Directors' Report

To the Members,

The Directors presents their Twenty Second Annual Report, together with the Audited Accounts of the Company for the Financial Year ended March 31, 2016.

FINANCIAL HIGHLIGHTS: ,

(Amount in Rs.)

OPERATIONAL PERFORMANCE

As can be seen from the above table, on consolidated basis, the Total Income for the year 2015-16 was ' 11,219,146,980 (previous year ' 11,128,528,639) and the Loss Before Tax was ' 88,125,882 (previous year Net Profit ' 600,448,591). After adjusting for Tax ' 15,422,986 (previous year ' 65,269,383), Net Loss after Tax was at ' 103,548,868 (previous year Net Profit of ' 535,179,208). After accounting for Minority Interest therefrom Net Loss After Tax and Minority Interest was at ' 106,661,584 as compared to Net Profit of ' 505,852,897 in the previous year.

The Consolidated Financial Statements (CFS) includes the financial statements of Zicom Electronic Security Systems Limited ("the Company") and its subsidiary companies, namely,

a) Zicom SaaS Private Limited ("Zicom SaaS");

b) Unisafe Fire Protection Specialists Singapore Pte. Ltd. ("Unisafe Singapore") and its subsidiaries, viz. Unisafe Fire Protection Specialists LLC, Dubai ("Unisafe Dubai") and its subsi diaries; and Phoenix Inter nationa l WLL, Qatar ("P hoe nix Qatar");

c) Unisafe Fire Protection Specialists India Private Limited ("Unisafe India"); and

d) Zicom Security Projects Pte. Ltd., Singapore ("Zicom Singapore")

On standalone basis, the Total Income for the year 2015-16 was ' 4,350,128,890 (previous year Rs. 3,905,323,251). The Profit before Tax was Rs. 23,354,295 (previous year Rs. 173,491,724). After adjusting for Tax Rs. 6,191,406 (previous year Rs. 60,472,214), Net Profit After Tax was at Rs. 17,162,889 (previous year Rs. 113,019,510).

BUSINESS DEVELOPMENTS AND PROSPECTS

The slump in the global crude prices led to slow-down in Middle East economy, which adversely affected project executions. This resulted delayed recovery from debtors and thereby affecting our consolidated performance. Despite every efforts made to expedite collections, external situation are taking it longer to settle down. To improve profitability, we have focused on service and maintenance business which offers steady cash flow. We have also taken up distribution of Unisafe branded products which are approved by Civil Defense to GCC and North African Region. As the weight age of fire security business in Middle East is high in the total consolidated revenue, performance has been affected adversely. The performance of Zicom SaaS Private Limited, a wholly-owned Indian subsidiary, has been exceptionally well, which shows significant growth on account of new addition of Banks and other Enterprise Customers for ATM and Facility Surveillance.

The initiative of the Central Government to remove custom duties on import of CCTV equipment in Budget of 2016 has made significant impact on electronic security industry. However, this sudden change has unfortunately impacted the valuation of existing inventories held by the Company and resulted in a onetime adjustment impact in profitability for the financial year under review. Further, with environment in our Distribution Business continuing to be competitive, margins were under severe pressure, impacting adversely the standalone performance.

In Unisafe India, your Company's focus continued to work as Global Design Centre by catering to the design, engineering and estimate needs of all our projects in Gulf Region. Our two wholly-owned subsidiaries in Singapore, viz. Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security Projects Pte. Ltd. (Zicom Singapore) continues to hold our investment in Phoenix Qatar.

DIVIDEND

Keeping in view the affected performance of the Company and also with a view to conserve resources to meet the business requirements, your Directors have recommend dividend for the financial year 2015-16 at a lower rate of Rs. 0.50 per Equity Share of Rs. 10 each (i.e. 5%) (previous year Rs. 1.20) on share capital of 20,199,829 Equity Shares (previous year 20,199,829 Equity Shares) of the Company. This dividend will entail a total outgo of Rs. 12,156,020 (Rs. 29,174,436) which shows decrease of 58%. The dividend outgo is lower on account of decrease in rate of dividend. The dividend will be paid to Members whose names appear in the Register of Members as on September 21, 2016 and in respect of shares held in dematerialized form, it will be paid to Members whose names are furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), as beneficial owners as on that date.

FINANCE

Subsequent to end of the year under review, on August 9, 2016, the Company has cancelled 1,050,000 Warrants due to non-exercise of the option by the Warrant-holders. As a result of same, the application money received upon allotment of said Warrants (calculated @ Rs. 40 per Warrant, being 25% of share price of Rs. 160 to be issued upon exercise of option by the Warrant-holders) were forfeited and the Securities Premium Account of the Company increased by Rs. 42,000,000.

The aforesaid Warrants were allotted by the Company on February

10, 2015 to Promoters' Group Companies i.e. Baronet Properties and Investments Private Limited and Coronet Properties and Investments Private Limited (525,000 Warrants each) with an option to Warrant-holders to acquire one Equity Share of Rs. 10 each, of the Company at a conversion price of Rs. 160 per Equity Share. This option was to be exercised on or before August 9, 2016. SUBSIDIARY AND JOINT VENTURE COMPANIES As on March 31, 2016, your Company had the following subsidiaries:

1. Zicom SaaS Private Limited (wholly owned subsidiary);

2. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore (wholly-owned subsidiary);

3. Unisafe Fire Protection Specialists LLC, Dubai (step-down subsidiary);

4. Phoenix International WLL, Qatar (step-down subsidiary);

5. Unisafe Fire Protection Specialists India Private Limited (wholly-owned subsidiary); and

6. Zicom Security Projects Pte. Ltd., Singapore (wholly-owned subsidiary)

A statement containing salient features of the financial statement of subsidiaries for 2015-16 as required under Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 and amendment there under is provided in Annexure A hereto in prescribed Form AOC-1. In respect of foreign subsidiary companies, figures in rupees are converted from applicable foreign currency at appropriate exchange rate as on year end date. The Policy on Material Subsidiary as approved may be accessed on the Company's website at the link: http://beta.zicom.com/img/pdf/ZESSL-Policy on Material Subsidiary.pdf

T h e det ails of key subsidiaries and highlights of their workings are given below:

Zicom SaaS Private Limited

Zicom SaaS has turned up with excellent performance during the year under review, which is evident from the fact that it has posted Total Income of ' 481,987,014 (previous year Rs. 335,496,922) and Net Profit of Rs. 31,791,381 (previous year Rs. 13,293,907) for the financial year ended March 31, 2016. Thus, although in the topline of consolidated results, Zicom SaaS's contribution may not be substantial; in the consolidated bottomline its contribution has been noteworthy.

This subsidiary offers wide range of managed electronic security services (e-SaaS). The two focus areas for Zicom SaaS are Enterprise division and Make Your City Safe (MYCS) division, where it makes offering of Security as a Service (SaaS).

While Enterprise division, mainly caters to BFSI sectors (Banks, Financial Services and Insurance), the other two sectors where the business is picking up are Retail and Education. Making use of the latest technology, this division offers customized security services to enable management of business more effectively. Various solution packages are offered under e-SaaS (i.e. Security as a Service). The other division being run by Zicom SaaS is Make Your City Safe (MYCS). MYCS caters to housing & residential societies in Greater Mumbai and Pune cities in Maharashtra providing right choice of technology to residential sector without making capital expenditure. This is facilitated through monthly service fees (EMI form), which has increase the affordability of surveillance services to residential sector.

In addition, a safety app called "Ziman" launched by this subsidiary has received overwhelming response. Ziman leverages Zicom Command Centre (also being operated under Zicom SaaS) and offers a strong backend support and all-in-one mobile safety solution. Enthused by the success of free App of Ziman, the Company has also launched Ziman's paid offering.

Unisafe Fire Protection Specialists LLC, Dubai Unisafe Dubai is one of the major contributor to the consolidated topline and bottomline. However, on account of weakening of crude prices and consequential of slowdown of economy in entire Middle East, performance of Unisafe Dubai has suffered a setback. For the financial year ended March 31, 2016, Unisafe Dubai has posted Total Income of Rs. 5,137,190,113 (as compared to Rs. 5,443,255,742 in the previous year) and a Net Profit of Rs. 33,950,450 (as compared to Rs. 454,061,092 in the previous year). Unisafe Dubai, a leading fire protection company in Dubai, UAE, is a step-down subsidiary of your Company owned 41% by Unisafe Singapore, our wholly owned subsidiary and 8% directly by your Company, making total stake of Zicom Group in this Company at 49%; and the balance 51% is held by our local partner. However, Zicom Group has economic interest of 95% in Unisafe Dubai. It has got presence in seven Emirates, Qatar and Oman and has got exceptional track record of part performance. Its clientele ranges from Government to corporate, refineries, shopping malls and multistorey buildings, etc. to whom it provides comprehensive range of solutions from fire protection needs.

Phoenix International WLL, Qatar

For the financial year ended March 31, 2016, Phoenix Qatar, posted Total Income of Rs. 1,380,355,335 (as compared to Rs. 1,414,389,855 in the previous year) and a Net Profit of Rs. 30,363,148 (as compared to Rs. 143,754,604 in the previous year). This is another step-down subsidiary in which Zicom Group holds 49% stake; 44% by Unisafe Singapore and 5% by your Company. However, Zicom Group's entitlement in economic interest in Phoenix Qatar is 95%.

Like, Unisafe Dubai, Phoenix Qatar has also suffered a set-back in its operations for the same reason as explained under Unisafe Dubai above. However, extent of set-back in operations is less severe in case of Phoenix Qatar. This subsidiary has also substantial impact on consolidated topline and bottomline of the Company. Unisafe Fire Protection Specialists India Private Limited

This is a wholly-owned subsidiary in India which has also suffered adverse impact on its operations as can be seen from its working results for the financial year ended March 2016. Unisafe India has shown total income of ' 86,699,825 (previous year Rs. 169,419,928) and a Net Loss of Rs. 5,451,305 (previous year Net Loss Rs. 7,238,748) in the year under review.

This business focuses on catering to the needs of design and engineering requirements of fire protection business in Gulf region by acting as a Global Design Centre and also as a trader in fire safety and security equipments.

The turnover and profitability of this Company does not have much impact on consolidated results of the Company.

Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore and Zicom Security Projects Pte. Ltd., Singapore

Both these companies are Company's wholly-owned subsidiaries in Singapore, incorporated with a view to internationally align and consolidate present and future investments of the Group. The Group overseas investment in fire business falls under the umbrella of Unisafe Singapore acting as a holding company for all such ventures, whereas Zicom Singapore, aimed as a holding company for Group investment in international electronic security business.

CONSOLIDATED FINANCIAL STATEMENTS

As per Section n 134 of the Companies Act, 2013, your Company has provided the audited Consolidated Financial Statements for the year ended on March 31, 2016; together with Auditors' Report thereon forming part of this Annual Report, which includes financial information of all the subsidiaries. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. Pursuant to the provisions of the Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 and amendment thereof, a statement containing salient features of the financial statements of Company's Subsidiaries for financial year 2015-16 (in Form AOC-1) is appended as Annexure A hereto. Your Company has placed the audited annual accounts and related information of subsidiary companies on its website and same will be made available to the Members upon request.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors:

During the year under review, Mr. Vijay Kalantri (DIN: 00019510), Independent Director resigned from the Directorship of the Company w.e.f. December 17, 2015.

Further, Ms. Kunjan Trivedi (DIN: 07131011) whose term as a Whole-time Director of the Company ended on March 25, 2016, ceased to be Director effective from the said date. The Company is looking out for a suitable woman candidate having experience in IT Security Industry for the post of Director, whose experience and knowledge in the security industry will benefit the Company in its business growth.

In accordance with provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Manohar Bidaye (DIN: 00010699) is the Director liable to retire by rotation at the ensuing Annual General Meeting and has offered himself for re-appointment.

On December 18, 2015, Mr. Sanjeev Dayal (DIN: 03490363), was appointed as an Additional Director under Section 161 of the Companies Act, 2013 to hold office till the date of the ensuing Annual General Meeting. Mr. Dayal being eligible, has offered himself for appointment as an Independent Director, not liable to retire by rotation.

The first term of Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal, Independent Directors, appointed pursuant to Section 149 of the Companies Act, 2013, ended on March 31, 2016 and June 26, 2016 respectively. The Board of Directors at their meetings held on March 31, 2016 and June 26, 2016 appointed Mr. Hodavdekar and Mr. Dalal as Additional Directors, effective from April 1, 2016 and June 27, 2016 respectively; and proposed their appointments as Independent Directors for their second term, pursuant to Section 149 of the Act, for approval of the Members at the ensuing Annual General Meeting by Special Resolutions.

Pursuant to Section 161 of Companies Act, 2013, the Company has received requisite notices, in writing from Members proposing the candidature of Mr. Sanjeev Dayal, Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal for the office of Independent Directors, not liable to retire by rotation. Their appointments shall be subject to the approval of Members at the forthcoming Annual General Meeting

The brief profiles of Mr. Sanjeev Dayal, Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal are given in Notice of the Annual General Meeting and discussed at length in the Corporate Governance Report.

Your Directors recommend the above appointments for your approval.

Besides, subsequent to the year end, Mr. Venu Raman Kumar, a Non-Independent / Non-Executive Director resigned w.e.f. August 9, 2016.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under provisions of the Companies Act, 2013, Rules thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Mr. Pramoud Rao, Managing Director of the Company, whose remuneration package includes commission, is appointed as the Managing Director of Zicom SaaS Private Limited, a wholly owned subsidiary of the Company, w.e.f. March 30, 2015 and is entitled for remuneration from the said subsidiary as per terms of his remuneration approved. However, for the year under review,

Mr. Rao has neither received any commission from the Company nor has received any remuneration from the said subsidiary.

Key Managerial Personnel:

Ms. Kunjan Trivedi, Company Secretary was appointed as a Whole time Director of the Company on the Board for a period of one year, effective from March 26, 2015 and as such she ceased as a Director effective from March 25, 2016. However, she continues to be Company Secretary of the Company. In view of the above, the position of Key Managerial Personnel is as under:

BOARD EVALUATION

In accordance with the requirements of the Companies Act, 2013 and Listing Regulations, the Board evaluation process was carried out. The Board / Nomination and Remuneration Committee of Directors have laid down the criteria for evaluation of the performance of the Board, its Committees and individual Director. A structured questionnaire prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committee, Board procedures, development, e tc. was circulated to Directors for the purpose of evaluation.

The Board and Nomination and Remuneration Committee of Directors reviewed the performance of the individual Directors on the basis of set criteria's.

The Independent Directors, at its separate meeting, carried out performance evaluation of Board as a whole, its Committees, Chairman of the Company and Non-Independent Directors. The same was discussed in the Board meeting that followed the meeting of Independent Directors, at which performance of the Board, its Committees and individual Directors was also discussed. REMUNERATION AND NOMINATION POLICY The Board of Directors has framed a Policy which lays down the framework in relation to remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. This Policy also lays down criteria for selection and appointment of Board Member. The Policy is provided in Annexure B to this Report.

AUDITORS AND THEIR REPORT

At the previous Annual General Meeting held on September 29, 2015, M/s. Shyam Malpani & Associates, Chartered Accountants, Mumbai, were appointed as Statutory Auditors of the Company to hold office from that Annual General Meeting until the conclusion of the ensuing Annual General Meeting. On August 10, 2016, the Company received a communication from the Auditors informing that effective from July 22, 2016 the constitution of their Firm has been changed from proprietorship to partnership and also the name has changed from M/s. Shyam Malpani & Associates to

M/s. S M M P & Associates. In view of this, M/s. S M M P & Associates holds the office as Statutory Auditors of the Company till the ensuing Annual General Meeting and are eligible for re-appointment.

As required under provisions of Section 139 and Section 141 of the Companies Act, 2013, the Company has obtained a written consent and certificate from them in respect of the proposal for their re-appointment to the effect that their re-appointment, if made, would be in conformity with the criteria specified in the said sections. The Auditors' Report does not contain any qualification, reservation or adverse remark. Further, with regard to emphasis of matter as per clause IV in the Auditors' Report, your Directors wish to state that the said emphasis of matter read with Note No. 25.8 of Standalone Financial Statements is self-explanatory and does not require any further explanation. Your Directors would like to add that the said matter will not have any material adverse effect on the functioning of the Company.

The Board recommends the re-appointment of M/s. S M M P & Associates, Chartered Accountant, for your approval.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act,

2013 and Rules there under, the Company has appointed Ganesh Narayan & Co, Company Secretaries in Practice (CP No. 2238) to conduct Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith as Annexure C (as Form MR-3) to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013, based on the representations received from the operating management, your Directors hereby state that -

a) in preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) 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 as at March 31, 2016 and of the profit / loss of the Company for the year ended on that date;

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

d) The Directors have prepared the annual accounts on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

MEETINGS OF THE BOARD

Six (6) meetings of the Board of Directors were held during the year under review. For further details, please refer Section II (F) - Other provisions related to Board and Committees of the Corporate Governance Report forming part of this Report.

COMMITTEES OF THE BOARD

The details of the Committees of the Board constituted under the Companies Act, 2013 and Listing Agreement / Listing Regulations are given under Section III - Board Committees of the Corporate Governance Report forming part of this Report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided are given in the standalone financial statements. Further, following are the purposes for which the loans or guarantees or securities are proposed to be utilized by the recipient:

RELATED PARTY TRANSACTIONS

All transactions entered with related parties during the year 2015-16 were on arm's length basis and in the ordinary course of business and that the provision of Section 188(1) of the Companies Act, 2013 are not attracted. Hence the particulars to be disclosed in this regards in Form AOC-2 is Nil. Further, during the year under review, there were no material related party transactions.

The Audit Committee and the Board of Directors have approved the Related Party Transaction Policy, which has been prepared in consonance with provisions of Regulation 23 of the Listing Regulations and Companies Act, 2013. The same has been uploaded on the Company's website at the link: http://beta.zicom.com/img/pdf/ZESSL-Related Party Transaction Policy.pdf.

All Related Party Transactions are being placed before the Audit Committee for approval. Omnibus approvals are also obtained for transactions which are of repetitive nature. Such transactions are placed before the Audit Committee and Board (as required) for periodical review and approval.

VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has formulated Vigil Mechanism / Whistle Blower Policy for Directors and employees to report to the management about the unethical behavior, fraud or violation of Company's Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. The said Committee oversees implementation of the Whistle Blower Policy of the Company. The said Policy as approved may be accessed on the Company's website at the link: http://beta.zicom.com/img/pdf/ZESSL-Whistle Blower Policy.pdf.

MATERIAL CHANGES AND COMMITMENTS As informed under Finance Section above, subsequent to end of the year under review, on August 9, 2016, the Company has cancelled 1,050,000 Warrants due to non-exercise of the option by the Warrant-holders. As a result of same, the application money received upon allotment of said Warrants (calculated @ Rs. 40 per Warrant, being 25% of share price of Rs. 160 to be issued upon exercise of option by the Warrant-holders) were forfeited and the Securities Premium Account of the Company increased by Rs. 42,000,000.

Except for the above, there have not been any other material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on March 31, 2016 and the date of this Report.

RISK MANAGEMENT

The Company already has in place the system to inform the Board about the risk assessment and minimization procedure. The risk management system identifies and assesses various risks associated with the Company and its business and finds out and suggests measures to mitigate them. This also includes mechanisms for their proper and timely monitoring and reporting. In this regard, the Company has framed policy to identify and evaluate business risks, and to mitigate them. The Policy defines the risk management approach at various levels including documentation and reporting. The Policy helps in identifying risks trend, exposure and potential impact analysis at Company level and also separately for each business division of the Company. The risk management system is periodically evaluated by the Audit Committee / Board in the light of changing business scenario. Accordingly, new risks are identified, and modified mechanism & procedure for risk assessment and minimization are adopted to ensure that executive management controls risk by means of properly defined framework. Progress in this regard is periodically reported to Audit Committee / Board for their review and corrective actions, required if any. This is a continuous process which enables the Company to keep its risk management system updated and robust in view of fast changing economic and business scenario affecting the Company.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return of the Company as on the financial year ended on March 31, 2016, in Form MGT-9, as required under Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is appended herewith as Annexure D to this Report.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, together with a certificate from your Company's Auditors confirming compliance of the conditions of Corporate Governance as stipulated under Listing Regulations is appended herewith as Annexure G forming part of this Report.

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

Pursuant to the provisions of Section 134(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relevant information are given hereunder:

A. Conservation of Energy

The Company's operations include selling, distributing, marketing and installing of electronic security systems, gadgets and equipments and monitoring them; and as can be obs erved s uch operations do not involve much use of energy. However, your Company makes every possible effort to conserve energy at all levels of its operations.

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

At offices and workplaces, creating awareness among employees, contractual workers and customers about modes and means of energy saving through utilization of energy saving systems, devices and equipments; and inculcating a habit in them to strive for conservation and saving of energy.

The above has helped the Company in keeping its energy cost under control.

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

As the operations of your Company does not involve much use of energy, the possibility of using alternate source of energy as a measure of conservation of energy in its operations are minimal.

(iii) The capital investment on energy conservation equipments: No material capital investment on energy conservation equipments has been made during the year by your Company.

B. Technology Absorption

As your Company has not imported any technology, the required information to be provided in this regard is Nil. Your Company is continuously working on improving its indigenous products and software. Your Company continuously strives to provide electronic security systems, gadgets and equipments based on latest technology. Further, the details of expenditure incurred on the research and development are Nil.

C. Foreign Exchange Earnings and Outgo and Export Market Developments

Your Company has earned Rs. 112,352,810 (previous year Rs. 59,750,165) in foreign currency and has spent Rs. 204,676,978 (previous year Rs. 237,424,758) in foreign exchange during the year under review. The details of the same are available at Note No. 25.17 being Notes forming part of the Financial Statements.

PARTICULARS OF EMPLOYEES

The disclosure required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure E to this Report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 and amendment thereof, during the year under review, there was no employee under the employment of your Company, who was in receipt of remuneration of Rs. 12,000,000 (before notification Rs. 6,000,000) or more per annum, if employed for the entire year, or a remuneration of Rs. 850,000 (before notification Rs. 500,000) or more per month, if employed during any part of the said year. Hence, the information required to be furnished in this regard is Nil.

At present the Company does not have any Employee Stock Option Plan / Scheme nor does it have any live stock options pending to be exercised.

HUMAN RESOURCES

The Human Resource (HR) is truly a strategic business partner in the growth of your Company. Our HR philosophy is developed around the fundamental of creating value through our most valued resource "Zi-Champ" to drive profitable growth and make Zicom a preferred choice of employer. HR has developed and maintained friendly, transparent and professional work culture woven into the fabric of the company's environment with strong business ethics.

HR has time and again used innovation in hiring talent in Zicom. With usage of high end assessment tools and latest hiring channels like social media, campus selection, references (Talent Connect) and job portals, HR has hired the best talent from the industry at competent compensation & benefits. HR has created benchmark in the Fire and Security Industry by hiring the Engineers through Pool Campus Recruitment from Tier II and III cities.

In order to fulfill our vision of value creation, a number of developmental initiatives have been undertaken which interalia includes employee branding and a series of learning sessions from senior management within the organization which helps them to serve the customer well.

During the financial year under the review, HR organized Employee connect programs wherein the Zi-Champs were cross functionally bonded with each other and took up fun activities as a team. The most appreciated initiative was "Meet the Top" which helped Employees to connect and share ideas directly with respective Business Heads and Managing Director of the Company.

As on March 31, 2016 the total numbers of direct and indirect employees were standing at 171.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with provisions under the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted and also a CSR policy has been adopted by the Company.

Pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the requisite details on CSR is given under Annexure F appended to this Report.

A provision of Rs. 851,000 made during the year for CSR activities, however the said amount was unspent during the year under review.

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

Your Company follows current best practices in internal audit and risk management system. Internal Audit System monitors the adequacy and effectiveness of the internal control as per the policy and procedures framed and also under the supervision and guidance of the Audit Committee. It is supported by the enterprise resource planning platform for all business process.

All transactions are properly authorized, recorded and presented to the Management. Your Company observes all the accounting standards prescribed for proper maintenance of books of accounts and reporting of financial statements.

The Internal Control inter-alia facilitates:

- Review of long-term business and annual plans

- Adherence to applicable accounting standards and policies

- Periodic review and rolling forecasts

- Proper accounting and review mechanism

- Compliance with applicable statutes, listing requirement and internal policies and procedures

- Audit on concurrent basis, carried out by an internal auditor covering all statutes and compliance requirements

- IT systems with adequate in-built controls and security

GENERAL

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

1. Details relating to deposits covered under Chapter V of the Act.

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

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and its future operations.

5. The Company has in place policy as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no case was reported to the Committee constituted under the said Act.

ACKNOWLEDGMENTS

Your Directors wish to place on record their sincere appreciation and thanks for the valuable co-operation and support received from the employees of your Company at all levels, Company’s Bankers, lenders, suppliers, Government authorities, business partners and Members of the Company; and look forward for the same to even greater extent in the coming year.

For and on behalf of the Board of Directors

Manohar Bidaye

Chairman

Place: Mumbai

Date: August 12, 2016

Registered Office:

501, Silver Metropolis,

Western Express Highway,

Goregaon (East), Mumbai 400063.