate

of

avai

lmen

t

Ava

ilmen

t of

Am

ount

(R

s in

Lac

s)

Bal

ance

as

on

30.0

9.09

(Rs i

n L

acs)

Rat

e of

In

tere

st

(%) p

.a.

Rep

aym

ent T

erm

s Se

curi

ty

1 Te

rm L

oan-

I

ID

BI

30-S

ep-0

6 10

,000

.00

Var

ious

D

ates

6,

550.

006,

379.

38B

PLR

103.

33

6

,482

.71

16

Equa

l In

stal

lmen

ts

com

men

cing

af

ter

a m

orat

oriu

m o

f on

e ye

ar f

rom

th

e en

d of

the

fin

anci

al y

ear

in

whi

ch

disb

urse

men

t ha

s ta

ken

plac

e.

Rs.4

09.3

75

Lacs

ev

ery

quar

ter

com

men

cing

fr

om

1.4.

2010

.

1) F

irst C

harg

e on

imm

ovab

le a

nd

mov

able

pro

perti

es o

f the

Com

pany

lo

cate

d at

68,

MID

C, S

atpu

r, N

ashi

k by

w

ay o

f ext

ensio

n of

par

i-pas

su f

irst

char

ge w

ith U

CO

Ban

k in

resp

ect o

f its

Te

rm L

oan

of R

s 600

0 La

cs e

xclu

ding

ex

clus

ive

char

ge c

reat

ed in

favo

ur o

f IR

EDA

on

the

sola

r pla

nts a

cqui

red

out o

f as

sist

ance

of R

s 197

1 La

cs sa

nctio

ned

by

IRED

A.

2) E

xclu

sive

firs

t cha

rge

of E

SCO

re

ceiv

able

s. 3)

Cha

rges

on

MSE

B R

ecei

vabl

es

2 Te

rm L

oan-

II

6-Ja

n-04

3,

000.

00

Var

ious

D

ates

3,

000.

001,

687.

50B

PLR

1) F

irst C

harg

es o

n m

ovab

le p

rope

rties

by

way

of h

ypor

thec

atio

n

ID

BI

25.

30

Rs 1

87.5

0 La

cs e

very

qua

rter

com

men

cing

from

1.4

.201

0.

2)

Firs

t ch

arge

by

w

ay

of

equi

tabl

e m

orta

ge o

n th

e im

mov

able

pro

perti

es o

f th

e C

ompa

ny a

t Nas

hik

1,7

12.8

0

3) H

ypot

heca

tion

of re

ceiv

able

s per

tain

ing

to E

SCO

pro

ject

sub

ject

to

first

prio

r ch

arge

of I

RED

A to

the

exte

nt o

f Rs 1

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La

cs

3 Te

rm L

oan-

III

25-S

ep-0

4 6,

000.

00

Var

ious

D

ates

6,00

0.00

1,50

0.00

1)

Ass

ignm

ent

of

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r of

C

redi

t of

M

SED

CL

and

hypo

thec

atio

n of

re

ceiv

able

s ar

isin

g ou

t of

MSE

DC

L le

ase

rent

als.

U

CO

Ban

k

Rs 3

00 L

acs e

very

Qtr.

from

Ju

ne, 2

009

onw

ards

. 2)

Exc

lusi

ve c

harg

e of

ESC

O r

ecei

vabl

es

subj

ect t

o fir

st p

rior

char

ge o

f IR

EDA

to

the

exte

nt o

f Rs 1

,800

Lac

s

In

tere

st

42.2

9

3)

Excl

usiv

e fir

st

mor

tgag

e ch

arge

on

im

mov

able

pro

perti

es a

nd h

ypot

heca

tion

char

ge o

n m

ovab

le f

ixed

ass

ets

of t

he

13

6

com

pany

ex

clud

ing

char

ge

crea

ted

in

favo

ur o

f IR

EDA

.

4)

Pa

ri pa

ssu

seco

nd

char

ge

on

Com

pany

’s

curr

ent

asse

ts

excl

udin

g ES

CO

re

ceiv

able

s an

d M

SED

CL

rece

ivab

les.

1

,542

.29

4 Te

rm L

oan-

IV

1) F

irst c

harg

e by

way

of h

ypot

heca

tion

of

asse

ts a

cqui

red

out

of I

RED

A's

loan

and

C

ompa

ny o

wn

fund

s un

der

the

sche

me,

bo

th e

xist

ing

and

futu

re.

IR

EDA

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13-A

ug-9

9 1,

816.

62

22-D

ec-0

01,

816.

6239

7.37

2.50

%R

s. 56

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Lacs

per

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2)

Seco

nd

char

ge

on

the

imm

ovab

le

prop

ertie

s of t

he C

ompa

ny a

t Nas

hik

3)

Pers

onal

gu

aran

tee

of

the

then

C

hairm

an a

nd M

anag

ing

Dire

ctor

(Sur

esh

Shah

)

IR

EDA

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13-A

ug-9

9 15

4.42

27

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154.

4233

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10.0

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s. 4.

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acs p

er Q

tr 4)

Cor

pora

te g

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ntee

of

a C

ompa

ny

(SIF

DC

)

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tere

st

6.65

5) P

ledg

e of

fix

ed d

epos

it re

ceip

t of

Rs

181.

66 la

cs (

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k of

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a)

1,

971.

04

1,

971.

0443

7.69

6) H

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heca

tion

of re

ceiv

able

s fro

m st

ate

elec

ricity

boa

rds

of a

mou

nt n

ot e

xcee

ding

R

s 180

0 la

cs

5 B

ank

of In

dia

900.

00

1) F

irst C

harg

e on

imm

ovab

le p

rope

rty a

t D

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Roa

d N

o. 2

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agle

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ate,

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ay o

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itabl

e M

ortg

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rest

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9.79

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1,

971.

0411

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ehic

le L

oan

L

ende

r Sa

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n L

ette

r D

ate

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ione

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mou

nt

(Rs L

acs)

D

ate

of

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lmen

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t of

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ount

(R

s in

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Bal

ance

as o

n 30

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(Rs i

n L

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e of

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) p.

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rity

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ak M

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red

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king

Cap

ital F

und

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mits

Len

der

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ion

Let

ter

Dat

e

Sant

ione

d A

mou

nt

( Rs L

acs)

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ate

of

avai

lmen

t

Ava

ilmen

t of

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ount

( R

s in

Lacs

)

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ance

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on 3

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( Rs i

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R

ate

of In

tere

st

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Rep

aym

ent

Ter

ms

Rem

arks

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k of

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dia

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ay-0

9 16

25

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1550

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0.25

% o

ver

BPL

R m

inim

um

12.7

5% p

.a.

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ble

on

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and

1. H

ypot

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of

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rent

A

sset

s ex

cept

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O re

ceiv

able

s. 2.

Sec

ond

char

ge

on

Imm

ovea

ble

Prop

ertie

s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

Uco

Ban

k 16

-Apr

-09

2500

N

.A25

0014

37.3

113

.00%

Pa

yabl

e on

D

eman

d

1.

Hyp

othe

caio

n of

C

urre

nt

Ass

ets

exce

pt E

SCO

rece

ivab

les.

2.

Seco

nd

char

ge

on

Imm

ovea

ble

Prop

ertie

s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

HD

FC

Ban

k Lt

d 19

-Oct

-07

2000

N

.A20

0019

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Pa

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of

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rent

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sset

s ex

cept

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ge

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s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

HSB

C

28-A

ug-0

9 50

0 N

.A50

0(2

3.94

)13

.50%

Pa

yabl

e on

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eman

d

1.

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othe

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n of

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ets

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pt E

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char

ge

on

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ble

Prop

ertie

s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

Stat

e B

ank

of

Indi

a 10

-Sep

t-09

1000

N

.A10

0016

06.7

12.

5% a

bove

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AR

Pa

yabl

e on

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eman

d

1. H

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of

Cur

rent

A

sset

s ex

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ceiv

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s. 2.

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on

Imm

ovea

ble

Prop

ertie

s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

IDB

I 13

-Jul

-09

975

N.A

975

1055

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R le

ss

1.25

%

Paya

ble

on

Dem

nd

1. H

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of

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A

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s ex

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ceiv

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ond

char

ge

on

Imm

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ble

Prop

ertie

s at

68

, M

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, Sa

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ashi

k –

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007.

TO

TAL

86

00

86

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82.8

2

Not

e :

Incl

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Rs 1

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Lim

its g

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Let

ter

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e

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Dat

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ount

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Bal

ance

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on

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Rat

e of

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tere

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) p.

a R

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ms

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arks

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k of

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dia

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700

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ver

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imum

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Four

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al

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ents

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ds.

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catio

n of

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nt

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ets

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pt

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les.

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nd

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ge

on

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Prop

ertie

s at

68

, M

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tpur

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007.

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ank

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9 71

1 71

173

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r B

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12 M

onth

ly In

stal

men

ts

of R

s.59.

25 L

acs e

ach

from

Oct

. 200

9 on

war

ds.

a.

Hyp

othe

catio

n of

C

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nt

Ass

ets

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pt

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rece

ivab

les.

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Seco

nd

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ge

on

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ovab

le

Prop

ertie

s at

68

, M

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, Sa

tpur

, N

ashi

k –

422

007.

HSB

C

28-A

ug-

09

400

400

400.

0011

.50%

R

epay

able

on

5th

Dec

embe

r, 20

09

a.

Hyp

othe

catio

n of

C

urre

nt

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ets

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pt

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les.

b.

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nd

char

ge

on

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ovab

le

Prop

ertie

s at

68

, M

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, Sa

tpur

, N

ashi

k –

422

007.

IDB

I 13

-Jul

-09

2255

22

5523

30.0

1B

PLR

12 M

onth

ly In

stal

men

ts

of R

s.187

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om O

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les.

b.

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nd

char

ge

on

Imm

ovab

le

Prop

ertie

s at

68

, M

IDC

, Sa

tpur

, N

ashi

k –

422

007.

TO

TAL

44

16

44

1645

29.5

6

13

9

Uns

ecur

ed L

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from

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k an

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Let

ter

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Rat

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50

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ET

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in L

acs)

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icul

ars

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nded

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09

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the

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31

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09

For

the

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nded

31

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08

For

the

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r E

nded

31

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07

For

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31

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06

For

the

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nded

31

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05

Nat

ure

of

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me

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ated

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iden

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com

e (T

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unds

-

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7

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Non

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ecur

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ge fl

uctu

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et)

--

146.

77

32.9

5

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Rec

urrin

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elat

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Mis

cella

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ome

98.4

1

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3.78

21

7.87

81

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43

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R

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98

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223.

7836

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08

432.

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0.89

14

1

Rel

ated

Par

ty tr

anst

actio

ns

Rs.

In la

cs

Ann

exur

e X

I 30

.09.

2009

31

.03.

2009

31

.03.

2008

31

.03.

2007

31

.03.

2006

31

.03.

2005

Part

icul

ars

Subs

idia

rie

s/

Ass

ocia

tes J

oint

V

entu

res

KM

P an

d R

elat

ives

of

KM

P

Part

ies

whe

re

cont

rol

exis

ts

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idia

rie

s/

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ocia

tes

Join

t V

entu

res

KM

P an

d R

elat

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of

KM

P

Part

ies

whe

re

cont

rol

exis

ts

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idia

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/ A

ssoc

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s Jo

int

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ture

s

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d R

elat

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whe

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cont

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ssoc

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int

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Tra

nsac

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du

ring

the

year

Sale

s

109

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-

308

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0.02

2,56

3.74

-

44

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-

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6

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7

Purc

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110

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353

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to

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1

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s pai

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uner

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49.4

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150

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265

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51.

05

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26

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Paya

bles

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130

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3.34

111

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75

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69

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142

AN

NEX

UR

E X

II

Stat

emen

t of T

ax S

helte

r (R

s. In

Lac

s)

Par

ticul

ars

30.0

9.20

0931

.03.

2009

31.0

3.20

08

31.0

3.20

0731

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2006

31.0

3.20

05N

et P

rofit

/ Los

s 11

6.59

535

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(15,

333.

26)

7,

704.

73

2,2

54.9

4

1,12

0.31

33.9

9%33

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33.9

9%

33.6

6%33

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36.5

9%Ta

x at

Not

iona

l Rat

es

39.6

318

2.12

(5

,211

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2,59

3.41

759

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4

09.9

5 A

djus

tmen

ts:

Ex

port

Prof

it -

(431

.10)

-

(5

3.11

)

(4

9.94

)

-

Diff

eren

ce b

etw

een

Tax

Dep

reci

atio

n an

d B

ook

Dep

reci

atio

n 16

4.27

283

.11

363

.53

535.

46

5

51.5

8

348

.45

Oth

er A

djus

tmen

ts

(2,8

83.8

3 (1

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.41)

177.

15

(5,1

80.5

4)

(3

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.15)

(4,8

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6)N

et A

djus

tmen

t (2

,719

.56)

(1,8

61.4

0)

5

40.6

8 (4

,698

.19)

(2,9

30.5

1) (4

,526

.71)

Tax

Expe

nse

/ (Sa

ving

s)

(924

.38)

(632

.69)

183.

78

(1,5

81.4

1) (9

86.4

1) (1

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.44)

Tota

l Tax

atio

n (8

84.7

5) (4

50.5

7) (5

,028

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1,

012.

00

(227

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(1,2

46.4

9)Ta

xatio

n on

Ext

raor

dina

ry it

ems

-

-

4,4

45.6

1

-

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-

Tax

on P

rofit

s afte

r ext

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dina

ry it

ems

(884

.75)

(450

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(582

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00

(227

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(1,2

46.4

9)Pr

ovis

ion

for M

AT

-

-

-

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1

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7

8

7.85

To

tal C

urre

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axes

-

-

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1,

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1

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7

8

7.85

In

vie

w o

f the

bus

ines

s los

s, no

pro

visi

on fo

r inc

ome

tax

has b

een

mad

e in

the

acco

unts

for t

he fi

nanc

ial y

ear e

nded

31s

t Mar

ch 2

008,

31s

t Mar

ch 2

009

and

30

Sept

. 200

9.

143

A

nnex

ure

XII

I Su

mm

ary

of O

ther

Fin

anci

al In

form

atio

n

A

) SH

AR

E C

API

TA

L

(Rs.

In L

acs)

Pa

rtic

ular

s 30

.09.

2009

31

.03.

2009

31

.03.

2008

31

.03.

2007

31

.03.

2006

31

.03.

2005

A

utho

rise

d

Equi

ty S

hare

s

Num

ber

80,0

00,0

00.0

0 80

,000

,000

.00

80,0

00,0

00.0

0 25

,000

,000

.00

15,0

00,0

00.0

0 15

,000

,000

.00

Face

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ue (R

s.)

5.00

5.

00

5.0

0 1

0.00

10

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10.0

0 V

alue

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in L

akhs

) (A

) 4,

000.

00

4,00

0.00

4,

000.

00

2,50

0.00

1,

500.

00

1,50

0.00

Pr

efer

ence

Sha

res

Num

ber

1,

000,

000.

00

1,0

00,0

00.0

0Fa

ce V

alue

(Rs.)

1

00.0

0 10

0.00

V

alue

(Rs.

in L

akhs

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)

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-

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1,00

0.00

1,

000.

00

Tota

l Aut

horis

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Cap

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00

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00

2,50

0.00

2,

500.

00

Issu

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Equi

ty S

hare

s

N

umbe

r 29

,886

,044

.00

29,8

86,0

44.0

0 29

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.00

14,3

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0 8,

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00

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0 Fa

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00

5.00

10

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10.0

0 10

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Val

ue (R

s. in

Lak

hs)

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1,49

4.30

1,

494.

30

1,49

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1,

434.

30

894.

30

850.

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Pref

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s

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--

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0 Fa

ce V

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-

-

- -

100.

00

Val

ue (R

s. in

Lak

hs)

(B)

-

-

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- 87

.62

Tota

l Iss

ued

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e C

apita

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+ B

) 1,

494.

30

1,49

4.30

1,

494.

30

1,43

4.30

89

4.30

93

7.92

Su

bscr

ibed

and

Pai

d up

Eq

uity

Sha

res

Num

ber

29,8

84,9

44.0

0 29

,884

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.00

29,8

84,9

44.0

0 14

,342

,472

.00

8,94

2,47

2.00

8,

502,

472.

00

Face

Val

ue (R

s.)

5.00

5.

00

5.00

1

0.00

10

.00

10.0

0 V

alue

(Rs.

in L

akhs

) 1,

494.

25

1,49

4.25

1,

494.

25

1

,434

.25

894.

25

850.

25

Less

: A

mou

nt R

ecov

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le fr

om E

SOP

Trus

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40.8

8 42

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42.

50

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148

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements included in this Draft Letter of Offer. You should also read the section titled ‘Risk factors’ beginning on page XIII of this Draft Letter of Offer, which enumerates number of factors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company on a stand alone basis, and, unless otherwise stated is based on our restated unconsolidated financial statements, which have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act, 1956, and the SEBI guidelines. Our Financial year ends on March 31 of each year OVERVIEW Our Company design, manufactures, installs commissions and maintains energy conservation products. AEL was originally established in 1964 to manufacture electronics components including resistors and capacitors. In the year 1980, AEL started focusing on capacitor-based energy conservation solutions and over the past two decades has established itself as a market leader in this segment. AEL’s capacitor-based Automatic Load Monitoring Systems (“ALMS”) enabled a reduction in transmission and distribution losses along with an increase in energy efficiency for electricity utilities. These were widely deployed by electricity utilities as part of their power transmission and distribution infrastructure. AEL shifted focus to energy-efficient lighting solutions as it anticipated a growing demand for energy-efficient lighting solutions from Indian municipalities and consumers. Leveraging on its core competences and manufacturing expertise in electronics and passive components, AEL entered the energy-efficient lighting market with a view to becoming an Energy Services Company (“ESCO”). AEL is one of the few ESCO companies in India which is empanelled with Bureau of Energy Efficiency (BEE). AEL has developed a wide range of energy-efficient lighting solutions. The Government of India has passed The Energy Conservation Act, 2001 to facilitate and enforce the efficient use of energy and its conservation. This has created a favourable environment for the energy-efficient lighting solutions industry in India. Since 2001, AEL’s lighting business has grown significantly and the management believes that the growing demand for energy efficient lighting solutions, including replacement of older, inefficient lighting fixtures with energy-efficient solutions, provides a significant opportunity for future growth. AEL’s track record of innovation in designing and manufacturing energy-efficient solutions, places it in a unique position to address the growing opportunity in this segment. Over the years, the reliability and quality of AEL’s products has resulted in a strong brand creation with repeat orders from its customers. In the fast changing economic scenario the Company very quickly responded by carrying out the following exercise:

� Determination of equity and debt and fund raising program for long term back bone in the form of rights shares and preferential allotment.

� Evaluation of all long term assets and realigning the same with underlying economic nature and value of such long term assets.

� Evaluation of delayed recoveries of trade receivables arising due to the various factors including economic slow down and ways and means of restricting the delays.

� Evaluation of cost cutting measures. � Evaluation of higher utilization of manufacturing capacity including undertaking contract manufacturing

activities. � Identification of idle assets and conversion into cash.

All the above aspects have resulted in arriving at a new business mix wherein resources allocation is done with a judicious evaluation of risk and reward. While ESCO sales will go down, the exports will jump significantly. Of course the profitability will take a southward turn. The Company will incur marginal capex, will utilize over 50 per cent of new capacity for exports and will fall in a steady stream of income.

149

The Company has also accorded increased priority to enter new technology products like LED to enhance sectors yielding higher revenues. Towards that end the Company has agreed to acquire LED business currently owned by Innovolt Inc of the USA, has taken steps to set up a modern and independent Asian Technology Centre and has commenced planned research in association with their overseas buyers in the energy saving products for export markets. The Company believes that in the long run, these efforts will provide greater values. The blues of one time write off from the aborted venture of high tech waste to energy business has left some scars and disturbed the cash flows. The measures listed above will quickly bring the affairs within a manageable frame. Since 2001, AEL’s lighting business has grown significantly and the company believes that the growing demand for energy efficient lighting solutions, including replacement of older, inefficient lighting fixtures with energy-efficient solutions, provides a significant opportunity for future growth. AEL’s track record of innovation in designing and manufacturing energy-efficient solutions, places it in a unique position to address the growing opportunity in this segment. The company is increasingly using the ESCO model, under which AEL provides its products to customers without any initial investment by them, but is entitled to a share of the savings in cost that result from the use of its products along with a periodic maintenance fee. The ESCO model is based on a “pay-for-performance” concept, under which AEL’s products generate demonstrable cost savings for the customer, which are then shared between the customer and AEL in a pre-determined ratio. The company is currently promoted by Mr. Arun B. Shah, who has a very good experience in this sector. We have also entered into Joint Ventures with Midcom Magnetics Management Pvt Ltd., Home Lighting India Limited and Asian Retail Lighting Ltd. SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR FACTORS AFFECTING OUR RESULTS OF OPERATIONS Except as otherwise stated in this Draft Letter of Offer, the Risk Factors in the Draft Letter of Offer the following important factors, among others, could cause the actual results to differ materially from the expectations � General Economic and Business Conditions; � Our Company’s ability to successfully implement its strategy and its growth plans; � Increasing competition in the Lighting Industry � Increases in labour costs, raw materials prices, prices of plant & machineries and insurance premium; � Manufacturers’ defects or mechanical problems with Company’s plant & machineries or incidents caused by human error; � Amount that our Company is able to realize from the customers; � Changes in laws and regulations that apply to the Industry; � Changes in fiscal, economic or political conditions in India; � Social or civil unrest or hostilities with neighboring countries or acts of international terrorism; � Changes in interest rates and tax laws in India. OUR SIGNIFICANT ACCOUNTING POLICIES For Significant accounting policies please refer to the section titled ‘Financial Information’ beginning on page no 109 of this Draft Letter of Offer. Results of Operations of the Company

(Rs. in Lacs) Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005 Sales Manufacturing (Net) 17,466.52 17,099.04 30,673.99 7,882.34 3,354.05 Trading 3,427.52 4,005.21 3,064.85 3,636.74 2,429.82 Total 20,894.04 21,104.25 33,738.84 11,519.08 5,783.87 Rent & Maintenance Income 285.25 539.75 3,005.78 4,091.84 4,468.96

150

Other Income 223.78 364.64 871.08 432.87 380.89 Total Income 21,403.07 22,008.63 37,615.70 16,043.79 10,633.72 Materials Consumed 13,409.88 9,025.71 17,813.84 7,639.42 3,987.05 Materials Consumed as a Percentage of Total Income 62.65% 41.01% 47.36% 47.62% 37.49% Personnel Cost 1,341.18 1,700.12 1,388.11 643.15 557.09 Personnel Cost as a Percentage of Total Income 6.27% 7.72% 3.69% 4.01% 5.24% Manufacturing, Administrative and Other Expenses 4,222.65 5,596.65 8,536.71 4,016.49 3,462.91 Manufacturing, Administrative and Other Expenses as a Percentage of Total Income 19.73% 25.43% 22.69% 25.03% 32.57% Total Expenses 18,974.60 16,323.22 27,739.40 12,299.83 8,007.80 Total Expenses as a percentage of Total Income 88.65% 74.17% 73.74% 76.66% 75.31% EBIDTA 2,428.47 5,685.41 9,876.30 3,743.96 2,625.92 EBIDTA as a percentage of Total Income 11.35% 25.83% 26.26% 23.34% 24.69% Interest 2,130.12 2,112.21 1,272.70 648.83 570.60 Interest as a percentage of Total Income 9.95% 9.60% 3.38% 4.04% 5.37% Depreciation 460.82 480.04 745.19 840.19 772.25 Depreciation as a percentage of Total Income 2.15% 2.18% 1.98% 5.24% 7.26% Profit before Tax and Exceptional Items (162.48) 3,093.15 7,858.40 2,254.94 1,283.07 PBT as a percentage of Total Income -0.76% 14.05% 20.89% 14.05% 12.07% Profit after Tax before Exceptional Items (195.52) 3,011.17 6,816.50 2,515.27 1,240.27 PAT as a percentage of Total Income -0.91% 13.68% 18.12% 15.68% 11.66% Exceptional Items - (17,877.54) - - (162.74) Profit after Exceptional Items (195.52) (14,866.38) 6,816.50 2,515.27 1,077.53

FY 2009 VS 2008 Sales The Sale of our Company in the Financial Year 2008-09 was Rs. 20894.04 Lacs as compared to Rs. 21104.25 Lacs in the Financial Year 2007-08. On an annualized basis there has been a reduction of 1% in the Financial Year 2008-09. Material Consumed The cost of the Material Consumed increased from Rs. 9,025.71 Lacs in the Financial Year 2007-08 to Rs. 13,409.88 in the Financial Year 2008-09. The increase in the cost of material consumption was attributed to increase in the cost of raw material and trading products. As a percentage of sales, cost of material consumed has increased from 41.01% in the Financial Year 2007-08 to 62.66% in the Financial Year 2008-09. Personnel Cost Personnel Cost of the company decreased from Rs. 1700.12 Lacs in the Financial Year 2007-08 to Rs. 1341.18 Lacs in the Financial Year 2008-09. As a percentage of total income personnel cost decreased marginally from 7.72% to 6.27% in Financial Year 2008-09.

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Manufacturing, Administrative and Other Expenses Manufacturing, Administrative and Other Expenses as a percentage of Income decreased from 25.43% in the Financial Year 2007-08 to 19.73% in the Financial Year 2008-09. This was due to the reductions in installation and maintenance expenses and marketing expenses. Profit before Interest, Depreciation and Tax (PBIDT) PBIDT of the Company has shown a negative growth of 57.30% in Financial Year 2008-09 as compared to the previous Financial Year 2007-08. As a percentage of total income also the margin has decreased from 25.83% for the Financial Year 2007-08 to 11.34% in the Financial Year 2008-09. The decrease was mainly due to the increase in cost of Material consumed. Finance Charges The finance cost for the financial year 2007-2008 was Rs. 2112.21 Lacs whereas for the Financial Year 2008-09 was Rs. 2130.12 Lacs thereby higher by Rs. 17.91 lacs. Depreciation The depreciation for the Financial Year 2007-2008 was Rs. 480.04 Lacs whereas for the Financial Year 2008-09 was Rs. 460.82 Lacs thereby higher by Rs. 19.22 Lacs. Profit before Tax and Exceptional Item The PBT of the company has decreased from Rs. 3093.15 Lacs in the FY 2007-08 to Rs. (162.48) Lacs in the FY 2008-09. As a percentage to total income also the PBT has decreased from 14.05% in the FY 2007-08 to (0.76)% in the FY 2008-09. FY 2008 VS 2007 Sales Sales for the period ended 31st March 2008 was Rs. 21,104.25 lacs as compared to Rs. 33,738.84 lacs for the previous year ended 31st March 2007, showing a decrease of 41.09%, this decrease was mainly due to a fire accident in one of its plants, due to some engineering issues while carrying on some R&D activity. Hence the company decided to call back all the plant and machinery sold and the company reversed all the sales of this division carried out for the year 2006-07, hence the sales reported in this division is NIL. However, in its traditional business of manufacturing/Sale of Lighting Products, the Company has registered a growth. Material Consumed The cost of the Material Consumed decreased from Rs. 17,813.84 Lacs in the Financial Year 2006-07 to Rs. 9,025.71 Lacs in the Financial Year 2007-08. The decrease in the material consumption was due to the closure of Plant and Machinery Division. As a percentage of sales, cost of material consumed has decreased from47.36% in the Financial Year 2006-07 to 41.01% in the Financial Year 2007-08. Personnel Cost Personnel Cost of the company increased from Rs. 1388.11 Lacs in the Financial Year 2006-07 to Rs. 1700.12 Lacs in the Financial Year 2007-08. As a percentage of total income staff cost increased marginally from 3.69% to 7.72% in Financial Year 2008-09.

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Manufacturing, Administrative and Other Expenses Manufacturing, Administrative and Other Expenses for the financial year 2007-08 were at Rs. 5,596.65 representing 25.43% of the total income whereas for the financial year 2006-07 were at Rs. 8,536.71 representing 22.69% of the total income. There has been therefore no major increase or decrease in the manufacturing, administrative and expenses of the Company. Profit before Interest, Depreciation and Tax (PBIDT) PBIDT of the Company has shown a negative growth of 42.43% in Financial Year 2007-08 as compared to the previous Financial Year 2006-07. As a percentage of total income also the margin has decreased from 26.26% for the Financial Year 2006-07 to 25.83% for the Financial Year 2007-08. Finance Charges The finance cost for the financial year 2006-2007 was Rs.1272.70 Lacs whereas for the Financial Year 2007-2008 was Rs. 2112.21 Lacs thereby higher by Rs.839.51 Lacs due to increase in borrowed funds. Depreciation The depreciation for the Financial Year 2006-2007 was Rs. 745.19 Lacs whereas for the Financial Year 2007-2008 was Rs. 480.04 Lacs thereby lower by Rs. 265.15 Lacs. This was due to the transfer of machinery to the MSEB thereby resulting in the reduction of Depreciation. Profit before Tax and Exceptional Item The PBT of the company has decreased from Rs. 7858.40 Lacs in the FY 2006-07 to Rs. Rs. 3093.15 Lacs in the FY 2007-08. As a percentage to total income also the PBT has decreased from 20.89% in the FY 2006-07 to 14.05% in the FY 2007-08. FY 2007 Vs 2006 Turnover Sales for the period ended 31st March 2007 was Rs. 33,738 Lacs compared to Rs.11,519.08 lacs for the previous year ended 31st March 2006, showing an increase of 192.89%. This increase was mainly due the growth achieved by the Company in its traditional business fields and in addition, the new revenue stream which took off in the last quarter of the FY 2006.While the Manufacturing/Sale of Lighting Products constituted a major share of 49% of the total turnover, the second place was occupied by the new Plant & Machinery segment with a share of 39%. The Manufacturing/Operating Lease of Energy Conservation Products accounted for the balance 12%. Total Income Total income for the FY 2006-2007 was Rs. 37,615.70 Lacs, which consists of Turnover of Rs. 33,738 lacs, other income of Rs. 3,876.86 lacs as compared to a total income of Rs.16,043.79 lacs for FY 2005-2006. The total income has increased due to the robust growth the company recorded in all its products and segments that the company was operating in. Manufacturing, Administrative and other expenses Manufacturing, Administration costs for FY 2006-2007 were at Rs.8,536.71 lacs which were at 22.69% of the total income as compared to Rs. 4,016.49 lacs for FY 2005-2006, which constituted 25.03% of the total income for FY 2005-2006. This increase was because of the increase in total turnover of the company.

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PBDIT PBDIT for FY 2006-2007 was 9,876.30 lacs and for FY 2005-2006 it was at Rs. 3743.96 Lacs. PBDIT as a percent to Turnover was 26.26% for the FY 2006-2007 and for FY 2005-2006 it was 23.34%. The increase in PBDIT was due to the robust growth in all segments and products of the company. Depreciation Depreciation for the FY 2006-2007 was Rs.745.19 lacs, while it was Rs. 840.19 lacs for the FY 2005-2006. The depreciation remained more or less the same in the two years, as there was no major increase in fixed assets. Interest and Finance Charges Interest and Finance Charges for FY 2006-2007 was Rs. 1272.70 lacs while it was Rs. 648.83 lacs for the FY 2005-2006. The increase was due to the Company availing disbursement of Rs. 300 lacs against rupee term loan sanctioned and another availment of Rs. 910 lacs from Industrial Development Bank of India Ltd. (IDBI) under the Line of Credit of Rs. 10,000 lacs sanctioned by them to fund the receivables of the ESCO Division. The company also availed short term loans from corporate bodies / banks during the period to meet its working capital requirements. Profit After Tax The company made a PAT of Rs. 6816.50 lacs in the FY 2006-2007 as compared to Rs. 2515.27 lacs in the FY 2005-2006. This increase was mainly due the growth achieved by the Company in its traditional business fields and in addition, the new revenue stream which took off in the last quarter of the FY 2005-2006. SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Asian Electronics Limited (AEL), established in 1964, is involved in design and manufacturing of Energy Conservation products – specializing in energy efficient lighting solutions. Basis of Preparation The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles, Accounting Standards issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956. The significant accounting policies followed by the Company are stated below: Use of Estimates The preparation of financial statements is in conformity with generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Method of Accounting

� Revenues and Costs are recognized on accrual basis. � Capital issue expenses are charged to Securities Premium Account. � Warranty period maintenance cost, being insignificant, is accounted when incurred.

However, in case of ESCO assets, relevant portion of income is accounted net of the warranty costs as estimated.

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Fixed assets and depreciation

� Fixed assets are stated at cost less accumulated depreciation & impairment losses, if any. Cost comprises of all expenses attributable for bringing the assets to their working condition for intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

� Depreciation on fixed assets, other than leased assets, is provided as per useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher as under :

- on the fixed assets acquired upto 31.12.1988, on written down value as appearing in the books on 1.1.1989.

- on the fixed assets acquired after 31.12.1988 on straight line basis, other than assets lying at Chennai Division, which are depreciated on written down value method.

- Assets costing less than Rs.5,000 acquired after 15.12.93 are depreciated at 100% � Leased assets are depreciated on straight line basis over the period of lease. � Patents and Trade marks are amortized over a period of ten years. Miscellaneous expenditure is written off

over a period of five years. � Product Development expenditure are amortized over a period of 3-7 years. � Software is written off over a period of five years. � Goodwill is amortized using straight line method over a period of five years. � However, no costs are incurred in respect of para (c) to (h) during the year, and are applicable for historical

assets only. Impairment

� The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

� After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

� A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

Lease rental Where the Company is the lessee Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized. These assets are depreciated on the straight line method over the period of lease. Where the Company is the lessor Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account.

155

Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account. However, upon termination of operating lease, the assets are removed from the fixed assets and reflected under appropriate head of receivables in accordance with the nature of claim and amount. Investment

� Investments are divided in the following segments: � Investments in subsidiaries and associate business entities made with a view to long term business benefit. � Other investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. Inventories Inventories are valued as under:

� Raw materials, Components, stores and spares: Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on FIFO basis.

� Finished goods: at lower of cost and net realizable value � Work in progress: at lower of cost and net realizable value � Cost in relation to finished goods and work in progress includes cost of material and appropriate share of

manufacturing overheads and includes excise duty payable on uncleared finished goods and excise duty paid on goods cleared but unsold.

� Cost of consumable spares purchased during the year is charged to the profit and loss account. � Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of

completion and estimated costs necessary to make the sale. Revenue recognition ESCO: The Company’s business includes supplies of products and/or services and contracts in the nature of energy savings and linked payments over long term in excess of a year. The contracts involve supply, installation and future maintenance of lights at locations. They are more popularly known as ESCO contracts. The contracts are generally with Municipal Corporations and Government Bodies. The nature of contracts involves free replacements in case of defects. Considering the various implications, the Company accounts for the transactions in the following manner:

� Sales: Equipment manufactured and supplied under the above contracts is recognized as sales at Net Present Value (NPV) by discounting the future receivables for interest and maintenance.

� Future Maintenance Expenses: The expenses are accounted for as and when they are incurred. Interest Income: Interest income (i.e. the difference between the Contract Value and the Sales at NPV) is accounted on accrual basis over the tenure of the contract.

Liabilities: Any specific term loan taken is shown separately under the head of Secured Loan. Assets: Any amounts receivable under the above contracts are shown under a separate head. The assets include rights over products and receivables.

156

Others � Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured.

� Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and on completion of installation. Sales are recorded net of sales tax but include excise duty.

� Income from annual maintenance service contract is recognized on a straight line basis over the period of

contracts. Income from other service contracts is recognized on completion of the service rendered.

� Income in respect of goods sold on deferred sales basis is recognized as sales at normal sale price. Finance income is recognized over the terms of the payment.

� Income from supply/erection of equipments/systems is recognized based on dispatches to customer/work done at project site.

� Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

� Dividend is recognized when the shareholders’ right to receive payment is established by the balance sheet date.

� Revenue from projects is recognized on acceptance of the work under the project by the respective project

authorities. Retirement and other employee benefits

� Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

� Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

� Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

� Actuarial gains / losses are immediately taken to profit and loss account and are not deferred. Foreign currency translation Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise except those arising from investments in non-integral operations.

157

Forward Exchange Contracts are not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year. Taxes on Income Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets on unabsorbed depreciation and unabsorbed tax losses are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Provisions A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Cash and Cash Equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

158

Contingent Liabilities, if any, are disclosed by way of notes to accounts. Adjustments/ restatements in financial information Statement of adjustments / restatements made in the financial information is set out in the Auditors Report AN ANALYSIS OF REASONS FOR THE CHANGES IN SIGNIFICANT ITEMS OF INCOME AND EXPENDITURE IS GIVEN BELOW 1) Unusual or infrequent events or transactions There have been no events or material transactions to our knowledge which may be described as “unusual” or “infrequent”. 2) Significant economic changes that materially affected or are likely to affect income from continuing operations. Any major changes in the policies of the Government towards electric/electronics based industry would have a significant impact on the operations of our Company. The risk relating to the changes in the economic or regulatory environment and its impact on our business is discussed separately in the section titled ‘Risk Factors’ on page no XIII of this Draft Letter of Offer. 3) Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue, or income from continuing operations Apart from the risks as disclosed under heading ‘Risk Factors’ beginning on page XIII in this Draft Letter of Offer, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations. 4) Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known Our Company’s future cost and sale prices will be determined by demand/supply situation, overall economic conditions of the country, government policies and availability of raw material etc. and prices there of. 5) Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices. Increases in revenues are by and large linked to increases in volume of business. 6) Total turnover of each major Industry segment in which our Company operated The Company is operating only in one segment namely lighting industry. 7) Status of any publicly announced new products or business segment. Our Company has not publicly announced any new products or business segments. 8) The extent to which the business is seasonal. The business of the Company is not seasonal in nature. 9) Any significant dependence on a single or few suppliers or customers. We source our major raw material from various suppliers across the region we operate. We are not dependent on few Customers for sales of our products.

159

10) Competitive Conditions The Company faces stiff competition from larger and well-established players. For further details of competitive conditions, please refer to the section titled ‘Competition’ beginning on page 63 of this Draft Letter of Offer. Information as required by the Government of India, Ministry of Finance circular No. F2/5/SE/76 dated February 5, 1977 as amended vide their circular of even number dated March 8, 1977 and in accordance with sub-item (B) of item X of Part E of the SEBI (ICDR) Regulations. 1. Working Results of the Company Unaudited Financial Results for the period between October 1, 2009 and November 30, 2009 Particulars Rs. In lacs Income from Operations 4892 Other Income 32 Total Income 4924 Profit Before Depreciation and Tax 673 Interest 650 Provision for Depreciation 73 Profit / (Loss) Before Tax (50) Provision for Tax - Estimated Net Profit (loss) / after tax (50) 2. There are no material changes and commitments, which are likely to affect the financial position of the Company since September 30, 2009 (i.e. last date up to which audited information is incorporated in the Draft Letter of Offer) 3. Stock Market Prices a) Week end prices of Equity Shares of the Company for the last four weeks on the BSE are as under: Week ended on Closing Rate Highest Rate Lowest Rate 6th November 2009 35.95 37.30 32.60 13th November 2009 34.60 39.25 34.05 20th November 2009 42.10 44.40 35.00 27th November 2009 37.80 42.75 36.00 b) Week end prices of Equity Shares of the Company for the last four weeks on the NSE are as under: Week ended on Closing Rate Highest Rate Lowest Rate 6th November 2009 36.10 37.80 32.85 13th November 2009 34.40 39.10 34.10 20th November 2009 42.25 44.45 34.70 27th November 2009 37.75 42.95 35.40 c) The Closing Price of the Equity Shares of the Company on the BSE and NSE on [•] was [•] and [•] per equity Share respectively, (Ex-rights price) Save as stated elsewhere in the Draft Letter of Offer, there are no material changes and commitments, which are likely to affect the financial position of the Company September 30, 2009.

160

FINANCIAL INDEBTEDNESS (For details of the existing secured credit facilities availed by our company, see section titled “Financial Statements” beginning on page 109 of this Draft Letter of Offer.

161

DEFAULTS Except as mentioned below, the Company has not defaulted in meeting any statutory dues, institutional dues or bank dues and the Company has not defaulted in making any payment/refunds for debentures, fixed deposits and interest on debentures and fixed deposits. The total dues to various statutory authorities / Banks/ Financial Institutions and the total default up to 30th November, 2009 were Rs.7134.70 lacs. The details are as under:- Non Payment of various statutory dues:

(Rs. in Lacs) Nature of Payment Year & Month Amount

August, 2009 1.23 September, 2009 1.19 October, 2009 1.14 Provident Fund

Total (A) 3.56 August, 2009 0.14 September, 2009 0.14 October, 2009 0.14 Profession Tax

Total (B) 0.42 August, 2009 17.92 September, 2009 15.81 TDS October, 2009 15.00

Total (C) 48.73 Total (A+B+C) 52.71

Overdues with Banks including interest:

(Rs. in Lacs) Name of Bank Total IDBI Bank Ltd. 1,007.06 UCO Bank 447.97 Bank of India 440.50 State Bank of India - The Hongkong & Shanghai Banking Corp. Ltd. 479.37 Total 2,374.90 Defaults with the Financial Institutions: (Rs. In Lacs) Name of Financial Institution Amount IREDA Ltd. Principal 123.20 Interest 5.00 Total 128.20 Unsecured Debentures (Rs. In Lacs) Name Nature Amount

Principal 4125.00 Interest 453.89 LIC Mutual Fund Total 4578.89

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lyin

g be

fore

th

e D

ebt

Rec

over

y A

ppel

late

Trib

unal

. A

ppea

l ha

s be

en a

dmitt

ed o

n C

ompa

ny d

epos

iting

a s

um o

f R

s. 50

lac

s w

ith t

he

Trib

unal

. U

nion

Ban

k ha

s al

so g

one

into

App

eal

in

the

Deb

t Rec

over

y Tr

ibun

al. U

nion

Ban

k of

Indi

a ha

s cl

aim

ed a

sum

of

Rs.3

39 l

acs

+ in

tere

st f

rom

the

C

ompa

ny, i

gnor

ing

the

Com

pany

’s c

laim

for

ref

und

of S

ecur

ity D

epos

it of

Rs.2

.33

lacs

with

int

eres

t th

ereo

n.

339.

00

The

mat

ters

will

be

hear

d by

the

conc

erne

d B

ench

of

the

Deb

t Rec

over

y A

ppel

late

Trib

unal

is

on 1

1.02

.201

0.

2 M

isc.

Pe

titio

n N

o.

24 o

f 200

6 &

Mis

c.

Petit

ion

No.

14

8 of

200

7

Phili

ps

Elec

troni

cs

Indi

a Lt

d

Hig

h C

ourt

of

Bom

bay,

O

.O.C

.J

The

mat

ters

will

com

e up

for

hea

ring

very

sho

rtly

befo

re

the

Inte

llect

ual

Prop

erty

A

ppel

late

B

oard

, C

henn

ai.

The

Com

pany

’s

Pate

nt

Atto

rney

s, M

/s.

Sura

na &

Sur

ana

have

file

d co

unte

r sta

tem

ent o

n 31

st

Mar

ch, 2

008.

Not

Sp

ecifi

ed

We

are

info

rmed

that

th

e m

atte

rs

will

be

tra

nsfe

rred

to

th

e In

telle

ctua

l Pr

oper

ty

App

ella

te

Boa

rd

at

Mum

bai.

3 C

ompa

ny

Petit

ion

N

o.

118/

2007

Dr.

Urm

ila

Ram

pal &

O

ther

s V/s

. U

niqu

e W

aste

Pl

astic

Com

pany

Law

B

oard

Pr

inci

ple

Ben

ch, N

ew

Del

hi

The

abov

e re

ferr

ed P

etiti

on w

as f

iled

agai

nst U

niqu

e W

aste

Pla

stic

Man

agem

ent &

Res

earc

h C

o. P

vt. L

td.,

AEL

and

Oth

ers

by m

inor

ity s

hare

hold

ers

of U

niqu

e fo

r op

pres

sion

of

m

inor

ity

shar

ehol

ders

an

d m

ism

anag

emen

t of t

he a

ffai

rs o

f tha

t Com

pany

in th

e ye

ar 2

007.

Afte

r sev

eral

hea

rings

, the

Com

pany

Law

Not

Sp

ecifi

ed

A fr

esh

Petit

ion

No.

80

/200

9 ha

s bee

n fil

ed w

ith th

e H

on’b

le

Com

pany

Law

Boa

rd,

Mum

bai.

16

3

Man

agem

ent

&

Res

earc

h C

o. P

vt.

Ltd.

, -

Asi

an

Elec

troni

cs

Ltd

and

Oth

ers.

Boa

rd P

rinci

ple

Ben

ch, N

ew D

elhi

has

pas

sed

Ord

er

date

d 3rd

Dec

embe

r, 20

08 a

s und

er:

“Lib

erty

gra

nted

to

Petit

ione

r to

file

fre

sh P

etiti

on

with

the

und

erst

andi

ng t

hat

this

Pet

ition

will

be

with

draw

n th

erea

fter.”

W

hen

fres

h Pe

titio

n w

as

pres

ente

d to

Com

pany

Law

Boa

rd,

New

Del

hi,

the

petit

ione

rs w

ere

dire

cted

to

file

petit

ion

with

the

C

ompa

ny L

aw B

oard

, Mum

bai.

4 C

ivil

Act

ion

No.

07-

0517

Wes

tingh

ouse

Li

tigat

ion

The

Dis

trict

C

ourt

for t

he

East

ern

Dis

trict

of

Penn

sylv

ania

, U

.S.A

The

Dis

trict

C

ourt

for

the

East

ern

Dis

trict

of

Pe

nnsy

lvan

ia,

U.S

.A.

has

pass

ed O

rder

in

the

civi

l ac

tion

in th

e W

estin

ghou

se L

ight

ing

Cor

pora

tion

V/s

. A

sian

El

ectro

nics

Lt

d.

on

10th

D

ecem

ber,

2008

. A

ccor

ding

ly, t

he ju

dgem

ent i

s en

tere

d in

favo

ur o

f the

Pl

aint

iff, i

.e.,

Wes

tingh

ouse

Lig

htin

g C

orpo

ratio

n In

c.

and

agai

nst

Def

enda

nts

AEL

in

the

amou

nt o

f U

SD

3321

177.

61 e

quiv

alen

t to

aro

und

Rs.1

625.

00 l

acs.

Th

e C

ompa

ny’s

cou

nter

cla

im o

f aro

und

Rs.1

000

lacs

ha

s bee

n di

sallo

wed

. Th

e C

ompa

ny h

as h

ande

d ov

er p

aper

s pe

rtain

ing

to

this

mat

ter

to it

s So

licito

rs in

Ind

ia. T

he C

ompa

ny is

ad

vise

d th

at f

or e

xecu

tion

of t

he j

udge

men

t of

the

U

.S.A

. Cou

rt, W

estin

ghou

se L

ight

ing

Cor

pora

tion

will

ha

ve to

mov

e In

dian

Cou

rt. T

he C

ompa

ny p

ropo

ses

to

proc

eed

agai

nst W

estin

ghou

se in

Indi

an C

ourt

and

also

m

ake

clai

m a

gain

st t

hem

for

var

ious

due

s to

the

C

ompa

ny fo

r sal

es m

ade,

for l

egal

exp

ense

s an

d ot

her

clai

ms.

1625

.00

No

prog

ress

.

5 C

ompa

ny

Petit

ion

No.

14

0 of

200

8 (S

ince

W

ithdr

awn)

Glo

bal

Trad

e Fi

nanc

e –

Civ

il C

ase

Hon

’ble

A

rbitr

atio

r M

rs. (

Just

ice)

Su

jata

M

anoh

ar

In M

arch

200

6, A

EL h

ad e

nter

ed i

nto

a Fa

ctor

ing

Agr

eem

ent w

ith G

TF f

or d

iscou

ntin

g of

invo

ices

of

a co

rpor

ate

cust

omer

(W

estin

ghou

se

Ligh

ting

Cor

pora

tion

(WLC

)) in

USA

. The

agg

rega

te v

alue

of

bills

dis

coun

ted

with

GTF

sto

od a

t U

SD 5

73,0

09.2

6;

acco

rdin

gly,

the

amou

nt r

elea

sed

to A

EL r

epre

sent

ed

85%

of

the

said

am

ount

les

s its

fac

torin

g an

d ot

her

char

ges

reco

vere

d up

fron

t (a

ggre

gatin

g to

IN

R

equi

vale

nt R

s.223

lacs

).

247.

00 (+

) In

tere

st @

18

% p

.a.

from

Se

ptem

ber

25, 2

007.

Und

er th

e ad

vice

of

the

Com

pany

’s

Solic

itors

, the

said

C

rimin

al c

ompl

aint

s ha

ve b

een

with

draw

n.

16

4

In te

rms o

f the

Agr

eem

ent,

Cre

dit P

rote

ctio

n is

off

ered

to

AEL

to th

e ex

tent

of 9

0% o

n th

e sp

ecifi

c cu

stom

er.

App

aren

tly G

TF d

id n

ot re

ceiv

e th

e pa

ymen

t fro

m th

e cu

stom

er. D

espi

te h

avin

g of

fere

d an

d ch

arge

d A

EL fo

r pr

ovid

ing

90%

C

redi

t Pr

otec

tion

on

the

spec

ific

cust

omer

, GTF

has

wro

ngfu

lly c

laim

ed f

rom

AEL

an

amou

nt o

f U

SD 5

2335

4.78

(IN

R e

quiv

alen

t R

s. 22

0 la

cs a

t cur

rent

exc

hang

e ra

tes)

. A

lthou

gh i

n te

rms

of t

he A

gree

men

t, th

e de

bt i

n re

spec

t of

fac

tore

d in

voic

es i

s as

sign

ed b

y A

EL t

o G

TF,

the

latte

r ha

s be

en n

eglig

ent

in c

olle

ctin

g th

e pr

ocee

ds a

nd h

as n

ot p

rote

cted

the

inte

rest

of i

ts c

lient

vi

z. A

EL.

The

afor

esai

d m

atte

r ha

s be

en r

efer

red

to

Arb

itrat

ion,

in

Ja

n’08

, in

te

rms

of

the

Fact

orin

g A

gree

men

t. M

s. (J

ustic

e) S

ujat

a M

anoh

ar h

as b

een

appo

inte

d as

th

e A

rbitr

ator

, an

d th

e A

rbitr

atio

n pr

ocee

ding

s hav

e al

read

y co

mm

ence

d.

In t

he m

eanw

hile

, w

ithou

t re

gard

to

the

ongo

ing

Arb

itrat

ion

proc

eedi

ngs,

GTF

file

d a

Win

ding

Up

Petit

ion

agai

nst A

EL in

the

Hon

oura

ble

Bom

bay

Hig

h C

ourt.

How

ever

, on

2nd

May

, 20

08,

the

Hon

oura

ble

Bom

bay

Hig

h C

ourt

has

dism

isse

d th

e W

indi

ng U

p Pe

titio

n. G

TF a

lso

sent

let

ters

(in

Feb

.’08)

to

AEL

’s

bank

ers a

nd M

umba

i Sto

ck E

xcha

nge

alle

ging

g A

EL’s

fa

ilure

an

d ne

glec

t to

pa

y its

du

es.

AEL

, in

co

nsul

tatio

n w

ith it

s A

dvoc

ates

, has

file

d 2

Crim

inal

co

mpl

aint

s ag

ains

t GTF

for

def

amat

ion

and

a co

unte

r cl

aim

of R

s. 51

90.0

0 la

cs

6 O

S N

o.

156/

2004

(C

heng

alpa

ttu

) O

S N

o.

124/

2006

(T

hiru

vallu

r)

Schn

eide

r El

ectri

c In

dia

Pvt.

Ltd.

, C

henn

ai

Dis

trict

M

unic

ipal

C

ourt,

Th

iruva

llur

The

Cla

im a

gain

st t

he C

ompa

ny i

s R

s.25.

21 l

acs

for

supp

lies

mad

e. E

arlie

r the

mat

ter w

as b

eing

hea

rd b

y th

e C

ourt

of

Hon

oura

ble

Subo

rdin

ate

Judg

e at

C

heng

alpa

ttu

whi

ch

has

now

be

en

trans

ferr

ed

to

Dis

trict

Mun

icip

al C

ourt,

Thi

ruva

llur.

25.2

1 Th

ere

is n

o pr

ogre

ss

in th

e m

atte

r, as

it

seem

s tha

t the

par

ty

is n

ot in

tere

sted

in

purs

uing

the

mat

ter.

7 O

S N

o.

7896

of

O.S

. No.

78

96 o

f C

ity C

ivil

Cou

rt, H

all

Orr

Cee

Ele

ctro

nics

Ltd

. C

laim

for

dam

ages

. C

laim

am

ount

not

spec

ified

. N

ot

Spec

ified

Th

e A

dvoc

ate,

Mr.

U.

L. S

omap

pa is

16

5

1996

19

96 fi

led

by M

r. A

. C

.Cha

ndra

she

kar R

aju

and

othe

rs

agai

nst t

he

Com

pany

an

d D

r.Cha

ndra

of

Orr

Cee

El

ectro

nics

Lt

d

No.

25,

B

anga

lore

hand

ling

the

mat

ter.

The

cros

s ex

amin

atio

n of

our

M

r. D

.N.B

harw

ada

was

ove

r on

24.1

.200

9 at

B

anga

lore

. Nex

t dat

e fo

r hea

ring

for t

he

final

arg

umen

t is

18.1

2.20

09.

8

O S

No.

66

32/1

996

O.S

. No.

66

32/1

996

filed

by

Mr.K

.M.N

anj

appa

and

4

othe

rs

agai

nst

M/s

.KSI

IDC

, Ban

ks

and

the

Com

pany

.

City

Civ

il C

ourt,

Hal

l N

o. 2

5,

Ban

galo

re

For

seek

ing

a de

clar

atio

n fr

om t

he C

ourt

that

the

gu

aran

tee

oblig

atio

n of

the

Pla

intif

f in

fav

our

of

Def

enda

nt N

o. 1

to 4

is w

ithdr

awn

and

the

Plai

ntiff

be

disc

harg

ed

from

su

ch

Gua

rant

ee.

Th

ere

are

7 D

efen

dant

s, ou

t of w

hich

one

is A

sian

Ele

ctro

nics

Ltd

.

Not

Sp

ecifi

ed

The

mat

ter i

s not

yet

co

nclu

ded.

Nex

t dat

e fo

r hea

ring

for t

he

final

arg

umen

t is

15.1

2.20

09

9 37

4 of

200

4 (U

nder

A

rbitr

atio

n)

Spec

ial

Leav

e Pe

titio

n N

o.

3666

of

2007

MSE

DC

L (M

SEB

) A

rbitr

al

Trib

unal

Pr

elim

inar

y m

eetin

g of

th

e A

rbitr

al

Trib

unal

co

nsis

ting

of:

o H

on’b

le Ju

stic

e M

r.S.N

.Var

iava

(Ret

d.)

o H

on’b

le Ju

stic

e M

rs. K

.K. B

am (R

etd.

) and

o

Hon

’ble

Jus

tice

Mr.

V.G

. Pa

lshi

kar

(Ret

d.)

[in p

lace

of H

on. J

ustic

e

Mr.

A.B

. Pa

lkar

(d

ecea

sed)

] w

as

held

on

27

th

Febr

uary

, 20

07.

As

per

the

dire

ctio

ns o

f pr

esid

ing

Arb

itrat

or J

ustic

e M

r.S.N

.Var

iava

, the

Com

pany

was

re

quire

d to

file

a s

tate

men

t of

cla

im b

y 19

th M

arch

, 20

08.

The

Com

pany

has

alre

ady

filed

a s

tate

men

t of

clai

m w

ithin

the

pres

crib

ed d

ate.

The

cla

im a

mou

nt is

R

s.157

10.0

0 la

cs.

MSE

DC

L ha

s al

so f

iled

stat

emen

t of

cla

im o

f Rs.5

0232

.00

lacs

with

inte

rest

on

Rs.3

0964

la

cs.

5023

2.00

Th

e ar

bitra

tion

proc

eedi

ngs a

re in

pr

ogre

ss. I

nspe

ctio

n of

doc

umen

ts is

in

prog

ress

. M

eanw

hile

th

e co

mpa

ny h

as

mov

ed a

n ap

plic

atio

n to

Arb

itral

Trib

unal

fo

r int

erim

relie

f of

Rs.

974.

00 la

cs w

ith

inte

rest

at 2

1% fr

om

1st N

ovem

ber 2

006.

Th

e ap

plic

atio

n fo

r in

terim

relie

f is t

o be

ar

gued

on

Janu

ary

22

& 2

3, 2

010.

16

6

2.

Liti

gatio

n In

volv

ing

Cri

min

al L

aws

S No.

C

ase

No.

(s)

Part

ies

Aut

hori

ty

Subj

ect M

atte

r an

d re

lief s

ough

t / b

rief

hi

stor

y A

mou

nt

invo

lved

(in

Lac

s)

Pres

ent S

tatu

s

1 25

/200

7;

56/2

007;

42

/200

7;

51/2

007;

11

9/20

07

shah

uwad

i, ch

ikha

lthan

a,

kinw

at,

wad

goan

and

D

indu

d po

lice

stat

ions

MSE

DC

L (MSE

B)

vs A

EL

and

Mr.

Jine

ndra

Sh

ah

Res

pect

ive

Cou

rt Se

vera

l friv

olou

s cr

imin

al c

ompl

aint

s ha

ve b

een

lodg

ed

by

MSE

DC

L w

ith

vario

us

Polic

e St

atio

ns in

the

Stat

e of

Mah

aras

htra

, whi

ch a

re

bein

g co

ntes

ted

by

the

Com

pany

an

d M

r. Ji

nend

ra S

hah,

For

mer

Exe

cutiv

e D

irect

or.

1.62

In

vest

igat

ions

are

no

t yet

com

plet

ed.

3.

Liti

gatio

n In

volv

ing

Secu

ritie

s and

Eco

nom

ic L

aws

Ther

e is

no

litig

atio

n pe

ndin

g ag

ains

t our

com

pany

invo

lvin

g Se

curit

ies a

nd E

cono

mic

Law

s. 4.

L

itiga

tion

Invo

lvin

g St

atut

ory

Law

s

S No.

C

ase

No.

(s)

Part

ies

Aut

hori

ty

Subj

ect M

atte

r an

d re

lief s

ough

t / b

rief

hi

stor

y A

mou

nt

invo

lved

( i

n La

cs )

Pres

ent S

tatu

s

1.

Mot

ion

1915

of

200

7 IT

App

eal

Lodg

ing

No.

10

56 o

f 200

7

Com

mis

sion

er o

f In

com

e Ta

x

Hon

’ble

Hig

Cou

rt,

Mum

bai

App

eal a

gain

st th

e or

der o

f the

Inco

me

Tax

App

ella

te T

ribun

al.

10.8

1 U

nder

hea

ring.

2.

Mot

ion

1916

of

200

7 IT

App

eal

Lodg

ing

No.

10

57 o

f 200

7

Com

mis

sion

er o

f In

com

e Ta

x

Hon

’ble

Hig

Cou

rt,

Mum

bai

App

eal a

gain

st th

e or

der o

f the

Inco

me

Tax

App

ella

te T

ribun

al.

38.0

1 U

nder

hea

ring.

3.

Mot

ion

1919

of

200

7

Com

mis

sion

er o

f In

com

e

Hon

’ble

Hig

Cou

rt,

Mum

bai

App

eal a

gain

st th

e or

der o

f the

Inco

me

Tax

App

ella

te T

ribun

al.

69.8

5 U

nder

hea

ring.

16

7

IT A

ppea

l Lo

dgin

g N

o.

1058

of 2

007

Tax

4.

Mot

ion

1918

of

200

7 IT

App

eal

Lodg

ing

No.

10

59 o

f 200

7

Com

mis

sion

er o

f In

com

e Ta

x

Hon

’ble

Hig

Cou

rt,

Mum

bai

App

eal a

gain

st th

e or

der o

f the

Inco

me

Tax

App

ella

te T

ribun

al.

114.

20

Und

er h

earin

g.

A

part

from

the

abov

e, th

ere

is n

o lit

igat

ion

pend

ing

agai

nst o

ur c

ompa

ny in

volv

ing

Stat

utor

y La

ws.

5.

L

itiga

tion

Invo

lvin

g La

bour

Law

s Th

ere

is n

o lit

igat

ion

pend

ing

agai

nst o

ur c

ompa

ny in

volv

ing

Labo

ur L

aws,

exce

pt a

s men

tione

d be

low

:-

S No.

C

ase

No.

(s

) Pa

rtie

s A

utho

rit

y Su

bjec

t M

atte

r an

d re

lief

soug

ht /

brie

f hi

stor

y A

mou

nt

invo

lved

( i

n La

cs )

Pres

ent S

tatu

s

1.

No

212/

AEC

L 15

07 o

f 20

07

Sand

eep

R

Am

bre

&

5 O

ther

s

Hig

h C

ourt,

B

omba

y (A

ppel

lat

e Si

de)

The

com

pany

ca

lled

Asi

an

Elec

tric

Com

pone

nts

Lim

ited

(AEC

L) w

as m

erge

d w

ith th

e co

mpa

ny in

the

year

200

3. S

ix e

x-tra

inee

s of

mer

ged

com

pany

mov

ed l

abou

r co

urt

for

rest

orat

ion

of t

heir

serv

ices

with

ba

ck w

ages

w.e

.f. 1

.10.

1998

. Th

e La

bour

C

ourt

gave

ord

er i

n th

eir

favo

ur w

hich

is

bein

g co

ntes

ted

by th

e co

mpa

ny in

Bom

bay

Hig

h co

urt b

y w

ay o

f wrip

etiti

on w

hich

was

ad

mitt

ed o

n pa

ymen

t of

Rs.

6.00

lac

s i.e

. 50

% o

f the

ir cl

aim

s

10.8

1 Th

e m

atte

r has

not

yet

co

me

up to

the

hear

ing

stag

e.

(B) F

ILE

D B

Y T

HE

ISSU

ER

CO

MPA

NY

1.

L

itiga

tion

Invo

lvin

g C

ivil

Law

s

S No.

C

ase

No.

(s

) Pa

rtie

s A

utho

rity

Su

bjec

t M

atte

r an

d re

lief

soug

ht /

bri

ef

hist

ory

Am

ount

in

volv

ed

( in

Lacs

)

Pres

ent S

tatu

s

1 A

ppea

l No.

70

of 2

007

Uni

on

Ban

k of

Th

e D

ebt

Rec

over

y Th

e m

atte

r is

lyin

g be

fore

the

Deb

t Rec

over

y A

ppel

late

Tr

ibun

al.

A

ppea

l ha

s be

en

233.

00

The

mat

ters

will

be

hear

d by

th

e

16

8

Indi

a

App

ella

te

Trib

unal

adm

itted

on

Com

pany

dep

ositi

ng a

sum

of

Rs.5

0 la

cs w

ith th

e Tr

ibun

al. U

nion

Ban

k ha

s al

so g

one

into

App

eal

in t

he D

ebt

Rec

over

y Tr

ibun

al. U

nion

Ban

k of

Ind

ia h

as c

laim

ed a

su

m o

f R

s.339

.00

lacs

+ i

nter

est

from

the

C

ompa

ny, i

gnor

ing

the

Com

pany

’s c

laim

for

re

fund

of

Secu

rity

Dep

osit

of R

s.233

.00

lacs

w

ith in

tere

st th

ereo

n.

conc

erne

d B

ench

of

the

Deb

t Rec

over

y A

ppel

late

Tr

ibun

al

Shor

tly.

2 Sp

ecia

l Le

ave

Petit

ion

(Civ

il) o

f 15

093/

2007

Tata

Fi

nanc

e Li

mite

d (N

ow

know

n as

Ta

ta

Mot

ors

Ltd.

)

Supr

eme

Cou

rt Th

e C

ompa

ny h

as m

oved

Sup

rem

e C

ourt

by

way

of

Spec

ial

Leav

e Pe

titio

n, w

hich

has

be

en a

dmitt

ed o

n C

ompa

ny d

epos

iting

a s

um

of R

s.200

lac

s w

ith t

he S

upre

me

Cou

rt. T

he

cont

inge

nt li

abili

ty fo

r thi

s cl

aim

is R

s.338

.94

lacs

as o

n 31

st M

arch

, 200

8 as

per

the

Arb

itral

Tr

ibun

al A

war

d.

Aga

inst

this

, the

Com

pany

ha

s al

read

y de

posi

ted

Rs.7

5 la

cs i

n Es

crow

A

ccou

nt a

nd s

ubse

quen

tly tr

ansf

erre

d to

Tat

a M

otor

s Lt

d. a

s pe

r th

e C

ourt

Ord

er d

ated

25

.1.2

007

for

appr

opria

tion.

Th

e m

atte

r w

ill

be h

eard

by

the

conc

erne

d B

ench

of

the

Supr

eme

Cou

rt af

ter

the

rece

ipt o

f A

war

d of

In

com

e Ta

x A

ppel

late

Trib

unal

. N

ow t

he

Com

pany

has

bee

n in

form

ed b

y A

dvoc

ates

&

Solic

itors

, M/s

. S. M

ahom

edbh

ai &

Co.

vid

e th

eir

lette

r da

ted

13.1

.200

9 th

at t

he I

ncom

e Ta

x Tr

ibun

al h

as a

lread

y pa

ssed

Ord

er o

n 24

.9.2

008

whe

reby

it

was

dire

cted

tha

t th

e im

pugn

ed o

rder

of t

he In

com

e Ta

x O

ffic

er b

e se

t asi

de a

nd th

e m

atte

r be

rest

ored

to th

e fil

e of

A.O

. with

a d

irect

ion

to h

im to

dec

ide

the

issu

e af

resh

as

per

the

law

afte

r al

low

ing

a re

ason

able

opp

ortu

nity

of b

eing

hea

rd to

the

asse

ssee

, i.e

., Ta

ta M

otor

s Ltd

.

610.

00

In v

iew

of t

he sa

id o

rder

of

the

Supr

eme

Cou

rt, o

ur

Solic

itors

will

take

suita

ble

actio

n to

app

roac

h th

e sa

id

Cou

rt fo

r ref

und

of th

e Se

curit

y D

epos

it of

Rs.

200

lacs

.

3 37

4 of

200

4 (U

nder

A

rbitr

atio

n)

Spec

ial

Leav

e Pe

titio

n N

o.

MSE

DC

L (M

SEB

) A

rbitr

al

Trib

unal

Pr

elim

inar

y m

eetin

g of

the

Arb

itral

Trib

unal

co

nsis

ting

of:

o

Hon

’ble

Ju

stic

e M

r.S.N

.Var

iava

(R

etd.

) o

Hon

’ble

Ju

stic

e M

rs.

K.K

. B

am

(Ret

d.) a

nd

1571

0.00

Th

e ar

bitra

tion

proc

eedi

ngs

are

in p

rogr

ess.

Insp

ectio

n of

do

cum

ents

is in

pro

gres

s. N

ext d

ates

for h

earin

g ou

r ap

plic

atio

n fo

r int

erim

relie

f ar

e 22

.1.2

010

& 2

3.1.

2010

.

16

9

3666

of

2007

o

Hon

’ble

Jus

tice

Mr.

V.G

. Pa

lshi

kar

(Ret

d.)

[in p

lace

of

Hon

. Ju

stic

e M

r. A

.B.

Palk

ar

(dec

ease

d)] w

as h

eld

on 2

7th F

ebru

ary,

200

7.

As

per

the

dire

ctio

ns o

f pr

esid

ing

Arb

itrat

or

Just

ice

Mr.S

.N.V

aria

va,

the

Com

pany

was

re

quire

d to

file

a s

tate

men

t of

cla

im b

y 19

th

Mar

ch, 2

008.

The

Com

pany

has

alre

ady

filed

a

stat

emen

t of

cla

im w

ithin

the

pre

scrib

ed

date

. Th

e cl

aim

am

ount

is R

s.157

10 la

cs.

4 N

A

Wes

tingh

ouLi

tigat

ion

Th

e D

istri

ct

Cou

rt fo

r th

e Ea

ster

n D

istri

ct o

f Pe

nnsy

lva

nia,

U.S

.A

The

Dis

trict

Cou

rt fo

r th

e Ea

ster

n D

istri

ct o

f Pe

nnsy

lvan

ia, U

.S.A

. has

pas

sed

Ord

er in

the

civi

l ac

tion

in t

he W

estin

ghou

se L

ight

ing

Cor

pora

tion

V/s

. A

sian

Ele

ctro

nics

Ltd

. O

n 10

th

Dec

embe

r, 20

08.

A

ccor

ding

ly,

the

judg

emen

t is

en

tere

d in

fa

vour

of

th

e Pl

aint

iff,

i.e.,

Wes

tingh

ouse

Li

ghtin

g C

orpo

ratio

n In

c. a

nd a

gain

st D

efen

dant

s A

EL

in th

e am

ount

of U

SD 3

3211

77.6

1 eq

uiva

lent

to

aro

und

Rs.1

625.

00 l

acs.

The

Com

pany

’s

coun

ter

clai

m o

f ar

ound

Rs.1

000.

00 la

cs h

as

been

dis

allo

wed

. Th

e C

ompa

ny h

as h

ande

d ov

er p

aper

s pe

rtain

ing

to t

his

mat

ter

to i

ts

Solic

itors

in

Indi

a. W

e ar

e ad

vise

d th

at f

or

exec

utio

n of

the

jud

gem

ent

of t

he U

.S.A

. C

ourt,

W

estin

ghou

se

Ligh

ting

Cor

pora

tion

will

ha

ve

to

mov

e In

dian

C

ourt.

Th

e C

ompa

ny

prop

oses

to

pr

ocee

d ag

ains

t W

estin

ghou

se in

Ind

ian

Cou

rt an

d al

so m

ake

clai

m a

gain

st t

hem

for

var

ious

due

s to

the

C

ompa

ny f

or s

ales

mad

e, f

or l

egal

exp

ense

s an

d ot

her c

laim

s.

1000

.00

No

prog

ress

.

5 A

rbitr

atio

n ap

peal

no.

22

/08

&

23/0

8

Mad

hya

Prad

esh

Stat

e El

ectri

city

B

oard

(M

PSEB

) –

Civ

il C

ase

Add

ition

al

Dis

trict

Ju

dge

of

Jaba

lpur

The

Com

pany

has

obt

aine

d an

Aw

ard

for

Rs.1

77

lacs

in

clus

ive

of

inte

rest

.

The

Com

pany

ha

s fil

ed

Petit

ion

for

exec

utio

n be

fore

th

e A

dditi

onal

D

istri

ct

Judg

e of

Ja

balp

ur o

n 12

.05.

2008

. Th

e m

atte

r cam

e up

on

20.

10.2

008.

Th

e C

ourt

issu

ed O

rder

that

M

PSEB

sha

ll de

posi

t the

am

ount

in th

e C

ourt

on o

r bef

ore

6th N

ovem

ber,

2008

. MPS

EB h

as

177.

00

The

mat

ters

in a

ppea

l wer

e on

th

e B

oard

3.

11.2

009

and

hear

ing

was

ad

jour

ned

and

mat

ter w

ill b

e he

ard

shor

tly.

17

0

gone

in

appe

al i

n H

igh

Cou

rt ag

ains

t th

e ab

ove

Ord

er.

The

appe

al h

as b

een

adm

itted

by

the

Hig

h C

ourt

on M

PSEB

dep

ositi

ng 5

0%

of th

e du

es in

clus

ive

of in

tere

st a

mou

ntin

g to

R

s. 10

4.04

lacs

in th

e H

igh

Cou

rt w

hich

can

be

with

draw

n by

the

Com

pany

aga

inst

Ban

k G

uara

ntee

of

the

like

amou

nt. T

he C

ompa

ny

has

alre

ady

filed

the

Ban

k G

uara

ntee

with

the

Hig

h C

ourt

and

refu

nd o

f Rs.

104.

04 la

cs h

as

been

rece

ived

. The

Com

pany

has

als

o fil

ed a

n ap

peal

in th

e H

igh

Cou

rt fo

r non

-incl

usio

n of

41

8 Pa

nels

by

the

Arb

itral

Trib

unal

. T

he

furth

er c

laim

am

ount

is R

s. 40

lacs

. 6

Suit

No.

28

25 o

f 19

96

Stan

dard

Tw

istin

g In

dust

ries

– C

ivil

Cas

e

Deb

t R

ecov

ery

Trib

unal

II

at

Mum

bai

Cla

im o

f th

e C

ompa

ny i

s R

s. 4.

84 l

acs

&

Rs.7

.50

lacs

. No

prog

ress

, as

the

Com

pany

’s

oper

atio

ns a

re s

uspe

nded

and

Ban

kers

are

in

proc

ess

of

taki

ng

over

th

e as

sets

of

th

e C

ompa

ny.

12.3

4 N

o pr

ogre

ss, a

s the

C

ompa

ny’s

ope

ratio

ns a

re

susp

ende

d an

d B

anke

rs a

re

in p

roce

ss o

f tak

ing

over

the

asse

ts o

f the

Com

pany

. 7

CS

(OS)

N

o. 1

177

of

2008

Jum

bo

Elec

troni

cs

Del

hi

Hig

h C

ourt

For

perm

anen

t in

junc

tion

to

rest

rain

in

frin

gem

ent o

f pat

ent,

copy

right

, pas

sing

off

an

d un

fair

com

petit

ion.

21.0

0 D

efen

dant

has

mov

ed

appl

icat

ion

to v

acat

e th

e st

ay

impo

sed

by th

e H

on’b

le

cour

t whi

ch h

as b

een

gran

ted.

The

com

pany

pr

opos

es to

file

revi

sion

pe

titio

n. T

he sa

id a

pplic

atio

n is

list

ed fo

r hea

ring

on

16.0

2.20

10.

8 C

S (O

S)

No.

116

8 of

20

09

Hav

ells

In

dia

Ltd.

D

elhi

H

igh

Cou

rt

For

perm

anen

t in

junc

tion

to

rest

rain

in

frin

gem

ent o

f pat

ent,

copy

right

, pas

sing

off

an

d un

fair

com

petit

ion

and

for

dam

ages

/

rend

ition

of a

ccou

nts.

25.0

0 To

rest

rain

the

defe

ndan

t fr

om c

ontin

uing

with

the

alle

ged

infr

ingi

ng a

ctiv

ities

an

d th

e sa

id a

pplic

atio

n w

as

last

list

ed fo

r hea

ring

on

06.0

1.20

10

2.

Liti

gatio

n In

volv

ing

Cri

min

al L

aws

S N

o.

Cas

e N

o.

(s)

Part

ies

Aut

hori

ty

Subj

ect M

atte

r an

d re

lief s

ough

t / b

rief

hi

stor

y A

mou

nt

invo

lved

( i

n La

cs )

Pres

ent S

tatu

s

17

1

1.

1876

/08

&

1873

/08

Paci

fic

Indi

a M

irjap

ur

Cou

rt,

Ahm

edab

ad

Sect

ion

138

of th

e N

egot

iabl

e In

stru

men

ts

Act

, 188

1.

9.73

A

Non

-Bai

labl

e W

arra

nt w

as

issu

ed fo

r the

seco

nd ti

me

agai

nst t

he d

efen

dant

s (Pa

cific

). St

ill n

eith

er th

e de

fend

ants

nor

th

eir c

ouns

el a

ppea

red

befo

re

the

Hon

’ble

cou

rt. D

ate

of n

ext

hear

ing

is D

ecem

ber 1

8, 2

009.

C

ross

Ver

ifica

tion

right

s of t

he

defe

ndan

ts h

ave

been

can

celle

d by

the

Hon

’ble

Cou

rt.

2.

Not

ice

No.

ES

A/1

56-

160/

98

date

d 17

/12/

1998

Pow

erflo

w

Cap

acito

rs

Pvt.

Ltd.

, N

ashi

k –

Crim

inal

C

ase

N.A

. C

laim

of

the

Com

pany

is

Rs.4

.75

lacs

. C

rimin

al C

ompl

aint

file

d un

der

Sect

ion

138

of N

egot

iabl

e In

stru

men

t Act

.

4.75

N

o pr

ogre

ss.

3.

CC

No.

70

83, C

C

No.

708

4,

CC

No.

77

84 &

CC

N

o. 4

350

Asi

an

Ligh

ts

Met

ropo

litan

M

agis

trate

, Sahi

dape

t, C

henn

ai

Sect

ion

138

of th

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e In

stru

men

ts

Act

, 188

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5 C

C N

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8 M

agnu

m

Ass

ocia

tes

Judi

cial

m

agis

trate

fir

st c

lass

at

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ne

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of th

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ts

Act

, 188

1, fo

r dis

hono

r of f

our c

hequ

es

37.4

9 H

earin

g is

not

yet

star

ted

6 C

C N

o.

5632

of

2008

Star

lite

Plas

tic

Engi

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cial

m

agis

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st c

lass

at

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ne

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of th

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stru

men

ts

Act

, 188

1, fo

r dis

hono

r of a

che

ques

0.

38

Sum

mon

s wou

ld n

ot b

e se

rves

w

hich

has

bee

n se

rved

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lic

anno

unce

men

t.

7 2

015

/ 07

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tan

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s and

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pply

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trict

C

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dore

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of th

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men

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Act

, 188

1, fo

r dis

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ques

10.0

0

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mat

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as la

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on

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09 a

nd sh

all b

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next

on

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8 91

31 /

08

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Supp

ly

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10

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e N

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has n

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as

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, 188

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all b

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on

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.200

9.

3.

Liti

gatio

n In

volv

ing

Secu

ritie

s and

Eco

nom

ic L

aws

Ther

e is

no

litig

atio

n pe

ndin

g fil

ed b

y ou

r com

pany

invo

lvin

g Se

curit

ies a

nd E

cono

mic

Law

s 4.

L

itiga

tion

Invo

lvin

g St

atut

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Law

s

A.

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tral

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es T

ax

S N

o.

Cas

e N

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(s)

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Aut

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ief h

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mou

nt

invo

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( i

n La

cs )

Pres

ent S

tatu

s

1.

W.P

.M.P

. N

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316

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.P. N

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/200

6

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epar

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igh

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adra

s

Rel

ief f

or S

ales

Tax

cha

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and

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nalty

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yea

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ay o

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igh

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rt fo

r rec

over

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ance

di

sput

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y Sa

les T

ax d

epar

tmen

t.

2.

A.P

. No.

92

/06

Ass

ista

nt

Com

mis

sion

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mer

cial

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x

Com

mer

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Ta

x O

ffic

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Rel

ief f

or S

ales

Tax

cha

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as

the

CTO

has

cla

imed

hig

her r

ate

of ta

x fo

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yea

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03.

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8 U

nder

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17

3

5.

Liti

gatio

n In

volv

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ur L

aws

S N

o.

Cas

e N

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(s)

Part

ies

Aut

hori

ty

Subj

ect M

atte

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d re

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t /

brie

f hist

ory

Am

ount

in

volv

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( in

Lacs

)

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ent S

tatu

s

1.

No

212/

AEC

L 15

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f 20

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eep

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bre

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h C

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omba

y (A

ppel

late

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The

com

pany

cal

led

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an E

lect

ric

Com

pone

nts L

imite

d (A

ECL)

was

m

erge

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ith th

e co

mpa

ny in

the

year

200

3. S

ix e

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s of

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ged

com

pany

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the

labo

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der i

n th

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este

d by

the

com

pany

in

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bay

Hig

h co

urt b

y w

ay o

f writ

pe

titio

n w

hich

was

adm

itted

on

paym

ent o

f Rs.

6.00

lacs

i.e.

50%

of

thei

r cla

ims

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1 Th

e m

atte

r has

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t yet

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UT

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ND

ING

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UR

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ER

OF

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E IS

SUE

R C

OM

PAN

Y

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itiga

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nst P

rom

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of t

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ompa

ny

• Per

tain

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to C

rimin

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aws (

Mr.

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ah –

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S N

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Am

ount

in

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ent S

tatu

s

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ourt,

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bai

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Act

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138

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men

ts A

ct

2.60

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akal

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akal

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5.

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com

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nade

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ourt,

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n 13

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the

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ents

Act

30

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com

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ourt,

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bai

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the

Neg

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rum

ents

Act

96

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97.7

6 95

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nanc

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ourt,

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bai

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ents

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10

.12

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V

akal

atna

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d

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ank

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ourt

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lard

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r, M

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i

Und

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n 13

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ents

Act

14

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U

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ring

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ard

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ddar

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son

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25

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umba

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tion

138

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egot

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men

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ct

19.3

5 U

nder

hea

ring

and

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last

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ard

on 0

5/11

/200

9

11.

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SS/2

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Indu

sind

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k Lt

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14th

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aum

C

ourt,

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bai

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er S

ectio

n 13

8 of

the

Neg

otia

ble

Inst

rum

ents

Act

10

00.0

0 U

nder

hea

ring

and

was

last

he

ard

on 3

1/10

/200

9 B

. Cas

es F

iled

by P

rom

oter

of t

he C

ompa

ny: N

IL

• Per

tain

ing

to C

rimin

al L

aws:

NIL

• P

erta

inin

g to

Civ

il La

ws:

NIL

• S

tatu

tory

Due

s: N

IL

• Def

aults

with

Ban

ks: N

IL

• Eco

nom

ic O

ffen

ce: N

IL

OU

TST

AN

DIN

G L

ITIG

ATI

ON

S IN

VO

LV

ING

OU

R P

RO

MO

TE

R G

RO

UP

OF

TH

E IS

SUE

R C

OM

PAN

Y

A. L

itiga

tion

agai

nst P

rom

oter

Gro

up o

f the

Issu

er C

ompa

ny

Th

ere

is n

o lit

igat

ion

agai

nst o

ur p

rom

oter

gro

up c

ompa

ny.

B. C

ases

File

d by

Pro

mot

er G

roup

of t

he Is

suer

Com

pany

: NIL

Ther

e is

no

litig

atio

n by

our

pro

mot

er g

roup

com

pany

175

OU

TST

AN

DIN

G L

ITIG

ATI

ON

S IN

VO

LV

ING

AL

L D

IRE

CT

OR

S O

F T

HE

ISSU

ER

CO

MPA

NY

A

. Liti

gatio

ns a

gain

st D

irec

tors

of t

he C

ompa

ny

• Per

tain

ing

to C

rimin

al L

aws:

NIL

• P

erta

inin

g to

Civ

il La

ws:

NIL

• S

tatu

tory

Due

s: N

IL

• Def

aults

with

Ban

ks: N

IL

• Eco

nom

ic O

ffen

ce: N

IL

B. C

ases

File

d by

Dir

ecto

rs o

f the

Com

pany

: NIL

• P

erta

inin

g to

Crim

inal

Law

s: N

IL

• Per

tain

ing

to C

ivil

Law

s: N

IL

• Sta

tuto

ry D

ues:

NIL

• D

efau

lts w

ith B

anks

: NIL

• E

cono

mic

Off

ence

: NIL

M

ater

ial D

evel

opm

ents

Th

e D

irect

ors

of th

e C

ompa

ny in

thei

r opi

nion

her

eby

stat

e th

at th

ere

is n

o m

ater

ial d

evel

opm

ent a

fter t

he d

ate

of th

e la

st fi

nanc

ial s

tate

men

ts d

iscl

osed

in th

e Le

tter o

f Off

er w

hich

is li

kely

to m

ater

ially

and

adv

erse

ly a

ffec

t or i

s lik

ely

to a

ffec

t the

trad

ing

or p

rofit

abili

ty o

f the

Com

pany

of t

he v

alue

of i

ts a

sset

s, or

its

abili

ty to

pay

its l

iabi

litie

s with

in th

e ne

xt tw

elve

mon

ths.

176

GOVERNMENT/ STATUTORY APPROVALS In view of the material approvals listed below, we can undertake this Issue and our current business activities and no further material approvals are required from any Government authority or the RBI to continue such activities. We have not applied for any license/approvals in relation to the Objects of the Issue, except as mentioned herein. We have received the following Government approvals that are material to our business: GOVERNMENT & OTHER STATUTORY APPROVALS We have received the necessary consents, licenses, permissions and approvals from the government and various governmental agencies required for our present business and except as mentioned below, no further material approvals are required for carrying on our present business. Approval for the Issue

1. The Board of Directors has pursuant to a resolution dated May 14 2009 & December 1, 2009 approved the issue.

2. The Shareholders of our company have pursuant to a resolution dated July 06, 2009 under section 81(1A) of the Companies Act, 1956, authorized the issue.

3. Board Resolution dated December 1, 2009 passed by the Board of the Company approving the Draft Letter of Offer.

4. Letter dated [•] 2009 Issued by Bombay Stock Exchange Limited (BSE) giving our company the in-principle approval for the issue.

5. Letter dated [•] 2009 Issued by the National Stock Exchange of India Limited (NSE) giving our company the in-principle approval for the issue.

6. Observation Letter dated [•] 2009 Issued by the Securities & Exchange Board of India Certificate

1. Company Identification Number: L99999MH1964PLC012835 2. Certificate of Incorporation dated January 21, 1964 and commencement of business dated 7th March 1964

issued by Registrar of Companies, Maharashtra. 3. Certificate of Importer Exporter Code (IEC) no: 0390000744, issued on April 01, 1994 by Government of

India, Ministry of Commerce issued from file no.: 03/04/130/50074/AM91/4; dated 20th October 2007. Status of all the Patents applications

Sr. No Country Application No Status

1 Brazil P10007495-0 11th Year – Next Renewal Fee - before January 07, 2010 2 Austria 1142453 11th Year – Next Renewal Fee - before January 31, 2010 3 Belgium 1142453 11th Year – Next Renewal Fee - before January 31, 2010 4 Switzerland 1142453 11th Year – Next Renewal Fee - before January 31, 2010 5 Germany 1142453 11th Year – Next Renewal Fee - before January 31, 2010 6 Denmark 1142453 11th Year – Next Renewal Fee - before January 31, 2010 7 Spain 1142453 11th Year – Next Renewal Fee - before January 31, 2010 8 France 1142453 11th Year – Next Renewal Fee - before January 31, 2010 9 United Kingdom 1142453 11th Year – Next Renewal Fee - before January 07, 2010 10 Ireland 1142453 11th Year – Next Renewal Fee - before January 31, 2010 11 Netherlands 1142453 06th Year – Next Renewal Fee - before January 31, 2010 12 Portugal 1142453 11th Year – Next Renewal Fee - before January 07, 2010 13 Sweden 1142453 11th Year – Next Renewal Fee - before January 31, 2010 14 South Africa 2001/6277 09th Year – Next Renewal Fee - before January 07, 2010 15 Korea 460344 07th Year – Next Renewal Fee – before January 07, 2010 16 Mexico PA/a/2001/007091 10th to 14th Year– Next Renewal Fee - before January 07, 2010 17 Hongkong 2102675.6 Granted -2nd Renewal Fee – before January 07, 2010

177

Current Status of the IPAB Appeals Details TA/11/2007/PT/MUM TA/12/2007/PT/MUM Counter statement files on March 31, 2008 March 31, 2008 Counter statement taken on record on

August 12, 2008 May 22, 2008

Replies to counter statements filed by Philips Electronics India Ltd. on

September 25, 2008 September 25, 2008

Replies to counter statements filed by Philips Electronics India Ltd. on

No date available (As no extension of time was sought, this is a matter of record at the IPAB Registry)

January 28, 2009 (Extension of time was sought in this case and therefore, the grant of such extension was formally conveyed by the IPAB Registry)

Therefore, the respective pleadings of the parties having been taken on record, the next stage are the hearing of the two appeals. However, we have so far not received any hearing notice from the IPAB Registry and the matters have not been listed till date. The Company requires various approvals for it to carry on its business in India and overseas. The approvals that the Company requires include the following. Other Approvals

1. Permanent Account Number: AABCA0832C 2. Service Tax registration No AABCA0832CST005; from Superintendent Custom & Central Excise, for

carrying out Goods and Transport Agency and Business Auxiliary Services by our Unit. 3. Central Sales Tax Registration DNH/CST/3405/dated 05.10.1999 4. Local Sales Tax Registration DNH/ST/3475/dated 05.10.1999 5. VAT Registration No 27120002695V-dated 01/04/06 6. Trade Marks registry No: RLC/RPD/3631/780675; dated 14th November 2007, trade mark journal no: 1374

issued by Registrar of Trade mark, Mumbai. 7. Central Excise Registration Number AABCA0832CXM011dated 17th February 2006 from Assistant

Commissioner of Central Excise & Customs, Nashik III Division, for operating an export oriented undertaking Goods at Nashik, Maharastra

8. Professional Tax Registration No. PT/R/1/1/21/45 9. Central Excise Registration Number AABCA0832CXM013; dated 22nd March 2007 from Assistant

Commissioner of Central Excise & Customs, Mettukuppam Division, Chennai for operating an export oriented undertaking Goods at Mettukuppam Division, Chennai, Tamilnadu.

Registration under various Industrial and Labor Laws:

1. Provident Fund Registration No: B.C.NO:J-1/251 (25)/67-118; Dated 31st August 1967 from Commissioner of Provident Fund & Income Tax, Mumbai

2. Factory License No: 02300045 dated 15.10.2008 from Chief Inspector of Factories, Government of 3. Registration under Employees’ State Insurance Act,1948 and Employers code No: A.E.L. ESI NO – 31-

10199-A-67 4. Commercial Taxes Department, Government of Tamilnadu, Certificate of Registration for Tax payer’s

Identification Number (TIN) 33221423785

178

Registration and various approvals from various Governmental and Regulatory Authorities to start our production facilities at various locations Nashik, Maharastra

o Factory License No. 080661 from Industrial o Service Tax registration No AABCA0832CST005 from Superintendent Custom & Central Excise, for

carrying out Goods and Transport Agency and Business Auxiliary Services by our Unit (all units) o Central Sales Tax Registration No: 27120002695C; Dated.01/04/2006 o Local Sales Tax Registration No: 27120002695V; Dated.01/04/2006 o VAT Registration No: 27120002695V Dtd.01/04/2006 o Central Excise Registration Number AABCA0832CXM010 (at Satpur), AABCA0832CXM014 (at Vilholi),

AABCA0832CXM011 (EOU), from Assistant Commissioner of Central Excise, for manufacturing of Excisable Goods at Nasik, District Nasik.

o Certificate of stability by Government approved Valuer, Mr. Mudkanna J.C. Nashik dated 2nd August 2008 for certifying the premises, machinery, plant etc which has been installed in survey no: 15/1B, Nashik for manufacturing of power saving electronic equipments.

o Consent Letter from Maharashtra Pollution Control Board; Consent letter No: RON/NASHIK/3246; dated 29th July 2008 and granted for a period up to 31st May 2011

Silvassa Unit, Dadra & Nagar Haveli

o Service Tax registration No AABCA0832CST005; from Superintendent Custom & Central Excise, for carrying out Goods and Transport Agency and Business Auxiliary Services by our Unit (all units).

o Factory Licence No. 508 for 113/2/6, Tirupati Industrial Estate, Nr. 66, KVA Amli, Silvassa by Chief Inspector of Factories & Boiler Administration of Dadra & Nagar Haveli, Silvassa, valid till 31.12.2010.

o Central Sales Tax Registration no: DNH/CST/3405/dated 05.10.1999 o Local Sales Tax Registration no: DNH/ST/3475/dated 05.10.1999 o VAT Registration No 27120002695V-dated 01/04/06 o Central Excise Registration Number AABCA032CXM007 from Assistant Commissioner of Central Excise,

for manufacturing of Excisable Goods at Amli, Silvassa o Daman & DIU and Dadra & Nagar Haveli Pollution Control Committee Consent Order No:

PCC/DDD/WH-W-1990/AL/WA/99-00/343; dated July 27, 2008 and granted for a period up to 28th February 2013.

Solan Unit, Himachal Pradesh

o Service Tax registration No AABCA0832CST005 from Superintendent Custom & Central Excise, for carrying out Goods and Transport Agency and Business Auxiliary Services by our Unit (all units)

o Central Sales Tax Registration no: SOL-CST- 11864 - dated 4/02/08, o Local Sales Tax Registration No: SOL-III-12046-dated:-4/02/08

Quality Certifications

o Awarded ISO 9001:2008 Certificate from Euro Veritas Quality Assurance Private Limited accreditation by the Joint Accreditation system of Australia and New Zealand. The certification No: EV/08/103. Registration period form 31st December 2008 to 30th December 2011 for Nashik site, for Design, Development, and Manufacturing and supply of Customised / Tailored Energy Efficient products and systems, statics and dynamics VAR compensation system, with Wire / Wireless Intelligent Controls, Sensors and supported by Electronic / software based / electrical control Gear or systems.

o Received a certificate dated 14th July 2006 from Verband Der Elektrotechnik Elektronik Informationstechnik e.V.

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Pending Approvals Licenses applied for renewal and pending approval for existing business of our company

S. No. Description Approvals to be received Present Status 1. Hadbast No. 932, Khasra No. 228,

Dist. Solan, Himachal Pradesh Factory License and Himachal Pradesh Pollution Control Board

Applied and Renewal to be granted

2. Plot No. 2, Survey No. 1B/2C, Near Octroi Naka, Vilholi, Nashik – 422 010

Factory License and Maharastra Pollution Control Board

Applied and Renewal to be granted

3. Survey No. 15, Plot No. 1, Nashik

Factory License Applied and Renewal to be granted

4 Application for Renewal for Registration under Contract Labor (Regulation & Abolition) Act, 1970 – bearing Registration No: 09/2005 from Registering Officer, Contract Labour (R & A) Act, 1970, Nashik

Contract Labour Applied and Renewal to be granted

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SECTION VII

OTHER REGULATORY AND STATUTORY DISCLOSURES Authority of the Issue Pursuant to the resolution passed at the meeting of Board of Directors of our Company held on 14th May 2009 & 1st December, 2009 and the resolution of the shareholders passed under Section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting held on 6th July 2009 it has been decided to make the following offer to the Equity Shareholders of our Company Prohibition by SEBI The Company, its Promoter, its Directors or any of the Company’s associates or group companies and companies with which the Directors of the Company are associated as Directors or Promoter, or Directors or Promoter in control of, of the promoting Company, are currently not prohibited from accessing the capital market under any order or direction passed by SEBI. Prohibition by RBI Further, our Company, our Directors, our Promoter, Group Companies, the relatives (as per Companies Act 1956) of our Promoter are not identified as willful defaulters by RBI/ Government authorities, other than as mentioned below:

� Name of our Company is appearing on the Reserve Bank of India’s list of wilful defaulters i.e. Credit Information Bureau (India) Limited (CIBIL) for suit filed of Rs. 100 lacs and above as on 30th September 2009. The details are as under: -

Name of Credit Grantors Branch Amount in (Rs. Lacs) Global Trade Finance Limited (GTF) Bandra 247.00

GTF filed a Winding up Petition against AEL in the Honourable Bombay High Court. However, on 2nd May, 2008, the Honourable Bombay High Court has dismissed the Winding up Petition. GTF also sent letters in February 2008 to AEL’s bankers and Bombay Stock Exchange allegingg AEL’s failure and neglect to pay its dues. AEL, in consultation with its Advocates, has filed 2 Criminal complaints against GTF for defamation and a counter claim of Rs. 5190.00 lacs. Under the advice of the company’s Solicitors, the said criminal complaints have been withdrawn. Eligibility for the Issue The Company is an existing company registered under the Companies Act whose Equity Shares are listed on BSE & NSE. It is eligible to offer this Issue in terms of Chapter IV of the SEBI (ICDR) Regulations, 2009. Compliance with Part A of Schedule VIII of the SEBI Regulations Pursuant to Clause (3) of Part E of Schedule VIII of the SEBI Regulations, the Company is eligible to offer this Issue in terms of Part A of Schedule VIII of the SEBI (ICDR) Regulations. Disclaimer Clause of SEBI “IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF DRAFT LETTER OF OFFER TO the SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME /PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER “TRANSWARRANTY CAPITAL PRIVATE LTD” HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY

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ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER TRANSWARRANTY CAPITAL PVT LTD HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 21st DECEMBER 2009 WHICH READ AS FOLLOWS: WE, THE LEAD MERCHANT BANKERS TO THE ABOVE MENTIONED FORTHCOMING ISSUE, STATE AND CONFIRM AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE; 2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, IT’S DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE COMPANY. WE CONFIRM THAT: (a) THE DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; (b) ALL THE LEGAL REQUIREMENTS RELATING TO ISSUE AS ALSO THE REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND (c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS. 3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. 4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. 5. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

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6. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. 7. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT MODE. 8. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. 9. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER: (a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND (b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME. 10. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE. 11. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTER EXPERIENCE, ETC. 12. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY. THE FILING OF THE OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME; WITH THE LEAD MERCHANT BANKER ANY IRREGULARITIES OR LAPSES IN OFFER DOCUMENT." Disclaimer from the Company and Lead Manager The Company and the Lead Manager to the issue accepts no responsibility for statements made otherwise than in this Draft Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the instance of the Company and anyone placing reliance on any other source of information including our website www.aelgroup.com would be doing so at his own risk.

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Caution All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc. Investors that invest in the Issue will be deemed to have represented to our Company and Lead Manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company, and are relying on independent advice / evaluation as to their ability and quantum of investment in this Issue. Disclaimer in Respect of Jurisdiction This Draft Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations hereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only. The distribution of the Draft Letter of Offer and the offering of the securities on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Draft Letter of Offer has been filed with SEBI for observations and SEBI has given its observations. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. Disclaimer Clause of BSE, Mumbai BSE (“the Exchange”) has given vide its letter dated [•] 2009 permission to the Company to use the Exchange’s name in this draft Letter of offer on which this Company’s Securities are proposed to be listed. The Exchange has scrutinized this Draft Letter of offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: � warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Letter of Offer; or � warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or � take any responsibility for the financial or other soundness of the Company, its Promoter, its management or � any scheme or project of this Company; And it should not for any reason be deemed or construed that this draft Letter of offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer clause of the NSE As required, a copy of this Draft Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafter referred to as “NSE”). NSE has given vide its letter dated [�], permission to the Issuer to use its name in this Draft Letter of Offer as one of the Stock Exchanges on which this Issuer’s Equity Shares are proposed to be listed. NSE has scrutinized this Draft Letter of Offer for its limited internal purpose of deciding on the matter of

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granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid permission, given by NSE, should not in any way be deemed or construed that the Draft Letter of Offer has been cleared or approved by NSE; nor does it in any manner Warrant, certify, or endorse the correctness or completeness of any of the contents of this Draft Letter of Offer; nor does it Warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its Promoter, its management, or any scheme or project of this Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. United States Restrictions NEITHER THE RIGHTS ENTITLEMENTS NOR THE EQUITY SHARES THAT MAY BE PURCHASED PURSUANT THERETO HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OF AMERICA OR THE TERRITORIES OR POSSESSIONS THEREOF (THE “UNITED STATES” OR THE “U.S.”) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”)), EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE RIGHTS REFERRED TO IN THIS DRAFT LETTER OF OFFER ARE BEING OFFERED IN INDIA, BUT NOT IN THE UNITED STATES. THE OFFERING TO WHICH THIS DRAFT LETTER OF OFFER RELATES IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FOR SALE IN THE UNITED STATES OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID SHARES OR RIGHTS. ACCORDINGLY, THIS DRAFT LETTER OF OFFER SHOULD NOT BE FORWARDED TO OR TRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME, EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER THE COMPANY NOR ANY PERSON ACTING ON BEHALF OF THE COMPANY WILL ACCEPT SUBSCRIPTIONS FROM ANY PERSON, OR THE AGENT OF ANY PERSON, WHO APPEARS TO BE, OR WHO THE COMPANY OR ANY PERSON ACTING ON BEHALF OF THE COMPANY HAS REASON TO BELIEVE IS, A RESIDENT OF THE UNITED STATES AND TO WHOM AN OFFER, IF MADE, WOULD RESULT IN REQUIRING REGISTRATION OF THIS DRAFT LETTER OF OFFER WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. THE COMPANY IS INFORMED THAT THERE IS NO OBJECTION TO A UNITED STATES SHAREHOLDER SELLING ITS RIGHTS IN INDIA. RIGHTS MAY NOT BE TRANSFERRED OR SOLD TO ANY U.S. PERSON. Filing

o Draft Letter of Offer has been filed with Securities Exchange Board of India, SEBI Bhavan, Plot No C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051.

o A copy of this Draft Letter of Offer also has been filed with the Bombay Stock Exchange Limited (BSE),

Phiroze Jeejebhoy Towers, Dalal Street, Mumbai- 400-023 and the National Stock Exchange of India Limited (NSE), Exchange Plaza, Bandra Kurla Complex, Bandra – East, Mumbai, having attached thereto the Material Contracts and Documents. All the legal requirements applicable till the date of filing the draft Letter of Offer with the stock exchanges and SEBI has been complied with.

Dematerialised Dealing Our Company has entered into agreement dated 16th March 2000 and 16th March 2000 with NSDL and CDSL respectively and its Equity Shares bear the ISIN No. INE441A01018

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Listing The existing Equity Shares of our Company are listed on BSE and NSE. Our Company has paid the current annual listing fees to each of the Stock Exchanges where its Equity Shares are listed. Our Company has applied for in-principle approvals from BSE and NSE for the securities proposed to be issued through this Draft Letter of Offer and has received in-principle approvals from the National Stock Exchange of India Limited by its letter dated [�] and from Bombay Stock Exchange Limited by its letter dated [�] granting in-principle approval for listing the securities arising from this Issue. If the permission to deal in and for an official quotation of the Equity Shares is not granted by the stock exchanges mentioned above, our Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of this Draft Letter of Offer. If such money is not repaid within eight days after our Company becomes liable to repay it (i.e. 15 days after closure of the Issue), then our Company and every director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money, with interest as prescribed under sub-sections (2) and (2A) of Section 73 of the Act. Consent Consent in writing of the Promoter, Directors, Compliance Officer, Auditors, Lead Manager to the Issue, Registrar to the Issue, Legal Advisor, Bankers to the Company, Bankers to the Issue and Refund Bankers to act in their respective capacity have been obtained and filed with SEBI, along with a copy of the Draft Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Draft Letter of Offer for registration with the stock exchanges. M/s. Sorab S Engineer & Co., the Auditors of our Company have given their written consent for the inclusion of their Report in the form and content as appearing this Draft Letter of Offer and such consents and Reports have not been withdrawn up to the time of delivery of this Draft Letter of Offer for registration to the Stock Exchanges. M/s. Sorab S Engineer & Co., the Auditors of our Company have given their written consent for inclusion of income tax benefits in the form and content as appearing in this Draft Letter of Offer accruing to our Company and its members. To the best of our knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by us. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below: “Any person who (a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or (b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.” Expert Opinion Save and except as stated in the Section titled “Outstanding Litigations” beginning at page 162 of this Draft Letter of Offer, our Company has not obtained any expert opinions in relation to this Draft Letter of Offer. Option to Subscribe Other than in the present Issue and except as stated in the section titled “Capital Structure” beginning at page 17 of this Draft Letter of Offer, our Company has not given any option to subscribe for any shares of our Company.

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Issue Expenses The expenses for this Issue include Issue Management fees, printing and distribution expenses, legal fees, advertisement expenses, depository charges, and listing fees to the Stock Exchanges, among others. The total expense for this Issue is estimated at Rs. [�]. A broad break-up of the same is as under:

Nature of Expenses Amount in (Rs. Lakhs)

% of total expenses of

the issue

% of total issue size

Lead Management, Issue Management fees and Legal Counsel charges [�] [�] [�] Registrars, Auditors, Printers, Postage, Dispatch expenses, Advertisement & publicity expenses, travelling & conveyance [�] [�] [�]

SEBI, Listing Expenses, Contingencies & Other Expenses [�] [�] [�] Total [�] [�] [�] Details of Fees Payable Fees Payable to the Lead Manager The total fees payable to the Lead Manager will be as per the Engagement Letter dated [•] and as stated in the Memorandum of Understandings executed between our Company and Lead Manager dated [�], copy of which is available for inspection at our Registered Office. Underwriting Commission, Brokerage and Selling Commission The Rights Issue has not been underwritten. No fee under this head is payable. Previous Public or Rights Issues There was no public/rights issue done by the Company in the last 5 years. Previous issues other than cash The details of the previous issues other than cash since its inception is as under:- Date of Issue/

Allotment No. of Equity Shares

Face Value (Rs.)

Issue Price (Rs.)

Nature of payment of

consideration

Nature of Allotment

15/10/1969 6000 100 - Consideration other than cash

Bonus issue out of free reserves in the ratio of One share for five shares held

01.07.1994 7,19,725 10 - Consideration other than cash

Bonus issue out of free reserves in the ratio of One share for two shares held

15.10.1996 37,33,078 10 10 Consideration other than cash

Bonus out of free reserves in the ratio of 1:1

22.02.2007 4,00,000 10 75 Consideration other than cash

Allotted to Shareholders of Asian Raymold Lighting Pvt Ltd., under a Scheme of

Arrangement

18.12.2003

87,622 – 9% Cumulative Redeemable Preference Shares of Rs. 100 each

100

NA Consideration other than cash

Allotted to Shareholders of Asian Electronics Components Ltd., under a Scheme of Arrangement at 7 fully paid-up 9%

cumulative Redeemable Preference shares of Rs.100/- each for every 2 fully paid-up

equity shares of Rs.100/- each.

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Commission or Brokerage on Previous Issues The Company has not made any public issue in last five years. Hence no commission or brokerage has been paid on any public issue in the last five years. Particulars in regard to the company and other listed companies under the same management within the meaning of section 370(1B) of the companies act, 1956, which made any public issue during the last three years. The Company as well as the other Companies under the same management has not made any Capital Issue in last three years. Listed Venture of Promoter There is no other listed venture promoted by the Promoter. Performance vis-à-vis objects: The company has not made any Public Issue or Rights issues during the last 10 years. Outstanding Bonds /Debentures The Company has issued Five (5) Redeemable Non Convertible Debentures of Rs. 1000 lacs each to LIC Mutual Fund Asset Management Company Limited which were to be redeemed in five equal monthly installments of Rs. 1000 Lacs each commencing from 15th December 2008 and ending on 15th April 2010. There are no outstanding other debentures or bonds or redeemable preference shares or any other instruments issued by the issuer company outstanding as on the date of Draft Letter of Offer. Stock Market Data As on date, Our Company’s Equity shares are listed on both the stock exchanges of BSE & NSE. Bombay Stock Exchange Limited (BSE):- The high and low closing prices recorded on BSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below:- Year High (Rs.) High Date Volume Low (Rs.) Low Date Volume

Total Volume for the Year

Average (Rs.)

2006 578.00 11.05.2006 103768 250.05 25.07.2006 55902 14134234 414.032007 1140.00 26.07.2007 33714 333.00 22.10.2007 39277 15577588 736.502008 590.00 17.01.2008 552458 20.90 27.10.2008 233143 80740652 305.45

(Source: Bombay Stock Exchange Limited, official website: www.bseindia.com, Mumbai)

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The details of the share prices on the BSE during last 6 months are as follows:

(Source: Bombay Stock Exchange Limited, official website: www.bseindia.com, Mumbai) The National Stock Exchange of India Limited (NSE):- The high and low closing prices recorded on NSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below:- Year High (Rs.) High Date Volume Low (Rs.) Low Date Volume

Total Volume for the Year

Average (Rs.)

2006 579.00 11.05.2006 125713 250.45 25.07.2006 46245 19442012 414.732007 1140.00 26.07.2007 31857 321.00 22.10.2007 62725 18993204 730.502008 589.95 17.01.2008 621445 20.80 27.10.2008 303481 89707569 305.38(Source: National Stock Exchange of India Limited, official website: www.nseindia.com, Mumbai) The details of the share prices on the NSE during last 6 months are as follows:

(Source: National StockExchange of India Limited, official website: www.nseindia.com, Mumbai)

o In the event the high and low price of the Equity Shares are the same on more than one day, the day on which there has been higher volume of trading has been considered for the purposes of this section.

o The Closing market price was Rs. 24.15 on BSE on May 15, 2009, the trading day immediately following

the day on which the Board meeting was held to finalize the offer price for this Issue.

o The Closing market price was Rs. 24.40 on NSE on May 15, 2009, the trading day immediately following the day on which the Board meeting was held to finalize the offer price for this Issue.

Month High (Rs.)

High Date Volume Low (Rs.) Low Date Volume

Total Volume for the month

Average (Rs.)

June 2009 52.25 08.06.2009 514404 39.75 15.06.2009 261922 3297797 46.00July 2009 43.35 02.07.2009 53591 33.35 14.07.2009 49117 1781351 38.35August 2009 40.10 06.08.2009 72668 37.00 05.08.2009 43799 267122 38.55September 2009 49.70 29.09.2009 242152 40.00 02.09.2009 77361 4364041 44.85October 2009 51.50 01.10.2009 156665 36.00 29.10.2009 48446 1703443 43.75November 2009 44.40 17.11.2009 2618899 32.60 04.11.2009 76007 11821027 38.50

Month High (Rs.) High Date Volume Low (Rs.) Low Date Volume

Total Volume for the month

Average (Rs.)

June 2009 51.20 08.06.2009 524530 39.70 15.06.2009 247577 2577441 45.45July 2009 43.00 28.07.2009 66673 33.00 14.07.2009 55962 1637635 38.00August 2009 43.90 26.08.2009 405285 34.00 11.08.2009 35847 1944757 38.95September 2009 49.50 29.09.2009 262720 40.10 14.09.2009 202429 4934174 44.80October 2009 49.00 01.10.2009 190303 36.00 30.10.2009 101022 2048790 42.50November 2009 44.45 17.11.2009 4127953 32.85 04.11.2009 73358 12960885 38.65

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Disclosure on Investor Grievances and Redressal System The Company has adequate arrangements for Redressal of investor’s complaints. The Company has developed well arranged correspondence system for letters of routine nature. The share transfer and dematerialization for the company is being handled by Link Intime India Pvt. Ltd, the registrar & share transfer agents of the Company. Letters are filed category wise after having attended to. A shareholders / investor grievances committee was constituted in the Year 2002. The Committee consists of Mr. Haresh G Desai and Mr. Arun B. Shah. The committee meets generally on review of redressal system of investor complaints by share transfer Agent and on specific nature of complaints not resolved within a period of 21 days from the date of receipt. The role of the Committee is to review investor grievances and the status of grievances. Mr. R. D. Goradia is the Compliance Officer of the Company. The Company has qualified and experienced staff in its Secretarial Department which closely monitors and co-ordinates with its RTA, for attending to and resolving the complaints of its shareholders. The Company attempts or uses its best endeavors jointly with the RTA, to ensure that complaints are minimal and that all complaints are resolved satisfactorily. The Company ordinarily attempts to dispose the complaints within fifteen days of receipt of complaints. The Compliance Officer supervises the process of redressal of grievances. The Company’s name has never appeared in the press release issued by SEBI regarding maximum number of complaints received from investors. Investor grievances arising out of this Issue The Company’s investor grievances arising out of this issue will be handled by the Registrars to the Issue, Link Intime India Pvt. Ltd. The registrar will have a separate dedicated team of personnel handling only our post issue correspondence. All grievances relating to the present issue may be addressed to the Registrar with a copy to compliance officer to the Company, giving full details such as name, address of the applicant, number of equity shares applied for, application / CAF serial number, amount paid on application and bank and branch where the application was deposited along with photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncees should be furnished. The Company would monitor the work of registrar to ensure that the investors’ grievances are settled expeditiously and satisfactorily. The Company would also be co-coordinating with the registrar in attending to the grievances of the investors. The Company assures that the Board of Directors / Investor Grievance Committee in respect of the complaint, if any, to be received, shall adhere to the following schedule.

S. No. Nature of Complaint Time Table 1. Non Receipt of Refund

Within 7 days of receipt of complaint subject to production of satisfactory evidence.

2. Non Receipt of Share Certificate

Within 7 days of receipt of complaint subject to production of satisfactory evidence

3. Transfer of shares Within 30 days 4. Change of Address notification Within 7 days of receipt of information 5. Any other complaint in relating to

the Rights Issue Within 7 days of receipt of complaint with all relevant details

Redressal of investor’s grievance is given top priority by the Company. The Company has adequate arrangements for redressal of investor complaints as indicated above. To handle the grievances received, the Company has appointed Mr.R.D.Goradia - Company Secretary of the Company as a Compliance Officer. He will supervise redressal of complaints received from the investors at the office of the Company as well as the Registrars to the Issue and ensure timely settlement. The investors may contact the compliance officer in case of any pre-issue / post issue related problem. The compliance officer can be contacted at the following address.

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Mr. R.D Goradia – Company Secretary & Compliance officer Asian Electronics Limited Registered Office: D-11, Road No. 28, Wagle Industrial Estate, Thane - 400 604, Maharashtra Tel No: +91 22 2583 5500/4/5; Fax No: +91 22 2582 7636; E-mail: rights@aelgroup.com; Website: www.aelgroup.com All the complaints received subsequent to making document public have been dealt with suitably. There are no investor complaints pending with the Company as on the date of letter of offer. There are no listed companies within the meaning of Section 370 (1B) of the Companies Act, 1956 hence the disclosures n respect of Grievances redressal of investors are not applicable. Changes in the Auditors in the Last five years and the Reasons Thereof The details of the changes in statutory auditors of our Company for the last five years are as follows: -

Capitalization of Reserves or Profits There is no Capitalization of reserves or profits during the last five years. Revaluation of Assets There has been no revaluation of any Assets in the last five years. Issue Programme The subscription list will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below or on such extended date (subject to a maximum of 60 days) as may be determined by the Board, subject to necessary approvals:

Issue opens on Last date for receiving requests for split Application Forms

Issue closes on

[�] [�] [�] Important This Issue is pursuant to the resolution passed by the Board of Directors at its meetings held on May 14, 2009, December 1, 2009 and Shareholders held on July 06, 2009

o This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of our Company at the close of business hours on the Record Date i.e. [•]

o Your attention is drawn to the section titled ‘Risk Factors’ beginning on page XIII of this draft Letter of Offer.

o Please ensure that you have received the CAF with the Draft Letter of Offer.

S. No.

Name of the Statutory Auditor Date of Appointment

Date of Cessation

1. M/s RSM & Co., Chartered Accountants, Mumbai 19.08.2004 23.12.2006 2. M/s S. R. Batliboi & Co., Chartered Accountants,

Mumbai 23.12.2006 29.11.2008

3. M/s Sorab S. Engineer & Co., Chartered Accountants, Mumbai

29.11.2008 NA

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o Please read the Draft Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of the Draft Letter of Offer and must be carefully followed. An application is liable to be rejected for any noncompliance of the provisions contained in the Draft Letter of Offer or the CAF.

o All enquiries in connection with the Draft Letter of Offer or CAF should be addressed to the Registrar to the Issue, quoting the Registered Folio number / DP and Client ID number and the CAF numbers as mentioned in the CAF.

o All information shall be made available to the Investors by the Lead Manager and the Issuer, and no selective or additional information would be available by them for any section of the Investors in any manner whatsoever including at road shows, presentations, in research or sales reports, etc.

o The Lead Manager and our Company shall update the Draft Letter of Offer and keep the public informed of any material changes till the listing and trading commences.

Issue Schedule The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below:

Issue Opening Date: [•], 2010 Last date for receiving requests for SAFs: [•], 2010Issue Closing Date: [•], 2010

The Board or a duly authorised committee thereof may however decide to extend the Issue period, as it may determine from time to time, but not exceeding 30 days from the Issue Opening Date.

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TERMS OF THE ISSUE The Equity Shares, now being issued, are subject to the terms and conditions contained in the Draft Letter of Offer, the enclosed CAF, the Memorandum of Association and Articles of Association of the company, approvals from the RBI, the provisions of the Companies Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate, the provisions of the Depositories Act, to the extent applicable and any other legislative enactments and rules as may be applicable and introduced from time to time. Authority for the Issue This Issue is being made pursuant to the resolution passed by the Board of Directors of our Company at its meeting held on May 14 2009 & December 1, 2009 and a special resolution passed by the shareholders under Section 81(1) and Section 81 (1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting held on July 06, 2009. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of our Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date, i.e. [•] 2010 fixed in consultation with the BSE (Designated Stock Exchange). The Equity Shares are being offered for subscription in the ratio of 1 Equity Shares of Rs. 5 each at a price of Rs.20/- per share for every 2 Equity Shares held on the Record Date i.e. [•]. Rights Entitlement As your name appears as beneficial owner in respect of the Equity Shares held in the electronic form or appears in the Register of Members as an Equity Shareholder as of the Record Date, you are entitled to the number of Equity Shares shown in Block I of Part A of the enclosed CAF. Mode of Payment of Dividend We shall pay dividend to our shareholders as per the provisions of the Companies Act, 1956. Principal Terms and Conditions of the Issue Face Value Face Value of Equity Shares of our Company is Rs. 5. Issue Price Each Equity Share is being offered at par; i.e. at a Price of Rs.20

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Terms of Payment The payment terms available to the Investors are as follows:

Amount payable per Equity Share (Rs.)^ Payment Method* Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 1.25 3.75 5.00 First Call 1.25 3.75 5.00 Second Call 1.25 3.75 5.00 Third and Final Call 1.25 3.75 5.00 Total 5.00 15.00 20.00

* Please refer to risk factor nos. 39 & 40 in “Risk Factors” on page XIII for risks associated with the payment method. For details on the payment method, see “Terms of the Present Issue” on page 192. ^ NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the Composite Application Form (“CAF”). The Issue Price of our Equity Shares is Rs. 20/- per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on the First Call and the balance 25% and 25% of the Issue Price on the Second Call and the Third and Final Call, respectively. However, NRIs, FIIs and non-residents can subscribe to partly paid-up Equity Share only if they have obtained the approval of the RBI. This approval is required to be submitted along with the CAF.

While making an application, the Investor shall make a payment of Rs. 5.00 per Equity Share.

� Out of the amount of Rs. 5.00 paid on application, Rs. 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

� Out of the amount of Rs. 5.00 paid on the First Call, Rs. 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

� Out of the amount of Rs. 5.00 paid on the Second Call, 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares

� Out of the amount of Rs. 5.00 paid on Third and Final Call, 1.25 would be adjusted towards the face value of the Equity Shares and Rs. 3.75 shall be adjusted towards the share premium of the Equity Shares.

Notices for the payment of call money for the First Call, the Second Call and the Third and Final Call shall be sent by our Company to the Equity Shareholders of the partly paid-up Equity Shares on the record dates fixed for the respective calls. The calls shall be structured in such a manner that the entire call money is called and will be payable within 12 months from the date of allotment of Equity Shares in this Issue. Equity Shares in respect of which the balance amount payable remains unpaid may be forfeited by the Company, at any time after the due date for payment of the balance amount due after giving a prior notice of at least 14 days, as provided under the Articles of Association. Procedure for First Call, Second Call and Third and Final Call Our Company would convene a meeting of the Board/Committee thereof to pass the required resolutions for making the First Call, the Second Call and the Third and Final Call and suitable intimation would be given by our Company to the Stock Exchanges. Further, advertisements for the same will be published in one English national daily, one Hindi national daily and one regional language daily published at the place where the registered office of the Company is situated i.e. Marathi with wide circulation. The First Call, the Second Call and the Third and Final Call shall be deemed to have been made at the time when the respective resolutions authorizing such First Call, the Second Call and the Third and Final Call are passed at the meeting of the Board/Committee thereof. The First Call, the Second Call and the Third and Final Call may be revoked or postponed at the discretion of the Board/Committee thereof. Pursuant to Article 30 of the Articles of Association of the Company, the Investors would be given not less than 14 days notice for the payment of the call money. The Board/Committee thereof may, from time to time at its

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discretion, extend the time fixed for the payments of the First Call, the Second Call and the Third and Final Call. The calls shall be structured in such a manner that the entire call money is called and will be payable within 12 months from the date of allotment of Equity Shares in this Issue. If the Investors fail to pay the call money within 12 months, the application money/call money already paid may be forfeited. Record dates for First Call, Second Call and the Third and Final Call and suspension of trading Our Company would fix record dates giving at least 15 days prior notice to the Stock Exchanges for the purpose of determining the list of Equity Shareholders to whom the notice for call money pursuant to the First Call, the Second Call and the Third and Final Call would be sent. Once the record dates have been fixed, trading in the partly paid Equity Shares for which the First Call, the Second Call and the Third and Final Call have been made would be suspended prior to such record date that has been fixed for the First Call, the Second Call or the Third and Final Call, respectively. Fractional entitlements On applying the rights ratio, the rights entitlement may contain certain fractional entitlements, in such case the fractional entitlement shall be rounded off to the next higher integer. Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association. The dividend payable on the partly paid-up Equity Shares, until fully paid-up, shall rank for dividend in proportion to the amount paid-up. The Equity Shares shall rank pari passu, in all respects including dividend, with our existing Equity Shares once fully paid-up. The voting rights in a poll, whether present in person or by representative or by proxy shall be in proportion to the paid-up value of the Equity Shares held, and no voting rights shall be exercisable in respect of moneys paid in advance until the moneys have become payable. Further no person shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the Company in respect of partly paid-up Equity Shares on which any calls or other sums payable by him have not been paid. Rights Entitlement Ratio As your name appears as beneficial owner in respect of Equity Shares held in the electronic form or appears in the register of members as an Equity Shareholder of our Company as on [•] Record Date. You are entitled to the number of Equity Shares as set out in Part A of the enclosed CAF, in the ratio of 1 (One) Equity Shares for cash at Rs.20 for every 2 (Two) Equity Share held as on the Record Date. Rights Entitlement on Equity Shares held in the pool account of the clearing members on the Book Closure Date shall be considered, and such claimants are requested to: 1. Approach the concerned depository through the clearing member of the Stock Exchange with requisite details; and 2. Depository in turn should furnish details of the transaction to the Registrar. Only upon receipt of the aforesaid details, Rights Entitlement of the claimants shall be determined. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights:

� Right to receive dividend, if declared; The dividend payable on partly paid-up Equity Shares, until fully paid-up, shall rank for dividend in proportion to the amount paid up

� Right to attend general meetings and exercise voting powers, unless prohibited by law; � Right to vote on a poll either in person or by proxy; � Right to receive offers for rights shares and be allotted bonus shares, if announced; � Right to receive surplus on liquidation; � Right of free transferability of shares; and � Such other rights, as may be available to a shareholder of a listed public company under the Companies Act

and our Memorandum of Association and Articles of Association.

195

For a detailed description of the main provisions of our Articles of Association dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, see section titled “Main Provisions of Articles of Association of our Company” beginning on page 268 of this Draft Letter of Offer. General Terms of the Issue Market Lot The Equity Shares of the Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialised mode is one. In case of holding of Equity Shares in physical form, the Company would issue to the allottees one certificate for the Equity Shares allotted to each folio (“Consolidated Certificate”). Disposal of odd Lots Our Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this Issue. Our Company will issue certificates of denomination equal to the number of Equity Shares being allotted to the Equity Shareholder. Restrictions on transfer and transmission of shares and on their consolidation/ splitting There are no restrictions on transfer and transmission and on their consolidation/splitting of shares issued pursuant to this Issue. Issue of Duplicate Equity Share Certificate If any Equity Share Certificate(s) is/are mutilated or defaced or the pages for recording transfers of Equity Shares are fully utilized, our Company against the surrender of such Certificate(s) may replace the same, provided that the same will be replaced as aforesaid only if the Certificate numbers and the Distinctive numbers are legible. If any Equity Share Certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof thereof to the satisfaction of our Company and upon furnishing such indemnity/ surety and/or such other documents as our Company may deem adequate, duplicate Equity Share Certificate(s) shall be issued. Nomination facility In terms of Section 109A of the Companies Act, nomination facility is available in case of Equity Shares. The Applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the registered office of our Company or such other person at such addresses as may be notified by our Company. The Applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Shareholder(s) has already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. However, new nominations, if any, by the Equity Shareholder(s) shall operate in supersession of the previous nomination, if any.

196

In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective the DP of the Applicant would prevail. In case the Applicant requires a change in nomination, they are requested to inform their respective DP. Notices All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation and/or, will be sent by ordinary post/ registered post /speed post to the registered holders of the Equity Share from time to time. Listing and trading of Equity Shares proposed to be Issued The Company’s existing Equity Shares are currently traded on the Stock Exchanges under the ISIN INE441A01018. In addition to the ISIN for the existing Equity Shares, our Company would obtain separate ISINs for its partly paid-up Equity Shares. The partly paid-up Equity Shares offered under the Issue will be listed and traded under a separate ISIN for each period as may be applicable prior to the record dates for the First Call, the Second Call and the Third and Final Call. On each of the record dates for the First Call, the Second Call and the Third and Final Call, the trading of then existing partly paid-up Equity Shares would be terminated. The process of corporate action for crediting the partly paid-up and fully paid-up Equity Shares to the Investors’ demat accounts may take about two weeks’ time from the last date of payment of the account under the call money notice. On payment of the Third and Final Call, the partly paid-up Equity Shares would be converted into fully paid-up Equity Shares and merged with the existing ISIN for our Equity Shares. The Equity Shares in respect of which the balance amount payable remains unpaid may be forfeited, at any time after the due date for payment of the balance amount due. The listing and trading of the partly paid-up and fully paid-up Equity Shares shall be based on the current regulatory framework applicable thereto. Accordingly, any change in the regulatory regime would accordingly affect the schedule. The Company has made an application for “in-principle” approval for listing of the Equity Shares in accordance with clause 24(a) of the Listing Agreement to the BSE and NSE through letters dated [•] and [•] and has received such approval from the BSE pursuant to the letter no. [•], dated [•] and from the NSE pursuant to letter no. [•], dated, [•]. Joint-Holders Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of the Company. Option to subscribe Equity Shares in dematerialized form Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the Applicant. In this context our Company has signed the following tripartite agreements: 1. Tripartite Agreement dated 16th March 2000 among our Company, NSDL and Link Intime India Pvt Ltd. 2. Tripartite Agreement dated 16th March 2000 among our Company, CDSL and Link Intime India Pvt Ltd. These agreements shall enable the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates. Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialized form at the option of the applicant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and/or dematerialized form should be made.

197

Responsibility for correctness of information filled in the CAF vis-à-vis such information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s depository participant. The Equity Shares pursuant to this Offer allotted to Investors opting for dematerialized form would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice / refund order, if any would be sent directly to the applicant by the Registrar to the Issue. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in this Issue in demat form. In case these details are incomplete or incorrect, the application is liable to be rejected. Restriction on Transfer and Transmission of Shares Nothing contained in the Articles of Association of the Company shall prejudice any power of the Company to refuse to register the transfer of shares. No fee shall be charged for sub-division and consolidation of share certificates (physical form) and for sub-division of letters of allotment and split, consolidation, renewal and pucca transfer receipts into denomination corresponding to the market units of trading. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. ISSUE PROCEDURE How to Apply? Procedure for Application The Composite Application Form (CAF) would be printed in black ink for all Equity Shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. For Resident Indian Shareholders Applications will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given in the Draft Letter of Offer. Only applications for an amount of less than Rs.20,000 may be effected in cash and all the payments more than Rs.20, 000 shall be effected by cheque / bank draft / drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the center where the CAF is submitted and which is participating in the clearing at the time of submission of the application. Outstation cheque / money orders / postal orders will not be accepted and CAFs accompanied by such cheque / money orders / postal orders are liable to be rejected. Non-Resident Equity Shareholders Applications received from the non-resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application money, allotment of Equity Shares, issue of letters of allotment / certificates / payment of dividends etc. The CAF consists of four parts: Part A Form for accepting the Equity Shares offered and for applying for additional Equity Shares Part B Form for renunciation Part C Form for application for renouncees Part D Form for request for CAF(s)

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Option available to the Equity Shareholders The Equity Shareholders will have the following five options: (a) Apply for his entitlement in part (b) Apply for his entitlement in part and renounce the other part (c) Renounce his entire entitlement (d) Apply for his entitlement in full (e) Apply for his entitlement in full and apply for additional Equity Shares Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Also note, Application by HUF shall be treated as Application by individual and the same procedure shall apply. Acceptance of the Rights Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling Block III of Part A of the enclosed CAF and submit the same along with the application money payable to the bankers to the Issue or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the demand draft, net of demand draft and postal charges, payable at Mumbai to the Registrar to the Issue by registered post /speed post / courier.. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. The CAF should be complete in all respects, as explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any circumstances; otherwise the application(s) will be rejected forthwith. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you applied for all the Equity Shares offered without renouncing them, in whole or in part, in favour of any other person(s). If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation, if necessary with the Designated Stock Exchange and in the manner prescribed under the section titled ‘Basis of Allotment’ on page 215 this Draft Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares. In case of application for additional Equity Shares by Non-Resident Equity Shareholders, the allotment of additional securities will be subject to the permission of the Reserve Bank of India. Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. Renunciation As an Equity Shareholder, you have the right to renounce your entitlement for the Equity Shares in full or in part in favour of one or more person(s). Your attention is drawn to the fact that our Company shall not allot and / or register any Equity Shares in favour of:

� More than three persons including joint holders � Partnership firm(s) or their nominee(s) � Minors, unless through their natural/legal guardian � HUF � Any trust or society (unless the same is registered under the Societies Registration Act, 1860 or any other

applicable trust laws and is authorized under its constitutions to hold Equity Shares of a Company)

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The right of renunciation is subject to the express condition that the Board/committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof. Any renunciation from Resident Indian Shareholder(s) to Non-resident Indian(s) or from Nonresident Indian Shareholder(s) to Resident Indian(s) or from Non-resident Indian shareholder(s) to other Non-resident Indian(s) is subject to the renouncer(s)/renounce(s) obtaining the approval of the FIPB and/or necessary permission of the RBI under the FEMA and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies ("OCBs") have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of the Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). Part 'A' of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part 'B' of the CAF) duly filled in shall be conclusive evidence for the Company of the person(s) applying for Equity Shares in Part 'C' of the CAF to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Part 'A' of the CAF must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person. Procedure for renunciation (a) To renounce the whole offer in favour of one renouncee If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renounces must sign Part C of the CAF. Renouncee(s) shall not be entitled to further renounce the entitlement in favour of any other person. (b) To renounce in part/or renounce the whole to more than one person(s) If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of CAF(s) in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for CAF(s). On receipt of the required number of CAF(s) from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not match with the specimen registered with our Company, the application is liable to be rejected. (c) Renouncee(s) The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the CAF and submit the completed CAF to the Banker to the Issue on or before the Issue Closing Date along with the application money in full. (d) Change and/or introduction of additional holders: If you wish to apply for Equity Shares jointly with any other person, or persons, not more than three, who is/are not already joint holders with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed viz. Part B & C of the CAF will have to be filled in.

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Renunciation by a resident Shareholder to a non-resident or vice-versa is subject to the Renouncee(s)/Renouncer(s) obtaining the necessary approval of the Reserve Bank of India and the said permission should be attached to the CAF, failing which the application will be rejected. In case of Non-Residents renouncing their rights without consideration, a declaration to that effect should be attached to the CAF, failing which the application is liable for rejection. Instructions for options The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Option Available Action Required A. Accept whole or part of your

entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

D. 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s) OR 2.Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

E. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Please note that:

� Part A of the CAF must not be used by any person(s) other than those in whose favour this Offer has been made. If used, this will render the application invalid.

� Request by the Equity Shareholder(s) for the CAF should reach to the Registrar to the Issue on or before [•]. � Only the person to whom the Draft Letter of Offer has been addressed to and not the renouncee(s) shall be

entitled to renounce and to apply for CAF. Forms once split cannot be split again. � CAF(s) will be sent to the Applicant(s) by post at the Applicant’s risk.

On receipt of the CAF(s) take action as indicated below: For the Equity Shares you wish to accept, if any, fill in and sign Part A.

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For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand it over to the renouncees. Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them. Introduce a joint holder or change the sequence of joint holders: This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C. For Applicants residing at places other than Designated Bank collecting branches Resident investors residing at places other than the cities where the bank collection centres have been opened and non-resident Applicants applying on a non-repatriation basis should send their completed CAF by registered post / speed post / courier to the Registrar to the Issue, Link Intime India Private Ltd along with demand drafts, net of bank and postal charges, payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked ‘Asian Electronics - Rights Issue 2010’ so that the same are received on or before the Issue Closing Date i.e. …………... Non-resident investors applying on a repatriation basis should send their completed CAF by registered post/speed post/courier to the Registrar to the Issue, Link Intime India Private Limited along with demand drafts for the full application amount, payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked ‘Asian Electronics -Rights Issue 2010’ so that the same are received on or before Issue Closing Date i.e. ……………. Our Company will not be liable for any postal delays and applications received through mail after the closure of the Issue are liable to be rejected and returned to the Applicants. Applications by mail should not be sent in any other manner except as mentioned below. Applicants must write CAF Number on the reverse of the cheque / demand draft Applications by non-resident equity shareholders Applications received from the non-resident equity shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment / certificates / payment of dividends etc. Non-resident equity shareholders will be required to represent, inter alia, that they are not excluded U.S. Persons as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended. Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the Applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the Applicant who should furnish the registered folio number/DP and Client ID number and his/her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. If the Applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications. Request for Split Forms

o Request for split form should be addressed to the Registrar to the issue so as to reach them on or before the last date for receiving of request for split forms by filling in Part D of the CAF

o Request for Split forms will be entertained only once Application on Plain Paper A resident Equity Shareholder or a non-resident Equity Shareholder applying on a non repatriation basis who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with an account payee cheque drawn on a local bank at Mumbai or demand draft / pay order payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked ‘Asian Electronics - Rights Issue 2010’ and send the same by registered post directly to the Registrar to the Issue.

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A non-resident Equity Shareholder applying on a repatriation basis who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with an Account Payee Cheque drawn on a local bank at Mumbai or demand draft / pay order payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked ‘Asian Electronics -Rights Issue 2010-NR’ and send the same by registered post directly to the Registrar to the Issue. The application on plain paper, duly signed by the Applicants including joint holders, in the same order as per specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

o Name of Issuer, being Asian Electronics Limited; o Name and address of the Equity Shareholder including joint holders; o Registered Folio Number / DP and Client ID No.; o Number of shares held as on Book Closure Date; o Number of Rights Equity Shares entitled; o Number of Rights Equity Shares applied for; o Number of additional Equity Shares applied for, if any; o Total number of Equity Shares applied for; o Total amount paid on application at the rate of Rs. 5/- per Equity Share; o Particulars of cheque/draft; o Savings/current account number and name and address of the bank where the Equity Shareholder will be

depositing the refund order; o PAN Number to be disclosed o Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of

our Company. o In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the bank and

branch should be given. o Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of

the Company o Payment in such cases, should be through a Cheque/ demand draft, net of demand draft and postal charges,

payable at Mumbai be drawn in favour of “Asian Electronics - Rights Issue 2010” crossed “A/c Payee only”.

o Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and

o Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the Applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications. For Applicants residing at places where the bank collection centres have been opened, application forms duly completed together with cash/cheque/demand draft for the application money must be submitted before the close of the subscription list to the Banker to the Issue named herein or to any of its branches mentioned on the reverse of the CAF. The CAF along with application money must not be sent to our Company or the Lead Manager to the Issue or the Registrar to the Issue. Only for Applicants residing at places other than the cities where the bank collection centres have been opened, CAFs duly completed together with cash / cheque / demand draft for the application money net of bank charges for demand draft and postal charges must reach Registrar to the Issue before the close of the subscription list. Despite existence of bank collection centre at his/her place, should the Applicant send a demand draft to the Registrar, such application shall be rejected.

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The Applicants are requested to strictly adhere to these instructions. Failure to do so could result in the application being liable to be rejected by our Company, the Lead Manager and the Registrar not having any liabilities to such Applicants. Application under Power of Attorney In case of applications under Power of Attorney or by Limited Companies or Bodies Corporates or Societies registered under the applicable laws, a certified copy of the Power of Attorney or the relevant authority, as the case may be, along with the certified copy of the Memorandum and Articles of Association or Bye-laws, as the case may be, must be lodged separately by registered post at the office of the Registrar to the Issue simultaneously with the submission of the CAF, indicating the serial number of the CAF and the name of the bank and the branch office where the application is submitted within 10 days of closure of the offer, failing which the application is liable to be rejected. In case the Power of Attorney is already registered with the Company, then the same need not be furnished again. However, the serial number of the Registration under which the Power of Attorney has been registered with the Company must be mentioned below the signature of the Applicant. Quoting of Permanent Account Number in the application forms In terms of circular no. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007, every applicant shall disclose the Permanent Account Number (PAN), allotted under the Income Tax Act, 1961, in the application form, irrespective of the amount for which application is made. Application forms without this information will be considered incomplete and are liable to be rejected. Note on Cash Payment (Section 269 SS) Having regard to the provisions of Section 269 (SS) of the Income Tax Act, 1961, if the amount payable is Rs. 20,000/- or more, subscriptions against applications for securities should not be effected in cash and must be effected only by ‘Account Payee’ cheques or ‘Account Payee’ bank drafts. In case payment is effected in contravention of this provision, the application is liable to be rejected. Incomplete Application CAF’s, which are not complete or are not accompanied with the application money amount payable, are liable to be rejected. Last date of Application The last date for submission of the duly filled in CAF is [•]. The Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 60 days from the Issue Opening Date. If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the Issue, as the case may be, on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/committee of Directors, the offer contained in the Draft Letter of Offer shall be deemed to have been declined and the Board / committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under “Basis of Allotment” below. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Investment by FIIs In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: The Issue of Equity Shares under this Issue to a single FII should not exceed 10% of the post-issue paid up capital of the Company. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts the investment on behalf of each sub-account shall not exceed 5% of the total paid up capital of the Company. In accordance with the approval of FIPB dated December 18, 2008, the paid-up equity capital holding of the FIIs in the Company has been

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capped at 1.16%. Therefore, the allotment of Equity Shares to FIIs would remain restricted to 1.16% of the post-Issue paid-up Equity Share capital of the Company. Investment by NRIs Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3) (i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. NRI Investors should note that applications by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided are liable to be rejected. Procedure for Applications by Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made. Mode of payment for Non-Resident Equity Shareholders/ Investors As regards the application by non-resident Equity Shareholders, the following conditions shall apply:

� Payment by non-residents must be made by demand draft payable at Mumbai /cheque payable drawn on a bank account maintained at Mumbai or funds remitted from abroad in any of the following ways:

Application with repatriation benefits By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or

� By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Mumbai; or By Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India and payable in Mumbai; or FIIs registered with SEBI must remit funds from special nonresident rupee deposit account.

� Non-resident investors applying with repatriation benefits should draw cheques/drafts in favour of ‘Asian Electronics– Rights Issue – NR’ and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges.

Application without repatriation benefits

� As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

� All cheques/drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of ‘Asian Electronics– Rights Issue – NR’ and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges. The CAFs duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

� Investors may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected.

� New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

Notes: � In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the

investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to IT Act. � In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity

Shares cannot be remitted outside India.

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� The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

� In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Declaration by Board on creation of separate account The Board of Directors declares that funds received against this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Companies Act. Allotment Letters / Refund Orders The Company will issue and dispatch allotment advice/ share certificates / demat credit and/or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the date of closure of the Issue. If such money is not repaid within eight days from the day our Company becomes liable to pay it, our Company shall pay that money with interest as stipulated under section 73 of the Companies Act. Applicants residing at centers where clearing houses are managed by the Reserve Bank of India (RBI) will get refunds through ECS only (Electronic Clearing Service) except where Applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS provided that the MICR details are recorded with the depositories or our Company. In case of those Applicants who have opted to receive their Equity Shares in dematerialized form using electronic credit under the depository system, and advice regarding their credit of the Equity Shares shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within fifteen (15) working days of closure of the Issue. In case of those Applicants who have opted to receive their Equity Shares in physical form and our Company issues an allotment advice, the corresponding share certificates will be dispatched within one month from the date of allotment. For more information please refer to section titled “Allotment and Refund” on page 216 of this Letter of Offer. In case of ASBA Investors, the Registrar to the Issue shall instruct the SCSBs to unblock the funds in the relevant ASBA Account to the extent of the refund to be made within 15 days of the Issue Closing Date. The refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first Applicant’s registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first Applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose. Interest in Case of Delay in Dispatch of Allotment Letters/ Refund Orders Our Company agrees that as far as possible the allotment of the Equity Shares shall be made within fifteen (15) days of the closure of Issue. Our Company further agrees that it shall pay interest at the rate of 15% per annum if the allotment has not been made and/or the refund orders have not been dispatched to the investors or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner within fifteen (15) days from the date of closure of the Issue. Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialized (electronic; paperless) form at the option of the Applicant. Our Company signed tripartite agreements with NSDL and CDSL which enables the Investors to hold and trade in securities in a dematerialized form, instead of

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holding the securities in the form of physical certificates. In this Issue, the Allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a DP. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and /or dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, may be allotted in physical shares. The Equity Shares of our Company will be listed on the BSE and NSE. Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under: 1. Open a beneficiary account with any DP (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of our Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with our Company). In case of investors having various folios in our Company with different joint holders, the investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not adhere to this step. 2. For Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the Book Closure Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it should be ensured that the depository account is in the Name(s) of the Equity Shareholders and the names are in the same order as in the records of our Company. 3. Responsibility for correctness of information (including Applicant’s age and other details) filled in the CAF vis-à-vis such information with the Applicant’s DP, would rest with the Applicant. Applicants should ensure that the names of the Applicants and the order in which they appear in CAF should be the same as registered with the Applicant’s DP. 4. Applicants must necessarily fill in the details (including the beneficiary account number or client ID number) appearing in the CAF under the heading ‘Request for Shares in Electronic Form’. 5. Equity Share allotted to an Applicant in the electronic account form will be credited directly to the Applicant’s respective beneficiary account(s) with the DP. 6. Applicants should ensure that the names of the Applicants and the order in which they appear in the CAF should be the same as registered with the Applicant’s DP. 7. Non-transferable allotment advice/refund orders will be directly sent to the Applicant by the Registrar to this Issue. 8. If incomplete/incorrect details are given under the heading ‘Request for Shares in Electronic Form’ in the CAF, the Applicant will get Equity Shares in physical form. 9. Renouncees can also exercise the option to receive Equity Shares in the demat form by indicating in the relevant block and providing the necessary details about their beneficiary account. 10. It may be noted that Equity Share arising out of this Issue can be received in demat form even if the existing Equity Shares are held in physical form. Nonetheless, it should be ensured that the DP account is in the name of the Applicant(s) in the same order as per specimen signatures appearing in the records of the DP / Company.

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11. It may be noted that shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity with NSDL or CDSL. 12. Dividend or other benefits with respect to the shares held in dematerialized form would be paid to those Equity Shareholders whose names appear in the list of beneficial owners given by the DP to our Company as on the Book Closure Date. 13. If incomplete / incorrect beneficiary account details are given in the CAF the Applicant will get Equity Shares in physical form. 14. The Equity Shares pursuant to this Issue allotted to investors opting for dematerialized form would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the Applicant by the Registrar to the Issue but the Applicant’s DP will provide to him the confirmation of the credit of such Equity Shares to the Applicant’s depository account. 15. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in this Issue. In case these details are incomplete or incorrect, the Renouncees will get Equity Shares in physical form. General instructions for Applicants Please read the instructions printed on the enclosed CAF carefully.

a) Application should be made on the printed CAF, provided by our Company and should be completed in all respect. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of the Draft Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s/husband’s name must be filled in block letters.

b) The CAF together with cheque/demand draft should be sent to the Banker to the Issue/collecting bank or to

the Registrar to the Issue, as the case may be, and not to our Company and the Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Banker to the Issue have been authorized by our Company for collecting applications, will have to make payment by account payee cheque drawn on a local bank at Mumbai or demand draft / pay order payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked ‘Asian Electronics -Rights Issue 2010’ and send their application forms to the Registrar to the Issue by registered post./ speed post If any portion of the CAF is/are detached or separated, such application is liable to be rejected.

c) Whenever the application(s) is/are made the applicant or in the case of an application in joint names, each of

the applicants, should mention his/her Permanent Account Number (PAN) allotted under the IT Act. The copy of the PAN card or PAN allotment letter is not required to be submitted with the CAF. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that Applicant should not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder, except in respect of Central and State Government officials and officials appointed by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State Government and not in their personal capacity;

d) Pursuant to the Circular (MRD/DoP/Cir 08- 2007) dated June 25, 2007, SEBI has discontinued with the

requirement of UIN under the SEBI (Central Database of Market Participants) Regulations, 2003 and the Circular (MAPIN/Cir-13/2005) dated July 1, 2005. Applicants are advised to provide information as to their savings / current account number, nine digit MICR number and the name of the bank, branch with whom

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such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees

e) Applicants are advised to provide information as to their savings/current account number, nine digit MICR

number and the name of the bank, branch with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Applications not containing such details are liable to be rejected.

f) The payment against the application should not be effected in cash if the amount to be paid is Rs. 20,000 or

more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Banker to the Issue.

g) Signatures should be either in English, Hindi or in any other language specified in the Eighth Schedule to

the Constitution of India. Signatures other than those specified above must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with our Company.

h) In case of an application under power of attorney or by a body corporate or by a society, a certified true

copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Offer and to sign the application and a copy of the Memorandum of Association and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected.

i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per

the specimen signature(s) recorded with our Company. Further, in case of joint Applicants who are renouncees, the number of Applicants should not exceed three. In case of joint Applicants, reference, if any, will be made in the first Applicant’s name and all communication will be addressed to the first Applicant.

j) Application(s) received from non-resident / NRIs, or persons of Indian origin residing abroad for allotment

of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a non-resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

k) All communication in connection with application for the Equity Shares, including any change in address of

the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole Applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Registrar and Transfer Agents of our Company – Link Intime India Pvt Limited in the case of Equity Shares held in physical form and to the respective DP, in case of Equity Shares held in dematerialized form.

l) CAF(s) cannot be re-split.

m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled

to obtain CAF(s).

n) Applicants must write their CAF number at the back of the cheque / demand draft.

o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is

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a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

p) A separate cheque/draft must accompany each CAF. Outstation cheques/demand drafts or postdated

cheques and postal / money orders will not be accepted and applications accompanied by not accept payment against application if made in cash. (For payment against application in cash please refer point (g) above)

q) No receipt will be issued for application money received. The Banker to the Issue / collecting bank /

Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

Grounds for Technical Rejections Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

� Amount paid does not tally with the amount payable for; � Bank account details (for refund) are not given; � Age of first Applicant not given; � Permanent Account Number (PAN) not mentioned; � In case of application under power of attorney or by limited companies, corporate, trust etc., relevant

documents are not submitted; � If the signature of the existing shareholder does not match with the one given on the CAF and for

renouncees if the signature does not match with the records available with their depositories; � If the Applicant desires to have shares in electronic form, but the CAF does not have the Applicant’s

depository account details; � CAFs are not submitted by the Applicants within the time prescribed as per the CAF and the Draft Letter of

Offer; � Applications not duly signed by the sole / joint Applicants; � Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to

invest in the Issue; � Applications accompanied by stockinvest; � In case no corresponding record is available with the depositories that matches three parameters, namely,

names of the Applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

� Applications by persons in the United States of America; � Applications which have evidence of being dispatched from the United States of America; � Applications by ineligible non-residents (including on account of restriction or prohibition under applicable

local laws) and where registered address in India has not been provided. � Duplicate applications � Applications by NRIs, FIIs and non-residents without prior RBI approval to subscribe to the partly paid up

Equity Shares of our Company; or � Applications where our Company believes that the CAF is incomplete or acceptance of such CAF may

infringe applicable legal or regulatory requirements

Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process This section is for the information of Equity Shareholders proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Draft Letter of Offer. Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such Shareholder do not exceed the applicable limits under laws or regulations. Shareholders applying under the ASBA Process are also advised to ensure that the CAF is correctly

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filled up, stating therein the bank account number maintained with the SCSB in which an amount equivalent to the amount payable on application as stated in the CAF will be blocked by the SCSB. The lists of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSBs collecting the CAF/plain paper application, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Shareholders of the Company on the Record Date and who:

� Is holding Equity Shares in dematerialised form and has applied for entitlements or additional Securities in the Issue in dematerialised form;

� Has not renounced his entitlements in full or in part; � Has not split the CAF; � Is not a Renouncee to the Issue; � Who applies through a bank account with one of the SCSBs.

CAF The Registrar will dispatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The method of applying under ASBA process will not be available for Investors applying on plain paper. The Equity Shareholder shall submit the CAF to the SCSB for authorizing such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain a duplicate CAF and wanting to apply under ASBA process may make an application to subscribe for the Issue on plain paper, The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must be submitted at a designated branch of a SCSB on or before the Issue Closing Date and should contain the following particulars;

� Name of the issuer, being Asian Electronics Limited; � Name and address of the Equity Shareholder, including any joint holders; � Registered folio number/DP ID number and client ID number; � Number of Equity Shares held as on the Record Date; � Rights Entitlement; � Number of Equity Shares applied for; � Number of additional Equity Shares applied for, if any; � �Total number of Equity Shares applied for; � �Savings/Current Account Number alongwith name and address of the SCSB and Branch from which the

money will be blocked; � �The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder,

except in respect of Central and State Government officials and officials appointed by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State Government and not in their personal capacity;

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� A representation that the Equity Shareholder is not a “U.S. Person” (as defined in Regulation S under the Securities Act);

� �Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company; �Incase of Non Resident Shareholders, NRE/FCNR/NRO A/c no., Name and address of the SCSB and Branch

� �In the application, the ASBA Investor shall, inter alia, give the following confirmations/declarations:

1. That he/she is an ASBA Investor as per the SEBI ICDR and 2. That he/she has authorized the SCSBs to do all acts as are necessary to make an application in the

Issue, upload his/her application data, block or unblock the funds in the ASBA Account and transfer the funds from the ASBA Account to the separate account maintained by the Company for Rights Issue after finalization of the basis of Allotment entitling the ASBA Investor to receive Equity Shares in the Issue etc

3. The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB

� If an applicant makes an application in more than one mode i.e both in the Composite Application

Form and on plain paper, then both the applications may be liable for rejection. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAF sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Mode of payment The Shareholder applying under the ASBA Process agrees to block the entire amount payable on application (including for additional Equity Shares, if any) with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Shareholder in the CAF. This amount will be transferred in terms of the SEBI Guidelines, into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalisation of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB. The Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds. Options available to the Shareholder applying under the ASBA Process The summary of options available to the Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the CAF / plain paper received from Registrar:

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S.No Option available Action required 1 Accept whole or part of your

entitlement without renouncing the balance.

Fill in and sign Part A of the CAF (All joint holders must sign)

2 Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign).

The Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Shareholder has selected to apply through the ASBA process option. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares (as the case may be) that you are entitled too, provided that you have applied for all the Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page 215 of this Draft Letter of Offer. If you desire to apply for additional shares, please indicate your requirement in the place provided for additional Securities in Part A of the CAF. Renunciation under the ASBA Process Renouncees cannot participate in the ASBA Process. Last date of Application The last date for submission of the duly filled in CAF/plain paper application is [•], 2010. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date. If the CAF/plain paper application together with the amount payable is not received by the Bankers to the Issue/Registrar to the Issue or if the CAF/plain paper application is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/Committee of Directors, the offer contained in this Draft Letter of Offer shall be deemed to have been declined and the Board/Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under “Basis of Allotment” on page 215 of this Draft Letter of Offer. Option to receive Securities in Dematerialized Form SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE. General instructions for Shareholders applying under the ASBA Process (a) Please read the instructions printed on the CAF carefully. (b) Application should be made on the printed CAF/plain paper only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Draft Letter of Offer are liable to be rejected. The CAF/plain paper application must be filled in English.

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(c) The CAF/plain paper application in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue. (d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs /plain paper application s without PAN will be considered incomplete and are liable to be rejected. (e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. (f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Thumb impression and Signatures other than in English or Hindi must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories. (g) In case of joint holders, all joint holders must sign the relevant part of the CAF/plain paper application in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant. (h) All communication in connection with application for the Securities, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Shareholder, folio numbers and CAF number. (i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process. Do’s: a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you. c. Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only. d. Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided in the CAF. e. Ensure that you have mentioned the correct bank account number in the CAF. f. Ensure that there are sufficient funds (equal to {number of Equity Shares applied for} X {Issue Price per Equity Shares as the case may be}] available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB. g. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same. h. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form. i. Each applicant should mention their Permanent Account Number (“PAN”) allotted under the I. T. Act. j. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF. k. Ensure that the Demographic Details are updated, true and correct, in all respects. Don’ts: 1) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. 2) Do not pay the amount payable on application in cash, by money order or by postal order. 3) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such

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Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only. 4) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. 5) Do not instruct their respective banks to release the funds blocked under the ASBA Process. Grounds for Technical Rejection for ASBA Process: In addition to the grounds listed under “Grounds for Technical Rejection” mentioned on page 209 of this Draft Letter of Offer, applications under ASBA Process can be rejected on following additional grounds: a) Application on on spilt form. b) Application for entitlements or additional shares in physical form. c) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar. d) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company. e) Renouncee applying under the ASBA Process. f) Insufficient funds are available with the SCSB for blocking the amount. g) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant to regulatory orders. h) Account holder not signing the CAF or declaration mentioned therein. Depository account and bank details for Shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF. Shareholders applying under the ASBA Process should note that on the basis of name of these Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Shareholders such as address, bank account details for printing on refund orders / advice and occupation (“Demographic Details”). Hence, Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such Shareholders including mailing of the letters intimating unblock of bank account of the respective Shareholder. The Demographic Details given by Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not the bank account linked to the DP ID. Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account. Note that any such delay shall be at the sole risk of the Shareholders applying under the ASBA Process and none of the Company, the

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SCSBs or the Lead Manager shall be liable to compensate the Shareholder applying under the ASBA Process for any losses caused to such Shareholder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. Payment by Stock Invest In terms of RBI Circular DBOD No: FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the stockinvest scheme has been withdrawn with immediate effect. Hence, payment through stockinvest would not be accepted in this Issue. Disposal of application and application money No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto. In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be unlocked within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to repay it, the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under Section 73 of the Companies Act. For further instruction, please read the CAF carefully. BASIS OF ALLOTMENT Subject to the provisions contained in the Letter of Offer, the Articles of Association of the Company and the approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority: (a) Full allotment to those Equity Shareholders who have applied for their Rights Entitlement either in full or in part and also to the Renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part. (b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of two. (c) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as part of the Issue and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such Equity Shares will be at the sole discretion of the Board of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a preferential allotment. (d) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have applied for additional Equity Shares provided there is surplus available after making full allotment under (a), (b) and (c) above. The allotment of such Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not preferential allotment. Promoter, Mr. Arun B. Shah & Promoter Group have confirmed vide letter dated 1st December 2009 that they will subscribe the extent of any unsubscribed portion of the Issue. Such subscription and acquisition of additional equity shares by our Promoter, if any, will not result in change of control of the management of our Company and shall be

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exempted in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Other than meeting the requirements indicated in Objects of the Issue, there is no other intention/purpose for the Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoter through the Issue, the promoter shareholding in the Company exceeds their current shareholding. However, the Promoter have confirmed that in case the Rights Issue of the Company is completed with their subscribing to equity shares and as a result, if the public shareholding in the Company after the Issue falls below the permissible minimum level as specified in the listing condition or listing agreement, they will undertake to maintain the minimum public shareholding in such manner and within such period as specified in Clause 40A of the Listing Agreement. Allotment Letters / Share Certificates / Demat Credit The Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of rejection along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73(2)/(2A) of the Companies Act. In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialised form by using electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately. Letters of allotment/ share certificates/ demat credit/ refund orders above the value of Rs. 1,500 will be dispatched by registered post/ speed post to the sole/ first applicant’s registered address. However, refund orders for value not exceeding Rs. 1,500 shall be sent to the applicants by way of certificate of posting. Such cheques or pay orders will be payable at par at all the centres where the applications were originally accepted and will be marked ‘A/c payee’ and would be drawn in the name of the sole/ first applicant. Adequate funds would be made available to the Registrar to the Issue for the dispatch of such letters of allotment/ share certificates/ demat credit and refund orders. The Company shall ensure at par facility is provided for encashment of refund orders/ pay orders at the places where applications are accepted. Underwriting The present Issue is not underwritten. Mode of payment of refund Applicants should note that on the basis of name of the applicants, Depository Participant’s name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Composite Application Form, the Registrar to the Issue will obtain from the Depositories, the applicant’s bank account details including nine digit MICR code. Hence, applicants are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to applicants at the applicant’s sole risk and neither the Lead Manager nor the Company shall have any responsibility and undertake any liability for the same. The payment of refund, if any, would be done through various modes in the following order of preference: 1. ECS/NECS - Payment of refund shall be undertaken through ECS/NECS for applicants having an account at any of the following centres: Mumbai, Kolkata, Chennai, Delhi, Pune Indore, Vadodra, Ahmedabad, Rajkot- refunds shall be credited through electronic transfer of funds by using ECS (Electronic Clearing Service)/ NECS (National Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer); This would be subject to availability of complete Bank Account Details including MICR code from the depository. 2. Direct Credit - Applicants having bank accounts with the Refund Banker(s), the refund amount would be directly credited to their refund banker Account with the refund banker.

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1. RTGS – Investors desirous of taking direct credit of refund through RTGS, will have to provide the IFSC

code in the CAF. 2. NEFT - – Investors desirous of taking direct credit of refund through NEFT, will have to provide the IFSC

code in the CAF.

3. For all other applicants, including those who have not updated their bank particulars with the MICR code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Mumbai and payable at par.

Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders, which can then be deposited only in the account specified. In case the share held in demat mode, such bank account particulars will be obtained from the Depository. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Interest in case of delay on allotment / dispatch The Company agrees that as far as possible allotment of securities offered to the existing shareholders on Rights basis shall be made within 15 days of the closure of the issue. Share certificate, letter of allotment or letter of rejection as the case may be will be despatched to the registered address of the first named applicant and/or the respective beneficiary accounts will be credited within 15 days, from the date of closure of the Issue. In case of delay beyond eight days, the Company agrees that it shall pay interest at the rate of 15% per annum. Disposal of application and application money No receipt will be issued for the application moneys received. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. In the event of shares not being allotted in full, the excess amount paid on application will be refunded to the applicant within 15 days of the closure of the Issue. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto. In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within 15 days from the close of the Issue in accordance with section 73 of the Act. For further instruction, please read the Composite Application Form (CAF) carefully. Undertakings by the Company The Company has given undertakings that:

� The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily.

� All steps for completion of the necessary formalities for listing and commencement of trading at all Stock

Exchange where the securities are to be listed will be taken within seven working days of finalization of basis of allotment.

� The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post /speed post

shall be made available to the Registrar to the Issue.

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� The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the

specified time.

� No further issue of securities affecting equity capital of the Company shall be made till the securities issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

� The Company accepts full responsibility for the accuracy of information given in this Draft Letter of Offer

and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Draft Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

� All information shall be made available by the Lead Managers and the Issuer to the Investors at large and

no selective or additional information would be available for a section of the Investors in any manner whatsoever including at road shows, presentations, in research or sales reports etc.

� We are having in place an Investor Grievance Handling Mechanism which includes meeting of

Shareholders’/Investors’ Grievance Committee’ at frequent intervals, appropriate delegation of power by the Board of Directors of the Issuer Company with regard to share transfer and clearly laid out systems and procedures for timely and satisfactorily redressal of Investor Grievance

� That we have been filing periodic statements in regard to financial results and shareholding pattern with the

Designated Stock Exchange BSE and Registrar of Companies for the last three years and such statements are available on websites of the Designated Stock Exchange/ on a common e- filing platform

� That we are addressing the investor grievances periodically by the authorized committee of the director

constituted as per Clause 49 of the Listing Agreement

� That we further confirm that other than the disclosures made in the instant Draft Letter of Offer nothing material has changed in respect of disclosures made by us at the time of our previous public Issue made on 1st July 1994.

� No further issue of securities affecting equity capital of our Company shall be made till the securities

issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

� Adequate arrangements shall be made to collect all Applications Supported By Blocked Amount (ASBA) and to

consider them similar to non – ASBA applications while finalizing the basis of allotment. Utilization of Issue Proceeds The Board of Directors declares that:

� The funds received against this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Act.

� Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in the

balance sheet of the Company indicating the purpose for which such moneys have been utilised.

� Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the form in which such unutilised moneys have been invested. The funds received against this Issue will be kept in a separate bank account and the Company will not have any access to such funds unless only after the basis of allotment is finalized.

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IMPORTANT Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in the accompanying Composite Application Form (CAF) are an integral part of the conditions of this Draft Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected. All enquiries in connection with this Draft Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed ‘Asian Electronics Rights Issue -2009’ on the envelope) to the Registrar to the Issue at the following address: Link Intime India Private Limited, C- 13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078

� It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled ‘Risk Factors’ beginning on page XIII of this Draft Letter of Offer.

� Our Company will not be liable for any postal delays and applications received through mail after the

closure of the Issue, are liable to be rejected and returned to the applicants.

� The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

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SECTION VIII

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that each provision herein below is numbered as per the corresponding article number in the Articles of Association and capitalized/defined terms herein have the same meaning given to them in the Articles of Association. SHARE CAPITAL Article 3 The Authorised Share Capital of the Company is Rs.40,00,00,000/-(Rupees four thousand lacs only), divided into 8,00,00,000 (Eight hundred lacs) Equity Shares of Rs.5/-(Rupees Five) each, with power to increase or reduce the capital of the company and to divide the Shares in capital for the time being into several Classes and to attach thereto respectively such preferential, deferred, qualified or special right, privileges, or conditions as may be determined by or in accordance with the Articles of Association of the Company and to vary, modify or amalgamate or abrogate any such rights, privileges, or conditions in such a manner as may be for the time being be provided by the Articles of Association of the Company. PREFERENCE SHARES Article 10 Subject to the provisions of the Act, the Company shall have power to issue preference shares which are redeemable or, at the option of the Company, are liable to be redeemed, and the manner in which such shares shall be redeemed shall be as provided by Article 79 unless the terms of the issue otherwise provide. SHARES AND SHAREHOLDERS Article 11 The Company shall cause to be kept a Register of Members and an Index of members in accordance with the provisions of the Act. The Company shall have power to keep branch registers of members or debenture holders in any state or country outside India. The Register of Members and Index and other documents mentioned in Section 163 of the Act shall be kept at the Registered Office of the Company unless a resolution is passed in the manner provided in the Act for them to be kept in some other place. Article 12 The shares in the capital shall be numbered progressively according to their several classes. Provided however that the provisions relation to progressive numbering shall not apply to the shares of the Company which have been dematerialized. Article 13 Subject to the provisions of the Act and of these Articles, the shares in the capital of the Company for the time being shall be under the control and at the disposal of the Directors, who may allot or otherwise dispose of the same or any of them to such persons, in such proportions, and on such terms and conditions, and at such times and either at par or premium or (subject to compliance with the provisions of the Act) at a discount as they may from time to time think fit and proper, and with power with the consent of the Company in General Meeting to give to any persons the call of any shares, either at par or at premium, or subject as aforesaid at a discount and for such time and for such consideration as the Directors think fit.

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Article 13A.

(i) Without prejudice to the generality of the powers of the Board under Article 13 or in any other Article of these Articles of Association, the Board or any Committee thereof duly constituted may, subject to the applicable provisions of the Act, rules notified thereunder and any other applicable laws, rules and regulations, at any point of time, offer existing or further shares (consequent to increase of share capital) of the Company, or options to acquire such shares at any point of time, whether such options are granted by way of warrants or in any other manner (subject to such consents and permissions as may be required) to its employees or to employees of any holding company or subsidiary company, including Directors (whether whole-time or not) of the Company and any holding company or subsidiary company of the Company, whether at par, at discount or at a premium, for cash or for consideration other than cash, or any combination thereof as may be permitted by law for the time being in force.

(ii) In addition to the powers of the Board under Article 13A(i), the Board may also allot the shares referred to in Article 13A(i) to any trust, whose principal objects would inter alia, include further transferring such shares to the employees or directors of the Company or any holding or subsidiary company of the Company [as referred to in Article 13A(i)] in accordance with the directions of the Board or any Committee thereof duly constituted for this purpose. The Board may make such provision of moneys for the purposes of such trust, as it deems fit.

(iii) The Board,or any Committee thereof duly authorised for this purpose, may do all such acts, deeds, things, etc. as may be necessary or expedient for the purposes of achieving the objectives set out in Articles 13A(i) and (ii) above.

(iv) This article shall not take away any right, which the Company/its Board or any duly authorised committee thereof had in this regard, without this Article being in place. Article 14 Subject as aforesaid the Directors may allot and issue shares in the capital of the Company as payment or part payment for any property sold or transferred, goods or machinery supplied or for services rendered to the Company, in the conduct of its business, or before the formation of the Company and shares which may be so allotted may be issued as fully paid-up shares, and if so issued, shall be deemed to be fully paid-up shares. Article 15 An application in writing signed by or on behalf of an applicant for shares in the Company agreeing to become a member and followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of these Articles, and every person who thus or otherwise accepts any shares or agrees to become a member of the Company and whose name is entered in its Register of Members shall, for the purpose of these Articles, be a member of the Company. Article 15A.

(i) Without prejudice to the generality of the powers of the General Meeting under Article 15 or in any other Article of these Articles of Association, the General Meeting may, subject to the applicable provisions of the Act, rules notified thereunder and any other applicable laws, rules and regulations, determine, or give the right to the Board or any Committee thereof to determine, that any existing or further shares (consequent to increase of share capital) of the Company, or options to acquire such shares at any point of time, whether such options are granted by way of warrants or in any other manner (subject to such consents and permissions as may be required) be allotted/granted to the employees, including Directors (whether whole-time or not) of the Company or any holding company or subsidiary company of the Company, whether at par, at discount or a premium, for cash or for consideration other than cash, or any combination thereof as may be permitted by law for the time being in force. The General Meeting may also approve any Scheme/Plan/other writing, as may be set out before it, for the aforesaid purpose.

(ii) In addition to the powers contained in Article 15A(i), the General Meeting may authorise the Board or any Committee thereof to exercise all such powers and do all such things as may be necessary or expedient to achieve the

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objectives of any Scheme/Plan/other writing approved under the aforesaid Article.”

(iii) This article shall not take away any right, which the Company/its Board or any duly authorised committee thereof had in this regard, without this Article being in place. Article 16 The money (if any) which the Directors shall on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any shares allotted by them, shall, immediately on the inscription of the name of the allottee in the Register of Members as the holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly. Article 17 The Directors shall cause to be made the returns as to all allotments from time to time made in accordance with the provisions of the said Act. Article 18 Subject to the provisions of the said Act, the Company may make arrangements on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and the time of payment of such calls. Article 19 If, by the conditions of allotment of any shares the whole or part of the amount or issue price thereof shall be payable by installments every such installment shall, when due, be paid to the Company by the person who for the time being and from time to time shall be the registered holder of the shares or his legal representative. Article 20 Every member, or his executors or administrator or other representatives, shall pay to the Company the portion of the capital represented by his shares, which may for the time being remain unpaid thereof, in such amounts, at such time or times and in such manner as the Directors, shall from time to time, in accordance with the Company’s regulations, require or fix for the payment thereof. Article 21 If any share stands in the names of two or more persons all the joint holders of the shares shall be severally and jointly liable for the payment of all deposits, installments, and calls due in respect of such share and for all incidents thereof according to the Company’s regulations; but the person first named in the Register shall, as regards service of notice, and all other matters connected with the Company, except the transfer of the share and any other matter by the said Act or herein otherwise provided, be deemed the sole holder thereof. Article 22 “Except as ordered by a court of competent jurisdiction or as required by law, the Company shall not be bound to recognize any equitable, contingent, future or partial interest in any share, or (except only as is by these Articles expressly provided) any right in respect of a share other than an absolute right thereto, in accordance with these articles, in the person whose name appears in the Register of Members as holder of shares or whose name appears as the Beneficial owner of the shares in the records of the Depository, but the Board shall be at liberty at their sole discretion to register any share in the joint names of any two or more persons or the survivor or survivors of them.” Article 22A Notwithstanding anything contained in the Articles of Association, the Company shall be entitled to dematerialize its shares, debentures and other securities for subscription in a dematerialized form. The Company shall further be

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entitled to maintain a Register of Members with the details of Members holding shares both in material and dematerialized form in any media as permitted by law including any form of electronic media. CERTIFICATES OF SHARES Articles 23 Every member or allottee of shares shall be entitled, without payment, to receive one certificate for the share or shares registered in his name under the Common Seal of the Company in such form as the Directors shall prescribe or approve, specifying the number and denoting number or numbers of the share or shares in respect of which it is issued and the amount paid up thereon. Such certificate shall be issued and signed in accordance with the provisions of the Companies (Issue of Certificates) Rules, 1960, or any modifications thereof or the rules for the time being in force in that behalf. The certificates shall be issued within three months after allotment or within two months after the application for the registration of transfer unless the conditions of issue otherwise provide. “Provided however that where the shares are dealt with in as Depository, the Company shall notwithstanding anything contained in Section 113 (1) of the Act, intimate the details of allotment of the shares to the Depository immediately on allotment of such shares.” “Provided that where the shares and other securities are held in a Depository, the records of the Beneficial ownership may be served by such Depository on the Company by means of electronic mode or delivery of floppies or discs.” Article 24 A certificate of shares registered in the names of two or more persons unless otherwise directed by them in writing may be delivered to any one of them on behalf of them all. Article 25 The Directors may issue additional or special certificate, and may issue new certificates in place of a certificate which is worn out, defaced lost, destroyed, filled up or otherwise whenever they think fit upon such terms as to indemnify, payment of costs or otherwise and on payment of such fee as they think fit per certificates in replacement of those which are old, decrepit, worn out or whose columns on the reverse for recording transfers have been fully utilized. A certificate may be renewed or a duplicate of a certificate may be issued if such certificate. [a] is proved to have been lost, or [b] having been defaced or mutilated or torn is surrendered to the Company. The manner of issue or renewal of a certificate or issue of a duplicate thereof and the particulars to be entered in the register of members or in the register of renewed or duplicate certificate, the form of such registers, the fee on payment of which, the terms and conditions, if any (including terms and conditions as to evidence and indemnity and the payment of out-of-pocket expenses incurred by a Company in investigating evidence) on which a certificate may be renewed or a duplicate thereof, may be issued shall be such as may be prescribed by the Rules made under the Act. Article 26 The Directors may waive payment of any fee generally or in any particular case. Article 27 Every endorsement upon the certificate of any share in favour of any transferee thereof shall be signed by a Director or some persons for the time being authorized by the Directors in that behalf. Article 27A Shares may be registered in the name of an incorporated Company or other body corporate but not in the name of a

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minor or in the name of a person of unsound mind or an insolvent or in the name of any firm or partnership. CALLS ON SHARES Article 28 Subject to the provisions of the said Act and any other prevailing regulations, the Directors may, from time to time, by means of resolutions passed at meetings of the Board make such calls as they may think fit upon the members in respect of moneys unpaid on the shares held by them respectively, whether on account of nominal value of the shares or by way or premium, and not by the conditions of allotment thereof made payable at fixed times and each member shall pay the amount of every call so made on him to the persons and at the time and places appointed by the Directors. A call may be made payable by installments. Article 29 A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed and may be made payable by members on the Register of Members on a subsequent date to be fixed by the Directors. Article 30 Fourteen day’s notice at least of every call made payable otherwise than on allotment shall be given by the Company in the manner hereinafter provided for the giving of notices specifying the time and place of payment and the person to whom such call shall be paid. Provided that before the time for payment of such call the Directors may by notice given in the manner hereinafter provided revoke the same. The Directors may from time to time, at their discretion, extend the time fixed for the payment of any call, and may extend such time as to all or any of the members who, from residence at a distance or from other cause, the Directors may deem fairly entitled to such extension, but no member shall be entitled to any such extension except as a matter of grace and favour. Article 31 If by the terms of issue of any share or otherwise any amount is payable at any fixed time or by installments at fixed times, whether on account of the amount of the share or by way of premium, every such amount of installment shall be payable as if it were a call duly made by the Directors and of which due notice had been given, and all the provisions herein contained in respect of calls relate to such amount of installments accordingly. Article 32 If the sum payable in respect of any call or such other amount or installment be not paid on or before the day appointed for payment thereof or any extension thereof as aforesaid, the holder for the time being of the share, in respect of which the call shall have been made or such amount of installment shall be due, shall pay interest for the same, from the day appointed for the payment thereof to the time of actual payment, at such rate not exceeding twenty four per cent as shall from time to time be fixed by the Directors. Nothing in this Article shall however be deemed to make it compulsory on the Directors to demand or recover any such interest, and the payment of such interest, wholly or in part, may be waived by the Directors if they think fit so to do. Article 33 Any money due from the Company to a member may, without the consent and notwithstanding the objection of such member be applied by the Company in or towards the payment of money due from him to the Company for calls or otherwise. Article 34 Neither a judgment nor a decree in favour of the Company for calls or other moneys due in respect of any shares nor any part-payment of satisfaction thereunder nor the receipt by the Company or a portion of any money which shall

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from time to time be due from any member to the Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by the Company in respect of payment of any such money, shall preclude the forfeiture of such shares as hereinafter provided. Article 35 On the trial or hearing of any action or suit brought by the Company against any member or his representatives to recover any moneys claimed to be due to the Company for any call or other sum in respect of his shares, it shall be sufficient to prove that the name of the member in respect of whose shares the money is sought to be recovered, appears entered on the Register of Members as the holder, or one of the holders, at or subsequent to the date at which the money sought to be recovered is alleged to have become due, of the shares in respect of which such money is sought to be recovered, and that the amount claimed is not entered as paid in the books of the Company or the Register of Members and that the resolution making the calls is duly recorded in the minute book, and that notice of presents; and it shall not be necessary to prove the appointment of the Directors who make such call, nor that a quorum of Directors was present at the Board at which such call was made, nor that the meeting at which such call was made was duly convened or constituted nor any other matter whatsoever, but the proof of the matters aforesaid shall be conclusive of the debt, and the same shall be recovered by the Company against the member or his representatives from whom the same is sought to be recovered, unless it shall be proved, on behalf of such member or his representatives, against the Company that the name of such member was improperly inserted in the register, or that the money sought to be recovered has actually been paid. Article 36 [a] The Directors may, if they think fit, receive from any member willing to advance the same, either in money or money’s worth the whole or any part of the amount remaining unpaid on the shares held by him beyond the sum actually called up and upon the moneys so paid or satisfied in advance, or so much there, as from time to time and at any time thereafter exceeds the amount of the calls then made upon and due in respect of the share on account of which such advances have been made, the Company may pay or allow interest at such rate as the member paying such advance and the Directors agree upon; provided always that if at any time after the payment of any such money the rate of interest so agreed to be paid to any such member appears to the Directors to be excessive, it shall be lawful for the Directors from time to time to repay to such members so much of such money as shall then exceed the amount of the calls made upon such shares unless there be an express agreement to the contrary; and after such repayment such members shall be liable to pay and such shares shall be charged with the payment of all future calls as if no such advance has been made, provided also that if at any time after the payment of any money so paid in advance, the Company shall go into liquidation, either voluntary or otherwise, before the full amount of the money so advanced shall have become due by the member to the Company for installments or calls, or in any other manner, the member making such advance shall be entitled (as between himself and the other members) to receive back from the Company the full balance of moneys rightly due to him by the Company in priority to any payment to members on account of capital. [b] The member making such advance shall not, however, be entitled to any voting rights in respect of the moneys so advanced by him until the same would, but for such payment, become presently payable. FORFEITURE OF AND LIEN ON SHARES Article 37 If any member fails to pay any money due from him in respect of any call or amount or installment as provided in Article 31 on or before the day appointed for payment of the same, or any such extension thereof as aforesaid or any interest due on such call or amount or installment or any expenses that may have been incurred thereon, the Directors or any person authorized by them for that purpose may, at any time thereafter, during such time as such money remain unpaid, serve a notice in the manner hereinafter provided for the serving of notice on such member or any of his legal representatives or any of the persons entitled to the share by transmission, requiring payment of the money payable in respect of such share, together with such interest and all expenses (legal or otherwise).

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Article 38 The notice shall name a day (not earlier than the expiration of fourteen days from the date of the notice and a place or place on or before and at which the money due as aforesaid is to be paid. The notice shall also state that in the event of the non-payment of such money at or before the time and the place appointed, the shares in respect of which the same is owing will be liable to be forfeited. Article 39 If the requirements of any such notice as aforesaid are not complied with every, or any share in respect of which the notice is given may, at any time thereafter before payment of all calls or amounts or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends and bonuses declared in respect of the forfeited shares and not actually paid before the forfeiture. Article 40 When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture or to any of his legal representatives, or to any of the persons entitled to the share by transmission and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members. The provisions of this Article are mandatory and no forfeiture shall in any manner be invalidated by any omission or neglect to give such notice, or to make such entry as aforesaid. Article 41 Any share so forfeited shall be deemed to be the property of the Company, and the Directors may sell or otherwise dispose of the same, either to the original holder thereof or to any other person, and either by public auction or by private sale, and upon such terms and such manner as they shall think fit. Article 42 In the meantime, and until any share so forfeited shall be sold or otherwise dealt with as aforesaid, the forfeiture thereof may at the discretion and by a resolution of the Directors, be remitted or annulled as a matter of grace and favour but not as of right, upon such terms and conditions as they think fit. Article 43 Any member whose shares have been forfeited shall, notwithstanding the forfeiture, remain liable to pay, and shall forthwith pay to the Company, all calls, amounts, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest thereon, from the time of the forfeiture until payment of such rates, not exceeding twenty four per cent per annum as the Directors may determine in the same manner in all respect as if the shares had not been forfeited, without any deduction or allowance for the value of the shares at the time of the forfeiture, and the Directors may enforce the payment thereof if they think fit (but without being under an obligation to do so), without entitling such member or his representative to any remission such forfeiture or to any compensation for the same, unless the Directors shall think fit to make such compensation, which they shall have full power to do, in such manner, and on such terms on behalf of the Company as they shall think fit. Article 44 The forfeiture of a share shall involve the extinction of all interest, in and of all claims and demands against the Company of the member in respect of the share, and all other rights of the member incident to the share except only of those rights as by these Articles are expressly saved. Article 45 A certificate in writing, under the signature of Director, or by any other person who may be authorized for the

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purpose by the Director, that the call amount or instilment in respect of a share was made or was due, or the interest in respect of a call, amount or instilment was or the expenses were payable, as the case may be, that notice thereof as aforesaid was given and default in payment was made, and that the forfeiture of the share was made by a resolution of the Directors to the effect, shall be sufficient evidence of the facts stated therein as against all persons entitled to or interested in such share and such certificate and the receipt of the Company for the price of such share shall constitute a good title to such share in the purchaser of such share who shall, as soon as he has completed his purchase, be entered in the Register of Members as the holder of the share. Any such purchaser shall not (unless by express agreement) be liable to pay any calls, amounts, installments, interest and expenses owing to the Company prior to such purchase, nor shall he be entitled (unless by agreement) to any of the dividends, interest or bonus accrued or which might have accrued upon the share before the time of completing the purchase. Such purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity in the proceedings in reference to the forfeiture of such share or the sale thereof. Article 46 The Company shall have a first and paramount lien upon all the shares, not being fully paid-up shares registered in the name of each member (whether solely or jointly with another or others), and upon the proceeds of sale thereof, for all moneys from time to time due or payable by him to the Company for calls then made and all amount or installments as provided by Article 31 payable in respect of such shares and no equitable interest in any share shall be created except upon the footing and condition that Article 22 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares. The Directors may at any time declare any shares to be exempt, wholly or partially from the provisions, of this Article. Article 47 For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as they think fit, and transfer the same to the name of the purchaser, without any consent and notwithstanding any opposition on the part of the indebted member or any other person or persons interested therein, and a complete title to the shares which shall be sold and transferred shall be acquired by the purchaser, by virtue of such sale and transfer, against such indebted member and all persons claiming with or under him whether he may be indebted to the Company in point of fact or not. But no such sale shall be made until notice in writing stating the amount due, or specifying the liability or engagement and demanding payment or fulfillment or discharge thereof, and of the intention to sell in default shall have been served upon the persons (if any) entitled by transmission to the shares or any one or more of such heirs, executors, administrators, representatives or persons and default shall have been made by him or them in payment, fulfillment or discharge of such debts, liabilities or engagements, for seven days after such notice. Article 48 The net proceeds of any such sale after payment of the costs of such sale, shall be applied in or towards the satisfaction of such debts, liabilities or engagement and the residue (if any) paid to such member, or any of his heirs, executors, administrators, representatives or assigns, or any of the person (if any) entitled by transmission to the shares sold. Article 49 Upon any sale after forfeiture, or upon any sale for enforcing a lien, in purported exercise of the powers herein before given, the Directors may appoint some person or persons to execute an instrument of transfer of the shares sold. Article 50 Upon any such sale after forfeiture, the Directors shall cause the purchaser’s name to be entered in the Register in respect of the shares sold and shall issue to the purchaser a certificate such as is specified in Article 23 hereof in respect of the shares sold if any the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money and after his name has been entered into the Register in respect of such shares, the

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validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively. TRANSFER AND TRANSMISSION OF SHARES Article 51 The Company shall keep a book called “Register of Transfers” and therein shall be fairly and distinctly entered the particulars of every transfer or transmission of any share in the Company. Article 52 No transfer shall be registered unless a proper instrument of transfer has been delivered to the Company. Every instrument of transfer shall be duly stamped and shall be executed by or on behalf of the transferor and the transferee, and in the case of a share held by two or more holders or to be transferred to the joint names of two or more transferees, by all such joint-holders or by all such joint transferees, as the case may be. Several executors or administrators of a deceased member proposing to transfer the share registered in the name of such deceased member shall all sign instrument of transfer in respect of the share as if they were the joint holders of the share. The instrument of transfer shall specify the name, address and occupation, if any, of the transferee. Article 53 The instrument of transfer shall be in writing and all the provisions of section 108 of the Act and any statutory modifications thereof for the time being shall be duly complied with in respect of all transfers of shares and of the registration thereof. Article 54 In the case of the death or any one or more of the persons named in the Register as the joint-holders of any share, the survivor or survivors shall be the only persons recognized by the Company as having any title to or interest in such shares, but nothing herein contained shall be taken to release the estate of the deceased joint-holder from any liability on the shares held by him jointly with any other person. Article 55 In the absence of a nomination recorded in accordance with the Section 109A of the Act, which shall in any event have precedence the executors or administrators of a deceased member not being one of several joint-holders shall be the only persons recognized by the Company as having any title to the shares registered in the name of such deceased member and the Company shall not be bound to recognize such executors or administrators, unless they shall have first obtained Probate or Letters of Administration or other legal representation, as the case may be, as provided in Article 2, provided nevertheless, the Director, in any case where they in their absolute discretion think fit, may dispense with the production of Probate or Letters of Administration or such other legal representation, upon such terms as to indemnify or otherwise as they may deem fit, and under the next Article, register the name of any persons who claims to be absolutely entitled to the shares standing in the name of the deceased member as a member in respect of such shares. Article 56 Subject to the provision of the last preceding Article, any person to whom the right to any share has been transmitted in consequence of the death or insolvency of any member, or otherwise by operation of law may, with the consent of the Directors (which they shall not be under any obligation to give), and upon his producing such evidence that he sustains the character in respect of which he proposes to act under this Article, and of his title, as the Directors think sufficient, either be registered himself as a member in respect of such share, or elect to have some person nominated by him and approved by the Directors registered as such member; provided, nevertheless, that if such person shall elect to have his nominee registered, he shall testify his election by executing to his nominee an instrument of transfer of the share in accordance with the provisions herein contained, and until he does so and subject to Article

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53, he shall not be freed from any liability in respect of the share. This clause is hereinafter referred to as the ‘transmission’ clause. Article 57 Every transmission of share shall be verified in such manner as the Directors may require, and the Company may refuse to register any such transmission, until the same be so verified, or unless and until an indemnity be given to the Company with regard to such registration which the Directors at their discretion shall consider sufficient; provided nevertheless, that these shall not be any obligation on the Company or the Directors to accept any indemnity. The Directors shall have the same right to register a person entitled by transmission to any shares or his nominee as if he were the transferee named in an ordinary transfer presented for registration. Article 58 A person entitled to a share by transmission may, until the Directors otherwise determine as provided by Article 122, receive and give discharge for any dividends, bonuses or other moneys payable in respect of the share, but he shall not be entitled to vote at meetings of the Company save as provided in Article 107 or save as aforesaid or save as provided in Article 202 to any of the rights and privileges of a member, unless and until he shall have become a member in respect of the shares. Article 59 An application for the registration of a transfer of shares or other interest of a member in the Company may be made either by the transferor or the transferee. Where such application is made by the transferor and relates to partly paid shares, the transfer shall not be registered unless the Company gives notices of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the date of the delivery of the notice. The notice to the transferee shall be deemed to have been duly given if dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been delivered at the time at which it would have been delivered in the ordinary course of post. Article 60 Every instrument of transfer, duly executed in accordance with the provision of these articles and duly stamped, shall be left at the office of the Company for registration, accompanied by the certificate of the shares to be transferred, or if no such certificate is in existence, the letter of allotment and also such other evidence as the Directors may require to prove the title of subject to such conditions and regulations as the directors shall from time to time prescribe. Where on an application n in writing made to the Company by the transferee and bearing the stamp required for an instrument of transfer it is proved to the satisfaction of the Directors that an instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost, the Company may if the Directors think fit register the transfer on such terms as to indemnify as the Directors may think fit. Article 61 The Directors may, at their own absolute and uncontrolled discretion and without assigning or being under any obligation to give any reasons, decline to register or acknowledge any transfer or transmission of shares and in particular, may so decline in any case in which the Company has a lien upon the shares or any of them, or in case of shares not fully paid-up whilst any moneys called upon payable at a fixed time in respect of the shares desired to be transferred or any of them remain unpaid, or unless the transferee is approved by the Directors. The registration of a transfer shall be conclusive evidence of the approval by the Directors of the transferee. If the Directors refuse to register the transfer or transmission of any shares, notice of the refusal shall within two months from the date on which the instrument of transfer or intimation of transmission was delivered to the Company be sent to the transferee and the transferor or to the person giving intimation of transmission, as the case may be. Such notice to the transferee shall be deemed to have been duly given if dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer. Notwithstanding anything contained in this Article, the Directors of the Company may in their absolute discretion

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refuse sub-division of share certificates or debenture certificates into denominations of less than the marketable lots except where such sub-division is required to be made to comply with an order of a competent court of Law. Article 62 The transferor shall be deemed to remain the holder of the shares until the name of the transferee shall be entered in the Register of Members. Article 63 Every instrument of transfer which shall be registered shall remain permanently in the custody of the Company. If the transfer relates to the only share or all the shares comprised in the certificate, such certificate or a new certificate in lieu thereof shall, after the registration of the transfer, be delivered to the transferee; and if the transfer relates only to a part of the shares comprised in the certificate, the same shall, on registration of the transfer, be retained by the Director and cancelled, and new certificates will be issued to the transferor and the transferee in respect of the shares respectively held by them on payment of such fee as may be decided by the Directors. Article 64 Registration of a transfer shall not be refused on the ground of the transferor being either alone or jointly with any persons or person indebted to the Company on any account whatsoever except a lien on shares. The Board of Directors shall have the power to delegate the right to transfer the shares in the Company to such organizations/institutions approved by the Board. Article 65 The Board may after giving not less than seven days previous notice by advertisement as required by the Act, close the Register of Members or the Register of Debenture Holders for any period or periods not exceeding in the aggregate 45 (forty five) days in each year, but not exceeding 30 days at any one time. Article 66 The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect to any transfer of shares made, or purporting to be made by an apparent legal owner thereof (as shown or appearing in the Register of Members, to the prejudice of any person or persons having or claiming any equitable right, title or interest to or in the same shares, notwithstanding that the Company may have had notice of such equitable right, title or interest, or notice prohibiting registration of such transfer, and may have entered such notice or referred thereto in any book of the Company; and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto, if the Directors shall so think fit. A. Without prejudice to the foregoing provisions and without limiting in any manner the generality of the above provisions the Board of Directors of the Company, may at its absolute and uncontrolled discretion, refuse to register the transfer of any shares or other securities of the Company in favour of any transferee whether individual, firm, group, constitutent of a group, body corporate, or bodies corporate under the same management or otherwise and whether in his or its own name or in the name of any other person, if the total nominal value of the shares or other securities intended to be so transferred exceeds or together with the total nominal value of any shares or other securities, already held in the Company by such individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management or otherwise will exceed 3% (three percent) of the paid up equity share capital of the Company or if the Board of Directors is satisfied that as a result of proposed transfer of any shares or securities or block of shares or securities of the Company, a change in the composition of the Board of Directors or change in the controlling interest of the Company is likely to take place and that such change would be prejudicial to the interest of the Company or to the Public interest. For the purpose of this Article the Board of Directors of the

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Company shall be entitled inter alia, to rely upon this Article to form its opinion as to whether such registration of transfer of any of its shares or other securities exceeding 3% (three per cent) of the paid up equity share capital of the Company should be refused or not. B. The certification by the Company of any instrument of transfer of shares in or debenture of the Company, shall be taken as representation by the Company to any person acting on the faith of the certification that there have been produced to the Company such documents as on the fact of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures. C. In case of transfer of shares or other securities, where the Company has not issued any certificates and where such shares or other securities are being held in fungible form, provisions of the Depositories Act shall apply. D. Notwithstanding anything contained in the Articles of Association, in the case of transfer of shares or other marketable securities, where the Company has not issued any certificates and where such shares or securities are being held in an electronic and fungible form, the provisions of the Depositories Act, 1996 apply. INCREASE AND REORGANISATION OF CAPITAL Article 67 The Company may by an Ordinary Resolution so alter the conditions of its Memorandum of Association as: [a] To increase its share capital by such amount as it thinks expedient by issuing new shares; [b] To consolidate and divide all or any of its share capital into shares of larger amount than its existing shares. [c] To convert all or any of its fully paid up shares into stock, and re-convert that stock into fully paid-up shares of any denomination. [d] To sub-divide its shares, or any of them into shares of smaller amount than is fixed by its Memorandum of Association, so however that in the sub-division the proportion between the amount paid and the amount, if any unpaid on each reduced shares shall be the same as it was in the case of the share from which the reduced share is derived. The Company may at the same time by the requisite majority determine that as between the holders of the resulting shares, one or more of such shares may subject to the provisions of the Act be given any preference or advantage as regards dividend, capital, voting or otherwise over the other or any other of such shares. [e] To cancel any shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. Article 68 The Company, may from time to time, in General Meeting with the sanction of any Ordinary Resolution, whether all the shares for the time being authorized shall have been issued or not, and whether all the shares for the time being issued shall have been fully called up or not, increase its capital to any amount by the creation of new shares, such aggregate increase to be divided into shares of such respective amounts as the Company by the resolution authorizing such increase directs or authorizes. The new shares shall be upon such terms and conditions (and if preference shares upon such conditions as to redemption) and with such rights and privileges annexed thereto, as the General Meeting resolving upon the creation thereof shall direct or authorize and in particular, such shares may be issued with a preferential or qualified right to dividends, and in the distribution of assets of the Company, and subject to the provisions of the said Act with a special or without any right of voting; and the General Meeting resolving upon the creation of the shares may direct that any shares for the time being unissued and any new shares about to be issued, or any of them, shall be offered in the first instance, and either at par or at a premium or at discount to all the then members or any class thereof, in proportion to the amount capital held by them or make any other provisions as to the issue and allotment of such original shares and the new shares; and failing such directions

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by the General Meeting resolving upon the creation of the shares, or so far as such directions shall not extend, the new shares shall be at the disposal of the Directors as if they formed part of the shares in the original capital. Whenever any shares are issued at a discount the provisions of the said Act shall be complied with. Article 69 The Directors may from time to time without any sanction of the Company and whether all the shares for the time being subscribed shall have been fully called up or not, issue further shares of such value as they may think fit. Such further shares shall be issued upon such terms and conditions (and if preference shares upon such conditions as to redemption). And with such rights and privileges annexed thereto as the Board shall direct, and, in particular, such shares may be issued with a preferential or qualified right to dividend, and in the distribution of assets of the Company, and subject to the provisions of the Act with a special right or without any right of voting, and the Board may dispose of such shares or any of them either at par or at a premium or subject to the provisions of the said Act at a discount, to any member or any class thereof or in such other manner as the Board may think most beneficial to the Company. Article 70 [1] Where the Board of Directors of the Company decides to increase the subscribed capital of the Company by allotment of further shares, then unless the requirements of sub-section (1-A) of section 81 of the Act are complied with: [a] such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the Company, in proportion, as nearly as circumstances admit, to the capital paid-up on those shares at that data; [b] the offer aforesaid shall be made by notice specifying the number of shares offered and limiting a time being not less than fifteen days or such other period as may be specified by the authorities from the date of the offer within which the offer, if not accepted , will be deemed to have been declined. [c] After the expiry of the time specified in the notice aforesaid or on receipt of earlier intimation from the persons to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose them in such manner as they think most beneficial to the Company. The offer aforesaid shall not be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person unless the Company in General Meeting or the Directors otherwise resolve. [2] Whenever any shares are to be offered to the members, the Directors may dispose of any such shares which, by reason of the proportion borne by them to the number of persons entitled to such offer, or by reason of any other difficulty in apportioning the same, cannot in the opinion of the directors be conveniently offered to the members. [3] Nothing in this Article shall apply to the increase of the subscribed capital of the Company caused by the conversion of debentures issued or loans raised by the Company into shares in the Company; Provided that the terms of issue of such debentures or the terms of such loans include a term providing for an option to exchange such debentures or loans for shares in the Company and such term. [a] has been approved by a special resolution of the Company before the issue of the debentures or the raising of the loans; and also [b] is in the conformity with the rules, if any, made by the Central Government or other relevant authorities in this behalf. Article 71 Where the Company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called “the Share Premium

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Account”. The Share Premium Account shall be applied only for the purpose authorized by Provisions of the said Act. Article 72 Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by creation of new shares shall be considered as part of the original capital and shall be subject to the provisions herein contained with reference to the payment of calls and instalments, transfer, transmission, forfeiture, lien surrender, voting and otherwise in all respects as if it had been the original capital. Article 73 The Directors shall, whenever the share capital is increased beyond the authorized capital, file with the Registrar of Companies notice of the increase of the capital as provided by provisions of the said Act within the prescribed time after the passing of the resolution authorizing the increase. Article 74 [a] When any shares shall have been converted into stock, the several holders of such stock may thenceforth transfer their respective interest therein or any part of such interest, in the same manner and subject to the same regulations and subject to which share in the Company’s capital may be transferred, or as near thereto as circumstances will admit. But the Directors may from time to time, if they think fit fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of that minimum, but with full power, nevertheless, at their discretion to waive such rules in any particular case. [b] Notice of such conversion of shares into stock or reconversion of stock into shares shall be filed with the Registrar of Companies as provided in the provisions of the said Act. Article 75 The stock shall confer on the holders thereof respectively the same privileges and advantages, as regards participation in profits and voting at meetings of the Company and for other purposes, as would have been conferred by shares of equal amount in the capital of the Company of the same class as the shares from which such stock was converted, but no such privileges or advantages, except the participation in profits of the Company or in the assets of the Company on a winding-up, shall be conferred by any such aliquot part of consolidated stock as would not, if existing in shares, have conferred such privileges or advantages. No such conversion shall affect or prejudice the preference or other special privileges attached to the shares so converted. Save as aforesaid, all the provisions herein contained shall, so far as circumstances will admit, apply to stock as well as to shares and the words “share” and “shareholder” in these presents shall include “stock” and “stockholder”. Article 76 The Company may subject to the provisions of the Act and other relevant laws issue share warrants, and accordingly the Directors may in their discretion, with respect to any fully paid-up share on application in writing signed by the person or all persons registered as holder or holders of the share and authenticated by such evidence (if any) as the Directors may from time to time require as to the identity of the person or persons signing the application, and on receiving the certificate (in any) of the share and the amount of the stamp duty on the warrant and such fee as the Directors may from time to time prescribe, issue under the Company’s seal a warrant, duly stamped, stating that the bearer of the warrant is entitled to the shares therein specified, and may provide by coupons or otherwise for the payment of dividends, or other moneys, the shares included in the warrant. On the issue of a share warrant the provisions of the Act shall apply. The bearer of a share warrant shall not be considered to be a member of the Company and accordingly save as herein otherwise expressly provided, no person shall as bearer of a share warrant, sign a requisition for calling a meeting of the Company, or attend or vote or exercise any other privileges of a member at a meeting of the Company, or be entitled to receive any notice of meetings or otherwise, or be qualified in respect of the shares or stock specified in the warrant for being a Director of the Company, or have or exercise any other rights of a member of the Company.

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Article 77 The Directors may from time to time make rules as to the terms on which (if they shall think fit) a new share warrant or coupon may be issued in case of defacement, loss, or destruction and the fees to be charged for the same. REDUCTION OF CAPITAL Article 78 The Company may from time to time by Special Resolution, and subject to confirmation by the Court and other relevant authorities, reduce its share capital in any way; and in particular and without prejudice to the generality of the foregoing power may: Extinguish or reduce the liability on any of its shares in respect of share capital not paid up; Either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost, or is unrepresented by available assets; or Either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the wants of the Company; and may, if and so far as is necessary, alter its Memorandum by reducing the amount of its share capital and of its shares accordingly. Capital may be paid off on the footing that it may be called up again or otherwise, and paid-up capital may be cancelled as aforesaid without reducing the nominal amount of the shares by the like amount to the intent that the unpaid and callable capital shall be increased by the like amount. The Directors shall whenever the capital of the Company is reduced duly comply with the provisions of the said Act. Article 78A “Subject to and in full compliance of the requirement of Sections 77A, 77AA and 77B of the Companies Act, 1956, or corresponding provision of any re-enactment thereof and any Rules and Regulations that may be prescribed by the Central Government, the Securities and Exchange Board of India (SEBI) or any other appropriate authority in this regard, the Company, in a General Meeting may, upon the recommendation of the Board, at any time and from time to time, by a Special Resolution authorize, buy-back of any part of the share capital of the Company fully paid up on that date.” Article 79 [1] Whenever any preference shares are issued which are, or at the option of the Company are to be liable to be redeemed, the following provisions shall take effect:- [a] No such shares shall be redeemed except out of the profits of the Company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purpose of the redemption. [b] No such shares be redeemed unless they are fully paid. [c] The premium, if any, payable on redemption must be provided for out of the profits of the Company or out of the Company’s Share Premium Account before the shares are redeemed. [d] Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue there shall out of profits which would otherwise have been available for dividend, be transferred to a Reserve Fund to be called “The Capital Redemption Reserve Account”, sum equal to the nominal amount of the shares redeemed and the provisions of the Act relating to the reduction of the share capital of the Company shall except as provided under provisions of the Act, apply as if the Capital Redemption Reserve Account were paid-up share capital of the Company. [e] Whenever the Company redeems any redeemable preference shares provisions of the Act shall be

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complied with.\ [2] Subject to the provisions of the Act and these Articles, the redemption of preference shares hereunder may be effected in accordance with the terms and conditions of their issue and in the absence of any such terms and conditions in such manner as the Directors may think fit. [3] Where the Company has redeemed or is about to redeem any preference shares, it shall have the power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued; and accordingly the share capital of the Company shall not, for the purpose of calculating the fees payable under the provisions of the Act, be deemed to be increased by the issue of shares in pursuance of this clause. Provided that, where new shares are issued before the redemption of the old shares, the new shares shall not so far as relate to stamp duty, be deemed to have been issued in pursuance of this clause unless the old shares are redeemed within one month after the issue of the new shares [4] The Capital Redemption Reserve Account may, notwithstanding anything in this Article, be applied by the Company, in paying up unissued shares of the Company to be issued to members of the Company as fully paid bonus shares Article 79A Subject to the provisions of the Act, the Company shall have the power to issue cumulative convertible preference shares to which the following provisions shall apply:- [a] The dividend payable on the said shares shall be on a preferential basis and shall be at such rate as may be prescribed or permitted under the applicable rules and regulations prevailing at the relevant time. [b] The dividend shall be cumulative and arrears shall be payable to the shareholders registered with the Company on the date fixed for determining to whom the dividend then declared is payable. [c] All such shares shall be converted into equity shares any time between the expiry of three years and the expiry of five years from the date of allotment of the shares as may be decided by the Board subject to any applicable regulations or sanctions that may be in force at the time. Upon conversion into equity shares the right to receive arrears of dividend if any, on the preference share up to the date of conversion shall devolve on the holders of the equity shares registered with the Company on the date prescribed in the declaration of the said dividend. [d] Such conversion shall be deemed to be a redemption of the preference shares out of the proceeds of a fresh issue of shares. MODIFICATION OF RIGHTS Article 80 Whenever the share capital is divided into different classes of share, all or any of the rights and privileges attached to each class may, subject to the provisions of the Act, be varied, modified commuted, affected, abrogated or dealt with, the consent in writing by the holders of not less than three-fourth of the issued shares of the class or with the sanction of a Special Resolution passed at a separate meeting of the holders of the issued shares of that class and all the provisions contained in these Articles as to General Meeting (including the provisions relating to quorum at such meetings) shall mutatis mutandis apply at every such meeting. This article is not to derogate from any power the Company would have if this Article were omitted and in particular the powers under Section 391, 394 and 395 of the said Act. GENERAL MEETINGS Article 81

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The Company shall, in addition to any other meetings which are hereinafter referred to as “Extra-Ordinary General Meetings”, hold a General Meeting which shall be styled its Annual General Meeting and shall specify the meeting as such in the notice calling it. Article 82 [a] An Annual General Meeting shall be held in each year and not more than fifteen months shall elapse between the date of one Annual General Meeting and that of the next : Provided that any Annual General Meeting may be held after such period of 15 months if the Registrar of Companies or other relevant authorities extends the time for holding the same. [b] Every Annual General Meeting shall be held within a period of 6 months from the date up to which the Balance Sheet and Profit and Loss Account of the Company intended to be placed before such Annual General Meeting are made up unless an extension of time has been granted for holding a meeting under the provisions of the Act. [c] Every Annual General Meeting shall be called during business hours, on a day that is not a public holiday and shall be held either at the Registered Office of the Company or at some other place within the city or town or village in which the Registered Office of the Company is situated and the notice calling the meeting shall specify it as the Annual General Meeting. [d] The Directors may call Extra-Ordinary General Meeting of the Company whenever they think fit and such meetings shall be held at such place and time as the Directors think fit. Article 83 The Directors shall call an Extra-Ordinary General Meeting of the Company in the manner provided in the said Act on receiving a valid requisition complying in all respects with the provisos of the said Act. If the board does not within twenty-one days from the date of deposit of a valid requisition proceed to call a meeting to be held within forty five days from such date a meeting may be called by the requisitionists as provided in the said Act. Article 84 [1] A General Meeting of the Company may be called by giving not less than twenty one days notice in writing but a General Meeting may be called after giving shorter notice if consent is accorded thereto:-

[i] in the case of an Annual General Meeting by all the members entitled to vote thereat; and

[ii] in the case of any other meeting, by members of the Company holding not less than 95 per cent, of such part of the paid-up share capital of the Company as gives a right to vote at the meeting. [2] Notice of every meeting of the Company shall specify the place and the day and hour of the meeting and shall contain a statement of the business to be transacted thereat [3] Such notice shall be given:

[i] to every member of the Company in any manner authorized by clause (1) to (5) of Article 200. [ii] To the person entitled to a share in consequence of the death or insolvency of a member, by

sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased , or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled or until such an address has been so supplied by giving the notice in any manner in which it might have been given if the death or insolvency had not occurred; and’

[iii] To the auditor or auditors for the time being of the Company in any manner authorized by Section 53 of the Act in the case of any member or members of the Company

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[4] The accidental omission to give notice to or the non receipt of notice by, any member or other person to whom it should be given shall not invalidate the proceedings at the meeting. [5] In every notice there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or where that is allowed one or more proxies to attend and vote instead of himself, and that a proxy need not be a member. [6] Where any items of business to be transacted at the meeting are deemed to be special as provided in Article 85 there shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular the nature of the concern or interest, if any therein, of every Director, provided that where the notice of a meeting is given by advertising the same in a news paper circulating in the neighbourhood of the Registered Office of the Company under clause (3) of Article 200, the statement of material facts referred to in this clause need not be annexed to the notice as required by that section but it shall be mentioned in the advertisement that the statement has been forwarded to the members of the Company. [7] Provided further that where any item of special business as aforesaid to be transacted at a meeting of the Company relates to, or affect, any other Company the extent of shareholding interest in the other Company of every Director, and the Manager, if any of this Company shall also be set out in the statement if the extent of such shareholding interest is not less than 20 per cent of the paid-up capital of that other Company. [8] Where any item of business consists of the according of approval of any document by the meeting, the time and place where the documents can be inspected shall be specified in the statement aforesaid. [9] The Directors shall duly comply with the provisions of section 190 of the said Act with regard to resolutions in respect of which special notice is required by the said Act. Article 85 In the case of an Annual General Meeting, all business to be transacted at the meeting shall be deemed special, with the exception of business relating to (i) the consideration of the Accounts, Balance Sheet and the Reports of the Board of Directors and Auditors (ii) the declaration of dividend (iii) the appointment of Directors in the place of those retiring, and (iv) the appointment of and the fixing of the remuneration of the Auditors. In the case of any other meeting, all business shall be deemed special. Article 86 Upon a requisition of members complying with section 188 of the said Act Directors shall duly comply with the obligations of the Company under the said Act relating to circulation of members resolutions and statements relating to such resolutions. Article 87 A certificate in writing signed by the Secretary or by a Director, or some officer appointed by the Directors for the purpose, to the effect that according to the best of his belief the notices convening the meeting have been duly given shall be prima facie evidence thereof. PROCEEDINGS AT GENERAL MEETING Article 88 No General Meeting, Annual or Extra-Ordinary, shall be competent to enter up on, discuss or transact any business a statement of which has not been specified in the notice convening the meeting except as provided in the said Act. Article 89

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No business shall be transacted at any General Meeting, unless the requisite quorum is present at the time when the meeting proceeds to business. Five members personally present and entitled to be present and to vote shall be quorum for a General Meeting for all purposes save as otherwise expressly provided in the said Act or in these presents. When more than one of the joint-holders of a share is present not more than one of them shall be counted for ascertaining the quorum. Several executors or administrators of a deceased person in whose sole name shares stand shall for the purpose of this clause be deemed joint-holders. Article 90 If, within half an hour from the time appointed for holding the meeting, a quorum of members is not present, the meeting, if convened by upon such requisition of members as aforesaid, shall be dissolved, but in any other case (subject to the provisions of Article 156 (4) (b) it shall stand adjourned to the same day in the next week at the same place and time or to such other day and at such time and place as the directors may determine. Article 91 If at such adjourned meeting, a quorum of members is not present within half an hour from the time appointed for holding the meeting the members present, whatever their number, shall be a quorum, and may transact the business, and decide upon all matters which could properly have been disposed off at the meeting from which the adjournment took place, if a quorum had been present thereat. Article 92 The Chairman of the Directors, if any, shall, if present and willing, be entitled to take the chair at every General Meeting, whether Annual or Extra-Ordinary, but if there be no such Chairman or in case of his not being present or being unwilling or failing to take the chair within fifteen minutes of the time appointed for holding such meeting, the members present shall choose another Director as Chairman, and if all the Directors present decline to take the chair, or if there be no Director present, then the members present shall choose one of their own member to be Chairman of the meeting. If the poll is demanded it shall be taken forthwith in accordance with the provisions of Article 98, the Chairman elected on a show of hands exercising all the powers of the Chairman for the purpose of such poll. If some other person is elected Chairman as a result of such poll, he shall be the Chairman for the rest of the meeting. Article 93 No business shall be transacted at any General Meeting, except the election of Chairman, whilst the chair is vacant. Article 94 The Chairman may, with the consent of a majority of members personally present at any meeting, adjourn such meeting from time to time land from place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. A resolution passed at an adjourned meeting of the Company shall be treated as having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date. Article 95 Whenever any meeting is adjourned for thirty days or more, notice of such adjourned meeting, shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of any adjourned meeting or of the business to be transacted at an adjourned meeting. Article 96 No resolution submitted to a meeting, unless proposed by the Chairman of the meeting, shall be discussed or put to vote until the same has been proposed by a member present and entitled to vote on such resolution and seconded by another member present at and entitled so to vote.

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Article 97 [1] At and General Meeting a resolution put to vote of the meeting shall, unless a poll is demanded under Article 98, be decided on a show of hands. [2] A declaration by the Chairman in pursuance of clause (1) hereof that on a show of hands a resolution has or has not been carried, or has or has not been carried either unanimously or by a particular majority and an entry to that effect in the book containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution. “RESOLVED THAT pursuant to section 31 and other applicable provisions, if any, of the Companies Act, 1956 the Articles of Association of the Company be and are hereby amended by insertion of a new sub-Article (3) after the existing Article 97 (2): [3] In the case of resolutions relating to such business as the Central Government may, by notification, declare to be conducted only by postal ballot, the Company shall get such resolution passed by means of a postal ballot and/or through electronic media instead of transacting the business in general meeting of the Company. Where the Company requires to or decides to, as the case may be, get a resolution passed by means of a postal ballot, the provisions of section 192A of the Act, and such other rules, regulations framed and modification there under from time to time shall be complied with.” Article 98

[i] Before or on the declaration of the result of the voting on any resolution on a show of hands, poll may be ordered to be taken by the chairman of the meeting of his own motion and shall be ordered to be taken by him on a demand made in that behalf by any member or members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution, not being less than one-tenth of the total voting power in respect of the resolution, or on which an aggregate sum of not less than fifty thousand rupees has been paid up.

[ii] The demand for a poll may be withdrawn at any time by the person or persons who made the demand.

[iii] If a poll is duly demanded, the same, if on the election of Chairman of a meeting or on any question of adjournment, shall be taken at the meeting and without adjournment and if on any other question, shall be taken in such manner and at such time and place in Bombay, and either at once, or after an interval or adjournment not being later than forty eight hours from the time when the demand was made, as the Chairman of the meeting who subject to the provisions of the said Act, shall have power to regulate the manner in which a poll shall be taken shall direct.

[iv] Every such poll may be taken either by open voting or by ballot as the Chairman of the meeting at which the poll was demanded may direct. The result of the poll shall be deemed to be the decision of the meeting on resolution on which the poll was taken.

[v] Two scrutineers shall be appointed by the Chairman to scrutinize the votes given on the poll and to report to him. The Chairman shall have the power at any time before the result of the poll is declared to remove a scrutineer from office and to fill vacancies in the office of the scrutineer arising from such removal or from any other cause. At least one scrutineer shall be a member present at the meeting not being an officer or employee of the Company provided such a member is available and willing to be appointed.

[vi] The decision of the Chairman on any difference between the scrutineers shall be conclusive.

[vii] The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the question on which the poll has been demanded.

[viii] A demand for a poll shall be made in the following or similar terms: We, the undersigned members of Asian Electronics Limited hereby demand a poll upon the resolution now proposed

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viz: Dated this __________ day of ________ 19 _______. Article 99 In case of an equality of votes the Chairman of any meeting shall both on the show of hands and at a poll (if any) held pursuant to a demand made at such meeting, have a casting vote in addition to the vote of votes to which he may be entitled as a member. Article 100 [1] a. The Company shall cause minutes of all proceedings of every General Meeting, and of all proceedings at every meeting of its Board of Directors or of every committee of the Board, to be kept by making within fourteen days of the conclusion of every such meeting concerned, entries thereof in book kept for that purpose with their pages consecutively numbered. In no case the minutes of proceeding of a meeting shall be attached to any such book as aforesaid by pasting or otherwise. b. The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat. c. All appointments of officers made at any time of the meeting aforesaid shall be included in the minutes of the meeting. d. In the case of a meeting of the Board of Directors or of a Committee of the Board the minutes shall also contain : i) the names of the Directors present at the meeting and ii) in the case of each resolution passed at the meeting, the names of the Directors, if any, dissenting from, or not concurring in the resolution, or Director who is interested and who is not voting. e. Nothing contained in sub-clauses (a) to (d) shall be deemed to require the inclusion in any such minutes of any matter which, in the absolute discretion of the Chairman of the meeting.

i. is, or could reasonably be regarded as defamatory of any person ii. is irrelevant or immaterial to the proceedings.

iii. is detrimental to the interests of the Company. [2] Each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting in such books shall be dated and signed : a. In the case of minutes of proceedings of a meeting of the Board or of a Committee thereof, by the Chairman of the said meeting of the chairman of the next succeeding meeting; b. In the case of minutes of proceedings of a General Meeting, by the Chairman of the same meeting within the aforesaid period of 30 days or in the event of the death or inability of the Chairman within the period by a Director duly authorized by the Board for the purpose. [3] Minutes of meetings kept in accordance with the provisions of clauses (1) and (2) shall be evidence of the proceeding recorded therein. [4] Where minutes of the proceedings of any General Meeting of the Company or of any meeting of its Board of Directors or of a Committee of the Board have been kept in accordance with the provisions of clauses (1) and (2) hereof, then until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings there at to have duly taken place and, in particular, all appointments of Directors or Liquidators made at the meeting shall be deemed to be valid. VOTES OF MANAGERS Article 101 No member shall be entitled to exercise any voting right on any question either personally or by proxy or upon poll in respect of any share registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has or has not exercised any right of lien.

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Article 102 A member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or at a poll, by his committee or other legal guardian and not otherwise, and any such committee or guardian may, on a poll vote by proxy. Article 103 A body corporate (whether a Company within the meaning of the said Act or not) may by resolution of its Board of Directors or other governing body, authorize such person as it think fit to act as its representatives at any meeting of the Company, or at any meeting of any class of members of the Company. A person authorized by resolution as aforesaid shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the body corporate which he represents as that body could exercise if it were an individual member, creditor or holder of debentures of the Company. Article 104 Subject and without prejudice to any special privileges or restrictions, conditions for the time being attached to our affecting the preference or other special classes of shares, if any, if issued by and for the time being forming part of the capital of the Company, every member entitled to vote under the provisions of these presents and not disqualified by the provisions of Articles 101 and 102 or by any other Articles shall on a show of hands have one vote and upon a poll every member, present in person or proxy or agent duly authorized by a power of attorney or representative duly authorized and not disqualified as aforesaid, shall have voting rights in proportion to his share of the paid-up equity capital of the Company subject however to any limits imposed by law. Provided however, if any, preference shareholder be present at any meeting of the Company, save as provided in provisions of the Act, he shall have a right to vote only on resolutions before the meeting which directly affect that rights attached to his preference shares. But no member shall have any voting right in respect of any moneys paid in advance as provided by Articles 36. Article 105 On a poll taken at a meeting of the Company a member entitled to more than one vote, or his proxy or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or case in the same way all the votes he uses. A member or his proxy who votes shall be deemed to have used all his votes unless he expressly gives written notice to the contrary at the time he casts any votes. Article 106 Where there are joint registered holders of any share any one of such persons may vote at any meeting in respect of such shares as if he were solely entitled thereto and if more than such joint holders be present at any meeting then one of the said persons so present whose name stands first on the register in respect of such shares shall alone be entitled to vote in respect thereof. Where there are several executors or administrators of a deceased member in whose sole name any shares stand, any one of such executors or administrators may vote in respect of such shares unless any other of such executors or administrators is present at the meeting at which such a vote is tendered and objects to the vote. Article 107 Any person entitled under the transmission clause (Article 56) to transfer any shares shall not be entitled to be present, or to vote at any meeting, either personally, or by proxy, in respect of such shares, unless forty-eight hours at least before the time for holding the meeting or adjourned meeting, as the case may be, at which he proposes to be present and to vote, he shall have satisfied the Directors of his right to transfer such shares as to which the opinion of the Directors shall be final or unless the Directors shall have previously admitted his right to vote in respect thereof. Article 108 Any member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of himself, but a proxy so appointed shall not

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have any right to speak at the meeting. Such proxy shall not be entitled to vote except on a poll. Article 109 The instrument appointing a proxy shall be in writing and shall be signed by the appointer or his attorney duly authorized in writing. If the appointer is a body corporate, such instrument shall be under its seal or be signed by an officer or an attorney duly authorized by it, or by the person authorized to act as the representative of such Company under Article 103. Any instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand or join in the demand for a poll on behalf of the appointer. Article 110 No instrument or proxy shall be treated as valid and no person shall be allowed to vote or act as proxy at any meeting under an instrument of proxy unless such instrument of proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of authority shall have been deposited at the Registered Office of the Company, at least forty eight hours before the time appointed for holding the meeting, or adjourned meeting at which the person named in such instrument proposes to vote. An instrument appointing a proxy or an attorney can be revoked by any member by giving a letter in this behalf. Article 111 If any such instrument of appointment be confined to the object of appointing an attorney or proxy or substitute, it shall remain, permanently or for such time as the Directors may determine, in the custody of the Company and if embracing other objects, a copy thereof, examined with the original, shall be delivered to the Company to remain in the custody of the Company. Article 112 Every instrument of proxy whether for a specified meeting or otherwise shall as nearly as circumstances will admit be in any of the forms set out in Schedule IX of the Act. Article 113 A vote given in pursuance of an instrument of proxy shall be valid not withstanding the previous death of the principal or the revocation of the proxy or any power of attorney under which such proxy was signed or the transfer of the shares in respect of which, the vote is given, provided no intimation in writing of the death, revocation, or transfer shall have been received at the Registered Office of the Company before the vote is given. Article 114 No objection shall be made to the validity of any vote, except at the meeting or adjourned meeting or poll at which such vote shall be tendered, and every vote, whether given personally or any proxy, and not disallowed at such meeting or poll, shall be deemed valid for all purposes of such meeting or poll whatsoever. Article 115 The chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting and the chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll. DIVIDENDS AND CAPITALISATION Article 116 The Company in General Meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits, and may fix the time for the payment thereof. The Company in General Meeting may at any time declare and pay an additional dividend in respect of any year in which such meeting is held.

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Article 117 No larger dividend shall be declared than is recommended by the Directors in office at the time of such recommendation, but the Company in General Meeting may declare a small dividend. Article 118 Unless the Company otherwise resolves, dividends shall be paid in proportion to the amount paid up or credited as paid up on each share, where a larger amount is paid up or credited as paid up on some shares than on others. Provided always that any capital paid up on a share during the period in respect of which a dividend is declared shall unless otherwise resolved only entitle the holder of such share to a proportionate amount of such dividend from the date of payment. Article 119 No dividends shall be declared or paid except out of profits of the Company of the year or any other undistributed profits after providing for depreciation as prescribed by the provision of the said Act, and no dividend shall carry interest against the Company. The declaration of the Directors in office at the time of such declaration as to the amount of net profits of the Company shall be conclusive. Article 120. The Directors may, from time to time, declare and pay to the members such interim dividend, as in their judgement the position of the Company justifies. Article 121 No member shall be entitled to receive payment of any dividend in respect of any share or shares on which the Company has a lien, or whilst any amount due or owing from time to time to the Company, either alone or jointly with any other person or persons, in respect of such share or shares, or on any other account whatsoever remains unpaid, and the Directors may retain, apply and adjust such dividend in or towards satisfaction of all debts, liabilities or engagements in respect of which the lien exists, and of all such money due as aforesaid. Article 122 The Directors may retain the dividends payable upon shares in respect of which any person is under the transmission clause entitled to become a member, or which any person under the same clause is entitled to transfer until such person shall become a member in respect thereof or shall duly transfer the same. Article 123 [a] A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer. [b] No dividend shall be paid by the Company in respect of any share except to the registered holder of such share or to his order or to his bankers and in case a share warrant has been issued in respect of the share to the bearer of the share warrant or to his bankers. Article 124 All dividends shall be paid or the cheque or warrant in respect thereof shall be posted within forty two days of the date on which such dividend is declared by the Company. Any dividend payable in cash may be paid by cheque or warrant sent through the post directed to the registered address of the shareholder entitled to the payment of the dividend or in the case of joint shareholders, to the registered address of that one of the joint shareholders which is first named on the register of members, or to such person and to such address as the shareholder or the joint shareholders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to

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whom it is sent. The Company shall not be liable or responsible for any cheque or warrant lost in transmission, or for any dividend lost to the member or person entitled thereto by forged endorsements on any cheque or warrant, or the fraudulent or improper recovery thereof any other means. Article 125 Notice of the declaration of any dividend, whether interim or otherwise, shall be given to the members in the manner hereinafter provided for giving of notice to members. Article 126 The Directors, may, if they think fit, call upon the members, when applying for dividends, to produce their share certificates to the Company or to the Secretary, Accountant or any other person appointed by them in that behalf. Article 127 Any one of the several persons who are registered as joint-holders of any share may give effectual receipts for all dividends and payments on account of dividends in respect of such share. Article 128 Subject to the provision of the Act no unclaimed Dividend shall be forfeited by the Board and the Company shall comply with all the provisions of the Act in respect of all unclaimed or unpaid dividend. Article 129 [a] Any general meeting may, upon the recommendation of the Board, resolve that any money, investments or other assets forming part of the undistributed profits of the Company standing to the credit of the Profit and Loss Account or of the Reserve Fund or any capital redemption reserve fund or in the hands of the Company and available for dividend or representing premium received on the issue of shares and standing to the credit or share premium account be capitalized and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any party of such capitalized fund shall not be paid in cash but shall be applied subject to the provisions contained in clause (b) hereof on behalf of such shareholders in full or towards : [1] Paying either at par or at such premium as; the resolution may provide any unissued shares or debentures of debenture-stock of the Company which shall be allotted, distributed and credited as fully paid up to and amongst such members in the proportions aforesaid; or [2] Paying up any amounts for the time being remaining unpaid on any shares, debentures or debenture stock held by such members respectively, or [3] Paying up partly in the way specified in sub-clause (1) and partly in the specified in sub-clause (2) and that such distribution or payment shall be acceptable by such shareholders in full satisfaction of their interest in the said capitalized sum. [b] [1] Any moneys, investment or other assets representing premium received on the issue of shares and standing to the credit of share premium account and [2] If the Company shall have redeemed any redeemable preference share, all or any part of any capital redemption fund arising from the redemption of such shares may by resolution of the Company be applied only in paying up in full for any shares then remaining unissued to be issued to such members of the Company as the general meeting may resolved up to an amount equal to the nominal amount of the shares so issued [c] Any general meeting may resolve that any surplus money arising from the realization of any capital assets of the Company or any investments representing the same or any other undistributed profits of the Company not subject to the charge for income tax distributed amongst the members on the footing that they receive the same as capital. [d] For the purpose of giving effect to any such resolution the Board may settle any difficulty which may arise in

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regard to the distribution or payment as aforesaid as it thinks expedient and in particular it may issue fractional certificates and may fix the value for distribution of any specific assets and may determine that cash payments be made to any members on the footing of the value so fixed and may vest any such cash, share, debentures, debenture stock, bonds or other obligations in trustees upon such trust for the persons entitled thereto as may seem expedient to the Board and generally may make such arrangement for acceptance, allotment and sale of such shares, debentures, debenture stock, bonds or other obligations and factional certificates or otherwise as it may think fit. [e] If and whenever any share becomes held by any member in fraction, the Board may subject to the provision of the Act, and these Articles and to the direction of the Company in general meeting, if any, sell the shares which members hold in fractions for the best price reasonably obtainable and shall pay and distribute to and amongst the members entitled to such shares in due proportion the net proceeds of the sale thereof. For the purpose of giving effect to any such sale the Board may authorize any person to transfer the shares sold to the purchaser thereof comprised in any such transfer and the purchaser shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or by invalidity in the proceedings with reference to the sale. [f] Where required, a proper contract shall be delivered to the Registrar for registration in accordance with section 75 of the Act and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalized fund and such appointment shall be effective. Article 130 Any General Meeting declaring a dividend may make a call on the members of such amount as the meeting fixed, and so that the call be made payable at the same time as the dividend, and the dividend may if so resolved the Company in General Meeting be set off against the calls. Article 131 Capital paid-up in advance of calls shall not confer a right to participate in profits. ACCOUNTS Article 132 [1] The Directors shall keep or cause to be kept at the Registered Office of the Company or at such other place in India as the Board thinks fit proper books of accounts in respect of: a. all sums of money received and expended by the Company, and the matters in respect of which the receipt and expenditure take place. b. all Sales and purchases of goods by the Company, and c. the assets and liabilities of the Company. Provided that all or any of the books of account aforesaid may be kept at such other place in India as the Board of Directors may decide, the Company shall, within seven days of the decision, file with the Registrar a notice in writing giving the full address of that other place. [2] Proper books of account shall also be kept at each branch office of the Company, whether in or outside India, relating to the transactions of that office and proper summarized returns made up to date at intervals of not more than three months shall be sent by each branch office to the Company at its Registered Office of the Company or the other place referred to in clause (1) hereof. [3] The books of account referred to in clauses (1) and (2) shall be such books as are necessary to give a true and fair view of the state of affairs of the Company or such branch office and to explain its transactions.

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[4] The books of account shall be open to inspection by any Director during business hours. [5] The Directors shall comply in all respects with sections 209 to 220 of the said Act and any statutory modifications thereof. Article 133 The Directors, shall from time to time, determine whether and to what extent, and at what times and places, and under what conditions or regulations, the accounts and books of the Company, or any of them, shall be open to the inspection of the members not being Directors; and no member (not being a Director) shall have any right of inspection of any account of book or document of Company, except as conferred by law or authorized by the Directors, or by a resolution of the Company in General Meeting. Article 134 At every Annual General Meeting of the Company, the Directors shall lay before the Company a Balance Sheet and Profit and Loss Accounts for the period beginning with the day immediately after the period for which the account was last submitted and ending with a day which shall not precede the day of the meeting by more than 6 months or in case of extension granted as mentioned in Article 82 (b) by more than six months from such extended date. Such Balance Sheet and Profit and Loss Account may be for a period of one year or less or more than one year, but such period shall not exceed fifteen months unless special permission is granted by the Registrar under the said Act. Article 135 The Balance Sheet shall give a true and fair view of the state of affairs of the Company at the end of the period of the Account. The Profit and Loss Account shall give a true and fair view of the profit and loss of the Company for the period of account. The Balance Sheet and Profit and Loss Account shall comply with the provisions of Section 211 and 212 of the said Act. Article 136 The Balance Sheet and Profit and Loss Account shall be signed in accordance with the provisions of section 215 of the said Act. The Profit and Loss Account shall be annexed to the Balance Sheet and the Auditors’ Report shall be attached thereto. The Directors shall make out and attach to every Balance Sheet laid before the Company in General Meeting a Report of the Board of Directors which shall comply with the requirements of and shall be signed in the manner provided by section 217 of the said Act. Article 137 [1] A copy of every Balance Sheet (including the Profit and Loss Account, the Auditors’ Report and every other document required by law to be annexed or attached, as the case may be to the Balance Sheet) which is to be laid before the Company in General Meeting, shall not less than twenty one days before the date of the meeting be sent to every member of the Company and to every other person entitled thereto under the provisions of section 219 of the said Act. If the copies of the documents aforesaid, are sent less than twenty-one days before the date of the meeting they shall not withstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to vote at the meeting. [2] Any member or holder of debenture of the Company whether he is or is not entitled to have copies of the Company’s Balance Sheet sent to him, shall, on demand, be entitled to be furnished without charge, and any person from whom the Company has accepted a sum of money by way of deposit shall, on demand accompanied by

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the payment of a fees as fixed by Directors, be entitled to be furnished, with a copy of the last Balance Sheet of the Company and of every document required by law, to be annexed or attached thereto, including the profit and loss account and the Auditors’ Report. [3] Subject to the provisions of the Act or any other law for the time being in force, the Company may send to every member of the Company and to every trustee for the holders of any debentures issued by the Company, a statement containing the salient features of such documents mentioned in Article 137(1) in the prescribed form or the copies of such documents, as the Company thinks fit, not less then twenty one days before the date of the meeting as laid down in Section 219 of the Act and all the rest of the provisions of this section shall apply in respect of the matters referred in Article 137(1). Article 138 [1] After Balance Sheet and Profit and Loss Account have been laid before the Company at the Annual General Meeting, the Company shall file with the Registrar at the same time as the copy of the Annual Return referred to in Section 161 of the said Act, copies of the Balance Sheet and Profit and Loss Account together with copies of all documents which are required by the said Act to be annexed or attached to such Balance Sheet or Profit and Loss Account as prescribed by section 220 and other provisions of the said Act and the Rules made thereunder. [2] If the Annual General Meeting before which a Balance Sheet is laid as aforesaid does not adopt the Balance Sheet, a statement of that fact and of the reasons therefore shall be annexed to the Balance Sheet and to the copies thereof required to be filed with the Registrar. Article 139 Every account when audited and approved by a General Meeting shall be conclusive, except as regards any error discovered therein within three months next after the approval thereof. Whenever any error is discovered within the period, the account shall forthwith be corrected and thenceforth shall be conclusive. AUDIT Article 140 [a] The correctness of the Profit and Loss Account and Balance Sheet shall be ascertained by one or more Auditor or Auditors. [b] Where the Company has a branch office, the accounts of the office shall be audited in the manner provided by section 228 of the Act. Article 141 [1] The Company shall at each Annual General Meeting appoint an Auditor or Auditors to hold office from the conclusion of that meeting until the conclusion of the next Annual General Meeting and shall within seven days of such appointment, give intimation thereof to every auditor so appointed, unless he is a retiring auditor. [2] At any Annual General Meeting a retiring Auditor, by whatsoever authority appointed shall be reappointed, unless; a. he is not qualified for re-appointment. b. he has given the Company notice in writing of his un-willingness to be re-appointed. c. a resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed or d. where notice has been given of an intended resolution to appoint some person or persons in the place of a retiring Auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with.

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[3] Where at an Annual General Meeting no Auditors are appointed or re-appointed, the Central Government may appoint a person to fill the vacancy. The Company shall, within seven days of the Central Government’s power under this clause becoming exercisable, give notice of that fact to the Central Government. [4] a. The Board may fill any casual vacancy in the office of an Auditor, but while any such vacancy continues, the remaining Auditor or Auditors, if any, may act. Provided that where such vacancy is caused by the resignation of an Auditor, the vacancy shall only be filled by the Company in General Meeting. b. Any auditor appointed in a casual vacancy shall hold office until the conclusion of the next Annual General Meeting. [5] Any auditor may be removed from office before the expiry of his term only by the Company in General Meeting after obtaining the previous approval of the Central Government in that behalf. [6] The remuneration of the Auditors of the Company. a. in the case of an auditor appointed by the Board of the Central Government, may be fixed by the Board or the Central Government, as the case may be; and b. subject to the sub-clause(a) shall be fixed by the Company in General Meeting or in such manner as the Company in General Meeting may determine. For the purposes of this sub-clause, any sums paid by the Company in respect of the auditor’s expenses shall be deemed to be included in the expression “remuneration” Article 142 [1] Special Notice as provided by the provisions of the said Act shall be required for a resolution at an Annual General Meeting appointing as Auditor a person other than a retiring Auditor, or providing expressly that a retiring Auditor shall not be re-appointed. [2] On receipt of the Notice of such a resolution the Company shall duly comply with the provisions of the said Act. Article 143 [1] An Auditor must hold the necessary qualifications and be qualified for appointed as provided in the said Act [2] If an Auditor becomes subject , after his appointment , to any of the disqualifications specified in the said Act, he shall be deemed to have vacated his office as such. Article 144 [1] Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company, whether kept at the head office of the Company or elsewhere, and shall be entitled to require from the officers of the Company such information and explanations as the Auditor may think necessary for the performance of his duties as Auditor. [2] Where the accounts of any branch office are audited, by a person other than the Company’s Auditor, the Company’s Auditor shall be entitled to visit the branch office if he deems it necessary to do so for the performance of his duties as Auditor, and shall have a right of access at all times to the books and accounts and

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vouchers of the Company maintained at the branch office. [3] All notices of and other communications relating to any General Meeting of the Company which any member of the Company is entitled to have sent to him shall also be forwarded to the Auditor of the Company; and the Auditor shall be entitled to have a notice of and attend any General Meeting and to be heard at any General Meeting which he attends on any part of the business which concerns him as Auditor. Article 145 [1] The Auditor shall make a Report to the members of the Company on the Accounts examined by him, and on every Balance Sheet and Profit and Loss Account and on every other document declared by the said Act to be part of or annexed to the Balance Sheet or Profit and Loss Account , which are laid before the Company in General Meeting during his tenure of office. Such Report shall comply with the provisions of the said Act. [2] Such Report and any other documents of the Company required by law to be signed or authenticated by the Auditors shall be signed or authenticated in the manner provided in the said Act. Article 146 The Auditor’s Report shall be read before the Company in General Meeting and shall be open to inspection by any member of the Company. DIRECTORS, THEIR QUALIFICATION AND REMUNERATION Article 147 The number of Directors shall not be less than three or until otherwise determined by a General Meeting more than twelve. Within the aforesaid limits the Company in General Meeting by Ordinary Resolution may increase or reduce the number of its Director. Any increase beyond the said limit shall not have any effect unless approved by the Central Government or any other authority prescribed under the said Act. The first Directors of the Company shall be appointed by the subscribers of the Memorandum of Association. Article 148 If and when the Company shall issue debentures the holders of such debentures, or if and when the Company shall create a mortgage of any property, or otherwise take loans the mortgage or mortgagees to whom such property shall be mortgaged, or the lender as the case may be, may be given the right to appoint and nominate and from time to time remove and re-appoint a Director or Directors. A Director so appointed under this Article is herein referred to as “the Debenture Director” and the term “Debenture Director” means a Director for the time being in office under this Article, and he shall have all the rights and privileges of an ordinary Director of the Company, except in so far as is otherwise provided for herein or by the Trust Deed securing the Debentures, or the deed creating the mortgage, as the case may be. A Director appointed by the lender of the loan where no mortgage is involved shall be termed as only “Director”. Article 149 A Director need not hold any qualification shares. Article 150 The Company may enter into any agreement with any Government, semi-government authority, local authority, joint stock Company, whether registered in India or abroad, or other body corporate or otherwise, or any other person or persons whatever whereby such Government, Semi-Government authority, local authority, joint stock Company or other body or person or persons become entitled to appoint ex-officio Director of the Company provided that the number of such ex-officio Directors should not exceed one-third of the total strength of the Directors. The ex-officio Directors shall not be liable to retirement by rotation and shall hold office during such terms and upon such terms

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and conditions as may be agreed between the parties and shall have the same rights as other Directors of the Company subject, however to the restrictions as may be agreed upon between the parties. Article 151 The Directors shall arrange to maintain at the Registered Office of the Company a Register of Directors, Managing Agents, etc. containing the particulars and in the form prescribed by the provision of the said Act and a register of Directors shareholdings as required by the provisions of the said Act. It shall be the duty of every Director and other persons regarding whom particulars have to be maintained in registers to disclose to the Company and matters relating to himself as may be necessary to comply with the provisions of the said Act. Article 152 The fee payable to a Director (including a Managing or Whole-time Director, if any) for attending a meeting of the Board or Committee thereof shall be the maximum sitting fee as may be prescribed by the Central Government or other appropriate authority under the Act as applied to the Company at any given time. Article 153 [a] [1] Subject to the provisions of the Act, a Managing Director , who is in the Whole time employment of the Company may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profit of the Company or partly by one way and partly by the other [2] Subject to the provisions of the Act, a Director, who is neither in the Whole-time employment nor a Managing Director, may be paid remuneration:

[i] by way of monthly, quarterly or annual payment with the approval of the Central Government or ; [ii] by way of commission if the Company by a special resolution authorizes such payments

[b] If any Director being willing, shall be called upon to go or reside away from his usual place of residence on the Company’s business, or otherwise perform extra services (which expression shall include the work done by a Director in signing certificates of shares or debentures issued by the Company, or work done by him as a member of any Committee appointed by the Directors in terms of these Articles), the Directors may arrange with such Director for such special remuneration for such services, either by way of salary or commission, or by a percentage of profits, or the payment of a fixed sum of money as may be determined by the Directors and such remuneration may be either in addition to or in substitution for his remuneration above. [c] The Directors may allow and pay to any Director who is not a bona fide resident of Bombay and who shall come to Bombay for the purpose of attending a meeting of the Directors of a committee, or if the meetings are held out of Bombay the traveling and other expenses for attending a meeting of the Board of Directors or of a committee such sum as the Directors may consider fair compensation for his traveling expenses, in addition to his fee for attending such meeting, as above specified. [d] The Directors shall be entitled to be repaid any traveling and other expenses incurred in connection with the business of the Company. [e] Without prejudice to the generality and scope of the provisions of Article 153(a) to Article 153(d), Directors of the Company, or any subsidiary or holding company of the Company (including additional directors, alternate directors, directors filling in casual vacancy, nominee directors, government directors and every other Director) whether whole-time Directors or not, shall be entitled to be granted options/shares under any share option scheme or share purchase scheme approved by the Board/shareholders, as may be required. The options/shares may be granted to such Directors at any price that is permitted by law, and otherwise at the discretion of the Board of Directors or any Committee thereof duly authorised for this purpose. This article shall not take away any right, which the Company/its Board or any duly authorised committee thereof had in this regard, without this Article being in place. APPOINTMENT AND ROTATION OF DIRECTORS.

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Article 154 [1] A person shall not be capable of being appointed Director of the Company if – a. he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force. b. he is an undischarged insolvent. c. he has applied to be adjudicated as an insolvent and his application is pending. d. he has been convicted by a Court of any offense involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, and a period of five years has not elapsed from the date of expiry of the sentence, unless such disqualification is removed by the Central Government. e. he has not paid any call in respect of shares of the Company held by him, whether alone or jointly with others and six months have elapsed from the last day fixed for the payment of the call; unless such disqualification is removed by the Central Government; or f. an order disqualifying him for appointment as Director has been passed by a Court in pursuance of provisions under the said Act and is in force, unless the leave of the Court has been obtained for his appointment in pursuance of the provisions in the Act. [2] No person shall be appointed as a Director unless the provisions of the Act are complied with. Article 155 [1] Not less than two-thirds of the total number of Directors of the Company shall – a. be persons whose period of office is liable to determination by retirement of Directors by rotation; and b. save as otherwise expressly provided in the said Act, be appointed by the Company in General Meeting. [2] The remaining Directors of the Company shall also be appointed by the Company in General Meeting except to the extent that the Articles otherwise provide or permit. Article 156 [1] At every Annual General Meeting, one-third of such Directors for the time being as are liable to retire by rotation or if their number is not three or a multiple of three then the number nearest to one third shall retire from office. [2] The Directors to retire by rotation at every Annual General Meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire shall, in default of and subject to any agreement among themselves, be determined by lot. [3] A retiring Director shall be eligible for re-election. [4] [a] At the Annual General Meeting at which a Director retires as aforesaid, the Company may fill up the vacancy by appointing the retiring Directors or some other person thereto. [b] If the place of retiring Director is not so filled up and the meeting has not expressly resolved not to fill the

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vacancy, the meeting shall stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place. [c] If at the adjourned meeting also, the place of the retiring Director is not filled up and that meeting also has not expressly resolved to fill the vacancy, the retiring Director shall be deemed to have been re-appointed at the adjourned meeting, unless –

[i] at the meeting or at the previous meeting a resolution for the re-appointment of such Director has been put to the meeting and lost;

[ii] the retiring Director has by a notice in writing addressed to the Company or its Board of Directors, expressed his unwillingness to be so re-appointed.

[iii] He is not qualified or disqualified for appointment ;

[iv] A resolution, whether special or ordinary, is required for his appointment or re-appointment in virtue of any provisions of the said Act; or

[v] the proviso to sub-section (2) of section 263 or Article 160(2) or sub-section (3) of section 280 or Article 154 (2) is applicable to the same. Article 157 Subject to the provisions of the said Act, the Company may at any Annual General Meeting fill up the office of any Director vacated during the previous year and not already filled up. Article 158 A person who is not a Director retiring by rotation shall, subject to the provisions of the said Act, be eligible for appointment to the office of Director at any General Meeting, if he or some member intending to propose him has not less than fourteen days before the meeting, left at the Registered Office of the Company a notice in writing under his hand signifying his candidature for the office of Director or the intention of such member to propose him as a candidate for that office, as the case may be. The company shall inform its members of the candidature of a person for the office of Director or the intention of a member to propose such person as a candidate for the office, by serving individual notices on the members not less than seven days before the meeting: Provided that it shall not be necessary for the company to serve individual notices upon the members as aforesaid if the company advertises such candidature or intention not less than seven days before the meeting in atleast two newspapers, circulating in the District where the registered office of the Company is located of which one is published in the English language and the other in the regional language of that place. Article 159 [a] Every person (other than a person who has left at the office of the Company a notice under Article 158 signifying his candidature for the office of Director) as candidate for the office of a Director shall sign and file with the Company, his consent in writing to act as a Director if appointed. [b] A person other than a Director reappointed after retirement by rotation shall not act as a Director of the Company unless he has within thirty days of his appointment signed and filed with the Registrar his consent to act as such Director. Article 160 [1] At a General Meeting of the Company a motion shall not be made for the appointment of two or more persons as Directors of the Company by a single resolution that it shall be so made has first been agreed to by the

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meeting without any vote being given against it. [2] A resolution moved in contravention of clause (1) shall be void, whether or not objection was taken at the time to its being so moved; provided that where a resolution so moved is passed, no provision for the automatic re-appointment of retiring Directors in default of another appointment shall apply. [3] For the purposes of this Article a motion for approving a person’s appointment, or for nominating a person for appointment shall be treated as a motion for his appointment. Article 161 The Directors shall have power at any time and from time to time, to appoint one or more additional Directors provided that the total number of Directors shall not thereby exceed the maximum number fixed by Article 147. Each such additional Director shall hold office only up to the date of the next following Annual General Meeting, but shall be eligible for appointment by the Company at the meeting as a Director. Article 162 [1] If the office of any Director appointed by the Company in General Meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may be filled by the Board of Directors at a meeting of the Board. [2] Any person appointed shall hold office only up to the date up to which the Director in whose place he is appointed would have held office if it has been vacated as aforesaid. Article 163 [1] The Board of Directors may appoint an Alternate Director to act for a Director (hereinafter called “the Original Director”) during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held. [2] An Alternate Director shall be entitled to notice of meetings of the Directors, and to attend and vote thereat accordingly, but he shall not require any qualification whilst the original Director holds the necessary qualification. [3] An Alternate Director shall not hold office as such for a period longer than that permissible to the original Director in whose place he has been appointed and shall vacate office if and when the original Director returns to the State in which meetings of the Board are ordinarily held. [4] If the terms of office of the Original Director is determined before he so returns to the State aforesaid; any provision for the automatic reappointment of retiring Directors in default of another appointment shall apply to the Original, and not to the Alternate Director. [5] An Alternate Director may be removed by the Board of Directors which may appoint another Alternate Director in his place. Article 164 The continuing Directors may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below three, the continuing Directors may act for the purpose of increasing the number of Directors to the said number, or for summoning a General Meeting of the Company, but for no other purpose VACATION OF OFFICE BY DIRECTORS Article 165 Subject to the provisions of section 283 of the said Act the office of a Director shall become vacant if

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[a] he is found to be of unsound mind by a Court of competent jurisdiction. [b] he applies to be adjudicated as an insolvent. [c] he is adjudged an insolvent [d] he is convicted by a Court of any offence involving moral turpitude and is sentenced in respect thereof to imprisonment for not less than six months. [e] he fails to pay any call in respect of share of the Company held by him, whether alone or jointly with others within six months from the last date fixed for the payment of the call unless the Central Government has, by notification in the Official Gazette removed the disqualification incurred by such failure ; [f] he absents himself from three consecutive meetings of the Board of Directors, or from all meetings of the Board for a continuous period of three months , whichever is longer, without obtaining leave of absence from the board. [g] he, (whether by himself or by any person for his benefit or on his account) or any firm in which he is a partner or any private Company of which he is a Director, accepts a loan, or any guarantee or security for a loan, from the Company in contravention of section 295 of the said Act, [h] he acts in contravention of Section 299 of the said Act; [i] he becomes disqualified by an order of Court under section 203 of he said Act, or; [j] he is removed in pursuance of Section 284 of the said Act, (Article 168) [k] having been appointed a Director by virtue of his holding any office or other employment in the Company, or as a nominee of the managing agent of the Company, he ceases to hold such office or other employment in the Company or, as the case may be, the managing agency comes to an end. Article 166 A Director shall vacate office if any office or place of profit under the Company or a subsidiary thereof is held in contravention of the provisions of section 314(1) of the said Act with effect from the first day on which the contravention occurs. Article 167 A Director may at any time resign from his office upon giving notice in writing to the Company of his intention so to do, and thereupon his office shall be vacated. Article 168 Subject to the provisions of the said Act, the Company may, by Ordinary Resolution remove a Director before the expiry of his period of office. A vacancy created by the removal of a Director under this Article may be filled by the appointment of another Director in his stead in the manner provided in the said Act PROCEEDINGS OF DIRECTORS Article 169 Notice of every meeting of the Board of Directors of the Company shall be given in writing to every Director for the time being in India, and at his usual address India to every Director.

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Article 170 A meeting of the Board of Directors shall be held at least once in every three calendar months. The Directors may meet together for the despatch of business, adjourn and otherwise regulate their meeting and proceeding, as they think fit, Article 171 The quorum for a meeting of the Board shall be three Directors or one third of its total strength whichever is higher. Article 172 [1] If a meeting of the Board could not be held for want of a quorum then the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place or if that day is a public holiday, till the next succeeding day which is not public holiday at the same time and place. [2] The provisions of Article 170 shall not be deemed to have been contravened merely by reason of the fact that a meeting of the Board which had been called in compliance with the terms of that Article could not be held for want of quorum. Article 173 A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by law or under the Articles and regulations for the time being vested in or exercisable by the Directors generally. Article 174 The Directors may elect a Chairman at their meetings, and determine the period for which he is to hold office, and unless otherwise determined the Chairman shall be elected annually. If no Chairman is elected, or if at any meeting the Chairman is not present within five minutes of the time appointed for holding the same, or he is unwilling to preside, the Directors present may choose one of their number to be the Chairman of such meeting. Article 175 Questions arising at any meeting of the Directors shall be decided by a majority of votes, and in case of an equality of votes, the Chairman thereat shall have a second or casting vote. Article 176

1. Subject to the provisions of the said Act, the Directors may designate any of their powers, other than the power to borrow and to make Calls, to issue debentures and any other powers which by reason of the provisions of the said Act cannot be delegated, to committees consisting of such member or members of their body as they may think fit, and they may from time to time revoke and discharge any such Committee either wholly or in part, and either as to persons or purposes.

2. Every Committee so formed shall, in the exercise of the powers so delegated, confirm to any regulations that may from time to time be imposed on it by the Directors, and all acts done by any such Committee in conformity with such regulations and in fulfillment of the purpose of their appointment, but not otherwise, shall have the like force and effect as if done by the Board.

Article 177 The meetings and proceedings of any such Committee consisting of two or more members shall be governed by the provisions herein contained for regulating the meeting and proceedings of the directors, so far as the same are applicable thereto, and are not superseded by the express terms of the appointment of any such Committee or by any regulations made by the Directors.

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Article 178 A resolution not being a resolution required by the said Act or these articles to be passed at a meeting of the Directors, may be passed without any meeting of the Directors or of a Committee of Directors provided that the resolution has been circulated in draft, together with the necessary papers, if any, to all the Directors, or to all the members of the Committee then in India (not being less in number than the quorum fixed for a meeting of the Board or Committee, as the case may be), and to all other Directors or members at their usual address in India, and has been approved by such of the Directors as are then in India, or by a majority of such of them as are entitled to vote on the resolution. Article 179 The Chairman or two Directors may, at any time, requisition a meeting of the Directors. Article 180 All acts done by a person as a Director shall be valid, notwithstanding that it may be afterwards discovered that his appointment was invalid by reason of any defect or disqualification or had terminated by virtue of an provision contained in the said Act or in these Articles. Provided that this Article shall not give validity to acts done by a Director after his appointment has been shown to the Company to be invalid or to have been terminated. DIRECTORS DISQUALIFICATIONS Article 181 Any assignment of his office by a Director shall be void. Article 182 The Company shall not make any loan or give any guarantee or provide any security in contravention of provisions of the said Act. Article 183 No Director or other person mentioned in section 314 shall without the previous consent of the Company accorded by a Special Resolution hold an office or place of profit under the Company or any subsidiary of the Company except as provided in the said section. Article 184 Subject to the restrictions imposed by Articles 182 and 183 and provisions of the said Act and the observance and fulfillment thereof, no Director shall be disqualified by his office from contracting with the Company either as vendor, purchaser, agent, broker, muccadum, or otherwise, nor shall any contract or arrangement entered into by or on behalf of the Company in which any Director shall in any way interested be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason only for such Director holding that office, or of the fiduciary relation thereby established. Article 184A

1. Every Director of the Company who is any way, whether directly or indirectly, concerned or interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into, by or on behalf of the Company, shall disclose the nature of his concern or interest at a meeting of the Board of Directors.

2. dfg

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a. In the case of a proposed contract or arrangement the disclosure required to be made by a Director

under clause (1) above shall be made at the meeting of the Board at which the question of entering into the contract or arrangement is first taken into consideration, or if the Director was not, at the date of that meeting not concerned or interested in the proposed contract or arrangement, at the first meeting of the Board held after he becomes so concerned or interested.

a. In the case of any other contract or arrangement, the required disclosure shall be made at the first meeting of the Board held after the Director becomes concerned or interested in the contract or arrangement. [2] a. For the purpose of clause (1) and (2) above a general notice in writing given to the Board by a Director to the effect that he is a Director or a member of a specified body corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement which may, after the date of the notice, be entered into with that body corporate or firm, shall be deemed to be a sufficient disclosure of concern or interest in relation to any contract or arrangement so made. b. Any such general notice shall expire at the end of the financial year in which it is given, but may be renewed for further periods of one financial year by a fresh notice in writing given in the last month of the financial year in which it would otherwise have expired. c. No such general notice and no renewal thereof shall be of effect unless either it is given at a meeting of the Board, or the Director concerned takes reasonable steps to be placed and read at the first meeting of the Board after it is given. [3] Nothing in this Article shall apply to any contract or arrangement entered into or to be entered into between two companies where any of the directors of the one Company or two or more of them together holds or hold not more than two per cent of the paid-up share capital in the other Company. Article 184B [1] No Director of the Company shall, as a Director take any part in the discussion of, or vote on, any contract or arrangement entered into, or to be entered into, by or on behalf of the Company if he is in any way, whether directly or indirectly concerned or interested in the contract or arrangement; nor shall his presence count for the purpose of forming a quorum at the time of any such discussion or vote; and if he does vote, his vote shall be void. [2] Clause (1) shall not apply to a. any contract of indemnity against any loss which the Directors or any one or more of them may suffer by reason of becoming or being sureties or a surety for the Company. b. Any contract or arrangement entered into or to be entered into with a public Company, or a private Company which is a subsidiary of a public Company, in which the interest of the Director aforesaid consists solely –

i. in his being a director of such Company.

ii. in his being a member holding not more than two percent of its paid up share capital. Article 185 A director of the Company may be or become a Director of any Company promoted by or a subsidiary of the Company, or in which it may be interested as a vendor, shareholder or otherwise, and no such director shall be accountable for any benefits received as director or member of such Company. BORROWING POWERS OF DIRECTORS

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Article 186

1. Subject to clause (2) hereof and the provisions of Section 292 of the Act the Directors may from time to time at their discretion raise or borrow, or secure the repayment of any sum or sums of money for the purpose of the Company from any persons, firm or companies, financial corporations, banks, government lending institutions etc. expressly including any member or Director of this Company. Any such moneys may be raised and the payment or repayment of such moneys may be secured in such manner and upon such terms and conditions in all respects as the Directors may think fit and , in particular, by promissory notes, or by opening current or other accounts or by receiving deposits and advances at interest, who or without security or by the issue of debentures or debenture-stock of the Company charged upon all or any part of the property of the Company (both present and future) including its uncalled capital for the time being, or by mortgaging, charging or pledging any lands, buildings, machinery, plant, goods, or other property and securities of the Company, or by such other means as to them may seem expedient.

2. The Board of Directors shall not except with the consent of the Company in general meeting, borrow

moneys where the moneys to be borrowed together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose. Every resolution of consent of the Company in General Meeting shall specify the total amount up to which the moneys may be borrowed by the Board of Directors.

Article 187 The Directors shall cause a proper register to be kept, in accordance with the provisions if the said Act, of all mortgages, debentures and charges and shall cause the requirements of various provisions of the said Act in that behalf to be duly complied with, so far as they are required to be complied with, by the Directors. Article 188 Subject to the provisions of the said Act, the Board of Directors of the Company shall be entitled to exercise all such powers, give all such comments, make all such arrangements, and generally to do all such acts and things as are or shall be, by the said Act, and the Memorandum of Association and these presents directed or authorized to be exercised, given, made or done by the Company and are not thereby or hereby expressly directed or required to be exercised, given, made or done by the Company in General Meeting, but subject to such regulations (if any) being not inconsistent with the said provisions as from time to time may be prescribed by the Company in general meeting provided that no regulations so made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if the regulation had not been made. Article 189 Save as provided by the said Act or by these presents and subject to the restrictions imposed by provision of the said Act, the directors may delegate all or any powers by the said Act or by the Memorandum of Association or by these presents reposed in them. Article 190 Subject to the provisions of Article 189 but without prejudice to the general powers thereby conferred and so as not in any way to limit or restrict those powers and without prejudice to the other powers conferred by these presents, it is hereby expressly declared that the Directors shall have the following powers and authorities, that is to say, power and authority.

1. to pay and charge to the capital account of the Company any commission or interest lawfully payable there out under the provisions of the said act.

2. to purchase or import to India or elsewhere in the world any machinery, plant, stores and other articles and

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things for all or any of the subject or purposes to the Company.

3. to purchase, take on lease or otherwise acquire in India. Any lands (whether freehold, leasehold, or otherwise) and with or without houses, buildings, structures or machinery (fixed or loose) and any movable property, rights or privileges from any person including a director in furtherance of or for carrying out its objects, at or for such price or consideration and generally on such terms and conditions and with such title thereto as they may think fit or may believe or be advised to be reasonably satisfactory.

4. to purchase, or otherwise acquire from any person and to resell, exchange and repurchase any patent for or

license for the use of, any invention to purchase or otherwise acquire for the Company any other property, formulae, concessions, rights and privileges which the Company is authorized to acquire, at or for such price or consideration and generally on such terms and conditions as they may think fit.

5. in an such purchase or other acquisition to accept such title as the Directors may believe or may be advised

to be reasonably satisfactory.

6. At their discretion to pay for any property, rights or privileges acquired by or services rendered to the Company, either wholly or partly in cash or in shares, or in both, or in bonds, debentures, mortgages or other securities of the Company, and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon, and any such bonds, debentures, mortgages or other securities, may be either specifically charged upon all or any part of the property of the Company, and its uncalled capital, or not so charges.

7. To sell or export for cash or on credit or to contract in any part of India and elsewhere in the world any

products or articles produced, manufactured or prepared by the Company as the Directors may deem advisable.

8. To erect, construct, and build any factories, warehouses, godowns, engine houses, tanks, wells, or other

constructions, adapted to the objects of the Company as may be considered expedient or desirable for the objects or purposes of the Company or any of them;

9. To sell from time to time any articles, materials, machinery, plant, stores and other articles and things

belonging to the Company as the Directors may think proper and to manufacture, prepare and sell waste and by-products.

10. From time to time to extend the business and undertaking of the Company by adding to, altering, or

enlarging all or any of the buildings, factories, workshops, premises, plant and machinery, for the time being the property or in the possession of the Company, or by erecting new or additional buildings, and to expend such sums of money for the purpose aforesaid or any of them, as may be thought necessary, or expedient;

11. To remove all or any of the machinery, plant and other movable property of the Company for the time being

in or upon lands, buildings, or premises of the Company to other lands, buildings, or premises;

12. To negotiate for, and subject to the approval of the Company in general meeting contract for the sale and transfer of all or any part of the property and undertaking of the Company as a going concern, subject or not subject to all or any of the obligations and liabilities of the Company.

13. To undertake on behalf of the Company the payment of all rents and the performance of all covenants,

conditions and agreements contained in or reserved by any lease that may be granted or assigned to or otherwise acquired by the Company, and to purchase the reversion or reversions, and otherwise to acquire the freehold or any of the lands of the Company for the time being held under lease, or for an estate less than a freehold estate;

14. To improve, manage, develop, exchange, lease, sell, re-sell and re-purchase, dispose of, deal with or

otherwise turn to account, any property (movable/immovable) or any rights and privileges belonging to or

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at the disposal of the Company or in which the Company is interested.

15. To secure the fulfillments of any contracts or engagements entered into by the Company by mortgage or charge of all or any of the property of the Company and its unpaid capital for time being in such manner as they may think fit,

16. To accept from any member, on such terms and conditions as shall be agreed upon, and as far as may be

permissible by law, a surrender of his shares or any part thereof;

17. To determine from time to time who shall be entitled to sign on the Company’s behalf bills, notes, receipts, acceptances, endorsements, cheques, dividend warrants, releases, contracts and documents and to give the necessary authority for such purpose.

18. To make advances and loans without any security, or on such security as they may think proper, and to take

security for already existing debts, and otherwise to invest and deal with any of the moneys of the Company in government or municipal securities, fixed or call deposits in banks, and in such other manner as they may think fit, and from time to time to vary or realize such investments.

19. To make and give receipts , releases and other discharges for moneys payable to , or for goods or property

belonging to the Company, and for the claims and demands of the Company.

20. Subject to the provisions of the said Act, to invest and deal with any money of the Company upon such security (not being shares of the Company) or without security and in such manner as they may think fit, and from time to time vary or realize such investments. Save as provided in provisions of the said Act all investments shall be made and held in the Company’s own name.

21. to give to any officer or other persons employed by the Company including any Director so employed a

commission on the profits of any particular business or transaction, or a share in general or particular profits of the Companies , and such commission or share of profits shall be treated as part of the working expenses of the Company, and to pay commissions and make allowances to any person introducing business to the Company or otherwise assisting or promoting its interests;

22. Subject to the provisions of section 49 of the said Act to appoint any person or persons (whether

incorporated or not) to accept and hold in trust for the Company any property belonging to the Company, or in which the Company is interested, or for any other purposes and to execute and do all such acts, deeds and things as may be requisite in relation to any trust, and to provide for the remuneration of such trustee or trustees;

23. To insure and keep insured against loss or damage or fire or otherwise for such period and to such extent as

they may think proper all or any part of the buildings, machinery, goods, stores, produce and other movable property of the Company either separately or conjointly, also to insure all or any portion of the goods, produce, machinery and other articles imported or exported by the Company and to sell, assign, surrender, or discontinue any policies of assurance effected in pursuance of this power;

24. to attach to any shares to be issued as the consideration or part of the consideration for any contract with or

property acquired by the Company, or in payment for services rendered to the Company, such conditions as to the transfer thereof as they think fit;

25. to execute, in the name and on behalf of the Company, in favour of any Director or other person who may

incur or be about to incur any personal liability for the benefit of the Company, such mortgages of the Company’s property (present and future) as they may think fit and any such mortgage may contain a power of sale and such other powers, covenants and provisions as shall be agreed upon;

26. to institute, conduct, defend, compound, abandon or refer to arbitration, any action, suit, appeals,

proceedings, for enforcing decrees and orders and other legal proceedings by or against the Company or its employees; or otherwise concerning the affairs of the Company, to compound or compromise and allow

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time for payment or satisfaction of any debts due and of any claims for demands by or against the Company, and to refer the same to arbitration, to observe and perform any awards made thereon; to act on behalf of the Company in all matters relating to bankrupts and insolvents;

27. any person duly authorized by the Directors shall be entitled to make, give, sign and execute all and every

warrant to sue or defend on behalf of the Company, and all and every legal proceedings and compositions or compromise, agreement and submission to arbitration and agreement to refer to arbitration as may be requisite, and for the purposes aforesaid, such person may be empowered to use their or his own name on behalf of the Company, and they or he shall be saved harmless and indemnified out of the funds and property of the Company, from and against all costs and damages which they or he may incur or be liable to by reason of their or his name so used as aforesaid.

28. to provide for the welfare of the Directors, ex-Directors, employees or ex-employees of the Company, and

the wives, widows and families or the dependents or connections of such persons and to give, award or allow any pension, gratuity, compensation grants of money, allowances, bonus or other payment to or for the benefit of such persons as may appear to the Directors, just and proper, whether they have or have not a legal claim upon the Company and, before recommending any dividends to set aside portions of the profits of the Company to form a fund to provide for such payments, and in particular provide for the welfare of such persons, by building or contributing to the building of houses, dwelling or chawls, or by creating and from time to time subscribing or contributing to provident and other associations, institutions, funds, or trusts and by providing or subscribing or contributing towards places of instruction and recreation, canteens, schools, hospitals and dispensaries, medical and other attendance and other assistance as the Directors shall think fit; and to subscribe or contribute to or otherwise to assist or to guarantee money to charitable, benevolent, religious, scientific, political, national, or other institutions, parties, objects or funds which shall have any moral or other claim to support or aid by Company either by reason of locality of operation or of public and general utility. The Directors shall duly comply with all provisions of the said Act.

29. before recommending any dividend to set aside, out of the profits of the Company, such terms as they think

proper for depreciation, or as reserve or as loss to a Depreciation Fund, Reserve Fund or Sinking Fund o any special fund to meet contingencies or to repay debentures or debenture-stock or to pay off preference or other share holders subject to the sanction of the Court when the same is required by law or for payment of dividends or equalizing dividend or for special dividend or bonus or for repairing, improving, extending and maintaining any part of the property of the Company and for such other purpose (including the purposes referred to in the preceding clause) as the Directors may in their absolute discretion think conducive to the interest of the Company and from time to time to carry forward such sums as may be deemed expedient and to invest and deal with the several sums so set aside or any part thereof as provided in clause (18) of this Article as they think fit, and from time to time to deal with and vary such investment and dispose of and apply and expend the same or any part thereof for benefit of the Company in such manner and for such purpose as the Directors in their absolute discretion think conducive to the interest of the Company notwithstanding that the matter to which the Directors apply or upon which they expend the same or any part thereof may be matters to and upon which the capital money of the Company might rightly be applied or expended and the Directors may divide the Reserve or any Fund into such special funds and transfer any sum from one end to another as they may think fit and may employ the assets constituting all or any of the above funds including the Depreciation Fund or any part thereof in the business of the Company or in the purchase or re-payment of debentures or debenture-stock or preference shares or in payment of special dividend or bonus and that without being bound to keep the same separate from the other assets, and without being bound to pay interest for the same with power, however to the Directors, at their discretion to pay or allow to the credit of such funds or any of them interest at such rate as the Directors may think proper.

30. To appoint and at their pleasure to remove, discharge, or suspend to re-employ or replace, for the

management of the business a manager (subject to provision of the said Act) secretaries, experts, departmental heads, accountants, agents, sub-agents, bankers, brokers, muccadums, solicitors, officers clerks, servants and other employees for permanent, temporary or special service, as the Directors may from time to time think fit, and to determine their powers and duties and to fix their emoluments, salaries, wages and to require security in such instances and to such amount as they think fit and insure and arrange for

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guarantee for fidelity of any employees of the Company and to pay such premiums on any policy of guarantee as may from time to time become payable;

31. from time to time and at any time to entrust to and confer upon the officers for the time being of the

Company, and to authorize or empower them to exercise and perform and by Power-of-Attorney under seal to appoint any persons to be the Attorney of the Company and invest them with such of their powers, authorities, duties and discretions exercisable by or conferred or imposed upon the Directors, but not the power to make calls or other powers which by law are expressly stated to be incapable of delegation as the Directors may think fit, and for such time and to be exercised for such objects and purposes and subject to such restrictions and conditions, as the Director may think proper or expedient, and either collaterally with or to the exclusion of and in substitution for all or any of the powers, authorities, duties and discretions of the Directors in that behalf, with authority to such officers or attorneys to sub delegate all or any of the power, authorities, duties and discretions for the time being vested in or conferred upon them and from time to time to revoke all such appointments of attorney and withdraw, alter or vary all or any of such powers, authorities and discretions;

32. at any time and from time to time by Power of Attorney to appoint any person or persons to be the Attorney

or Attorneys of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these presents) and for such period and subject to such conditions as the Directors may from time to time think fit and any such appointment (if the Directors think fit) may be made in favour of the members or any of the members of any Local Board established as aforesaid or in favour of any Company or the members, directors, nominees or managers of the Company or firm or otherwise in favour of any fluctuating body or persons whether nominated directly or indirectly by the Directors, and any such Power-of-Attorney may contain such powers for the protection or convenience of persons dealing with such Attorney as the Directors may think fit;

33. from time to time to provide for the management and transaction of the affairs of the Company outside

Bombay or in any specified locality in India or outside India, in such manner as they think fit and in particular to appoint any person to be the Attorneys or agent of the Company with such powers, authorities and discretions (including power to sub-delegate) but not exceeding those vested in or exercisable by the Directors and also not the power to make Calls or issue debentures and for such period and upon such terms and subject to such conditions as the Directors may think fit, and at any time to remove any person so appointed or withdraw or vary any such powers as may be thought fit and for that purpose the Company may exercise the powers conferred by sections 50 and 157 of the Act relating to official seal for use abroad and the keeping in any State or country outside India a foreign Register respectively and such powers shall accordingly be vested in the Directors.

34. subject to the provisions of Section 292 of the said Act, from time to time and at any time to establish any

Local Board for managing any of the affairs of the Company in any specified locality in India or elsewhere in the world and to appoint any person to be members of any Local Boards and to fix their remuneration, and from time to time and at any time to delegate to any person so appointed any of the powers, authorities and discretions for the time being vested in the Directors, other than their power to make a Call and to authorize the members for the time being of any such Local Board, or any of them to fill up any of them to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit, and the Directors may at any time remove any persons so appointed, and may annul or vary any such delegation. Any such delegate may be authorized by the Directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him;

35. for or in relation to any of the matters aforesaid or otherwise for the purposes and objects of the Company to

enter into all such negotiations and contracts, and rescind and vary all such contracts and execute, perform and do and sanction, and authorize all such acts, deeds, matters and things in the name and on behalf of the Company as they may consider expedient;

36. to open account or accounts with any bank or bankers or with any Company, firm or individual for the

purpose of the Company’s business and to pay money into and draw money from any such account from

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time to time as the Directors may think fit, and to authorize anybody to operate such account or accounts;

37. to deal with all Government depts., state or central, local authorities for observing requisite formalities as prescribed by Acts, Laws, rules and regulations etc.

38. generally subject to the provisions of the Act and these Articles to delegate the powers, authorities and

discretions vested in the Directors to any person, firm, Company or fluctuating body of persons as aforesaid.

DUTIES OF DIRECTORS Article 191 The Directors shall duly comply with the provisions of the Companies Act, 1956 or any other statutory modifications thereof for the time being in force, and the Rules made thereunder, and in particular the provisions in regard to registration of the particulars of mortgages, debentures and charges affecting the property of the Company or created by it and keeping a Register of Driectors, Managers, etc., and sending to the Registrar annual returns and an annual list of members, and a summary of particulars relating thereto, and the Balance Sheet and the notice of any consolidation of increase of share capital and conversion of shares into stock and copies of Special Resolutions and the Register of Directors, Managers, etc. and notifications of any change therein. MANAGING DIRECTORS/WHOLE TIME DIRECTORS Article 192

a) The Directors may from time to time (Subject to the provisions of the said Act) appoint one or more of their body or any other suitable person or persons to be Managing or Whole Time Director or Managing or Whole time Directors of the Company for a term not exceeding five years at a time for which he or they is or are to hold such office and may from time to time remove or dismiss him or them from office and appoint another or others in his or their place or places. The Directors may, whenever there is more than one Managing or Whole time Director, decide whether the Managing or Whole time Directors should act jointly or severally and may delegate powers separately to one or more Managing Directors.

b) A Managing or Whole time Director shall, subject to the terms of any contract between him and the

Company, be subject to the same provisions as to qualification, resignation and removal as the Directors of the Company, and if he ceases to hold the office of Director for any cause, shall ipso facto and immediately cease to be a Managing or Whole time Director.

c) Subject to any contract between the Company and a Manager or Whole time Director, the remuneration of a

Managing or Whole time Director shall from time to time be fixed by the Directors and may be by way of salary or participation in profits or by any or all of those modes or in any other form.

d) The Directors may from time to time entrust to and confer upon a Managing or Whole time Director for the

time being such of the powers exercisable under these Articles by the Directors as they may think fit and may confer such power for such time and to be exercised for such objects and purposes and upon such terms and conditions and with such restrictions as they think expedient and they may confer such powers either collaterally with or to the exclusion of and in substitution for, all or any of the power of the Directors in that behalf and may from time to time revoke, withdraw after or vary all or any of such powers, unless and until otherwise determined, a Managing or Whole time Director may exercise all the powers exercisable by the Directors themselves.

CHIEF EXECUTIVE Article 193

1. The Directors may from time to time appoint a Chief Executive either for a fixed term, or without any

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limitation as to the period for which he is to hold that office, and may from time to time remove or dismiss him from office and appoint another in his place, and fix the remuneration of such Chief Executive which may be by way of salary, or commission, or participation in profits, or by any or all of these modes and may also from time to time appoint a temporary substitute for the Chief Executive, who shall be deemed to be the Chief Executive during the term of his appointment. The Chief Executive may be one of the Directors of the Company.

2. The Chief Executive for the time being shall exercise and perform all powers, authorities, discretions and

duties as may from time to time be vested in, conferred upon, or assigned to him by the Directors appointing him, or by these presents.

INDEMNITY TO AND PROTECTION OF DIRECTORS AND OFFICERS. Article 194 Every Officer of the Company as defined by section 2 (30) of the said Act or any person (whether an officer of the Company or not) employed by the Company as Auditor shall be indemnified out of the funds of the Company against all liability incurred by him in defending, any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or discharged, or in connection with any application under section 63 of the said Act in which relief is granted to him by the Court. Article 195 Subject to the provisions of the said Act, every Director of the Company, the Chief Executive, Trustee, Auditor and other officer or servant of the Company shall be indemnified by the Company against and it shall be the duty of the Directors out of the funds of the Company, to pay all losses, costs and expenses which any such person, officer, or servant may incur or become liable to by reason of any contract entered into or any act or thing done by him as such officer or servant, or in any way or about the discharge of his duties, including traveling expenses. Article 196 Subject to the provisions of the said Act, no Director of the Company, Chief Executive, Trustee, Auditor and other officer or servant of the Company shall be liable for the Acts, receipts, neglects or defaults of any other Director or officer or servant, or for joining in any receipts or other act for the sake of conformity merely, or for any loss or expenses happening to the Company through the insufficiency or deficiency in point of titles or value of any property acquired by the order of the Directors for or on behalf of the Company, or mortgaged to the Company, or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested, or for any loss or damage arising from the bankruptcy, insolvency, or tortuous act of any person, Company or corporation to or with whom any moneys, securities or effects of the Company shall be entrusted or deposited, or for any loss occasioned by any error of judgement, omission, default or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in relation to the execution or performance of the duties of his office or in relation thereto, unless the same happen through his own dishonesty THE SEAL Article 197 The Directors shall provide a Common Seal for the purpose of the Company, and shall have power from time to time to destroy the same and substitute a new seal in lieu thereof, and the Directors shall provide for the safe custody of the Seal for the time being. The Seal shall never be used except by the authority of the Directors of a Committee of Directors previously given, and save as hereinafter provided, except in the presence of one Director at the least and some other person appointed by the Board. Article 198 Every deed or other instrument to which the Seal of the Company is to be affixed shall be sealed in the presence of

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one Director and such other officer as the Directors may for the purpose from time to time appoint who shall sign the same. Save that the Directors shall as regards affixing the seal on share certificates comply with the provisions of the Rules issued in that behalf under the Act. NOTICES AND SERVICE OF DOCUMENTS Article 199 It shall be imperative on every member to notify to the Company for registration, his place of address in India and if he has no registered address within India, to supply to the Company an address within India for the giving of notices to him. Article 200

1. Subject to section 53 of the said Act, a document may be served by the Company on any member thereof either personally or by sending it by post to him to his registered address, or if he has no registered address in India, to the address if any within India supplied by him to the Company for the giving of notices to him.

2. Where a document is sent by post –

a. Service thereof shall be deemed to be effected by properly addressing, prepaying and posting a

letter containing the document provided that where a member has intimated to the Company in advance that documents should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the Company a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by the member, and

b. such service shall be deemed to have been duly effected: i. in the case of the notice of a meeting at the expiration of forty-eight hours after the latter

containing the same is posted, and ii. in any other case, at the time at which the letter would be delivered in the ordinary course

of post.

3. A document advertised in a newspaper circulating in the District where the Registered Office of the Company is situated shall be deemed to be duly served on the day on which the advertisement appears on every member of the Company who has no registered address in India and has not supplied to the Company an address within India for the giving of notices to him.

4. A document may be served by the Company on the joint-holders of a share by serving it on the joint-holder

named first in the Register of Members in respect of the share.

5. A document may be served by the Company on the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by name or by the title of representative of the deceased, or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied by serving the document in any manner in which it might have been served if the death or insolvency had not occurred.

Article 201 A certificate in writing signed by a Director of the Company or any other officer of the Company, that the letter containing the notice was so addressed and posted shall be prima facie evidence thereof. Article 202 Every person, who by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall be bound by any and every notice and other document in respect of such share which previous to his name and

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address being entered upon the Register shall have been duly given to the person from whom he derives his title to such share. Article 203 Any notice required to be given by the Company to the member or any of them and not expressly provided for by these presents shall sufficiently be given, if given by advertisement, once in an English and once in a vernacular daily newspaper circulating in Bombay. Article 204 Any notice of document served in the manner hereinbefore provided shall, notwithstanding such members be then dead, and whether or not the Company has notice of the death, be deemed to have been duly served in respect of any share, whether held solely or jointly with other persons by such member, until some other person be registered in his stead as the holder or joint holder thereof and such service shall, for all purposes of these presents, be deemed a sufficient service of such notice or documents on his heirs, executors, administrators and all persons (if an) jointly interested with him in any such shares. Article 205 Any notice given by the Company shall be signed by a Director, or any other officer appointed by the Directors, and the signature thereto may be written, printed, lithographed, or Photostat Article 206 A document may be served on the Company or an officer thereof by sending it to the Company or officer at the Registered Office of the Company by post under a certificate of posting or by Registered Post or by leaving it at its Registered Office. Article 207 Where a given number of days notice or notice extending over any other period is required to be given, the day of service shall not be counted nor shall the day for which notice is given be counted. Article 207A Save as otherwise expressly provided in the Act, a document or proceedings requiring authentication by the Company may be signed by a Director, Managing Director, the Manager, the Secretary or other authorized officer of the Company and need not be under the Common Seal of the Company. SECRECY CLAUSE Article 208 No member shall be entitled to visit any works, factory or laboratory of the Company without the earlier permission of the Directors or require discovery of or any information respecting any details of the Company’s working, trading, or any matter which is or may be in the nature of a trade secret, mystery of trade or secret process, which may relate to the conduct of the business of the Company, and which in the opinion of the Directors, it will be expedient in the interests of the members of the Company to communicate to the public. WINDING UP Article 209 If upon the winding up of the Company, the surplus assets shall be more than sufficient to repay the whole of the paid-up capital, the excess shall be distributed amongst the members in proportion to the capital paid or which ought

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to have been paid on the shares at the commencement of the winding-up held by them respectively other than the amounts paid in advance of calls. If the surplus assets shall be insufficient to repay the whole of the paid-up capital, such surplus assets shall be distributed so that as nearly as may be the losses shall be borne by the members in proportion to the capital paid or which ought to have been paid up at the time of the commencement of the winding-up on the shares held by them respectively, other than the amounts paid by them in advance of Calls. But this Article is without prejudice to the rights of the holders of any shares issued upon special terms and conditions and shall not be construed so as to be deemed to confer upon them any rights greater than those conferred by the terms and conditions of issue. Article 210 If the Company shall be wound up whether voluntary or otherwise, the following provisions shall take effect:

1. The Liquidator may, with the sanction of a Special Resolution, divide among the contributories in specie or kind or any part of the assets of the Company, and may, with the like sanction, vest any part of the assets of the Company in trustees upon such trust for the benefit of the contributories or any of them, as the Liquidator with the like sanction shall think fit.

2. If thought fit any such division may be otherwise than in accordance with the legal rights of the

contributories (except where unalterably fixed by the Memorandum of Association) and in particular any class may be given preferential or special rights, or may be excluded altogether or in part but in case any division otherwise than in accordance with the legal rights of the contributories shall be determined on, any contributory who would be prejudiced thereby shall have the right to dissent and shall have ancillary rights as if such determination were Special Resolution passed pursuant to Section 494 or 507 of the said Act.

3. In case any shares to be divided as aforesaid involve a liability to Calls or otherwise any person entitled

under such division to any of the said shares, may, within seven days after the passing of the Special Resolution by notice in writing, direct the Liquidator to sell his proportion and pay him the net proceeds, and the Liquidator shall, if practicable, act accordingly.

Article 211 Any such Liquidator may, irrespective of the powers conferred upon him by the said Act and as an additional power conferring a general or special authority sell the undertaking of the Company, or the whole or any part of its assets for shares fully or partly paid up, or the obligations of or other interest in any other Company, and may by the contract of sale agree for the allotment to the members directly of the processes of sale in proportion to their respective interests in the Company, and in case the shares of this Company shall be of different classes, may arrange for the allotment in respect of preference shares of the Company, of obligations of the purchasing Company, or of the shares of the purchasing Company with preference or priority over or with a larger amount paid up than the shares allotted in respect of ordinary shares of this Company and may further by the contract, limit a time that the expiration of which shares, obligations or other interests not accepted or required to be sold, shall be deemed to have been refused and be at the disposal of the Liquidator. Upon any sale under the last preceding Article, or under the powers given by Section 494 and 507 of the said Act, no member shall be entitled to require the Liquidator either to abstain from carrying into effect the sale or the resolution authorizing the same, or to purchase such members interest in this Company, but in case any member shall be unwilling to accept the shares, obligations or interests to which under such sale he would be entitled, he may within seven days of the passing of the resolution authorizing the sale by notice in writing to the Liquidator, require him to sell such shares obligations or interests and thereupon the same shall be sold in such manner as Liquidator may think fit, and the proceeds shall be paid over to the member requiring such sale. Article 212 Each member of the Company, present and future, is to be deemed to join the Company with full knowledge of all contents of these presents.

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SECTION IX

OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered in to in the ordinary course of business carried on by the Company or entered into more than two years before the date of this Draft Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by the Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company situated at D-11, Road No. 28, Wagle Industrial Estate, Thane - 400 604, Maharashtra – 400-604, India, from 11 a.m. to 3 p.m. on any Business Day, from the date of this Draft Letter of Offer until the Issue Closing Date. A. MATERIAL CONTRACTS

1. Engagement letter dated 3rd June 2009 appointing Transwarranty Capital Private Limited as the Lead Manager to the Rights Issue.

2. Copy Memorandum of Understanding dated 20th August 2009 between the Company and Transwarranty Capital Private Limited.

3. Memorandum of Understanding dated 26th August 2009 between the Company and Link Intime India Pvt. Ltd. as Registrar to the Issue

4. Engagement letter dated 10th August, 2009 issued by the Company appointing J.J. Bhatt & Co. as the Legal Advisors to the Issue.

5. Tripartite Agreement dated 16th March 2000 between the Company, Link Intime India Pvt. Ltd. and CDSL to establish direct connectivity with CSDL.

6. Tripartite Agreement dated 16th March 2000 between the Company, Link Intime India Pvt. Ltd. and NSDL to establish direct connectivity with NSDL.

7. Joint Venture agreement between Asian Retail Lighting Ltd and Asian Electronics Limited dated 20th April 2007

8. Joint Venture agreement with Home Lighting India Ltd and Asian Electronics Limited dated 20th April 2007

9. Joint Venture agreement with Midcom Magnetics Management Pvt Ltd and Asian Electronics Limited dated 20th April 2007

B. DOCUMENTS FOR INSPECTION

1. Copy of Memorandum and Articles of Association and Certificate of Incorporation of Asian Electronics Limited.

2. Annual Reports & Financial Statements of the company for the year ended 2005, 2006, 2007, 2008 and 2009.

3. A copy of the resolution passed at the meeting of Board of Directors of our Company held on 14th May 2009 and 1st December 2009 for approving the Rights Issue.

4. A copy of the resolution of the shareholders passed under Section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting held on 6th July 2009 approving the present Rights Issue.

5. Copy of Board Resolution & EGM Resolution dated 5th November 2008 & 12th February 2009 regarding appointment of Mr. Arun B. Shah as Non - Executive Chairman

6. Copy of Board Resolution & AGM Resolution dated 23rd April 2009 & 30th September 2009 regarding appointment of Executive Chairman and fixing his remuneration for the same.

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7. Copy of Resolution passed in the Board Meeting dated 29th October 1997 for appointment of Mr. R.D.Goradia as Company Secretary and Compliance Officer of our company

8. Shareholders Resolution passed at the Annual General Meeting held on 29.11.2008 appointing M/s. Sorab S. Engineer & Co., Chartered Accountants as Statutory Auditors.

9. Letter dated December 1, 2009 from M/s. Sorab S. Engineer & Co., Chartered Accountants, the Statutory Auditors of the Company, regarding the Tax benefits available to our Company and its members.

10. The Report of the Auditors M/s. Sorab S. Engineer & Co., Chartered Accountants dated December 1, 2009 in relation to the financial of the Company for the financial year ended March 31st 2005, 2006, 2007, 2008, 2009 and for the period ended 30th September 2009, prepared as per Indian GAAP, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

11. Scheme of Amalgamation of Asian Raymold Lighting Pvt Limited with Asian Electonics Limited.

12. Scheme of Amalgamation of Asian Electronics Component Limited with Asian Electonics Limited.

13. Undertaking given by the Promoter and Promoters Group to subscribe balance unsubscribed portion, if any, in case required to ensure minimum subscription in the Right Issue.

14. Copy of the Placement Document dated October 17, 2006 issued in respect of the Qualified Institutional Placement (QIP) by our Company.

15. Consents of the Directors, Statutory Auditors, Company Secretary & Compliance Officer, Lead Manager to the Issue, Legal Advisors to the Issue, Bankers to the Company, Bankers to the Issue, Registrars to the Issue and to include their names in the Draft Letter of Offer and to act in their respective capacities.

16. Copies of various Undertakings received from the Company.

17. A copy Letter of Offer dated 25th March 1994 issued by our Company in connection with the previous Rights Issue.

18. Power of Attorney executed by Mr. Dipankar De and Mr. Suresh Sharma - Alternate Director to Mr. Deepak Divan in favour of Mr. Arun B. Shah and Mr. Haresh G Desai for signing and making corrections in the Draft Letter of Offer on their behalf.

19. Undertaking given by the Promoter & Promoter Group dated 1st December 2009 to subscribe the balance unsubscribed portion, in case required to ensure minimum subscription in the Right Issue.

20. Board Resolution dated 1st December 2009 passed by the Board of the Company approving the Draft Letter of Offer;

21. Copy of Due Diligence certificate dated 21st December 2009 issued by the Lead Manager to Issue and filed with SEBI.

22. Legal advisor Certificates dated December 1, 2009

23. In principle approval letter no [•] and dated [•] 2009 from BSE for listing of the securities offered in this issue.

24. In principle approval letter no [•] and dated [•] 2009 from NSE for listing of the securities offered in this issue.

25. SEBI Observation letter no [•] and dated [•] 2009

Any of the contracts or documents mentioned in this Draft Letter of Offer may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION We, the Directors, Joint Chief Financial Officer (Finance & Accounts) and Company Secretary & Compliance Officer of the Company, certify that all relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government of India or the guidelines issued by Securities and Exchange Board of India, applicable, as the case may be, have been complied with and no statement made in this Draft Letter of Offer is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the rules made or guidelines issued there under, as the case may be, and that all approvals and permissions required to carry on the business of our Company have been obtained, are currently valid and have been complied with. Since the date of last financial statement disclosed in this Draft Letter of Offer, there have been no circumstances that materially and adversely affect or are likely to affect the profitability of the company or the value of its assets or its ability to pay off its liabilities within a period of next twelve months. All the Directors, Joint Chief Financial Officer (Finance & Accounts) and Company Secretary & Compliance Officer of the Company certify that all disclosures made in the Draft Letter of Offer are true and correct. Yours truly FOR ASIAN ELECTRONICS LIMITED Signed by all the Directors of Asian Electronics Limited Mr. Arun B. Shah - Executive Chairman

Mr. Haresh G. Desai - Director

Mr. Deepakraj Divan - Director *

Mr. Suresh Sharma - Alternate Director to Mr. Deepakraj Divan *

Mr. Dipankar De - Nominee Director (IDBI Bank)

Mr. D.G.Prasad - Director

Mr. Snehal Shah - Joint Chief Financial Officer (Finance & Accounts) Mr. Rasik D.Goradia - Company Secretary & Compliance Officer * Through their constituted power of attorney Mr. Arun B. Shah and Mr. Haresh G Desai Place: Thane Date: Encl.: Composite Application Form (‘CAF’)

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