| The Directors have pleasure in presenting their 17lh Annual Report and
the audited Accounts for the financial year ended 30th September, 2013.
FINANCIAL HIGHLIGHTS
(Rs.in lakhs)
2012-13 2011-12
Profit/ (Loss) before Depreciation &
Taxation & Exceptional Items (7044.77) (4681.38)
Less : Depreciation 1271.76 1269.24
Profit / (Loss) before Taxation &
Exceptional Items (8316.53) (5950.62)
Less : Exceptional Items
(FCCB Interest) 1896.27 NIL
(10,212.80) (5950.62)
Less: Provision for Taxation NIL NIL
Profit/ (Loss) after taxation
available for appropriation (10212.80) (5950.62)
Profit/(Loss) brought forward from
the previous year NIL NIL
Amount available for appropriations : (10212.80) (5950.62)
Appropriations
Proposed Dividend NIL NIL
Tax on Proposed Dividend NIL NIL
Transfer to General Reserves 336.04 5950.62
Balance Profit / (Loss) carried to
the Balance Sheet (9876.76) NIL
COMPANY'S ACTIVITIES
The Company suffered a sharp drop in its business during the financial
year 2012 - 2013, on account of a weak US economy as well as the
reputational and financial damage the Company has suffered on account
of its ongoing litigation. The Company's turnover was at Rs. 8597.43
Lakhs as against Rs. 10661.51 Lakhs in the previous year. Your
Company's operations, during the year under report, yielded a loss of
Rs. 10212.80 Lakhs.
DIVIDEND
Your Directors do not recommend payment of any Dividend in view of the
loss made during the financial year ended 30th September, 2013.
REVIEW OF OPERATIONS
a) During the year, the Earnings before Interest, Depreciation and
Taxes (EBIDTA) of the Company was negative at Rs. 8791.88 Lakhs as
against Rs. 4504.08 Lakhs during the previous year.
b) Exports of the company's electronic equipment and software were Rs.
8547.15 Lakhs as against Rs. 10588.05 Lakhs during the previous year.
PROSPECTS AND OUTLOOK
Your Directors are fully seized of the fact that the need of the hour
is to enhance the Revenue and Profit to higher levels and to achieve
this end, efforts have been initiated by adding on value of products,
customers and markets.
Vigorous marketing efforts and ceaseless cost reduction activities
continue with more thrust and vigor to accomplish these goals.
The efforts are being intensified to sustain leadership position by
constantly upgrading the products to match advancing technology trends,
maintaining the superiority in quality, and continuing the unblemished
timely service support;
Your Directors are hopeful that all the above, coupled with continuous
monitoring of inventory, receivables and overheads, would result in
healthier results during the current and coming years.
SHIFTING OF THE REGISTERED OFFICE
The Registered Office of the Company was shifted, pursuant to the
resolution passed by the Board of Directors on 10th January, 2014, from
B-52, 'Electronic Sadan - 1', MIDC, TTC Area, Mahape, Navi Mumbai 400
710 to Gala No.9, Ground Floor, Building No. 2, Sector 2, Millennium
Business Park, MIDC, Mahape, Navi Mumbai 400 710 with effect from 10th
January, 2014.
SUBSIDIARY COMPANIES
The Board of Directors had passed a resolution in its meeting held on
14th February, 2014, pursuant to 'General Circulars No. 2 & 3/2011
dated 08.02.2011 and 21.02.2011, giving consent, inter alia, for not
attaching the audited Accounts of its subsidiary companies The audited
Statements of Accounts of the Company's Subsidiary Companies in
Singapore, Malaysia, USA and the UAE in respect of the financial year
ended 31s1 March, 2013 have therefore not been attached, pursuant to
Section 212(8) of the Indian Companies Act, 1956. The list of
subsidiaries included in the Consolidated Financial Statements and the
Company's holding therein is appended hereto as Annexure 'C and forms
part of this Report.
FIXED DEPOSITS
During the year, the Company has not accepted any fixed deposits under
Sections 58A and 58AA of the Companies Act, 1956.
COMPULSORY DEMATERIALISATION OF COMPANY'S SHARES
The Company's Securities were compulsorily dematerialized with effect
from 28th February, 2001 and continue to be traded in the electronic
form as per the relevant SEBI guidelines.
LISTING OF SHARES ON THE STOCK EXCHANGES
The Company's Securities continue to be listed on the Bombay Stock
Exchange Limited (BSE), Mumbai and the National Stock Exchange of India
Limited (NSE), Mumbai. The Company has paid the requisite Annual
Listing Fees for the year 2013-14, to the above Exchanges.
DIRECTORS
Mr. Vipin Shah resigned as a Director on 11lh September, 2013. The
Board has placed on record its appreciation of the valuable
contribution and advice rendered by Mr. Vipin Shah during his tenure.
Mr. Raj Kumar Saraf retires by rotation at the ensuing Annual General
Meeting (AGM) and being eligible, offers himself for re-appointment.
BUSINESS EXCELLENCE AND QUALITY INITIATIVES
Your Company continues its process in the Zenith Business Excellence
Model known as ZBEM and the Company has gone through external
assessment process with good results. A number of initiatives were
launched in order to strengthen business processes.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm:
(1) that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed;
(2) thatthe 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 30"1
September, 2013 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, 1956, for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
(4) that the Directors have prepared the annual accounts on a going
concern basis.
FOREIGN CURRENCY CONVERTIBLE BONDS
The Company has issued Foreign Currency Convertible Bonds (FCCBs) of
the value of US$ 83 million. FCCBs of the value of US$ 6.080 Million
were converted into 8,93,879 Equity Shares of Rs. 10/- each, till date
and these shares were duly listed on BSE and NSE in due time. FCCBs of
the value of US $ 76.92 million out of US$ 83 million are outstanding
as on 30th September, 2013. The Company's issued, subscribed and
paid-up capital is Rs. 12,68,13,7907- divided into 1,26,81,379 Equity
Shares of Rs. 10/- each, fully paid-up as on 30.09.2013. The matter is
currently under litigation in the Bombay High Court.
EX-PARTE OEDER PASSED BY SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
AND ORDER PASSED BY THE SECURITIES APPELLATE TRIBUNAL (SAT)
SEBI has on 25lh March, 2013 passed an ex-parte Order, inter alia,
directing the Board of Directors to furnish Bank Guarantee(s) for US $
33.93 Million in respect of certain alleged non-disclosures and a sharp
fall in the Company's Share Prices in the market. This Order was
successfully challenged by the Company before the Securities Appellate
Tribunal; by its Order dated 23rd July, 2013, SAT has directed that all
the matters be heard afresh by SEBI. SEBI has preferred an appeal
against the SAT Order in the Hon'ble Supreme Court of India.
REFERENCE MADE TO THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION
(BIFR)
The Company has made, on 22nd July, 2013, a reference to the Board of
Industrial and Financial Reconstruction (BIFR) under the Sick
Industrial Companies Act, 1985, on the basis the Company's Accounts for
the 9 months' period ended 30th June, 2013 and registration of the said
reference was declined both by the Registrar on 12lh August, 2013; the
appeal filed before the Secretary, BIFR was declined on 13lh September,
2013. The Company has filed an appeal before the Chairman, BIFR; the
appeal has been heard and the Order is awaited.
ORDER PASSED BY THE HON'BLE HIGH COURT OF BOMBAY
The Hon'ble High Court of Bombay passed an Order on 13th December, 2013
directing the Company to be wound up and appointing the Official
Liquidator as the Liquidator of the Company, but has stayed this
direction till 16th April, 2014; the said Order has directed the
Administrator, inter alia, to sell the businesses of the Company in the
first instance and later the assets of the Company by Public Auction to
repay the monies due to the holders of the Foreign Currency Convertible
Bonds. The Company has preferred an appeal in the Hon'ble Bombay High
Court against the said Order and the matter is pending.
CORPORATE GOVERNANCE
The Company has complied with the requirements of Corporate Governance
as applicable to the Company, as per the amended Listing Agreements
with the Stock Exchanges. The Report of Corporate Governance with the
Auditors' Report thereon is annexed hereto in accordance with Clause 49
of the Listing Agreement with the Stock Exchanges.
AUDITORS
M/s. C.L.Khanna & Company, Chartered Accountants, Mumbai, the Statutory
Auditors of the Company, retires at ensuing Annual General Meeting and
are eligible for re- appointment.
EMPLOYEES & THE PARTICULARS UNDER SECTION 217(2A)
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 Statement in respect of employees drawing a salary of Rs. 5 lakhs
per month or more for part of the year or Rs. 60 Lakhs or more per
annum as required under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 is enclosed
as Annexure 'A' and forms part of this Report..
ENERGY, TECHNOLOGY ABSORPTION and FOREIGN EXCHANGE
The information required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988, with respect to conservation of
energy, technology
absorption and foreign exchange earnings and outgo is appended hereto
as Annexure 'B' and forms part of this Report.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation of the support
received from the Company's Bankers and Shareholders and look forward
to their continued support and goodwill.
By Order of the Board
MUMBAI RAJKUMAR SARAF
14th FEBRUARY 2014 CHAIRMAN |