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Directors Report of PAE Ltd.

Mar 31, 2015

The Members,

The Directors presents their 65th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31,2015.

STATE OF COMPANY'S AFFAIRS:

Your Company is in the business of sales and service of Lead Storage Batteries, Power Backup Systems, Automotive parts and Solar Photovoltaic Products. It has a nationwide network of 29 sales offices and warehouses and 109 peoples are providing sales and services to the customers' across India.

In the Lead Storage Battery segment, your Company markets its own brands of automotive and non-automotive batteries. Your Company markets a premium range of batteries known as ZENIDE and ZENIDE GOLD and it also markets AUTOZEN and POWERZEN standard range of batteries. These batteries are sold to end-users, OE customers and to battery dealers and power solution providers across India. PAE also provides battery charging service to its customers. The range of batteries includes automotive, motorcycle, tubular and sealed-maintenance-free and valve-regulated lead acid batteries.

Batteries sold across India are supported by its high-quality and prompt service network as well as its dealer network that is present in almost every state of India. The warranty claims process is built on a technology platform that enables customers to make warranty or service claims and gives suggestions by SMS, on its website as well as a toll free number.

In the Power Backup Systems segment, PAE Renewables Pvt. Ltd. (Wholly owned subsidiary of PAE) markets UPS, inverters, ELOS (Emergency Lift Operating Systems), and EPS (Emergency Power Systems). In addition to marketing, PAER also provides installation and after sales service to its customers.

Your company provides value to the manufacturer by reducing market risk, parts obsolescence risk and credit risk. Your company is in a better position to cater to rapid changes in the marketplace by keeping purchase and sales decision-making at the regional level. Further, using an advance and ever- changing information technology system, your company is able to adapt to market changes quickly.

FINANCIAL RESULTS

The financial highlights of the year are:

Particulars Standalone March March 2015 2014

Income from operation 7523 8655

Other Income 136 121

Total Income 7659 8776

Profit/(loss) before Interest, Depreciation, Tax and

Exceptional Items (714) (781)

Less Interest Expenses (433) (511)

Less Depreciation (73) (55)

Less Exceptional Items 113 --

Profit/(loss) before Tax ~ (1107) (1347)

Less Provision for Taxation 89 --

Net Profit/(Loss) after Tax (1019) (1347)

(Rs In Lacs) Consolidated March March 2015 2014

Income from operation 8193 9479

Other Income 186 107

Total Income 8379 9586

Proflt/(loss) before Interest, (399) (548) Depreciation, Tax and Exceptional Items

Less Interest Expenses (688) (727)

Less Depreciation (392) (384)

Less Exceptional Items 73 --

Profit/(loss) before Tax (1406) (1659)

Less Provision for Taxation 91 31

Net Profit/(Loss) after Tax (1316) (1628)

During the financial year 2014-15 the total income decreased by 12.73% to Rs.7,659 lacs as compared to last year's total income of Rs. 8,776 lacs. Loss before Tax increased accordingly by 17.82% to Rs. 1,107 lacs in the current year as compared to Rs. 1,347 lacs in the previous year. This was due to the decrease in sales and other operational activities of the Company, on account of difficult market conditions, financial crunch and challenging situation worldwide.

DIVIDEND AND BOOK CLOSURE:

The Board of Directors does not recommend dividend on equity shares for the current financial year.

The register of members and share transfer books will remain close from Monday, August 10, 2015 to August 13, 2015 (both days inclusive) for the 65th Annual General Meeting of the Company scheduled to be convened on 13th August, 2015 at The Victoria Memorial School for the Blind, 73, Tardeo Road, Opp. Tardeo A/c market, Mumbai-400 034.

FINANCIAL SITUATION:

Reserves & Surplus

As at March 31,2015 Reserves and Surplus amounted to Rs. (Minus) 592.83 lacs as compared to Rs.463.83 lacs of previous year. The said scenario is due to inadequate profitability during the year under review and contribution of losses by the wholly owned subsidiaries.

Long Term Borrowings

There has been decrease in the Long Term Borrowings to Rs.175.63 compared to Rs.788.48 lacs as at March 31,2014.

Short Term Borrowings

The Short Term Borrowings also decreased to Rs.1,805 lacs as at March 31,2015 as compared to Rs.2,302.70 lacs as at March 31,2014.

Fixed Asset

Net Fixed Assets as at March 31, 2015 have decreased to Rs.607.62 lacs as compared to Rs.825.88 lacs in the previous year.

Investments

Investments are at Rs. 2,001.93 lacs as on March 31,2015 as compared to last year Rs.2,001.80 lacs.

Authorised Capital

The current Authorised Share Capital of the Company is Rs. 25.00. 00.000 (Rupees Twenty Five Crores) divided into 1.50.00. 000 (One Crore Fifty lacs) Equity shares of Rs.10/- each and 1,00,00,000 (One Crore ) Preference shares of Rs.10/- each.

The company with approval of members at the 64th Annual General Meeting increased the Authorised Capital to the tune of Rs.5,00,00,000/- (Rupees Five Crores) by creation of

50.00. 000 lacs Preference Shares of Rs.10/- each ranking pari-passu to the existing Preference Shares.

Equity Shares

The paid up Equity share capital of the Company as on March 31,2015 was Rs.9,94,96,000/- comprising of 99,49,600 equity shares of Rs. 10/- each.

During the year the company issued and allotted 4,30,000 equity shares on conversion of 4,30,000 11% Optionally Convertible, Cumulative Redeemable Preference Shares (OCCRPS) Rs.10 each as requested by Preference Shareholders.

Preference Shares

The paid up Preference share capital of the Company as on March 31, 2015 was Rs.8,47,00,000/- comprising of

80.00. 000 11% Non-Convertible, Cumulative, Redeemable Preference shares of Rs.10/- each and 4,70,000 11% Optionally Convertible, Cumulative Redeemable Preference Shares (OCCRPS) Rs.10 each.

BOARD OF DIRECTORS MEETINGS :

The Board normally meets once in a quarter and additional meetings are held as and when required. During the year, the

Board of Directors met 4 times i.e. on May 23, 2014, August 08, 2014, November 10, 2014 and February 06, 2015. The dates of Board Meetings were generally decided in advance with adequate notice to all Board Members.

APPOINTMENT / RESIGNATION OF DIRECTORS (SECTION 168(1)) AND KEY MANAGERIAL PERSONNEL (KMP):

During the year:

1) Dr. Mrs. Pratibha A. Doshi was appointed as Additional Director on the Board of the Company with effect from May 23, 2014 and her appointment was regularised by the Shareholders at the 64th Annual General Meeting of the Company.

2) Mr. Dilip J. Thakkar, Independent Director had resigned from the directorship of the Company with effect from September 24, 2014 and

3) Mr. Vishal Totla, Company Secretary of the Company had resigned with effect from March 30, 2015.

The Board of Directors accepted their resignations and given them best wishes for their future endeavors.

Dr. Mrs. Pratibha A. Doshi is retiring by rotation and being eligible offers herself for reappointment.

The Members had approved appointment of Mr. Pritam A. Doshi as Managing Director of the Company at the 60th AGM for a period of five years upto March 31,2015. The Board of Directors at its meeting held on May 29, 2015 had re- appointed him as Managing Director for further term of 3 years subject to approval of the Members at the ensuing Annual General Meeting.

INDEPENDENT DIRECTORS:

Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received declarations from Dr. Rajendra Nath Mehrotra, Mr. Karthikeyan Muthuswamy and Mr. John O Band, Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION PURSUANT TO SECTION 178(3) OF THE COMPANIES ACT, 2013:

The Board of Directors of your Company in consultation with Nomination and Remuneration Committee had formulated and adopted Code for Independent Directors and which contains policy on director's appointment and remuneration including criteria for determining qualification, positive attributes and independence of directors.

Board of Directors of the Company duly consider appointment of the Directors in adherence with the policy prescribed under the code of independent directors and provisions of section 178(3) of the Companies Act, 2013.

The Company has an Independent Audit Committee comprising of 3 (three) Independent Directors and 1 (one) Executive Director. Consequent upon resignation of Mr. Dilip J. Thakkar, Dr. Rajendra Nath Mehrotra was appointed as a Chairman of the Audit Committee with effect from November 10, 2014. Mr. Karthikeyan Muthuswamy, Mr. John O. Band, Independent Directors and Mr. Pritam Doshi, Managing Director of the Company are Members of the Committee. All the members of the Audit Committee are financially literate. In view of their professional qualification and experience in finance, all are considered to have financial management and accounting related expertise. Terms of reference of the Audit committee are elaborated in the Corporate Governance report which forms the part of this Annual Report.

EVALUATION OF PERFORMANCE OF BOARD:

During the year a separate Meeting of Independent Directors of the Company was held on 28th March, 2015, which was attended by all the Independent Directors to discuss and review the self-assessment of Directors, Board and Committees thereof and also assessed the quality, content and timeliness of flow of information between the Management and the Board

DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors confirms that:

(a) in the preparation of the annual accounts for the financial year ended March 31,2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating.

LOANS MADE, GUARANTEES GIVEN OR INVESTMENTS IN SECURITIES BY THE COMPANY:

Particulars of loans made, guarantees given or investments in securities by the Company are provided in the Note 19 of notes to the Financial Statements.

PARTICULARS OF CONTRACT OR ARRANGEMENTS WITH RELATED PARTIES IN A PRESCRIBED FORM ALONGWITH THE JUSTIFICATION FOR ENTERING INTO SUCH CONTRACT OR ARRANGEMENT:

During the year there was no related party transactions of material nature that may have a potential conflict with interests of the Company, all transactions with related parties were in the normal course of business. On recommendation of Audit Committee the Board ratifies all the related party transactions on quarterly basis. The details of the transactions are annexed herewith as 'Annexure- I' in the prescribed Form AOC-2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Since the Company does not own any manufacturing facility or unit, hence disclosures with respect to conservation of energy, technology absorption being not relevant, have not been given. During the year the foreign exchange outgo was Rs.0.49 lacs and foreign exchange earnings were Nil.

MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments has been done my management affecting the financial position of the Company between the end of the financial year of the company to which the financial statements relates and the date of the report.

CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS)-21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company as it is suffering losses since last three consecutive years, hence disclosure in this regard are not provided.

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES (SECTION 177(10)):

The Board of directors of the Company believes in conducting all its affairs in a fair and transparent manner, by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The directors are committed to comply with the laws and regulations to which it is subject. For this, it has put in place systems, policies and procedures to interpret and apply these laws and regulations in the organizational environment. In consonance with the object of transparency and good governance, the board of directors of the company formulated and adopted "Whistle Blower Policy and Vigil Mechanism"

The organization's internal controls and operating procedures are intended to detect and prevent improper activities. In this regard, the Company believes in developing a culture where it is safe for all the Directors/Employees to raise concerns about any poor or unacceptable practice and any event of misconduct. These help to strengthen and promote ethical practices and ethical treatment of all those who work in and with the organization.

The main objective of this Policy is to provide a platform to Directors and Employees to raise concerns regarding any irregularity, misconduct or unethical matters / dealings within the group which have a negative bearing on the organisation either financially or otherwise.

RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES REMUNERATION (SECTION 197(12)):

Details pertaining to remuneration as required under section 197(12) of the Companies act, 2013 read with rule 5(1) of the companies (appointment and Remuneration of managerial personnel) rules, 2014 are provided in 'Annexure-II' to the Board's Report.

DISCLOSURES:

Disclosures pertaining to remuneration to directors and other details as required under Section 197(12) of the Act read with Rule 5(1 ) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.

Pertaining the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the board of directors do hereby declare that:

(i) No employee throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees;

(ii) No employee for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month;

(iii) No employee throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

SUBSIDIARY COMPANIES:

The Company has three unlisted subsidiary companies and two step down foreign based subsidiaries. PAE Renewables Private Limited, PAE Infrastructure Private Limited and Shurjo Energy Private Limited are the Indian wholly owned subsidiaries of the company. Sovox Renewables Pte. Ltd., Singapore is wholly owned subsidiary of PAE Renewables Pte. Ltd., Singapore (PAER, Singapore) and PAER, Singapore is wholly owned subsidiary of PAE Renewables Pvt. Ltd. and both are step down subsidiaries of the Company.

Shurjo Energy Limited (SEPL):

SEPL has been manufacturing solar panels and industry currently in a challenging situation worldwide. During the year SEPL reported a lower turnover of Rs. 2.45 lacs compared to Rs. 6.90 lacs last year. As at March 31,2014 the accumulated losses in SEPL have exceeded its net worth by Rs. 426.47 lacs.

PAE Renewables Private Limited (PAER):

During the year under review, PAER sold its 24.39% stake in Sovox Renewables Private Limited. During the year PAER reported lower turnover of Rs. 732.31 lacs compared to last year turnover of Rs.899.06 lacs. The company incurred loss of Rs. 45.73 lacs comparatively loss for the last year amounting to Rs. 70.56 lacs due to heavy cost of finance and operating expenses.

PAE Infrastructure Private Limited ("PAE Infra"):

PAE Infra achieved higher turnover of Rs.2.32 lacs as compared to last year turnover of Rs.2.11 lacs. The net profit accordingly high amounting to Rs. 0.46 lacs as compared to last years net profit of Rs.0.30 lacs.

Sovox Renewables Pte. Ltd. (Sovox, Singapore)

Sovox, Singapore wholly owned subsidiary of PAER, Singapore have achieved turnover of USD 903,283 compared to last year's turnover of USD 33 and accordingly earned profit amounting to USD 891,660 compared to last year's losses of USD 9,185.

PAE Renewables Pte. Ltd (PAER, Singapore):

PAER, Singapore wholly owned subsidiary of PAE Renewables Pvt. Ltd., India, have incurred losses of USD 914,295 compared to last year's losses of USD 10,844 due to Non-operation and Administrative Expenses. During the year under review PAER entered.

Pursuant to Section 129(3) read with rule 5 of Companies (Accounts) Rules, 2014, the Statement containing salient features of the financial statement of subsidiary companies is provided in the Annual Report as per Form AOC-1.

DEPOSITS COVERED UNDER CHAPTER-V OF THE COMPANIES ACT, 2013:

The Company had accepted deposits prior to the commencement of Companies Act, 2013. In terms of section 74(1)(b) of the Companies Act, 2013 such deposits amounting to Rs.259.84 Lacs have been repaid during the year and an amount of Rs.307.69 Lacs are pending for due for the period under review. The deposits pending for due will be repaid on the respective due dates as per the terms of acceptance of the same, in terms of explanation to Rule 19 of the Companies (Acceptance of Deposits) Rules, 2014.

During the year, the Company has not accepted any new deposits from public in terms of section 73 of the Companies Act, 2013.

No deposits were accepted by the subsidiary companies incorporated in India except in case of Sovox Renewables Private Limited, where it has accepted deposits of Rs 15.00 lacs from individuals during the financial year, however it has not made any compliances related to the provisions of Section 73 to 76 of the Companies Act, 2013, Companies (Acceptance of Deposits) Rules, 2014.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

M/s. K. S. Aiyar & Co., Chartered Accountants, the Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under the provisions of the Companies Act, 2013 and also that their firm is not disqualified within the meaning of Section 141 of the Companies Act, 2013, for such appointment.

The Audit Committee and the Board of Directors therefore recommend the appointment of M/s. K. S. Aiyar & Co., Chartered Accountants as Statutory Auditors of the Company for the financial year 2015-2016 for the approval of the Members.

With reference to "Basis for Qualified Opinion" in Standalone Audit Report pertaining to company's investment of Rs.785.55 Lacs and loans and advances of Rs.655.47 lacs in its subsidiary, Shurjo Energy Pvt. Ltd.(SEPL), the management is of opinion that no diminution is required in company's long term strategic investment in the subsidiary company and the company is considering diversification plan in its activities. Also the loans and advances given to SEPL are considered likely to be recoverable.

Further, The carrying cost of company's investment of Rs.1176 lacs in its subsidiary, PAE Renewables Pvt. Ltd.(PAER) which in turn has invested in it's step down wholly owned subsidiary, Sovox Renewables Pvt. Ltd., India (Sovox). The management is of the opinion that, loss arising out of the sale transaction and impact of its on PAER investment is not presently ascertainable. The same will be considered on completion of sale transactions of shares.

Further, the report of independent auditors on standalone and consolidated financial statements are presented in a separate section forming part of the Annual Report .

The Company undertaken Secretarial Audit for the year 2014- 15 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Agreement and Regulations and Guidelines prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999. The Secretarial Audit Report issued by M/s. Shravan Gupta & Associates, Practicing Company Secretary is enclosed herewith as Annexure-III

HUMAN RESOURCES:

Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company has a dedicated team of employees at various locations across our corporate office and branch offices (including Subsidiary companies) spread across the country. The Company strives to inculcate the culture where its employees

are motivated and their performance is aligned with values. Company has achieved this present level of excellence through the commitment and dedication exhibited by its employees. The focus on improving productivity and adoption of best practices in every area are being pursued relentlessly. Efforts for active participation, nurturing creativity and innovation and ensuring a climate of synergy and enthusiasm have been at the core of Human Resource initiatives and interventions.

Your Company has adequate internal financial control and adopted Internal Financial Control Policy in order to maintain confidentiality of price sensitive information and internal

The Company has mechanisms to inform the Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risk through means of a properly identified framework. Risk management is an ongoing process and the Audit Committee will periodically review risk mitigation measures. The Board of Directors has not constituted a Risk Management Committee as is not mandatory to the company vide circular bearing number CIR/CFD/POLICY CELL/7/2014 issued by SEBI dated September 15, 2014.

The Board of Directors of the Company and the Audit Committee shall periodically review and evaluate the risk management system of the Company so that the management controls the risks through properly defined network.

Head of Departments shall be responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE

There were no significant and material orders passed by the regulators and/or courts or tribunals during the year, but two suppliers (Creditors) of the Company had filed a winding up petition against the Company before Hon'ble Bombay High Court; M/s. Gabriel India Limited for outstanding dues of Rs.1.31 Cr. and M/s. Mahle Filter Systems India Limited for outstanding dues of Rs.1.31Cr. In respect to said matters the management of the Company has settled the matters with petitioners and signed Consent Terms for settlement

Your Directors take this opportunity to thank all investors, clients, vendors, banks, regulatory, Government authorities and Stock Exchanges for their continued support and cooperation. The Directors also wish to place on record their appreciation of the contribution made by the business partners / associates at all levels.

For and be half of the Board of the Director

Sd/- Arvind A. Doshi Chairman

Place Mumbai Date 29th May 2015


Mar 31, 2014

To the Members,

PAE Limited

The Directors wish to present the Sixty Fourth Annual Report of the Company together with the Audited Statements of Accounts for the financial year ended March 31,2014.

The Ministry of Corporate Affairs vide its Circular bearing number 1/19/2013-CL-V dated 4/4/2014 had clarified that for the financial year ended on March 31, 2014 the Balance Sheet, Statement of Profit and Loss, Board Report can be prepared in the formats of the Companies Act, 1956. ("1956 Act") hence all these reports are presented in the formats of 1956 Act.

FINANCIAL RESULTS

The financial highlights of the year are: (Rs In Lacs)

Particulars Consolidated March 2014 March 2013

Total Income 9,585.53 14,138.32

Profit/(loss) before Interest, Depreciation and Tax (547.91) (337.22)

Less Interest Expenses (726.44) (822.66)

Less Depreciation (384.44) (407.41)

Profit/(loss) before Tax (1,658.79) (1,567.29)

Less Provision for Taxation 30.38 74.43

Net Profit/(Loss) after Tax (1,628.41) (1,492.87)

Particulars Standalone March 2014 March 2013

Total Income 8,776.28 13,901.61

Profit/(loss) before Interest, (780.45) (192.58) Depreciation and Tax

Less Interest Expenses (511.05) (690.63)

Less Depreciation (55.31) (68.69)

Profit/(loss) before Tax (1.346.81) (951.90)

Less Provision for Taxation 00 6.52

Net Profit/(Loss) after Tax (1.346.81) (945.38)

PERFORMANCE REVIEW

During the financial year 2013-14 the total income decreased by 36.87% to Rs. 8,776.28 lacs as compared to last year''s total income of Rs. 13,901.61 lacs. Loss before Tax increased accordingly by 42.46% to Rs. (1,346.81) lacs in the current year compared to Rs. (945.38) lacs in the previous year. This was due to the decrease in sales and other operational activities of the Company, on account of difficult market conditions and financial crunch.

DIVIDEND

The Board of Directors does not recommend dividend on equity shares for the current financial year.

The register of members and share transfer books will remain closed from Monday, August 4, 2014 to Friday, August 8, 2014 both days inclusive. The Annual General Meeting of the Company is scheduled to be convened on Friday August 8, 2014.

SHARE CAPITAL AUTHORISED CAPITAL

The current Authorised Share Capital of the Company is Rs. 20,00,00,000 (Rupees Twenty Crore) divided into

1,50,00,000 (One Crore Fifty lacs) Equity shares of Rs. 10/- each and 50,00,000 (Fifty lacs) Preference shares of Rs. 10/- each.

The Board of Directors at its meeting held on May 23, 2014 had decided to increase the Authorised Capital to the tune of Rs. 5,00,00,000/- (Rupees Five Crores) by creation of 50,00,000 lacs Preference Shares of Rs. 10/- each ranking pari-passu to the existing Preference Shares.

EQUITY SHARES

The paid up Equity share capital of the Company as on March 31,2014 was Rs. 9,51,96,000/- comprising of 95,19,600 equity shares of Rs. 10/- each.

PREFERENCE SHARES

The Company had redeemed 50,00,000 8% Non- Convertible, Non-Cumulative Redeemable Preference shares of Rs. 10/- each on request of Preference Shareholders out of the proceeds of issue of 50,00,000 11% Non-Convertible, Cumulative, Redeemable Preference shares of Rs. 10/- each at par.

The paid up Preference share capital of the Company as on March 31,2014 was Rs. 5,00,00,000/- comprising of 50,00,000 11% Non-Convertible, Cumulative, Redeemable Preference shares of Rs. 10/- each.

The Board of Directors at its meeting held on May 23, 2014 had decided to issue and allot on Preferential basis

I. 9,00,000 (Nine lacs) 11% optionally Convertible, Cumulative, Redeemable Preference shares of Rs. 10/- each at par and

ii. 41,00,000 (Forty One lacs) 11% Non- Convertible, Cumulative, Redeemable Preference shares of Rs. 10/- each at par to the Promoters and/or their relatives subject to approval of Members at the ensuing Annual General Meeting of the Company.

The above increase in Authorised Capital and issuance of Preference Shares forms part of the notice convening the Annual General Meeting and the resolutions are recommended for your approval.

DIRECTORS

Pursuant to the provisions of Sections 149(13) and 152 of the Companies Act, 2013 and circular of Securities and Exchange Board of India ("SEBI") dated 12th February, 2014 Independent Directors of the Company are not liable to retire by rotation. The term of office of Independent Director is five consecutive years on the Board of the Company, but he shall be eligible for re-appointment on passing the Special Resolution. Hence all the Independent Directors of the Company will be appointed for term of Five years commencing from August 8, 2014 to August 7, 2019.

Pursuant to the Companies Act, 2013 and the Articles of Association of the Company Mr. Arvind R. Doshi, Whole Time Director (Executive Chairman) retire by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting.

Pursuant to the provisions of Companies Act, 2013 Dr. Mrs. Pratibha A. Doshi was appointed as an Additional Non-

Executive Woman Director of the Company liable to retire by rotation w.e.f. May 23, 2014. The Company has received notices under Section 160 of the Companies Act, 2013 from Members of the Company with requisite deposit signifying their intention to propose Mr. Dilip J. Thakkar, Mr. John O Band, Mr. Karthikeyan Muthuswamy Dr. Rajendra Nath Merohtra and Dr. Mrs. Pratibha A. Doshi as Directors of the Company.

The above appointment / re-appointment forms part of the notice convening the Annual General Meeting and the resolutions are recommended for your approval.

Brief resume of the Directors proposed to be appointed and re- appointed and other information as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges are part of Corporate Governance Report.

PUBLIC DEPOSIT

The amount of Fixed Deposits accepted from the public during the year under review is Rs. 41.58 lacs (including renewals). At the end of the year, there were 55 matured deposits for Rs. 14.87 lacs, which were not claimed by the depositors as on date of this Report. There were no deposits during the year, which were claimed but not paid by the Company.

The unclaimed deposits/interest on deposits lying with the Company for more than seven years will be transferred to Investor Education & Protection Fund as per Section 205C of the Companies Act, 1956.

Financial Situations

Reserves and Surplus

As at March 31, 2014 Reserves and Surplus amounted to Rs. 463.83 lacs as compared to Rs.1,832.96 lacs of previous year.

Long Term Borrowings

There has been increase in the Long Term Borrowings to Rs. 788.48 lacs as at March 31,2014 as compared to Rs. 742.80 lacs as at March 31,2013.

Short Term Borrowings

The Short Term Borrowings also increased to Rs. 2,302.70 lacs as at March 31, 2014 as compared to Rs. 1,799.28 lacs as at March 31,2013.

Fixed Asset

Net Fixed Assets as at March 31, 2014 have decreased to Rs. 831.28 lacs as compared to Rs. 891.90 lacs in the previous year.

Investments

Investments are at Rs. 2,001.80 lacs as on March 31,2014 as compared to last year Rs. 2,001.80 lacs.

Current Assets

Current Assets have decreased to Rs. 4,548.62 lacs as at March 31,2014 from Rs. 5459.97 lacs as at March 31,2013.

PARTICULARS OF EMPLOYEES

As permitted by the provisions of Section 219(1)(b)(iv) of the

Companies Act, 1956, the Annual Report does not contain the details required under the provisions of Section 217(2A) of the Companies Act, 1956, i.e. details of the names and other particulars of employees drawing remuneration aggregating to more than Rs. 60,00,000/- (Rupees Sixty Lacs only) per annum and Rs. 5,00,000/- (Rupees Five Lacs only) per month. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office and the same will be sent by post. The statement is also available for inspection at the Registered Office of the Company on all working days except Saturdays between 11.00 a.m. to 1.00 p.m. till the date of Annual General Meeting.

SUBSIDIARY COMPANIES

Particulars of subsidiary Companies are as follows:

- Company continues to hold 85% stake in Shurjo Energy Private Limited.

- PAE Infrastructure Private Limited continues to be 100% subsidiary of PAE Limited.

- PAE Renewables Private Limited continues to be a 100% subsidiary of PAE Limited.

- PAE Renewables Pte Ltd., Singapore continues to be 100% subsidiary of PAE Renewables Private Limited.

- Sovox Renewables Pte. Ltd., Singapore continues to be 100% subsidiary of PAE Renewables Pte. Ltd. Singapore.

- Sovox Renewables Private Limited is the subsidiary of Sovox Renewables Pte. Ltd., Singapore.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and General Circular No.2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, the Balance Sheet, Statement of Profit and Loss as on March 31,2014 and other documents of the Subsidiary Companies are not being attached with the Balance Sheet of the Company subject to the consent of the Board of Directors of the Company. Accordingly the consent of the Board of Directors of the Company has been obtained at the Board Meeting of the Company held on May 23, 2014.

However, the financial information of the subsidiary Companies is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any Member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies on all working days except Saturdays between 11.00 a.m. to 1.00 p.m. till the date of Annual General Meeting. The Company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

CONSOLIDATED FINANCIAL STATEMENTS

As stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges, the attached consolidated financial statements have been prepared in accordance with Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates.

PERSONNEL & INDUSTRIAL RELATIONS

The Industrial relations continue to be peaceful and cordial. Our employees are compassionate and committed for the success of the Company. We have set up a scalable recruitment and resource management process which enables us to attract and retain talent. The focus is on increasing the efficiency and effectiveness of the employees and thereby contributing to the organizational triumph in the competitive market.

We strongly believe that trained and motivated people determine the future augmentation of the Company. Your Company endeavors to attract and recruit best possible talent and considers the quality of its human resources to be most important.

EMPLOYEE SAFETY

Employee safety is of paramount importance for the Company. All the executives in the Company have a personal objective of ensuring a safe working environment for its employees. The safety performance is analyzed in all important forums.

The Company and its Management value the dedication of its employees and acknowledge their contribution in attaining short and long term goals of the Company. The Company has been encouraging employees by providing better working environment, opportunities and training in various fields.

CORPORATE GOVERNANCE

As required by the existing Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed report on Corporate Governance is included in the Annual Report. The Auditors of the Company have certified the Company''s compliance of the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement and the same is annexed to the Report of the Corporate Governance.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 ("the Act"), with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit/loss of the Company for the year ended on that date;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts of the Company on a "going concern basis".

The Company is in compliance with various accounting and financial reporting requirements in respect of the financial statements for the year under review.

MANAGEMENT DISCUSSION & ANALYSIS

During the year 2013-14 the management has further optimized the Branch operations by Warehouse Consolidation.

- Benefits of Warehouse Consolidation:

- Lower Shipment Costs.

- No Capital Investment done.

- Lower Inventory Level.

This has indeed helped your company face the current economic scenario.

- Infrastructure:

- Each state now has one centralized warehouse.

- The sales and service offices are retained in all the locations by giving more thrust towards better coverage of the sales team and just in time service support.

- Mobile Application:

Mobile application (TBS Mobile) played key role in the restructuring process.

- Order to invoice automated process.

- Minimum Manual Intervention.

- Order to Dispatch Tracking.

- On time Inventory.

- Customer Management.

- Travel Management.

The sales team is provided with our TBS Mobile Application which allows the team to conduct effective ordering and payment updating, while they are in the field with distributors and customers. The sales team is now fully market centric.

The company is now on a firm footing in expanding the battery business since full range of batteries are made available to the market. The distribution channel is very much active and the promotional activities to develop the secondary sales are underway. Going forward, detailed plans of a dedicated drive to increase the distributors pan India basis is worked out. With the consolidation of warehouse and successful implementation of mobile application the company is now envisaging increasing the sales force in the rural market to tap the growing tractor and inverter market.

- Power

With the strength of last four decades marketing and distribution experience in Automotive and Industrial Batteries, your Company''s new brand of batteries" ZENIDE" has now gained momentum since the acceptability have now increased and the confidence has been rebuilt by persistent market penetration during the year 2013-14.

Despite the current challenges in economic scenario, we are confident more than ever that our business in this segment will improve systematically and will become

more active and will turnaround when the economy rebounds.

Our Power vertical consists of major segments as below.

- Automotive Batteries

The Aftermarket Business of Four wheeler and Two Wheeler

Initiatives:

During the year 2013-14 our marketing team spent more time on largely enhancing the network and increasing the visibility of our brand. We now have a fairly active network of distributors. The distributors have also enlarged their base with the appointment of dealers and mechanics under them with our support.

We will further grow in this business since we have the budget in place to increase the network of distributors by another 150 nos and dealers under them by another 450 nos during the year 14-15. Our visibility is now effectively noticed in the tier-1 cities with our dealer boards and wall painting and innovative campaigns and Zenide occupying shelf space. The regular contacts with the workshops and electricians are adding value to the secondary sales. For 2014-15, we have ambitious plans to appoint dealers in tier-2 cities and rural areas for marketing tractor batteries.

The sale of 2 wheeler vehicles are growing very fast in India. India is currently the second largest two wheeler market in the world. During 2013-14 we have added full range of motor cycle batteries in VRLA segment for the new generation vehicles. The quality and the cosmetics are well accepted by the dealers and customers and we foresee quantum jump in sales.

- Industrial Batteries

- Inverter Tubular Batteries:

During the year 2013-14, though we had limitations in fulfilling the supply chain for the Inverter tubular batteries, it gives us confidence that our order booking has increased considerably.

- UPS VRLA Batteries:

We have started bagging bulk orders in the UPS VRLA batteries segment. As per the plan in the year 2013-14 we have now obtained test certificates from reputed testing lab from Ahmedabad which will now help the team to quote for big installations.

- C10 Tubular Batteries for Solar Application:

With the growing demand in this segment your company is now geared up with the complete range of batteries with 60 Months warranty to the customers. The batteries are also under testing for MNRE approval at National Institute of Solar Energy (NISE) in Gurgaon.

- Institutional Business:

A new team is formed to concentrate in the Institutional Business with the Key Customers Pan India, who will

target all the fleet/travel/logistics operators apart from the small and medium generator and UPS manufacturers. This will also enable your company to grow in the revenue.

- Export:

The Company has been getting good enquiries and is confident of bringing Export Revenue starting from 2014-15.

- Power Back-up Systems:

Company continues to make headway in getting prestigious orders in this segment in our Brand of Power Zen power back up systems. This only speaks the topmost quality of the products and also the services offered to the customers. Depending on the type of application, PAE/PAER (PAE Renewables Pvt. Ltd.) designs the system custom made, sells to channel partners and end users. PAER also provides a comprehensive range of installation, commissioning and annual maintenance services to the end customers. During the year 2013-14 the company obtained competitive pricing from the vendors which resulted in bagging the orders in this highly price competitive market.

No doubt, Government is making all out efforts to ensure the supply of power to Agriculture, Industries and domestic. We are also aware that there is a wide gap between the demand and supply. Hence the dependence on the Power backup devices will continue.

There was acute shortage of power in many parts of India and the Battery Industry is reaping big benefits with their top line is increasing. There is big increase in the purchase of Inverters/UPS/Batteries in households to make sure their kids gets uninterrupted supply of power for the studies and comfort. Earlier this was purely a status symbol but now this has become a necessity. The usage of UPS/Batteries is growing due to various applications such as lifts / Hospital Equipment''s / Computer etc.

- Strengths and Opportunities:

- Your company has now established full range of batteries in a short time with Pan India Distributors and Dealers.

- The Company has grown in numbers. We have crossed a sale of one Lakh units of automotive batteries and one lakh units of two wheeler batteries. With the plan for increasing the visibility and also investment in branding the sales is definitely going to go up.

- Zenide is now a registered brand. The discerning dealers and customers are making this as a strong choice.

- The Consolidation of warehouse and implementation of Mobile application has now enabled your company to become lean and will leverage to expand the sales team.

- The Organized Sector battery industry is growing and because of the strong reputation of your company in the Automobile industry there will more and more channel partners joining us to make Zenide their favorite brand.

- Experienced Marketing Team with wide knowledge of Battery business, product launches, market contacts and fast decision making.

- Extensive network of 34 sales and service offices throughout the country with battery charging/checking.

- The unprecedented sales of new cars during the year

2010-11, continue to help the industry to grow in percentage and this will be highest in the year 2014-15 as all the batteries life will end by then.

- With the Computer education reaching the rural areas, the banks on their target on expansion of branches/ATMs there will be much demand of UPS and UPS batteries.

- The battery management rule continues to be strict with the wide awareness of the disposal of used battery through proper mechanism by pollution control board. By the fear of legal actions and penalty becoming very rigid there is a big shift of rebuilders opting for promoting organized sector batteries. This will also help your company to get further share.

- Threats and Weaknesses:

- Inverter Tubular and Flat plate battery segment is largely seasonality driven and is unpredictable.

- The fluctuation lead price will change the market dynamics.

- The change in Govt policies in duties, Taxes and import regulations will be a big challenge.

- Any downward pricing and high velocity schemes to the market by Industry leaders will directly hit our bottom line to stay competitive.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

Your Company has instituted an internal control system for all its branches to ensure efficiency of operations, financial reporting, proper recording and safeguarding of assets, compliance with applicable laws and regulations, etc. The Company has its own team for Internal Audit purpose, who review the various functions of the Company thoroughly and report to the Audit Committee.

The adequacy of the same has been reported by the Statutory Auditors of your Company in their report as required under the Companies (Auditor''s Report) Order, 2003.

AUDITORS & AUDITORS'' REPORT

M/s. K. S. Aiyar & Co., Chartered Accountants, the Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under the provisions of the Companies Act, 2013 and also that their firm is not disqualified within the meaning of Section 141 of the Companies Act, 2013, for such appointment.

The Audit Committee and the Board of Directors therefore recommend the appointment of M/s. K. S. Aiyar & Co., Chartered Accountants as Statutory Auditors of the Company for the financial year 2014-2015 for the approval of the Members.

With regard to the Auditor''s remarks on the investment made by the Company in its Subsidiary Shurjo Energy Pvt. Ltd. (SEPL), SEPL has been manufacturing solar panels, an industry currently in a challenging situation worldwide. As at March 31, 2014, the accumulated losses in SEPL have exceeded its net worth by Rs. 309.58 lacs. The Company is actively pursuing the revival of it''s subsidiary Shurjo Energy Pvt. Ltd.(SEPL) by diversifying its activities. Towards this end, the company has applied to Falta Special Economic Zone for removing the 100% E.O.U. status to facilitate the diversification. Company is also exploring the induction of a strategic investor for trading in power back up systems and lead smelting activity. It is of the opinion that losses suffered during the initial years by SEPL are temporary in nature and no provision for diminution in the value of investment of Rs. 785.66 lacs is considered necessary at this juncture. Also the loans and advances ofRs. 717.30 lacs due from SEPL as at the balance sheet date are considered as fully recoverable.

RECONCILIATION OF SHARE CAPITAL AUDIT

In compliance of circular no. D&CC/FITTC/CIR-16/2002 dated 31st December, 2002 further amended by Circular No. CIR/MRD/DP/30/2010 dated 6th September, 2010 issued by the Securities and Exchange Board of India ("SEBI"), Reconciliation of Share Capital Audit has being carried out at the specified intervals by a Practising Company Secretary and have been submitted to the Stock Exchanges where the Company is listed within due dates.

ACKNOWLEDGMENT

Your Directors take this opportunity to thank all investors, clients, vendors, banks, regulatory, Government authorities and Stock Exchanges for their continued support and co- operation. The Directors also wish to place on record their appreciation of the contribution made by the business partners / associates at all levels.

For and on behalf of Board of Directors

Arvind R. Doshi Executive Chairman

Place : Mumbai Date : May 23, 2014


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting their Sixty Third Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2013.

1. Financial Results

Current Year Previous Year ended ended 31.03.2013 31.03.2012 (Rs. in lacs) (Rs. in lacs)

Total revenue 13,901.61 24,715.09

Total expenses 14,094.19 24554.48

Less: Finance cost 690.63 652.84

Less: Depreciation 68.69 90.22

Profit / (Loss) before tax (951.90) (582.45)

Less: Provision for tax (6.52) (14.90)

Profit / (Loss) after taxes (945.38) (567.55)



2. Dividend

The Board of Directors does not recommend dividend on equity shares for the current financial year.

3. Subsidiary Companies and Consolidated Financial Statements

- PAE Infrastructure Private Limited continues to be the 100% subsidiary of PAE Limited.

- Company continues to hold 85% stake in Shurjo Energy Private Limited.

- During the year under review PAE Limited has further invested Rs. 460.00 lacs in PAE Renewables Private Limited. PAE Renewables Private Limited continuesto be a 100% subsidiary of PAE Limited.

- During the year under review PAE Renewables Pvt. Ltd. further invested USD 8.92 lacs in PAE Renewables Pte Ltd, Singapore. PAE Renewables Pte Ltd., Singapore continues to be 100% subsidiary of PAE Renewables Private Limited.

- Sovox Renewables Pte. Ltd., Singapore continues to be 100% subsidiary of PAE Renewables Pte. Ltd. Singapore.

- Sovox Renewables Private Limited is the subsidiary of Sovox Renewables Pte. Ltd., Singapore.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and General Circular No.2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs general exemption has beengranted to the Companies from attaching the Balance Sheet, Profit and Loss Account and other documentsof the subsidiary companies with the Balance Sheet of the Company subject to the consent of the Board of Directors of the Company. Accordingly the consent of the Board of Directors of the Company has been obtained at the Board Meeting of the Company held on May 27, 2013.

A statement containing brief financial details of the Company''s subsidiary companies with the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is included in the Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any member of the Company seeking such information at any point of time and are also available for inspection by any member of the Company at the registered office of the Company.

The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

Discussion on financial performance with respect to operational performance

(Rs. in lacs)

Particulars 2012-13 2011-12

1. Net sales & operating income 13,570.92 24,392.28

2. Other income 330.69 322.81

3. Total Income (1 2) 13,901.61 24,715.09

4. Total expenditure:

a. Cost of sales 11,979.50 21,983.16

b. Employees'' remuneration

and benefits 874.39 1,035.59

c. Other expenses 1,240.30 1,535.73

14,094.19 24,554.48

5. Interest/Finance cost 690.83 652.84

6. Profit after interest but before depreciation & tax (883.21) (492.23)

7. Depreciation 68.69 90.22

8. Profit before tax (951.90) (582.45)

9. Provision for tax:

a. Previous years taxes ( 6.52) (2.93)

b. Current tax

c. Deferred tax (Asset)/Liability (11.97)

10. Net Profit/(Loss) after tax (945.38) (567.55)

11. Expenses as a % to net sales & Operating income:

a. Employee cost 6.44% 4.25%

b. Other expenses 9.14% 6.30%

c. Interest/Finance cost 5.09% 2.68%

Sales and Operating Income for the year has decreased by 44.36% from Rs. 24,392.28 lacs in the previous year to Rs. 13,570.92 lacs on account drop in demand.

During the year, the Company has made a loss of Rs. 945.38 lacs as against loss of Rs. 567.55 lacs in the previous year.

Interest for the year is Rs. 690.63 lacs which is 5.09% of the net sales & operating income as compared to Rs. 652.84 lacs and was 2.68% of the net sales & operating income in the previous year.

Financial Condition

Share Capital

Issued, Subscribed and Paid-up Capital as at March 31,2013 was Rs. 1,451.96 lacs as against Rs. 951.96 lacs for previous year. The Company allotted 50,00,000 8% Non-Convertible Non-Cumulative Redeemable Preference Shares at par to promoters of the Company.

Reserves and Surplus

As at March 31, 2013 Reserves and Surplus amounted to Rs. 1,832.96 lacs as compared to Rs. 2,800.66 lacs of previous year.

Long Term Borrowings

There has been a decrease in the Long Term Borrowings to

Rs. 742.80 lacs as at March 31, 2013 as compared to Rs. 1,314.96 lacs as at March 31, 2012.

Short Term Borrowings

There has been a decrease in the Short Term Borrowings to Rs. 1,799.28 lacs as at March 31, 2013 as compared to Rs. 2,937.57 lacs as at March 31, 2012.

Fixed Asset

Net Fixed Assets as at March 31, 2013 have decreased to Rs. 891.90 lacs as compared to Rs. 978.83 lacs in the previous year.

Investments

Investments are at Rs. 2,001.81 lacs as on March 31, 2013 as compared to last year Rs. 1,541.73 lacs.

Current Assets

Current Assets have decreased to Rs. 2,914.83 lacs as at March 31, 2013 from Rs. 5,436.09 lacs as at March 31, 2012.

Human Resources

The Company believes that Human Resources are a key asset that provides a competitive edge in the current business environment. The Company''s philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition and sharing, skill building, creativity and responsibility and performance based compensation.

The employees'' relations during the year under review were cordial and harmonious and the productivity improved in all the areas. Your Company has a total strength of 277 employees as on March 31, 2013.

5. Fixed Deposit

The amount of Fixed Deposits accepted from the public during the year under review is Rs. 149.37 lacs (including renewals). At the end of the year, there were 18 matured deposits for Rs. 9.80 lacs, which were not claimed by the depositors as on date of this Report. There were no deposits during the year, which were claimed but not paid by the Company.

The unclaimed deposits/interest on deposits lying with the Company for more than seven years were transferred to Investor Education & Protection Fund as per Section 205C of the Companies Act, 1956.

6. Directors

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and Article 117 of the Articles of Association of the Company, Shri Karthikeyan Muthuswamy and Dr. Rajendra Nath Mehrotra retires by rotation but being eligible offers themselves for re-appointment.

A brief profile of the Directors is furnished as part of Corporate Governance Report.

7. Corporate Governance Report

Your Company is committed to good corporate governance practices. The Report on Corporate Governance along with the Auditor''s Certificate regarding compliance of the conditions of Corporate Governance pursuant to clause 49 of the Listing Agreement are annexed hereto.

8. Directors'' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) ofthe Companies Act, 1956 with respect to the Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

9. Auditors'' Report

The Auditors'' Report to the shareholders does not containany qualifications.

10. Auditors

M/s. K. S. Aiyar & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible offered themselves for re- appointment.

The Board of Directors recommends their re-appointment as Statutory Auditors.

11. Financial Ratings

The Company has received the "BB " rating for long term bank facilities and "A4 " rating for shortterm bank facilities from Credit Analysis & Research Limited (CARE) which is valid for a period of 1 year.

12. Particulars as per Section 217 of the Companies Act,1956

For the financial year 2012-13 none of the employee''s salary exceeded Rs. 60.00 lacs p.a. or Rs. 5.00 lacs p.m.

13. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since the Company does not own any manufacturing facility the other particulars relating to Conservation of energy and technology absorption stipulated in the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.

During the year the foreign exchange outgo was Rs. 6.41 lacs and foreign exchange earnings were Nil.

14. Acknowledgements

Your Directors thank the Company''s shareholders, Customers, Dealers, Suppliers and Principals, Vendors and Bankers for their continued support during the year. It will be your Company''s endeavour to build and nurture strong links with them based on mutuality, respect and cooperation with each other. Your Directors take this opportunity to thank all employees for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players.

Your Directors place on record their appreciation for the support and continued co-operation that the Company received from the Government of India, the Ministry of Finance, the Ministry of Corporate Affairs, the Stock Exchanges, the Reserve Bank of India, the Central Board of Excise and Customs, and other Government agencies.

For and on behalf of the Board of Directors

Arvind R. Doshi Executive Chairman

Registered Office:

69, Tardeo Road

Mumbai 400 034

Date: May 27, 2013


Mar 31, 2012

The Directors have pleasure in presenting their Sixty Second Annual Report together with the Audited Statement of Accounts for the year ended March 31,2012.

1. Financial Results

Current Year Previous Year ended ended 31.03.2012 31.03.2011 (Rs. in lacs) (Rs. in lacs)

Total Revenue 24,569.94 26,220.88

Total Expenses 24,554.48 25,382.56

Less Interest 507.69 313.46

Less: Depreciation 90.22 102.52

Profit before tax (582.45) 422.34

Less: Provision for tax 14.90 133.54

Profit after taxes (567.55) 288.80

Profit brought forward from previous year 1,465.00 1,321.72

Balance Available for Appropriation 897.45 1,610.52

APPROPRIATION:

Transfer to General Reserve - 7.22

Proposed Dividend - 119.00

Tax on Dividend - 19.30

Balance carried forward 897.45 1,465.00

2. Dividend

The Board of Directors does not recommend dividend on equity shares for the current financial year.

5. Fixed Deposit

The amount of Fixed Deposits accepted from the public during the year under review is Rs.296.60 lacs (including renewals). At the end of the year, there were 13 matured deposits for Rs.3.20 lacs, which were not claimed by the depositors as on date of this Report. There were no deposits during the year, which were claimed but not paid by the Company.

The unclaimed deposits/interest on deposits lying with the Company for more than seven years were transferred to Investor Education & Protection Fund as per Section 205C of the Companies Act, 1956.

6. Directors

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and Article 117 of the Articles of Association of the Company, Shri Dilip J.Thakkarand Shri John O. Band retires by rotation but being eligible offers themselves for re-appointment.

A brief profile of the Directors is furnished as part of Corporate Governance Report.

7. Corporate Governance Report

Your Company is committed to good corporate governance practices. The Report on Corporate Governance alongwith the Auditor's Certificate regarding compliance of the conditions of Corporate Governance pursuant to clause 49 of the Listing Agreement are annexed hereto.

8. Directors' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

9. Auditors' Report

The Auditors' Report to the shareholders does not contain any qualifications.

10. Auditors

M/s. K. S. Aiyar & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible offered themselves for re-appointment.

The Board of Directors recommends their re-appointment as Statutory Auditors.

11. Financial Ratings

The Company has received the "CARE BBB" rating for long term bank facilities and "CARE A3" rating for short term bank facilities from Credit Analysis & Research Limited (CARE) which is valid for a period of 1 year.

Further the Company has received "SP 2B" rating for Solar Energy Grading from CARE which is valid till November 3,2012.

12. Particulars as per Section 217 of the Companies Act, 1956 For the financial year 2011-12 none of the employee's salary exceeded Rs.60.00 lacs p.a. or Rs.5.00 lacs p.m.

13. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since the Company does not own any manufacturing facility the other particulars relating to Conservation of energy and technology absorption stipulated in the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.

During the year the foreign exchange outgo was Rs. 17.59 lacs and foreign exchange earnings were Nil.

14. Acknowledgements

Your Directors thank the Company's shareholders, Customers, Dealers, Suppliers and Principals, Vendors and Bankers for their continued support during the year. It will be your Company's endeavour to build and nurture strong links with them based on mutuality, respect and co- operation with each other. Your Directors take this opportunity to thank all employees for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players.

Your Directors place on record their appreciation for the support and continued co-operation that the Company received from the Government of India, the Ministry of Finance, the Ministry of Corporate Affairs, the Stock Exchanges, the Reserve Bank of India, the Central Board of Excise and Customs, and other Government agencies. For and on behalf of the Board of Directors

Arvind R. Doshi

Executive Chairman

Registered Office:

69, Tardeo Road Mumbai 400 034

Date: June 29, 2012


Mar 31, 2011

The Directors have pleasure in presenting their Sixty First Annual Report together with the Audited Statement of Accounts for the year ended March 31,2011.

1. Financial Results Current Year Previous Year ended ended 31.03.2011 31.03.2010 (Rs. in lacs) (Rs. in lacs)

Total Revenue 26,212.76 21,918.57

Total Expenses 25,440.22 20,986.56

Less: Interest 247.68 125.91

Less: Depreciation 102.52 81.50

Profit before Tax 422.34 724.60

Less: Provision for tax 133.54 249.24

Profit after tax 288.80 475.36

Profit brought forward from previous year 1,321.72 1,088.05

Balance available 1,610.52 1,563.41 for appropriation

APPROPRIATION:

Transfer to General Reserves 7.22 35.65

Proposed Dividend 119.00 176.11

Tax on Dividend 19.30 29.93

Balance carried forward 1,465.00 1,321.72

2. Dividend

Your Directors are pleased to recommend final dividend of Rs. 1.25 (Rupee One and twenty five paise only) i.e. 12.50% per Equity Share of Rs 10/-, subject to the approval of shareholders at their Annual General Meeting.

3. Management discussion and Analysis

During the financial year 2010-2011, PAE restructured operations and transitioned from a horizontal organization structure to a more defined, vertical structure. Under the revised organization layout, PAEs business will be divided into 5 business verticals for better internal monitoring:

- Auto Batteries

- Auto Parts

- Industrial Batteries

- Power Backup Systems

- Solar

Each vertical will perform as an independent Strategic Business Unit (SBU), focused on growing sales and optimizing operations. Each SBU is supported by one or two national heads, a dedicated regional management team and a dedicated sales team.

SWOT Analysis of Strategic Business Units:

1) Auto Batteries:

PAE has been in the marketing and distribution business of automotive and motorcycle batteries for

the last 41 years. PAE sells batteries in the after market and caters to requirements for all vehicle types ranging from heavy commercial vehicles to passenger cars and two-wheelers.

Strengths and Opportunities:

- Automobile industry has grown by 20%

- Extensive network of 39 sales and service offices throughout the country

- Superior product quality

- Experienced marketing team

- Strategic tie-ups with suppliers

Threats and Weaknesses:

- Low market share in light commercial and two- wheeler segment

- Two-wheeler market dominated by local brands with low price and warranty same as that offered by the organised sector.

- Continuous increase in raw material prices

- Poor penetration in rural areas due to competition from cheaper products

- High market credit risk

2) Auto Parts

PAE sells different brands of automotive parts to after market parts dealers and retail stores across India, which in turn cater to the needs of the end customer. This business consists of parts for various new generation passenger cars, light, medium and heavy commercial vehicles and two and three wheelers. PAE also provides comprehensive warranty service to its customers.

Strengths and Opportunities:

- Replacement after market, including OES, has grown by 60% YOY

- Centralized price controlling system

- Pioneer in establishing brands as proven historically

- Extensive network of sales and service offices across the country

- Experienced marketing team

Threats and Weaknesses:

- Low market share in light commercial and two- wheelersegment

- Fewer number of product lines as compared to other nationwide distributors.

- Large presence of unorganized players and mom- and-pop shops

- Replacement market demand is decreasing due to better quality of product

AUTO COMPONENT INDUSTRY: PRODUCT RANGE

Product Range 2009 2015 (E) 2020 (E)

Body & Structural 40% 35% 31%

Transmission Steering 10% 13% 16%

Suspension & Braking 10% 13% 11%

Engine & Exhaust 20% 17% 18%

Electronics & Electrical 10% 13% 16%

Interior 10% 9% 8%

SEGMENT WISE MARKET SHARE

SEGMENTS 2009 2015 (E) 2020 (E)

Two & Three Wheelers 76% 76% 72%

Passenger Vehicles 17% 17% 21%

M & HCV 2% 1% 1%

LCVs 1% 1% 1%

SCVs 1% 2% 3%

Tractors 3% 2% 2%

3) Industrial Batteries

PAE has been in the marketing and distribution business of industrial batteries for almost a decade. These batteries are used for various applications at home, in the office and at various industrial locations including telecom sites, ATMs, telephone exchanges, etc.

Strengths and Opportunities:

- Large market potential in rural areas, which experience long power cuts daily

- As proliferation of computers increases across India, including rural areas, this will lead to increased requirement of UPS and UPS batteries

- Extensive network of sales and battery service locations throughout the country

- Superior product quality and competitive pricing

- Experienced marketing team

Threats and Weaknesses:

- Heavily dependent on a few number of suppliers

- Inverter batteries have seasonality in business and is unpredictable

- Prices dependent on lead price resulting in volatility

- Shortage of supply during peak seasons

- New power plants coming online are increasing reliability of power thereby reducing the need for inverters

4) Sojar

PAE designs, manufactures, markets and installs solar products tailored for the Indian market. These products focus on commercial, residential and semi- urban power requirements including MW-sized power plants. In addition to solar products PAEs subsidiary, PAE Renewables Private Limited (PAER), will also offer customized solutions for larger, bespoke applications.

Strengths and Opportunities:

- Huge demand for an alternative power source

- Attractive incentives offered by the National Solar Mission

- Competitive and convenient pricing when compared to diesel generators

- Synergies with Industrial Battery and Power Backup Systems business can be leveraged

- Synergies with other group companies offer higher level of focus and commitment

Threats and Weaknesses:

- Potential large investment required to reach scalable levels

- Large upfront costs might deter end users

- Highly fragmented market - plethora of small players and mom-and-pop outfits

5) Power Back-up systems

PAE markets and distributes power back-up devices and systems under its own brand - PowerZen. Depending on the type of application, PAE/PAER designs the system custom made or standard, sells it to channel partners and end users. PAER also provides a comprehensive range of installation, commissioning and annual maintenance services to the end customers.

PAE has a very definite expansion plan by creating a distribution channel of 100 distributors for its own branded products with best after sales service facilities. Focus on brand building is on top priority with increase in service facilities by outsourcing the activity.

Strengths and Opportunities:

- Large market potential of urban and semi-urban areas where usage of computers is high and increasing progressively

- Large power deficit and frequent power cuts will help increase sales

- Extensive network of 39 sales and service offices throughout the country

- Sound network of dealers and end customers will support the cause in least time

- Superior product quality and competitive pricing

- Experienced marketing team

Threats and Weaknesses:

- Change in duties, taxes, import regulations and government policies might affect future demand

- Laptops are a threat to UPS business

- Power-savers as well energy-efficient products might reduce the gap in demand and supply of electricity in future thereby affecting sale of inverters

- Heavily dependent on a few number of suppliers

Internal control systems

The Company maintains a system of internal control, including suitable monitoring procedures. The internal auditors regularly conduct the audit and the quarterly reports along with observations and suggestions are reviewed by the Audit Committee of the Board of Directors. Follow-up actions as suggested by the committee are complied with.

4. Subsidiary Companies and Consolidated Financial Statements

- During the year under review, the Company has further acquired stake in Shurjo Energy Private Limited and is presently holding 70% of total stake.

- During the year under review the Company has further invested in PAE Renewables Private Limited which is already a 100% subsidiary of the Company.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its approval dated 28.01.2011 has granted exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A statement containing brief financial details of the Companys subsidiaries for the financial year ended March 31, 2011 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company seeking such information at any point of time and are also available for inspection by

any member of the Company at the registered office of the Company. The company shall furnish a copy of annual accounts of subsidiaries to any member on demand.

Discussion on financial performance with respect to operational performance

(Rs. in lacs)

Particulars 2010-2011 2009-2010

1 Sales & Operating Income 28,958.23 24,074.45

2 Less: Value Added Tax 2,822.19 2,221.86

3 Net Sales & Operating Income 26,136.04 21,852.59

4 Other Income 76.72 65.98

5 Total Income (3+ 4) 26,212.76 21.918.57

6 Total Expenditure:

a. Cost of Sales 22,897.12 19,200.74

b. Employees Remuneration and 1,068.67 659.81 Benefits

c. Establishments Other Expenses 1,474.43 1,126.01

25,440.22 20,986.56

7 Interest 247.68 125.91

8 Profit after interest but before 524.86 806.10 depreciations tax

9 Depreciation 102.52 81.50

10 Profit before tax 422.34 724.60

11 Provision for Tax:

a. Previous year taxes (9.21) 5.25

b. Current Tax 148.00 245.00

c. Deferred Tax (Asset)/Liability (5.25) (1.01)

12 Net Profit/(Loss) after tax 288.80 475.36

13 Expenses as a % to Net Sales & Operating Income:

a Employee Cost 4.09% 3.02%

b. Establishments Other Expenses 5.64% 5 15%

c. Interest 0.95% 0.58%

Sales and Operating Income for the year has increased by 20.29% from Rs. 24,074.45 lacs in the previous year to Rs. 28,958.23 lacs on account of higher volume of sales in Auto Components and Lead Acid storage battery segment.

During the year, the Company has made a profit before tax of Rs. 422.34 lacs as against Rs. 724.60 lacs in the previous year.

Interest for the year is Rs.247.68 lacs which is 0.95% of the net sales & operating income as compared to Rs. 125.91 lacs and was 0.58% of the net sales & operating income in the previous year, an increase of 0.37% due to higher inventory holding position and tight money market conditions.

The Company has made a provision for tax of Rs. 148 lacs. In accordance with AS-22, Accounting for Taxes on Income, the Deferred Tax Asset stands at Rs. 11.97 lacs as on the Balance Sheet date.

The Company has a Net Profit available for appropriation amounting to Rs. 1,610.52 lacs as on March 31, 2011 and has proposed a dividend of Rs. 1.25 per Equity Share of Rs.10/-each, for the year ended March 31, 2011

Financial Condition

Share Capital

Issued, Subscribed and Paid-up Capital as at March 31, 2011 was Rs. 951.96 lacs and there is no change as compared to previous year.

Reserves and Surplus

As at March 31, 2011 Reserves and Surplus amounted to Rs. 3,390.51 lacs as compared to Rs. 3,262.33 lacs at the end of previous year.

Loan Funds

There has been an increase in the Loan Funds to Rs. 4,510.78 lacs as at March 31, 2011 as compared to Rs. 682.62 lacs as at March 31, 2010 due to increase in working capital requirement.

Fixed Asset

Net Fixed Assets as at March 31, 2011 have increased to Rs. 1,049.12 lacs as compared to Rs. 988.15 lacs in the previous year. There have been additions amounting to Rs. 203.16 lacs in the current year.

Investments

Investments are at Rs. 573.58 lacs as on March 31, 2011 as compared to last year Rs. 612.49 lacs. The Company made further investment of Rs. 51 lacs in M/s. Shurjo Energy Private Limited to acquire 70% stake in the company. M/s. Shurjo Energy Private Limited is engaged in the manufacturing of solar panels. The Company has also increased its investment in its 100% subsidiary namely, PAE Renewables Pvt. Ltd. from Rs. 1 lac to Rs. 11 lacs.

Net Current Assets

Net Current Assets have increased to Rs. 7,242.52 lacs as at March 31, 2011 from Rs. 3,313.49 lacs as at March 31, 2010, on account of higher inventory and debtors.

Human Resources

The Company believes that Human Resources are a key asset that provides a competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition and sharing, skill building, creativity and responsibility and performance based compensation.

The employees relations during the year under review were cordial and harmonious and the productivity improved in all the areas. Your Company has a total strength of 386 employees as on March 31, 2011.

5. Fixed Deposit

The amount of Fixed Deposits accepted from the public during the year under review is Rs. 600.07 lacs (including renewals). At the end of the year, there were 9 matured deposits for Rs.2.10 lacs, which were not claimed by the

depositors as on date of this Report. There were no deposits during the year, which were claimed but not paid by the Company.

The unclaimed deposits/interest on deposits lying with the Company for more than seven years were transferred to Investor Education & Protection Fund as per Section 205C of the Companies Act, 1956.

6. Directors

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and Article 117 of the Articles of Association of the Company, Shri Karthikeyan Muthuswamy and Dr. Rajendra Nath Mehrotra retires by rotation but being eligible offers themselves for re- appointment.

A brief profile of the Directors is furnished as part of Corporate Governance Report.

7. Corporate Governance Report

Your Company is committed to good corporate governance practices. The Report on Corporate Governance along with the Auditors Certificate regarding compliance of the conditions of Corporate Governance pursuant to clause 49 of the Listing Agreement are annexed hereto.

8. Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended March 31, 2011 on a going concern basis.

9. Auditors Report

The Auditors Report to the shareholders does not contain any qualifications.

10. Auditors

M/s. K. S. Aiyar & Co., Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible offered themselves for re-appointment.

The Board of Directors recommends their re-appointment as Statutory Auditors.

11. Financial Ratings

The Company has received the "CARE BBB+" rating for long term bank facilities and "PR2+" rating for short term bank facilities from Credit Analysis & Research Limited (CARE) which is valid for a period of 1 year.

12. Particulars as per Section 217 of the Companies Act, 1956

The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 are given in a separate statement attached to this report and forms part of it.

13. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since the Company does not own any manufacturing facility the other particulars relating to Conservation of energy and technology absorption stipulated in the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.

During the year the foreign exchange outgo was Rs. 407.01 lacs and foreign exchange earnings were Nil.

14. Acknowledgements

Your Directors place on record their sincere appreciation for the assistance and co-operation received from the Shareholders, Consortium of Bankers, Customers, Dealers, Suppliers and Principals.

Your Directors also sincerely acknowledge the valuable contributions made by the Employees at all levels and for their dedicated services to the Company.

For and on behalf of the Board of Directors

Arvind R. Doshi Executive Chairman

Registered Office:

69, Tardeo Road Mumbai 400 034

Dated: May 27, 2011


Mar 31, 2010

The Directors have pleasure in presenting their Sixtieth Annual Report together with the Audited Statement of Accounts for the year ended March 31,2010.

1. Financial Results

Current Year Previous Year ended ended 31.03.2010 31.03.2009 (Rs. in lacs) (Rs. in lacs)

Total Revenue 21918.57 25082.13

Total Expenses 20986.56 23951.50

Less: Interest 125.91 193.71

Less: Depreciation 81.50 91.60

Profit before Tax 724.60 845.32

Less: Provision for tax 249.24 309.06

Profit after taxes 475.36 536.26 Profit brought forward from previous year 1088.05 745.66

Balance Available 1563.41 1281.92 for Appropriation

APPROPRIATION

Transfer to General Reserves 35.65 26.81

Proposed Dividend 176.11 142.79

Tax on Dividend 29.93 24.27

Balance carried forward 1321.72 1088.05

2. Dividend

Your Directors are pleased to recommend final dividend of Rs.1.85 (Rupee One & Paisa Eighty Five Only) i.e.18.5% [which includes special dividend of Rs.0.60 (Paisa Sixty Only) on occasion of 60w year of the Company] per Equity Share of Rs.10/-, subject to the approval of shareholders at their Annual General Meeting.

3. Management Discussion and Analysis

During the financial year 2009-10, PAE has restructured operations and transitioned from a horizontal organization structure to a more defined, vertical structure. Under the revised organization layout, PAEs business will be divided into 6 business verticals -

• Auto Batteries

• Auto Parts

• Inverter and Inverter Batteries

• Solar

• UPS

• UPS Batteries

Each vertical will perform as an independent Strategic Business Unit (SBU), focused on growing sales and optimizing operations. Each SBU will be supported by a one or two national heads and a dedicated regional management and sales team. This new organization structure will better equip PAE to meet increasing demand and leverage its position as one of the largest distribution companies in its industry in India.

SWOT Analysis of Strategic Business Units:

1) Auto Batteries

PAE has been in the marketing and distribution business of automotive and motorcycle batteries for the last over 40 years. PAE sells batteries in the aftermarket and caters to requirements for all vehicle types ranging from heavy commercial vehicles to passengercars and two-wheelers.

Strengths and Opportunities:

• Number of Automobile manufactures have grown by47%YOY

• Extensive network of sales and service offices throughout the country

• Superior product quality

• Experienced marketing team

• Strategic tie ups with suppliers Threats and Weaknesses:

• Low market share in light commercial and 2 wheelersegment

• Increase in raw material prices

• Poor penetration in rural areas

• High market credit risk

2) Auto Parts

PAE sells different brands of automotive parts to aftermarket parts dealers and retail stores across India, who in turn cater to the needs of the end customer. This business consists of parts for various new generation passenger cars, light, medium and heavy commercial vehicles and 2 & 3 wheelers. PAE also provides comprehensive warranty services to its customers.

Strengths and Opportunities:

• Replacement after market, including OES, has grown by 60% YOY

• Centralized Price Controlling System

• Pioneer in establishing Brand

• Extensive network of sales and service offices across the country

• Experienced marketing team Threats and Weaknesses:

• Low market share in light commercial and 2 wheelersegment

• Lesser number of product lines as compared to other nationwide distributors.

• Large presence of unorganized players and mom-and-pop shops

. Replacement market demand is decreasing due to betterquality of products

3) Inverter and Inverter Batteries

PAE has been in the marketing and distribution business of inverter and inverter batteries for over 5 years. These batteries are used for various applications at home, in the office and at various industrial locations.

Strengths and Opportunities:

• Large market potential in rural areas, which experience 8 hour power cuts daily

• Large power deficit and other critical power problems will help increase sales.

• Extensive network of sales and service offices throughout the country.

• Superior product quality and competitive pricing

• Experienced marketing team Threats and Weaknesses:

• Heavily dependentonafewnumberof suppliers

• Seasonal nature of business

• Shortageofsupplyduringpeakseason

• Alternate energy sources are helping to narrow the gap in supply

4) Solar

PAE designs, manufactures, markets and installs solar products tailored for the Indian market. These products focus on commercial, residential and semi- urban power requirements. In addition to solar products, PAEs subsidiary, PAE Renewables Private Limited (PAER), will also offer customized solutions for larger, bespoke applications.

Strengths and Opportunities:

• Huge demand for an alternative power source

• Attractive incentives offered by the National Solar Mission

• Competitive and convenient pricing when compared to diesel generators

• Synergies with other group companies offer higher level of focus and commitment

Threats and Weaknesses:

• Potential large investment required to reach scalable levels

• Large upfront costs might deter end users

• Highly fragmented market-plethora of small players and mom-and-pop shops

5) UPS & UPS Batteries

PAE markets and distributes power back-up devices and systems under its own brand name PowerZen.

Depending on the type of application, PAE/PAER buys or builds the required system and sells it to dealers and end users. PAER also provides a comprehensive range of installation, commissioning and annual maintenance services to the end customers

Strengths and Opportunities:

• Large market potential in urban and semi urban areas where computer use is high

• Large power deficit and frequent power cuts will help increase sales.

• Extensive network of sales and service offices throughout the country.

• Superior product quality and competitive pricing

• Experienced marketing team Threats and Weaknesses:

• Change in duties, taxes and government policies might affectfuture demand.

• Heavily dependent on a few number of suppliers

• Increase in raw materials cost would affect the battery market.

Internal control systems

The Company maintains a system of internal control, including suitable monitoring procedures. The internal auditors regularly conduct the audit and the quarterly reports along with observations and suggestions are reviewed by the Audit Committee of the Board of Directors. Follow-up actions as suggested by the committee are complied with.

4. Subsidiaries

Shurjo Energy Private Limited

As reported in last annual report the Company has acquired the majority stake in Shurjo Energy Private Limited. As required under the Companies Act necessary information of the subsidiary is provided in this annual report elsewhere along with the consolidated results.

PAE Renewables Private Limited

During the year under review PAE has invested in PAE Renewables Private Limited making it a 100% subsidiary of the Company.

PAER, as a 100% subsidiary of PAE, will be engaged in the business to design, install, sell and service renewable energy solutions of small and medium sizes in India. PAER will source some of its installation components for PAE, which is already a distributor for CIGS solar panels, storage batteries and solar power electronics.

As required under the Companies Act necessary information of the subsidiary is provided in this annual report elsewhere along with the consolidated results.

Discussion on financial performance with respect to operational performance

Highlights of Financial Performance:

Particulars 2009-2010 2008-2009

1 Sales & Operating Income 24074.45 27592.28

2 Less: Value Added Tax 2221.86 2572.81

3 Net Sales & Operating Income 21852.59 25019.47

4 Other Income 65.98 62.66

5 Total Income (3 + 4) 21918.57 25082.13

6 Total Expenditure:

a. Cost of Sales 19200.74 22175.03

b. EmployeesRemuneration and 659.81 563.79 Benefits

c. Establishments Other Expenses 1126.01 1212.68

20986.56 23951.50

7 Interest 125.91 193.71

8 Profit after interest but before 806.10 936.92 depreciations tax

9 Profit after interest but before 3.68% 3.74% depreciations tax as % to Total Income

10 Depreciation 81.50 91.60

11 Profit before tax 724.60 845.2

12 Provision for Tax:

a. Previous year taxes 5.25

b. Current Tax 245.00 292.00

c. Fringe Benefit Tax - 20.00

d. Wealth Tax - 0.20

e. Deferred Tax (Asset)/Liability (1.01) (3.14)

13 Net Profit/(Loss) after tax 475.36 536.6

14 Expenses as a % to Net Sales & Operating Income:

a Employee Cost 3.02% 2.25%

b Establishments Other Expenses 5.15% 4 85%

c. Interest 0.58% 0.77%

Sales and Operating Income for the year has decreased by 12.74% from Rs 27592.28 lacs the previous year to Rs.24074.85 lacs on account of general recession & improvement of power situation in South of India.

During the year, the Company has made a profit before tax of Rs 724.60 lacs as against Rs.845.32 lacs in the previous year. Employee Cost for the year is Rs.659.81 lacs and is 3.02% of the net sales & operating income as compared to Rs.563.79 lacs which was 2.25% of the net sales & operating income in the previous year, an increase of 0.76%. Establishment and Other Expenses for the year is Rs.1126.01 lacs and is 5.15% of the net sales and operating income as compared to Rs.1212.68 lacs which was 4.85% of the net sales & operating income in the previous year, an increase of 0.30%.

Depreciation for the year is Rs.81.50 lacs as compared to Rs.91.60 lacs in the previous year due to no major additions during the current year.

Interestforthe year is Rs.125.91lacs which is0.58%ofthe net sales & operating income as compared to Rs. 193.71 lacs and was 0.77% of the net sales & operating income in the previous year, a decrease of 0.19% due to reduction in the volume of sales resulting in decreased net working capital.

The Company has made a provision for tax of Rs.245 lacs and a provision of Rs.5.25 lacs for previous years taxes. In accordance with AS-22, Accounting for Taxes on Income, the Deferred Tax Asset stands at Rs.17.22 lacs as on the date of Balance Sheet.

The Company has a Net Profit available for appropriation amounting to Rs. 1563.41 lacs as on 31st March 2010 and has proposed a dividend of Rs.1.85 per Equity Share of Rs.107-, on occasion of 60* year of the company for the year ended 31st March, 2010.

Financial Condition

Share Capital

Issued, Subscribed and Paid-up Capital as at March 31, 2010 was Rs.951.96 lacs and there is no change as compared to previous year.

Reserves and Surplus

As at March 31, 2010 Reserves and Surplus amounted to Rs.3262.33 lacs as compared to Rs.3015.33 lacs at the end of previous year. The Company has also proposed a dividend of Rs.1.85 per equity share of Rs.107-, on occasion of 60* year of the company amounting to Rs.176.11 lacs from the net profit available for appropriation of Rs. 1563.41 lacs during the current year.

Loan Funds

There has been a decrease in the Loan Funds to Rs.682.62 lacs as at March 31, 2010 as compared to Rs.733.46 lacs in the previous year due to decrease in working capital requirement.

Fixed Asset

Net Fixed Assets as at March 31,2010 have decreased to Rs.988.15 lacs as compared to Rs.1047.90 lacs in the previous year. There have been additions amounting to Rs.45.15 lacs in the current year.

Investments

Investments are at Rs.612.49 lacs as on March 31, 2010 as compared to last year Rs.180.23 lacs. The Company made further investment of Rs.331.21 lacs in M/s. Shurjo Energy Private Limited to acquire 57% stake in the company. M/s. Shurjo Energy Private Limited is engaged in the manufacturing of solar panels.

The Company has also invested Rs.1 lac in PAE Renewables Pvt. Ltd., to acquire 100% stake in the company. PAE Renewables Pvt. Ltd., will be engaged in the business to design, install, sell and service renewable energy solutions of small and medium sizes in India.

Net Current Assets

Net Current Assets have decreased to Rs.3313.49 lacs as at March 31, 2010 from Rs.3490.85 lacs as at March 31, 2009.

Human Resources

The Company believes that Human Resources are a key asset that provides a competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition and sharing, skill building, creativity and responsibility and performance based compensation.

The employees relations during the year under review were cordial and harmonious and the productivity improved in all the areas. Your Company has a total strength of 267 employees as on March 31,2010.

5. Fixed Deposit

The amount of Fixed Deposits accepted from the public during the year under review is Rs.110.38 lacs (including renewals). At the end of the year, there were 2 matured deposits for Rs.0.25 lacs, which were not claimed by the depositors as on date of this Report.There were no deposits during the year, which were claimed but not paid by the Company.

The unclaimed deposits/interest on deposits lying with the Company for more than seven years were transferred to Investor Education & Protection Fund as per Section 205C of the Companies Act, 1956.

6. Directors

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and Article 117 of the Articles of Association of the Company, Shri Dilip J. Thakkarand Shri John O. Band retires by rotation but being eligible offers themselves for re-appointment.

A brief profile of the Directors is furnished as part of Corporate Governance Report.

7. Corporate Governance Report

Your Company is committed to good corporate governance practices. The Report on Corporate Governance alongwith the Auditors Certificate regarding compliance of the conditions of Corporate Governance pursuant to clause 49 of the Listing Agreement are annexed hereto.

8. Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards had been followed along with the proper explanation relating to material departures, if any;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies

Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the accounts for the financial year ended 31st March, 2010 on a going concernbasis.

9. AuditorsReport

The Auditors Report to the shareholders does not contain any qualifications.

10. Auditors

M/s. K. S.Aiyar&Co., Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible offered themselves for re-appointment.

The Board of Directors recommends their re-appointment as Statutory Auditors.

11. Financial Ratings

The Company has received the "CARE A-" rating for long term bank facilities and "PR1" rating for short term bank facilities from Credit Analysis & Research Limited (CARE) which is valid fora period of 1 year.

12. Particulars as per Section 217 of the Companies Act, 1956

The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 are given in a separate statement attached to this report and forms part ofit.

13. Conservation of energy, technology absorption, foreign exchange earnings and outgo Since the Company does not own any manufacturing facility the other particulars relating to Conservation of energy and technology absorption stipulated in the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.

During the year the foreign exchange outgo was Rs.477.35 lacs and foreign exchange earnings were Nil.

14. Acknowledgements

Your Directors place on record their sincere appreciation for the assistance and co-operation received from the Shareholders, Consortium of Bankers, Customers, Dealers, Suppliers and Principals.

Your Directors also sincerely acknowledge the valuable contributions made by the Employees at all levels and for their dedicated services to the Company.

For and on behalf of the Board of Directors Arvind R. Doshi Chairman & Managing Director

Registered Office:

69, Tardeo Road

Mumbai400 034.

Dated: 29th May 2010

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