Directors Report of Munoth Communication Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their Thirtieth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2014

FINANCIAL RESULTS:

Particulars 2013-2014 2012-2013 Rs.In ''000 Rs. in ''000

Revenue from operations 67.36 88.72

EBITDA (6632.43) (4161.62)

Less: Depreciation and amortization 2930.34 3206.49

Finance cost 93.62 121.62

Profit / (Loss) before Tax (9656.39) (7489.73) Less: Tax expenses 3955.51 -

Profit / (Loss) after tax (13611.90) (7489.73)

REVIEW OF BUSINESS OPERATIONS:

The Company has designed mobile phone accessories like Chargers, Adopters, Power bank, Pen drive and have refined 5.5 design house based out of Paris, France and Sohamsaa Systems Pvt. Ltd based out of Bangalore, India for designing. The Company made prototype of the charger and is in final stage before mass production^The product would get launched in the 3rd quarter of the current financial year under the brand ''VG''. The Company has also applied three patents for Socket Charger, Hybrid Charger, Normal & fast charger with switch.

The Company filed civil and criminal cases against Kingtech Electronics (India) Pvt Ltd for money recovery. Madras High Court on 23rd July 2013 allowed the application No.3060/2012 made by MCL against Kingtech Electronics (India) Pvt Ltd and order restrains Ganishee HSBC Bank Ltd from making payment to Kingtech Electronics (India) Pvt Ltd to be extent of suit claim amounting to Rs.51,38,776/-.

The Company has also made a claim of Rs. 2,28,22,324/- towards damage.

With respect to its own brand ''MUNOTH'' the Company is exploring the possibility of re launching Senior Citizen phone and other application based phones

FUTURE PROSPECTS:

Mobile accessories market in India does not have a single brand which makes all accessories. The Company''s brand "VG" would be one of the early mover advantage. The Company will use direct sales and sales through internet route to sell all mobile phone accessories.

The Company will continue to work on senior citizen phone in both hardware and software segment. It is planning to develop a senior citizen application on different operating system

DIVIDEND:

On account of the losses sustained by the company, your Directors regret their inability to declare any dividend.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with the Auditor''s Certificate regarding compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

DIRECTORS:

In terms of provisions of the Articles of Association, Mr. Bharat Munoth and Mr. Lalchand Munoth retires by rotation at the forthcoming Annual General Meeting and both being eligible offers themselves for re- appointment.

Mr. Vikas Munoth has been appointed as an Additional Director of the Company with effect from December 14, 2013. He is proposed to be appointed as Director at the ensuing Annual General Meeting liable to retire by rotation.

Mr. C R Sasi has been appointed as an Additional Director of the Company with effect from December 14 2013. He is proposed to be appointed as Independent Director at the ensuing Annual General Meeting for a term of 5 consecutive years from the date of the ensuing Annual General Meeting as required under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Three of the existing directors namely Mr. M Jayantilal Jain, Mr. Manish Mardia and Ms. Ranjani Padmanabhan have been selected for appointment as Independent Directors for a term of 5 consecutive years from the date of the ensuing Annual General Meeting subject to the approval of shareholders, as required under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

DIRECTOR''S RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) which was introduced by the Companies (Amendment) Act, 2000 your Director''s confirm that:-

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the close of the financial year ended 31st March 2014 and of the Profit/Loss of the company for the year ended 31st March 2014.

iii) The Directors had 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.

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

DEPOSITORY SYSTEM:

As per SEBI''s Directive, Equity Shares of your company is now compulsorily traded in dematerialised form. In this connection your company has signed an agreement with NSDL & CDSL for dematerialisation of its equity shares. As of date Equity Shares representing about 86.43% of the Shares Capital have been dematerialised. The company has appointed M/s. Cameo Corporate Services Limited as Registrars for the purpose of electronic connectivity for effecting dematerialisation of shares.

FIXED DEPOSITS

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

STOCK EXCHANGES

The Company''s shares are listed on Madras Stock Exchange, Bombay Stock Exchange and Ahmedabad Stock Exchange.

STATUTORY INFORMATION: PARTICULARS:

There are no persons, employed in the company either during the year or part of the year who were in receipt of remuneration exceeding the sums prescribed under the provision of Sec.217 (2A) of the Companies Act, 1956.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company being in the trading business, requirement regarding the disclosure of particulars relating to conservation of energy and technology absorption prescribed by the rules are not applicable.

AUDITORS:

M/s.Kumbhat & Co., Chartered Accountants, the Auditors of the Company, retires at the close of the ensuing Annual General Meeting and are eligible for re-appointment.

PERSONNEL:

Employee relations have been very cordial during the year under review.

ACKNOWLEDGEMENT:

Your Directors express their deep gratitude for the assistance, co-operation and support extended to your company by the Bankers and other valued clients. The Board gratefully express their thanks to you all for the trust you have reposed in the Company and look forward to your continued support. Your Directors take this opportunity to place on record their warm appreciation of the valuable contribution, unstinted efforts and the spirit of dedication by the employees and officers at all levels in the progress of the company.

For and on behalf of the Board of Directors

Place : Chennai LALCHAND MUNOTH Date : 20/05/2014 CHAIRMAN

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Mar 31, 2013

TO THE MEMBERS:

The Directors have pleasure in presenting their Twenty Ninth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2013

FINANCIAL RESULTS:

2012-2013 2011-2012 Particulars Rs.ln ''000 Rs. in ''000

Total Revenue 3751.24 188388.16

Total Expenditure 7912.86 190112.77

EBITDA (4161.62) (1724.61)

Less: Depreciation and amortization 3206.49 3574.71

Finance cost 121.62 2358.28

Profit / (Loss) before Tax (7489.73) (7657.60)

Less: Tax expenses 716.29

Profit / (Loss) after tax (7489.73) (8373.88)



REVIEW OF BUSINESS OPERATIONS:

The Company terminated the distribution business of G''Five mobile phones. It reduced the number of employees and closed down branches to save cost. The employee cost was reduced to Rs. 29.50 lakhs from Rs. 76.02 lakhs in the previous year and the other expenses was reduced to Rs. 37.69 lakhs as against Rs.121.45 lakhs in the previous year. The Company also changed the classification of share to investment from stock in trade resulting in a book loss of Rs. 11.93 lakhs.

The Company filed civil and criminal cases against Klngtech Electronics (India) Private Limited for money recovery. A sum of Rs. 51,38,776/- is due from the said Company for return of stock. The Company has also made a claim of Rs. 2,28,22,324/- towards damage.

With respect to its own brand ''MUNOTH'' the Company continued to explore for possibility of increasing sales in Senior Citizen phone.

FUTURE PROSPECTS:

The Company will continue to work on senior citizen phone in both hardware and software segment. It is planning to develop a senior citizen application on different operating system.

The Company is also exploring the possibilities of foraying into construction business through Joint Venture route.

DIVIDEND:

On account of the losses sustained by the company, your Directors regret their inability to declare any dividend.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with the Auditor''s Certificate regarding compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

DIRECTORS:

In terms of provisions of the Articles of Association, Mr. Bharat Munoth and Ms. Ranjani Padmanabhan retires by rotation at the forthcoming Annual General Meeting and both being eligible offers themselves for re-appointment.

DIRECTOR''S RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) which was introduced by the Companies (Amendment) Act, 2000 your Director''s confirm that:-

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the close of the financial year ended 31st March 2013 and of the Profit/Loss of the company for the year ended 31st March 2013.

iii) The Directors had 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.

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

AUDIT COMMITTEE:

The Audit committee constituted by the Board of Directors consists of three Independent Directors Viz.

1. Mr. Manish Mardia Chairman

2. Mr.M Jayantilal Jain Member

3. Mrs. Ranjani Padmanabhan Member

The constitution of the Audit Committee also meets the requirements of Sec.292A of the Companies Act 1956 as introduced by the Companies (Amendment) Act 2000. The terms of reference specified by the Board to the Audit Committee are as per clause 49 of the Listing Agreement.

REMUNERATION COMMITTEE:

The remuneration committee has been constituted for performing inter alia the role/various functions as set out under clause 49 of the listing agreement with the Stock Exchanges and also in pursuance to the amendments made to Schedule XIII to the Companies Act, 1956.

DEPOSITORY SYSTEM:

As per SEBI''s Directive, Equity Shares of your company is now compulsorily traded in dematerialised form. In this connection your company has signed an agreement with NSDL & CDSL for dematerialisation of its equity shares. As of date Equity Shares representing about 86.17% of the Shares Capital have been dematerialised. The company has appointed M/s. Cameo Corporate Services Limited as Registrars for the purpose of electronic connectivity for effecting dematerialisation of shares.

FIXED DEPOSITS

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

STOCK EXCHANGES

The Company''s shares are listed on Madras Stock Exchange, Bombay Stock Exchange and Ahmedabad Stock Exchange. The Listing fees to all Stock Exchanges have been paid up to date.

STATUTORY INFORMATION: PARTICULARS:

There are no persons, employed in the company either during the year or part of the year who were in receipt of remuneration exceeding the sums prescribed under the provision of Sec.217 (2A) of the Companies Act, 1956.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company being in the trading business, requirement regarding the disclosure of particulars relating to conservation of energy and technology absorption prescribed by the rules are not applicable.

AUDITORS:

M/s.Kumbhat & Co., Chartered Accountants, the Auditors of the Company, retires at the close of the ensuing Annua! General Meeting and are eligible for re-appointment.

PERSONNEL:

Employee relations have been very cordial during the year under review.

ACKNOWLEDGEMENT:

Your Directors express their deep gratitude for the assistance, co-operation and support extended to your company by the Bankers and other valued clients. The Board gratefully express their thanks to you all for the trust you have reposed in the Company and look forward to your continued support. Your Directors take this opportunity to place on record their warm appreciation of the valuable contribution, efforts and the spirit of dedication by the employees and officers at all levels in the progress of the company.

For and on behalf of the Board of Directors

Place : Chennai LALCHAND MUNOTH

Date : 29/05/2013 CHAIRMAN

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Mar 31, 2012

The Directors have pleasure in presenting their Twenty Eighth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2012

FINANCIAL RESULTS:

Particulars 2011-2012 2010-2011 Rs.In'000 Rs.in'000

Total Revenue 188388.16 64498.28

Total Expenditure 190112.76 61965.44

EBITDA (1724.60) 2532.84

Less: Depreciation and amortization 3574.71 1272.75

Finance cost 2358.28 684.18

Profit / (Loss) before Tax (7657.60) 575.91

Less: Tax expenses 716.29 400.82

Profit / (Loss) after tax (8373.88) 175.09

REVIEW OF BUSINESS OPERATIONS:

Distribution of G'Five Mobile phones was discontinued as Kingtech Electronics (India) Private Limited terminated the agreement. MCL is in the process of closing down the business of G'Five Mobile phones.

FUTURE PROSPECTS:

The Company would look for some other distribution opportunities and continue to focus on its own brand Munoth which is in to application based phones.

DIVIDEND:

On account of the losses sustained by the company, your Directors regret their inability to declare any dividend.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with the Auditor's Certificate regarding compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

DIRECTORS:

In terms of provisions of the Articles of Association, Mr. Lalchand Munoth and Mr. M Jayantilal Jain retires by rotation at the forthcoming Annual General Meeting and both being eligible offers themselves for re-appointment.

The present term of office of Mr. Jaswant Munoth as Managing Director approved by the shareholders will be ending on 30/11/2012 and his reappointment as Managing Director for another term of five years is placed before members for approval.

DIRECTOR'S RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) which was introduced by the Companies (Amendment) Act, 2000 your Director's confirm that:-

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the close of the financial year ended 31st March 2012 and of the Profit/Loss of the company for the year ended 31st March 2012.

iii) The Directors had 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.

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

AUDIT COMMITTEE:

The Audit committee constituted by the Board of Directors consists of three Independent Directors Viz.

1. Mr. Manish Mardia Chairman

2. Mr.M Jayantilal Jain Member

3. Mrs. Ranjani Padmanabhan Member

The constitution of the Audit Committee also meets the requirements of Sec.292A of the Companies Act 1956 as introduced by the Companies (Amendment) Act 2000. The terms of reference specified by the Board to the Audit Committee are as per clause 49 of the Listing Agreement.

REMUNERATION COMMITTEE:

The remuneration committee has been constituted for performing inter alia the role/various functions as set out under clause 49 of the listing agreement with the Stock Exchanges and also in pursuance to the amendments made to Schedule XIII to the Companies Act, 1956.

DEPOSITORY SYSTEM:

As per SEBI's Directive, Equity Shares of your company is now compulsorily traded in dematerialised form. In this connection your company has signed an agreement with NSDL & CDSL for dematerialisation of its equity shares. As of date Equity Shares representing about 85.87% of the Shares Capital have been dematerialised. The company has appointed M/s. Cameo Corporate Services Limited as Registrars for the purpose of electronic connectivity for effecting dematerialisation of shares.

FIXED DEPOSITS

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

STOCK EXCHANGES

The Company's shares are listed on Madras Stock Exchange, Bombay Stock Exchange and Ahmedabad Stock Exchange. The Listing fees to all Stock Exchanges have been paid up to date.

STATUTORY INFORMATION: PARTICULARS:

There are no persons, employed in the company either during the year or part of the year who were in receipt of remuneration exceeding the sums prescribed under the provision of Sec.217 (2A) of the Companies Act, 1956.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company being in the trading business, requirement regarding the disclosure of particulars relating to conservation of energy and technology absorption prescribed by the rules are not applicable.

AUDITORS:

M/s.Kumbhat & Co., Chartered Accountants, the Auditors of the Company, retires at the close of the ensuing Annual General Meeting and are eligible for re-appointment.

PERSONNEL:

Employee relations have been very cordial during the year under review.

ACKNOWLEDGEMENT:

Your Directors express their deep gratitude for the assistance, co-operation and support extended to your company by the Bankers and other valued clients. The Board gratefully express their thanks to you all for the trust you have reposed in the Company and look forward to your continued support. Your Directors take this opportunity to place on record their warm appreciation of the valuable contribution, unstinted efforts and the spirit of dedication by the employees and officers at all levels in the progress of the company.

For and on behalf of the Board of Directors

Place : Chennai LALCHAND MUNOTH

Date : 26/05/2012 CHAIRMAN

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Mar 31, 2011

DIRECTORS' REPORT TO THE MEMBERS:

The Directors have pleasure in presenting their Twenty Seventh Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2011

FINANCIAL RESULTS:

Particulars 2010-2011 2009-2010 Rs.in Lacs Rs. in Lacs

Total Income 703.42 91.25

Total Expenditure 684.94 64.35

Profit / (Loss) before Depreciation 18.48 26.90

Less: Depreciation 12.72 9.53

Profit / (Loss) before Tax 5.76 17.37

Less: Provision .or Tax - 0.79

Profit / (Loss) after tax 5.76 16.58

Less: Deferred Tax adjustment for the year 4 .01 6.59

Profit for the year 1.75 9.99

Loss brought forward 341.54 351.53

Profit / (Loss) carried forward (339.79) (341.54)

REVIEW OF BUSINESS OPERATIONS:

The Company has launched MUNOTH brand of mobile phones in the country. Currently it has five models A9, A28, A29, A36 and S5. S5 is an application based phone meant for senior citizen. MCL has set up a website www.soshealth.co.in where in the users of S5 can store their medical data. S5 has been featured in leading newspaper/magazine and was also featured in Haward review. MCL was also appointed as distributor for G'Five mobile phones for Tamilnadu, Karnataka and Gujarat. In the current year the Company sales is at Rs. 6.16 crores and a profit before tax of Rs. 5.76 lakhs.

FUTURE PROSPECTS:

The Company will focus on application based phones in its own brand.MUNOTH and continue to distribute phones of other brands. The Company expects to increase sales considerably in the current year of operation.

DIVIDEND:

On account of the carried forward losses sustained by the company, your Directors regret their inability to declare any dividend.

CORPORATE GOVERNANCE:

Areporton Corporate Governance along with the Auditor's Certificate regarding compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

DIRECTORS:

In terms of provisions of the Articles of Association, Mr. Manish Mardia retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.

DIRECTOR'S RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) which was introduced by the Companies (Amendment) Act, 2000 your Director's confirm that:-

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the close of the financial year ended 31 st March 2011 and of the Profit/Loss of the company for the year ended 31st March 2011.

iii) The Directors had 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.

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

AUDIT COMMITTEE:

The Audit committee constituted by the Board of Directors consists of three Independent Directors Viz.

1. Mr. Manish Mardia Chairman

2. Mr.M Jayantilal Jain Member

3. Mrs. Ranjani Padmanabhan Member

The constitution of the Audit Committee also meets the requirements of Sec.292Aof the Companies Act 1956 as introduced by the Companies (Amendment) Act 2000. The terms of reference specified by the Board to the Audit Committee are as per clause 49 of the Listing Agreement.

REMUNERATION COMMITTEE:

The remuneration committee has been constituted for performing inter alia the role/various functions as set out under clause 49 of the listing agreement with the Stock Exchanges and also in pursuance to the amendments made to Schedule XIII to the Companies Act, 1956.

DEPOSITORY SYSTEM:

As per SEBI's Directive, Equity Shares of your company is now compulsorily traded in dematerialised form. In this connection your company has signed an agreement with NSDL & CDSL fordematerialisation of its equity shares. As of date Equity Shares representing about 85.84% of the Shares Capital have been dematerialised. The company has appointed M/s. Cameo Corporate Services Limited as Registrars for the purpose of electronic connectivity for effecting dematerialisation of shares.

FIXED DEPOSITS

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

STOCK EXCHANGES

The Company's shares are listed on Madras Stock Exchange, Bombay Stock Exchange and Ahmedabad Stock Exchange. The Listing fees to all Stock Exchanges have been paid up to date.

STATUTORY INFORMATION: PARTICULARS:

There are no persons, employed in the company either during the year or part of the year who were in receipt of remuneration exceeding the sums prescribed under the provision of Sec.217 (2A) of the Companies Act, 1956.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company being in the trading business, requirement regarding the disclosure of particulars relating to conservation of energy and technology absorption prescribed by the rules are not applicable.

AUDITORS:

M/s.Kumbhat & Co., Chartered Accountants, the Auditors of the Company, retires at the close of the ensuing Annual General Meeting and are eligible for re-appointment.

PERSONNEL:

Employee relations have been very cordial during the year under review.

ACKNOWLEDGEMENT:

Your Directors express their deep gratitude for the assistance, co-operation and support extended to your company by the Bankers and other valued clients. The Board gratefully express their thanks to you all for the trust you have reposed in the Company and look forward to your continued support. Your Directors take this opportunity to place on record their warm appreciation of the valuable contribution, unstinted efforts and the spirit of dedication by the employees and officers at all levels in the progress of the company.

For and on behalf of the Board of Directors LALCHAND MUNOTH Chairman

Place: Chennai Date : 14/05/2011

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Mar 31, 2010

The Directors have pleasure in presenting their Twenty sixth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS:

2009-2010 2008-2009

Particulars Rs. in Lakh Rs. in Lakh

Total Income 150.95 128.08

Total Expenditure 124.05 300.68

Profit / (Loss) before Depreciation 26.90 (172.60)

Less: Depreciation 9.53 6.55

Profit / (Loss) before Tax 17.37 (179.15)

Less: Provision for Tax 0.79 -

Less Provision for FBT - 0.48

Profit / (Loss) after tax 16.58 (179.63)

Add / (Less): Deferred Tax adjustment for the year 6.59 (53.30)

Profit / (Loss) for the year 9.99 (126.33)

Profit / (Loss) brought forward (351.53) (225.20)

Profit / (Loss) carried forward (341.54) (351.53)



REVIEW OF BUSINESS OPERATIONS:

The Company is launching its own brand of mobile phone in the country. Efforts have been taken to locate design house, manufacturer in China and the sales and distribution network is being setup. The Company has already placed the first trial order with vendor based in China. The Company has invested in a new brand ID, new packaging and has brought out two models A9 and A36.

FUTURE PROSPECTS:

The Company plans to formally launch its own brand of mobile phones in the country in the second quarter of the financial year. It would have developed by that time over six models of GSM compliant mobile phones.

DIVIDEND:

On account of the carried forward losses sustained by the company, your Directors regret their inability to declare any dividend.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with the Auditor’s Certificate regarding compliance of the conditions of Corporate Governance and also a Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement are annexed hereto.

DIRECTORS:

In terms of provisions of the Articles of Association, Ms. Ranjani Padmanabhan retires by rotation at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) which was introduced by the Companies (Amendment) Act, 2000 your Directors confirm that:-

i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the close of the financial year ended 31st March 2010 and of the Profit/Loss of the company for the year ended 31st March 2010.

iii) The Directors had 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.

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

AUDIT COMMITTEE:

The Audit committee constituted by the Board of Directors consists of three Independent Directors Viz.

1. Mr. Manish Mardia Chairman

2. Mr.M Jayantilal Jain Member

3. Mrs. Ranjani Padmanabhan Member

The constitution of the Audit Committee also meets the requirements of Sec.292A of the Companies Act 1956 as introduced by the Companies (Amendment) Act 2000. The terms of reference specified by the Board to the Audit Committee are as per clause 49 of the Listing Agreement.

REMUNERATION COMMITTEE:

The remuneration committee has been constituted for performing inter alia the role/various functions as set out under clause 49 of the listing agreement with the Stock Exchanges and also in pursuance to the amendments made to Schedule XIII to the Companies Act, 1956.

DEPOSITORY SYSTEM:

As per SEBI’s Directive, Equity Shares of your company is now compulsorily traded in dematerialised form. In this connection your company has signed an agreement with NSDL & CDSL for dematerialisation of its equity shares. As on March 31, 2010 Equity Shares representing about 85.75% of the Shares Capital have been dematerialised. The company has appointed M/s. Cameo Corporate Services Limited as Registrars for the purpose of electronic connectivity for effecting dematerialisation of shares.

FIXED DEPOSITS

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

STOCK EXCHANGES

The Company’s shares are listed on Madras Stock Exchange, Bombay Stock Exchange and Ahmedabad Stock Exchange. The Listing fees to all Stock Exchanges have been paid up to date.

STATUTORY INFORMATION: PARTICULARS:

There are no persons, employed in the company either during the year or part of the year who were in receipt of remuneration exceeding the sums prescribed under the provision of Sec.217 (2A) of the Companies Act, 1956.

DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company being in the trading business, requirement regarding the disclosure of particulars relating to conservation of energy and technology absorption prescribed by the rules are not applicable.

There are no earnings or outgo in respect of foreign exchange during the year under review.

AUDITORS:

M/s.Kumbhat & Co., Chartered Accountants, having firm Registeration No. : 00160S the Auditors of the Company, retires at the close of the ensuing Annual General Meeting and are eligible for re-appointment.

PERSONNEL:

Employee relations have been very cordial during the year under review.

ACKNOWLEDGEMENT:

Your Directors express their deep gratitude for the assistance, co-operation and support extended to your company by the Bankers and other valued clients. The Board gratefully express their thanks to you all for the trust you have reposed in the Company and look forward to your continued support. Your Directors take this opportunity to place on record their warm appreciation of the valuable contribution, unstinted efforts and the spirit of dedication by the employees and officers at all levels in the progress of the company.

For and on behalf of the Board of Directors

Place : Chennai Lalchand Munoth

Date:21.05.2010 Chairman