Zenith Computers Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting their 36th Annual Report and the audited Accounts for the financial year ended 31st March, 2016.

(Rs. in Lakhs]

FINANCIAL HIGHLIGHTS 2015-2016 2014-2015
Profit / (Loss) before Taxes (919.80) (3,191.22)
Less: Provision for Taxes NIL NIL
Profit after taxation available for appropriation (919.80) (3,191.22)
Appropriations
Proposed Dividend NIL NIL
Tax on Proposed Dividend Nil NIL
Balance Profit / (Loss)carried to the Balance Sheet (919.80) (3,191.22)
Basic & Diluted Earnings per Share of face value of Rs.10/- fully paid up (5.94) (20.61)

COMPANY’S ACTIVITIES

Your Company has discontinued the business of manufacture of desktop and laptop computers and is presently only in the services segment of maintenance contracts and fulfilling warranty commitments.

DIVIDEND

Your Directors do not recommend any Dividend in respect of the financial year ended 31 st March, 2016, as the Company has suffered a Loss.

REVIEW OF OPERATIONS

During the year under review, the net sales revenues at Rs. 150.46 lakhs were lower than the previous years revenues of Rs. 2,201.22 lakhs. During the year the net Loss (Tax Expense was NIL) was Rs. 919.80 lakhs as against the previous years Loss of Rs. 3,191.22 lakhs (Tax Expense was NIL); the Loss was due to discontinuation of the Companys core business activities relating to manufacture and sale of computers and accessories and the adverse market conditions and interest costs.

FIXED DEPOSITS

The Company did not have any outstanding / unpaid Deposits or unpaid / unclaimed interest thereon as on 1st April, 2015; the Company has not accepted any deposits under Sections 73 to 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

DEMATERIALISATION OF COMPANY’S SHARES

The Companys Securities continue to be traded in the electronic form only as per the relevant SEBI guidelines.

LISTING OF SHARES ON THE STOCK EXCHANGES

During the year ended 31st March, 2016, the Companys Securities continue to be listed on the BSE Limited (BSE), Mumbai; the Companys securities on the National Stock Exchange of India Limited (NSE), Mumbai were listed only up to 18th March, 2016 as the Companys Voluntary Delisting application was accepted by NSE. The Company has paid the requisite Annual Listing Fees for the year 2016-17 to the BSE.

VOLUNTARY DELISTING OF THE COMPANY’S SHARES FROM THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE)

The Company made an application to the NSE, pursuant to the Board Resolution passed on 13th June, 2015, on 17th June, 2015 for voluntarily delisting the Company shares as the Board felt that as there was no trading since September, 2014 till date, the Listing on NSE was no longer required; the Shares are already listed on the BSE Limited which has nation-wide terminals for enabling shareholders, investors and other stakeholders to deal in the Companys Shares. The NSE has approved the Delisting of the Companys Shares with effect from 18th March, 2016.

DIRECTORS

Mrs. Manju Bhartia was appointed as a Director (as a Woman Director) in the 35th Annual General Meeting of the Company held on 30th September, 2015 in compliance of Clause 49 of the Listing Agreements with the Stock Exchanges.

In accordance with the Companys Articles of Association and the provisions of the Companies Act, 2013, Mrs. Manju Bhartia, aa a Woman Director retires by rotation and offers herself for re-appointment. A brief resume of Mrs. Manju Bhartia, nature of experience and the names of Companies in which she holds Directorship and membership / Chairmanship of Board Committees, as stipulated in Clause 49 of the Listing Agreement / SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 is provided in the Explanatory Statement annexed to the Notice convening the meeting.

CORPORATE SOCIAL RESPONSIBILITY

The Company has been incurring losses in the previous 3 years and hence the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors confirm:

(1) that in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(2) that 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 at the end of the financial year ended 31st March, 2016 and of the profit of the Company for that year;

(3) that the Directors have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(4) that the Directors have prepared the annual accounts on a going concern basis; and

(5) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

REGISTRATION OF THE COMPANY AS A SICK INDUSTRIAL COMPANY

Your Company was registered as a sick industrial company under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 by the Board for Industrial and Financial Reconstruction (BIFR) with effect from 29th August, 2014; however on an application made by Indian Bank, the BIFR has abated the registration of reference by the Company as a sick industrial undertaking.

TAKING OVER OF THE COMPANY’S PROPERTIES IN GOA AND MAHAPE

Indian Bank as the Lead Bank of the Consortium of Banks, has taken physical possession of the land, buildings and stocks of the Company in Goa in April, 2015 and the properties and stocks at Mahape, Navi Mumbai in June, 2015. Consequently, the Company had to discontinue its business of manufacture of desktop and laptop computers.

SHIFTING OF THE REGISTERED OFFICE

Since the Registered Office of the Company located in Electronic Sadan was taken over by Indian Bank, the Company shifted its registered office to a rented premises at Mahape. Thus the Registered

Office of the Company has been shifted from B-5, Electronic Sadan

- 1, MIDC, TTC Area, Mahape, Navi Mumbai 400 710 to Plot No. EL

- 117, 1st Floor, Mahape, MIDC, TTC Area, Navi Mumbai 400 710 with effect from 6th June, 2015.

CORPORATE GOVERNANCE

The Company has complied with the requirements of Corporate Governance, as applicable to the Company, during the period under report, as per the amended Listing Agreements with Stock Exchanges. The Report on Corporate Governance with the Auditors Report thereon, is annexed hereto as Annexure ‘D’ in accordance with Clause 49 of the Listing Agreements with the Stock Exchanges / SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.

STATEMENT SHOWING THE EXTRACT OF THE ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED 31st MARCH, 2016

In accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Statement showing the Extract of the Annual Return as on the financial year ended 31st March, 2016 is annexed as Annexure ‘C’ and forms part of this Report.

PARTICULARS OF LOANS, ETC., UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year, the Company has not given any loans, provided any guarantees or made any investments attracting the provisions of Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All transactions / contracts / arrangements of the nature specified in Section 188(1) of the Companies Act, 2013 entered into by the Company during the year under review with related party (ies) are in the ordinary course of business and on arms length basis. Hence, Section 188(1) is not applicable and consequently no particulars in Form AOC - 2 are furnished.

SECRETARIAL AUDIT

The Secretarial Audit Report dated 30th July, 2016, of M/s. Mohan Akella & Company, Company Secretaries, Thane, pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014, of the Compliance of the applicable Statutory Provisions and adherence to good corporate practices by the Company is annexed hereto as Annexure ‘B’ and forms part of this report.

The Companys representatives have provided the material data for the qualifications / observations and / or remarks contained in the said Secretarial audit Report.

AUDITORS

M/s. C. L. Khanna & Company, Chartered Accountants, Mumbai, the Statutory Auditors of the Company, were re-appointed for a period of 3 years at the 34th Annual General Meeting, in accordance with Sections 139 and 141 of the Companies Act, 2013; the tenure of the said Auditors is to be confirmed at the ensuing AGM.

The Notes to Accounts mentioned in the Audited Accounts of the Company for the year ended 31st March, 2016 are self explanatory to the observations made by the Statutory Auditors in their Report on the said Financial Statements.

EMPLOYEES

Relations between the management and its employees have been cordial. Your Directors place on record their appreciation of the efficient and loyal services rendered by the employees of the Company at all levels.

The Company did not have any employee(s) during the year or part of the year drawing remuneration specified in the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended; the Companys paid-up Share Capital being less than Rs. 25 Crores, the Provisions of Rules 4 and 5 of the Companies (Accounts) Rules, 2014 are not applicable to the Company; moreover, the Company being a Sick Industrial Company did not pay any increased salary or perquisites to any KMP or any employee during the year; hence the statement under these provisions is not annexed.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is appended hereto as Annexure ‘A’ and forms part of this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation of the support received from the Companys Bankers and Shareholders and look forward to their continued support and goodwill.

By Order of the Board
MUMBAI RAJKUMARSARAF
9th August, 2016 CHAIRMAN & MANAGING DIRECTOR

ANNEXURE ‘A TO THE DIRECTORS REPORT

STATEMENT OF PARTICULARS REQUIRED TO BE GIVEN UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(2) OF THE COMPANIES (ACCOUNTS) RULES, 2014 IN RESPECT OF THE FINANCIAL YEAR ENDED 31st MARCH, 2016.

A. Conservation of Energy : Though the Companys manufacturing operations are not power intensive, regular and preventive maintenance of all equipment is undertaken by the Company.

B. Technology Absorption : Form B enclosed.

C. Foreign Exchange Earnings and Outgo : Rs. in Lakhs
Total foreign exchange used and earned
(i) Expenditure in foreign currency NIL
(ii) Foreign Exchange earned NIL

FORM B

Form of disclosure of particulars with respect to absorption

1. Specfic areas in which R & D carried out by the Company :

Designing / development of state-of-art systems, import substitution, technology upgradation. Upgradation of products and quality enhancement. Development and evaluation of alternate raw materials.

2. Benefits derived as a result of the above R & D :

Cost reduction, product improvement, import substitution and effective time management.

3. Future plan of action :

Development of new products and enhancing market revenues by upgrading existing spectrum of products.

4. Expenditure in R & D : Rs. in Lakhs
a. Capital NIL
b. Recurring NIL
c. Total NIL
d. Total R & D expenditure as a percentage of total turnover NIL %

TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION

1. Efforts, in brief, made towards technology absorption, adaptation and innovation : Introduction of All-in-one PC and Touch Panel LCD Monitor for Industrial and Commercial applications towards improvement of efficiency and productivity.

2. Benefits derived as a result of the above efforts : On going

3. Imported Technology : None

By Order of the Board
MUMBAI RAJKUMARSARAF
9th August, 2016 CHAIRMAN & MANAGING DIRECTOR