Cyanconnode Regulatory News (CYAN)

30 November 2011 

Cyan Holdings Plc

("Cyan" or "the Company")

Substantial Developments in the Indian Smart Metering Electricity Market

·; Leading Supplier Status for Indian Market

·; New Tender for 1.5M Units Released

·; Short Term 200K Unit Opportunity

Cyan Holdings Plc (AIM:CYAN.L), the integrated system design company delivering mesh based flexible wireless solutions for lighting control, utility metering and industrial telemetry announces that it has been confirmed as a leading supplier of a smart metering solution for the Indian market at The Smart Energy Conference held 14-16th November in Delhi.

Cyan was the only company to demonstrate a live metering installation that conformed to the specifications as published by India's Central Electricity Authority (CEA). The CEA is an "Attached Office" of the Ministry of Power, which set up a committee to finalise the specification of single-phase electricity meters for India's Advanced Metering Infrastructure and has published a report which refers to a 200 million meter requirement in India. The committee consisted of representatives from electricity utilities, meter manufacturers, component manufacturers and India's standards bodies.

At the show Cyan demonstrated a live communication link to a pilot installation of over 100 networked smart meters located in an industrial cluster in Noida, a suburb of Delhi. The pilot installation was developed in conjunction and cooperation with several leading Indian companies in the utility sector such as Capital Meters, who supplied the wireless meters, and Phoenix IT Solutions, whose mPower Meter Data Management System (MDMS) was used to process the metering data.

The pilot was to demonstrate the features available to utilities from the Cyan based Automatic Meter Reading (AMR) solution offered by this consortium of companies. Deliberately installed in a challenging, busy and noisy industrial environment that required good range and penetration, Cyan's 865/867MHz frequency solution was robust and supported multiple overlapping meter networks. Using the CyLec protocol, RF modules in meters and gateways configured as Data Concentrator Units (DCUs), Cyan was able to perform live retrieval of metering data and meter status including tamper alerts, and remote disconnect. The pilot validated the availability of these features and reduced concerns over reliable real world operation through the choice of a challenging environment. The speed and ease of the deployment and configuration surprised Capital Meters and was an unexpected bonus of CyNet.

Capital Meters, in advance of a long anticipated AMR metering tender, had demonstrated this pilot to Tamil Nadu Electricity Board (TNEB). This tender, published yesterday, requires a number of the capabilities demonstrated in the pilot, and specifies features that in combination favour Cyan over other suppliers.

The TNEB tender is for 1.5 million units, and represents the first of a number of similar sized tenders required to make up the total requirement which TNEB have told us will be 18 million units over a five year period. We have been informed that a meeting will be held 7th December 2011 to review the tender specification and hear feedback from meter manufacturers proposing to bid. The tender close date is 11th January 2012 after which bidders will be required to demonstrate that they have a product that meets the specification. TNEB will then allocate the tender to successful bidders, possibly one but probably two, meter suppliers with interoperable meters.

Capital Meters expect to win a substantial portion of this and subsequent tenders, the balance awarded to one of two other preferred suppliers to TNEB, both of which are amongst a growing list of meter manufacturers adopting CyLec. All three manufacturers claim a good relationship with TNEB and we could see this and future tenders divided between the three of them. Any other meter supplier intending to bid on this or subsequent tenders will be required to demonstrate interoperability with the other selected meter vendors, something easily achieved through use of Cyan and CyLec.

Cyan believes that it is reasonable to expect that a substantial portion of the 18 million meter requirement over the next five years will use Cyan, and that this tender specification will prove influential with other utilities as it is based on a fully operational pilot.

Other developments following the show include a substantial established IT company, on seeing the live demonstration, deciding to propose a MDMS solution using Cyan to a utility that has reportedly had two failed AMR deployments.

Cyan has also been made aware of a short term requirement by another major electricity utility for 200,000 units as part of a 500,000 unit requirement for installation next year. Following the Smart Energy Conference, Cyan visited this utility and demonstrated our AMR solution to senior management who have a high tamper rate and were particularly interested in the tamper alarm feature. At the meeting we were given the expectation that orders would be shortly released. Subsequently Cyan has been informed, by letter from the meter manufacturer, to the effect that "we are now confident that orders for the first 200k will be released very soon and you should also prepare for us to immediately place an order on Cyan".

Cyan has earlier stage engagements with a number of other Electricity utilities who are currently developing AMR tender specifications, all of whom have expressed interest in the pilot installation in Noida.