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Zen Technologies Ltd.

BSE: 533339 Sector: IT
NSE: ZENTEC ISIN Code: INE251B01027
BSE 11:08 | 28 Jul 94.35 -2.95
(-3.03%)
OPEN

97.00

HIGH

97.45

LOW

94.25

NSE 10:59 | 28 Jul 94.75 -2.50
(-2.57%)
OPEN

97.10

HIGH

97.85

LOW

94.20

OPEN 97.00
PREVIOUS CLOSE 97.30
VOLUME 127508
52-Week high 106.85
52-Week low 49.75
P/E 168.48
Mkt Cap.(Rs cr) 750
Buy Price 94.35
Buy Qty 1021.00
Sell Price 94.55
Sell Qty 1.00
OPEN 97.00
CLOSE 97.30
VOLUME 127508
52-Week high 106.85
52-Week low 49.75
P/E 168.48
Mkt Cap.(Rs cr) 750
Buy Price 94.35
Buy Qty 1021.00
Sell Price 94.55
Sell Qty 1.00

Zen Technologies Ltd. (ZENTEC) - Director Report

Company director report

Your Directors have great pleasure in presenting the report on the Business andOperations of your Company (‘the Company' or ‘Zen') along with the auditedFinancial statements for the Financial year ended 31 March 2020. The consolidatedperformance of your Company and its Subsidiaries has been referred to wherever required.

FINANCIAL HIGHLIGHTS

The Financial highlights of the Company are as follows:

(Rs. in lakhs)

Particulars Consolidated Standalone
2019-20 2018-19 2019-20 2018-19
Total Income 15132.51 9532.84 14899.86 9532.84
Total Operating Expenditure 8667.28 7554.79 8350.12 6967.54
Operating Profit (PBIDT) 6465.23 1978.05 6549.74 2565.30
Less: Interest 334.98 481.12 318.23 478.88
Less: Depreciation & Amortization 456.78 379.69 375.25 376.81
Profit/(Loss) before tax 5673.47 1117.24 5856.26 1709.61
Current Tax 1024.57 368.40 1021.20 368.40
Deferred Tax (1215.78) (582.50) (1215.63) (582.50)
Share of Profit / (Loss) from Associates (1.28) 0.35 -- --
Add: Other Comprehensive Income / (Expense) 8.85 (16.35) 1.91 (18.13)
Profit after Tax 5872.24 1315.34 6052.60 1905.58
Earnings per Share (Rs.) (face value Rs. 1/- per share) 7.62 1.73 7.84 2.49

GLOBAL PANDEMIC 3 COVID319

The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causingsignificant disturbance and slowdown of economic activity. In many countries businessesare being forced to cease or limit their operations for long or indefinite periods oftime. Measures taken to contain the spread of the virus including travel bansquarantines social distancing and closures of non-essential services have triggeredsignificant disruptions to businesses worldwide resulting in an economic slowdown.

Due to COVID-19 some Governments have refocused their priorities to limit the damagecaused by the virus. This has led to some training funds to be delayed or reallocated. Dueto such actions we expect the coming quarters to be very subdued in terms of turnover andprofit. However we continue to have a positive outlook for the long term.

Although there are uncertainties due to the pandemic the strong balance sheetposition best-in-class profitability and inherent resilience of the business modelposition the Company well to navigate the challenges ahead and gain market share.

DIVIDEND

The Board of Directors of your Company in its meeting held on 06 June 2020 recommendeda 3nal dividend @ 40% on the paid-up equity share capital i.e. Rs. 0.40 per equity shareof Rs. 1/- each for the year 2019-20. Dividend is subject to approval of members at theensuing Annual General Meeting (AGM) and shall be subject to deduction of income tax atsource.

STATE OF THE COMPANY'S AFFAIRS

During the year under review your Company achieved total income of Rs. 14899.86 lacsas against Rs. 9532.84 lacs during the previous year. The Net profit after tax stood atRs. 6052.60 lacs as against Rs. 1905.58 lacs for the previous year.

The order book size as on 31 March 2020 is around Rs. 160.79 Crores including AMCs ofworth Rs. 94.83 Crores as against Rs. 282.20 Crores including AMCs of worth Rs. 111.17Crores for the previous year.

During the year the R&D expenditure (capital and revenue) is Rs. 14.82 Crores(previous year Rs. 12.33 Crores). The R&D products developed during the year havesubstantial scope for revenue generation and are expected to become commercially viable inthe next few years.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has two (2) subsidiaries as on March 31 2020. There are no associate orjoint 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 thesubsidiaries.

Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of the Financial statements of the Company's subsidiaries in Form AOC-1is attached as Annexure I to this report.

FurtherpursuanttotheprovisionsofSection136oftheActtheFinancial statements of theCompany including the consolidated Financial statements along with the relevantdocuments and the separate audited Financial statements in respect of subsidiaries areavailable on the website of the Company https://www.zentechnologies.com/investor-information.

CONSOLIDATED FINANCIAL STATEMENTS (CFS)

During the year the Board of Directors reviewed the a3airs of its subsidiaries. YourCompany has prepared its consolidated Financial statements in accordance with therequirements 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 ConsolidatedFinancial 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 ofthe Company including the consolidated Financial statements and all other documentsrequired to be attached to this report are available for inspection by the members at theregistered o3ce of the Company during the business hours on all days except SaturdaysSundays 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 to theCompany Secretary of the Company. The above-mentioned documents have also been uploaded onthe website of the Company (www.zentechnologies.com).

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act 2013 read with Companies(Management and Administration) Rules 2014 an extract of the Annual Return in Form MGT-9is annexed as

Annexure – II.

NUMBER OF MEETINGS OF THE BOARD

The Board met 3ve (5) times during the year 2019-20 viz on 18 May 2019 28 June 201903 August 2019 02 November 2019 and 01 February 2020.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act 2013 the Directorscon3rm that:

i. In the preparation of Annual Accounts the applicable Accounting Standards had beenfollowed along with proper explanation relating to material departures.

ii. they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of a3airs of the Company at the end of the Financial year and of the profitand loss of the Company for that period.

iii. they had taken proper and su3cient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities.

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

v. they had laid down internal Financial controls to be followed by the Company andthat such internal Financial controls are adequate and are operating Effectively; and

vi. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating Effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149

As required under Section 149 of the Companies Act 2013 the Independent Directorshave submitted the declaration a3rming that they meet the criteria of independence asprovided in Section 149(6) of the Act and Regulation 25 of Securities and Exchange Boardof India

(Listing Obligations and Disclosure Requirements) Regulations 2015. There has been nochange in the circumstances a3ecting their status as independent directors of the Company.

The Board is of the opinion that all the Independent Directors appointed during theyear under review are persons of integrity and possess relevant expertise and experienceto act as Independent Director of the Company. The Independent Directors of the Companyhave con3rmed that they have registered or will register themselves with the IndianInstitute of Corporate A3airs Manesar and have included their name in the databank ofIndependent Directors within the statutory timeline and they will also appear for theonline pro3ciency test within a period of one year wherever applicable.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport forming part of this Report and is also available onhttps://www.zentechnologies.com/ investors.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of loans given guarantees provided and investments made by the Companyduring the year 2019-2020 as required under the provisions of Section 186 of theCompanies Act 2013 read with Companies (Meetings of Board and its Powers) Rules 2014are disclosed in the notes to Financial Statements which may be read as a part of thisReport.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as AnnexureIII to this Report.

All Related Party Transactions were placed before the Audit Committee and the Board forapproval. The Board of Directors has framed a policy on Related Party Transactions toensure a process for approval and reporting of transactions between the Company and itsrelated parties. The policy is posted under the Investors section of the Company's websiteat: 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 readwith the Companies (Accounts) Rules 2014 with respect to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo are provided in Annexure IVto this Report.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board has formulated a Risk Management Policy which includes identi3cation thereinof various elements of risk including those that may threaten the existence of theCompany and the measures adopted to contain and mitigate such risks.

A Risk management process has been established across the organization and is designedto identify assess and frame a response to threats that a3ect the achievement of itsobjectives.

The Board has constituted a Risk Management Committee which meets regularly to monitorand review the Risk Management Policy. The Audit Committee and Board reviews and evaluatesthe internal Financial controls and risk management systems of the Company.

Mitigation plans are 3nalized owners are identi3ed and the progress of mitigationactions are monitored and reviewed.

The Risk Management Policy is also posted under the Investors' section of the Company'swebsite at: https://www.zentechnologies. com/policies-and-code-of-conduct.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) constituted by the Boardhas formulated a Corporate Social Responsibility Policy (CSR Policy) indicating theactivities to be undertaken by the Company. The CSR Committee monitors the CSR Policy andrecommends the amount of expenditure to be incurred on activities mentioned in the CSRPolicy.

CSR Committee met once during the year under review on 03 August 2019.

The category and composition of the committee is as follows: -

S. No Name Category
1. Dr. Ravindra Kumar Tyagi Chairman* Independent Non-Executive
2. Ms. Sridevi Madati** Independent Non-Executive
3. Mr. Ashok Atluri Non-Independent Executive
4. Mr. Ravi Kumar Midathala Non-Independent Executive

*Appointed as the Chairman of this Committee w.e.f. June 06 2020. **Ceased to be aChairman of this Committee w.e.f. May 28 2020.

The Corporate Social Responsibility Policy is posted under the Investors section of theCompany's website at: https://www.zentechnologies. com/policies-and-code-of-conduct.

The brief outline of the CSR Policy of the Company as adopted by the Board and theinitiatives undertaken by the Company on CSR activities during the year under review areset out in Annexure V of this

report in the format prescribed in the Companies (Corporate Social ResponsibilityPolicy) Rules 2014.

ANNUAL EVALUATION OF PERFOMANCE OF BOARD COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors evaluated the annual performance of the Board as a whole itsCommittees and the directors individually in accordance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with specific focus on the performance and Effective functioning of theBoard and individual directors.

A separate meeting of Independent Directors was held on 01 February 2020 to review theperformance of the Non-Independent Directors and the Board as a whole review theperformance of Chairperson of the Company and assess the quality quantity and timelinessof flow of information between the management and the Board that is necessary for theBoard to Effectively and reasonably perform its duties. All the independent directors werepresent at the meeting.

CRITERIA FOR PERFORMANCE EVALUATION

a. Ability of the candidate to devote su3cient time and attention to his professionalobligations as Independent Director for informed and balanced decision making.

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

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

d. Statutory compliance and ensuring high standards of Financial probity and CorporateGovernance.

e. Responsibility towards requirements under the Companies Act 2013 responsibilitiesof 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 the website athttps://www.zentechnologies. com/investor-information.

DIRECTORS

The Board of Directors consists of seven directors 3ve of whom are independentdirectors and the remaining two executive directors.

In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Ashok Atluri who is the Chairman and Managing Directorretires by rotation at the ensuing Annual General Meeting and being eligible o3ershimself for reappointment. The aforesaid appointment/reappointment as Chairman andManaging Director is subject to the shareholders' approval. Further the tenure of Mr.Ashok Atluri as the Managing Director of the company is ending on 30 September 2020 theBoard reappointed him w.e.f. 01 October 2020 which is subject to the approval of theshareholders at the ensuing Annual General Meeting.

Dr. Ajay Kumar Singh & Ms. Sirisha Chintapalli have been co-opted as the AdditionalDirectors w.e.f. 02 November 2019 & 08 August 2020 respectively to act as theIndependent Directors subject to the approval of shareholders by way of a resolution atthe ensuing Annual General Meeting.

DIRECTORS OR KEY MANAGERIAL PERSONNEL (KMP) WHO WERE APPOINTED OR HAVE RESIGNED ORCEASED DURING ??THE YEAR

Dr. Ravindra Kumar Tyagi was appointed as the Independent Director of the company tohold office for Three (3) consecutive years i.e. from 01 April 2019 to 31 March 2022.

? Mr. Ravi Kumar Midathala was reappointed as the Whole-Time Director of the companyfor a period of Three (3) years from 29 June 2019 to 28 June 2022.

? Dr. Ajay Kumar Singh was co-opted as an Additional Director to act as IndependentDirector w.e.f. 02 November 2019.

? Mr. M. Ravi Kiran resigned as the Chief Financial Officer of the Company w.e.f. 31December 2019 and Mr. Ashok Atluri Chairman and Managing Director was designated to actas the Chief Financial Officer of the company w.e.f. June 06 2020.

? Ms. Sridevi Madati retired as a Non-Executive Independent Director of the Companyeffective May 28 2020 upon completion of her second consecutive tenure as IndependentDirector in the company. The Board places on record its appreciation for her invaluablecontribution and guidance.

? Ms. Sirisha Chintapalli was co-opted as an Additional Director to act as IndependentDirector w.e.f. 08 August 2020.

? In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Ashok Atluri Managing Director retires by rotation and being eligible offers himselffor re-appointment.

? Mr. Ashok Atluri was re-appointed as the Managing Director w.e.f. 01 October 2020 fora period of 3 years which is subject to approval of the shareholders in the ensuing AnnualGeneral Meeting.

? Mr. Kishore Dutt Atluri was re-appointed to office or place of profit as thePresident of the company w.e.f. 01 October 2020 for a period of 5 years which is subjectto approval of the shareholders in the ensuing Annual General Meeting.

? Mr. M. Satish Choudhury resigned as Company Secretary w.e.f.

09 July 2019 and consequently Mr. Hansraj Singh Rajput was appointed as CompanySecretary w.e.f. 03 August 2019.

In compliance with Regulation 36(3) of the Listing Regulations brief resume of all thedirectors proposed to be appointed / re-appointed are attached along with the Notice ofthe ensuing Annual General Meeting.

During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses if any incurred by them for the purpose of attending meetingsof the Board / Committee of the Company.

Apart from the above there have been no changes in Directors and KMP.

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

Unistring Tech Solutions Private Limited became a subsidiary of the Company during theyear.

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

Your Company has established and maintained a framework of internal Financial controlsand compliance systems. Based on the framework of internal Financial controls andcompliance systems established and maintained by the Company the work performed by theinternal statutory and secretarial auditors and external consultants including the auditof internal Financial controls over Financial reporting by the statutory auditors and thereviews performed by management and the relevant board committees including the auditcommittee the Board is of the opinion that the Company's internal Financial controls wereadequate and your Company is constantly endeavoring to improve the standards of internalcontrol in various areas and taking steps to strengthen the internal control system tomake it commensurate and Effective with the nature of its business.

Further the statutory auditors of your Company have also issued an attestation reporton internal control over Financial reporting (as defined in section 143 of Companies Act2013) for the Financial year ended March 31 2020 which forms part to the StatutoryAuditor's Report.

VIGIL MECHANISM

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

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

SEXUAL HARASSMENT POLICY

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

The Company has taken several initiatives across the organization to build awarenessamongst employees about the Policy and the provisions of the Prevention of SexualHarassment of Women at Workplace Act.

During the Financial year ended 31 March 2020 the Company has received and disposed-o3two (2) complaints pertaining to Sexual Harassment. Further there were no cases /complaints pending disposal as at the end of the Financial year. The Company has alsocomplied with provisions relating to the constitution of Internal Complaints Committeeunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013.

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

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

The Insider Trading Policy of the Company covering the Code of Practices andProcedures for Fair Disclosure of Unpublished Price Sensitive Information and Code ofConduct for 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 perthe requirements of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act 2013 read with InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 (‘the Rules') all unpaid or unclaimed dividend are required to be transferredby the Company to the IEPF established by the Central Government after the completion ofseven years. Further according to the Rules the shares in respect of which dividend hasnot been paid or claimed by the shareholders for seven consecutive years or more shallalso be transferred to the demat account created by the IEPF Authority. Accordingly theCompany has transferred the unclaimed and unpaid dividend of Rs. 320203/- pertaining tothe FY 2011-12.

Further 9940 corresponding shares were also transferred as per the requirement ofIEPF Rules. The details are also available on the Company's website i.e.www.zentechnologies.com.

AUDITORS

a) STATUTORY AUDITORS:

At the twenty-sixth AGM held on September 21 2019 the Members approved appointment ofRamasamy Koteswara Rao and Co LLP. Chartered Accountants (Firm Registration No.010396S/S200084) as Statutory Auditors of the Company to hold o3ce for a period of 3veyears from the conclusion of that AGM till the conclusion of the thirty-3rst AGM subjectto rati3cation of their appointment by Members at every AGM if so required under the Act.The requirement to place the matter relating to appointment of auditors for rati3cation byMembers at every AGM has been done away by the Companies (Amendment) Act 2017 with Effectfrom May 7 2018. Accordingly no resolution is being proposed for rati3cation ofappointment of statutory auditors at the ensuing AGM.

The Auditor's Report on the Financial statements of the Company does not contain anyquali3cations reservations or adverse remarks or disclaimer and the Notes on theFinancial statements referred to therein are self-explanatory thereby not requiring anyfurther comments on the same.

b) SECRETARIAL AUDITORS:

M/s. P S Rao & Associates Practicing Company Secretaries were appointed to conductthe secretarial audit for the Financial year 2019-2020. Pursuant to Section 204 of theCompanies Act 2013 and Rules made thereunder the Secretarial Audit Report for theFinancial year ended 31 March 2020 in Form MR-3 is annexed to this Annual Report asAnnexure VI. The Board has appointed M/s P S Rao & Associates Practicing CompanySecretaries as the Secretarial Auditors of the Company for the Financial year 2020-2021.

The Secretarial Audit Report does not contain any quali3cations reservations oradverse remarks or disclaimer. Secretarial audit report is attached to this report.

AUDIT COMMITTEE

The details of the composition of the Audit Committee as required under the provisionsof Section 177(8) of the Companies Act 2013 is given in the Corporate Governance Reportfurnished as part of the Annual Report. During the year under review the Board hasaccepted all the recommendations of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The details of the composition of the Committee are given in the Corporate GovernanceReport furnished as a part of the Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The detail of the composition of the Committee is given in the Corporate GovernanceReport furnished as part of the Annual Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modi3cation(s) or re-enactment(s) thereof for the time being in force) inrespect of directors/employees of the Company is appended as Annexure –VII to thisReport.

CORPORATE GOVERNANCE

Your Company is committed to maintain high standards of corporate governance and adhereto the corporate governance requirements set out by Securities and Exchange Board ofIndia. The Report on Corporate Governance as stipulated under the Listing Regulationsforms part of the Annual Report. The requisite Certificate from the Practicing CompanySecretary con3rming compliance with the conditions of corporate governance as stipulatedunder the aforesaid Regulations forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (BRR) of your Company for the Financial year2019-2020 forms part of this Annual Report as required under Regulation 34(2)(f) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the Financial yearunder review :

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

2. Issue of shares (including sweat equity shares) to employees of your Company underany scheme.

3. The company did not transfer any amount to the reserves.

4. Your Company has not accepted any Fixed deposits and as such no amount ofprincipal or interest was outstanding on the date of the Balance Sheet.

5. No Significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

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

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

8. During the period under review none of the Auditors of the Company have reportedany fraud as speci3ed under the second proviso of Section 143 (12) of the Companies Act2013 (including any statutory modi3cation(s) or re-enactment(s) thereof for the time beingin force).

9. The Company has complied with Secretarial Standards i.e. SS-1 SS-2 and SS-3relating to Meetings of the Board of Directors General Meetings and Dividendrespectively issued by the Institute of Company Secretaries of India.

10. There were no material changes/commitments a3ecting the Financial position of yourCompany between the end of the Financial year (March 31 2020) and the date of this Report(08 August 2020).

ACKNOWLEDGMENTS

Your directors thank various departments of Central and State Government Organizationsand 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. memberscustomers dealers vendors Financial institutions banks and other business partners forthe excellent support received from them during the year.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to 3ght thispandemic.

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

Annexure-II

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

As on the Financial year ended on 31 March 2020

[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:

i) 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 o3ce and contact details: B-42 Industrial Estate Sanathnagar Hyderabad - 500018 Telangana
Ph: 040-23813281; Fax: 040-23813694
Email: investors@zentechnologies.com
Website: www.zentechnologies.com
vi) Whether listed company Yes
BSE Limited
National Stock Exchange of India Limited
vii) Name Address and Contact details of Registrar and Transfer KFin Technologies Private Limited
Agent if any (Formerly known as Karvy Fintech Private Limited)
Unit: Zen Technologies Limited
Selenium Tower B Plot No 31 & 32
Gachibowli Financial District Nanakramguda
Serilingampally Mandal Hyderabad - 500 032
Ph: 040-67161605
Fax: 040-23001153
Email id: einward.ris@k3ntech.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of thecompany shall be stated:-

Sl. No. Name and Description of main products / services NIC Code of the Product/ service % to total turnover of the company
1 Sale of Simulators 8549 86.76
2 Sale of Product Services 8549 13.24

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. No. Name and Address of the Company CIN/GLN Holding/ Subsid- iary/ Associate % of shares held Applicable Section
1 Zen Technologies USA INC. 3500 South DuPont Highway Dover DE 19901 Kent County Foreign Company Subsidiary 100 Section 2(87)
2 Unistring Tech Solutions Private Limited* 8th Floor SLN Terminus Survey No.133 Beside Botanical Gardens Gachibowli Hyderabad – 500032 Telangana India U72200TG2007PTC052628 Subsidiary 51 Section 2(87)

* Unistring Tech Solutions Private Limited became a subsidiary of the Company w.e.f. 08May 2019 upon acquisition of 51% of shareholding.

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year
Category of Shareholders

% of Total

% of Total
Demat Physical Total Shares Demat Physical Total Shares % Change during the year
A. Promoters
(1) Indian
a) Individual/HUF 45902340 0 45902340 59.49 45953560 0 45953560 59.56 +0.07
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 / FI 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):- 45902340 0 45902340 59.49 45953560 0 45953560 59.56 +0.07
(2) Foreign 3 3 3 3
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 / FI 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 (A) =
(A)(1)+(A)(2) 45902340 0 45902340 59.49 45953560 0 45953560 59.56 +0.07
B. Public Shareholding
1. Institutions
a) Mutual Funds 0 0 0 0.00 0 0 0 0.00 0
b) Banks / FI 61691 0 61691 0.08 185549 0 185549 0.24 +0.16
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) FIIs 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 Investors 8350 0 8350 0.01 1715 0 1715 0.01 -0.11
b) Foreign Nationals 0 0 0 0.00 0 0 0 0.00 0
Sub-total (B)(1):- 70041 0 70041 0.09 187264 0 187264 0.24 +0.15
2. Non-Institutions
a) Bodies Corporate
i) Indian 4979305 0 4979305 6.45 5377800 0 5377800 6.97 +0.52
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 18049676 214300 18263976 23.67 18996120 198300 19194420 24.88 +1.21
ii) Individual shareholders holding nominal share capital in excess of Rs. 2 lakh 6638452 5000 6643452 8.61 5048710 0 5048710 6.54 -2.07
c) Others (NBFC Registered with RBI) 27419 0 27419 0.04 4000 0 4000 0.01 -0.03
Clearing Members 99333 0 99333 0.13 220542 0 220542 0.29 +0.16
Non Resident Indians 702135 0 702135 0.91 693489 0 693489 0.90 -0.01
NRI-non repatriable 396149 0 396149 0.51 400925 0 400925 0.52 +0.01
IEPF 75910 0 75910 0.10 79350 0 79350 0.10 0.00
Sub-total (B)(2):- 30968379 219300 31187679 40.42 30820936 198300 31019236 40.20 -0.22
Total Public Shareholding (B)=(B)(1)+ (B)(2) 31038420 219300 31257720 40.51 31008200 198300 31206500 40.44 -0.07
C. Shares held by Custodian for GDRs & ADRs 0 0 0 0.00 0 0 0 0.00 0
Grand Total (A+B+C) 76940760 219300 77160060 100 76961760 198300 77160060 100 0

ii) Shareholding of Promoters (including Promoter Group):

Sl. No. Shareholder's Name

Shareholding at the beginning of the year

Shareholding at the end of the year

No. of Shares % of total Shares of the company %of Shares Pledged / en- cumbered to total shares No. of Shares % of total Shares of the company %of Shares Pledged / en- cumbered to total shares % change in shareholding during the year
1 Mr Ashok Atluri 20211250 26.19 19.44 20211250 26.19 0 0
2 Mr Kishore Dutt Atluri 17556250 22.75 0 17556250 22.75 0 0
3 Ms Tara Dutt Atluri 2800000 3.63 0 2820756 3.66 0 +0.03
4 Ms A Rama Devi 2670000 3.46 0 2670000 3.46 0 0
5 Mr Satish Atluri 1184000 1.53 0 1184000 1.53 0 0
6 Mr Ravi Kumar Midathala 794000 1.03 0 794000 1.03 0 0
7 Ms Beena Atluri 395000 0.51 0 401864 0.52 0 +0.01
8 Mr Nagarjunudu Kilaru 121840 0.16 0 145440 0.19 0 +0.03
9 Ms Indira Garapati 120000 0.16 0 120000 0.16 0 0
10 Ms Nandita Sethi 50000 0.06 0 50000 0.06 0 0
Total 45902340 59.49 19.44 45953560 59.56 0 +0.07

iii) Change in Promoters (including Promoter Group) Shareholding (please specify ifthere is no change).

Sl. 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 45902340 59.49 45902340 59.49
2 Changes during the year 51220 +0.07 45953560 59.56
3 At the end of the year 45953560 59.56 45953560 59.56

iv) Shareholding Pattern of top ten Shareholders:

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

Sl. 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 2144951 2.78 2144951 2.78
Changes during the year - - - -
At the end of the year - - 2144951 2.78
2 Barclays Wealth Trustees India Private Limited
At the beginning of the year - - - -
Changes during the year
27/03/2020 1300000 1.68 1300000 1.68
At the end of the year - - 1300000 1.68
3 Ajay Upadhyaya
At the beginning of the year 1250000 1.62 1250000 1.62
Changes during the year
14/06/2019 15000 0.02 1265000 1.64
27/09/2019 40000 0.05 1305000 1.69
27/09/2019 -40000 0.05 1265000 1.64
04/10/2019 1265000 1.64 2530000 3.28
04/10/2019 -1265000 1.64 1265000 1.64
10/01/2020 1265000 1.64 2530000 3.28
10/01/2020 -1265000 1.64 1265000 1.64
14/02/2020 12494 0.02 1277949 1.66
14/02/2020 -12494 0.02 1265000 1.64
20/03/2020 42494 0.06 1307494 1.69
20/03/2020 -12494 0.02 1295000 1.68
27/03/2020 -1295000 1.68 0 0.00
At the end of the year - - 0 0.00
4 Logical Solutions Ltd
At the beginning of the year 1234640 1.60 1234640 1.60
Changes during the year
20/09/2019 109305 0.14 1343945 1.74
At the end of the year - - 1343945 1.74
5 Navin Sood
At the beginning of the year 357400 0.46 357400 0.46
Changes during the year
02/08/2019 14400 0.02 371800 0.48
06/03/2020 26882 0.03 398682 0.52
13/03/2020 7500 0.01 406182 0.53
20/03/2020 34000
0.04 440182 0.57
27/03/2020 2600 0.00 442782 0.57
At the end of the year -
- 442782 0.57
6 Sanjay Jagdish Poddar
At the beginning of the year 340000 0.44 340000 0.44
Changes during the year - - - -
At the end of the year - - 340000 0.44
7 Nitin Radheshyam Agarwal
At the beginning of the year 326805 0.42 326805 0.42
Changes during the year
07/02/2020 126805 0.16 453610 0.59
07/02/2020 -126805 0.16 326805 0.42
At the end of the year - - 326805 0.42
8 Moturu Chandra Sekhar
At the beginning of the year 316352 0.41 316352 0.41
Changes during the year - - - -
At the end of the year - - 316352 0.41
9 Deepti Agrawal
At the beginning of the year 300000 0.39 300000 0.39
Changes during the year
27/03/2020 -300000 0.39 0 0.00
At the end of the year - - 0 0.00
10 Pigeon Exports International Private Limited
At the beginning of the year 0 0.00 0 0.00
Changes during the year
31/03/2020 298938 0.39 298938 0.39
At the end of the year - - 298938 0.39
11 Nilu Poddar
At the beginning of the year 298000 0.39 298000 0.39
Changes during the year - - - -
At the end of the year - - 298000 0.39
12 Dowell Fiscal Services Pvt Ltd
At the beginning of the year 268437 0.35 268437 0.35
Changes during the year
12/07/2019 -25000 0.03 243437 0.32
26/07/2019 -30995 0.04 212442 0.28
02/08/2019 -22339 0.03 190103 0.25
09/08/2019 -32278 0.04 157825 0.20
30/08/2019 -32431 0.04 125394 0.16
30/09/2019 -125394 0.16 0 0.00
At the end of the year - - 0 0.00
13 Ghisulal D Rathod
At the beginning of the year 262000 0.34 262000 0.34
Changes during the year - - - -
At the end of the year - - 262000 0.34

v) Shareholding of Directors and Key Managerial Personnel:

Sl. No. Shareholding of each Direc- tors and each Key Managerial

Shareholding at the be- ginning of the year

Change in sharehold- ing and reason

Cumulative Shareholding during the year

Shareholding at the end of the year

Personnel No. of shares % of total Shares of the com- pany No. of shares % of total Shares of the com- pany No. of shares % of total Shares of the com- pany
3Directors
1 Mr Ashok Atluri 20211250 26.19 0 20211250 26.19 20211250 26.19
2 Mr M Ravi Kumar 794000 1.03 0 794000 1.03 794000 1.03
3 Ms Sridevi Madati 0 0.00 0 0 0.00 0 0.00
4 Mr Venkat Samir Oruganti 0 0.00 0 0 0.00 0 0.00
5 Mr Amreek Singh Sandhu 0 0.00 0 0 0.00 0 0.00
6 Dr Ravindra Kumar Tyagi 0 0.00 +4400 4400 0.00 4400 0.00
(Purchase)
7 Dr Ajay Kumar Singh 0 0.00 0 0 0.00 0 0.00
3 Key Managerial Personnel
3 Mr M Satish Choudhury Comapany Secretary (Resigned w.e.f. 09/07/2019) 0 0.00 0 0 0.00 0 0.00
4 Mr Hansraj Singh Rajput Company Secretary (Appointed w.e.f. 03/08/2019) 0 0.00 0 1 0.00 1 0.00
5 Mr M Ravi Kiran CFO (Resigned w.e.f. 31/12/2019) 0 0.00 0 0 0.00 0 0.00

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment.

(Rs. in lakhs)

Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the Financial year
i) Principal Amount 4157.10 - - 4157.10
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 22.55 - - 22.55
Total (i+ii+iii) 4179.65 - - 4179.65
Change in Indebtedness during the Financial year
Addition - -
Reduction 4091.83 - - 4091.83
Net Change -4091.83 - - -4091.83
Indebtedness at the end of the Financial year
i) Principal Amount 87.82 - - 87.82
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 87.82 - - 87.82

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager:-

(Rs. in lakhs)

Sl. No. Particulars of Remuneration Name of MD/WTD/ Manager Total Amount
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 48.51 98.91
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 1.52 1.17 2.69
(c) Profits in lieu of salary under section 17(3) Income- tax Act 1961 -3 -3 -3
2 Stock Option - - -
3 Sweat Equity - - -
4 Commission
- as 3 % of net profits 132.21 - 132.21
(Calculated as per Section 198 of the Companies Act 2013)
- Others specify - - -
5 Others please specify - - -
3 Total (A) 184.13 49.68 233.81
3 Ceiling as per Section 197 of the Companies Act 2013 609.01

B. Remuneration to other directors

(In Rs.)

Sl. No. Particulars of Remuneration

Name of Directors

Total Amount
Venkat Samir Kumar Oruganti Sridevi Madati Amreek Singh Sandhu Dr Ravindra Kumar Tyagi Dr Ajay Kumar Singh
1 Independent Directors
Fee for attending board & committee meetings 200000 250000 250000 250000 100000 1050000
Commission - - - - - -
Others please specify - - - - - -
Total (1) 200000 250000 250000 250000 100000 1050000
2 Other Non-Executive Directors - - - - - -
Fee for attending board & committee meetings - - - - - -
Commission - - - - - -
Others please specify - - - - - -
Total (2) - - - - - -
Total (B)=(1+2) 200000 250000 250000 250000 100000 1050000

Notes: -

1. Ms. Sridevi Madati retired as an Independent Director of the company w.e.f. May 282020 upon completion of her tenure.

2. Dr. Ajay Kumar Singh was co-opted as an Additional Director to act as IndependentDirector w.e.f. 02 November 2019.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

(Rs. in lakhs)

Key Managerial Personnel

Sl. No. Particulars of Remuneration

Company Secretary

Chief Financial Officer
1 Gross salary M Satish Choudhury Hansraj Singh Rajput M Ravi Kiran Total
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961 3.51 9.56 8.28 21.35
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 - - -
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 - - -
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission - - - -
3 - as % of profit - - - -
3 Others specify - - - -
5 Others please specify - - - -
3 Total 3.51 9.56 8.28 21.35

Notes:

1. Mr M Satish Choudhury ceased w.e.f. 09/07/2019 and Mr Hansraj Singh Rajput wasappointed as the Company Secretary of the Company w.e.f. 03/08/2019.

2. Mr. M Ravi Kiran resigned w.e.f. 31/12/2019 as the Chief Financial Officer of thecompany.

VII. PENALTIES/PUNISHMENTS/COMPOUNDING OF OFFENCES:

There were no penalties Punishment or Compounding of o3ences during the year endedMarch 31 2020.

.