Nature of Operations
 
 Asian Electronics Limited (AEL) was established in 1964 is involved in
 design and manufacturing of Energy Conservation products – specializing
 in energy efficient lighting solutions.
 
 1.  (a) Sundry Creditors include principal amount of Rs. 84.50 Lacs
 (Rs. 125.40 Lacs) due to the suppliers covered by The Micro Small and
 Medium Enterprises Development Act, 2006.
 
 (b) The Management has certified that there is no interest paid/payable
 during the year by the Company to such suppliers. (Previous year – Rs.
 Nil).
 
 (c) Micro and Small Enterprises to whom the Company owes dues, which
 are outstanding for more than 45 days as at March 31, 2011 are as under
 –
 
 See Megh Industrial Electricals Pvt. Ltd., Ashoka Industries, Swami
 Samarth Electronics Pvt. Ltd, Sarang Enterprises, Sheetal Thermocol
 Packers, Nisha Enterprises, Sa Enterprises, M-Tech Trading Co., Shubham
 Engineering, Libra Industries, Pramod Fibre-Plast Pvt Ltd, Shree Fabs,
 Shalaka Polymers, Kalpana Enterprises, Suprim Engineering, Bright Light
 Company, Sai Ashish Enterprises, Impakt Packaging, Hira Plastics
 Industries, Devyani Enterprises, Shiva Enterprises, Kunal Enterprises,
 Arya Enterprises, See Ram Industries, Aashirwad Press Tools, Bhamre Saw
 Mill, Chafekar Engineering Works, Shree Raj Packaging, Pushkraj
 Packaging, A.B. Stamping, Swati Packagers, Bhagyashree Eng. Pvt. Ltd.,
 Garima Enterprises, Printa Chem, Jai Sadguru Industries, Kamal
 Industries, Perfect Engraving Works, Shaunak Enterprises, M. M.
 Woodland Pvt. Ltd, Manisha Packaging.
 
 The above information as required to be disclosed under the Micro,
 Small and Medium Enterprises Development Act, 2006 has been determined
 to the extent such parties have been identified on the basis of
 information available with the Company. This has been relied upon by
 the Auditors.
 
 2.  (i) As per approval of the shareholders of the Company under
 Section 293 (1) (a) of the Companies Act, 1956, obtained through postal
 ballot on 22nd May, 2010, the Company has effective from Oct 1st 2009,
 transferred the businesses of the following divisions to two 100%
 subsidiaries as under, subject to requisite approvals being obtained
 from the concerned Statutory Authorities and the Company''s lenders and
 creditors:
 
 a.  Business of ESCO Division, i.e. financing of Projects / Products to
 customers on energy saving basis, and all activities related thereto
 together with all related assets, liabilities and entitlements at book
 values as at the time of transfer on a going concern basis.
 
 b.  Business of Projects Division, i.e. State Electricity Board
 Projects and all activities related thereto together with all related
 assets, liabilities and entitlements at book values as at the time of
 transfer on a going concern basis.
 
 (ii) In accordance with the accounting principles, the accounts have
 incorporated all such transactions at book values at the time of
 transfer and the difference between the book values of identified
 Assets and Liabilities of ESCO Division amounting to Rs.  5,174.34 Lacs
 and of Projects Division amounting to Rs. 1,129.15 Lacs is shown as an
 Investment in the subsidiaries. However pending allotment of shares by
 the two subsidiary companies the Company has for the time being shown
 the said investments under Investment Suspense Account in Schedule 6 of
 the Accounts.
 
 (iii) The Company had applied for approvals of Secured / Unsecured
 Lenders. However, one of the lenders has informed the Company that they
 are not agreeable to the transfer of the businesses of the two
 divisions to the two 100% subsidiaries and has declined to give its
 approval. Besides, the Lead bank of the Consortium for Working Capital
 has informed the Company not to proceed with hiving-off of assets
 without the written consent of the Consortium Banks. Consequently, the
 Company continues to be liable to the lenders for the Term Loans and
 Unsecured Redeemable Non-Convertible Debentures transferred to the
 subsidiary companies.  The Company has not provided interest on the
 above for the year under review. Therefore, the company will continue
 to be liable to the lenders for the following:
 
 Liabilities of ESCO Division
 
 a.  Term loan and interest due thereon to IDBI for Rs 1714.75 lacs
 which is secured by way of: i.  First charge on movable properties of
 the Company by way of hypothecation.
 
 ii.  First charge by way of equitable mortgage on the immovable
 properties of the Company at Nasik.
 
 iii.  Hypothecation of receivables pertaining to ESCO Division subject
 to first prior charge of IREDA to the extent of Rs.1800 lacs.
 
 b.  Term loan and interest due thereon to IDBI for Rs 7221.41 lacs
 which is secured by way of:
 
 i.  First charge on immovable and movable properties of the Company
 located at 68, MIDC, Satpur Nashik by way of extension of pari-passu
 first charge with UCO Bank in respect of its Term loan of Rs.6000 lacs
 (outstanding as on 31 Mar 2011 is Rs. 300.00 Lacs) excluding exclusive
 charge created in favour of IREDA on the Solar Plant acquired out of
 assistance of Rs.1971 lacs sanctioned by IREDA
 
 ii.  Exclusive first charge of ESCO receivables (except MSEDCL
 receivables) under deferred sales and all new ESCO contracts for Energy
 Efficient Lighting Systems to be funded by IDBI under this loan
 
 iii. Charge on MSEDCL receivables is subject to first prior charge in
 favor of UCO Bank in respect of its Rupee Term Loan of Rs.6000 lacs
 (Outstanding as on 31 Mar 2011 is Rs. 300.00 Lacs) and first prior
 charge in respect of IREDA to the extent of Rs.1800 lacs.
 
 Liabilities of Projects Division
 
 a.  Unsecured Redeemable Non – Convertible Debentures and interest
 thereon issued to LIC Mutual Fund Asset Management Company Limited
 amounting to Rs. 4935.08 Lacs
 
 (i) The Wholly Owned Subsidiary Companies (Transferee Companies) may
 opt to revalue the assets and appropriate the costs incurred based on
 fair market value including goodwill and may therefore adjust premium
 on transfer upon completion of exercise.
 
 3 The Company had issued and allotted 31,45,000 Equity Share Warrants
 to an investor on 13th August, 2009 at an exercise price of Rs.40/
 
 - per Equity Share aggregating to Rs.1,258 Lacs, on payment of 25% of
 the issue price aggregating to Rs. 314.50 Lacs. Out of the above
 31,45,000 Warrants, the Investor has exercised an option for conversion
 of 8,33,333 Warrants into equivalent number of Equity Shares in the
 previous year and 4,13,333 Warrants into equivalent number of Equity
 Shares in the current year on payment of the balance amount of Rs. 30
 per share, aggregating to Rs. 374 Lacs upto 12th February, 2011. The
 money so raised has been utilized for meeting working capital
 requirement of the Company. As the option to convert the balance of
 18,98,334 Warrants into Equity Shares was not exercised within the
 period of 18 months, the same lapsed on 12th February, 2011 and
 consequently 25% of the Issue Price paid upfront on these warrants
 amounting to Rs. 189.83 Lacs stands forfeited and the same has been
 transferred to the Capital Reserve Account of the Company.
 
 The Company modified the Scheme in terms of the provisions of the SEBI
 ESOP Guidelines and Scheme. A Trust called Asian Electronics Limited
 Employees'' Welfare Trust (The Trust) has been constituted vide Trust
 Deed dated 25th January, 2007 to administer the Scheme under the
 directions of the Compensation Committee.
 
 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 Compensation Committee of the Board of Directors at its meeting
 held on 31st March 2010 had granted 3,51,550 stock options under ESOP -
 2005 Scheme to certain Executives / Officers of the Company which shall
 be exercisable into equal number of fully paid up Equity Shares of the
 Company of the Face Value of Rs. 5/- each in one or more tranches on
 payment of exercise price of Rs. 28 per Equity Share of Rs. 5/- each,
 being the market price prevailing as on 30th March 2010, on or after
 completion of one year from the date of grant, i.e. 30th March 2011
 being the vesting date. The options are to be exercised within a period
 of seven years from the date of vesting.
 
 During the year under review, the Compensation Committee of the Board
 of Directors, on 23rd March, 2011, revised the exercise price to Rs.
 12.60/- per share, which was the closing price of the share on the
 Stock Exchanges on the previous day of such revision ie. 22nd March,
 2011. Consequently due to the revision of price, an amount of Rs.
 600.15 Lacs is shown under Exceptional Item and charged to Profit and
 Loss Account.
 
 Further the Company has received Rs. 10 Lacs on 30th March 2011 towards
 exercise of 79,365 Stock Option into equal number of Shares under the
 ESOP Scheme 2005. The balance of Loan to the Trust outstanding as on
 31st March 2011 is Rs. 97.10 Lacs which is adjusted against Share
 Capital and Securities Premium Account.
 
 Subsequent to the Balance Sheet date, the Company has received Rs.
 21.50 Lacs towards exercise of 1,70,635 Stock Option into equal number
 of Shares under the Scheme.
 
 The Company has received listing approvals for listing of Shares from
 Bombay Stock Exchange Limited and National Stock Exchange of India
 Limited vide their letters dated 8th January 2010 and 11th January 2010
 respectively.
 
 5 During the Financial Year 2009 - 10, the Company has instituted ESOP
 2009 Scheme. The Compensation Committee of the Board of
 
 Directors at its meeting held on 31st March 2010 has granted 10,00,000
 Stock Options under ESOP 2009 Scheme to the Non – Executive Independent
 Directors of the Company which shall be exercisable into equal number
 of fully paid up Equity Shares of the Company of the Face Value of Rs.
 5/- each in one or more tranches on payment of exercise price of Rs.
 28/- per Equity Share of Rs.  5/- each, being the market price
 prevailing as on 30th March 2010, on or after completion of one year
 from the date of grant, i.e. 30th March 2011 being the vesting date.
 The options are to be exercised within a period of five years from the
 date of vesting.
 
 Towards streamlining of the implementation of the ESOS 2009, the
 Company modified the Scheme in terms of the provisions of the SEBI ESOP
 Guidelines and Scheme, vide Special Resolution passed at the Annual
 General Meeting held on 30th September, 2009. A Trust called Asian
 Electronics Limited Employees'' Welfare Trust, 2009 (The Trust) has
 been constituted vide Trust Deed dated 12th February, 2011 to
 administer the Scheme under the directions of the Compensation
 Committee.
 
 During the year under review, the Compensation Committee of the Board
 of Directors, on 23rd March, 2011, revised the exercise price to Rs.
 12.60/- per share, which was the closing price of the share on the
 Stock Exchanges on the previous day of such revision i.e. 22nd March,
 2011.
 
 Subsequently, the Company has allotted 10,00,000 Shares to the Trust on
 25th March, 2011 at a price of Rs. 12.60/- per Equity Share to be
 eventually allotted to the eligible Directors of the Company on
 exercise of option by them in due course of time. The Company has also
 given advance of Rs. 126 Lacs to the Trust for the purpose. During the
 year under review, the Company has received Rs. 24 Lacs towards
 exercise of 1,90,476 options in to equivalent number of Shares under
 the Scheme. The balance of the Loan outstanding as on 31st March 2011
 is Rs. 102 Lacs which is adjusted against Share Capital and Securities
 Premium Account.
 
 Subsequent to the Balance Sheet date, the Company has received Rs.
 7,50,000 towards exercise of 59,524 Stock Option into equal number of
 Shares under the Scheme.
 
 6 On 16th September 2009, the Compensation committee of the Board of
 Directors had granted 33,20,549 Stock Options under Chairman''s Stock
 Option Scheme 2009, to the Executive Chairman Mr. Arun B. Shah, which
 shall be exercisable in to equal number of fully paid up Equity Shares
 of the Company of the Face Value of Rs. 5/- each on payment of exercise
 price of Rs. 5 per Equity Share on or after completion of one year from
 the date of grant i.e. 15th September 2010 being the vesting date. The
 options are to be exercised within a period of one year from the date
 of vesting.
 
 The amount of Rs. 204.48 Lacs represents the pro rata difference
 between the market price prevailing on 12th February, 2009 (being the
 date on which the Chairman became eligible for the Options) and the
 exercise price of Rs. 5/- per Equity Share, which has been provided as
 an exceptional item.
 
 During the year under review, the Company received Rs. 1,50,00,000/-
 and Rs. 16,02,745/- on 30th September 2010 and on 9th February 2011
 respectively, from the Executive Chairman Mr. Arun B. Shah, towards the
 exercise of 33,20,549 Stock Options into equal number of equity shares
 of Rs. 5/- each at an exercise price of Rs. 5/- per share. Accordingly,
 the Company allotted 30,00,000 and 3,20,549 equity shares to Mr. Arun
 B. Shah on 30th September, 2010 and on 9th February 2011 respectively
 which are being held by third parties on behalf of Mr. Arun B. Shah
 under Sec. 187 C of the Companies Act, 1956.
 
 During the year an amount of Rs. 647.51 Lacs (comprising of Rs. 443.03
 Lacs for previous year and Rs 204.48 Lacs for the current year, being
 the difference between the market price prevailing on 12th February,
 2009 and the exercise price of Rs. 5/- per Equity Share) which has been
 provided as exceptional item over the vesting period ending 30th
 September 2010 is credited to Stock Option Outstanding.  On allotment
 of the shares, the said amount of Rs. 647.51 Lacs is transferred from
 Stock Option Outstanding to the Securities Premium Account.
 
 7 The Company has followed the Intrinsic value method of accounting for
 the Options granted to Employees under the above mentioned Stock Option
 Schemes as mentioned in Paras 4, 5 and 6 above. However since the
 Company has not ascertained the fair value of the above Options
 granted, disclosure of the impact of the same if any on the Company''s
 proforma net profit, proforma basic earnings per share and proforma
 diluted earnings per share is not ascertainable.
 
 8 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
 by the Management.
 
 9 Due to current mismatch of inflows and outflows, compounded by
 delayed recoveries of certain stressed assets, as enumerated in Note
 No. 11 below, the debt servicing by the Company has been adversely
 affected. As a result, action has been initiated by some of the lenders
 of the Company. LIC Mutual Fund has filed a petition in the Bombay High
 Court for winding up of the Company for non-payment of its dues. The
 matter is being heard and the Company is representing its case. Bank of
 India has served upon the Company a Notice under Section 13(2) of The
 Securitization and Reconstruction of Financial Assets and Enforcement
 of Security Act, 2002 for repayment of dues. Also other Banks have sent
 Demand Notices to the Company for repayment of their dues.
 
 10 In view of the temporary strain on financial resources which has
 inter alia resulted in delay in repayment of dues, and also with an
 objective to bring normalcy to the Company''s operations, a reference
 for Corporate Debt Restructuring (CDR) has been made recently under the
 CDR mechanism, instituted by Reserve Bank of India, for restructuring
 corporate debts of viable corporate entities, affected by internal
 factors or external factors, for the benefit of all stakeholders. The
 restructuring requests, inter alia, includes approval of the lenders
 for hiving off the businesses of ESCO and Projects Divisions to two
 100% subsidiaries. Pending consideration of such requests, the Company
 has not yet taken any steps with regard to the non-approval as
 explained in Note No. 2 above.
 
 11 Consequent to a review made by the Management of the various Assets
 of the Company, the Management is of the opinion that special efforts
 over a period of time would be needed for recovery of the following
 stressed assets which would have an impact on the results of the
 Company for the year under review:- (a) Diminution in the value of
 Investments in Foreign Companies Rs. 7.77 Lacs, where the local
 Managements have deserted the
 
 Companies and the businesses have been closed down.
 
 (b) Diminution in the value of the Investments, if any, in Unique Waste
 Plastic Management and Research Company Pvt. Ltd. of Rs.  4,360.20 Lacs
 where the pending disputes with minority shareholders need to be
 resolved to recover the value of the Investments held by the Company.
 
 (c) Inventories of Rs. 8364.69 Lacs include Rs. 3,000.00 Lacs of old/
 unusable stocks, where the Product Lines are discontinued.
 
 (d) Sundry Debtors considered good includes Rs. 4,216.23 Lacs of old
 Outstanding''s where the recovery may happen only after due legal
 actions and settlements of counter claims, if any, which cannot be
 determined.
 
 (e) Loans and Advances considered good includes Rs. 2,926.51 Lacs of
 old debit balances where the same may be recovered in the form of
 assets or will be settled subject to counter claims, if any, which
 cannot be determined.
 
 (f) Cash and Bank Balances include Rs 192.67 lacs on account of
 unreconciled Bank balances which may not be recoverable / realizable.
 
 Non or delayed recoverability of the above Stressed Assets and
 inadequacy of accruals have adversely affected the debt servicing by
 the Company and also led to operating losses and erosion of liquidity.
 The management is of the view that the above stressed assets of various
 classes may need provision in due course the extent of which cannot be
 determined at present. Consequently they have been shown as considered
 good and no provision has been made for the same.
 
 The management is of the view that the future viability of the company
 and its ''going concern'' assumption would depend on the timely approval
 of the CDR to the Company''s restructuring proposal.
 
 12 Balances of Sundry Debtors, Loans and Advances and Sundry Creditors
 are subject to confirmations, reconciliation and consequential
 adjustments, if any, the effects of which are at present
 unascertainable.
 
 13 As recommended by the Board of Directors and approved by the
 Shareholders at the Extraordinary General Meeting held on 6th July,
 2009, the Company is proposing to make a Rights Issue in the ratio of
 1:2 to its existing Shareholders in the near future, subject to market
 conditions and other considerations and the Company has filed Draft
 Letter of Offer with the Securities & Exchange Board of India (SEBI),
 Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.
 pursuant to which SEBI has issued Observation Letter. The Company is
 now required to update the Draft Letter of Offer and take the necessary
 approval of SEBI to proceed with the Rights Issue in due course of
 time. The SEBI Observation Letter is valid upto 24th August, 2011.
 
 15 Interest in Joint Ventures
 
 i) 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.
 
 i) The Company along with Home Solutions Retails (India) Ltd., a Future
 Group Company had formed a Joint Venture Company,
 
 i.e., Asian Retail Lighting Ltd. (ARLL) for the purpose of providing
 lighting solutions to Retail Industries in the year 2007-08.  The
 Company''s share of Investment in the Joint Venture was 46.50% at the
 beginning of the year.
 
 At the meeting of the Board of Directors and Committee of Directors of
 the Joint Venture Company held on 29th December 2010 and 27th January,
 2011 respectively, decision was taken for the issue and offer of
 1,00,15,200 Equity Shares of Rs. 10 each (Rs.  10 only) for Cash at par
 on Rights basis in the ratio of 321 Equity Shares for every 100 Equity
 Shares held by the existing Shareholders holding shares on 27th
 January, 2011.
 
 Accordingly on the Company''s holding of 14,51,040 Equity Shares in
 ARLL, the Company''s rights entitlement in the Rights issue was
 46,57,838. However the Company did not subscribe to the Rights Issue
 and the same was allotted to the other partner of the Joint Venture
 Company. Consequently Company''s share of investment in ARLL fell from
 46.50% to 11.05% and ARLL ceased to be a Joint Venture Company as on
 31st March 2011.
 
 17 Deferred Tax
 
 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 compliance with provisions of
 the Accounting Standard and based on General Prudence, the Company has
 not recognized the deferred tax asset while preparing the accounts of
 the year under review.
 
 18 Leases
 
 In case of assets taken on Lease
 
 Finance Lease
 
 Plant & Machinery includes machinery obtained on finance lease. The
 legal title for the same has passed to the Company. There are no lease
 payments outstanding.
 
 Operating Lease
 
 Office Premises are obtained on Operating lease. The lease term is for
 11 months and thereafter renewable. There is no escalation clause in
 the lease agreement. There are no restrictions imposed by lease
 arrangements. There are no subleases. Lease rental expense for the year
 for the agreements entered into is Rs. 91.61 Lacs (Rs. 103.55 Lacs).
 
 In case of Assets given on Lease
 
 Finance Lease
 
 There are no Assets given on Finance lease.
 
 Operating Lease
 
 The Company has leased out Plant & Machinery on operating lease. The
 lease term is for 3 to 10 years and thereafter not renewable. There is
 no escalation clause in the lease agreement. There are no restrictions
 imposed by lease arrangements.
 
 19 Related Parties Disclosure
 
 Name of the related parties where control exists irrespective of
 whether transactions have occurred or not:
 
 a.  Subsidiary
 
 AEL Projects Pvt. Ltd. (w.e.f. 22.7.2010)
 AEL ESCO Pvt. Ltd. (w.e.f. 21.7.2010)
 
 b.  Joint Venture:
 
 Midcom Magnetics Management Private Limited
 Asian Retail Lighting Limited (upto 23rd March, 2011)
 
 c.  Associate
 
 Unique Waste Plastic Management And Research Co. Pvt. Ltd.
 
 d.  Key Management Personnel Mr. Arun Shah, Executive Chairman
 
 e.  Relatives of Key Management Personnel Mr. Naman Arun Shah
 
 f.  Enterprises over which any person specified in (d) or (e) 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
 
 Pranamghar (India) Private Limited Arsh Advisors Pvt. Ltd.  Arun & Co.
 
 Indage Vintners Limited (upto 30.03.2011) Indage Restaurants and
 Leisure Limited (upto 30.03.2011) Dalal Desai and Kumana (Partnership
 Firm) Note: Related Party relationship is as identified by the Company
 and relied upon by the Auditors
 
 20 Segment Information
 
 Segment reporting as required under AS – 17 is not applicable for the
 year under review, as more than 90% of the revenue comes from a single
 segment of Lighting Products / Systems. There is only one geographical
 segment.
 
 21 Previous Year figures have been regrouped / rearranged wherever
 necessary to make them comparable to those of the current year.