Zenith Computers Ltd Management Discussions.

(within the limits set by the Companys competitive position)

Industry Scenario & Review

The overall face of the industry and the market has changed drastically; the Computer Hardware industry has in more ways than one been replaced by I - Pads, tablets and Smart Phones and other similar products - it has become uniquely obsolete to do business in Desktops and Laptops. The Company has discontinued manufacturing and is presently servicing clients for annual maintenance contracts and warranties.

Performance & Review

Computer Hardware

The Company has achieved the Gross Turnover of Rs. 150.46 lakhs and a Loss of Rs. 919.80 lakhs as against previous years Gross Turnover of Rs. 2201.22 lakhs and a net Loss of Rs. 3191.22 lakhs. The turnover of the Company is not comparable with the Sales Turnover of the previous year. The Company has vastly reduced its computer hardware manufacturing.

Opportunities, Threats & Risks

Indian Bank has, as the Lead Bank of the Consortium of Banks, under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, taken over the properties and inventories of the Company in Goa and Mahape (including the Registered Office of the Company), Navi Mumbai from April, 2015 to June, 2015.

These acts of the Indian Bank have resulted in the Companys business becoming redundant and consequent closure of its manufacturing businesses. Overseas & Indian Subsidiaries

The Company does not have any subsidiary companies, whether domestic or overseas.

Internal Control & Adequacy

The Company has good internal control system for business process and operations, financial reporting and compliance with applicable regulations and laws and to ensure that all the assets are safeguarded, protected, against loss from unauthorized use or disposition and these transactions are authorized, recorded and reported correctly. The adequacy of the Companys internal control systems has been reported by its auditors in their report as required under the Companies (Auditors Report) Order, 2016. The discussion on financial performance of the Company is covered in the Directors Report.

Report on Corporate Governance

The quarterly compliance report has been submitted to the Stock Exchanges where the Companys equity shares are listed in the requisite format duly signed by the Compliance Officer. The other information on Corporate Governance for the benefit of the shareholders is given hereunder.

General Shareholder Information

Annual General Meeting

(i) Day, Date, time and Venue Friday, 30th September, 2016 at 11.30 A.M.
Auditorium of Hotel ABBOT, Sector 2, Vashi,
Near Vashi Bus Station,
Navi Mumbai - 400 703.
(ii) Financial year 1st April to 31st March
(iii) Date of Book Closure Saturday, 24th September, 2016 to Friday, 30th September, 2016 (both days inclusive)
(iv) E-Voting Period From Tuesday, 27th September, 2016 to Thursday, 29th September, 2016
(v) Dividend Payment Date No dividend has been recommended; hence not applicable.
(vi) Listing The Stock Exchanges on which the Companys shares are listed (The Shares on NSE were Voluntarily Delisted with effect from 18th March, 2016):

 

BSE Ltd. The National Stock Exchange of India Ltd.
Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor,
Dalal Street, Plot No.C/1, G Block,
Mumbai - 400 001. Bandra-Kurla Complex,
Bandra (E), Mumbai-400051.
(Shares listed / traded up to 18th March, 2016)

(vi) Stock Code

BSE Limited (physical) BSE Limited (demat) Code : 517164
The National Stock Exchange (demat) Code : INE 598B01013

(vii) Annual General Meetings

Location and time where last three Annual General Meetings were held are given below:

Financial Year Date Location of the Meeting Time
2014-15 30/09/2015 The Auditorium of ‘Hotel Abbot, Sector 2A, Vashi, Near Vashi Bus Stand, Navi Mumbai - 400 703. 12.00 Noon
2013-14 23/08/2014 The Auditorium of ‘Hotel Abbot, Sector 2A, Vashi, Near Vashi Bus Stand, Navi Mumbai - 400 703. 11.30 a.m.
2012-13 30/09/2013 The Auditorium of ‘Hotel Abbot, Sector 2A, Vashi, Near Vashi Bus Stand, Navi Mumbai - 400 703. 11.00 a.m.

(viii) Market price information

The high and low closing prices during the year ended March 31,2016 on the BSE Limited and The National Stock Exchange of India Limited, where your Companys shares are frequently traded, are given below:

Month

BSE

National Stock Exchange

High Low High Low
April, 2015 3.99 2.88 No Trades No Trades
May,2015 3.65 2.83 No Trades No Trades
June, 2015 3.50 2.81 No Trades No Trades
July, 2015 3.15 2.80 No Trades No Trades
August, 2015 3.05 2.47 No Trades No Trades
September, 2015 2.89 2.12 No Trades No Trades
October, 2015 2.54 2.17 No Trades No Trades
November, 2015 2.68 2.18 No Trades No Trades
December, 2015 2.89 2.32 No Trades No Trades
January, 2016 3.49 2.87 No Trades No Trades
February, 2016 3.14 2.50 No Trades No Trades
March, 2016 2.77 1.65 No Trades No Trades

(ix) Registrars and Share Transfer Agents:

The Members are requested to correspond with the Companys Registrars & Share Transfer Agents - M/s. Link Intime India Private Limited: C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400 078

(x) Distribution of shareholding

(a) Distribution of shareholding (no. of shares) as on March 31,2016:

Category No. of Equity shares held Percentage of shareholding
A Promoters
1 Indian Promoters (Individuals/HUF) 47,55,621 30.72
2 Foreign Promoters NIL NIL
3 Bodies Corporate NIL NIL
B Non-Promoters Holding
1 Institutional Investors
A Mutual Funds and UTI 5,800 0.04
B Banks, Financial Institutions, Insurance Comp-anies, Central/State Govt. Institutions/ Non-Govt. Institutions) 3,050 0.02
C Foreign Portfolio Investors 3,600 0.02
2 Others - Non Institutions
A Bodies Corporate 25,43,453 16.43
B Clearing Members (Shares in Transit) 68,601 0.44
C NRIs/OCBs/Foreign Nationals 6,40,304 4.13
D Trusts 500 0.01
E Hindu Undivided Familiy 1,23,702 0.80
F Individuals holding nominal share capital upto Rs.2 lakh 49,01,562 31.66
G Individuals holding nominal share capital more than Rs.2 lakh 24,34,647 15.73
TOTAL 1,54,80,840 100.00

(p) Shareholding pattern as on March 31,2016:

SHAREHOLDING OF SHARES RS. SHAREHOLDERS NUMBER % AGE OF TOTAL NUMBER OF SHARES % AGE OF TOTAL
1 - 500 18,001 91.03 27,20,672 17.57
501 - 1000 968 4.89 7,84,387 5.07
1000 - 2000 413 2.09 6,30,421 4.07
2001 - 3000 158 0.80 4,05,940 2.62
3001 - 4000 63 0.32 2,23,661 1.44
4001 - 500 46 0.23 2,15,454 1.39
5001 - 10000 73 0.37 5,02,031 3.24
10001 ******** 53 0.27 99,98,274 64.60
TOTAL 19,775 100.00 1,54,80,840 100.00

(xi) Dematerialistion of shares and liquidity

1,43,43,403 (92.65 %) of the equity shares have been dematerialized by about 12,393 shareholders (62.67 %) as on March 31, 2016. The Companys shares can be traded only in dematerialized form as per SEBI notification. The Company has entered into Agreement with NSDL and CDSL whereby shareholders have the option to dematerialize their shares with either of the depositories. Equity shares are actively traded on BSE and NSE.

(xii) Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity The Company has not issued any GDRs/ADRs/Warrants.

(xiii) Plant locations and Offices

Your Companys manufacturing units which were located at Plot No. P-33/37, Sancoale Industrial Estate, P.O.Zuari Nagar, Goa - 403 726 and the Registered Office at B-5, Electronic Sadan - 1, Mahape, MIDC, TTC Area, Navi Mumbai 400 710 have been taken over by Indian Bank Under SARFESI Act, 2002. The Company does not have any office located outside Navi Mumbai.

(xiv) Address for correspondence - Registered Office

Zenith Computers Limited, Plot No. EL - 117, 1st Floor, Mahape, TTC Area, Navi Mumbai 400 710.

NON-MANDATORY REQUIREMENTS

(a) Nomination and Remuneration Committee (Earlier known as Remuneration Committee)

The Company has a Remuneration Committee consisting of, inter alia, two Non-Executive Directors, with the Chairman being an Independent Director. The members of the Remuneration Committee are as follows:

1. Mr. Vijay Ram Mukhi - Chairman

2. Mr. Raj Kumar Saraf

3. Mr. Vipin M. Shah - Member

The scope and function of the Remuneration Committee is to review and fix the remuneration payable to the Managing Director of the Company. The Committee did not hold any meeting as there was no agenda.

(b) Risk Management Committee

The Risk Management Committee was constituted by the Board of Directors on 13th November, 2015 consisting of, inter alia, two NonExecutive Directors, with the Chairman being an Independent Director. The members of the Risk Management Committee are as follows:

1. Mr. Vipin M. Shah - Chairman

2. Mr. Raj Kumar Saraf

3. Mr. Vijay Ram Mukhi - Member

The Committee held 2 meetings on 13th November, 2015 and 13th February, 2016 when all the members were present.

The Committee reviewed the downward and extraordinary risks of the Company and took note of the way forward to mitigate those risks.

(c) Whistle Blower Policy

Your Company has established a mechanism called ‘Whistle Blower Policy for employees to report to the management, instances of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy.

By Order of the Board
Place: Mumbai, RAJ KUMAR SARAF
Date: 9th August, 2016 CHAIRMAN & MANAGING DIRECTOR