The Directors present the Twenty-Fifth Annual Report of your Company together with the Audited Accounts and Auditors' Report for the financial year ended on 31st December, 2014.

FINANCIAL HIGHLIGHTS

The performance of the Company for the financial year ended on 31st December, 2014, is summarized below:

                                                        (Rsin Million)
Particulars                             Year ended         Year ended

                                     31 Dec., 2014     31 Dec., 2013 
Net Sales                                14,768.79         14,250.64

Other Income                                 23.61              1.22

Total Income                             14,792.40         14,251.86

Profit before Finance Costs, 
Tax & Depreciation                          457.07            374.61

Finance Costs                               686.57            751.54

Depreciation and Amortisation               218.09            213.21

Profit/(Loss) before Tax                   (447.59)          (590.14)

Profit/(Loss) after Tax                    (347.79)          (500.49)

The year 2014 showed a steady growth in the Set Top Box (STB) market. Rise in disposable income along with high penetration of television in rural India is driving the Indian STB market. The introduction of High Definition (HD) channels and Smart TVs has led to an increase in digital TV viewing which in turn will hike the growth of the STB market. The Core Advisory Group for Research and Development in Electronics Hardware (CAREL) has identified STBs as one of the six products to be designed, developed and manufactured indigenously. STB industry provides a huge potential for economic activity, employment generation and saving valuable foreign exchange and increase in the revenue for the government.

During the year under review, the Company has earned a total income of Rs. 14,792.40 Million as against Rs. 14,251.86 Million for the previous year. Total Expenditure amounted to Rs. 15,239.99 Million as against Rs. 14,842.00 Million for the previous year. The Company has incurred a net loss of Rs. 347.79 Million as against a loss of Rs. 500.49 Million for the previous year.

DIVIDEND AND TRANSFER TO RESERVES

Dividend:

In view of the loss incurred, the Board of Directors does not recommend any dividend for the year under review.

Transfer to Reserves:

In view of the loss incurred, the Board of Directors propose not to transfer any amount to the General Reserve.

TRANSFER OF INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs. 0.19 Million in respect of unpaid/ unclaimed dividend for the financial year 2006-07 to the Investor Education and Protection Fund.

FIXED DEPOSIT

Your Company has not accepted/renewed any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

PERSONNEL

The Company does not have any employee whose particulars are required to be furnished under Section 217(2A) of the Companies, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

CONSERVATION OF ENERGY

"Conservation" when used in relation to natural resources and energy is a virtuous act. Conservation and efficient utilization of energy resources play a vital role in narrowing the gap between demand and supply of energy. Your Company firmly believes that, improving energy efficiency is probably the most profitable thing that can be done in the short term. Energy conservation is the quickest, cheapest and most practical method of overcoming energy shortage.

The Company has initiated a drive for the conservation of natural resources, including the energy conservation. The Company focuses on reducing energy consumption through various in-process innovations and adoption of best practices like machine productivity and improving the efficiency to reduce specific energy consumption. The

Company focuses on developing energy saving methods to avoid wastage of energy. Your Company follows and practices "Energy saved is Energy produced" principle truly in law and spirit.

The In-house expert team under the valuable guidance of expert engineers from the Research and Development Centre of the Company continuously monitors and devise various means to conserve energy and identify methods for the optimum use of energy without affecting productivity.

This is ensured through:

- Installation of electronic timers which has helped to cut down the electricity consumption;

- Addition and installation of newer generation Air Compressor;

- Energy efficiency audit;

- Proper ventilation at the Factory Premises and use of energy saving Lighting Systems;

- Regular maintenance and replacement of worn-out Machinery for optimum performance with reduction in power consumption;

- Recycling of Products i.e papers, cups, cardboards and envelopes;

- Use of dimmer switches;

- Unplugging appliances when not in use or unused;

- Insulation of walls & ceilings;

- Awareness programmes towards optimum utilization of natural resources at managerial as well as employee level;

- Display of charts at the premises, plant, office, showing the means for conservation of energy;

- Inspection of machinery by the team of experts at regular intervals; and

- Encourage communications through e-mails.

Your Company lays emphasis on "Sustainable Development" i.e development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

The above initiatives have resulted in proper monitoring and usage of energy, minimizing the wastage and increase in overall efficiency at every stage of power consumption. Your Company's endeavor to introduce energy efficient electronic products has met with success.

RESEARCH AND DEVELOPMENT (R&D) AND TECHNOLOGY ABSORPTION

The Research and Development (R&D) is an important contributor to economy of any country and hence growth and sustainability of R&D is vital for nations. As the pace of technology is accelerating and newer and newer technologies and processes are becoming important, R&D is becoming a crucial factor in success of the companies and economies in a globalized and competitive world. In today's competitive scenario, innovation has become a key to success, in areas of process, product, sales & after sales service.

In endeavor to keep pace with the changing technologies worldwide and to offer products with maximum durability at low cost, the Company pays utmost importance to R&D. The Company has in-house R&D Facility comprising of experts to help Company to stay at par with the latest technologies.

Usually the primary function of the R&D department is to conduct researches for new products and develop new solutions. Every product has its shelf life and the consumers always need something new. In order to be competitive, the Company continuously has to be updated and has to find ways for new technologies and development of various products. During the continuous process of R&D, both the R&D managers and their staff take responsibility of performing the following key tasks:

- Ensuring the new products meet the product specification;

- Researching the products according to allocated budget;

- Checking if the product meets production costs;

- Delivering product at the right time and at right place in the market;

- Developing the product to comply with regulatory requirement and specified quality levels; and

- To bring variety of products at an affordable price level.

Benefits derived from R & D Activities:

The well focused R&D activities of the Company have resulted in introducing variety of models with superior technology and improved proficiency and reliability at right time and at right cost, which meet the needs of all the categories of the consumers. Because of these efforts only, the Company was successful in developing and launching the India's first 4K Set Top Box.

Further, the Company could also derive the following benefits:

- Introduction of High Definition 4K Set-top Box with Digital Video Recording facility to record as much content as a subscriber wishes to.

- Development and production of Digital Direct Broadcast (DDB) technology in India with a broader convergence of TV, D2H, Internet and Cloud computing, STRATA & HARMAN-KARDON certified audio, 2D to 3D conversion etc.;

- Introduction of MPEG-4 DVBS-2 technologies which has many exciting features like Multiple Tickers, 12 PIP Mosaic, 22 Active Music Audio Video Channels, which shall take viewing experience to a new level. and;

- Introduction of Direct to Mobile (d2m) facility, where it is possible to see television on mobile phone.

The Company's now plan to introduce a unique feature to HD Set Top Box i.e., "Unlimited Recording" feature, where the user can record any programme if he is busy at that time. User can either record a Live TV programme or even record a scheduled programme and can watch recorded programme later at his/her leisure.

Future Plan of Action:

In near future, your Company shall continue to focus on all the areas mentioned earlier and also aims to offer new technologies and processes to provide better products at affordable prices to the customers. Your Company shall continue to rollout innovative products, which is in line with its ideology of bringing about change combined with quality that is trusted by the millions of customers.

The future plan of action includes:

- The Company plans to provide the Set Top Box with internet connectivity. Such connectivity can offer the user to directly access popular applications such as Youtube, Picassa etc.;

- The future plan also includes introducing Wi-Fi connectivity in the Set Top Box;

- The Company has plans to introduce a unique motion control & Audio Streaming remote control in the Set Top Box. With this innovative product, the user can listen to the Audio Streaming using Headphones, without disturbing others, & can also use Google Voice search, can navigate using the motion control or Air Mouse Function. Such an Air Mouse function, will allow the customer to play interactive video games via the Set Top Box.

During the year under review, the recurring expenses on R&D amounted to Rs. 3.75 Million representing 0.03% of the turnover.

Technology Absorption:

Using technology efficiently needs a conscious effort. Because of its continuous efforts in the sphere of technology absorption, your Company has been accredited with Certificate of Compliance to the latest eSd Standard i.e., ESD 20:20 which minimize or eliminate risks associated with electrostatic discharge, improving product quality and customer satisfaction. All the products that are manufactured by the Company are certified to the latest Bureau of Indian Standard, ISO 13252:2010.

The Company has also installed Climatic Chambers and Salt Spray Chambers to simulate the effect of ageing of the products in actual field conditions, ahead of the production. Such tests help predict the possibility of early failures and thereby, the same can be prevented.

The Company also plans to focus on development of new technologies which would offer better products to all classes of consumers at an affordable price.

INFORMATION TECHNOLOGY

In due recognition of the key role played by Information Technology (IT) in revolutionizing the world, your Company has re-engineered its processes by leveraging IT for building, sustaining and expanding its competitive edge.

The management believes that use of latest and upgraded IT can be extensively used in all spheres of its activities to improve productivity and efficiency levels. The Company has already implemented SAP (System Analysis Programming), a customized ERP (Enterprise Resource planning) module, at its manufacturing facility. The Company has implemented latest version of SAP and ERP for better operational control. MySAP solution has enabled your Company to leverage the benefits of integration in business operations, optimization of enterprise resources, standardized business process, thereby enabling standard operating practices with well established controls. It has also benefited the management at all levels with business information which is available online and reliable to control the business operations in a well- informed manner. The Company has implemented a network application for facilitating the storage & retrieval of the Set Top Box pairing elements. The application developed uses state of the art Database Servers & deployed using Microsoft, .Net and Java. The applications have been integrated with the online production management system effectively.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, the foreign exchange outgo amounted to Rs. 3,219.07. Million as against Rs. 2,531.23 Million for the year ended on 31st December, 2013. There was no foreign exchange earnings during the year and previous year ended on 31st December, 2013.

HEALTH, SAFETY AND ENVIRONMENT

The Company's vision is to be a safe operator and a sustainable corporate citizen, leading the industry in health and safety standards whilst demonstrating top quartile performance among its domestic and global peers. Your Company believes that all injuries and fatalities are preventable and is committed to ensure safety of all employees and individuals involved in Manufacturing activities.

Your Company lays special emphasis to ensure safety at its manufacturing plant and also undertakes continuous efforts to reduce the accidents by constantly improving the standards of safety equipments. The following steps have been taken to improve the safety standards at the factory:

- Timely disposal of waste and scrap materials;

- Round the clock occupational health center and ambulance with all medical devices;

- Conducting regular safety audit and mock drill;

- Installation of Effluent Treatment Plant, where the waste water is treated & re- cycled for gardening purpose;

- First-Aid boxes are located at several points in the factory;

- Providing protective clothing and equipment to employees;

- Proper safeguards are put into place to eliminate the risk of violence as far as possible;

- Risk-assessment at the workplace at regular intervals;

- Organized "Safety Week", in order to promote Safety awareness among the staff & employees;

- AIDS Awareness Program; and

- Blood Donation Camps.

The Company is continuously taking efforts to build a 'just safety culture'. It's not the effort of one person, but the focus and determination of the entire team working towards a common goal of health and safety and environment protection.

The manufacturing facility and offices are equipped with modern amenities to meet strict requirements of efficient servicing and smooth functioning at all times. The Company follows strict compliance of pollution, environment and safety norms in carrying out all its activities.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility is no longer defined by how much money a company contributes to charity, but by its overall involvement in activities that improve the quality of people's lives.

Your Company as a whole aims at Corporate Social Responsibility (CSR) Management that is trusted by the society and implements this by undertaking several initiatives that contribute to the society and promote energy saving and environmental sustainability management. Developing green and energy-efficient products, reducing Co2 emissions, resource circulation, contributing to local communities, encouraging the spread of environmental conservation activities, developing an excellent working environment and promoting 'eco ideas' for everybody everywhere are some of the ways your Company carries out CSR activities. The manufacturing process and plants of your Company adhere with the standards laid down by various regulatory authorities for the protection of environment and safety of workers engaged in the manufacturing process.

Your Company shall continue to discharge its CSR in the best possible manner.

HUMAN RESOURCE MANAGEMENT

We view our employees as our greatest asset and are committed to providing them with a progressive workplace. The Company provides vibrant working environment to enable employees to innovate, discover potential and realize professional dreams. Several initiatives were taken to facilitate the performance and developmental requirements of employees. The Company will continue to strengthen employer- employee relationship by providing a conducive working environment and offering a competitive compensation package. Imparting adequate HR training programmes and specialized trainings to the employees of the Company is an ongoing exercise. Your Company continuously gives emphasis on use of advance technology in production. With a view to increase the productivity and output the management organizes training programs, lectures of experts, training camps, on regular basis, which boosts, motivates the employees to give their best to the organization.

BOARD OF DIRECTORS

During the year under review, Mr. Vivek D. Dharm was appointed as an Independent Director by the shareholders of the Company at the Annual General Meeting held on 30th June, 2014 for a term of 5 years from 30th June, 2014. Subsequently, in order to further comply with the new requirements of the provisions of Section 149 of the Companies Act, 2013 and the provisions of Clause 49 of the Listing Agreement and so as to ensure optimum composition of Independent Directors on various committees, the Board of Directors thought it fit to appoint Mr. Subhash S. Nabar and Mr. Bhopinder J. Chopra also as Independent Director(s) for a period of five years. Accordingly, the Board of Directors of the Company at its meeting held on 14th August, 2014 have made to continue appointment of Mr. Subhash S. Nabar and Mr. Bhopinder J. Chopra as Independent Director(s) to hold office upto a term of five consecutive years from 14th August, 2014, not liable to retire by rotation. These Directors have confirmed that they meet criteria of independence as provided in Sub-Section (6) of Section 149 of the Companies Act, 2013.

After the Balance Sheet date, pursuant to the provisions of Companies Act, 2013, Mrs. Smita Dharm was appointed as an Additional Director with effect from 31st March, 2015. She holds office upto the date of ensuing annual general meeting.

The Company has also received a notice in writing along with requisite deposit, from a member under Section 160 of the Companies Act, 2013, signifying its intention to propose candidature of each of Mr. Subhash S. Nabar and Mr. Bhopinder J. Chopra for confirmation/appointment to the office of Director of the Company as Independent Director and its intention to propose candidature of Mrs. Smita Dharm to the office of Director of the Company.

The Board recommends the confirmation/appointment of Mr. Subhash S. Nabar, Mr. Bhopinder J. Chopra and Mrs. Smita Dharm at the ensuing Annual General Meeting.

A brief profile of the Directors seeking confirmation/appointment, nature of expertise in specific functional area, name of other public companies in which he/she holds directorship and membership/chairmanship of the committees of the Board of Directors and the particulars of the shareholding as stipulated under Clause 49 of the Listing Agreement entered with the Stock Exchange form integral part of the Corporate Governance Report.

CASH FLOW STATEMENT

As per the requirements of Clause 32 of the Listing Agreement with the Stock Exchange, the Cash Flow Statement as prepared in accordance with the Accounting Standard on Cash Flow Statement (AS-3) issued by the Institute of Chartered Accountants of India, is given along with the Balance Sheet and Profit and Loss Account.

AUDIT COMMITTEE

Pursuant to the provisions of Section 177 of the Companies Act, 2013 and as per the provisions of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of Audit Committee together with details of meetings held during the year under review forms part of the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

During the year under review, the Company has formed a Committee titled as "Corporate Social Responsibility Committee" in terms of the provisions of Section 135 of the Companies Act, 2013. The said Committee shall:

a. recommend the amount of expenditure to be incurred on such activities; and

b. monitor the Corporate Social Responsibility Policy of the Company.

The composition, detailed scope and powers of the Committee forms part of the Corporate Governance Report.

AUDITORS' REPORT

The Audit Report of the Company is Unqualified. However, the Auditors of the Company have in their statement annexed to the report have mentioned that "There are accumulated losses of Rs. 892.92 Million as on 31st December, 2014 which are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and also during the immediately preceding financial year". In this regard, the management explanation is as under:

The Networth of the Company is Rs. 1,718.85 Million as at 31st December, 2014. The Management has already prepared a concrete plan and well laid strategy for increasing operational efficiencies and optimum utilization of available infrastructures, which are expected to lead to higher efficiency/cost savings in the time to company and resulting into improved turnover and profitability. Further, the promoters of the Company also have proposed to infuse an amount of Rs. 1,000 Million immediately into the Company. The necessary steps for this infusion are being taken by the Company.

AUDITORS

In terms of Section 139 of the Companies Act, 2013 read with the Rules made thereunder, the Company had, on 30th June 2014, appointed M/s. Khandelwal Jain & Co., (Firm Registration No. 105049W) Chartered Accountants, Mumbai and M/s. Kadam & Co., (Firm Registration No. 104524W) Chartered Accountants, Ahmednagar, as the Statutory Auditors of the Company for a period of three years from the conclusion of 24th Annual General Meeting of the Company upto the conclusion of 27th Annual General meeting.

As per the provisions of Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, such appointment made by the company shall be subject to ratification in every Annual General Meeting upto the end of the tenure of appointment of the auditors.

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar have confirmed their eligibility in terms of the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

The Board recommends the ratification of the appointment of M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, from the conclusion of this meeting i.e, 25th Annual General Meeting until the conclusion of 27th Annual General Meeting (subject to ratification by the Members at every subsequent meeting) on such remuneration as shall be fixed by the Board of Directors of the Company.

COST AUDIT

The Central Government had directed vide its order no. 52/26/CAB-2010 dated 6th November, 2012 to conduct a Cost Audit in respect of the specified products viz., Electrical & Electronic Equipments /Appliances.

The Board of Directors of the Company has accorded its approval for the appointment of Sneha Gaurav Badwe & Co., Cost Accountant in Whole-Time Practice (Membership Number 35552), Ahmednagar, as the Cost Auditor of the Company, to conduct audit of the Cost Accounting Records maintained by the Company for the financial year commencing on 1st January, 2015 and ending on 31st December, 2015, subject to the approval of the Central Government.

In compliance with the provisions of the Companies (Cost Audit Report) Rules, 2011 and General Circular No. 15/2011 issued by Government of India, Ministry of Corporate Affairs, Cost Audit Branch, we hereby submit that, the Company has filed the Cost Audit Report for the financial year ended on 31st December, 2013 on 11th February, 2015. As regards, to the financial year ended on 31st December, 2014, the due date for filing the Cost Audit Report is 29th June, 2015 and the Company shall file the same on or before due date.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of performance and future prospects is included in the section "Management Discussion and Analysis Report" of the Annual Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the Reports on Corporate Governance and Management Discussion and Analysis form part of this Report.

The Company is in full compliance with the requirements and disclosures that have to be made in this regard. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, we, the directors of TREND ELECTRONICS LIMITED, state in respect of financial year ended 31st December, 2014 that:

- in the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

- 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 and of the loss of the Company for the year ended on that date;

- the directors have 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; and

- the directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors wish to express their deep sense of appreciation for the committed services of all the employees of the Company. Your Directors also take this opportunity to thank all stakeholders, banks, regulatory and government authorities for their continued support.

                          For and on behalf of the Board of Directors of 
                                  TREND ELECTRONICS LIMITED

                             V. D. DHARM          S. S. NABAR
Place : Mumbai                 Director            Director
Date : 14th May, 2015        DIN: 00214361        DIN: 01341057