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The Board of Directors is pleased to present the 26th Annual Report on the business and operations of your Company along with the audited statement of accounts and the Auditors
Report for the financial year ended March 31, 2019. The highlights of the financial results for the year under review are given below:
1. FINANCIAL RESULTS:
The Companys financial and operational performance for the year ended March 31, 2019 is summarized below:
(Amount in Rupees)
|Less: Total Expenditure||655,666,091||702,806,177|
|Profit before tax||18,900,626||16,537,813|
|Less: Provision for Tax||6,266,235||4,900,000|
|Profit after tax||12,634,391||11,637,813|
|Add: Brought forward P&L balance from prev. year||0||0|
|Profit available for Appropriation||12,634,391||11,637,813|
|Less: Transfer to General Reserve||12,634,391||11,637,813|
The audited financial statements for FY 19 are recommended for adoption by the shareholders at the ensuing Annual General Meeting (AGM).
2. TRANSFER TO RESERVES
During the financial year 2018-19 the Company has transferred INR 12,634,391 (profit after tax) to the general reserves.
3. STATE OF AFFAIRS
The Company had earned a profit of INR 12,634,391 from its operation during the year.
In view to expand the business of the company, the Directors of the Board do not recommend any dividend.
5. CHANGES IN SHARE CAPITAL, IF ANY
During the year under review, there has been no change in the authorized share capital of your Company.
As on 31st March 2019, the authorised capital of Company is INR 70,000,000 (Indian Rupees Seven Crore only) divided into 7,000,000 (Seventy Lakhs only) equity shares of INR 10/- (Indian Rupees Ten only).
Your Company has, during the year under review, issued 310,001 Bonus Equity Shares of INR 10 each in the ratio of 1:20 i.e. 1 (one) new equity bonus share i.e. 1 (One) each for every 20 (Twenty) existing equity shares of Rs 10/- each.
After considering the above bonus shares, Companys paid up share capital as on 31st March, 2019 is INR 65,100,150/- (Indian Rupees Six Crore Fifty One Lakhs One Hundred and Fifty only) divided into 6,510,015 (Sixty Five Lakh Ten thousand Fifteen only) equity shares of INR 10 each.
The detailed break-up of the share capital is furnished in Note-11 to the Notes to Accounts of the Audited Financial Statements of the Company.
6. EXTRACT OF ANNUAL RETURN:
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure A and is attached to this Report.
7. MEETINGS OF BOARD
During the FY 2018-19, the Board met 10 (Ten) times as against the minimum requirement of four (4) Board Meetings as per the Companies Act, 2013. The gap between two meetings did not exceed 120 days.
|Sr. No.||Name of Directors||
Number of meetings during the financial Year 2018-19
|Entitled to Attend||Attended|
|1||Mr. Sanjeev Kumar||10||8|
|2||Mr. Satish Kumar||10||10|
|3||Mr. Harpreet Singh||10||10|
|4||Mr. Pawan Sharma||1||1|
|5||Ms. Him Jyoti||10||2|
|6||Mr. Ashok Kumar Gupta||10||10|
|7||Mr. Narang Singh||10||1|
|8||Mr. Chander Sheel Baweja||10||2|
|9||Mr. Sanjay Dhir||10||10|
|10||Mr. Anurag Malhotra||10||10|
8. AUDIT COMMITTEE:
The Board has constituted the Audit Committee in terms of the requirements of the Companies Act, 2013. During the year Audit committee met 5 (Five) times.
The Audit Committee met on 25th May, 2018, 13th August, 2018, 25th August, 2018, 09th November, 2018 and 5th February, 2019 with the following members:
|S. No.||Name||Number of meetings during the financial year 2018-19|
|Entitled to Attend||Attended|
|1||Mr. Satish Kumar (cease to be member on 13.08.2018)||1||1|
|2||Mr. Pawan Sharma (Ceased to be Chairman & Member on 23.05.2018)||1||1|
|3||Mr. Ashok Kumar Gupta (Chairman & Member)||5||5|
|4||Mr. Anurag Malhotra (Member)||5||5|
|5||Mr. Sanjay Dhir (Member)||5||5|
9. NOMINATION AND REMUNERATION COMMITTEE
In order to comply with the provisions of Section 178 of the Companies Act, 2013, the
Board of Directors of your Company had already constituted "Nomination and Remuneration Committee".
Further, the policy formulated by the Nomination and Remuneration Committee on Directors Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matter provided under Sub-section (3) of Section 178 of the Companies Act, 2013, as adopted by the Board.
The committee met on 17th May, 2018 and 13th February, 2019 with following members:
Number of meetings during the Sr. No. Name financial year 2018-19 Entitled to Attend Attended
1 Mr. Pawan Sharma 1 1 (Ceased to be Chairman & Member on 23.05.2018)
2 Mr. Satish Kumar (Member) 1 1
2 Mr. Ashok Kumar Gupta 2 2 (Chairman & Member)
3 Mr. Chander Sheel Baweja 2 2 (Member)
10. STAKEHOLDER RELATIONSHIP COMMITTEE
The Board has constituted the stakeholder relationship Committee in terms of the requirements of the Companies Act, 2013. During the year stakeholder relationship committee met 4 times.
Number of meetings during the financial year 2018-19
|Entitled to Attend||Attended|
|1||Mr. Satish Kumar (Chairman)||4||4|
|2||Mr. Sanjeev Kumar (Member till 23.05.2018)||1||1|
|3||Ms. HimJyoti (Member)||4||4|
|4||Mr. Ashok Kumar Gupta (Member)||4||4|
|5||Mr. Anurag Malhotra (Member)||3||3|
11. DECLARATION OF INDEPENDENT DIRECTORS:
Mr. Narang Singh, Mr. Ashok Kumar Gupta, Mr. Chander Sheel Baweja and Mr. Anurag Malhotra are the Independent Directors on the Board of your Company. Based upon the confirmation/ disclosures received from Independent Directors, the Board is of the opinion that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 & the Rules made thereunder.
12. STATUTORY AUDITORS:
The Shareholders of the Company at the 23rd Annual General Meeting (AGM) held on 30th September, 2016 had appointed Vijay Darji and Associates, Chartered Accountants, Mumbai (Firm Registration No. 118614W) as the Statutory Auditors of the Company for one term of five consecutive years i.e. upto the conclusion of 28th AGM to be held in 2021, subject to ratification of their appointment by the members at every AGM of the Company.
However, the requirement to place the matter relating to ratification of appointment of Auditors by the members at every Annual General Meeting is done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, the matter for ratification of appointment of Auditors will not be placed before the members at the forthcoming Annual General Meeting of the Company.
13. AUDITORS REPORT:
M/s. Vijay Darji and Associates, Chartered Accountants (FRN: 118614W) have audited the accounts of your Company for the FY 2018-19 and their report is annexed together with the explanatory notes therein, which are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors Report does not contain any qualification, reservation or adverse remark.
14. INTERNAL AUDITORS:
M/s Anu & Associates, Chartered Accountants are the Internal Auditors of your Company,
The Internal Auditors have reviewed the design and operating effectiveness of various process covering the surveillance, operational, statutory compliances, business development, administrative, human resource, financial & accounting aspects of your Company.
The Internal Auditors were satisfied with the management response on the observation and recommendations made by them during the course of their audit and have expressed satisfaction with the internal systems, controls and process followed by your Company.
15. SECRETARIAL AUDITOR & REPORT
The Board of Directors of the Company had appointed Jaspreet Singh Dhawan; Whole-time Practicing Company Secretary to conduct the Secretarial Audit for the financial year 2018-19.
The Secretarial audit report for the financial year ended 31st March, 2019 is Annexure B to this Report.
The Observations given by Secretarial Auditor in his Secretarial Audit Report are self-explanatory and do not call for further explanations.
16. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134 (3) (c) of Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:
i. That in the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures.
ii. That 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 Profit of the Company for that period.
iii. That the Directors have taken proper and sufficient care for the maintenances of adequate accounting records in accordance with the provision of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. That the Directors have prepared the Annual accounts on a going concern basis.
v. That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating
vi. That the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
17. RESEARCH AND DEVELOPMENT:
As your Company is a trading company and not directly involved in any manufacturing activity, your Company is not directly involved in any Research and Development activities.
18. FOREIGN EXCHANGE EARNINGS & OUTGO:
The information required pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 on the foreign exchange earnings and outgo of the Company during the FY 2018-19 is given below:
|Foreign Exchange Earnings and Outgo|
|Particulars||Amount (In Rs.)|
|A-Foreign Exchange Earnings (Exports)||3,918,596.73|
|B- Foreign Exchange Outgo|
|1. Expense (Imports)||19,034,400|
|2. Dividend on Equity Shares|
|3. Dividend on Preference Shares (CCPS)|
Your Company had not invited any deposits from the public, and as such, no amount on account of principal or interest related thereto was outstanding as on the date of the Balance Sheet i.e. March 31, 2019.
20. PARTICULARS OF EMPLOYEES:
The ratio of remuneration of each Director to the median employees remuneration and other details in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure C.
Further, in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement containing particulars of employees as stipulated therein also forms part of this Directors Report as Annexure C.
21. BUY BACK OF SHARES:
During the year under review, your Company has not announced any scheme for buy back of shares from its shareholders.
22. CORPORATE GOVERNANCE:
The company falls under the criteria 15(2)(a) of the SEBI (Listing Obligations & Disclosure requirements) Regulations, 2015 as the Paid up capital of the company was below Rs. 10 Crores and net worth was below Rs. 25 Crores as on the last day of the previous financial year.
As on 31st March, 2018, the Companys Paid up Capital is of Rs. 62,000,140/- (Rupees Six Crore Twenty Lakhs One Hundred Forty only) and Net worth is of INR 70,138,811/- (Indian Rupees Seven Crore One Lakh Thirty Eight Thousand Eight Hundred and Eleven only).
Hence, compliance with Corporate Governance provisions as per Listing Obligations & Disclosure requirements (LODR) Regulations, 2015 are not applicable to company.
23. INDEPENDENT DIRECTORS MEETING/ BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of independent Directors was held on 13.03.2019, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.
24. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Board of Directors of the company is duly constituted. During the financial year 2018-19, there have been following changes in the position of Directors of the Company: Mr. Harpreet Singh is changed from Executive to Non- Executive Director with effect from 23rd May, 2018. Mr. Pawan Sharma Independent Director resigned from directorship w.e.f. 23rd May, 2018. Ms. Harmilan Kaur, Company Secretary resigned from the office w.e.f. 3rd October, 2018, and Ms. Bharti Sethi was appointed as Company Secretary on 4th October, 2018 in her place and thereafter she resigned from the office w.e.f. 7th December, 2018. Ms. Nayandeep Kaur then appointed as Company Secretary of the Company w.e.f. 8th December, 2018.
Mr. Sanjeev Kumar Managing Director, Mr. Sanjay Dhir, CFO and Ms Nayandeep Kaur, Company Secretary are Key Managerial personnels as on 31st March, 2019 as per the Companies Act, 2013.
In accordance with the provisions of Section 152 of the Companies Act 2013, Mr. Satish Kumar (DIN 00763060), Director of the company, will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Board has recommended his reappointment.
25. VIGIL MECHANISM AND WHISTLE BLOWER POLICY
The Board, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 has framed a "Whistle Blower and Anti-fraud Policy".
Your Company believes in highest possible standards of ethical practices, moral and legal conduct of business operations and to maintain these standards, the Company encourages its Directors and employees to come forward and freely communicate their concerns about illegal or unethical practices/ behaviour, actual or suspected, fraud or violation of companys code of conduct or ethic policy to the appropriate authority so that timely and speedy investigations can be undertaken and corrective action could be taken if warranted.
This Policy has been framed with a view to provide a mechanism inter alia enabling stakeholders, including Directors, individual employees of the Company to freely communicate their concerns about illegal or unethical practices and to report genuine concerns or grievance as also to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy.
The Policy provides for (a) adequate safeguards against victimization of persons who use this Mechanism; and provides (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company.
Details of the Whistle Blower and Anti-fraud Policy are made available on the Companys website www.zenlabsethica.com
26. SUBSIDIARIES/ ASSOCIATES/JOINT VENTURES
The Company has no subsidiary/Joint ventures/Associate Companies as per the provisions of Companies Act, 2013.
27. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNING AND OUTGO AS PER SECTION 217(1) COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988. Though the operations of your Company are not energy intensive, your Company takes adequate measures to reduce energy consumption by using energy-efficient lightning in office, computer systems and procuring energy-efficient equipments. As an on-going process, your Company continuously evaluates new technologies and techniques to make infrastructure more energy efficient. Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable.
28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The transactions entered into with related parties as defined under Companies Act, 2013 during the year were in the ordinary course of business and on arms length basis, and did not attract provisions of Section 188 of Companies Act, 2013. The details as required pursuant to clause (h) of sub section (3) of Section 134 of Companies Act, 2013 in Form A OC-2 attached herewith as per Annexure D.
29. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Your Company has, during the year under review, not given any loans, guarantees or provided security and has not made any investments in any body-corporate as specified under Section 186 of the Companies Act, 2013.
The particulars of loans, guarantees and investments have been disclosed in the financial Statements as on 31st March, 2019.
30. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of the report.
31. RISK MANAGEMENT POLICY
The Company has adopted a Policy on Risk Management to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the Companys business. In order to achieve the key objective, this Policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.
In addition to above, the Audit Committee of the Board has additional oversight in the area of financial risks and controls. Major risk identified by the business and functions are systematically addressed through mitigating actions on a continuous basis.
32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There were no significant and material orders passed by the Regulators or Courts or tribunals during the financial year which would impact the going concern status of the Company and its future operations.
33. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS
There are adequate systems of internal financial controls in the Company pursuant to provisions of Section 134(q) r/w Rule 8(5)(viii) of Companies (Accounts) Rules, 2014. The Board has adopted policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the companies Policies, the safeguarding of its assets, prevention and detection of frauds, and accuracy of the accounting records and timely preparation of financial disclosures.
The Company has appointed M/s Anu & Associates, Chartered Accountants, as Internal Auditors for the financial year 2019-20.
The Internal Auditor monitors and evaluates the efficiency and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.
Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committees of the Board.
34. CORPORATE SOCIAL RESPONSIBILITY
The Provisions of Section 134(3) (o) and Section 135 of the Companies Act, 2013 read with Rule 8 of Companies (CSR Policy) Rules, 2014 regarding corporate social responsibility do not apply to the company for the period under review.
35. DISCLOSURES UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company has put in place an Anti-Sexual Harassment mechanism in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year under review, the Company has not received any complaint pertaining to sexual harassment.
36. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and analysis report as per Regulation 34 of the SEBI (Listing Obligations & Disclosure requirements) Regulations, 2015 is annexed to this Board Report Annexure E.
Your Directors would like to express their appreciation for assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.
|For and on behalf of the Board|
|Zenlabs Ethica Limited|
|Sanjeev Kumar||Sanjay Dhir|
|Date: 27th August, 2019||Mg. Director||Wholetime Director|
|Place: Chandigarh||DIN: 01154896||DIN: 02452461|