Directors Report of Zen Technologies Ltd.

Mar 31, 2025

The Board of Directors presents the Company''s Thirty Second Annual Report and the Company''s Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31,2025.

FINANCIAL HIGHLIGHTS

The financial highlights of the Company are as follows:

('' in Lakhs)
Particulars	Consolidated		Standalone
	2024-25	2023-24	2024-25	2023-24
Total Income	103,202.71	45,477.46	98,845.16	44,420.54
Total Operating Expenditure	60,011.77	25,906.89	61,694.63	25,304.37
Operating Profit (PBIDT)	43,190.94	19,570.57	37,150.53	19,116.17
Less: Interest	1,037.56	228.13	942.08	184.05
Less: Depreciation & Amortization	1,541.37	967.96	1,009.40	732.05
Add/Less: Exceptional Items	-	240.90	-	240.90
Share of Profit/(Loss) of Associates and Joint Venture	(4.62)	-	-	-
Profit/(Loss) before tax	40,607.39	18,6 15.39	35,199.05	18,440.96
Current Tax	11,170.59	3,664.93	9,443.00	3,523.53
Prior Period Taxes	22.69	-44.68	22.69	-
Deferred Tax	-519.35	2,044.70	-561.71	1,993.99
Net Profit after Tax	29,933.46	12,950.44	26,295.07	12923.46
Add: Other Comprehensive Income/(Expense)	-256.62	54.75	-143.29	-55.97
Total Comprehensive income	29,676.84	13,005.19	26,151.78	12,867.49
Earnings per Share (?) (face value '' 1 per share) Basic:	32.07	15.45	30.09	15.61
Diluted:	32.07	15.34	30.09	15.51

The Company''s operations have been further discussed in detail in the Management Discussion and Analysis Report.

HIGHLIGHTS OF PERFORMANCE

Your Company recorded net sales of '' 93,066.72 Lakhs in FY 2024-25, against '' 43,027.51 Lakhs in the previous year, registering a 116 per cent year-on-year growth. Your Company has delivered a robust growth in profits. EBITDA grew to '' 37,150.54 Lakhs, up from '' 19,116.17 Lakhs in FY 2023-24, marking a robust 93.63 per cent year-on-year growth. The EBITDA margin stood at 38 per cent, demonstrating improved operational leverage and cost efficiency. The profit before tax for the year was '' 35,199.05 Lakhs compared with '' 18,440.96 Lakhs in the previous year, which is a 90.87 per cent year-on-year increase.

DIVIDEND

In view of the overall performance of the Comapny, while retaining capital to support future growth and in line with the Dividend Distribution Policy, the Board at its meeting held on May 17, 2025, recommended a final dividend of '' 2 per equity share of '' 1 each fully paid (i.e., 200% of the face value), subject to the approval of members at the ensuing 32^nd Annual General Meeting (the "AGM"). The dividend, if approved at the AGM will be paid to those members whose names appear on the register of members of the Company as of end of the day on

August 15, 2025 ("Record Date"). The total dividend payout will be approximately '' 1,800 Lakhs (including tax). In terms of the provisions of the Income Tax Act, 1961, dividend income is taxable in the hands of the members, and therefore will be subject to deduction of applicable tax.

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend Distribution Policy, is available on the Company''s website at https://www.zentechnologies. com/investor_relations/zen-dividend-distribution-policy. pdf

TRANSFER TO RESERVES

The Company has not transferred any amount to reserves during the year under review.

SHARE CAPITAL

The Authorized Share Capital of the Company is '' 2,000 Lakhs divided into 20,00,00,000 equity shares of '' 1 each. During the year under review, there has been no change in the Authorized Share Capital.

During the year under review, pursuant to the approval of shareholders by way of postal ballot on March 08, 2024, the

Company had allotted 62,46,096 equity shares of face value of '' 1 each to Qualified Institutions Buyers (QIBs) at '' 1,601 per equity share aggregating to '' 1,00,000 Lakhs.

Accordingly, there was an increase in paid up share capital by '' 62.46 Lakhs, consequent to allotment of shares to QIBs. Total paid up share capital of the Company as on March 31,2025 was '' 902.90 Lakhs.

EMPLOYEE STOCK OPTION (ESOP) SCHEME

The Company has implemented "Zen Technologies Limited Employee Stock Option Plan-2021" ("ESOP-2021 Scheme") and the Company has made grants under ESOP-2021 Scheme to the eligible employees of the Company. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the ESOP-2021 Scheme. There has not been any material change in the ESOP-2021 Scheme during the financial year under review. The ESOP-2021 Scheme and its implementation is in line with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB & SE) Regulations") as amended thereof.

The disclosures pursuant to SEBI (SBEB & SE) Regulations is hosted and available on the Company''s website and

the same is available for electronic inspection by the Members during the AGM. The web-link for the same is https://www.zentechnologies.com/general-meeting-notices.

Further, a certificate from the Secretarial Auditors of the Company as prescribed under SEBI (SBEB & SE) Regulations shall be placed before the members in the AGM.

QUALIFIED INSTITUTIONAL PLACEMENT(S)

During the year under review, the Company raised '' 1,00,000 Lakhs through a Qualified Institutions Placement (QIP). Pursuant to the approval of the Board in its meeting held on January 27, 2024 and the approval of the Members of the Company through postal ballot on March 08, 2024, the Company had issued and allotted 62,46,096 Equity Shares of face value '' 1 each at a price of '' 1,601 per equity share, including a premium of '' 1,600 per Equity Share aggregating to '' 1,00,000 Lakhs to Qualified Institutional Buyers on August 23, 2024.

DEPOSITS FROM PUBLIC

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013, and the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification/s or re-enactment/s thereof) for the time being in force.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES Details of subsidiary and associate companies as on March 31,2025 are tabulated below:
S.No	Name of the Company	% shareholding	Subsidiary/Associate
1	Unistring Tech Solutions Private Limited	51	Subsidiary
2	Zen Technologies USA, Inc	100	Subsidiary
3	Zen Medical Technologies Private Limited	100	Subsidiary
4	Zen Defence Technologies L.L.C, UAE	99	Subsidiary
5	AiTuring Technologies Private Limited	51	Subsidiary
6	Applied Research International Private Limited*	76	Subsidiary
7	ARI Labs Private Limited*	100	Subsidiary
8	Bhairav Robotics Private Limited*	45.33	Associate
9	Vector Technics Private Limited*	51	Subsidiary
* Acquired during the year under review

Further no subsidiary Company ceased to be the subsidiary of the Company during the year under review. There are no joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Company''s website at https://www.zentechnologies.com/policies-and-code-of-conduct

CONSOLIDATED FINANCIAL STATEMENTS

In line with the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of the Company''s subsidiaries and associates in Form AOC-1 have been provided in Annexure I to this Report. This form highlights the financial performance of each subsidiary and associate Company and their contribution to the Company''s overall performance as required by Rule 8(1) of the Companies (Accounts) Rules, 2014.

Further, pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company,

including the consolidated financial statements, along with the relevant documents and the separate audited financial statements in respect of subsidiaries are made available on the website of the Company at https://www.zentechnologies. com/investor-information.

Brief details of the performance of the subsidiaries of the Company are given below:

Unistring Tech Solutions Private Limited

Unistring Tech Solutions Private Limited (UTS) is a material subsidiary of the Company and is engaged in the business of design and development of various products in Electronic Warfare (EW), Communication and RADAR applications. UTS offers services to Government and private clients in the area of EW systems (ESM, COMINT, ELINT & Jammers), RADARs, Drone based EW systems, command links, EW and Radar Target Simulators.

During the year under review, UTS''s revenue from operations was '' 17,437.42 Lakhs for the year ended March 31,2025, and Profit after tax was '' 3,943.93 Lakhs.

Zen Defence Technologies L.L.C, UAE

Zen Defence Technologies L.L.C, UAE (ZDT) is a wholly-owned subsidiary in UAE and is engaged in the business of import and export of training equipment and simulators, as well as in trading, development, and maintenance of defense and surveillance systems on a global scale. It incurred a net loss of AED 2.65 Lakhs for the year ended March 31,2025.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED

Details of investments made and/or loans or guarantees given and/or security provided, if any, are given in the notes to the Standalone and Consolidated financial statements which form part of the Annual Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments

During the year under review, the Board of Directors of the Company, based on the recommendations of the Nomination and Remuneration Committee, by the resolution passed through circulation on March 29, 2025 approved the appointment of Mr. Durga Prasad Kode (DIN: 07946821) as a Non-Executive Independent Director of the Company for a term of 3 (three) consecutive years i.e., from March 28, 2025 to March 27, 2028, not liable to retire by rotation and the same was approved by the members of the Company through postal ballot on May 13, 2025.

The Board opined that the above Independent Director possessed requisite experience and expertise (including the proficiency).

Retirement and Resignation

Dr. Ravindra Kumar Tyagi (DIN: 01509031), Non-Executive Independent Director of the Company has completed his second term of directorship on March 31, 2025 and consequently he ceased to be an Independent Director of the Company w.e.f. April 01,2025.

The Board of Directors and the Management of the Company placed on record their appreciation for the valuable contributions and guidance provided during his association with the Company.

Retirement by Rotation

Mrs. Shilpa Choudari (DIN: 06646539), Whole Time Director, is liable to retire by rotation at the forthcoming 32^nd AGM and being eligible, seeks re-appointment. For reference of members, a brief profile of Mrs. Shilpa Choudari is given in the Notice convening the 32^nd AGM.

Changes in Key Managerial Personnel (KMP)

During the year under review, the following directors/executives served as Key Managerial Personnel of the Company:

1. Mr. Ashok Atluri, Chairman and Managing Director

2. Mr. Kishore Dutt Atluri, President and Joint Managing Director

3. Mr. Ravi Kumar Midathala, Whole-Time Director

4. Mrs. Shilpa Choudari, Whole-Time Director

Applied Research International Private Limited

Applied Research International Private Limited (ARIPL) is a material subsidiary of the Company and is engaged in the business of (i) providing simulation and assessment tools for the marine, offshore, naval, ports & terminals, construction and mining industries; (ii) providing services relating to maintenance, certification, assessment solutions with respect to (i) above; (iii) fleetview monitoring of ships; and (iv) maintenance and module development for egovernance of DG Shipping of India.

During the year under review, ARIPL''s revenue from operations was '' 13,739.27 Lakhs for the year ended March 31,2025, and Profit after tax was '' 745.33 Lakhs.

ARI Labs Private Limited

ARI Labs Private Limited (ALPL) is a wholly owned subsidiary of the Company and is engaged in the business of providing simulation and assessment tools for the marine and naval industries.

During the year under review, ALPL''s revenue from operations was '' 44.34 Lakhs for the year ended March 31,2025, and Loss for the year was '' 10.15 Lakhs.

Vector Technics Private Limited

Vector Technics Private Limited (Vector), is a subsidiary of the Company and engaged in the business of providing propulsion and power distribution solutions for drones and UAVs. Its current product portfolio includes BLDC motors, electronic speed controllers (ESCs), propellers, and starter generators— key components used in drones, UAVs, and robotic systems.

During the year under review, Vector''s revenue from operations was '' 99.00 Lakhs for the year ended March 31,2025, and Loss for the year was '' 315.67 Lakhs.

AiTuring Technologies Private Limited

AiTuring Technologies Private Limited (ATPL) is a subsidiary of the Company. ATPL is pioneers in the field of robotics, integrating sophisticated technologies and specializes in providing cutting-edge solutions in the field of Remote Controlled Weapon Stations (RCWS) and Optronics for a wide range of weapon platforms, ranging from 5.56mm to 12.7mm calibers.

During the year under review, ATPL''s revenue from operations was '' 236.30 Lakhs for the year ended March 31,2025, and Loss for the year was '' 33.26 Lakhs.

Zen Technologies USA, Inc

Zen Technologies USA, Inc is a wholly-owned subsidiary of the Company in USA and is engaged in the business of simulator industry, which complements the parent Company''s core competencies. Zen Technologies USA is primarily dedicated to offering combat training products to defense and security customers worldwide. It incurred a net loss of USD 5.14 Lakhs for the year ended March 31,2025.

Zen Medical Technologies Private Limited

Zen Medical Technologies Private Limited (ZMTPL) is a wholly-owned subsidiary of the Company in India. Zen Medical is primarily involved in the field of medical and hospital equipment. It incurred a net loss of '' 2.22 Lakhs for the year ended March 31,2025.

5. Mr. Afzal Harunbhai Malkani, Chief Financial Officer

6. Mr. Sourav Dhar, Company Secretary & Compliane Officer (w.e.f. November 02, 2024)

7. Mr. M. Raghavendra Prasad, Company Secretary & Compliane Officer (upto September 24, 2024)

BOARD MEETINGS

The Board and Committee meetings are pre-scheduled and a tentative calendar of the meetings shall be finalised in consultation with the Directors to facilitate them to plan their schedule. However, in case of urgent business needs, approval is taken by passing resolutions through circulation. During the year under review, 4 (four) board meetings were held. The details of the meetings including the composition of various committees are provided in the Corporate Governance Report, which forms part of this Report.

DECLARATION OF INDEPENDENCE

In line with Section 149(7) of the Companies Act, 2013, each Independent Directors has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and complies with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and Regulation 16( 1 )(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company. Furthermore, they have affirmed compliance with the code of conduct for Independent Directors as prescribed in Schedule IV of the Companies Act, 2013.

OPINION OF THE BOARD

The Board opines that all the Independent Directors of the Company strictly adhere to corporate integrity, possesses requisite expertise, experience and qualifications to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and SEBI Listing Regulations diligently.

BOARD EVALUATION

Under the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Company has carried out the Board Evaluation process of the performance of the Board, Board Committees, Directors including Executive Directors, Independent Directors, and the Chairman. This exercise was carried out following the Company''s Nomination and Remuneration Policy within the framework of applicable laws. The questionnaire and the evaluation process were reviewed in line with the SEBI guidance note and suitably aligned with the requirements.

While evaluating the performance and effectiveness of the Board, various aspects of the Board''s functioning, such as adequacy of the composition and quality of the Board, time devoted by the Board to the Company''s long-term strategic issues, the quality and transparency of Board discussions, and execution and performance of specific duties, obligations, and governance were taken into consideration. Committee performance was evaluated on their effectiveness in carrying out respective mandates, composition, the effectiveness of the committees, the structure of the committees and meetings of the committee from the Board, and its contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Executive Director including the Chairman of the Board and Independent Directors, who were evaluated on parameters such as level of engagement

and contribution to Board deliberations, independence of judgement, safeguarding the interests of the Company, focus on the creation of shareholder''s value, ability to guide the Company in key matters, attendance at meetings, etc. The Directors expressed their satisfaction with the evaluation process.

NOMINATION AND REMUNERATION POLICY

The Board based on the recommendation of the Nomination and Remuneration Committee framed and adopted the Nomination and Remuneration Policy for selection, appointment and removal of Directors, Senior Management, Key Managerial Personnel ("KMP") including their remuneration. The Committee plays an important role in selection of Directors, Senior Management and KMP inter-alia including determination of qualifications, experience, expertise, and board diversity.

The Non-Executive Directors are remunerated by way of sitting fees for attending Board and Committee meetings.

The remuneration to a Whole-time Director/Executive Directors is broadly divided into fixed and variable components. The remuneration payable to them is subject to approval of the members of the Company.

For Senior Management, the remuneration is based on their performance, Company''s performance, individual targets achieved, industry benchmark and compensation trends. Their remuneration consists of monthly salary, bonus, perquisites, KPI and other benefits

The Company''s Nomination and Remuneration Policy is available at https://www.zentechnologies.com/policies-and-code-of-conduct

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS'' INDEPENDENCE

The Nomination and Remuneration Committee (NRC) shall assess the independence of directors at the time of appointment, re-appointment and the Board shall assess the same annually based on the criteria provided by NRC. The Board shall re-assess determination of independence when any new interests or relationships are disclosed by a Director.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors was held on February 14, 2025, inter-alia, to discuss evaluation of the performance of Non-Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non- Executive Directors and the evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

REGISTRATION OF INDEPENDENT DIRECTORS IN INDEPENDENT DIRECTORS DATABANK

All the Independent Directors of the Company have been registered and are members of Independent Directors Databank maintained by the Indian Institute of Corporate Affairs (IICA).

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act, 2013, the

Board of Directors of the Company states that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had 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 profit and loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operative effectively; and

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operative effectively.

COMPLIANCE WITH THE CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

All Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel. A declaration to that effect is attached to the Corporate Governance report.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

In terms of Section 118(10) of the Companies Act, 2013, the Company complies with Secretarial Standards 1 and 2, relating to the ''Meetings of the Board of Directors'' and ''General Meetings'', respectively as issued by the Institute of Company Secretaries of India ("ICSI") and approved by the Central Government.

COMMITTEES OF THE BOARD

As on March 31,2025, the Board has the following Committees:

i) Audit Committee

ii) Nomination and Remuneration Committee

iii) Stakeholders Relationship Committee

iv) Corporate Social Responsibility Committee

v) Risk Management Committee

vi) Borrowing Committee

vii) Investment and Finance Committee

All the recommendations made by the Committees including the Audit Committee were accepted by the Board. A detailed update on the statutory Committees, its composition, terms of reference, number of meetings held and attendance of the Members at each meeting is provided in the Report on Corporate Governance.

DIRECTORS AND OFFICERS INSURANCE (''D & O INSURANCE'')

The Company has procured D & O liability insurance policy that covers the members of the Board and Officers of the Company for such quantum and risks as determined by its Board of Directors.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has in place a robust process for approval of Related Party Transactions ("RPTs") and dealing with Related Parties. The Company demonstrates a structured approach to manage RPTs. Transparency and oversight is ensured by providing detailed justifications to the Audit Committee and adhering to regulatory requirements (SEBI Master Circulars and SEBI Listing Regulations).

All related-party transactions (RPT) entered during the financial year were conducted in the ordinary course of business and on an arms-length basis. The Company, during the year, has not entered into any materially significant related-party transactions with Promoters, Directors, Key Managerial Personnel, or other persons that may have had a potential conflict with the Company''s interests. All related-party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for repetitive related-party transactions that can be foreseen. The required disclosures are accordingly made to the Audit Committee every quarter regarding their omnibus approval.

Under Regulations 23(5) of SEBI Listing Regulations, as amended, approval of the Audit Committee is not applicable for the RPTs entered into between a holding Company and its wholly-owned subsidiary, and RPT entered into between two wholly owned subsidiaries of the listed holding Company, whose accounts are consolidated with such a holding Company and placed before the shareholders at the general meeting for approval. Since most Company''s transactions are with its subsidiaries, omnibus approval of the Audit Committee is obtained for such transactions and is reviewed quarterly as a measure of good corporate governance.

The policy on the materiality of related-party transactions and on dealing with related-party transactions is in line with SEBI Listing Regulations, as amended, and is uploaded on the Company''s website at https://www.zentechnologies.com/ policies-and-code-of-conduct.

In accordance with Section 134(3)(h) of the Companies Act,

2013, and Rule 8(2) of the Companies (Accounts) Rules,

2014, the particulars of the contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in Form AOC-2 is attached as Annexure II to this Report. The Company at the Annual General Meeting held on September 14, 2024 obtained approval of the Members for continuing/undertaking RPTs with Unistring Tech Solutions Private Limited which may exceed the materiality threshold,

and which are in the ordinary course of business and on arms'' length. Detailed disclosure on related party transactions as per IND AS-24 containing name of the related party and details of the transactions entered with such related party have been provided under Notes to financial statements. Disclosure on RPTs on half year basis are also submitted to the stock exchanges i.e BSE Limited and National Stock Exchange of India Limited.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of corporate governance and adhering to the corporate governance requirements set out by the Securities and Exchange Board of India (SEBI). The report on corporate governance as stipulated under the SEBI Listing Regulations forms an integral part of this report. The requisite certificate from the Secretarial Auditor of the Company confirming compliance with the conditions of corporate governance is attached to the report on corporate governance.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report for the year under review, as stipulated under Regulation 34(2)(f) of the SEBI Listing Regulations, is presented in a separate section, forming part of the annual report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed herewith as Annexure III to this report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended thereof, a statement showing the names and other particulars of the employees drawing remuneration over the limits set out in the said rules forms part of this report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the annual report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection by the members at the registered office of the Company or through electronic mode during business hours on working days up to the date of the forthcoming 32^nd AGM of the Company. Any member interested in obtaining a copy thereof may write to the Company Secretary at cosec@ zentechnologies.com in this regard.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company believes in upholding professional integrity and ethical behaviour in the conduct of its business. In terms of Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations and to uphold and promote these standards, the Company has a Whistle Blower Policy which serves as a mechanism for its Director(s) and employee(s) to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal. The policy also provides employee(s) access to the Chairman of the Audit Committee under certain circumstances. The details of the procedures are also available on the Company''s website at https://www.zentechnologies.com/ policies-and-code-of-conduct

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on March 31,2025 is made available on the Company''s website at https://www. zentechnologies.com/annual-returns.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) for the year under review as stipulated under Regulation 34 of the SEBI Listing Regulations forms part of this Annual Report.

RISK MANAGEMENT POLICY

The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedures are reviewed by the Audit Committee, Risk Management Committee and the Board on periodical basis.

The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 and Regulation 21 of the SEBI Listing Regulations and the same is also made available on the Company''s website at: https:// www.zentechnologies.com/policies-and-code-of-conduct.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), as amended from time to time, the Company has constituted the CSR Committee of the Board which is chaired by an Independent Director. The Company has formulated and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Companies Act, 2013) under which various developmental initiatives are undertaken.

The Annual Report on CSR activities of the Company during fiscal 2025, in accordance with the CSR Rules, is attached as Annexure IV to this report. Further details on CSR activities also form part of this Annual Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has an ongoing familiarization programme for all Independent Directors with regard to their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc. The Company issues a formal letter of appointment to the Independent Directors, outlining their role, function, duties and responsibilities, the format of which is available on the Company''s Website.

Further, various other programmes are conducted for the benefit of Independent Directors to provide periodical updates on regulatory front, industry developments and any other significant matters of importance.

The details of training and familiarization program are available on the Company''s website at https://www.zentechnologies. com/investor-information.

AUDITORS Statutory Auditors

M/s. Ramasamy Koteswara Rao and Co LLP, Chartered Accountants (Registration No: 010396S/S200084), were re-appointed as Statutory Auditors of the Company at the 31^st Annual General Meeting held on September 14, 2024, to hold office for a second term of 5 (five) consecutive years from the conclusion of that AGM till the conclusion of the 36^th Annual General Meeting of the Company to be held in the year 2029.

Cost Records and Auditors

Pursuant to the provisions of Section 148(1) of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendments Rules, 2014, the cost records maintained by the Company are required to be audited.

The Board on the recommendation of the Audit Committee, has appointed M/s. M P R & Associates, Cost Accountants (Registration No: 000413) to audit the cost records of the Company for the FY 2025-26 at a remuneration of '' 1,25,000 (Rupees One Lakh Twenty Five Thousands only) plus applicable taxes as well as reimbursement of reasonable out-of-pocket expenses at actuals. M/s. M P R & Associates have confirmed that their appointment is in compliance with the provisions of the Companies Act, 2013.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking Member''s ratification for the remuneration payable to M/s M P R & Associates Cost Auditors is included in the Notice convening the AGM.

The Cost Audit Report for the FY 2023-24 was filed with the Ministry of Corporate Affairs. The report was unmodified and did not contain any qualification or reservation or adverse remark or disclaimer. The Cost Audit Report for the FY 2024-25 will be filed before the due date.

Secretarial Auditors & Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Regulation 24A of SEBI Listing Regulations, as amended, the Board, subject to the approval of the shareholders, has appointed M/s. P S Rao & Associates, Practising Company Secretaries, (Registration No: P2001TL078000) a peer reviewed firm, to undertake the Secretarial Audit of the Company for a term of five consecutive years i.e. from FY 2025-26 to FY 2029-30. Accordingly, a resolution seeking Member''s approval for the appointment of M/s P S Rao & Associates, Practising Company Secretaries, is included in the Notice convening the AGM.

The Secretarial Audit Report issued by M/s. P S Rao & Associates for the period under review in Form MR-3 is in Annexure-V to this Report. There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.

SECRETARIAL AUDIT OF MATERIAL UNLISTED SUBSIDIARY COMPANY

Mr. D S Rao, Practicing Company Secretary and Mrs.Sunita Verma, Practising Company Secretary, have undertaken a Secretarial Audit of the Company''s material subsidiaries viz. Unistring Tech Solutions Private Limited and Applied Reaserch International Private Limited for the financial year 2024-25. The Audit report confirms that the material subsidiaries have complied with the provisions of the Companies Act, 2013, Rules, Regulations and Guidelines and that there were no deviations or non-compliance.

As required under Regulation 24A of the SEBI Listing Regulations, the reports of the Secretarial Audit are given as Annexure VA and VB to this report.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Annual Secretarial Compliance Report for the FY 2024-25 has been submitted to the Stock Exchanges i.e BSE Limited and National Stock Exchange of India Limited within 60 days from end of the Financial Year ended March 31,2025.

RECONCILIATION OF SHARE CAPITAL AUDIT

As required by the SEBI Listing Regulations, a quarterly audit of the Company''s Share Capital is being carried out by an Independent Practicing Company Secretary to reconcile the total share capital, the total share capital admitted with NSDL, CDSL and held in physical form, with the issued and listed capital. The Practicing Company Secretary''s certificate in regard to the same is submitted to BSE Limited and National Stock Exchange of India Limited and is also placed before the Board of Directors.

AUDITORS'' QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE

There are no qualifications, reservations or adverse remarks by the Statutory Auditors in their report or by the Practising Company Secretary in the secretarial audit report. The emphasis on the matter and the key audit matters paragraphs are self explanatory and require no clarification.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Companies Act, 2013 and the rules made there under.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has established and maintained a framework of internal financial controls and compliance systems. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were

adequate and your Company is constantly endeavoring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate and effective with the nature of its business.

Further, the statutory auditors of your Company have also issued an attestation report on internal control over financial reporting (as defined in Section 143 of the Companies Act, 2013) for the financial year ended March 31, 2025, which forms part to the Statutory Auditor''s Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information under clause (m) of sub-section (3) of Section 134 of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure VI to this Report

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE ''GOING CONCERN'' STATUS AND THE COMPANY''S OPERATIONS IN THE FUTURE

No significant material orders passed by the regulators/courts/ tribunals would impact the Company''s ''going-concern'' status and future operations. However, members'' attention is drawn to the statement on contingent liabilities and commitments in the notes forming part of the financial statements.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has taken several initiatives across the organization to build awareness amongst employees about the Policy and the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 . An Internal Complaints Committee (ICC) has been constituted in compliance with the requirements of said Act to redress complaints received regarding sexual harassment. All employees are covered under this Policy.

The details of sexual harassment complaints as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules thereunder are provided in the Coporate Governance Report.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Company adopted a Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and Immediate Relatives of Designated Persons pursuant the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information and has been made available on the Company''s website at https://www.zentechnologies.com/policies-and-code-of-conduct.

The Company is maintaining Structured Digital Database (''SDD''), for monitoring the dealings in the securities of the Company by the promoters, directors and designated persons including immediate relative and also to keep record of the persons with whom the unpublished price sensitive information of the Company has been shared internally or externally until it becomes public.

CHANGE IN THE NATURE OF BUSINESS,

IF ANY

During the year under review, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report i.e. between March 31,2025 to May 17, 2025.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of the Section 124 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, declared dividends which remained unpaid or unclaimed for a period of seven years have been transferred by the Company to the IEPF, which has been established by the Central Government.

During the year under review, pursuant to the provisions of Section 124 (5) of the Companies Act, 2013, an amount of '' 85,119 relating to FY 2016-17, which remained unclaimed for a period of 7 years was transferred to the Investor Education and Protection Fund by the Company in November, 2024.

Further, during the year under review, the Company transferred 11,650 equity shares to the Investor Education and Protection Fund relating to the investors who have not claimed any dividend from the last seven consecutive years.

The details of the investors whose dividend amount and shares are transferred are available on the Company''s website https://www. zentechnologies.com/unpaid-unclaimed-dividend.

INSURANCE

All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial during the year under review, and your directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels, contributing to the successful operations of the Company.

GREEN INITIATIVES

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of the Notice of 32^nd Annual General Meeting of the Company including the Annual Report for FY 2024-25 are being sent to all members whose e-mail addresses are registered with the Company/Depository Participant(s)/RTA.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

The Company has not made any such valuation during the FY 2024-25.

APPLICATION UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

The Company has not made any application under the Insolvency and Bankruptcy Code, 2016 during the FY 2024-25.

ACKNOWLEDGMENTS

Your directors thank various departments of Central and State Government, Organizations and Agencies for the continued help and co-operation extended by them to your Company. Your directors also gratefully acknowledge all the stakeholders of the Company viz. shareholders, customers, dealers, suppliers, vendors, financial institutions, banks, other intermediaries and business partners for the excellent support received from them during the year.

Your directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

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Mar 31, 2024

The Directors have great pleasure in presenting the report on the Business and Operations of your Company ("the Company" or "Zen"), along with the audited financial statements, for the financial year ended March 31, 2024.

FINANCIAL HIGHLIGHTS

The financial highlights of the Company are as follows:				(Rs. in Lakhs)
Particulars	Consolidated		Standalone
	2023-24	2022-23	2023-24	2022-23
Total Income	45,477.46	22,609.36	44,420.54	16,848.90
Total Operating Expenditure	25,906.89	14,623.50	25,304.37	11,016.00
Operating Profit (PBIDT)	19,570.57	7,985.86	19,116.17	5,832.9
Less: Interest	228.13	407.55	184.05	202.55
Less: Depreciation & Amortization	967.96	605.65	732.05	437.62
Add/Less: Exceptional Items	240.90	200.00	240.90	200.00
Profit/(Loss) before tax	18,615.39	7,172.66	18,440.97	5,392.74
Current Tax	3,664.93	1,548.71	3,523.53	952.00
Prior Period Taxes	(44.68)	0	0	0
Deferred Tax	2,044.70	627.14	1,994.03	676.96
Net Profit after Tax	12,950.44	4,996.82	12,923.41	3,763.78
Add: Other Comprehensive Income/(Expense)	54.75	40.51	(55.97)	(13.25)
Total Comprehensive income	13,005.19	5,037.33	12,867.44	3,750.53
Earnings per Share (?) (Face Value '' 1/- per share)
Basic	15.45	5.39	15.61	4.75
Diluted	15.34	5.20	15.51	4.58

REVIEW OF OPERATIONS

During the year under review, your Company achieved total income of '' 44,420.54 Lakhs as against '' 16,848.90 Lakhs during the previous year The Net profit after tax stood at '' 12,923.45 Lakhs as against '' 3,763.78 Lakhs for the previous year

During the year, the R&D expenditure (capital and revenue) is '' 2,665.34 Lakhs (previous year '' 2,021.13 Lakhs).

DIVIDEND

The Board of Directors of your Company in its meeting held on May 4, 2024, recommended a dividend @ 100% ('' 1/- per equity share of '' 1/- each) for the financial year 2023-24 after having considered ongoing and imminent commitments, subject to shareholders'' approvalat the ensuing annualgeneralmeeting (AGM) and shall be subject to deduction of income tax at source.

Dividend Distribution Policy

Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), as amended, the Dividend Distribution Policy duly approved by the Board is available on the website of the Company and can be accessed at https://www.zentechnologies.com/ investor_relations/zen-dividend-distribution-policy.pdf

ALLOTMENT OF EQUITY SHARES

The Board of Directors of the Company on May 24, 2023, allotted 40,64,627 equity shares of '' 1/- each at premium of '' 212/-

pursuant to conversion of Compulsory Convertible Debentures (CCDs) and 4,69,633 equity shares '' 1/- each at premium of '' 212/- pursuant to conversion of Convertible Warrants.

Further, the Stock Exchanges granted trading approval for the above mentioned equity shares on July 18, 2023, which is effective from July 19, 2023.

ZEN TECHNOLOGIES LIMITED EMPLOYEE STOCK OPTION PLAN-2021

The Board of Directors and the shareholders of the Company at their meetings held on July 24, 2021, and August 28, 2021, respectively and further amended by the Board of Directors and shareholders of the Company at their meetings held on September 6, 2022 and September 29, 2022, respectively, approved the Zen Technologies Limited Employee Stock Option Plan-2021 ("ZEN ESOS 2021"/"Scheme") to acquire, create, issue, offer, grant, allot and/or transfer from time to time, in one or more tranches up to 40,00,000 (Forty Lakhs) Employee Stock Options ("ESOPs") exercisable into 40,00,000 (Forty Lakhs) equity shares of face value '' 1/- (rupee one) each. The scheme is being implemented through a Trust set up by the Company namely "Zen Technologies Limited Employees Welfare Trust" and involves acquisition of shares from the secondary market for which the Company has also obtained the in-principle approval from both the stock exchanges viz., BSE Limited and the National Stock Exchange of India Limited. The above mentioned Trust acquired 6,41,400 Equity Shares of '' 1/- each from market as part of implementation of ZEN ESOS 2021.

Disclosures pursuant to Regulation 14 read along with Part F of Schedule-I of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are placed on the Company''s Website: https://www.zentechnologies.com/ policies-and-code-of-conduct

Further, the certificate from the SecretarialAuditors of the Company certifying that the Company''s Scheme is being implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is enclosed as "Annexure-1" and the resolutions passed by the Members is also placed on the Company''s Website: https://www.zentechnologies.com/investor-information

TRANSFER OF SHARES PURSUANT TO ESOPS

During the financialyear under review, the Company has transferred 1,23,690 equity shares of face value of '' 1/- each, (2,00,040 as on July 20, 2024) to the eligible employees of the Company, to whom the grants were issued earlier under Zen Technologies Limited Employee Stock Option Plan-2021 ("the Scheme"), from Zen Technologies Limited Employees Welfare Trust established for the purpose of implementing the scheme, upon completion of respective vesting period as may be applicable as per the scheme.

SHARE CAPITAL

Subsequent to the allotment of equity shares pursuant to conversion of CCDs and Warrants issued in November 2021, the paid-up equity share capital of the Company stood at '' 8,40,44,260 Crores comprising of 8,40,44,260 equity shares of '' 1/- each w.e.f

The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

During the financial year under review, the Company has granted Employee Stock Options (ESOPs) convertible into equal number of equity shares of face value of '' 1/- each under "Zen Technologies Limited Employee Stock Option Plan - 2021" at a price of '' 100/-per option as detailed below. The said price is more than the face value of equity shares of the company and less than the prevailing Market Price as on the date of the grant. Details of total options granted, vested and exercised (as on July 20, 2024) under the scheme are as follows:

Total no. of Shares acquired through open market
In FY 2022-23:	4,81,524
In FY 2023-24:	1,59,876
Total (A)	6,41,400
Grants issued to Employees under the Scheme
First Grant on February 21, 2023:	2,70,900
Second Grant on October 28, 2023:	22,500
Third Grant on May 4, 2024:	5,000
Total(B)	2,98,400
Options lapsed/forfeited/cancelled (C)	10,000
Options which are in vesting period	46,000
Options Exercised	2,00,040
Options which have completed the vesting period but yet to be Exercised	42,360
Money realized by exercise of options 2,00,04,000
Total options outstanding which are not backed by the grants (A-B C)	3,53,000

QUALIFIED INSTITUTIONAL PLACEMENT(S)

During the year under review, the Company obtained the necessary approval(s) from the shareholders on March 8, 2024, for one or more Qualified Institutional Placements (QIPs) for an aggregate amount upto '' 1,000 Crores, which is valid for a period of 365 days from the date of passing of the resolution.

RESERVES

No amounts were proposed to be transferred to Reserves for the period under review.

FIXED DEPOSITS

The Company has not accepted any deposits from Public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of balance sheet.

LISTING OF EQUITY SHARES

The securities of the Company are listed at National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Further, the Company has no equity shares carrying differential rights.

The Company has paid Listing Fees for the Financial Year 2024-25, to each of the Stock Exchanges, where its equity shares are listed.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has Five (5) subsidiaries in India and overseas as mentioned below and there are no associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries:

a. Unistring Tech Solutions Private Limited (Material Subsidiary)

b. Zen Technologies USA, Inc

c. Zen Medical Technologies Private Limited

d. Zen Defence Technologies L.L.C, UAE

e. AiTuring Technologies Private Limited (w.e.f. March 30, 2024)

Consolidated financialstatements have been prepared by the Company in accordance with the requirements of Ind AS 110 issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of the Act.

Pursuant to the provisions of Section 129(3) of the Act and Rule 8(1) of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company''s subsidiaries, in Form AOC-1, is attached as "Annexure-2" to this report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, including the consolidated financial statements, along with the relevant documents and the separate audited financial statements in respect of subsidiaries are made available on the website of the Company https://www. zentechnologies.com/investor-information

Further, the Company''s policy on determining the material subsidiaries, as approved by the Board is uploaded on the Company''s website at https://www.zentechnologies.com/policies-and-code-of-conduct

Unistring Tech Solutions Private Limited (UTS)

UTS is a subsidy of the Company in India with 51% of holding. UTS works for design and development of various products in Electronic Warfare (EW), Communication and RADAR applications. UTS offers services to Govt and private clients in the area of EW systems (ESM, COMINT, ELINT & Jammers), RADARs, Drone based EW systems, command links, EW and Radar Target Simulators. UTS''s major products and services are targeted for military clients (Armed forces, DRDO, ECIL, BEL and Private companies in defence). UTS has demonstrated remarkable financialprogress in the financialyear 2022-23 & 2023-24, which turned the Company as a material Subsidiary of the Company in term of the Listing Regulations and playing a significant role in shaping the consolidated financial statements.

Zen Medical Technologies Private Limited (ZMTPL)

ZMTPL is a wholly-owned subsidiary of the Company in India. Zen Medicalis primarily involved in the field of medicaland hospital equipment.

AiTuring Technologies Private Limited (ATPL)

ATPL is a subsidy of the Company in India with 51% of holding. ATPL is pioneers in the field of robotics, integrating sophisticated technologies and specializes in providing cutting-edge solutions in the field of Remote Controlled Weapon Stations (RCWS) and Optronics for a wide range of weapon platforms, ranging from 5.56mm to 12.7mm calibers. Its portfolio includes sophisticated RCWS engineered for multifaceted firearms with unparalleled precision in 360° azimuth and elevation. Its RCWS are designed to be mounted on any vehicle and are the lightest in weight compared to any other RCWS with similar capabilities. They also design state-of-the-art Pan-Tilt-Zoom (PTZ) cameras equipped with cutting- edge day/night thermal vision and Long Range Finder Systems (LRFS).

Zen Technologies USA, Inc

Zen Technologies USA is a wholly-owned subsidiary of the Company in USA, incorporated on March 9, 2018. It operates within the simulator industry, which complements the parent Company''s core competencies. Zen Technologies USA is primarily dedicated to offering combat training products to defense and security customers worldwide.

Zen Defence Technologies L.L.C, UAE (ZDT)

ZDT is a wholly-owned subsidiary in UAE, incorporated on November 15, 2022. ZDT is dedicated to the import and export of training equipment and simulators, as well as engaging in trading, development, and maintenance of defense and surveillance systems on a global scale. ZDT is yet to commence the operations.

CONSOLIDATED FINANCIAL STATEMENTS (CFS)

During the year, the Board of Directors reviewed the affairs of its subsidiaries. Your Company has prepared its consolidated financial statements in accordance with the requirements of Ind AS-27 issued by the Institute of Chartered Accountants of India (ICAI)

and as per the provisions of Section 129(3) of the Companies Act, 2013. The Consolidated Financial Statements together with the Auditors'' Report form part of this Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the financial statements of the Company, including the consolidated financialstatements, and allother documents required to be attached to this report are available for inspection by the members at the registered office of the Company during the business hours on all days, except Saturdays, Sundays and public holidays, up to the date of the Annual General Meeting (''AGM''). Any member desirous of obtaining a copy of the said financialstatements may write a mail to the Company Secretary of the Company. The above-mentioned documents have also been uploaded on the website of the Company (https://www.zentechnologies.com/annual-reports).

ANNUALRETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is made available on the Company''s website at https://www.zentechnologies.com/annual-returns

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) for the year under review as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015 ("the Listing Regulations") forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business and Responsibility Sustainability Report (BRSR) as stipulated under Regulation 34(2)(f) of the Listing Regulations is applicable to your Company for FY 2023-24 and the same is provided as separate section to this Annual Report which indicates the Company''s performance against the principles of the ''National Guidelines on Responsible Business Conduct'' This would enable the members to have an insight into environmental, social and governance initiatives of the Company.

CORPORATE GOVERNANCE

A separate report on Corporate Governance as required under the Listing Regulations is provided as separate section to this Annual Report.

OUTLOOK AND FUTURE PLANS

"Management Discussion and Analysis" contains a section on the Company''s outlook and future plans and members may please refer the same on this.

DIRECTORS

The Board of Directors of the Company has an optimum combination of Executive (4), Non-Executive and Independent Directors (4) including one woman Independent Director

Independent and Non-Executive Directors

As prescribed under Listing Regulations and pursuant to Section 149(6) of the Act, the Non-Executive and Independent

Directors (as on the date of signing this report) of the Company are Dr Ravindra Kumar Tyagi, Dr Ajay Kumar Singh, Ms. Sirisha Chintapalli and Mr Sanjay Vijay Singh Jesrani.

All the above mentioned directors were appointed as Independent Directors by the shareholders in their respective meetings.

Executive Directors

The following are the Whole-Time Directors of the Company.

Mr Ashok Atluri, Chairman and Managing Director, Mr Kishore Dutt Atluri, President and Joint Managing Director, Mr. M. Ravi Kumar, Whole-Time Director and Mrs. Shilpa Choudari, Whole-Time Director.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year under review,

a) Mr Ashok Atluri has been re-appointed as Chairman and Managing Director for a period of 3 years with effect from May 1, 2023.

b) Mr Kishore Dutt Atluri has been re-appointed as President and Joint Managing Director for a period of 3 years with effect from May 1, 2023.

c) Mr M. Raghavendra Prasad has been appointed as Company Secretary and Compliance Officer of the Company with effect from May 6, 2023.

d) Ms. Sirisha Chintapalli has been re-appointed as the Non-Executive and Independent Director of the Company for the second consecutive term of 3 years, with effect from August 8, 2023.

e) Mrs. Shilpa Choudari has been re-appointed as the Whole-Time Director for a period of 3 years with effect from November 1, 2023.

f) Mr Sanjay Vijay Singh Jesrani has been appointed as the Non-Executive and Independent Director of the Company for a period of 3 years, with effect from January 27, 2024.

g) Mr Amreek Singh Sandhu has retired for office of Directorship w.e.f. February 3, 2024.

DIRECTORS RETIRING BY ROTATION

Pursuant to the provisions of the Act, Mr Kishore Dutt Atluri retires at the AGM and being eligible, offers himself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134, sub-section 3(c) and sub-section 5 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability state and confirm that:

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

ii. such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as on March 31, 2024, and of the Company''s profit or loss for the year ended on that date;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DECLARATIONS OF INDEPENDENT DIRECTORS

All independent directors of the Company have given declaration that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Act. The Company also received a declaration of compliance of sub-rule (1) and sub-rule (2) of the Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

Pursuant to the provisions of the Act and the Listing Regulations, the Nomination and Remuneration committee identifies persons who are qualified to become directors in accordance with the criteria laid down and recommend to the Board for their appointment and removal.

The Company adopted a policy relating to the remuneration for Directors and Key Managerial Personnel. This Policy covers the remuneration and other terms of employment for the Company''s Executive Team. The remuneration policy for members of the Board and for management, aims at improving the performance and enhancing the value of the Company by motivating and retaining them and to attract the right persons to the right jobs in the Company. The object of this Remuneration Policy is to make your Company a desirable workplace for competent employees and thereby secure competitiveness, future development and acceptable profitability. In order to achieve this, it is imperative that the Company is in a position to offer competitive remuneration in all its operational locations.

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act is made available on https://www.zentechnologies.com/policies-and-code-of-conduct

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS'' INDEPENDENCE

The Nomination and Remuneration committee (NRC) shall assess the independence of directors at the time of appointment, re-appointment and the Board shall assess the same annually based on the criteria provided by NRC. The Board shall re-assess determination of independence when any new interests or relationships are disclosed by a Director

The criteria of independence is as prescribed in the Act and the Listing Regulations and the independent directors shall abide by the Code specified for them in Schedule IV of the Act.

NUMBER OF MEETINGS OF THE BOARD

During the financial year, five (5) meetings of the Board of Directors were held on May 6, August 5, October 28, 2023, January 27, 2024 and February 24, 2024, in compliance with provisions of the Act read with rules made thereunder, Secretarial Standards and the Listing Regulations.

COMMITTEES OF THE BOARD

Currently the Board has 6 (six) committees: Audit, Nomination and Remuneration, Corporate Social Responsibility, Stakeholders'' Relationship, Risk Management, Borrowing and Investment & Finance Committee.

The compositions of the committees are in line with the applicable provisions of the Act, Rules and Regulations are as given below:
Name of the Committee	Composition of the Committee	Remarks
Audit Committee	Mr Sanjay Vijay Singh Jesrani, Chairperson Dr Ajay Kumar Singh, Member Dr R.K. Tyagi, Member Mr Ashok Atluri, Member	The Audit committee of the Board of Directors was constituted in conformity with the requirements of Section 177 of the Act and regulation 18 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.
		All recommendations made by the Audit committee during the year were accepted by the Board.
Nomination and Remuneration Committee	Mr Sanjay Vijay Singh Jesrani, Chairperson Dr Ajay Kumar Singh, Member Dr R.K. Tyagi, Member	The Nomination and Remuneration committee of the Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 19 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.
Corporate Social Responsibility Committee	Dr R.K. Tyagi, Chairperson Mr M. Ravi Kumar, Member Mr Ashok Atluri, Member	The Corporate Social Responsibility committee of the Board of Directors was constituted in conformity with the requirements of Section 135 of the Act.
		The Committee monitored the implementation of the CSR Policy from time to time.
Stakeholders'' Relationship Committee	Ms. Sirisha Chintapalli, Chairperson Mr. Ashok Atluri, Member Mr Sanjay Vijay Singh Jesrani, Member	The Stakeholders'' Relationship committee of the Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 20 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above.
Risk Management Committee	Mr Sanjay Vijay Singh Jesrani, Chairperson Mr Ashok Atluri, Member Mr M. Ravi Kumar, Member Dr Ajay Kumar Singh, Member	The Risk Management committee of the Board of Directors was constituted in conformity with the requirements of Regulation 21 of the Listing Regulations with its role as stipulated in the Listing Regulations.
Borrowing Committee & Investment and Finance Committee	Mr Sanjay Vijay Singh Jesrani, Chairperson Mr M. Ravi Kumar, Member Mr Kishore Dutt Atluri, Member Mrs. Shilpa Choudari, Member Mr Ashok Atluri, Member	The Borrowing Committee and Investment & Finance Committee of the Board of Directors were constituted pursuant to the respective resolutions passed by the Board of Directors in line with the proviso under Section 179(3) of the Companies Act, 2013.
Fund Raising Committee	Mrs. Shilpa Choudari, Chairperson Mr. M. Ravi Kumar, Member Dr. Ajay Kumar Singh, Member Mr Afzal Harunbhai Malkani, Member	The Fund Raising Committee of the Board of Directors was constituted pursuant to the resolution passed by the Board of Directors for the purpose of "Qualified Institutional Placement".
A detailed note on the Board and its mandatory Committees is provided in the Corporate Governance Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, are enclosed as "Annexure-3" to this report.

The policy on materiality of related party transactions and also on dealing with the related party transactions as approved by the Audit committee and the Board of Directors was placed on the website of the Company at https://www.zentechnologies. com/policies-and-code-of-conduct

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, with respect to Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo are provided in "Annexure-4" to this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans given, guarantees provided and investments made, if any during the Financial Year ended on March 31, 2024, are enclosed as "Annexure-5" to this Report in compliance with the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014. The particulars of aggregate loans, guarantees and investments under Section 186 of the Act are disclosed in the notes to Financial Statements, which may be read as part of this Report.

RISK MANAGEMENT POLICY

The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedures are reviewed by the Audit committee and the Board on periodical basis.

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 21 of the Listing Regulations and the same is also made available on the Company website of the Company at: https://www. zentechnologies.com/policies-and-code-of-conduct

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The annual report on CSR activities, in terms of Section 135 of the Act, and the details about the policy developed and implemented by the Company on CSR initiatives taken during the year are enclosed as "Annexure-6" to this report. A detailed policy on CSR

is placed on the Company''s website under the web link: https:// www.zentechnologies.com/policies-and-code-of-conduct

BOARD EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out annual performance evaluation of its own, the individual directors as well as the mandatory committees of the Board. A structured set of criteria was adopted after taking into consideration the inputs received from the directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. Evaluation of the Board members is conducted on an annual basis by the Board, Nomination and Remuneration committee and Independent Directors with specific focus on the performance and effective functioning of the Board and individual directors.

The Nomination and Remuneration committee had specified criteria for performance evaluation of Directors, Committees and Board as a whole and recommended the same to the Board for evaluation.

CRITERIA FOR PERFORMANCE EVALUATION

a. Ability of the candidate to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.

b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.

c. Bringing objectivity and independence of view to the Board''s discussions in relation to the Company''s strategy, performance, and risk management.

d. Statutory compliance and ensuring high standards of financial probity and Corporate Governance.

e. Responsibility towards requirements under the Companies Act, 2013, responsibilities of the Board and accountability under the Director''s Responsibility Statement.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors attend a Familiarization/Orientation Program on being inducted into the Board. Further, various other programmes are conducted for the benefit of Independent Directors to provide periodical updates on regulatory front, industry developments and any other significant matters of importance. The Company issues a formal letter of appointment to the Independent Directors, outlining their role, function, duties and responsibilities, the format of which is available on the Company''s Website.

The details of training and familiarization program are available on the website at https://www.zentechnologies.com/investor-information

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, AiTuring Technologies Private Limited became a subsidiary of the Company and no subsidiary Company ceased to be the subsidiary of the Company during the said period.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has established and maintained a framework of internal financial controls and compliance systems. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and your Company is constantly endeavoring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate and effective with the nature of its business.

Further, the statutory auditors of your Company have also issued an attestation report on internal control over financial reporting (as defined in Section 143 of Companies Act, 2013) for the financial year ended March 31, 2024, which forms part to the Statutory Auditors'' Report.

VIGIL MECHANISM

The Board of Directors, on the recommendation of the Audit Committee, established a vigil mechanism for directors and employees called "Whistle Blower Policy", pursuant to the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy and to provide adequate safeguards against victimization of persons who use such mechanism and to provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

The Whistle Blower Policy is posted under the Investors section of the Company''s website at: https://www.zentechnologies.com/ policies-and-code-of-conduct

FRAUD REPORTING

During the Financial Year under review, the Statutory Auditors have not reported any incident of fraud to the Board of Directors of the Company, pursuant to the provisions of Section 143(12) of the Companies Act, 2013.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance towards sexualharassment at the workplace has adopted a policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has taken several initiatives across the organization to build awareness amongst employees about the Policy and the provisions of the Prevention of Sexual Harassment of Women at Workplace Act. The details of sexual harassment complaints as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules thereunder are as follows:

No. of Complaints Received: Nil

No. of Complaints disposed off: N.A.

Further, during the year under review, the Company has complied with the provisions related to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed and disclosures to be made while in possession of Unpublished Price Sensitive Information and while dealing in the shares of the Company, as well as the consequences of violations. The Policy has been formulated to regulate, monitor and ensure reporting of trading by insiders by employees and to maintain the highest ethical standards while dealing in the Company''s securities.

The Insider Trading Policy of the Company, covering the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct for prevention of insider trading is available on our website: https://www. zentechnologies.com/policies-and-code-of-conduct

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, pursuant to the provisions of Section 124(5) of the Act (Section 205A of the Companies Act, 1956), an amount of '' 1,08,595.00/- relating to FY 2015-16, which remained unclaimed for a period of 7 years was transferred to the Investor Education and Protection Fund by the Company in November 2023.

TRANSFER OF UNCLAIMED SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY

During the year under review, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more (relevant shares) up to and including the financial year 2015-16 were transferred by the Company in the name of IEPF from time to time and the statement containing such details as prescribed is placed on the Company''s website at https://www. zentechnologies.com/unpaid-unclaimed-dividend

STATUTORY AUDITORS & AUDITORS'' REPORT

The Members of the Companyt at their meeting held on September 21, 2019, approved the appointment of M/s. Ramasamy Koteswara Rao and Co LLP, Chartered Accountants (Firm Registration No. 010396S/S200084) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of 26^th AGM till the conclusion of the 31^st AGM.

The Auditors'' Report on the financial statements of the Company does not contain any qualifications, reservations, or adverse remarks or disclaimer and the Notes on the financial statements referred to therein are self-explanatory, thereby not requiring any further comments on the same.

As the term of the existing statutory auditors (M/s. Ramasamy Koteswara Rao and Co LLP,) will expire at the conclusion of 31^st AGM of the Company. Hence, the Board of Directors at its meeting held July 28, 2024, based on the recommendations of Audit committee re-appointed M/s. Ramasamy Koteswara Rao and Co LLP Chartered Accountants (ICAI Firm Registration No. 010396S/ S200084) for second term of 5 (five) years from the conclusion of 31^st AGM till the conclusion of the 36^th AGM to be held in the calendar year 2029 at such remuneration, as recommended by the Audit Committee and as may be mutually agreed between the Board of Directors of the Company and the statutory auditors from time to time, subject to the approval of shareholders at the 31^st AGM.

MAINTENANCE OF COST RECORDS

During the year under review, Section 148(1) of the Act is applicable to your Company and accordingly such accounts and records are made and maintained by the Company as specified in the Act.

COST AUDIT

The Board of directors, based on the recommendations of the audit committee, appointed M/s. M P R & Associates, Cost Accountants, Hyderabad, as Cost Auditors for conducting the audit of cost records of the Company for FY 2023-24. The same was ratified by the members at the 30^th AGM held on September 16, 2023.

Further, the Board of Directors based on the recommendations of the audit committee, appointed M/s. M P R & Associates, Cost Accountants, as Cost Auditors for conducting the audit of cost records of the Company for FY 2024-25, subject to ratification of

remuneration payable to them for the financial year 2024-25 by the members at the ensuing AGM.

SECRETARIAL AUDITORS AND AUDIT REPORT

During the year under review, the Company has complied with the provisions of Section 204 of the Act and Regulation 24A of the Listing Regulations.

The Secretarial Audit Report for the financial year ended March 31, 2024, issued by Mr D. S. Rao (ACS no. 12394/CP no. 14487), Practicing Company Secretary, is enclosed as "Annexure-7" to this Report and it does not contain any reservation, qualification or adverse remarks.

Further, the Board has appointed Mr P S. Rao (FCS no. 10322/ CP no. 3829), Managing Partner of M/s P S. Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct secretarial audit pursuant to the recommendations of the Audit committee for the FY 2024-25.

Furthermore, the Secretarial Audit report of Unistring Tech Solutions Private Limited (UTS), a material subsidiary of the Company, is also available on the Company''s website at https:// www.zentechnologies.com/subsidiary-Company-accounts

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The remuneration paid to your directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of directors/employees of the Company is enclosed as "Annexure-8" to this Report.

INSURANCE

All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial during the year under review, and your directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels, contributing to the successful operations of the Company.

GREEN INITIATIVES

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of the Notice of 31^st Annual General Meeting of the Company including the Annual Report for FY 2023-24 are being sent to all members whose e-mail addresses are registered with the Company/ Depository Participant(s).

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings (i.e., SS-1), General Meetings (i.e., SS-2) and on Dividend (i.e., SS-3).

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the financial year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. No significant or materialorders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future;

3. No material changes and commitments in the business operations of the Company from the financial year ended March 31, 2024, to the date of the signing of the Directors'' Report.

4. Neither the Managing Director nor the Whole-Time Directors of the Company receive any remuneration or commission from any of its subsidiaries; and

5. There is no change in the nature of the business of the Company.

6. No application was made, nor is any proceeding pending, under the Insolvency and Bankruptcy Code, 2016;

7. The Company hasn''t opted for one time settlement with any Bank or Financial Institution.

ACKNOWLEDGMENTS

Your directors thank various departments of Central and State Government, Organizations and Agencies for the continued help and co-operation extended by them to your Company. Your directors also gratefully acknowledge all stakeholders of the Company viz. shareholders, customers, dealers, vendors, suppliers, financial institutions, banks, other intermediaries and business partners for the excellent support received from them during the year.

Your directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

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Mar 31, 2023

Your Directors have great pleasure in presenting the report on the Business and Operations of your Company (''the Company'' or ''Zen''), along with the audited financial statements, for the financial year ended 31 March 2023.

FINANCIAL HIGHLIGHTS

The financial highlights of the Company are as follows:

(Rs. in Lakhs)
Particulars	Consolidated		Standalone
	2022-23	2021-22	2022-23	2021-22
Total Income	22,609.36	7,513.07	16,848.90	5,898.63
Total Operating Expenditure	14,623.49	6,518.39	11,016.00	5,170.50
Operating Profit (PBIDT)	7,985.87	994.68	5,832.9	728.13
Less: Interest	407.55	153.05	202.55	140.38
Less: Depreciation & Amortization	605.65	483.35	437.62	373.40
Add/Less: Exceptional Items	200.00	(27.96)	200.00	(27.96)
Profit/(Loss) before tax	7,172.66	330.32	5,392.74	186.39
Current Tax	1,548.71	127.95	952.00	36.33
Prior Period Taxes	0	(92.84)	0	(92.84)
Deferred Tax	627.14	34.24	676.96	40.54
Net Profit after Tax	4,996.82	260.96	3,763.78	202.36
Add: Other Comprehensive Income/(Expense)	40.51	3.48	(13.25)	2.38
Total Comprehensive income	5,037.33	264.45	3,750.53	204.74
Earnings per Share (?) (face value ? 1/- per share)
Basic:	5.39	0.25	4.75	0.25
Diluted:	5.20	0.25	4.58	0.25

REVIEW OF OPERATIONS

During the year under review, your Company achieved total income of ? 16,848.90 lakhs as against ? 5,898.63 lakhs during the previous year The Net profit after tax stood at ? 3,763.78 lakhs as against ? 202.36 lakhs for the previous year

During the year, the R&D expenditure (capital and revenue) is ? 19.09 crores (previous year ? 13.80 crores).

DIVIDEND

The Board of Directors of your Company in its meeting held on 06 May 2023 recommended a dividend @ 20% (? 0.20/- per equity share of ? 1/- each) for the financial year 2022-23 after having considered ongoing and imminent commitments, subject to shareholders'' approval at the ensuing annual general meeting (AGM) and shall be subject to deduction of income tax at source.

Dividend Distribution Policy

Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), as amended, the Dividend Distribution Policy duly approved by the Board is available on the website of the Company at: https://www.zentechnologies.com/investor_relations/zen-

dividend-distribution-policy.pdf

ALLOTMENT OF EQUITY SHARES

The Board of Directors of the Company on 24 May 2023, allotted 40,64,627 equity shares of ? 1/- each at premium of ? 212/-

pursuant to conversion of Compulsory Convertible Debentures (CCDs) and 4,69,633 equity shares ? 1/- each at premium of ? 212/- pursuant to conversion of Convertible Warrants.

Further, the Stock Exchanges granted trading approval for the above mentioned equity shares on 18 July 2023, which is effective from 19 July 2023.

ZEN TECHNOLOGIES LIMITED EMPLOYEE STOCK OPTION PLAN-2021

The Board of Directors and the shareholders of the Company at their meetings held on 24 July 2021 and 28 August 2021, respectively and further amended by the Board of Directors and shareholders of the Company at their meetings held on 06 September 2022 and 29 September 2022, respectively, approved the Zen Technologies Limited Employee Stock Option Plan-2021 ("ZEN ESOS 2021"/"Scheme") to create, issue, offer, grant, allot and/or transfer from time to time, in one or more tranches up to 40,00,000 (Forty lakhs) Employee Stock Options ("ESOPs") exercisable into 40,00,000 (Forty lakhs) equity shares of face value ? 1/- (Rupee one) each. The scheme is being implemented through a Trust set up by the Company namely "Zen Technologies Limited Employees Welfare Trust" and involves acquisition of shares from the secondary market for which the Company has also obtained the in-principle approval from both the stock exchanges viz., BSE Limited and the National Stock Exchange of India Limited.

The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

During the period under review, the Company has granted 2,70,900 (Two lakh Seventy thousand Nine hundred only) Employee Stock Options (ESOPs) convertible into 2,70,900 equity shares of face value of ? 1/- each under "Zen Technologies Limited Employee Stock Option Plan - 2021" at a price of ? 100/- per option on 21 February 2023. The said price is more than the face value of equity shares of the Company and less than the prevailing Market Price as on the date of the grant.

Disclosures pursuant to Regulation 14 read along with Part F of Schedule-I of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are placed on the Company''s: Website: https://www.zentechnologies.com/ policies-and-code-of-conduct

Further, the certificate from the SecretarialAuditors of the Company certifying that the Company''s Scheme is being implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by the Members is also placed on the Company''s Website: https://www.zentechnologies.com/investor-information

SHARE CAPITAL

The paid-up equity share capital of the Company stood at ? 7,95,10,000 comprising of 7,95,10,000 equity shares of ? 1/- each as on 31 March 2023.

Subsequent to the allotment of equity shares pursuant to conversion of CCDs and Warrants issued in November 2021, the paid-up equity share capital of the Company stood at ? 8,40,44,260 comprising of 8,40,44,260 equity shares of ? 1/-each we.f 24 May 2023.

Further, the amount so raised from the above said preferential issue in November 2021, was utilized as per the objects approved by the shareholders at their meeting held on 11 November 2021. During the period under review, there has been no deviation or variation in the utilization of the proceeds of the preferential issue.

RESERVES

No amounts were proposed to be transferred to Reserves for the period under review.

FIXED DEPOSITS

The Company has not accepted any deposits from Public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of balance sheet.

LISTING OF EQUITY SHARES

The securities of the Company are listed at National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Further, the Company has no equity shares carrying differential rights.

The Company has paid Listing Fees for the Financial Year 2023-24, to each of the Stock Exchanges, where its equity shares are listed.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has Four (4) subsidiaries in India and overseas as mentioned below and there are no associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries:

a. Unistring Tech Solutions Private Limited;

b. Zen Medical Technologies Private Limited;

c. Zen Technologies USA, Inc;

d. Zen Defence Technologies L.LC, UAE.

Consolidated financialstatements have been prepared by the Company in accordance with the requirements of Ind AS 110 issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of the Act.

Pursuant to the provisions of Section 129(3) of the Act and Rule 8(1) of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company''s subsidiaries, in Form AOC-1, is attached as Annexure-1 to this report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, including the consolidated financial statements, along with the relevant documents and the separate audited financial statements in respect of subsidiaries are made available on the website of the Company at: https://www. zentechnologies.com/investor-information.

Further, the Company''s policy on determining the material subsidiaries, as approved by the Board is uploaded on the Company''s website at: https://www.zentechnologies.com/ policies-and-code-of-conduct.

Unistring Tech Solutions Private Limited (UTS)

UTS is a subsidiary of the Company in India with 51% of holding. UTS works for design and development of various products in Communication and RADAR applications. UTS offers services to Govt and private clients in the area of FPGA based firmware development, Embedded software development on Intel and PowerPC architectures. UTS''s major products and services are targeted for military clients (DRDO, ECIL and BEL). UTS has demonstrated remarkable financial progress in the financial year 2022-23, which turned the Company as a material Subsidiary of the Company in term of the Listing Regulations and playing a significant role in shaping the consolidated financial statements.

Zen Medical Technologies Private Limited (ZMTPL)

ZMTPL is a wholly-owned subsidiary of the Company in India. Zen Medicalis primarily involved in the field of medicaland hospital equipment.

Zen Technologies USA, Inc

Zen Technologies USA is a wholly-owned subsidiary of the Company in USA. It operates within the simulator industry, which complements the parent

Company''s core competencies. Zen Technologies USA is primarily dedicated to offering combat training products to defense and security customers worldwide.

Zen Defence Technologies L.L.C, UAE (ZDT)

ZDT is a wholly-owned subsidiary in UAE, incorporated on 15 November 2022. ZDT is dedicated to the import and export of training equipment and simulators, as well as engaging in trading, development, and maintenance of defense and surveillance systems on a global scale. ZDT is yet to commence the operations.

CONSOLIDATED FINANCIAL STATEMENTS (CFS)

During the year, the Board of Directors reviewed the affairs of its subsidiaries. Your Company has prepared its Consolidated Financial Statements in accordance with the requirements of IND AS-27 issued by the Institute of Chartered Accountants of India (ICAI) and as per the provisions of Section 129(3) of the Companies Act, 2013. The Consolidated Financial Statements together with the Auditors'' Report form part of this Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the financial statements of the Company, including the consolidated financialstatements, and allother documents required to be attached to this report are available for inspection by the members at the registered office of the Company during the business hours on all days, except Saturdays, Sundays and public holidays, up to the date of the Annual General Meeting (AGM''). Any member desirous of obtaining a copy of the said financial statements may write a mail to the Company Secretary of the Company. The above-mentioned documents have also been uploaded on the website of the Company at: https://www.zentechnologies.com/annual-reports

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31 March 2023 is made available on the Company''s website at: https://www.zentechnologies.com/ investor-information

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) for the year under review as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015 ("the Listing Regulations") forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business and Responsibility Sustainability Report (BRSR) as stipulated under Regulation 34(2)(f) of the Listing Regulations is applicable to your Company for FY 2022-23 and the same is provided as separate section to this Annual Report which indicates the Company''s performance against the principles of the ''National Guidelines on Responsible Business Conduct'' This would enable the members to have an insight into environmental, social and governance initiatives of the Company.

CORPORATE GOVERNANCE

A separate report on Corporate Governance as required under the Listing Regulations is provided as separate section to this Annual Report.

OUTLOOK AND FUTURE PLANS

"Management Discussion and Analysis" contains a section on the Company''s outlook and future plans and members may please refer the same on this.

DIRECTORS

The Board of Directors of the Company has an optimum combination of Executive (4), Non-Executive and Independent Directors (4) including one woman Independent Director

Independent and Non-executive Directors

As prescribed under Listing Regulations and pursuant to Section 149(6) of the Act, the Non-Executive and Independent Directors (as on the date of signing this report) of the Company are Mr Amreek Singh Sandhu, Dr Ajay Kumar Singh, Dr Ravindra Kumar Tyagi and Ms. Sirisha Chintapalli.

All the above mentioned directors were appointed as independent directors by the shareholders in their respective meetings.

Executive Directors

The following are the Whole-Time directors of the Company.

Mr Ashok Atluri, Chairman and Managing Director, Mr Kishore Dutt Atluri, President and Joint Managing Director, Mr. M Ravi Kumar, Whole-Time Director and Mrs. Shilpa Choudari, Whole-Time Director

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year under review,

a) Mr M Ravi Kumar (DIN: 00089921) has been re-appointed as the Whole-Time Director of the Company, not liable to retire by rotation, for a period of three years, with effect from 29 June 2022.

b) Mr Afzal H. Malkani has been appointed as Chief Financial officer of the Company, in the place of Mr Ashok Atluri, the then Chief Financial Officer of the Company, with effect from 01 August 2022.

c) Dr Ajay Kumar Singh (DIN: 08532830) has been re-appointed as the Non-executive Independent Director of the Company, for the second consecutive term of three years, with effect from 02 November 2022.

d) Mr Ashok Atluri (DIN:00056050) has been re-appointed as Chairman and Managing Director for a period of 3 years with effect from 01 May 2023, subject to approvalof the shareholders in the ensuing Annual General Meeting.

e) Mr Kishore Dutt Atluri (DIN: 09691242) has been re-appointed as President and Joint Managing Director for a period of 3 years with effect from 01 May 2023, subject to approval of the shareholders in the ensuing Annual General Meeting.

f) Mr Hansraj Singh Rajput, Company Secretary and Compliance officer, was resigned w.e.f 14 December 2023.

g) Mr M. Raghavendra Prasad has been appointed as Company Secretary and Compliance Officer of the Company with effect from 06 May 2023.

h) Mrs. Shilpa Choudari (DIN:06646539) has been re-appointed as the Whole-Time Director for a period of 3 years with effect from

01 November 2023, subject to approval of the shareholders in the ensuing Annual General Meeting.

i) Ms. Sirisha Chintapalli (DIN: 08407008) has been re-appointed as the Non-Executive Independent Director of the Company, for the second consecutive term of three years, with effect from 07 August 2023 subject to approval of the shareholders in the ensuing Annual General Meeting.

DIRECTORS RETIRING BY ROTATION

Pursuant to the provisions of the Act, Mr Ashok Atluri retires at the AGM and being eligible, offers himself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134, sub-section 3(c) and sub-section 5 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state and confirm that:

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

ii. such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as on 31 March 2023 and of the Company''s profit or loss for the year ended on that date;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

DECLARATIONS OF INDEPENDENT DIRECTORS

All independent directors of the Company have given declaration that they meet the criteria of independence as provided in sub-section (6) of section149 of the Act. The Company also received a declaration of compliance of sub-rule (1) and sub-rule (2) of the Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

Pursuant to the provisions of the Act and the Listing Regulations, the Nomination and Remuneration committee identifies persons who are qualified to become directors in accordance with the criteria laid down and recommend to the Board for their appointment and removal.

The Company adopted a policy relating to the remuneration for Directors and Key Managerial Personnel. This Policy covers the remuneration and other terms of employment for the Company''s Executive Team. The remuneration policy for members of the Board and for management, aims at improving the performance and enhancing the value of the Company by motivating and retaining them and to attract the right persons to the right jobs in the Company. The object of this Remuneration Policy is to make your Company a desirable workplace for competent employees and thereby secure competitiveness, future development and acceptable profitability. In order to achieve this, it is imperative that the Company is in a position to offer competitive remuneration in all its operational locations.

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act is made available on the website of the Company at: https://www. zentechnologies.com/policies-and-code-of-conduct.

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS'' INDEPENDENCE

The Nomination and Remuneration committee (NRC) shall assess the independence of directors at the time of appointment, re-appointment and the Board shall assess the same annually based on the criteria provided by NRC. The Board shall re-assess the determination of independence when any new interests or relationships are disclosed by a Director

The criteria of independence are as prescribed in the Act and the Listing Regulations and the independent directors shall abide by the Code specified for them in Schedule IV of the Act.

NUMBER OF MEETINGS OF THE BOARD

During the financial year, five (5) meetings of the Board of Directors were held on 07 May 2022, 30 July 2022, 06 September 2022, 12 November 2022 and 28 January 2023 in compliance with provisions of the Act read with rules made thereunder, Secretarial Standards and the Listing Regulations.

COMMITTEES OF THE BOARD

Currently the Board has 6 (six) committees: Audit, Nomination and Remuneration, Corporate Social Responsibility, Stakeholders'' Relationship, Risk Management and Borrowing committee.

The compositions of the committees are in line with the applicable provisions of the Act, Rules and Regulations and are as given below:
Name of the Committee	Composition of the Committee	Remarks
Audit Committee	Mr Amreek Singh Sandhu, Chairman Dr Ajay Kumar Singh, Member Dr R.K. Tyagi, Member Mr Ashok Atluri, Member	The Audit committee of the Board of Directors was constituted in conformity with the requirements of Section 177 of the Act and Regulation 18 of the Listing Regulations and its role has been the same as stipulated in the Act and the Listing Regulations. All recommendations made by the Audit committee during the year were accepted by the Board.
Nomination and	Mr Amreek Singh Sandhu, Chairman	The Nomination and Remuneration committee of the
Remuneration Committee	Dr Ajay Kumar Singh, Member Dr R.K. Tyagi, Member	Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 19 of the Listing Regulations and its role has been the same as stipulated in the Act and the Listing Regulations.
Corporate Social	Dr R.K. Tyagi, Chairman	The Corporate Social Responsibility committee of the
Responsibility Committee	Mr M.Ravi Kumar, Member Mr Ashok Atluri, Member	Board of Directors was constituted in conformity with the requirements of Section 135 of the Act. The Committee monitored the implementation of the CSR Policy from time to time.
Stakeholders''	Ms. Sirisha Chintapalli, Chairman	The Stakeholders'' Relationship committee of the Board
Relationship Committee	Mr Ashok Atluri, Member Mr Amreek Singh Sandhu, Member	of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 20 of the Listing Regulations and its role has been the same as stipulated in the Act and the Listing Regulations.
Risk	Mr Amreek Singh Sandhu, Chairman	The Risk Management committee of the Board of Directors
Management Committee	Mr Ashok Atluri, Member Mr M. Ravi Kumar, Member Dr Ajay Kumar Singh, Member	was constituted in conformity with the requirements of Regulation 21 of the Listing Regulations with its role as stipulated in the Listing Regulations.
Borrowing Committee	Mr Amreek Singh Sandhu, Chairman Mr M. Ravi Kumar, Member Mr Kishore Dutt Atluri, Member Mrs. Shilpa Choudari, Member Mr Ashok Atluri, Member	The Borrowing Committee of the Board of Directors was constituted pursuant the resolution passed by the Board of Directors in line with the proviso under Section 179(3) of the Companies Act, 2013.
A detailed note on the Board and its mandatory Committees is provided in the Corporate Governance Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section188 in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 are enclosed as Annexure-2 to this report.

The policy on materiality of related party transactions and also on dealing with the related party transactions as approved by the Audit committee and the Board of Directors was placed on the website of the Company at: https://www.zentechnologies.com/ policies-and-code-of-conduct.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts)

Rules, 2014, with respect to Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo are provided in Annexure-3 to this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans given, guarantees provided and investments made, if any, during the Financial Year ended on 31 March 2023 are enclosed as Annexure-4 to this Report in compliance with the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014. The particulars of aggregate loans, guarantees and investments under Section 186 of the Act are disclosed in the notes to Financial Statements, which may be read as part of this Report.

RISK MANAGEMENT POLICY

The Board formulated and implemented Risk Management Policy for the Company which identifies various elements of risks

which in its opinion may threaten the existence of the Company and measures to contain and mitigate risks. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedures are reviewed by the Audit committee and the Board on periodical basis.

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 21 of the Listing Regulations and the same is also made available on the website of the Company at: https://www.zentechnologies.com/ policies-and-code-of-conduct.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The annual report on CSR activities, in terms of Section 135 of the Act, and the details about the policy developed and implemented by the Company on CSR initiatives taken during the year are enclosed as Annexure-5 to this report. A detailed policy on CSR is placed on the Company''s website under the web link: https://www. zentechnologies.com/investor_relations/CSR-Policy.pdf

BOARD EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out annual performance evaluation of its own, the individual directors as well as the mandatory committees of the Board. A structured set of criteria was adopted after taking into consideration the inputs received from the directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. Evaluation of the Board members is conducted on an annual basis by the Board, Nomination and Remuneration committee and Independent Directors with specific focus on the performance and effective functioning of the Board and individual directors.

The Nomination and Remuneration committee had specified criteria for performance evaluation of Directors, Committees and Board as a whole and recommended the same to the Board for evaluation.

CRITERIA FOR PERFORMANCE EVALUATION

a. Ability of the candidate to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.

b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.

c. Bringing objectivity and independence of view to the Board''s discussions in relation to the Company''s strategy, performance, and risk management.

d. Statutory compliance and ensuring high standards of financial probity and Corporate Governance.

e. Responsibility towards requirements under the Companies Act, 2013, responsibilities of the Board and accountability under the Director''s Responsibility Statement.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors attend a Familiarization/Orientation Program on being inducted into the Board. Further, various other programmes are conducted for the benefit of Independent Directors to provide periodical updates on regulatory front,

industry developments and any other significant matters of importance. The Company issues a formal letter of appointment to the Independent Directors, outlining their role, function, duties and responsibilities, the format of which is available on the Company''s Website.

The details of training and familiarization program are available on the website of the Company at: https://www.zentechnologies.com/ investor-information.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, Zen Defence Technologies L.L.C, UAE (ZDT) became a subsidiary of the Company and no subsidiary Company ceased to be the subsidiary of the Company during the same period.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has established and maintained a framework of internal financial controls and compliance systems. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company''s internal financial controls were adequate and your Company is constantly endeavoring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate and effective with the nature of its business.

Further, the statutory auditors of your Company have also issued an attestation report on internal control over financial reporting (as defined in section 143 of Companies Act, 2013) for the financial year ended 31 March 2023, which forms part to the Statutory Auditor''s Report.

VIGIL MECHANISM

The Board of Directors, on the recommendation of the Audit Committee, established a vigil mechanism for directors and employees called "Whistle Blower Policy", pursuant to the provisions of the Act and the Listing Regulations to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy and to provide adequate safeguards against victimization of persons who use such mechanism and to provide direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

The Whistle Blower Policy is posted under the Investors section of the Company''s website at: https://www.zentechnologies.com/ policies-and-code-of-conduct.

FRAUD REPORTING

During the Financial Year under review, the Statutory Auditors have not reported any incident of fraud to the Board of Directors of the Company, pursuant to the provisions of Section 143(12) of the Companies Act, 2013.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has taken several initiatives across the organization to build awareness amongst employees about the Policy and the provisions of the Prevention of Sexual Harassment of Women at Workplace Act. The details of sexual harassment complaints as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder are as follows:

No. of Complaints Received : Nil

No. of Complaints disposed off : NA

Further, during the year under review, the Company has complied with the provisions related to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed and disclosures to be made while in possession of Unpublished Price Sensitive Information and while dealing in the shares of the Company, as well as the consequences of violations. The Policy has been formulated to regulate, monitor and ensure reporting of trading by insiders by employees and to maintain the highest ethical standards while dealing in the Company''s securities.

The Insider Trading Policy of the Company covering the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct for prevention ofinsider trading is available on the website of the Company at: httpsY/www. zentechnologies.com/policies-and-code-of-conduct.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, pursuant to the provisions of Section 124 (5) of the Act (section 205A of the Companies Act 1956), an amount of ? 1,18,157.20/- relating to FY 2014-15, which remained unclaimed for a period of 7 years was transferred to the Investor Education and Protection Fund by the Company on 11 November 2022.

TRANSFER OF UNCLAIMED SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY

During the year under review, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more (relevant shares) up to and including the financial year 2014-15 were transferred by the Company in the name of IEPF from time to time and the statement containing such details as prescribed is placed on the Company''s website at: https://www.zentechnologies. com/unpaid-unclaimed-dividend/2021-2022

STATUTORY AUDITORS & AUDITOR''S REPORT

At the twenty-sixth (26^th) AGM held on 21 September 2019 the Members approved appointment of Ramasamy Koteswara Rao and Co LLP, Chartered Accountants (Firm Registration No. 010396S/S200084) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the thirty-first (31^st) AGM.

The Auditor''s Report on the financial statements of the Company does not contain any qualifications, reservations, or adverse remarks or disclaimer and the Notes on the financial statements referred therein are self-explanatory, thereby not requiring any further comments on the same.

MAINTENANCE OF COST RECORDS

During the year under review, Section 148(1) of the Act is applicable to your Company and accordingly such accounts and records are made and maintained by the Company as specified.

COST AUDIT

The Company is required to appoint Cost Auditors for conducting the audit of cost records being maintained by the Company for FY 2023-24 (for W 2022-23 this requirement was not applicable). Accordingly, the Board ofDirectors based on the recommendations of the audit committee, appointed M/s. M P R & Associates, Cost Accountants, Hyderabad, as Cost Auditors for conducting the audit of cost records for FY 2023-24, with a remuneration which is subject to ratification by the members at the ensuing AGM.

SECRETARIAL AUDITORS AND AUDIT REPORT

During the year under review, the Company has complied with the provisions of Section 204 of the Act and Regulation 24A of the Listing Regulations.

The Secretarial Audit Report for the financial year ended 31 March 2023 issued by Mrs. Vanitha Nagulavari (ACS No. 26859/CP No. 10573) is enclosed as Annexure-6 to this Report and it does not contain any reservation, qualification or adverse remarks.

The Board has appointed Mr D.S. Rao (ACS no. 12394/CP no. 14487), Practicing Company Secretary, as Secretarial Auditors to conduct secretarial audit, pursuant to the recommendations of the Audit committee, for the FY 2023-24.

Further, the Secretarial Audit report of Unistring Tech Solutions Private Limited (UTS), a material subsidiary of the Company, is also available on the Company''s website at: https://www. zentechnologies.com/subsidiary-Company-accounts

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The remuneration paid to your directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) in respect of directors/employees of the Company is enclosed as Annexure-7 to this Report.

INSURANCE

All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial during the year under review, and your directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels, contributing to the successful operations of the Company.

GREEN INITIATIVES

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of the Notice of 30^th Annual General Meeting of the Company including the Annual Report for FY 2022-23 are being sent to all members whose e-mail addresses are registered with the Company/Depository Participant(s).

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings (i.e., SS-1), General Meetings (i.e., SS-2) and on Dividend (i.e., SS-3).

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the financial year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future;

3. No material changes and commitments in the business operations of the Company from the financial year ended 31 March 2023 to the date of the signing of the Directors'' Report;

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries; and

5. There is no change in the nature of the business of the Company.

ACKNOWLEDGMENTS

Your directors thank various departments of Central and State Government, Organizations and Agencies for the continued help and co-operation extended by them to your Company. Your directors also gratefully acknowledge all stakeholders of the Company viz. shareholders, customers, dealers, vendors, financial institutions, banks and other business partners for the excellent support received from them during the year

Your directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

---

Mar 31, 2018

Dear Members,

Your Directors are pleased to present the 25th Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31 March 2018.

FINANCIAL RESULTS

The financial highlights of the Company are as follows:

		(Rs. in Lakhs)
Particulars	FY 2017-18	FY 2016-17
Total Income	4,336.43	6,613.52
Total Operating Expenditure	4,082.07	5,037.06
Operating Profit (PBIDT)	254.36	1,576.46
Interest	240.76	285.61
Depreciation & Amortization	282.39	363.80
Profit/(Loss) before tax	(268.80)	927.05
Provision for Tax		183.54
Deferred Tax Asset	229.89
Add: Other Comprehensive Income /(Expense)	59.71	(26.88)
Profit after Tax	20.80	716.62
Earnings per Share (Rs) (face value Rs 1/- per share)	0.03	0.93

STATE OF THE COMPANY''S AFFAIRS

During the year under review, your Company achieved total income of Rs. 4,336.43 lacs as against Rs. 6,613.52 lacs during the previous year. The Net profit after tax stood at Rs 20.80 lacs as against Rs 716.62 lacs for the previous year.

The order book size as on 31 March 2018 is around Rs 348.78 Crores, including AMCs of worth Rs 125.13 Crores, as against Rs 73.99 Crores, including AMCs of worth Rs 70.03 Crores for the previous year.

During the year, the R&D expenditure (capital and revenue) is Rs 16.10 Crores (previous year Rs 13.51 Crores). The R&D products developed during the year have substantial scope for revenue generation and are expected to become commercially viable in the next few years.

DIVIDEND

The Board in its meeting held on 26 May 2018 recommended final dividend @ 10% on the paid-up eguity share capital i.e., Rs 0.10 per eguity share of Rs 1/- each, for the year 2017-18. The dividend will be paid subject to the approval of the shareholders at the ensuing Annual General Meeting. On approval of shareholders, the dividend would be paid to the shareholders whose names appear in the Register of Members of the Company as on 21 September 2018.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

At the beginning of the year under review, your Company had a subsidiary, Version 2 Games Limited. However, during the year the Company divested its entire stake of Version 2 Games Limited, hence the Company does not have any subsidiary as on the date of closure of the financial year ended 31 March 2018. There was no associate company within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

SUBSIDIARY

VERSION 2 GAMES LTD

During the year the Company divested its entire stake of Version 2 Games Limited and accordingly Version 2 Games Limited ceased to be subsidiary of the Company with effect from 24 November 2017.

ZEN TECHNOLOGIES USA, INC.

The Company formed ZEN TECHNOLOGIES USA, INC., a wholly owned subsidiary in the USA for the US operations of the Company and ZEN TECHNOLOGIES USA, INC became subsidiary of the Company with effect from 7th May 2018.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format in Form MGT-9 as per the provisions of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 is appended as Annexure 1 to this report.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the year 2017-18.

The dates on which the Board meetings were held are 29 May 2017, 24 August 2017, 18 November 2017, 03 February 2018 and 06 March 2018.

However, the Board meeting held on 06 March 2018 was adjourned to 17 March 2018, which was convened accordingly.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the reguirement under Section 134 of the Companies Act, 2013, the Directors confirm that:

i. In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii. The Directors had 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 profit and loss of the Company for that period.

iii. The Directors had taken proper and sufficient care for the maintenance of adeguate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors had prepared the annual accounts on a going concern basis.

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149

The Independent directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 25 of SEBI (Listing Obligations and Disclosure Reguirements) Regulations, 2015.

COMPANY POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Board of Directors, on recommendation of the Nomination and Remuneration Committee, framed a Nomination and Remuneration policy on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013. The Policy is posted under the Investors section of the Company''s website at: http://www.zentechnologies.com/ investor_relations/Nomination-Remuneration-Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantees and investments as required under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are provided in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to the Board''s Report.

All Related Party Transactions were placed before the Audit Committee and the Board for approval. The Board of Directors framed a policy for Related Party Transactions to ensure a process for approval and reporting of transactions between the Company and its Related Parties. The policy is posted under the Investors section of the Company''s website at: http://www.zentechnologies.com/investor_relations/ Related-Party-Transaction-Policy.pdf

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company from the financial year ended 31 March 2018 to the date of signing of the Director''s Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 with respect to Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo are provided in Annexure 3 to this Report.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board formulated a Risk Management Policy identifying different kinds of risks which are good and bad and the mitigation measures adopted and to be adopted for dealing with the risks of the Company.

The Board constituted a Risk Management Committee constituting Mr Ashok Atluri, Chairman and Managing Director, Mr M Ravi Kumar, Whole-time Director and Mr N Ramesh Kumar, Chief Financial Officer. The Committee regularly meets to monitor and review the Risk Management Policy.

The Audit Committee and Board reviews and evaluates the internal financial controls and risk management systems of the Company.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including those that may threaten the existence of the Company. Risk management process has been established across the organization and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives.

The Risk mitigation measures which are adopting by the Company are posted under the Investors section of the Company''s website at: http://www.zentechnologies.com/investor_relations/Zen-Risk-Management-Policy.pdf

Mitigation plans are finalized, owners are identified and the progress of mitigation actions are monitored and reviewed.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Pursuant to Section 135 of the Companies Act, 2013, the Board constituted Corporate Social Responsibility Committee consisting Ms. Sridevi Madati, Independent Director, Mr Ashok Atluri, Chairman and Managing Director and Mr M Ravi Kumar, Whole-time Director. The Committee was reconstituted with effect from August 24 2017.

The Committee periodically recommends the activities to be taken up under the CSR policy. The Corporate Social Responsibility Policy is posted under the Investors section of the Company''s website at: http://www.zentechnologies.com/investor_relations/CSR-Policy.pdf

"Corporate Social Responsibility is the continuing commitment of the Company to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large. The Company believes in undertaking business in such a way that its leads to overall development of all stake holders and society."

As per the CSR policy, during the year 2017-18, the Company implemented CSR activities by providing Financial Assistance of Rs 56,00,000/- towards furnishing (i.e. for procuring furniture, kitchen equipment, computer, electronics equipment & security system, etc.) to the War Memorial Boys and Girls Hostel Society at Dehradun, Care of Commandant, Garhwal Rifles Regimental Centre, Lansdowne (Uttarakhand). The object of the War Memorial Boys and Girls Hostel Society is to prepare children of War Widows/ Battle causalities of Army for competitive exam by providing advance level education facilities and has strength of approximate 250 students (125 Boys and Girls each).

As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, annual report on CSR is prepared and the same is enclosed as Annexure 4 to this Report.

ANNUAL EVALUATION OF PERFOMANCE OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors evaluated the annual performance of the Board as a whole, its committee''s and the directors individually, in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Reguirements) Regulations, 2015 with specific focus on the performance and effective functioning of the Board and Individual Directors.

A separate meeting of Independent Directors was held on 03 February 2018 to review the performance of the Non-Independent Directors and the Board as a whole, review the performance of Chairperson of the Company and assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

CRITERIA FOR PERFORMANCE EVALUATION

a. Ability of the candidates to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.

b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.

c. Bringing objectivity and independence of view to the Board''s discussions in relation to the Company''s strategy, performance, and risk management

d. Statutory Compliance and ensuring high standards of financial probity and Corporate Governance

e. Responsibility towards requirements under the Companies Act, 2013, Responsibilities of the Board and Accountability under the Director''s Responsibility Statement

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors inducted into the Board attended an orientation programme. The details of training and familiarization program are available on website http://www.zentechnologies.com/ investor_relations/Details-of-Familiarization-Programmes-imparted-to-lndependent-Directors.pdf

CHANGE IN THE NATURE OF BUSINESS

During the Financial year 2017-18 there is no change in the nature of the business of the Company.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED OR CEASED DURING THE YEAR

Ms. Sridevi Madati (DIN: 02446610) has been co-opted as an Additional Director w.e.f 29 May 2017 and was appointed as independent director for a period of 3 years for the second term in the Annual General Meeting held on 28 September 2017.

Mr. Chada Jagadish Reddy resigned as Company Secretary w.e.f 1 August 2017.

Mr M Satish Choudhury appointed as Company secretary w.e.f. 24 August 2017.

Mr Rajesh Katragadda was appointed as Independent Director w.e.f. 24 August 2017 and ceased to be Director w.e.f. 18 November 2017 consequent to his disqualification under Section 164(2) of the Companies Act, 2013.

Mr G Sankara Rao resigned as Chief Financial Officer w.e.f. 06 October 2017.

Mr Amreek Singh Sandhu was appointed as Independent Director (Additional Director) w.e.f. 03 February 2018.

Mr N Ramesh Kumar was appointed as Chief Financial Officer of the Company with w.e.f 03 February 2018.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

Version 2 Games Limited ceased to be a subsidiary of the Company during the year.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

In every quarter during the approval of Financial Statements, Internal Audit Reportis presented by the Internal Auditor. The Audit Committee reviews the Internal Audit Report along with the Management Replies.

The internal financial controls are evaluated and reviewed by the Audit Committee and the Board for ensuring orderly and efficient conduct of its business, including adherence to Company''s policies safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial statements.

VIGIL MECHANISM

The Board of Directors, on recommendation of the Audit Committee, established a vigil mechanism for Directors and Employees called "Whistle Blower Policy" pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy and to provide adequate safeguards against victimization of persons who use such mechanism and to provide for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

The Whistle Blower Policy is posted under the Investors section of the Company''s website at:

http://www.zentechnologies.com/investor_relations/Whistle-Blower-Policy-2014.pdf

SEXUAL HARASSMENT POLICY

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended 31 March 2018, the Company has not received any Complaints pertaining to Sexual Harassment. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ZEN TECHNOLOGIES LIMITED''S CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed and disclosures to be made while dealing with shares of the Company, as well as the consequences of violations. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.

The Insider trading Policy of the Company covering code of practices and procedures for fair disclosures of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on our website (htttp://www.zentechnologies.com)

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Management Discussion & Analysis forms part of the Annual report as per the requirements of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 with the Stock Exchanges.

DIRECTORS

In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr Ashok Atluri, who is a Chairman and Managing Director, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. The aforesaid appointment/reappointment as Chairman and Managing Director is subject to your approval.

Mr Venkat Samir Kumar Oruganti whose period of office as director of the Company will be completed on 13 August 2018, was co-opted as an Additional Director w.e.f. 14 August 2018 to act as an Independent Director for another term, subject to the approval of shareholders by way of a special resolution at the ensuing Annual General Meeting.

Mr Amreek Singh Sandhu has been co-opted as an Additional Director w.e.f. 03 February 2018 to act as an Independent Director subject to the approval of shareholders by way of a resolution at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they continue to meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 with the Stock Exchanges.

AUDITORS

Statutory Auditors

M/s Sekhar & Co, Chartered Accountants, (Registration number 003695S), Secunderabad, were appointed as Statutory Auditors to hold office from the conclusion of the 24th Annual General Meeting and till the conclusion of 29th Annual General Meeting.

The ratification of appointment of statutory auditor is not required as per the first proviso of Section 139 (1) by the Companies (Amendment) Act, 2017 effective from 07 May 2018, accordingly the ratification of appointment of statutory auditor is not proposed.

The Notes on the Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

SECRETARIAL AUDITORS

M/s P S Rao & Associates, Practicing Company Secretaries were appointed to conduct secretarial audit for the financial year 2017-18. Pursuant to Section 204 of the Companies Act, 2013 and Rules there under, the Secretarial Audit Report for the financial year ended 31 March 2018 in form MR-3, is annexed to this Annual Report as Annexure 5. The Board has appointed M/s P S Rao & Associates, Practicing Company Secretaries, as Secretarial Auditors of the Company for the financial year 2018-19.

MAINTENANCE OF COST RECORDS

The maintenance of cost records is not applicable to the Company.

AUDIT COMMITTEE

Audit Committee has been reconstituted w.e.f. 26 May 2018. The details of the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013, is given in the Corporate Governance Report furnished as part of the Annual Report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee was reconstituted with effect from 03 February 2018. The details of the composition of the Committee is given in the Corporate Governance Report furnished as part of the Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee was reconstituted with effect from 24 August 2017. The details of the composition of the Committee is given in the Corporate Governance Report furnished as part of the Annual Report.

PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure 6 to the Board''s report.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with a certificate from the Statutory Auditors of the Company with regard to the compliance of Corporate Governance as per Regulation 27 of SEBI (Listing Obligations and Disclosure Reguirement) Regulations, 2015 forms part of this Annual Report.

ACKNOWLEDGMENTS

The Board of Directors thank the Company''s customers, suppliers, dealers, banks, financial institutions, Government and Regulatory authorities and consultants for their continued support. The Directors express their sincere gratitude to the shareholders and also wish to place on record their appreciation for the committed services rendered by all the employees of the Company.

	For and on behalf of the Board
Place: Hyderabad	Ashok Atluri
Date: 14 August 2018	Chairman and Managing Director
	DIN: 00056050

Form No. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31 March 2018

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:
0	CIN:	L72200TG1993PLC015939
ii)	Registration Date:	29 June 1993
iii)	Name of the Company:	Zen Technologies Limited
iv)	Category /Sub-Category of the Company:	Company Limited by Shares
v)	Address of the Registered office and contact details:	B-42, Industrial Estate, Sanathnagar, Hyderabad - 500018, Telangana Ph: 040-23813281; Fax: [phone] Email: [e-mail] Website: www.zentechnologies.com
0	Whether listed company	Yes BSE Limited National Stock Exchange of India Limited
ii)	Name, Address and Contact details of Registrar and Transfer Agent, if any	Karvy Computershare Private Limited Unit: Zen Technologies Limited Karvy Selenium Tower B, Plot No 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally Mandal, Hyderabad - 500 032 Ph: 040-67161605 Fax:[phone] Email id: [e-mail]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company shall bestated:-
Sl. No.	Name and Description of main products /services	NIC Code of the Product/ service	% to total turnover of the company I
1	Sale of Simulators	8549	47.30%
2	Sale of Product Services	8549	52.70%

II. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: I

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholders	No. of Shares held at the beginning of the year				No. of Shares held at the end of the year				% Change
	Demat	Physical	Total	% of Total Shares	Demat	Physical	Total	% of Total Shares	during the year
A. Promoters
(1) Indian
a) Individual/HUF	458,67,340	0	4,58,67,340	59.44	4,58,67,340	0	4,58,67,340 59.44		0
b) Central Government	0	0	0	0.00	0	0	0	0.00	0
c) State Government(s)	0	0	0	0.00	0	0	0	0.00	0
d) Bodies Corporate	0	0	0	0.00	0	0	0	0.00	0
e) Banks /Fl	0	0	0	0.00	0	0	0	0.00	0
f) Any Other	0	0	0	0.00	0	0	0	0.00	0
Sub-total (A) (1):-	4,58,67,340	0	4,58,67,340		5944 4,58,67,340	0	4,58,67,340	5944	0
(2) Foreign
a) NRIs- Individuals	0	0	0	0.00	0	0	0	0.00	0
b) Other- Individuals	0	0	0	0.00	0	0	0	0.00	0
c) Bodies Corporate	0	0	0	0.00	0	0	0	0.00	0
d) Banks /Fl	0	0	0	0.00	0	0	0	0.00	0
e) Any Other	0	0	0	0.00	0	0	0	0.00	0
Sub-total (A) (2):-	0	0	0	0.00	0	0	0	0.00	0
Total shareholding of Promoter	4,58,67,340	0 4,58,67,340		59.44	4,58,67,340	0	4,58,67,340	59.44	0
(A) = (A)(1) (A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds	0	0	0	0.00	0	0	0	0.00	0.00
b) Banks /Fl	66,294	0	66,294	0.09	1,39,345	0	1,39,345	0.18	0.09
c) Central Government	0	0	0	0.00	0	0	0	0.00	0
d) State Government(s)	0	0	0	0.00	0	0	0	0.00	0
e) Venture Capital Funds	0	0	0	0.00	0	0	0	0.00	0
f) Insurance Companies	0	0	0	0.00	0	0	0	0.00	0
g) Flls	0	0	0	0.00	0	0	0	0.00	0
h) Foreign Venture Capital Funds	0	0	0	0.00	0	0	0	0.00	0
i) Others a)Foreign Portfolio	81,748	0	81,748	0.11	94,637	0	94,637	0.12	0.01
Investors
b)Foreign Nationals	320	0	320	0.00	0	0	0	0.00	0
Sub-total (B)(1):-	1,48,362	0	1,48,362	0.20	2,33,982	0	2,33,982	0.30	0.10
2. Non-Institutions
a) Bodies Corporate
i) Indian	49,44,176	0	49,44,176	6.41	56,22,384	0	56,22,384	7.29	0.88
ii) Overseas	0	0	0	0.00	0	0	0	0.00	0
b) Individuals
i) Individual shareholders holding nominal share capital upto Rs 2 lakh	1,63,74,588	4,29,320	1,68,03,908	21.78	1,74,05,935	3,55,300	1,77,61,235	23.02	1.24
ii) Individual shareholders holding nominal share capital in excess of ?2 lakh	85,63,790	0	85,63,790	11.10	62,54,590	5000	62,59,590	8.11	-2.99

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of Shareholders	No. of Shares held at the beginning of the year				No. of Shares held at the end of the year				% Change
	Demat	Physical	Total	% of Total Shares	Demat	Physical	Total	% of Total Shares	during the year
c) Others (NBFC Registered with RBI)	13,500	0	13,500	0.02	24,200	0	24,200	0.03	0.01
Clearing Members	2,01,796	0	2,01,796	0.26	1,47,029	0	1,47,029	0.19	-0.07
Non Resident Indians	3,88,122	0	3,88,122	0.50	8,83,852	0	8,83,852	1.15	0.65
NRI-non repattriable	2,29,066	0	2,29,066	0.30	2,95,898	0	2,95,898	0.38	0.08
IEPF	0	0	0	0	64,550	0	64,550	0.08	0.08
Sub-total (B)(2):-	3,07,15,038	4,29,320	3,11,44,358	40.36	3,06,98,438	3,60,300	3,10,58,738	40.25	-0.11
Total Public Shareholding (B)=(B)(1) (B)(2)	3,08,63,400	4,29,320	3,12,92,720	40.56	3,09,32,420	3,60,300	3,12,92,720	40.56	0
C. Shares held by Custodian for GDRs & ADRs	0	0	0	0.00	0	0	0	0.00	0
Grand Total (A B C)	7,67,30,740	4,29,320	7,71,60,060	100	7,67,30,740	4,29,320	7,71,60,060	100	0.00

ii) Shareholding of Promoters

SI. No.	Shareholder''s Name	Shareholding at the beginning of the year			Shareholding at the end of the year			% change in shareholding during the year
		No. of Shares	% of total Shares of the company	% of Shares Pledged/ encumbered to total shares	No. of Shares	% of total Shares of the company	% of Shares Pledged/ encumbered to total shares
1	Mr Ashok Atluri	2,01,76,250	26.15	19.44	2,01,76,250	26.15	19.44	0
2	Mr Kishore Dutt Atluri	1,75,56,250	22.75	0	1,75,56,250	22.75	0	0
3	Ms Tara Dutt Atluri	28,00,000	3.63	0	28,00,000	3.63	0	0
4	Ms A Rama Devi	26,70,000	3.46	0	26,70,000	3.46	0	0
5	Mr Satish Atluri	11,84,000	1.53	0	11,84,000	1.53	0	0
6	Mr Ravi Kumar Midathala	7,94,000	1.03	0	7,94,000	1.03	0	0
7	Ms Beena Atluri	3,95,000	0.51	0	3,95,000	0.51	0	0
8	Mr Nagarjunudu Kilaru	1,21,840	0.16	0	1,21,840	0.16	0	0
9	Ms Indira Garapati	1,20,000	0.16	0	1,20,000	0.16	0	0
10	Ms Nandita Sethi	50,000	0.06	0	50,000	0.06	0	0
		4,58,67,340	59.44	19.44	4,58,67,340	59.44	19.44	0

iii) Change in Promoters'' Shareholding (please specify, if there is no change)

SI. No.	Particulars	Shareholding at the beginning of the year		Cumulative Shareholding during the year
		No. of shares	% of total Shares of the company	No. of shares	% of total Shares of the company
1	At the beginning of the year	4,58,67,340	59.44	4,58,67,340	59.44
2	Changes during the year	Nil	Nil	Nil	Nil
3	At the end of the year	4,58,67,340	59.44	4,58,67,340	59.44

iv) Shareholding Pattern of top ten Shareholders:

(Other than Directors, Promoters and Holders of GDRs and ADRs):

SI. No.	Name of the Shareholder	Shareholding at the beginning of the year		Cumulative Shareholding during the year
		No. of shares	% of total Shares of the company	No. of shares	% of total Shares of the company
1	Ravi Kamepalli
	At the beginning of the year	26,64,855	3.45	26,64,855	3.45
	Bought during the year	-	-	-	-
	Sold during the year	(5,19,904)	(0.67)	21,44,951	2.78
	At the end of the year			21,44,951	2.78
2	Moturu Chandra Sekhar
	At the beginning of the year	19,06,718	2.47	19,06,718	2.47
	Bought during the year	-	-	-	-
	Sold during the year	(14,56,718)	(1.89)	4,50,000	0.58
	At the end of the year			4,50,000	0.58
3	Logical Solutions Ltd
	At the beginning of the year	13,34,640	1.73	13,34,640	1.73
	Bought during the year	-	-	-	-
	Sold during the year	(2,00,000)	-0.26	11,34,640	1.47
	At the end of the year			11,34,640	1.47
4	Mukul Agrawal
	At the beginning of the year	10,00,000	1.30	10,00,000	1.30
	Bought during the year	3,00,000	0.39	13,00,000	1.68
	Sold during the year	(8,73,601)	(1.13)	4,26,399	0.55
	At the end of the year			4,26,399	0.55
5	Ajay Upadhyaya
	At the beginning of the year	-	-	-	-
	Bought during the year	8,50,000	1.10	8,50,000	1.10
	Sold during the year	-	-	-	-
	At the end of the year			8,50,000	1.10
6	Vimal Sagarmal Jain
	At the beginning of the year	7,00,000	0.91	7,00,000	0.91
	Bought during the year	-	-	-	-
	Sold during the year	(2,52,000)	-0.33	-	-
	At the end of the year			4,48,000	0.58
7	Sanjay Jagdish Poddar
	At the beginning of the year	-	-	-	-
	Bought during the year	3,40,000	0.44	3,40,000	0.44
	Sold during the year	-	-	-	-
	At the end of the year			3,40,000	0.44

SI. No.	Name of the Shareholder	Shareholding at the beginning of the year		Cumulative Shareholding during the year
		No. of shares	% of total Shares of the company	No. of shares	% of total Shares of the company
8	Centrum Financial Services Limited
	At the beginning of the year	10,000	0.01	10,000	0.01
	Bought during the year	5,00,867	0.65	5,10,867	0.66
	Sold during the year	(2,00,000)	(0.26)	3,10,867	0.40
	At the end of the year			3,10,867	0.40
9	Navin Sood
	At the beginning of the year	1,05,100	0.14	1,05,100	0.14
	Bought during the year	2,18,800	0.28	3,23,900	0.42
	Sold during the year	(22,000)	(0.03)	3,01,900	0.39
	At the end of the year			3,01,900	0.39
10	Nilu Poddar
	At the beginning of the year	-	-	-	-
	Bought during the year	4,18,000	0.54	4,43,000	0.57
	Sold during the year	(1,20,000)	(0.16)	2,98,000	0.39
	At the end of the year			2,98,000	0.39

v) Shareholding of Directors and Key Managerial Personnel

SI. No.	Shareholding of each Directors and each Key Managerial Personnel	Shareholding at the beginning of the year		Cumulative Shareholding during the year		Shareholding at the end of the year |
		No. of shares	% of total Shares of the company	No. of shares	% of total Shares of the company	No. of shares	% of total Shares of the company
	At the beginning of the year
	Directors
1	Mr Ashok Atluri	20,176,250	26.15	20,176,250	26.15	2,01,76,250	26.15
2	MrM Ravi Kumar	794,000	1.03	794,000	1.03	7,94,000	1.03
3	Ms Sridevi Madati					0	0.00
	(Appointed w.e.f. 29 May 2017)	0	0.00	0	0.00	0
4	Mr Venkat Samir Oruganti	0	0.00	0	0.00	0	0.00
5	Mr Amreek Singh Sandhu					0	0.00
	(Appointed w.e.f. 03 February 2018)	0	0.00	0	0.00
	Key Managerial Personnel
1	Mr G Sankara Rao					-	-
	(Ceased w.e.f. 06 October 2017)	2,000	0.002	2,000	0.002
2	Mr Chada Jagadish Reddy					-	-
	(Ceased w.e.f. 01 August 2017)	0	0.00	0	0.00
3	Mr M Satish Choudhury					0	0.00
	(Ceased w.e.f. 24 August 2017)	0	0.00	0	0.00
4	Mr N Ramesh Kumar					0	0.00
	(Appointed w.e.f. 03 February 2018)	0	0.00	0	0.00

V. INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.				(In Rs Lakhs)
	Secured Loans excluding deposits	Unsecured Loans	Deposits	Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount	1,093.67	-	-	1,093.67
ii) Interest due but not paid	-	-	-	-
iii) Interest accrued but not due	39.47	-	-	39.47
Total (i ii iii)	1,133.14	-	-	1,133.14
Change in Indebtedness during the financial year
* Addition	377.28			377.28
* Reduction	500.02	-	-	500.02
Net Change	-122.74	-	-	-122.74
Indebtedness at the end of the financial year
i) Principal Amount	982.88	-	-	982.88
ii) Interest due but not paid	-	-	-	-
iii) Interest accrued but not due	27.52	-	-	27.52
Total (i ii iii)	1,010.40	-	-	1,010.40

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (In Rs)
SI.	Particulars of Remuneration	Name of MD/WTD/ Manager		Total Amount
No.		Ashok Atluri	M Ravi Kumar
1	Gross salary
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	50,40,000	39,60,000	90,00,000
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961	1,55,995	63,669	2,19,664
	(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961	-	-	-
2	Stock Option	-	-	-
3	Sweat Equity	-	-	-
4	Commission
	- as 3 % of net profits	-	-	-
	-(net profits calculated as per Section 198 of the Companies Act, 2013)
	- Others, specify...	-	-	-
5	Others, please specify	-	-	-
	Total (A)	51,95,995	40,23,669	92,19,664
	Ceiling as per the Act	Within the Ceilinq Limits as prescribed under the Act

B. Re	muneration to other directors					(InRs )
SI.	Particulars of Remuneration	Name of Directors				Total Amount
No.		Venkat Samir Kumar Oruganti	Sridevi Madati	Rajesh Katragadda2	Amreek Singh Sandhu3
1	Independent Directors
	Fee for attending board committee meetings	2,25,000	2,25,000	50,000	75,000 5,75,000
	Commission	-	-	-	-	-
	Others, please specify	-	-	-	-	-
	Total (1)	2,25,000	2,25,000	50,000	75,000	5,75,000
2	Other Non-Executive Directors	-	-	-	-	-
	Fee for attending board committee meetings	-	-	-	-	-
	Commission	-	-	-	-	-
	Others, please specify	-	-	-	-	-
	Total (2)	-	-	-	-	-
	Total(B)=(1 2)	2,25,000	2,25,000	50,000	75,000	5,75,000

1. Appointed w.e.f. 29 May 2017.

2. Appointed w.e.f. 24 August 2017 and Ceased w.e.f. 18 November 2017.

3. Appointed w.e.f. 03 February 2018

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD						(In Rs)
SI.	Particulars of Remuneration	Key Managerial Personnel
No.		Company Secretary		Chief Financial Officer		Total Amount
		Ch Jagadesh Reddy1	M Satish Choudhury2	G Sankara Rao3	N Ramesh Kumar4
1	Gross salary
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	1,00,800	7,07,226	5,04,000	4,03,064	17,15,090
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961	9,600	1,19,555	104,200	71,838	3,26,193
	(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961	~	~	~	~	~
2	Stock Option	-	-	-	-	-
3	Sweat Eguity	-	-	-	-	-
4 Commission		-	-	-	-	-
	- as % of profit	-	-	-	-	-
	others, specify...	-	-	-	-	-
5 Others, please specify		-	-	-	-	-
	Total	1,10,400	8,26,781	6,08,200	4,74,902	20,20,283

1. Ceased with effect from 1 August 2017.

2. Appointed w.e.f. 24 August 2017.

3. Ceased w.e.f. 06 October 2017.

4. Appointed w.e.f. 03 February 2018.

VII. PENALTIES/PUNISHMENTS/COMPOUNDING OF OFFENCES:

There were no penalties/punishments/compounding of offences under the Companies Act 2013 for the year ended 31 March, 2018.

	For and on behalf of the Board
Place: Hyderabad	Ashok Atluri
Date: 14 August 2018	Chairman and Managing Director
	DIN: 00056050

ANNEXURE-2

Form No. AOC-2

Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of

section 188 of the Companies Act, 2013

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. There are no contracts or arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 which are not at arm''s length basis.

2. Contracts or arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 which are at arm''s length basis:

s. No	(a) Name(s) of the related party and nature of relationship	(b) Nature of contracts/ arrangements/ transactions	(c) Duration of the contracts/ arrangements/ transactions	(d) Salient terms of the contracts or arrangements or transactions including the value, if any:	(e) Date(s) of approval by the Board, if any:	(f) Amount paid as advances, if any:
1	Mr Kishore Dutt Atluri -Brother of Mr Ashok Atluri, Chairman and Managing Director of the Company	Appointed to office or place of profit in the Company	Ongoing	During the year 2017-18, he received remuneration Rs 30,97,425/-p.a. (including perks) and Commission of Rs18,42,904/-.	14-08-2016	Nil
2	Mrs A Rama Devi	Leasing of property of any kind	01 June 2017 to 31 May 2019 (Renewal with mutual consent of the parties)	Taking on lease 3 bedroom fully furnished flat jointly owned by Mr Kishore Dutt Atluri, President of the Company and his wife Mrs A Rama Devi for use as Guest House for Company executives and business clients for Rs 5,25,000/-p.a.fortheFY2017-18.	24-08-2017	Security deposit- lease rent of two months
3	Mr Arjun Atluri	Appointed to office or place of profit in the Company	Ongoing	During the year 2017-18, he received remuneration Rs 4,73,394/-p.a. (including perks).	16-08-2016 & 18-11 -2017	Nil

	For and on behalf of the Board
Place: Hyderabad	Ashok Atluri
Date: 14 August 2018	Chairman and Managing Director
	DIN: 00056050

ANNEXURE-3

Statement of particulars of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014

A. Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The Company does not use energy-intensive eguipment for its operations. Besides, due to significant awareness campaigns within the Company, the employees are averse to wasting power. Conseguently power consumption is one of the lowest per employee. The computers, air-conditioners and other eguipment being used by the Company are energy-efficient and environment-friendly.

(ii) The steps taken by the company for utilizing alternate sources of energy:

a. The Company is energy conscious. All types of driving simulators manufactured by the Company work with high-rated, power-saving servo motors.

b. The employees are disciplined on saving energy. Systems are switched on only when it is to be used and switched off as soon as the scheduled work is completed.

c. The Company has made a policy decision of buying systems that are rated high in power saving. Employees work on LED monitors. Their energy consumption is less. They also release less heat compared to CRT and LCD monitors enabling the centralized air-conditioner maintain the temperature with ease. The air-conditioner too has a regulator to save power.

d. Plans are afoot to buy eco-friendly vehicles for intra-office movement at the Hardware Park Plant and between the research wing and production wings.

e. Also there is a move to harness solar energy for lighting and wire fencing. The roof of the plant is about 70 feet from ground and there are enough provisions for the day light to seep into the plant to enable technical hands to work without switching on electrical lights especially in day time.

f. Air conditioners are fitted with controllers to cut off power at the set temperature. The present MH lamps and mercury lamps are replaced with LED lamps which consume only 40% of CFL and its minimum life is 50,000 burning hours.

g. The street lights at the Hardware Park are replaced with LED bulbs.

(iii) The capital investment on energy conservation equipments: The capital investment was made on controllers used for air conditioners, LED bulbs and green generators.

B. Technology absorption

(i) The efforts made towards technology absorption:

The Company has indigenously developed significant technologies that are useful in various products. The technologies nurtured within the Company have been incorporated into various products.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:

We expect such technologies will give us an unbeatable edge in evolving our products into advanced, reliable, and robust simulators.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

The Company has not imported any technology during the past 3 years.

(iv) The expenditure incurred on Research and Development:

The Company has incurred Rs 16.10 Crores as R&D expenditure (capital and revenue) for the financial year 2017-18 for the development of various products. Out of Rs 16.10 Crores, Rs 12.83 Crores was for R&D Revenue expenditure and Rs 3.27Crores for R&D Capital Expenditure. The Company has incurred 41.32 % as R&D expenditure of Sales Turnover. The Company will continue to make big bets for long-term national interests which may impact short-term profitability of the Company.

		(In Rs Lakhs)
Particulars	FY2017-2018	FY 2016-17
Earned during the year	97.67	2,239.04
Used during the year	524.49	487.45

	For and on behalf of the Board
Place: Hyderabad	Ashok Atluri
Date: 14 August 2018	Chairman and Managing Director
	DIN: 00056050

ANNEXURE-4

Annual Report on report on CSR Activities FY 2017-18

(As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014)

1. A brief outline of the Company''s CSR policy:

On the recommendations of the Corporate Social Responsibility Committee, the Board approved and adopted the Corporate Social Responsibility Policy of the Company. The Company proposes to adopt projects or programmes under one or more of the activities as prescribed under Schedule VII of the Companies Act, 2013, as amended from time to time and as stated in the Corporate Social Responsibility Policy.

The Corporate Social Responsibility Policy is posted under the Investors section of the Company''s website at: http://www.zentechnologies. com/investor_relations/CSR-Policy.pdf

2. Composition of the CSR Committee:

Ms Sridevi Madati, Chairperson (Independent Director) (Appointed w.e.f. 24 August 2017)

Mr Ashok Aturi, Member (Chairman and Managing Director)

Mr M Ravi Kumar, Member (Whole-Time Director)

3. Average net profit of the Company for the last three financial years
Financial Year	Profit before tax (?)
2014-15	19,81,60,186
2015-16	2,91,83,424
2016-17	9,00,15,858
Total	31,73,59,468
Average of 3 years PBT	10,57,86,489

4. Prescribed CSR expenditure (2% of Average Net Profits): Rs.21,16,000/-

5. Details of CSR spent during the financial year 2017-18:

(a) Total amount to be spent for the financial year: Rs. 21,15,7307-

(b) Amount unspent, if any: Nil

(c) Manner in which the amount spent during the financial year is detailed below:
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
s. No	CSR project or activity identified	Sector in which the project is covered	Projects or programs (1) Local area or other (2) Specify the State and district where projects or prog rams was undertaken	Amount outlay (budget) project or programs wise	Amount spent on the projects or programs Subheads: (1) Direct expenditure on projects or programs (2) Overheads	Cumulative expenditure up to the reporting period	Amount spent: Direct or through implementing agency
1	Providing Financial Assistance towards furnishing (i.e. for procuring furniture, kitchen eguipment, computer, electronics equipment & security system, etc.) the War Memorial Boys and Girls Hostel Society at Dehradun, Care of Commandant, Garhwal Rifles Regimental Centre, Lansdowne (Uttarakhand)	1. Measures for the benefit of armed forces veterans, war widows and their dependent; 2. Promoting education	Dehradun, Uttarakhand	Rs. 56 Lakhs* (Rupees Fifty Six Lakhs Only)	Direct expenditure on projects or programs	Rs 56 Lakhs* (Rupees Fifty Six Lakhs Only)	Spent through the CSR Trust of the Company Veer Sammaan Foundation

Notes:

* The financial assistance of Rs 56,00,000/- include Rs 34.84 lakhs accumulated amount available with Veer Sammaan Foundation and Rs 21.16 lakhs CSR amount transferred by the Company to the Trust for the FY2017-18.

6. Responsibility Statement: The CSR Committee confirms that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and policy of the Company

	For and on behalf of Corporate Social Responsibility Committee
	Ashok Atluri	Sridevi Madati
Place: Hyderabad	Chairman and Managing Director	Chairperson of the Committee
Date: 14 August 2018	DIN: 00056050	DIN: 02446610

Form No. MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

Zen Technologies Limited

Hyderabad

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s Zen Technologies Limited, (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company''s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2018 has complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the company for the financial year ended on 31st March, 2018 according to the provisions of:

(i) The Companies Act, 2013 (the Act) (Applicable Sections as on date) and the Rules made under that Act;

(ii) The Securities Contracts (Regulation) Act, 1956 (''SCRA'') and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment and Overseas Direct Investment (If applicable);

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (''SEBI Act''):-

(a) The Securities and Exchange Board of India (Substantial Acguisition of Shares and Takeovers) Regulations, 2011;

(b) Securities and Exchange Board of India (Listing Obligations and Disclosure Reguirements) Regulations, 2015;

(c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(e) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996;

(vi) Provisions of the following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (''SEBI Act'') were not applicable to the Company under the financial year under report-fa) The Securities and Exchange Board of India (Issue of Capital and Disclosure Reguirements) Regulations, 2009;

(b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(c) The Securities and Exchange Board of India (Delisting of Eguity Shares) Regulations, 2009; and

(d) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

(vii) The industry specific laws that are applicable to the company are as follows:

a) The Factories Act, 1948

b) The Bonus Act,1965

c) The Employees'' State Insurance Act, 1948

d) The Information Technology Act, 2008

e) The e-waste (Management and Handling) Rules, 2011

f) The Official Secrets Act, 1923

g) Security Manual, Category B, Ministry of Defence

We have also examined compliance with the applicable clauses of the

following:

a. Secretarial Standards SS-1, SS-2 and SS-3 with respect to Meetings of the Board of Directors, General Meetings and Dividend respectively issued by The Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.

During the period under review the Company has complied with the provisions of the Acts, Rules, Regulations, Guidelines, Standards, etc. mentioned.

We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. During the year:

a) Ms. Madati Sridevi has been reappointed as an Independent Director for another term of 3 years w.e.f.29 May, 2017.

b) Mr.Ashok Atluri has been reappointed as Managing Director for a period of 3 years w.e.f 1 October, 2017.

c) Mr.Rajesh Katragadda has been co-opted as an Independent Director w.e.f.24 August, 2017 however, he ceased to be a director due to his disgualification u/s 164(2) of the Act.

d) Mr.Amreek Singh Sandhu has been co-opted as an Additional Director w.e.f. 3 February, 2018 to act as an Independent Director.

Adeguate notice has been given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

1 As a general practice of the Board decisions are taken on unanimous consent.

We further report that during the year as per the provisions of section 124(6) of the Act 64,550 eguity shares of Rs 1/-each held by 38 shareholders, were transferred to Investor Education and Protection Fund.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

Place: Hyderabad	For P.S. Rao & Associates
Date: 14 August 2018	Company Secretaries
	N.Vanitha
	Company Secretary
	ACS No: 26859
	CPNo: 10573

Note: This report is to be read with our letter of even date which is annexed as ''Annexure A ''and forms an integral part of this report.

ANNEXURE A

To

The Members

Zen Technologies Limited

Hyderabad

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever reguired, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

	For P.S. Rao & Associates
	Company Secretaries
	N.Vanitha
	Company Secretary
Place: Hyderabad	ACS No: 26859
Date: 14 August 2018	CPNo: 10573

ANNEXURE-6

Details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(i) The ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year:

s. No	Name of the Director, Designation	Ratio of remuneration to the median remuneration of the employees
1	Mr Ashok Atluri, Chairman and Managing Director	15.96*
2	Mr M Ravi Kumar, Whole-time Director	12.36
3	Ms Sridevi Madati, Independent Director	Nil
4	Mr Venkat Samir Kumar Oruganti, Independent Director	Nil
5	Mr Amreek Singh Sandhu	Nil

Note: * Commission, if any is not included in the remuneration paid to the Chairman and Managing Director. - Independent Directors were paid sitting fees for attending the Meetings.

(ii) The percentage increase in remuneration of each director. Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

S. No	Name of the Director /KMP, Designation	Percentage increase in remuneration
1	Mr Ashok Atluri, Chairman and Managing Director	NA*
2	Mr M Ravi Kumar, Whole-time Director	NA*
3	Ms Sridevi Madati, Independent Director	Nil
4	Mr Venkat Samir Kumar Oruganti, Independent Director	Nil
5	Mr Amreek Singh Sandhu	Nil
6	Mr N Ramesh Kumar, Chief Financial Officer	NA**
7	Mr M Satish Choudhury, Company Secretary	NA**

* There was no increase in the remuneration paid to Mr Ashok Atluri, Managing Director and Mr Ravi Kumar Midathala, Whole Time Director during the financial year 2017-18.

** Appointed during the financial year 2017-18, hence not applicable.

Note: * Commission, if any is not included in the remuneration paid to the Chairman and Managing Director.

- Independent Directors were paid sitting fees for attending the Meetings.

(iii) The percentage increase in the median remuneration of employees in the financial year:

During the year under review, there was no increase in median remuneration of employee.

(iv) The number of permanent employees on the rolls of company:

There are 246 permanent employees on the rolls of the Company.

(v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year: 5.90%

Percentile increases in the managerial remuneration and justification

thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Nil

(vi) The key parameters for any variable component of remuneration availed by the directors:

The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy of the Company.

(vii) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.

(viii) Particulars of Employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules, 2014:

SL. No	Employee Name	Designation & Nature of Employment	Educational Qualifications Age		Experience	Date of Joining	Gross Remuneration Paid (Rs In Lacs)	Previous Employment and Designation, if any	No. of share held, if any	Remarks
1	Ashok Atluri	Chairman and Managing Director	B.COM, P G Diploma	52 yrs	Over 2 7 years	29-06-1993	5,195,995		2,01,76,250	Promoter & Managing Director
2	Kishore Dutt Atluri	President	Master of Computer Application	57 Years	33 years	29-06-1993	4,940,329		17,556,250	Promoter and Brother of Mr Ashok Atluri, Chairman and Managing Director
3	M Ravi Kumar	Whole-time Director	PG Diploma in computer science	56 yrs	Around 30 years	29-06-1993	4,023,669		7,94,000	Promoter & Whole-time Director
4	H J Kamath	Sr Vice President (Business Development)	PGDM-IIM,Calcuitta, Btech-Electronics & Communications, NT Madras	60 yrs	37 yrs	8-NOV-14	3,600,000	Mahindra Defence Systems Ltd, VP & CEO	12,934
5	Brig Anjum Shahab	Vice President (Projects & Coordination)	Msc In Physics (Electronics), Msc in Defence studies, PG Diploma in Software Technology and System Administration	65 yrs	43 yrs	7-Feb-13	3,153,560	Indian Army, retired as Brigadier.
6	Ravi Manchu	SR ARCHITECT-SIMULATION (SOFTWARE)	MTech (Computational Technigues), M.Sc (Physics)	42 yrs	16 yrs	22-Dec-06	2,693,854	Matrix View Technologies India Pvt Ltd, Team Head R&D security.
7	Brig (Retd) Amul Asthana	VP-PROJECTS	Msc Defence Studies	58 yrs	37 yrs	16-Aug-16	2,400,000	Indian Army, retired as Brigadier.	~	-
8	Rahul Vasant Thombre	Program Manager	BE-Electronics	42 yrs	20 yrs	16-0ct-08	2,398,059	Zeon Solutions Ltd, Project Manager	-	-
9	M Vijaya Rama	SR MANAGER (R&D-	BE-Electronics	41	16 yrs	3-Apr-02	2,276,187		4,000	-
	Rao	ELECTRONICS)		yrs
10	Surya Prakash Koti	Project Lead (Software)	M.Sc-Electronics	36 yrs	12 yrs	26-Dec-05	2,252,070		1,300
For and on behalf of the Board

Place: Hyderabad	Ashok Atluri
Date: 14 August 2018	Chairman and Managing Director
	DIN: 00056050

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 22nd Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31 March 2015.

FINANCIAL RESULTS

The financial highlights of the Company are as follows:

(Rs. in Cr) Particulars 2014-15 2013-14

Total Income 81.86 49.89

Total Expenditure 57.67 45.73

Operating Profit (PBIDT) 24.19 4.16

Interest 2.13 2.48

Depreciation & Amortization 2.25 1.57

Profit before tax 19.82 0.11

Provision for Tax 4.08 0.02

Deferred Tax Liability - -

Profit after Tax 15.74 0.09

Appropriations:

Transferred to General Reserve 1.39 -

Proposed Dividend 2.70 0.77

Dividend Tax 0.55 0.13

Retained profit 11.10 -

Earnings Per Share (Rs.) (face value of Equity Share of Rs. 1/- each) - Basic 2.04 0.01

STATE OF THE COMPANY'S AFFAIRS

During the year under review, your Company achieved total income of Rs. 81.86 Crores as against Rs. 49.89 Crores during the previous year. The Net profit after tax stood at Rs. 15.74 Crores (Rs. 9.33 Lakhs for the previous year). The Earnings Per Share (EPS) of face value of Rs. 1/- each is Rs. 2.04 (previous year's EPS Rs. 0.01).

The order book size as on 31 March 2015 is around Rs. 118.94 Crores including AMCs of worth Rs. 79.04 Crores as against Rs. 3.84 Crores excluding AMCs for the previous year.

During the year, the R&D expenditure (capital and revenue) is Rs. 13.07 Crores (previous year 20.66 Crores). The R&D products developed during the year have substantial scope for revenue generation and are expected to become commercially viable in the next two years.

STRATEGIC ALLIANCE

During the year under review, your Company signed a Memorandum of Understanding (MoU) with Rockwell Collins, an American Company having facilities in Hyderabad and near New Delhi to combine their strengths in simulation and training to offer industry-leading, high fidelity solutions to Indian military customers. This alliance marks the first time that a global simulator original equipment manufacturer has partnered with an Indian simulator manufacturing company to cater to the Indian Defence market.

Further to MoU, your Company and Rockwell Collins joined their forces in military flight simulation by unveiling a next generation rotary wing simulator at Aero India 2015. This strategic alliance will produce high fidelity innovative solutions while also ensuring cost benefits for customers across the region since the alliance's capabilities are indigenized, including in software, electronics and visuals. With the rotary wing platform launch, both companies aim to emerge, in the near future, as key partners to the Indian Armed Forces.

DIVIDEND

Your Directors have recommended a dividend of Rs. 0.35 per Equity Share (35 percent) of face value of Rs. 1.00 each of the Company for the financial year ended 31 March 2015, amounting to Rs. 3.25 Crores, (including dividend tax of Rs. 0.55 Crores). The dividend, if approved, at the ensuing Annual General Meeting to be held on 26 September 2015, will be paid to those members whose names appear in the Register of Members as on record date. The Register of Members and Share Transfer books of the Company will remain closed from 22 September 2015 to 26 September 2015 (both days inclusive) for the purpose of payment of dividend for the financial year ended 31 March 2015 and the AGM.

TRANSFER OF AMOUNT TO RESERVES

An amount of Rs. 1.39 Crores out of the current profits for the year are transferred to General Reserves. An amount of Rs. 11.10 Crores is proposed to be retained in the surplus.

SUB-DIVISION OF EQUITY SHARES AND CONSEQUENT AMENDMENT IN MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY

During the year, with a view to broad-base the investor base by encouraging the participation of the small investors and also to increase the liquidity of Equity Shares of the Company, the Company after obtaining members approval on 18 September 2014 through Postal Ballot has sub-divided each Equity Share of face value of Rs. 10/- (Rupees Ten only) as existing on the Record Date (24 November 2014) into 10 (Ten) Equity Shares of face value of Rs. 1/- (Rupee One only) each fully paid-up, with effect from the Record Date.

Consequent upon sub-division of Equity Shares of the Company, the Capital Clause of Memorandum of Association and Article 4 of the Articles of Association of the Company were amended with the approval of the members through Postal Ballot i.e. from Rs. 20,00,00,000/- (Rupees Twenty Crores only) divided into 2,00,00,000 (Two Crores) Equity Shares of Rs. 10/- (Rupees Ten only) each to 20,00,00,000 (Twenty Crores) Equity Shares of Rs. 1/- (Rupees One only) each.

ESTABLISHMENT OF 100% WHOLLY OWNED SUBSIDIARY COMPANY AT AJMAN FREE ZONE AUTHORITY, AJMAN, UAE

As a part of the expansion program, the Board accorded its consent to establish a 100% wholly owned subsidiary company at Ajman Free Zone Authority, Ajman, UAE to tap the global market for the products of the company.

ALLOCATION OF SUB-LIMITS FOR PORTFOLIO INVESTMENT WITHIN THE DEFAULT PORTFOLIO INVESTMENT LIMIT OF 24% OF THE PAID-UP EQUITY SHARE CAPITAL OF THE COMPANY

In terms of applicable provisions of the Foreign Exchange Management Act, 1999 (which along with the regulations framed thereunder be referred to as "FEMA"), Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (including any statutory modification(s), amendment or re- enactment thereof for the time being in force), and pursuant to Reserve Bank of India A.P. (DIR Series) Circular No. 46 dated 8 December 2014 on Foreign Direct Investment (FDI) in India – Review of FDI policy –Sector Specific conditions- Defence, the Company passed Special Resolution on 9 March 2015 by way of Postal Ballot for allocation of sub-limits for Portfolio Investment for Registered Foreign Portfolio Investor/s (including Qualified Foreign Investor/s and Foreign Institutional Investor/s), Foreign Venture Capital Investor/s up to 20% and for Non Resident Indian/s up to 4% in the shares of the Company, within the default portfolio investment limit of 24% of the paid-up equity share capital of the Company and to enable RBI to monitor the RFPIs, FVCIs and NRIs holdings of the Company.

Accordingly, Reserve Bank of India vide its Press Release dated 13 March 2015 advised that FIIs/RFPIs can invest up to 20% and Non Resident Indian (NRI)/Persons of Indian Origin (PIO) can invest up to 4% of the paid up capital of Zen Technologies Limited under the Portfolio Investment Scheme (PIS).

LISTING OF COMPANY'S EQUITY SHARES ON THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED, MUMBAI

The Company had made application to the National Stock Exchange (NSE) for getting the shares listed on the Exchange. NSE vide its letter dated 26 March 2015, granted listing approval stating that the equity shares of the Company shall be listed and admitted to dealings on the Exchange w. e. f. 30 March 2015. Accordingly, the equity shares of the Company got listed on NSE with effect from 30 March 2015.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

Pursuant to Rule 8 of the Companies (Accounts) Rules, 2014, report on the performance and financial position of the subsidiary included in the consolidated financial statements is appended as Annexure 1 to this Report.

SUBSIDIARY

VERSION 2 GAMES LTD

As per the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the sailent features of the financial statements of the subsidiary in the prescribed format AOC-1 is appended to this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129(3) of the Companies Act, 2013, consolidated financial statements of the Company and its subsidiary have been prepared in accordance with the requirements of Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) and as per the provisions of the Companies Act, 2013, which form part of the Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements of the Company, including the consolidated financial statements and audited accounts of its subsidiary, are placed on the Company's website www.zentechnologies.com. A copy of separate audited financial statements of subsidiary will be provided to the shareholders at their request.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 is appended as Annexure 2 to this report.

NUMBER OF MEETINGS OF THE BOARD

During the year 2014-2015, six Board Meetings were held.

The dates on which the Board meetings were held are 5 April 2014, 24 May 2014, 9 August 2014, 8 November 2014, 5 January 2015 and 9 February 2015.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, the Directors confirm that:

i. In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii. The Directors had 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 profit and loss of the Company for that period.

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors had prepared the annual accounts on a going concern basis.

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149

The independent directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6) and Clause 49 of the Listing Agreement.

COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Board of Directors, on recommendation of the Nomination and Remuneration Committee framed a Nomination and Remuneration policy on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013. The Policy is posted under the Investors section of the Company's website at: http://www. zentechnologies.com/investor_relations/Nomination-Remuneration-Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantees or investments as required under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are provided in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 3 to the Board's report.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. The Board of Directors framed a policy for Related Party Transactions to ensure a process for approval and reporting of transactions between the Company and its Related Parties. The policy is posted under the Investors section of the Company's website at: http://www.zentechnologies.com/investor_relations/Related-Party- Transaction-Policy.pdf

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company from the financial year ended 31 March 2015 to the date of signing of the Board's Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 with respect to Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo are provided in Annexure 4 to this Report.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board formulated a Risk Management Policy identifying different kinds of risks and the mitigation measures adopted and to be adopted for dealing with the risks of the Company.

The Board constituted a Risk Management Committee constituting Mr Ashok Atluri, Chairman and Managing Director, Mr M Ravi Kumar, Whole-time Director and Mr P V Krishna Mohan, Chief Financial Officer. The Committee regularly meets to monitor and review the risk management policy.

The Audit Committee and Board reviews and evaluates the internal financial controls and risk management systems of the Company.

DEVELOPMENT AND IMPLEMENTATION OF CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

Pursuant to Section 135 of the Companies Act, 2013, the Board constituted Corporate Social Responsibility Committee constituting Mr G Prasad, Independent Director, Mr Ashok Atluri, Chairman and Managing Director and Mr M Ravi Kumar, Whole-time Director. The Committee formulated and recommended to the Board the CSR Policy. On the recommendations of the CSR Committee, the Board approved and adopted the CSR Policy of the Company. The Corporate Social Responsibility Policy is posted under the Investors section of the Company's website at:http://www.zentechnologies.com/investor_relations/CSR-Policy.pdf

As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, annual report on CSR is prepared and the same is enclosed as Annexure 5 to this Report.

ANNUAL EVALUATION OF PERFOMANCE OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors evaluated the annual performance of the Board as a whole, its committee's and the directors individually in accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with specific focus on the performance and effective functioning of the Board and Individual Directors.

A separate meeting of Independent Directors was held on 9 February 2015 to review the performance of the Non- Independent Directors and the Board as a whole, review the performance of Chairperson of the Company and assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

CRITERIA FOR PERFORMANCE EVALUATION

a. Ability of the candidates to devote sufficient time and attention to his professional obligations as Independent Director for informed and balanced decision making.

b. Adherence to the Code of Conduct in letter and in spirit by the Independent Directors.

c. Bringing objectivity and independence of view to the Board's discussions in relation to the Company's strategy, performance, and risk management

d. Statutory Compliance and ensuring high standards of financial probity and Corporate Governance

e. Responsibility towards requirements under the Companies Act, 2013, Responsibilities of the Board and Accountability under the Director's Responsibility Statement

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

During the year, Mr P V Krishna Mohan was appointed as the Chief Financial Officer of the Company.

Mr P V Krishna Mohan, Chief Financial Officer has resigned from the services of the Company with effect from the close of business hours on 30 June 2015.

Names of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year: NIL

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

In every quarter during the approval of Financial Statements, Internal Audit Report is presented by the Internal Auditor. The Audit Committee reviews the Internal Audit Report along with the Management Replies.

The internal financial controls are evaluated and reviewed by the Audit Committee and the Board for ensuring orderly and efficient conduct of its business, including adherence to Company's policies safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial statements.

VIGIL MECHANISM

The Board of Directors, on recommendation of the Audit Committee, established a vigil mechanism for Directors and Employees called "Whistle Blower Policy" pursuant to the provisions of Companies Act, 2013 and Listing Agreement to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy and to provide adequate safeguards against victimization of persons who use such mechanism and to provide for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

The Whistle Blower Policy is posted under the Investors section of the Company's website at: http://www.zentechnologies.com/investor_relations/Whistle-Blower- Policy-2014.pdf

SEXUAL HARASSMENT POLICY

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended 31 March 2015, the Company has not received any Complaints pertaining to Sexual Harassment.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Management Discussion & Analysis forms part of the Annual report as per the requirements of Listing Agreement with the Stock Exchanges.

DIRECTORS

Cmde Sarvotham Rao retired as an Independent Director from the Board of Directors of the Company on 29 June 2015 in accordance with the retirement age policy for Directors of the Company. The Board places on record its sincere appreciation for Cmde Sarvotham Rao's long and fruitful association with the Company and thank him for providing valuable guidance to the Company during his tenure.

On the recommendation of Nomination and Remuneration Committee, Mr Venkat Samir Kumar Oruganti, was appointed as an Additional Director (Non-Executive Independent) of the Company in the Board Meeting held on 14 August 2015, pursuant to Section 161 of the Companies Act, 2013 read with Articles of Association of the Company and holds office up to the date of this AGM. In accordance with the provisions of Section 149 of the Act, Mr Venkat Samir Kumar Oruganti, is proposed to be appointed as an Independent Director to hold office as per the tenure of appointment mentioned in the Notice of the forthcoming AGM of the Company.

In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr Ashok Atluri, Chairman and Managing Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The aforesaid appointment/reappointment of Independent Director and Managing Director are subject to your approval.

The Company has received declarations from all the Independent Directors of the Company confirming that they continue to meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDITORS

Statutory Auditors:

At the 21st Annual General Meeting held on 27 September 2014, M/s Gokhale & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 24th Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Gokhale & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

The Notes on the Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

Secretarial Audit:

Mr Mahadev Tirunagari, Practicing Company Secretary was appointed to conduct secretarial audit for the financial year 2014-15. Pursuant to Section 204 of the Companies Act, 2013 and Rules thereunder, the Secretarial Audit Report for the financial year ended 31 March 2015 in form MR-3, is annexed to this Annual Report as Annexure 6.

There are no qualifications in the Secretarial Audit Report.

Internal Auditors:

M/s Venkatadri & Co., Chartered Accountants have been appointed as Internal Auditors of the Company to conduct the Internal Audit on quarterly basis. The Audit Committee of the Board is apprised on the internal audit report and the action taken by the management. The Audit Committee also reviews the adequacy of internal control systems, reporting structure coverage and frequency of internal audit.

AUDIT COMMITTEE

For the year 2014-15, Audit Committee has been constituted as per the requirements of Section 177 of the Companies Act, 2013. The details of the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013, is given in the Corporate Governance Report furnished as part of the Annual Report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with a certificate from the Statutory Auditor of the Company with regard to the compliance of Corporate Governance as per Clause 49 of the Listing Agreement forms part of this Annual Report.

PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure 7 to the Board's report.

ACKNOWLEDGEMENTS

The Board of Directors thank the company's customers, suppliers, dealers, banks, financial institutions, Government and Regulatory authorities and consultants for their continued support. The Directors express their sincere gratitude to the shareholders and also wish to place on record their appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board

Place: Hyderabad Ashok Atluri

Date : 14 August 2015 Chairman and Managing Director

DIN: 00056050

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Mar 31, 2014

Dear Members,

The Directors are pleased to present the 21st Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31 March 2014.

FINANCIAL RESULTS

The financial highlights of the Company are as follows:

('' in Cr)

Particulars 2013-14 2012-13

Total Income 49.89 41.77

Total Expenditure 45.73 32.55

Operating Profit (PBIDT) 4.16 9.23

Interest 2.48 1.84

Depreciation & Amortization 1.57 1.84

Profit before tax 0.11 5.55

Provision for Tax 0.02 0.85

Deferred Tax Liability - -

Profit after Tax 0.09 4.70

Appropriations:

Transferred to General Reserve - 3.00

Proposed Dividend 0.77 0.89

Dividend Tax 0.13 0.15

Retained profit - 0.66

Earning Per Share (Rs.) (face value of Equity share of Rs.10/- each)

- Basic 0.12 5.29

RESULTS OF OPERATIONS

During the year under review, your Company achieved total income of ''49.89 Crores as against Rs.41.77 Crores during the previous year. Due to delay in receipt of some of the orders and cancellation of some tenders, the sales of the current year are lower than expected. The Net profit after tax stood at Rs. 9.33 lakhs (Rs. 4.70 Crores for the previous year). The Earnings Per Share (EPS) is Rs.0.12 (previous year''s EPS Rs. 5.29).

The order book size as on 31 March 2014 is about Rs. 3.84 Crores excluding AMCs as against Rs. 0.96 Crores for the previous year.

The increase in R&D expenditure caused the fall in profit. The R&D expenditure during the year 2013-14 is '' 14.85 crores (previous year ''9.16 crores). The R&D products developed during the year have substantial scope for revenue generation and are expected to become commercially viable in the next two years.

DIVIDEND

Your Directors have recommended a dividend of '' 1.00 per Equity Share (10 percent) of face value of ''10.00 each of the Company for the financial year ended 31 March 2014, amounting to '' 90.27 lakhs, (including dividend tax of '' 13.11 lakhs). The dividend, if approved, at the ensuing Annual General Meeting will be paid to those members whose names appear in the Register of Members as on record date.

APPROPRIATIONS

In accordance with the Companies Act, 1956 and the Companies (Transfer of Profits to Reserves) Rules, 1975, transfer of profits to reserves is required only if the dividend proposed exceeds 10 percent of the paid-up capital of the Company. The Board decided not to transfer any profits to reserves for the financial year 2013- 14.

BUYBACK OF EQUITY SHARES

The Board in its meeting held on 22 April 2013 approved Buyback offer of the Company upto maximum of 16,00,000 equity shares and minimum of 4,00,000 equity shares of '' 10.00 each at a price not exceeding '' 90.00 per equity share for a maximum amount not exceeding '' 1,000 lakhs through open market mechanism on Stock Exchange.

The Buyback commenced on 9 May 2013 and closed on 25 October 2013. Your Company has bought back 11,72,426 equity shares through electronic mode and incurred an amount of '' 810.70 lakhs towards Buyback of shares, which constitutes 81.07% of the total buyback offer size of ''1,000 lakhs. The paid-up capital post buyback offer is '' 7,71,60,060/-.

SUB-DIVISION OF EQUITY SHARES AND CONSEQUENT AMENDMENT IN MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY

The Equity Shares of the Company are listed on BSE Limited (BSE). With a view to broadbase the investor base by encouraging the participation of the small investors and also to increase the liquidity of Equity Shares of the Company, the Board of Directors at its meeting held on 9 August 2014 have recommended the sub- division of each Equity Share of face value of ''10/- (Rupees Ten only) of the Company into 10 (Ten) Equity Shares of face value ''1/- (Rupee One only) each for approval by the members through Postal Ballot.

Accordingly, each issued Equity Share of nominal value ''10/- (Rupees Ten only) of the Company existing on the Record Date shall stand sub-divided into 10 (Ten) Equity Shares of nominal value ''1/- (Rupee One only) each.

The Record Date for the aforesaid sub-division of the equity shares will be fixed by the Board of Directors after the approval of the Members is obtained through Postal Ballot.

Consequent upon sub-division of Equity Shares of the Company, the Capital Clause of Memorandum of Association and Article 4 of the Articles of Association of the Company will also require amendment. Accordingly, the Board has also recommended for approval for Members through Postal Ballot to amend Clause V of the Memorandum of Association and Article 4 of Articles of Association to reflect the alteration in the Authorised Share Capital of the Company, i.e. from ''20,00,00,000/- (Rupees Twenty crores only) divided into 2,00,00,000 (Two crores) Equity Shares of '' 10/- (Rupees Ten only) each to 20,00,00,000 (Twenty crores) Equity Shares of ''1/- (Rupee One only) each.

BORROWINGS AND CREATION OF CHARGE UNDER SECTION 180(1)(c) AND 180(1)(a) OF THE COMPANIES ACT, 2013

In view of increased scope of operations and R&D activities, the Board of Directors at its meeting held on 9 August 2014 have recommended to the Members of the Company to accord their consent through Postal Ballot, to the Board to borrow for and on behalf of the Company from time to time as they may consider fit, any sum or sums of money, on such terms and conditions as the Board may deem fit, in any manner where the monies to be borrowed together with the monies, if any, already borrowed by the Company (apart from temporary loans and credit obtained or to be obtained from the Company''s bankers in the ordinary course of business) will exceed the aggregate of the paid-up share capital of the Company and its free reserves such that, the total amount so borrowed by the Board of Directors and outstanding at any point of time, shall not at any time exceed, in the aggregate, the sum of ''500 crores (Rupees Five Hundred crores only).

Further, the Board in the above said meeting held on 9 August 2014 have recommended to the Members of the Company to accord their consent through Postal Ballot, to the Board to create charge / mortgage/ hypothecate etc., in addition to the charge/mortgage/ hypothecation etc., already created, in such form, manner and ranking and on such terms as the Board deems fit in the interest of the Company, on the whole or substantially the whole of the Company''s any one or more of the undertakings or all of the undertakings, whether immovable and /or movable properties of the Company, both present and future and /or any other assets or properties, either tangible or intangible, of the Company as may be agreed to in favour of the bank(s), financial institution(s) or other body(ies) corporate(s), other entity(ies), firms(s), person(s)etc. in India or abroad, to secure the borrowings availed or to be availed by the Company, up to the limits which shall not at any time exceed ''500 crores (Rupees Five Hundred crores only).

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. Therefore the provisions of Section 58A of the Companies Act, 1956, and the rules made thereunder, are not applicable to the Company.

SUBSIDIARY

VERSION 2 GAMES LTD

Version 2 Games Ltd is a wholly owned subsidiary of the Company. During the year under review, the company had not done any business. The statement of Holding Company''s interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated financial statements, as a part of Annual Report.

EXEMPTION FROM ATTACHING THE BALANCE SHEET, ETC. OF THE SUBSIDIARY COMPANY WITH THE BALANCE SHEET OF THE COMPANY

Pursuant to the provisions of Section 212 of the Companies Act, 1956 (the Act), documents in respect of the subsidiary viz., Directors'' Report, Auditors'' Report, Balance Sheet and Statement of Profit and Loss are required to be attached to the Balance sheet of the holding company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, Ministry of Corporate Affairs, has vide General Circular No. 2/2011 dated 8 February 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiary of the Company, but contains audited consolidated financial statements of the Company and its Subsidiary. However, the Company will make available the audited annual accounts and related detailed information of the subsidiary

to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the Company during business hours.

A statement of Company''s interest in the subsidiary and a summary of the financials of the subsidiary are given along with the consolidated financial statements.

DIRECTORS

As per the provisions of Section 152 of the Companies Act, 2013, at every AGM, one-third of such of the Directors for the time being are liable to retire by rotation, or if their number is neither three nor a multiple of three, then the number nearest to one-third, shall retire from office. The said Act also provides that the provisions of retirement of Directors by rotation shall not be applicable to appointment of Independent Directors. To comply with the requirement of the Companies Act, 2013, the Board of Directors in their meeting held on 9 August 2014 have recommended to the Members to accord their consent through Postal Ballot to amend Article 66 of Articles of Association of the Company so as to enable the office of the Managing Director and or Manager or Whole-time Director(s) liable to determination by retirement of Directors by rotation. At the ensuing AGM, Mr M Ravi Kumar is proposed to be appointed as Director liable to retire by rotation.

In terms of the provisions of Section 149(4) of the Companies Act, 2013, which came into effect from 1 April 2014, your Company is required to have at least one-third of the total number of Directors as Independent Directors, who are not liable to retire by rotation.

The Company''s non-executive Independent Directors were appointed as Directors liable to retire by rotation under the provisions of erstwhile Companies Act, 1956 and holds office as Independent Directors of the Company under Clause 49 of the listing agreement with Stock Exchange.

The above referred Independent Directors have furnished declarations under Section 149(7) of the Act to the effect that they meet the criteria of Independent Directors and in the opinion of the Board of Directors, the said Independent Directors fulfill the conditions specified in the Companies Act, 2013 and rules made thereunder and they are independent of the Management.

The Company has received notices in writing from members along with the deposit of requisite amount under Section 160 of the Act, proposing the candidatures of Cmde Sarvotham Rao, Mr G Prasad and Mrs M Sridevi for the office of Directors of the Company. In accordance with the provisions of Section 149 of the Act, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting of the Company.

Mr Ashok Atluri is proposed to be reappointed as the Managing Director of the Company for a period of 5 years effective from 1 November 2014.

The aforesaid appointment/reappointment of Independent Directors, Managing Director and Whole-time Director are subject to your approval.

AUDITORS

Statutory Auditors:

M/s Gokhale & Co., Chartered Accountants, the Statutory Auditors of the Company will retire at the conclusion of the forthcoming 21st AGM. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their reappointment as Statutory Auditors of the Company, such reappointment will be in accordance with the limits specified in Section 141(g) of the Companies Act, 2013.

Your Company would comply with the requirement of Rotation of Auditors within 3 years as permitted under the Companies Act, 2013.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, it is proposed to appoint M/s Gokhale & Co., as Statutory Auditors of the Company from the conclusion of the forthcoming 21st AGM till the conclusion of 24th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

The Notes on the Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Secretarial Auditor:

For effective corporate governance and compliance, Secretarial Audit was conducted by Mr Mahadev Tirunagari, Practicing Company Secretary for the financial year 2013-14. The Secretarial Audit Report for the financial year ended 31 March 2014, is annexed to the Annual Report.

Internal Auditor:

M/s Venkatadri & Co., Chartered Accountants has been appointed as an Internal Auditor of the Company to conduct the Internal Audit on quarterly basis. The Audit Committee of the Board is apprised on the internal audit report and the action taken by the management. The Audit Committee also reviews the adequacy of internal control systems, reporting structure, coverage and frequency of internal audit.

CORPORATE GOVERNANCE

The Report on Corporate Governance and Management Discussion and Analysis along with a certificate from the Statutory Auditor of the Company with regard to the compliance of Corporate Governance as per Clause 49 of the Listing Agreement is annexed to this report.

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of the Companies Act, 2013, the Board of your Company constituted a Corporate Social Responsibility (CSR) Committee to formulate and recommend CSR Policy and to comply with other requirements as mandated under the said Companies Act, 2013. Commencing from financial year 2014- 15, your Company, each year, has to spend at least 2% of its average profits made during three immediate preceding financial years towards CSR Policy.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time and forming part of Directors'' Report for the year ended 31 March 2014:

There were no employees who were in the Company''s employment for whole or a part of the year and were in receipt of remuneration for any part of the financial year at a rate, which in the aggregate was not less than '' 5,00,000/- per month.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings & Outgo are provided in Annexure II and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

i) In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii) They 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 as on 31 March 2014 and of the profit of the Company for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENTS

Your Directors thank the company''s customers, suppliers, dealers, banks, financial institutions, Government authorities and consultants for their continued support. Your Directors express their sincere gratitude to the shareholders and also wish to place on record their appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board

Place: Hyderabad Ashok Atluri

Date: 9 August 2014 Chairman and Managing Director

(DIN: 00056050)

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Mar 31, 2013

Dear Members,

The Directors are pleased to present the 20th Annual Report of the Company along with the Audited Statement of Accounts for the financial year ended 31 March 2013.

FINANCIAL RESULTS

The financial performance of the Company is summarized below:-

(Rs.in Cr)

Particulars 2012-13 2011-12

Total Income 41.77 107.17

Total Expenditure 32.55 64.75

Operating Profit (PBIDT) 9.23 42.42

Interest 1.84 1.90

Depreciation & Amortization 1.84 1.10

Profit before tax 5.55 39.42

Provision for Tax 0.85 7.80

Deferred Tax Liability

Profit after Tax 4.70 31.62

Appropriations:

Transferred to General Reserve 3.00 10.00

Proposed Dividend 0.89 5.77

Dividend Tax 0.15 0.94

Retained profit 0.66 14.91

Earning Per Share (Rs.) (face value of Equity share of Rs.10/- each) - Basic 5.29 35.57

RESULTS OF OPERATIONS

During the year under review, your Company achieved total income of Rs. 41.77 Crores as against Rs. 107.17 Crores during the previous year. Due to delay in receipt of some of the orders and cancellation of some tenders, the sales of the current year are lower than expected. The Net profit after tax stood at Rs. 4.70 Crores as against a net profit of Rs. 31.62 Crores for the previous year. In line with the profit, the Earnings Per Share (EPS) has also considerably declined to Rs. 5.29 compared to previous year''s EPS of Rs. 35.57.

The order book size as on 31 March 2013 is about Rs. 0.96 Crores excluding AMCs as against Rs. 31.49 Crores for the previous year.

DIVIDEND

Your Directors have recommended a dividend of Rs. 1/- per Equity Share (10 percent) of face value of Rs.10/- each of the Company for the financial year ended 31 March 2013, amounting to Rs. 103.99 lakhs, (including dividend tax of Rs. 15.11 lakhs). The dividend, if approved, at the ensuing Annual General Meeting will be paid to those members whose names appear in the Register of Members as on record date.

APPROPRIATIONS

Your Company has voluntarily transferred Rs. 3 Crores to the General Reserve, which is higher than the limits as prescribed under the Companies (Transfer of Profits to Reserves) Rules, 1975.

BUYBACK OF EQUITY SHARES

The Board in its meeting held on 22 April 2013 approved Buyback offer of the Company upto maximum of 16,00,000 equity shares and minimum of 4,00,000 equity shares of Rs. 10.00 each at a price not exceeding Rs. 90.00 per equity share for a maximum amount not exceeding Rs. 1,000 lakhs through open market mechanism on Stock Exchange.

The Buyback commenced on 9 May 2013 and last date for completion of Buyback is 25 October 2013 or when the Company completes Buyback to the extent of 16,00,000 Equity Shares under the offer or upon exhaustion of Rs.1,000 lakhs set aside for Buyback, whichever is earlier. The Board reserves the right to close the Buyback offer at an earlier date by giving appropriate notice and reasons for such early closure and completing all formalities.

Your Company has bought back 11,32,832 equity shares through electronic mode as of 2 August 2013 and incurred an amount of Rs. 783.92 lakhs towards Buyback of shares, which constitutes 70.80% of total Buyback offer size in terms of quantity.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. Therefore the provisions of Section 58A of the Companies Act, 1956, and the rules made thereunder, are not applicable to the Company.

SUBSIDIARY

VERSION 2 GAMES LTD

Version 2 Games Ltd is a wholly owned subsidiary of the Company, registered in the State of Andhra Pradesh, India. During the year under review, the company had not done any business. The statement of Holding Company''s interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated Financial Statements, as a part of Annual Report.

EXEMPTION FROM ATTACHING THE BALANCE SHEET, ETC. OF THE SUBSIDIARY COMPANY WITH THE BALANCE SHEET OF THE COMPANY

Pursuant to the provisions of Section 212 of the Companies Act, 1956 (the Act), documents in respect of the subsidiary viz., Directors'' Report, Auditors'' Report, Balance Sheet and Statement of Profit and Loss are required to be attached to the Balance sheet of the holding company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, Ministry of Corporate Affairs, has vide General Circular No. 2/2011 dated 08 February 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiary of the Company, but contains audited consolidated financial statements of the Company and its Subsidiary. However, the Company will make available the audited annual accounts and related detailed information of the subsidiary to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the Company during business hours.

A statement of Company''s interest in the subsidiary and a summary of the financials of the subsidiary are given along with the Consolidated Financial Statements.

DIRECTORS

In accordance with Sections 255, 256 and other applicable provisions of the Companies Act, 1956, Mr D Satish Babu and Mr Utpal H Sheth, Directors of the Company retire by rotation at the twentieth Annual General Meeting and though eligible for reappointment have not offered themselves for reappointment. The vacancy in the Board caused by their retirement will not be filled up for the time being. The Members of the Board place on record their deep sense of appreciation and immense gratitude for the services rendered by Mr D Satish Babu and Mr Utpal H Sheth for being valuable source to the Company as Directors on the Board.

Mr G Prasad was appointed as an Additional Director of the Company w.e.f 9 November 2012, to hold office up to the date of the ensuing Annual General Meeting. Notice was received from a member under Section 257 of the Companies Act, 1956 proposing his candidature as the Director of the Company. The Board at its meeting held on 3 August 2013 had recommended to the Members for appointment of Mr G Prasad as Director liable to retire by rotation, subject to the approval of the members at the ensuing Annual General Meeting.

The Board of Directors at their meeting held on 3 August 2013 on recommendation of Remuneration Committee and subject to the approval of the Members at the ensuing Annual General Meeting had reappointed Mr M Ravi Kumar as a Whole Time Director of the Company for a period of three years w.e.f 29 June 2013.

AUDITORS

Statutory Auditors:

M/s Gokhale & Co., Chartered Accountants, the Statutory Auditors of the Company will retire at the conclusion of the twentieth Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their reappointment as Statutory Auditors of the Company, such reappointment will be in accordance with the limits specified in sub-section (1B) of Section 224 of the Companies Act, 1956.

The Notes on the Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Cost Auditor:

The Board of Directors at their meeting held on 30 May 2013 appointed M/s Nageswara Rao & Co., Cost Accountants, Secunderabad as the Company''s Cost Auditors, subject to the approval of the Central Government, to conduct an audit of Cost Accounting records and for issuance of Cost Audit Report for the financial year 2013 - 14. The due date of filing the Cost Audit Report by the Cost Auditor is 30 September 2014 for the financial year 2013-14.

Secretarial Auditor:

For effective corporate governance and compliance, a Secretarial Audit was conducted by Mr Mahadev Tiruanagari, Practicing Company Secretary for the financial year 2012-13. The Secretarial Audit Report for the financial year ended 31 March 2013, is annexed to the Annual Report.

Internal Auditor:

M/s Venkatadri & Co., Chartered Accountants has been appointed as an Internal Auditor of the Company to conduct the Internal Audit on quarterly basis. The Audit Committee of the Board is apprised on the internal audit report and the action taken by the management. The Audit Committee also reviews the adequacy of internal control systems, reporting structure, coverage and frequency of internal audit.

CORPORATE GOVERNANCE

The Report on Corporate Governance and Management Discussion and Analysis along with a certificate from the Statutory Auditor of the Company with regard to the compliance of Corporate Governance as per Clause 49 of the Listing Agreement is annexed to this report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time and forming part of Directors'' Report for the year ended 31 March 2013.

There were no employees who were in the Company''s employment for whole or a part of the year and were in receipt of remuneration for any part of the financial year at a rate, which in the aggregate was not less than Rs. 5,00,000/- per month.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings & Outgo are provided in Annexure II and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

i) In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii) They 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 as on 31 March 2013 and of the profit of the Company for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENTS

Your Directors thank the company''s customers, suppliers, dealers, banks, financial institutions, Government authorities and consultants for their continued support. Your Directors express their sincere gratitude to the shareholders and also wish to place on record their appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board

Place : Hyderabad Ashok Atluri

Date : 3 August 2013 Chairman and Managing Director

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Mar 31, 2012

The Directors are pleased to present the 19 Annual Report along with the Audited Accounts of the Company for the year ended 31 March 2012.

FINANCIAL RESULTS

The financial performance of the Company is summarized below:-

(Rs. in Cr)

Particulars 2011-12 2010-11

Total Income 107.17 25.09

Total Expenditure 64.75 25.52

Operating Profit (PBIDT) 42.42 (0.43)

Interest 1.90 1.26

Depreciation & Amortisation 1.10 1.25

Profit before tax 39.42 (2.93)

Provision for Tax 7.80 0.99*

Deferred Tax Liability - (1.85)

Profit after Tax 31.62 (2.08)

Appropriations:

Transferred to General Reserve 10.00 1.80

Proposed Dividend 5.77 1.33

Dividend Tax 0.94 0.21

Retained profit 14.91 -

Earnings Per Share (Rs.) (face value of Equity share of Rs.10/- each)

- Basic 35.57 (2.34)

*Tax for earlier period

RESULTS OF OPERATIONS

During the year under review, your Company performed well with a total income of Rs. 107.17 Crores against Rs. 25.09 Crores during the previous year. The Net profit after tax is of Rs. 31.62 Crores against a net loss of Rs. 2.08 Crores for the previous year. In line with the profit, the Earnings per Share (EPS) has also considerably increased to Rs. 35.57 compared to previous year's negative EPS of Rs. 2.34.

The order book size as on 31 March 2012 is about Rs. 31.49 Crores as against Rs. 110 Crores for the previous year.

DIVIDEND

Your Directors have recommended a dividend of Rs. 6.50/- per Equity Share (65 percent) of face value of Rs. 10/- each of the Company for the financial year ended 31 March 2012, amounting to Rs. 671.16 lakhs, (including dividend tax of Rs. 93.69 lakhs). The dividend, if approved, at the ensuing Annual General Meeting will be paid to all eligible equity shareholders of the Company.

APPROPRIATIONS

Your Company has voluntarily transferred Rs. 10.00 Crores to the General Reserve, which is higher than the limits as prescribed under the Companies (Transfer of Profits to Reserves) Rules, 1975.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. Therefore the provisions of Section 58A of the Companies Act, 1956, and the rules made thereunder, are not applicable to the Company.

SUBSIDIARIES ZEN TECHNOLOGIES FZE

Zen Technologies FZE, a wholly owned subsidiary of the Company, registered in RAK Free Trade Zone, Ras Al Khaimah, U.A.E. During the year under review, the Company has not done any business. The statement of Holding Company's interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated Balance Sheet, as a part of Annual Report

Due to very little strategic advantage and support that the Company has got locally and owing to the global economic slowdown, no significant operations had been carried on at Zen Technologies FZE, U.A.E, since its inception. Consequently the same was de-registered from RAK Free Zone and closed.

VERSION 2 GAMES LTD

Version 2 Games Ltd is a wholly owned subsidiary of the Company, registered in the State of Andhra Pradesh, India. During the year under review, the company released the SnS game in February 2012. However, the sales of the game were far below expectation. The statement of Holding Company's interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated Balance Sheet, as a part of Annual Report.

ACCOUNTS OF THE SUBSIDIARIES

Pursuant to the provisions of Section 212 of the Companies Act, 1956 (the Act), documents in respect of the various subsidiaries viz., Directors' Report, Auditor's Report, Balance Sheet and Profit and Loss Account, are required to be attached to the Balance sheet of the holding company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, Ministry of Corporate Affairs, has vide General Circular No. 2/2011 dated 08 February 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiaries of the Company, but contains audited consolidated financial statements of the Company and its Subsidiaries. However, the Company will make available the audited annual accounts and related detailed information of the subsidiaries to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the Company during business hours.

A statement of Company's interest in the subsidiaries and a summary of the financials of the subsidiaries are given along with the consolidated accounts.

DIRECTORS

In accordance with Sections 255, 256 and other applicable provisions of the Companies Act, 1956, Dr. Pamidi Kotaiah, Director of the Company retires by rotation at the 19 Annual General Meeting and though eligible for reappointment has not offered himself for reappointment. The vacancy in the Board caused by his retirement will not be filled up for the time being. The Members of the Board place on record their deep sense of appreciation and immense gratitude for the services rendered by Dr. Pamidi Kotaiah for being a valuable source to the Company as Director on the Board and Chairman of the Audit Committee.

AUDITORS

M/s Gokhale & Co., Chartered Accountants, the Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their re-appointment as Statutory Auditors of the Company, such re-appointment will be in accordance with the limits specified in sub-section (1B) of Section 224 of the Companies Act, 1956.

The Notes on the Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

CORPORATE GOVERNANCE

A Report on Corporate Governance and Management Discussion Analysis along with a certificate from the Auditor with regard to the compliance of Corporate Governance as per Clause 49 of the Listing Agreement is annexed to this report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read along with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of Directors Report for the year ended 31 March 2012.

The Employees who were in the Company's employment throughout the financial year and were in receipt of remuneration, which in the aggregate, was not less than Rs. 60,00,000/- for the year including perquisites, if any.

Name of the Employee : Mr Ashok Atluri

Age : 46 Years

Qualification : B.Com, PGDACS

Designation : Chairman and Managing Director

Nature of Employment : Contract

Remuneration : Rs. 1,36,42,888/-

Experience : 18 Years

Date of commencement of employment : 01-11-1994

Percentage of Equity shares held in the Company : 27.14

There were no employees who were in the Company's employment for a part of the year and were in receipt of remuneration for any part of the financial year at a rate, which in the aggregate was not less than Rs. 5,00,000/- per month.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings & Outgo are provided in Annexure II and form part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

i) In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii) They 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 as on 31 March 2012 and of the profit of the Company for that period.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENTS

Your Directors thank the company's customers, suppliers, dealers, banks, financial institutions, Government authorities and consultants for their continued support. Your Directors express their sincere gratitude to the shareholders and also wish to place on record their appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board

Place: Hyderabad Ashok Atluri

Date: 3 August 2012 Chairman and Managing Director

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Mar 31, 2011

The Members

The Directors present to you their 18th Annual Report along with the Audited Accounts of the Company for the year ended March 31, 2011. The financial highlights of the Company are as follows:-

FINANCIAL PERFORMANCE

(Rs in Lakhs)

Particulars 2010-11 2009-10

Total Income 2509.03 5515.72

Total Expenditure 2584.87 3443.16

Operating Profit (PBIDT) (75.84) 2072.56

Interest 126.23 39.65

Depreciation 91.41 58.88

Profit before tax (293.48) 1974.03

Provision for Tax 99.28 285.65

Deferred Tax Liability (185.19) 4.16

Profit after Tax (207.58) 1684.22

Appropriations:

Transferred to General Reserve 180.00 300.00

Proposed Dividend 133.33 399.98

Dividend Tax 21.63 66.43

Retained profit - 917.81

Earning Per Share (Rs)(face value of equity share of Rs.10/- each) - Basic (2.34) 19.39

RESULTS OF OPERATIONS

Your Company passed through a lean phase during the year under review because of delay in realizing the orders from customers due to which the income was Rs. 2509.03 lakhs as against Rs. 5515.72 lakhs for the previous year. Consequently, there was a net loss after tax of Rs. 207.58 lakhs as against profit of Rs. 1684.22 lakhs for the previous year. The orders were received at the end of the year and we expect to execute, at least, a part of these pending orders by the end of the next financial year.

Your Company is, however, hopeful that with a significant order size of Rs. 110 crores (previous year Rs.4.33 Crores), the next financial year is expected to be profitable.

DIVIDEND

Your Directors recommend a dividend of Rs. 1.50/- on the Equity Share of Rs. 10/- each of the Company for the financial year ended March 31, 2011. The dividend out flow will aggregate to Rs. 154.96 lakhs, including dividend tax.

APPROPRIATIONS

Your Company has transferred Rs 180.00 lakhs to the General Reserve as required under the Companies Act, 1956.

DEPOSITS

Your Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet, therefore the provisions of Section 58A of the Companies Act, 1956 and the rules made thereunder are not applicable to the Company.

WORLD-CLASS OFFICE AT MAHESWARAM

The world-class 75,000 sft production facility built on the land allotted to us near Hyderabad International Airport is operational.

SUBSIDIARIES

ZEN TECHNOLOGIES FZE

Zen Technologies FZE, is a wholly owned subsidiary of the Company, registered in RAK Free Trade Zone, Ras Al Khaimah, U.A.E. During the year under review the Company has not done any business. The statement of Holding Company's interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated Balance Sheet, as a part of Annual Report.

VERSION 2 GAMES LTD

Version 2 Games Ltd is a newly incorporated wholly owned subsidiary of the Company, registered in Andhra Pradesh, India. During the year under review, the Company has not done any business. The statement of Holding Company's interest in Subsidiary Company pursuant to Section 212(3) of the Companies Act 1956, is given in Annexure I, which forms part of this Report. Relevant details have been disclosed in the Consolidated Balance Sheet, as a part of Annual Report.

ACCOUNTS OF THE SUBSIDIARIES

Pursuant to the provisions of Section 212 of the Companies Act, 1956 (Act), documents in respect of the various subsidiaries viz., Directors' Report, Auditor's Report, Balance Sheet and Profit and Loss Account, are required to be attached to the Balance sheet of the holding company. However, in terms of the provisions of Section 212(8) of the Act, the Government of India, Ministry of Corporate Affairs, has vide letter No. 51/12/ 2007-CL-III dated February 08, 2011 granted exemption from the provisions of Section 212(1) of the Act. Accordingly, the annual report does not contain the financial statements of the subsidiaries of the Company, but contains audited consolidated financial statements of the Company and its Subsidiaries. However, the Company will make available the audited annual accounts and related detailed information of the subsidiaries to the shareholders upon request in accordance with the applicable law. These documents are also available for inspection at the Registered Office of the Company during business hours. The details of accounts of individual subsidiary companies will also be available on the website of the Company. A statement of Company's interest in the subsidiaries and a summary of the financials of the subsidiaries are given along with the consolidated accounts.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Cmde. S. Rao, Director retires by rotation at the 18th Annual General Meeting and being eligible offers himself for re-appointment.

AUDITORS

M/s Gokhale & Co., Chartered Accountants, the Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting. The Company is in receipt of confirmation from the Statutory Auditors that in the event of their re-appointment as Statutory Auditors of the Company, such re-appointment will be in accordance with the limits specified in sub-section (1B) of Section 224 of the Companies Act, 1956

CORPORATE GOVERNANCE

A report on Corporate Governance and Management Discussion Analysis along with a certificate from the Auditor with regard to the compliance of Corporate Governance as per Clause 49 of the Listing Agreement is annexed to this report.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

Your Company believes that its greatest strength is its human resources and it is this resource, which makes your Company a force to reckon with in the highly competitive environment. Accordingly, the Company has instituted an Employee Stock Option Scheme viz. ESOS 2004 by means of a special resolution passed by the members at the Tenth Annual General Meeting held on September 30, 2003, for the employees including Directors. Pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, the required disclosures regarding Employee Stock Options is set out as Annexure-III of this report. The shares/options reserved under the scheme to Employees do not exceed 5% of the paid-up Share Capital of the Company. During the financial year 10,000 options were granted to Mr.Vishnu V Yarmaneni, Vice President (Finance) of the Company at market price but lapsed as he left the company before the vesting period.

EMPLOYEE PARTICULARS

Information as per Section 217(2A) of the Companies Act, 1956 read along with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of Directors Report for the year ended March 31, 2011.

There were no employees who were in the Company's employment for whole or a part of the year and were in receipt of remuneration for any part of the financial year at a rate, at which the aggregate was not less than Rs 5,00,000/- per month.

DISCLOSURES

A) Disclosures in terms of Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988 in respect of Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings & Outgo are attached (Annexure II) and forms part of this Report.

B) Directors Responsibility Statement as required under Section 217(2AA) of the Companies Act, 1956 The Directors confirm that:

i) In the preparation of Annual Accounts, applicable accounting standards had been followed along with proper explanation relating to material departures.

ii) The accounting policies adopted are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2011 and of the profit of the Company for the year ended as on that date.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGMENTS

Your Directors thank the company's customers, suppliers, dealers, banks, financial institutions, Government authorities and consultants for their continued support. Your Directors express their sincere gratitude to the shareholders and place on record their appreciation for the contribution made by all the employees of the Company.

For and on behalf of the Board

Hyderabad Ashok Atluri

August 10, 2011 Chairman and Managing Director