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Directors Report of Trend Electronics Ltd.

Dec 31, 2014

Dear Shareholders,

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

FINANCIAL HIGHLIGHTS

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

(Rsin Million) Particulars Year ended Year ended

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

Other Income 23.61 1.22

Total Income 14,792.40 14,251.86

Profit before Finance Costs, Tax & Depreciation 457.07 374.61

Finance Costs 686.57 751.54

Depreciation and Amortisation 218.09 213.21

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

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

PERFORMANCE REVIEW

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

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

DIVIDEND AND TRANSFER TO RESERVES

Dividend:

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

Transfer to Reserves:

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

TRANSFER OF INVESTOR EDUCATION AND PROTECTION FUND

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

FIXED DEPOSIT

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

PERSONNEL

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

CONSERVATION OF ENERGY

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

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

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

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

This is ensured through:

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

- Addition and installation of newer generation Air Compressor;

- Energy efficiency audit;

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

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

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

- Use of dimmer switches;

- Unplugging appliances when not in use or unused;

- Insulation of walls & ceilings;

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

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

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

- Encourage communications through e-mails.

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

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

RESEARCH AND DEVELOPMENT (R&D) AND TECHNOLOGY ABSORPTION

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

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

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

- Ensuring the new products meet the product specification;

- Researching the products according to allocated budget;

- Checking if the product meets production costs;

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

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

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

Benefits derived from R & D Activities:

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

Further, the Company could also derive the following benefits:

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

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

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

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

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

Future Plan of Action:

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

The future plan of action includes:

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

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

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

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

Technology Absorption:

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

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

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

INFORMATION TECHNOLOGY

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

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

FOREIGN EXCHANGE EARNINGS AND OUTGO

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

HEALTH, SAFETY AND ENVIRONMENT

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

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

- Timely disposal of waste and scrap materials;

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

- Conducting regular safety audit and mock drill;

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

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

- Providing protective clothing and equipment to employees;

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

- Risk-assessment at the workplace at regular intervals;

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

- AIDS Awareness Program; and

- Blood Donation Camps.

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

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

INDUSTRIAL RELATIONS

Industrial Relations remained cordial during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

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

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

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

HUMAN RESOURCE MANAGEMENT

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

BOARD OF DIRECTORS

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

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

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

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

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

CASH FLOW STATEMENT

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

AUDIT COMMITTEE

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

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

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

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

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

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

AUDITORS'' REPORT

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

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

AUDITORS

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

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

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

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

COST AUDIT

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

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

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

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE GOVERNANCE

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

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

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

- the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year ended on that date;

- the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

ACKNOWLEDGEMENT

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

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

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


Dec 31, 2013

The Directors present the Twenty-Fourth Annual Report of your Company together with the Audited Accounts and Auditors'' Report for the financial year ended on 31st December, 2013.

FINANCIAL RESULTS AND OPERATIONS

The performance of the Company for the financial year ended on 31st December, 2013, is summarized below:



(Rs. in Million)

Year ended Year ended

Particulars 31st Dec, 2013 31st Dec, 2012

Net Sales 14,250.64 14,507.73

Other Income 1.22 21.69

Total Income 14,251.86 14,529.42

Profit before Finance Costs, Tax and 374.61 396.21

Depreciation

Finance Costs 751.54 737.97

Depreciation and Amortization 213.21 204.87

Profit/(Loss) before Tax (590.14) (546.63)

Profit/(Loss) after Tax (500.49) (415.71)

BUSINESS PERFORMANCE

During the year, the Indian economy went through upheavals owing to global distress and persistent domestic turbulence. The major challenges were inflation, high fiscal deficit, lack of liquidity, policy uncertainty and currency volatility. India''s Gross Domestic Product (GDP) growth rate moderated in the year 2013, owing to the underperformance by almost all sectors of the economy. In addition, the Rupee''s historic plunge against the US Dollar has made the markets jittery.

During the year under review, the Company has earned a total income of Rs. 14,251.86 Million as against Rs.14,529.42 Million for the previous year. Total expenditure amounted toRs.14,842.00 Million as against Rs. 15,076.05 Million for the previous year. The Company has incurred a net loss of Rs. 500.49 Million as against a net loss of Rs. 415.71 Million for the previous year.

Your Company believes that it is the only Set Top Box manufacturer in India. The Government of India through its mandate of implementation of Digital Addressable System (DAS), which envisages the mandatory transformation of the entire television distribution system through a digital pipe by December 2014, has offered a landmark opportunity for the Company.

APPROPRIATIONS Dividend:

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

Transfer to Reserves:

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

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs. 0.18 Million in respect of unpaid/ unclaimed dividend for the financial year 2005-06 to the Investor Education and Protection Fund.

FIXED DEPOSIT

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

PERSONNEL

Particulars of the Employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time is annexed and forms part of this Report.

CONSERVATION OF ENERGY

Energy can neither be created nor destroyed by itself ADs- it can only be transformed. The conservation of energy is the need of the day. Your Company believes in sustainable consumption of natural resources and the conservation of energy remains a key focus area at all times. The Company continues its efforts for the betterment of the environment. The Company gives utmost importance to the conservation of energy as a part of its Corporate Social Responsibility and is committed to produce eco- friendly products and adopt eco-friendly practices in all its areas of operations.

The Company has undertaken several initiatives to reduce energy consumption at all levels. The implementation progress of these initiatives, led by In-house team of experts, is reported at regular intervals. It strives to conserve energy on a perpetual basis in order to meet the future demands. The In-house team submits its findings on various energy consumption centers highlighting the measures taken for conservation of energy and their implementation status, at scheduled intervals, for management consideration. Further, corrective measures are taken as appropriate to reduce energy consumption.

Some of the other measures taken during the year, are as under:

- Energy efficiency audit has been conducted and the recommendations are being implemented ADs-

- Provision of LED lights in place of conventional lights in factory area and replacing lamps with energy efficient bulbs for internal usage ADs-

- Reduction of fuel consumption ADs-

- Lighting energy savers have been installed at various units which have led to significant savings in power usage ADs-

- Rain water harvesting to reduce water consumption in a factory ADs-

- Plantation of trees in the factory area ADs-

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

- Maintaining power log register for effectively monitoring consumption of energy.

To make available the resources for future generation is the ultimate responsibility of today''s generation. Hence, your Company continues to lay emphasis on conservation of energy, power and other energy resources. Such measures for conservation of energy will ultimately reduce the cost of production by reducing maintenance cost and efficient use of resources.

The manufacturing facilities of the Company are equipped with hi-tech energy monitoring and conservation systems to monitor usage, minimize wastage and increase overall efficiency at every stage of power consumption.

By implementing the aforesaid measures, there has been reduction in the energy consumption which has resulted in the reduction of the cost of production.

RESEARCH AND DEVELOPMENT (R ACY- D) AND TECHNOLOGY ABSORPTION

Your Company believes in continuous innovations. The future of any business depends upon its ability to upgrade existing products and innovate new products by continuously performing R ACY- D activities and finding ways to blend in the latest technology. It is the need of the hour to provide modernized technologies at affordable prices, so as to sustain competitive development. Our R ACY- D efforts are in line with changing consumer demands and preferences.

Your Company is determined to develop its own technologies in selected areas besides being an efficient user and customizer of available technologies. R ACY- D and technology development are integral to your Company''s innovation agenda for achieving growth, business profitability, sustainability and rural transformation.

The following are the areas, where the R ACY- D activities are focused:

- To provide effective support and assurance to manufacturing plants and businesses ADs-

- To improve technical productivity on a continuous basis ADs-

- To cut down cost of production ADs-

- To create a high performance environment to promote innovation ADs-

- To bring variety of products at an affordable price level ADs- and

- To conduct market survey and ascertain the new trend.

Benefits derived from R ACY- D activities:

The R ACY- D activities undertaken by the Company have resulted in maximizing product yield, improved products quality, optimization of efficiency and reliability of plant processes by using advanced tools and technology developed by the team and higher consumer satisfaction.

The other benefits derived are:

- Higher Consumer Satisfaction ADs-

- Improved operational process ADs-

- Cost reduction ADs-

- Maintenance of Quality ADs- and

- Cosmetic design and new outlook to all the products.

Further, apart from the above benefits, the Company could derive the following benefits:

- Introduction of High Definition Set Top Box with Digital Video Recording facility with the facility of recording as much content as a subscriber wishes to ADs-

- Development and production of Digital Direct Broadcast (DDB) technology in India with a broader convergence of TV, D2H, Internet and Cloud computing ADs-

- DDB TV with single chip solution with built in DTH facility having MPEG4 DVB-S2 digital signal. Customer can enjoy the unmatched picture ACY- audio quality of LCD/LED TV. This product has various features such as Dual Core Processor, 14-Bit Video Processor, Faroudja Video and Audio Optimization, 10-Band Graphics Equalizer, STRATA certified audio, 2D to 3D conversion etc. ADs- and

- Platform for ''Internet TV based on Android Operating System having DTH facility.

The Company now plan to introduce ACI-Karaoke - Sing along ACI- feature, in the Set Top Box, where the user can sing-along with the recorded song, using a Microphone.

The Company has also introduced Set Top Box with ACI-Recording ACI- facility, which enables a consumer to record ACY- playback the recorded contents. It also allows the consumer to ACI-Pause ACI- Live TV ACY- other trick play modes, such as rewind ACY- forward.

Future Plan of action:

In near future, the Company shall focus on environment friendly products and also focus its efforts on new technologies which would offer better in domestic market. Your Company is looking forward to take an advantage of technological changes and compete efficiently with multinational players. The future plan of action includes:

- The Company has plans to introduce a Unique Motion control ACY- Audio Streaming remote control in the Set Top Box. With this innovative product, the user can listen to the Audio Streaming using Headphones, without disturbing others ACY- can also use Google Voice search, can navigate using the motion control or Air Mouse Function ADs-

- Introducing new technology called 4K2K or Ultra HD TV. 4K2K in short is 4 times High Definition pixel image and the term 4K2K refers to the horizontal resolution of formats which are all on the order 4,000 pixels ADs- and

- Introducing environment friendly products.

During the year under review, the Company has incurred an amount of Rs. 2.71 Million towards R ACY- D Activities representing 0.02 ACU- of the turnover.

Technology Absorption:

The Company''s focus has been to develop state-of-art products by using the latest technology. However, the management believes that information technology can be extensively used in all spheres of its activities to improve productivity and efficiency levels.

The efforts made by the Company towards technology absorption have resulted in the introduction of innovative energy efficient products at competitive cost which are likely to enlarge the market share of the Company''s products.

INFORMATION TECHNOLOGY

Information Technology (IT) is the backbone of any industry in today''s environment. Your Company firmly believes that an appropriate IT solution gives competitive edge to an industry.

Your Company has implemented my SAP and ERP whereby all business processes of the Company have been successfully integrated on my SAP. This has not only enabled your Company to adapt the best business practices, but also helped it keep a close control on all aspects of the business, be it manufacturing, sales and distribution or customer communication.

Your Company has institutionalized an extensive IT capability for customer development function to support execution in the front-end. Your Company has put in place an enabled consumer interaction centre for addressing complaints and suggestions from customers, retailers and distributors.

Your Company has introduced Sales Transformation ACY- Enhancement Program (STEP), an innovative ACY- customized in-house developed sales tool for providing day to day information required by sales force on the field.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, the foreign exchange outgo amounted to Rs. 2,531.23 Million as against Rs. 3,038.46 Million for the year ended on 31st December, 2012. There were no foreign exchange earnings during the year and previous year ended on 31st December, 2012.

HEALTH, SAFETY AND ENVIRONMENT

Safety of people overrides all production targets''. Bearing this in mind, every business issue in the Company is discussed and every solution complies with the safety policy of your Company. The management of the Company believes that the employees are the heart and soul of the organization and hence, considers health and safety of its employees as its prime responsibility.

Your Company also accords highest priority to Protection of Environment. Your Company has effective waste management systems to prevent any hazards to the environment. Your Company believes that clean surrounding and healthy environment adds to efficiency of workers.

Following activities were conducted for building healthy work culture during the year under review:

- Blood Donation Camps ADs-

- Availability of occupational health center and ambulance with all medical devices, in case of emergency ADs-

- Conducting regular safety audit and mock drill ADs- and

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

The manufacturing plant is having appropriate safety initiatives underway, headed by senior officials who diligently oversee the safety aspect.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible corporate citizen, your Company greatly values the conservation of our environment and is committed to conducting business activities with minimal adverse impact on the environment. Your Company endeavors to produce energy- efficient products and encourage the spread of environmental conservation activities. The manufacturing process and plant of your Company adhere to the standards laid down by various regulatory authorities for protection of the environment and safety of workers engaged in the manufacturing process.

Product safety and quality underlines the Company''s determination to deliver a sense of security and satisfaction in its products to all its customers. The Company has, through its ACI-eco idea activities ACI-, contributed to the prevention of global warming by implementing various measures e.g. changing all raw materials in compliance to Restriction of Hazardous Substances (RoHS) Directive. The operations have been reviewed to improve energy efficiency by reducing energy, fuel and diesel consumptions in daily operations.

Your Company shall continue its efforts to discharge its Corporate Social Responsibility in the best possible manner.

HUMAN RESOURCES MANAGEMENT

Human Resources (HR) continue to be a focus area for your Company. Several Initiatives were taken to facilitate the performance and developmental requirements of employees.

Your Company follows best HR practices and has won runners'' up award for the HR practices in the local region for the 2nd time in row.

Your Company continues to focus on the training requirements of its employees on a continuing basis, both on the job and off the job and through training programs conducted by internal and external experts. Your Company continuously gives emphasis on use of the advanced technology in the production. With a view to increase the productivity and output, the management organizes training programs, lectures of experts, training camps, on regular basis, which boosts, motivates the employees to give their best to the organisation.

BOARD OF DIRECTORS

During the year under review, there was no change in the composition of the Board of Directors of the Company.

In terms of the provisions of the Listing Agreement all the listed companies are required to appoint Independent Directors. The entire Board of our Company comprises of Independent Directors. The Companies Act, 2013, now also provides provisions for appointment of Independent Directors. Sub-Section (10) of Section 149 of the Companies Act, 2013 (effective 1st April, 2014) provides that the independent Directors shall hold office for a term of up to five consecutive years on the board of a company ADs- and shall be eligible for re-appointment on passing a special resolution of the shareholders of the Company. Sub-Section (11) states that no Independent Director shall be eligible for more than two consecutive terms of five years. Sub-Section (13) states that the provisions of retirement by rotation as defined in Sub-Section (6) and (7) of the Section 152 of the Companies Act, 2013, shall not apply to such Independent Directors.

Our Independent Directors were appointed as directors liable to retire by rotation under the provisions of erstwhile Companies Act, 1956. The Board has been advised that Independent Directors so appointed would continue to serve the term that was ascertained at the time of appointment (i.e. based on retirement period calculation) as per the resolution pursuant to which they were appointed. Therefore, it stands to reason that only those Independent Directors who will complete the present term, at the ensuing Annual General Meeting of the Company in June 2014, being eligible and seeking appointment, be considered by the Shareholders for appointment for a term up to five consecutive years.

Independent Director who do not complete their term at the ensuing Annual General Meeting will continue to hold office till expiry of their term (based on retirement period calculation) and would thereafter be eligible for re-appointment for a fixed term in accordance with Companies Act, 2013.

Mr. Vivek D. Dharm is an Independent Director of the Company. He joined the Board of Directors in December, 2005. He retires by rotation at the ensuing Annual General Meeting under the provisions of erstwhile Companies Act, 1956. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Vivek D. Dharm being eligible and seeking re-appointment is proposed to be appointed as an Independent Director for a term of five years. A Notice has been received from a Member proposing Mr. Vivek D. Dharm as a candidate for the office of Director of the Company. The detailed profile of Mr. Vivek D. Dharm forms part of the Corporate Governance Report.

The Board recommends appointment of Mr. Vivek D. Dharm as an Independent Director.

CASH FLOW STATEMENT

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

AUDITORS'' REPORT

The Auditors'' Report is unqualified.

AUDITORS

M/s. Khandelwal Jain ACY- Co., Chartered Accountants, Mumbai and M/s. Kadam ACY- Co., Chartered Accountants, Ahmednagar, would retire as the Statutory Auditors of the Company at the conclusion of the Twenty-Fourth Annual General Meeting and have offered themselves for re-appointment. M/s. Khandelwal Jain ACY- Co., Chartered Accountants, Mumbai and M/s. Kadam ACY- Co., Chartered Accountants, Ahmednagar, have confirmed their eligibility and willingness to accept the office, if re-appointed.

The Board recommends re-appointment of M/s. Khandelwal Jain ACY- Co., Chartered Accountants, Mumbai and M/s. Kadam ACY- Co., Chartered Accountants, Ahmednagar, as the Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of 27th Annual General Meeting.

COST AUDIT

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

The Board of Directors of the Company has accorded its approval for the appointment of Mrs. Sneha Gaurav Badwe, Cost Accountant in Whole-Time Practice (Membership Number 35552), Ahmednagar, as the Cost Auditor of the Company, to conduct audit of the Cost Accounting Records maintained by the Company for the financial year 2014, subject to the approval of the Central Government.

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

AUDIT COMMITTEE

The Company has duly constituted the Audit Committee, pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement. The composition, scope and powers of Audit Committee together with details of the meetings held during the year under review forms part of the Corporate Governance Report.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE GOVERNANCE

Good Corporate Governance is an integral part of the management and business philosophy. The Company subscribes fully to the principles and spirit of good Corporate Governance and embeds the principles of independence, integrity, accountability and transparency into the value system driving the Company. A section on Corporate Governance together with a Compliance Certificate from the Statutory Auditors of the Company, confirming compliance with the Clause 49 of the Listing Agreement, forms part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, we, the Directors of TREND ELECTRONICS LIMITED, state in respect of financial year 2013 that:

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

- the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year ended on that date ADs-

- the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ADs- and

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

ACKNOWLEDGEMENT

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



For and on behalf of the Board of Directors of

TREND ELECTRONICS LIMITED



V. D. DHARM S. S. NABAR

Director Director



Place : Mumbai

Date : 15th May, 2014


Dec 31, 2012

Dear Shareholders,

The Directors present the Twenty-Third Annual Report of your Company together with the Audited Accounts and Auditors'' Report for the financial year ended on 31st December, 2012.

FINANCIAL RESULTS AND OPERATIONS

The performance of the Company for the financial year ended on 31st December, 2012, is summarized below:

(in Million) Particulars Year ended Year ended 31st Dec.,2012 31st Dec.,2011

Net Sales 14,507.73 16,576.68

Other Income 21.69 68.49

Total Income 14,529.42 16,645.17

Profit before Finance Costs, Tax and 396.21 860.54

Depreciation

Finance Costs 737.97 620.63

Depreciation and Amortisation 204.87 186.48

Profit/(Loss) before Tax (546.63) 53.43

Profit/(Loss) for the year (415.71) 52.48

In order to offer products equipped with world class technology to its valued customers and in view of numerous opportunities available for enlargement of area of operation of the Company, the Main Objects Clause of the Memorandum of Association was altered during the year, by inserting the words Light Emission Displays (LEDs), Plasma Display Panels (PDPs), Liquid Crystal Displays (LCDs), DVDs, Set Top Boxes, Mobile Phones, Mobile Tablets, electronic gadgets.

Further, the Authorised Share Capital of the Company has been increased from Rs. 60 Crores to Rs. 125 Crores. During the year, the Company has allotted 10,000,000 8% Non-Cumulative Redeemable Preference Shares of Rs. 100/- each.

BUSINESS PERFORMANCE

The financial year under review, was a difficult period for the Company. During the year, the Indian Economy encountered a slowdown which had an impact on several businesses including the consumer electronics industry. The performance of the Company was affected due to economic slowdown, which resulted in lower business volume. Further, rigid liquidity conditions, increased interest rates, intense competition, appreciation of dollar vis-à- vis the Indian Rupee added to the problems, which impacted the bottom line. All this resulted into deferment of capital investment apart from creating a slowdown in business activity.

During the year 2012, the Company experienced a dip in the sales and severe pressure on the bottom line. The turnover of the Company stood at 14,507.73 Million as against Rs. 16,576.68 Million for the previous year. The Company has incurred a net loss of Rs. 415.71 Million as against a net profit of Rs. 52.48 Million for the previous year.

In view of the implementation of Digital Addressable System (DAS) mandate by the Government of India, which envisages the mandatory transformation of the entire television distribution system through a digital pipe by December 2014, has offered a landmark opportunity for the Company, since, your Company believes that it is the only Set-top Box manufacturer in India.

APPROPRIATIONS

Dividend:

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

Transfer to Reserves:

Due to loss incurred during the year, your Directors propose not to transfer any amount to the General Reserve.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs. 0.18 Million in respect of unpaid/ unclaimed dividend for the financial year 2004-05 to the Investor Education and Protection Fund.

FIXED DEPOSIT

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

PERSONNEL

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

CONSERVATION OF ENERGY

Your Company believes that energy is vital for economic growth and social development and must therefore be conserved and used judiciously. The Company is making all efforts to conserve energy by monitoring energy costs and periodical reviews of the consumption of energy. The Company has initiated a drive for the conservation of natural resources, including the energy conservation. The aim is to reduce the consumption of energy, by improving the machine efficiency. Also, as regards to the products, the Company is coming up with a range of new models which are expected to consume less power, but, at the same time, meet the expectations of the consumer.

Some of the other measures taken during the year ended 31 st December, 2012, are as under:

1. Increasing capacity of equipment by reducing its cycle time;

2. Installation of improved energy efficient machinery which has built-in cooling system and does not require additional air conditioning;

3. Provision of LED lights in place of conventional lights in factory area and replacing lamps with energy efficient bulbs for internal usage;

4. Installation of Energy Management System;

5. Usage of energy efficient star rated motors in factory;

6. Reduction of energy consumption by turning off lights, personal computers and other electronic equipments, when not in use;

7. Plantation of trees in the factory area;

8. Awareness programmes towards optimum utilization of natural resources at managerial as well as employee level; and

9. Installation of solar street lights in factory premises.

During the year, the Company has introduced, energy efficient lighting at various places, which has helped the Company to save money on the energy bills. An awareness drive was launched for the staff & workmen, to make them aware of the conservation of energy.

Further, the Company has through its "eco ideas” activities contributed to the prevention of global warming by implementing measures that help to reduce carbon dioxide emissions. The operations have been reviewed to improve energy efficiency by reducing energy, fuel and diesel consumptions in daily operations which have a direct impact on carbon dioxide emissions.

RESEARCH AND DEVELOPMENT (R & D) AND TECHNOLOGY ABSORPTION

Innovation continues to be our prime focus. Your Company recognizes that a vigorous intelligent research initiative not only reduces cost through effective process improvement but also adds value through sustained innovative and customized products in line with consumer requirements. Our R & D efforts are in line with changing consumer demands and preferences.

The Company is known for the introduction of innovative models, by using latest technologies. The Company makes continuous efforts to harness new technologies, which make the products even more innovative. These efforts are largely directed to enhance the product performance, reduction in the material cost, reduction in the manufacturing resources, thereby making the product competitive.

The following are the areas, where the R & D activities are focused:

1. Study the consumer feedback on the product performance;

2. Study the market trends for competition;

3. Upgrade the product, based on the study & product performance;

4. Develop new products, which suit the changing tastes of the consumer; and

5. Make changes in the design to make the product more reliable.

Benefits derived from R & D Activities:

Your Company remains committed towards introducing new models and improving existing products to meet the ever-increasing demands of the consumers by fully exploring technological advancements. The efforts made by the R & D team have helped in introducing innovative energy efficient products with unique features and superior technology at competitive costs, which is likely to enlarge the market share of the Company in future.

The benefits derived are:

1. Maintenance and improvement of quality;

2. Innovations in product designs and outlook;

3. Cost reduction;

4. Optimum utilization of resources; and

5. Efficient use of technological advancements.

Further, apart from the above benefits, the Company could derive the following benefits:

1. Introduction of new models in LED and LCD TV;

2. Introduction of "Smart TV” model in LCD TV with full fledge high speed internet, Skype, Twitter, You Tube, Picasa etc;

3. Introduction of new Integrated Digital TV with single chip solution with a built in DTH facility having MPEG 4 DVB-S2 digital signal having features like Full HD (1920 x 1080P); 100% full HD reception which improves picture and sound quality etc.; and

4. Introduction of New-age LEDs – DDB TV, having ability to convert 2D channels into life like 3D quality and which will help to receive digital signals without a set-top box giving an audio-visual sense, never experienced before.

The Company has come out with a RF4CE (Radio Frequency for Consumer Electronics) technology in the Set Top Box remote control. Unlike the conventional remote control, this remote, does not need to be directed towards the Set Top Box, for its operation. The remote can be even operated from a longer distance as compared to the traditional remote control.

The Company has also introduced Set Top Box with "Recording” facility, which enables a consumer to record as much content as a subscriber wishes to & playback the recorded contents. It also allows the consumer to "Pause” Live TV & other trick play modes, such as rewind & forward.

Future Plan of action:

Your Company is committed towards bringing out new innovative products at affordable prices. The Company is looking forward to take advantage of technological up gradations and compete efficiently with the competitors.

The future plan of action includes:

1. Implementation of new technology;

2. Introducing environment friendly products; and

3. Harnessing the opportunities created out of Digital Addressable System (DAS) Regime containing cost of fund; steep taxation; which satiates the ever increasing appetite for new content.

During the year under review, the Company has incurred an amount of ` 5.22 Million towards R & D Activities representing 0.04 % of the turnover.

Technology Absorption:

The management believes that Information Technology can be extensively used in all spheres of its activities to improve productivity and efficiency levels. The Company has already implemented SAP (System Analysis Programming), a customized ERP (Enterprise Resource Planning) module, at its manufacturing facility.

INFO RMATION TECHNOLOGY

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

The Company has implemented latest version of SAP ERP ECC 6.0 for better operational control. SAP solution has enabled your Company to leverage the benefits of integration in business operations, optimization of enterprise resources, standardized business process, thereby enabling standard operating practices with well established controls. It has also benefited the management at all levels with business information which is available online and reliable to control the business operations in a well-informed manner. The Company has implemented a network application for facilitating the storage & retrieval of the Set Top Box pairing elements. The application developed uses state of the art Database Servers & deployed using Microsoft.Net & Java. The applications have been integrated with the on-line production management system effectively.

Your Company has designed and implemented web based Customer Relationship Management (CRM) application. It has put in place an enabled consumer interaction centre for addressing complaints and suggestions from consumers, retailers and distributors.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, the foreign exchange outgo amounted to Rs. 3,038.46 Million as against Rs. 3,564.89 Million for the year ended on 31st December, 2011. There were no foreign exchange earnings during the year and previous year ended on 31st December, 2011.

HEALTH, SAFETY AND ENVIRONMENT

Your Company believes that healthy and happy working environment is essential for every employee and to provide the same is a duty of the Company. Your Company is committed towards providing a healthy working environment in every possible way.

Your Company took various initiatives to improve compatibility of its operations with the environment. It has adopted new policies for greener surroundings and is strictly adhering to the Environment, Health and Safety norms at its manufacturing plant.

During the year 2012, following activities were conducted for building healthy work culture:

Health/Eye check up camps;

Blood Donation camps;

Vaccination facility for contagious diseases;

Free distribution of medicines; and

Aids Awareness Programme.

The manufacturing plant is having appropriate safety initiatives underway, headed by senior officials who diligently oversee the safety aspect.

INDUSTRIAL RELATIONS

Industrial Relations remained cordial during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Your Company aims at managing its business processes in such a way so as to produce an overall positive impact on the society. CSR is at the core of your Company''s vision and mission which is achieved by focusing on the interest of the employees, customers and shareholders of the Company and the society at large.

The Company believes pursuing a wide socio-economic objective and has always endeavored to not just live upto it, but try and exceed the expectations of the communities in which we operate.

Your Company has been making meaningful contributions to the society in different areas. The Company has chosen 3 broad areas to focus its CSR activities:

1. Energy Conservation;

2. Environmental Protection; and

3. Community Service.

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

HUMAN RESOURCE MANAGEMENT

Your Company believes that employees are vital to the Company and hence, aims to incorporate the planning and controlling of manpower resources into the corporate level plans so that all resources are used together in the best possible combination. Pay revisions and other benefits are designed in such a way, so as to compensate for good performance of the employees of the Company. The talent base of your Company has steadily increased and the Company has created a favourable work environment which encourages innovation. The Company has also put in place a scalable recruitment and human resource management process which ensures retention and development of competent employees.

Your Company considers the quality of its human resource to be the most important asset and places emphasis on training and development of employees at all levels. It ensures equal opportunities to the employees to excel in their work and advance themselves in their career depending on their abilities. It commits itself to grow hand-in-hand with its employees, encouraging and aiding them to reach their full potential and improve their standard of living.

BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 1956 and in terms of Articles of Association of the Company, Mr. Bhopinder J. Chopra, Director, is liable to retire by rotation and being eligible, has offered himself for re- appointment. Pursuant to the provisions of Clause 49 of the Listing Agreement, a brief profile of Mr. Bhopinder J. Chopra, who is proposed to be re-appointed, forms part of the Corporate Governance Report. The Board recommends re- appointment of Mr. Bhopinder J. Chopra as the Director of the Company.

During the year under review, Mr. Pradipkumar N. Dhoot, Mr. Anirudha V. Dhoot and Mr. Subhash S. Dayama resigned from the directorship of the Company w.e.f. 6th January, 2012. The Board would like to place on record its appreciation for the valuable guidance and services rendered by Mr. Pradipkumar N. Dhoot, Mr. Anirudha V. Dhoot and Mr. Subhash S. Dayama, during their tenure as the Directors of the Company.

CASH FLOW STATEMENT

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

AUDITORS'' REPORT

The Auditors'' Report is unqualified.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, would retire as the Statutory Auditors of the Company at the conclusion of the Twenty-Third Annual General Meeting and have offered themselves for re-appointment. M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, have confirmed their eligibility and willingness to accept the office, if re-appointed. The Company has also received certificates from the said Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

The Board recommends re-appointment of M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, as the Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

COST AUDIT

As per order dated 6th November, 2012, issued by the Government of India, Ministry of Corporate Affairs, Cost Audit Branch, the Company is required to appoint a Cost Auditor for the financial year commencing from 1st January, 2013 to 31st December, 2013.

In accordance with the provisions of General Circular No. 15/2011 issued by the Government of India, Ministry of Corporate Affairs, Cost Audit Branch, the Board of Directors of the Company have accorded its approval for appointment of Mr. Sudhir C. Sant, Practicing Cost Accountant, Pune, having Membership No. 7836, as the Cost Auditor of the Company, subject to the approval of the Central Government, to conduct audit of the Cost Accounts Records maintained by the Company for the financial year commencing on 1st January, 2013 and ending on 31st December, 2013.

AUDIT COMMITTEE

The Company has duly constituted the Audit Committee, pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement. The composition, scope and powers of Audit Committee together with details of the meetings held during the year under review forms part of the Corporate Governance Report.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE GOVERNANCE

Good Corporate Governance is an integral part of the management and business philosophy. The Company subscribes fully to the principles and spirit of good Corporate Governance and embeds the principles of independence, integrity, accountability and transparency into the value system driving the Company. A section on Corporate Governance together with a Compliance Certificate from the Statutory Auditors of the Company, confirming compliance with the Clause 49 of the Listing Agreement, forms part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, we, the directors of TREND ELECTRONICS LIMITED, state in respect of financial year ended 31st December, 2012 that:

In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any; the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year ended on that date; the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and the directors have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

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

TREND ELECTRONICS LIMITED

VIVEK D. DHARM BHOPINDER J. CHOPRA

Director Director

Place : Mumbai

Date : 15th May, 2013

 
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