Asian Electronics Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Business Review

Asian Electronics Limited (AEL or ‘the Company) has been one of the pioneering Companies in the energy efficient lighting industry in India.

Over the years, the reliability and quality of the AEL’s product has resulted in a strong brand creation.

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 will concentrate only on manufacturing of quality products in terms reliability and functionality. The Company has shifted its market outlook to hardcore marketing companies in India and overseas which is lead by a team of highly talented and experienced professionals. The company thus becomes ideologically a "contract manufacturing" company.

Market Prospects:

Lighting consumes more than a 5th of the total energy produced worldwide. As evident, rising costs of energy coupled with awareness about global warming and energy security has brought about radical changes in the industry which is riding on a wave of energy efficiency. There are five basic types of lighting: incandescent, fluorescent, high intensity discharge, low pressure sodiumandcompactfluorescentlamp (CFL) and LED. The new trend to save energy and improve illumination has ushered in a wide range of LED lamps and Luminaries. LED lights offer several 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 LEDs are "Instant on" with no warm up time needed as seen in conventional CFL lighting. Lower consumption of electricity and Longer Life makes LED Lighting Products an attractive buy. The advantages of LED lighting adding to the lowering of the worlds carbon footprint cannot be under estimated. The company is trying to increase the efficiency of the LEDs lighting products to incorporate all possible aspects and dimensions. AEL believes that its holistic and intuitive approach to technology gives the advantage to its customers when compared with worldwide LEDs lighting vendors.

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.

Strengths:

Under the marketing potential and size AEL has the following strength;

i. The company has manufacturing facilities exceed more than 200,000 sq feet which is of global standards.

ii. The complete backward integration of the manufacturing gives greater advantage on control of lead time, yield and quality of product.

iii. The technical competence in addition to the ability to innovate has given the company a technological edge.

iv. The company provides for a unique environment in the form of its Research & Development unit to design, develop and patent the technology of its clients’ whilst protecting its Intellectual Property Rights (IPR).

Weakness:

As per the TEV (Total Enterprise Value) Report carried out by independent agency the business of the Company is subject to following Weaknesses:

(i) The existing capacity utilization is very low and the companys facilities at Nasik were not utilized fully due to shortage of working capital funds, which is locked in huge receivables.

(ii) The company has infrastructure, technology and client base to produce various products to the tune of Rs. 350 cr per year. However, it may take 2-3 years to reach the optimum levels of capacity utilization.

(iii) The company has huge debt burden of Rs. 390 cr. However, based on current projections, EBIDTA of Rs. 25-30 cr. can be sustained at a level not in excess of Rs. 120 cr.-Rs.150 cr.

(iv) The assets of the company are highly illiquid and cannot fetch more than Rs. 90 cr. that too over 2 years.

(v) The timelines for revial of the company are very critical. Any further delay of revival of AEL would reduce the enterprise value of the company which ultimately effects the interest of all stakeholders of the company.

Opportunities

The energy crisis world is facing has given an opportunity to establish energy saving practices. The total population of energy efficientlighting producs across all segments stands at a dismal figure at a percentage of lower two digits. The existing facilities available with the company are technically capable of achieving capacity of production in pace with the demand..

i. With advent of energy efficient lighting technology and awakening amongst the masses to adopt energy saving practice the market has potential of achieving a very high growth.

ii. The power products developed by the company have big potential for exports.

iii. Wide-spread awareness amongst consumers and policies and initiatives taken by government has opened up new vistas of opportunities.

Threats:-

The major threats which can affect adversely are as follows:

1. Outstanding litigations involving the Company.

The Company is defendants/plaintiff in various legal proceedings incidental to our business and operations. These legal proceedings are pending at different levels of adjudication before various courts. In the event of rulings against the company by courts in these proceedings or levy of penalties by any statutory authorities, the Company may need to make payment to others or book provisions against probable future payments, which could increase Company’s expenses and current liabilities.

2. Debt Burden of the Company

The Company has entered into financing agreements with various lenders that grant them certain rights to determine how the Company is operated. Most of these financing arrangements are secured by substantially all of the movable and immovable assets of the Company. Due to failure of the CDR the said secured creditors have initiated action against the Company under The Securitization and Reconstruction of Financial Assets and Enforcement of Security Act, 2002, The Company proposed to settle the issues under One Time Settlement (OTS) platform, but the outcome of such litigations may not necessarily in favour of the Company.

Financial Performance

For Financial Performance, reference may please be made to the Financial Statements forming part of the Directors’ Report.

Human Resources

The Company assigns the highest importance to its human resources which are very critical for company like ours. The Human Resources (HR) function of the Company continuously strives to achieve the mission of the Company by creating a favourable work environment and by institutionalizing a performance oriented work culture.

The Company has put in place processes to ensure it attracts and retains the talented personnel.

The industrial relations were cordial through out the year under review. The Company has not lost a single day of work due to industrial unrest.

Internal Controls and their adequacy

The Audit Committee of the Board of Directors has been constituted as per the provisions of Section 292A of the Companies Act, 1956 and Corporate Governance requirement specified by the Stock Exchanges.

The internal audit for various functions and aspects is conducted by the In-house Internal Audit Department which conducts reviews and evaluation and present their reports to the Audit Committee and the management at regular intervals.

The In-house Internal Audit Reports dealing with internal control systems are considered by the Audited Committee and appropriate actions are being taken, wherever necessary.

Risks and Concerns

As is the case with any industrial enterprise, the Company is exposed to a number of risks. The Company assesses the risks every year which include regulatory risks, financial risks, competition risks and risks of input cost increase etc.

The In-house Internal Audit Department plays a key roll in providing the Management as well as Audit Committee, assurance of overall control system and effectiveness of the risk management process.

Your Management tries to keep all these risks in control, to the extent it is possible, by developing a frame work for risk identification, risk management and control and risk reporting and review.

Acknowledgments

Management deeply appreciates the stakeholders, esteemed customers and business associates of the Company for providing the management with opportunities to earn their confidence and excel. Management wishes to convey and express sincere gratitude to all the officers and employees of AEL for their dedication and commitment which is responsible for driving growth in the Company. It shall be our continuous endeavor to build on these strengths to face future challenges to continue the journey of profitable growth.

Caution

The Company’s objectives, expectations or predictions as described in the statement in the Management Discussion and Analysis Report may be forward looking within the meaning of applicable Rules of the Regulatory Authorities. Actual Results may defer materially from those expressed in the statement.

Important factors that could influence Company’s operations include global and domestic supply and demand conditions affecting selling price of finished goods, input availability and changes in the government regulations, tax laws, economic developments, development within the country and other factors such as litigation and industrial relations.

ANNEXURE TO THE DIRECTORS’ REPORT

Information relating to Corporate Governance

I. Company’s philosophy on Code of Governance:

The Company believes in implementing and observing good Corporate Governance practices. The Company’s Corporate Governance philosophy is based on values such as transparency, professionalism and accountability. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for safeguarding and enhancing their wealth

The Company has adopted a Code of Conduct for the Members of the Board and Senior Management Personnel in compliance with the provisions of Clause 49 of the Listing Agreement.

A copy of the Code of Conduct is available on the website of the Company www.aelgroup.com.

All the Members of the Board and the Senior Management Personnel of the Company have affirmed compliance to the Code of Conduct as on 31st March, 2013, and a declaration to that effect signed by the Executive Chairman is attached and forms part of this Report.

II. Board of Directors (Board)

The Board as on 31st March, 2013 comprises of 6 Directors of which 3 are independent. The number of Non-Executive Directors is more than 50% of the total number of Directors. The Company is in compliance with the clause 49 of the listing agreement pertaining to composition of the Board.

The Non-Executive Directors are eminent professionals with experience in over all management, finance and law, who bring a wide range of skills and experience to the Board.

None of the Directors on the Board is member of more than 10 committees and chairman of more than 5 committees (as specified in clause 49), across all the companies in which he is a Director. The necessary disclosure regarding committee positions have been made by the Directors.

a. Composition of the Board

Name of Director	Note	Promoter, Executive, Non executive, Independent	No. of other Director- ship held @	No. of other Committees of which he is a Chairman	No. of other Committee (s) of which he is a member	No. of Shares held in the Company as at 31.3.2013
Mr. Arun B. Shah		Executive, Promoter	8	-	-	33,20,549
Mr. D.G. Prasad	a	Non-Executive, Independent	-	-	-	-
Dr. Deepak Divan		Non-Executive, Independent	2	-	-	-
Mr. Suresh Sharma	b	Non-Executive, Independent	-	-	-	-
Mr. Jim Mitropoulos	c	Non-Executive, Independent	-	-	-	-
Mr. D.B. Shah	d	Non-Executive, Independent	1	-	-	2000
Mr. Hardik Shah	e	Non-Executive, Independent	1	-	-	-
Mr. Rajesh Mehta	f	Non-Executive	2	-	-	-
Mr. S. Neelakanta Iyer		Executive	5	-	-	-

@ Includes private Companies and Alternate Directorships

Notes:

a) Ceased to be Director w.e.f. 8th May, 2012.

b) Ceased to be Alternate Director to Mr. Deepak Divan w.e.f. 4th August, 2012 and was appointed as Additional Director w.e.f. 4th August, 2012. Ceased to be Additional Director w.e.f. 16th November, 2012.

c) Ceased to be Director w.e.f. 1st January, 2013.

d) Appointed as Additional Director w.e.f. 29th November, 2012. Reappointed as Director by the members at the AGM held on 29th December, 2012.

e) Appointed as Additional Director w.e.f. 6th March, 2013.

f) Ceased to be Executive Director w.e.f 14th February, 2013, continued as Non-Executive Director.

b. Number of Board Meetings:

During the year, the Board of Directors met seven times on the following dates:-

7th May, 2012	4th August, 2012	17th October, 2012
29th November, 2012	21st December, 2012	14th February, 2013
6th March, 2013

 

Name of Director	Meetings Attended	Attended last AGM on 29th December, 2012
Mr. Arun B. Shah	7	Yes
Mr. D.G. Prasad	1	No
Dr. Deepak Divan	-	No
Mr. Suresh Sharma	1	No
Mr. Jim Mitropoulos	-	No
Mr. D.B. Shah	4	Yes
Mr. Hardik Shah	-	No
Mr. Rajesh Mehta	7	Yes
Mr. S. Neelakanta Iyer	7	Yes

III. Committee of Directors :

Good Corporate Governance requires that the Non-Executive Directors of the Company are more actively involved in providing guidance to full time management on policy matters as well in the monitoring of actions carried out by operating management. This involvement is formalised and institutionalised through constitution of designated committees of the Board. The Committees are intended to provide periodical and regular exchange of information and ideas between the Non-Executive Directors and the operating management.

The Board has accordingly constituted Committees at its meeting held on 27th January, 2000 which comply with the requirements of clause 49 of the Listing Agreement with the Stock Exchanges and the applicable provisions of the Companies (Amendment) Act, 2000. The said Committees were reconstituted from time to time by Resolutions passed by the Board of Directors of the Company.

(A) Audit Committee:-

The Audit Committee comprises of experts specializing in accounting / financial management. The Chairman of the Audit Committee is a Non-executive and Independent Director.

As on 1st April, 2012, the Audit Committee comprised of the following Directors:

(1) Mr. D.G. Prasad, Chairman

(2) Dr. Deepak Divan, Member

(3) Mr. Rajesh Mehta, Member

During the year, the Audit Committee was reconstituted on three occasions as detailed below:

On 4th August 2012 Mr. Suresh Sharma was appointed as Chairman of the Audit Committee in place of Mr. D.G. Prasad, who ceased to be a member of the Committee due to resignation w.e.f. 8th May, 2012.

On 29th November 2012 Mr. D.B. Shah was appointed as Chairman of the Audit Committee in place of Mr. Suresh Shah who ceased to be a member of the Committee w.e.f. 16th November, 2012 due to resignation. Mr. Jim Mitropoulos was also appointed as member of the Committee in place of Mr. Deepak Divan, who ceased to be a member of the Committee w.e.f. 29th November, 2012.

On 6th March, 2013 Mr. Hardik Shah was appointed as member of the Audit Committee in place of Mr. Jim Mitropoulos who ceased to be a member of the Committee w.e.f. 1st January, 2013 due to resignation.

The present composition of the Audit Committee is as follows:

(1) Mr. D. B. Shah

(2) Mr. Hardik Shah

(3) Mr. Rajesh Mehta

Mr. D.B. Shah is the Chairman of the Audit Committee. Mr. Dhananjay Dumbre, Asst. Company Secretary acts as secretary to the Audit Committee.

The role and terms of reference to the Audit Committee cover the areas mentioned under Clause 49 of the Listing Agreement as amended from time to time and Section 292A of the Companies Act, 1956. The Audit Committee met five times during the year 2012-2013 on 7th May, 2012, 4th August, 2012, 29th November, 2012, 21st December, 2012 and 14th February, 2013.

The attendance of each Audit Committee member is as under:

Name of the Audit Committee Members	Note	No. of meetings attended
Mr. D.G. Prasad	a	1
Dr. Deepak Divan	b	-
Mr. Rajesh Mehta	-	5
Mr. Suresh Sharma	c	1
Mr. D.B. Shah	d	3
Mr. Jim Mitropoulos	e	-
Mr. Hardik Shah	f	-

Note:

a) Ceased to be the Chairman and member of the Committee w.e.f. 8th May, 2012.

b) Ceased to be the member of the Committee w.e.f. 29th November, 2012.

c) Appointed as the Chairman of the Committee w.e.f. 4th August, 2012 and ceased to be the chairman w.e.f. 16th November, 2012

d) Appointed as Chairman of the Committee w.e.f. 29th November, 2012

e) Appointed as member of the Committee w.e.f. 29th November, 2012 and ceased to be the member of the committee w.e.f. 1st January, 2013 due to resignation.

f) Appointed as member of the Committee w.e.f. 6th March, 2013

The meetings were also attended by Executive Chairman – Mr. Arun B. Shah, Executive Director & Jt. Chief Executive Officer(Manufacturing Operations) Mr. Neelakanta Iyer, Chief Financial Officer – Mr. Sadanand Sahasrabudhe, DGM (Accounts) – Mr. Krishnaraj Kapadia and Mr. Naman Shah as special invitees. The Secretary – Mr. Dhananjay Dumbre attended the Meetings held on 4th August, 2012, 29th November, 2012, 21st December, 2012 and 14th February, 2013.

The Statutory Auditors were invited to the meetings.

(B) Executive Committee:-

The Executive Committee of the Board of Directors as on 1st April, 2012 comprised of the following Directors:

Mr. Arun B. Shah, Chairman

Mr. D.G. Prasad, Member

During the year, the Executive Committee was reconstituted on two occasions as detailed below: On 4th August, 2012 Mr. Suresh Sharma was appointed as member of the Executive Committee in place of Mr. D.G. Prasad, who ceased to be a member of the Committee due to resignation w.e.f. 8th May, 2012. Mr. Neelakanta Iyer was also appointed as member of the Executive Committee w.e.f. 8th May, 2012.

Mr. Suresh Sharma ceased to be a member of the Executive Committee w.e.f. 16th November, 2012 due to resignation. In view of the same Mr. D.B. Shah was appointed as member and chairman of the Executive Committee w.e.f. 29th November, 2012.

The present composition of the Executive Committee is as follows:

(1) Mr. D. B. Shah

(2) Mr. Arun B. Shah

(3) Mr. Neelakanta Iyer

Mr. D.B. Shah is the Chairman of the Executive Committee. Mr. Dhananjay Dumbre, Asst. Company Secretary acts as secretary to the Executive Committee.

This Committee deals with matters like banking operation, authorisation to employees in respect of Excise, Sales Tax, Tender submission etc. asalsosomemattersspecifically delegated by the Board from time to time.

The Executive Committee met three times during the year 2012-2013 on 23rd April, 2012, 24th August, 2012 and 12th October, 2012.

Name of the Executive Committee Members	Note	No. of meetings attended
Mr. Arun B. Shah	a	3
Mr. D.G. Prasad	b	1
Mr. Suresh Sharma	c	-
Mr. Neelakanta Iyer	d	2
Mr. D.B. Shah	e	-

a) Ceased to be the Chairman of the Committee w.e.f. 29th November, 2012, but continued as member of the committee.

b) Ceased to be the member of the Committee w.e.f. 8th May, 2012.

c) Appointed as the member of the Committee w.e.f. 8th May, 2012 and ceased to be member of the Committee w.e.f. 16th November, 2012.

d) Appointed as the member of the Committee w.e.f. 8th May, 2012.

e) Appointed as member and Chairman of the Committee w.e.f. 29th November, 2012

Mr. Dhananjay Dumbre, Asst. Company Secretary acted as Secretary to the Executive Committee from 18th June, 2012, attended the meetings of the Committee held on 24th August, 2012 and 12th October, 2012.

(C) Committee for Transfer of Shares:-

The Committee for Transfer of Shares as on 1st April, 2012 comprised of the following Directors:

Mr. Arun B. Shah, Chairman

Mr. Rajesh Mehta, Member

There was no change in composition of members of the Committee during the year under review.

Mr. Dhananjay Dumbre, Asst. Company Secretary acted as Secretary to the Committee from 18th June, 2012.

During the year under review, 14 meetings were held on 16th April, 2012, 30th April, 2012, 15th May, 2012, 31st May, 2012, 15th June, 2012, 30th June, 2012, 16th July, 2012, 1st October, 2012, 16th October, 2012, 30th November, 2012, 31st December, 2012, 31st January, 2013, 28th February, 2013 and 30th March, 2013.

The attendance of each Transfer Committee Members is as under:

Name	No. of Meetings attended
Mr. Arun Shah	14
Mr. Rajesh Mehta	14

The Secretary: Mr. Dhananjay Dumbre attended all the meetings held on and after 18th June, 2012.

(D) Shareholders’ / Investors’ Grievances Committee

(a) The Shareholders’ / Investors’ Grievances Committee as on 1st April, 2012 comprised of the following Directors:

1) Mr. D.G. Prasad, Chairman

2) Mr. Arun B. Shah, Member

Consequent to cessation of Mr. D.G. Prasad as a Director of the Company w.e.f. 8th May, 2012, the Committee was reconstituted and Mr. Suresh Sharma was appointed as Chairman of the Committee w.e.f. 4th August, 2012.

On 16th November, 2012 Mr. Suresh Sharma ceased to be the chairman of the Committee due to resignation, In view of the same Mr. D. B. Shah was appointed as member and chairman of the committee w.e.f. 29th November, 2012.

The present composition of the Shareholders’ / Investors’ Grievances Committee is as follows:

Mr. D. B. Shah, Chairman

Mr. Arun Shah, Member

During the year under review, the Shareholders’ / Investors’ Grievances Committee met once on 6th March, 2013.

This meeting was attended by both members Mr. D.B. Shah and Mr. Arun B. Shah. The meeting was also attended by Complianceofficer Mr. Dhananjay Dumbre.

(b) Number of shareholder complaints / requests received during the year:

During the year under review, total 21 investor’s complaints / requests were received.

All the complaints / requests received during the year ended 31st March, 2013 were solved within time to the satisfaction of the investors / shareholders and no complaints were pending as on 31st March, 2013 for more than 30 days. All the shares received for transfer / transmission have been transferred / transmitted and no transfer is pending as on 31st March, 2013.

(E) Remuneration Committee

Matters of remuneration of Executive Directors are considered by the Board of Directors of the Company, where the interested Executive Director(s) do not participate or vote. The terms of remuneration of Executive Directors are approved by the shareholders at the Annual General Meeting. Therefore, no separate remuneration committee has been constituted.

The Board of Directors decides the remuneration of non-executive Directors which consist of sitting fees as well as commission based on net profits of the Company.

REMUNERATION OF DIRECTORS FOR 2012-2013

Name of the Director	Sitting Fees (Rs. in Lacs)	Salaries, Commission Perquisites (Rs. in Lacs)	Service Contract, Notice Period, Severance Fees.
Mr. Arun B. Shah	-	-	-
Mr. D.G. Prasad	0.20	-	-
Dr. Deepak Divan	-	-	-
Mr. Suresh Sharma	0.20	-	-
Mr. Jim Mitropoulos	-	-	-
Mr. D.B. Shah	1.80	-	-
Mr. Hardik Shah	-	-	-
Mr. Rajesh Mehta	-	-	Was appointed as Executive Director for a period of 2 years w.e.f. 1st June, 2013, but he resigned from the post of Executive Director w.e.f 14th February, 2013, and continued as Non-Executive Director.
Mr. S. Neelakanta Iyer	-	17.99	-

(F) Compensation Committee

The Compensation Committee as on 1st April, 2012 comprised of the following Directors:

1) Mr. D. G. Prasad, Chairman

2) Mr. Arun B. Shah, Member

3) Mr. Deepak Divan, Member

Consequent to cessation of Mr. D.G. Prasad as a Director of the Company w.e.f. 8th May, 2012, the Committee was reconstituted and Mr. Suresh Sharma was appointed as Chairman of the Committee w.e.f. 4th August, 2012.

On 16th November, 2012 Mr. Suresh Sharma ceased to be the chairman of the Committee due to resignation, In view of the same, Mr. D. B. Shah was appointed as member and chairman of the committee w.e.f. 29th November, 2012. On the same date, Mr. Neelakanta Iyer was also appointed as member in place of Mr. Deepak Diwan who conveyed his intention to retire from membership of the committee.

The present composition of the Compensation Committee is as follows:

1) Mr. D.B. Shah, Chairman

2) Mr. Arun B. Shah, Member

3) Mr. Neelakanta Iyer, Member

During the year under review, Compensation Committee met once on 21st December, 2012.

This meeting was attended by Mr. D.B. Shah, Mr. Arun B. Shah and Mr. Neelakanta Iyer. The meeting was also attended by secretary to the Committee Mr. Dhananjay Dumbre.

IV. General Body Meetings

(1) The details of Annual General Meetings held in the last three years are as under:

	Date	Time	Venue
(i) 45th Annual General Meeting	21st September, 2010	2 p.m.	Registered Office of the Company at Thane
(ii) 46th Annual General Meeting	22nd Septem- ber, 2011	10.00 a.m	Registered Office of the Company at Thane
(iii) 47th Annual General Meeting	29th December, 2012	10.00 a.m	Anand Banquet Hall, Anand Theatre Compound, Kopri, Near Railway Stn Thane(E), Thane 400603

All resolutions moved at the last AGM were passed unanimously on a show of hands by the shareholders present at the meeting.

Details of Special Resolutions passed in the previous three AGMs are given hereunder:-

Date	Matter
21.9.2010	1) Amendment of the Articles of Association of the Company.
22.9.2011	1) Appointment and Remuneration of Mr. S. Neelakanta Iyer as Executive Director & Jt.ChiefExecutive Operations).
	2) Appointment and Remuneration of Mr. Rajesh Mehta as Executive Director & Jt. Chief Executive Officer (Technology & Finance).
	3) Approval for revision of Exercise Price for 10,00,000 Stock Options granted to four Directors of the Company under ESOS-2009 Scheme, by the Compensation Committee of the Board of Directors.
	4) Approval for Revision of Exercise Price for 3,51,550 Stock Options granted to certain Executives / Officers of the Company under ESOS-2005 Scheme, by the Compensation Committee of the Board of Directors.
29.12.2012	1) Approval of decision of Compensation Committee of the Board of Directors for revision of Exercise Price for 4,98,450 Stock Options granted to eligible executives of the Company under ESOS-2005 Scheme from Rs. 10.75 per share to Rs. 5.80 per share.
	2) Approval of decision of Compensation Committee of the Board of Directors for revision of Exercise Price for 41,80,057 Stock Options granted to eligible executives and Directors of the Company under ESOS-2009 Scheme from Rs. 10.75 per share to Rs. 5.80 per share.
	3) Approval of decision of Compensation Committee of the Board of Directors for revision of Exercise Price for 7,50,00 Stock Options granted to eligible Directors of the Company under ESOS-2009 Scheme from Rs. 10.75 per share to Rs. 5.80 per share.
	4) Approval pursuant to Section 146 of the Companies Act, 1956 and other applicable provisions, for shifting of the Registered office of the Company from D-11, Road No. 28, Wagle Industrial Estate, Thane – 400604 to 107, 1st Floor, Sumer Kendra Building, P.B. Marg, Behind Mahindra Towers, Worli, Mumbai- 400018, which falls within the state of Maharashtra but outside the local limits of the city Thane.

(2) Postal Ballot (under Section 192A):–

None of the business required to be transacted at the AGM was passed by the postal ballot.

(3) Extraordinary General Meetings held in last 3 years:-

Day	Date	Time	Venue
Monday	6th July, 2009	11.00 a.m.	Registered Office of the Company at Thane.

Following are Special Resolutions passed at the Extraordinary General Meetings held in the last three years:

EGM held on	Whether Special Resolution passed	Summary
6.7.2009	Yes	1) Approval pursuant to the provisions of Section 81 and all other applicable provisions, if any, of the Companies Act, 1956 for raising of funds not exceeding Rs. 70 crores by issue of securities to finance the Company’s requirement of capital expenditure for expansion and mordernisation activities etc.
		2) Approval pursuant to the provisions of Section 81(1A) and all other applicable provisions, if any, of the Act for issue of 60,00,000 Equity Share Warrants at a price of Rs.40/- (inclusive of premium of Rs.35/- each) to Financial Investors.
		3) Approval for passing Special Resolution for issue of Right Shares in the ratio of 1:2 at a price of Rs.20/- per Share or such other price as may be decided by the Board.
		4) Approval of Special Resolution for modification of CSOS-2009 Scheme for making corrections in the number of Shares to be allotted.
		5) Approval of Special Resolution for modification of earlier Resolution pursuant to the provisions of Sections 77, 79A, 81, 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 for CSOS-2009 under Clause 6.3(b) of the ESOP Guidelines.

None of the business proposed to be transacted at the EGM held on 6.7.2009 was passed by the Postal Ballot.

Ordinary Resolutions passed by way of Postal Ballot pursuant to Section 192A of the Companies Act, 1956:

Ordinary Resolutions mentioned at Item Nos. 1, 2 and 3 of the Notice dated 22nd April, 2010, pertaining to (a) hiving off of the ESCO funding activities (Energy Saving Company) Division of the Company, (b) hiving off of the Projects Division of the Company and (c) mortgage and/or charge of movable and immovable properties of the Company were passed by way of Postal Ballot pursuant to Section 192A(2) of the Companies Act, 1956 and the results thereof as per the Scrutinizer’s Report dated 22nd May, 2010 were declared at the Head Office of the Company on 22nd May, 2010.

V. Notes on Directors appointment/re-appointment

For details, please refer to brief resume of Directors attached to and forming part of the Notice dated 9th July, 2013.

VI. Disclosures

(i) Related party transactions:

A full disclosure of related party transactions, as per the Accounting Standard 18 issued by the Institute of Chartered Accountants of India has been given under Note 47 of the Annual Accounts.

All related party transactions have been entered into in the ordinary course of business and were placed periodically before the Audit Committee in summary form. There were no material individual transactions with related parties which were not in the normal course of business and required to be placed before the Audit Committee and that may have potential conflict with the interest of the Company at large.

All individual transactions with related parties or others were on an arm’s length basis.

(ii) All mandatory Accounting Standards have been followed in preparation of financial statements and no deviation has been made in following the same.

(iii) (a) All pecuniary relationship or transactions of the Non-executive Directors vis-a-vis the Company have been disclosed hereinabove.

(b) The Company has two Whole time Directors on the Board whose appointment and remuneration have been fixed by the Board in terms of Resolution passed by the members. The remuneration paid / payable is mentioned earlier in this report.

(c) The number of shares held by each Director is mentioned in Item No. II (a) above.

(iv) (a) Management Discussion and Analysis forms part of the Annual Report to the shareholders and it includes discussions on matters as required under the provisions of Clause 49 of the Listing Agreement with Stock Exchanges.

(b) There were no material financial & commercial in Clause transactions by Senior Management as defined 49 of the Listing Agreement where they have personal interest that may have a potential conflict with the interests of the Company at large requiring disclosure by them to the Board of Directors of the Company.

(v) There was no non-compliance during the last three years by the Company on any matter related to Capital Market. However, the Securities and Exchange Board of India (SEBI) vide its letter No. CFD/DCR/RC/TO/ 13060/04 dated 21st July, 2004 had alleged violation of regulations 6 and 8 of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 by the Company. SEBI had intimated willingness to consider Company’s request for consent order, if the Company is willing to pay an amount of Rs.1,75,000/- as penalty for the alleged violation of Takeover Regulations. The Company had made submissions to SEBI vide its letter dated 24th September, 2004, explaining the fact and requesting them in any case to take lenient view and condone the alleged delay on the part of the Company and its Officers in compliance of the SEBI

Takeover Regulations and also requested for personal hearing in the matter. As of date, the Company has not received any response from SEBI.

VII. Means of Communication

a. The quarterly/ half yearly and annual Financial Results of the Company are forwarded to the Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. and published in leading national newspapers. Besides the same is also displayed on the corporate website : www.aelgroup.com

b. The Company also electronically files documents such as full version of Annual Report, Quarterly Financial Statements, Corporate Governance Report, Shareholding Pattern Statement and other prescribed information with CorpFiling website in compliance with Clause 52 of the Listing Agreement.

c. The Company has made presentations to various Institutional Investors/ Analysts during the year.

d. Management Discussion & Analysis is covered elsewhere in the Directors Report to Members.

The Company has its own web site viz. www.aelgroup.com and all the vital information relating to the Company and its products is displayed on the website. The shareholders can also post their queries to the designated email Id Secdept@ aelgroup.com

VIII. Management Discussion and Analysis Report

Management Discussion & Analysis forms part of the Directors’ Report.

IX. Shareholder Information

1. Annual General Meeting
Date	12th August, 2013
Time	4.30 p.m.
Venue	Victoria Memorial School for Blind, 73,Tardeo Road, Opposite Film Centre, Tardeo, Mumbai 400 034
2. Financial Year	2012-2013
3. Book closure date	6th August, 2013 to 12th August, 2013
4. Dividend payment date	Not applicable
5. Listing of equity shares	The shares are listed on
	1) Bombay Stock Exchange Ltd. (BSE), Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001 and
	(2) National Stock Exchange of India Ltd. (NSE),"Exchange Plaza", Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051. Annual listing fee for the year2012-2013 (as applicable) has been paid by the Company to BSE and NSE .
6. Stock Code	BSE Scrip Code 503940 NSE Trading symbol: ASIANELEC

Market Price Data : High/Low in each month of the year ended March 31, 2013 on The Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd are as under.

Month / Year	The Bombay Stock Exchange Limited			National Stock Exchange of India Limited.*
	High	Low	Volume	High	Low	Volume
	(Rs.)	(Rs.)	(Nos.)	(Rs.)	(Rs.)	(Nos.)
Apr-12	7.90	5.65	287728	7.70	5.90	351758
May-12	7.23	5.35	557682	7.25	5.40	404467
Jun-12	7.30	5.76	361729	7.20	6.00	294526
Jul-12	7.40	5.30	574027	7.35	5.30	454257
Aug-12	6.00	3.52	866004	6.00	4.30	407459
Sep-12	4.64	3.82	427162	NA	NA	NA
Oct-12	4.80	3.70	473265	NA	NA	NA
Nov-12	4.49	3.66	486678	NA	NA	NA
Dec-12	7.27	4.35	883304	NA	NA	NA
Jan-13	6.10	4.66	549192	NA	NA	NA
Feb-13	4.90	3.76	309029	NA	NA	NA
Mar-13	4.45	2.97	487469	NA	NA	NA
TOTAL			6263269			1912467

* The Shares of the Company were temporarily suspended for trading on NSE w.e.f. 22nd August, 2012 due to certain non compliances, which inter alia include non submission of unaudited results for the financial year ended on March 31, 2012, The same were duly submitted to NSE after the due date.Accordingly, the suspension have been revoked and the shares were permitted for trading w.e.f. June 17, 2013.

In view of the same (a) the monthly high/low data for August is calculated based on high/low data available from NSE from 1st August, 2012 to 21st August, 2012 and (b) monthly high/low data is not available for the month of September, 2012 to March 2013.

7. Registrars & Transfer Agents

The Company was handling share transfer and other allied matters in- house. Link Intime India Pvt. Ltd. were the connectivity agent for Demat of Company’s shares. Securities and Exchange Board of India (SEBI) by its Circular dated 27-12-2002, directed that all share registry work in terms of both, physical and electronic segments should be maintained at a single point either in-house or with a SEBI registered Registrar & Transfer Agent. In compliance with this directive, the Company has appointed Link Intime India Pvt. Ltd. as Registrar and Transfer Agent with effect from 1.2.2003.

8. Share Transfer System

Transfer requests received in physical forms are presently processed by the R & T Agent and Share Certificates are returned within a period of 30 days from the date of receipt. The Company obtains from a Company Secretary in Practice half yearly certificate of compliance with the share transfer formalities as required under Clause 47 (C) of the Listing Agreement with Stock Exchanges and files a copy of the Certificate with Stock Exchanges.

9. Distribution of Shareholding as on 31st March, 2013:

No of Equity Shares held ( Range )	No. of Shareholders	% of Shareholders	No. of Sharesheld	% of ShareHolding
1 to 500	37299	79.80	5969682	15.06
501 to 1000	4672	10.00	3854213	9.72
1001 to 2000	2356	5.04	3610821	9.11
2001 to 3000	856	1.83	2195044	5.53
3001 to 4000	392	0.84	1406037	3.54
4001 to 5000	304	0.65	1442924	3.64
5001 to 10000	490	1.05	3542757	8.90
10001 & above	367	0.79	17610738	44.50
Total :	46736	100.00	39632216	100.00

10. Categories of shareholding as on 31st March, 2013 :

Category	No. of Share- holders	% of Share- Holders	No. of Shares held	% of Share- Holding
Promoters & Group Companies	1	0.00	3320549	8.38
Directors	1	0.00	2000	0.01
Trustee AEL Emp. Welfare Trust 2009	1	0.00	4680057	11.81
Financial Institution / Banks	2	0.01	2420	0.01
Mutual Funds	4	0.01	3200	0.01
F. I. I.s, N.R.I.s & OCBS	334	0.71	780651	1.97
Public	46393	99.27	30843339	77.81
Total	46736	100.00	39632216	100.00

11. Dematerialisation of shares

During the previous years and the year under review 3,92,25,919(98.97%) shares were held in demat form.

ISIN No. INE441A01026

12. Plant Locations

Companys Plants are located at

Works

Plot No.68, MIDC Industrial Area, Satpur, Nashik - 422 007.

DTA Unit

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

EOU

Survey No. 15, Plot No. 1, Mumbai-Agra Road, Near Octroi Naka, Vilholi, Nashik – 422 010.

Solan Unit

Hadbast No. 932, Khasra No.228, Village Jakhroda, P.O. Partha, Panchayat – Narayani Tehsil Kasauli, Dist. Solan Himachal Pradesh.

Silvassa Unit

Survey No. 113/6, Tirupati Industrial Estate Near 66 KV Road, Amli, Silvassa – 396 230. events in

13. Address for correspondence

The Company’s Registered Office is situated at107, 1st Floor, Sumer Kendra Bldg, Behind Mahindra Towers, Worli, Mumbai – 400018, Tel: (91-22) 66104887, Fax: (91-22) 66104888, E-mail: jp@aelgroup.com and secdept@aelgroup.com Website: www.aelgroup.com

The secretarial department of the Company is located at Registered office as mentioned herein above.

Shareholder correspondence may be directed to:

Link Intime India Pvt. Ltd.,

Unit : Asian Electronics Limited

C-13, Pannalal Silk Mills Compound,

L.B.S. Marg, Bhandup (West), Mumbai – 400 078.

Tel.: 25963838, Fax: 25946979, E-mail: helpline@linkintime.co.in Shareholders holding shares in electronic mode should address their correspondence to their respective Depository Participants.

14. Transfer of unclaimed dividend amount to Investor Education & Protection Fund

During the year under review, the Company has credited Rs. 3,13,734/- to the Investor Education & Protection Fund pursuant to Section 205 C of the Companies Act, 1956 read with the Investor Education & Protection Fund (Awareness & Protection of Investors) Rules, 2001.

15. Compliance Certificate of Auditors

Certificate from the Auditors of the Company, M/s. Sorab S. Engineer & Co. confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is annexed to the Directors’ Report forming part of the Annual Report.

This certificate has been forwarded to Stock Exchanges where the shares of the Company are listed.

16. Secretarial Audit

The Secretarial Audit Report confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the dematerialised shares held with NSDL and CDSL is placed before the Board on quarterly basis. A copy of the Audit Report is submitted to the Stock Exchanges where the shares of the Company are listed.

17. Non-Mandatory Requirements

1. The Board

(a) The Company has got an Executive Chairman.

(b) At present there is no policy fixing the tenure of independent Directors. However, no independent Directors’ tenure exceeds in aggregate a period of nine years.

2. Remuneration Committee

As on 31st March, 2013, the Company has two Whole-time Directors on the Board whose appointment and remuneration have been fixed by the Board in terms of Resolution passed by the members.

In view of this, no Remuneration Committee is constituted for the purpose.

3. Shareholders’ Rights

Half yearly financial results including summary of the six months are presently not being significant sent to shareholders of the Company.

4. Audit Qualifications

As regards qualification as contained in the dated May 30, 2013 please refer to the responses given by the Management in Director’s Report.

5. Training of Board Members

There is no formal policy at present for training of the Board Members of the Company as the members of the Board are eminent and experienced professional persons.

6. Mechanism for evaluating non-executive board members

There is no formal mechanism existing at present for performance evaluation of non-executive directors.

7. Whistle Blower Policy

The Employees of the Company are encouraged to report to the management any unethical behavior, actual or suspected fraud or violation of the company’s code of conduct or ethics policy, which may have come to their notice. In exceptional cases, employees can have direct access to the Chairman of the Audit Committee. However, the Company has not, so far, established any formal whistle blower policy.

The above report has been placed before the Board at its meeting held on May 30, 2013 and the same was approved.

Declaration by the CEO under Clause 49 of the Listing Agreement on Compliance of the Company’s Code of Conduct

To,

Asian Electronics Ltd.,

107, Sumer Kendra, 1st Floor,

Behind Mahindra Towers,

P.B. Marg, Worli,

Mumbai – 400 018.

The Company has framed a specific Code of Conduct for the members of the Board of Directors and the Senior Management Personnel of the Board of Directors and Senior Management Personnel of the Company pursuant to Clause 49 of the Listing Agreement with Stock Exchanges to further strengthen corporate governance practices in the Company. All the members of the Board and Senior Management Personnel of the Company have affirmed due observance of the said Code of Conduct in so far as it is applicable to them and there is no non-compliance thereof during the year ended 31st March, 2013.

Place: Mumbai	Arun B. Shah
Date: 9th July, 2013	Executive Chairman

AUDITORS’ REPORT ON CORPORATE GOVERANCE

To the Members of

Asian Electronics Ltd.

We have examined the compliance of conditions of Corporate Governance by Asian Electronics Ltd., for the year ended 31st March, 2013, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges.

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

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

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

	For SORAB S. ENGINEER & CO.
	Chartered Accountants
	CA N.D. ANKLESARIA
	Partner
	Membership No. 10250
Place: Mumbai.
Date: 09-07-2013