Zenlabs Ethica Ltd Directors Report.

Dear Shareholders,

The Board of Directors is pleased to present the 29th 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, 2022. The highlights of the financial results for the year under review are given below:

1. FINANCIAL RESULTS:

The Company?s financial and operational performance for the year ended March 31, 2022 is summarized below:

(Rs. in Lakh)

Particulars 2021-22 2020-21
Operating Income 6,908.78 5,664.02
Other Income 8.73 12.41
Total Income 6,917.51 5,676.43
Less: Total Expenditure 6,791.36 5,590.43
Profit before tax 126.15 86.00
Less: Provision for Tax 43.90 9.26
Profit after tax 82.25 76.74
Other Comprehensive Income (121) 15.31
Total Comprehensive Income/expenses for the year 81.04 92.05
Earning per equity share(nominal value of shares Rs. 10 each)
Basic 1.26 1.18
Diluted 1.26 1.18

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.

Further, there has been no change in nature of business of the Company.

2. TRANSFER TO RESERVES

During the financial year 2021-22 the Company has transferred INR 82.25 Lakh (Profit after tax) to the general reserves.

3. DIVIDEND

Your Board has not recommended any Dividend on the Equity Shares of the Company for Financial Year ended March 31, 2022.

4. CHANGES IN SHARE CAPITAL, IF ANY

During the year under review, there has been no change in the authorized, issued, subscribed and paid up share capital share capital of the Company.

As on 31st March 2022, the authorized share capital of the Company is Rs. 7,00,00,000 (Rupees Seven Crore only) divided into 70,00,000 (Seventy Lakhs only) equity shares of Rs. 10/- (Rupees Ten only) and paid-up share capital is Rs. 6,51,00,150 (Rupees Six Crore Fifty One Lakhs One Hundred Fifty only) divided into 65,10,015 (Sixty Five Lakhs Ten Thousand Fifteen only) equity shares of Rs. 10/- (Rupees Ten only).

The detailed break-up of the share capital is furnished in Note-15 to the ‘Notes to Accounts? of the Audited Financial Statements of the Company.

5. ANNUAL RETURN

The Annual Return of the Company as on March 31, 2022 in Form MGT - 7 in accordance with Section 92(3) and Section 134(3)(a) of the Act as amended from time to time and the Companies (Management and Administration) Rules, 2014, will be made available on the website of the Company at https:// www.zenlabsethica.com.

6. MEETINGS OF BOARD

The Board met 8 times during the year under review. The details of such meetings is given below. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act.

The Attendance of the Directors at the Board Meetings are as under:

Name of Directors 26th May 2021 10th July 2021 22nd July 2021 3rd September 2021 30th October 2021 23rd November 2021 14th February 2022 31st March 2022
Mr.Satish Kumar - A A A NA NA NA NA
Mr.Harpreet Singh -

-

A A NA NA NA NA
Mr.Chander Sheel Baweja - NA NA NA NA
Mr.Sanjeev Kumar & A
Mrs. Him Jyoti A A A A A A A A
Mr.Ashok Kumar Gupta A A A A A A A

-

Mr. Sanjay Dhir A A A A A A A A
Mr.Anurag Malhotra S ? - S ? ? S ?
Mr. Kuldeep Singh A A A A A A A A

7. AUDIT COMMITTEE:

The Audit Committee of the Company is constituted in line with the provisions of Section 177 of the Act read with the rules made thereunder. The Committee comprises of members who possess financial and accounting expertise/exposure.

During the year under review, 5 Meetings of the Audit Committee were held as follows:

Meeting 1st Meeting 2nd Meeting 3rd Meeting 4th Meeting 5th Meeting
Date 26th May, 2021 22nd July, 2021 30th October, 2021 22nd November, 2021 14th February, 2022

Composition of the Committee and details of attendance of each Member at the Audit Committee Meetings are as follows:

S. No. Name DESIGNATION Number of meetings during the financial year 2021-22
Entitled to Attend Attended
1 Mr. Ashok Kumar Gupta (Chairman & Member) Independent Director Non Executive 5 5
2 Mr. Anurag Malhotra (Member) Independent Director Non Executive 5 5
3 Mr. Sanjay Dhir (Member) Executive Director 5 5

The Manager, Chief Financial Officer, Internal Auditors, Statutory Auditors and other senior executives of the Company attended the Audit Committee Meetings as invitees. The Company Secretary acts as the Secretary to the Audit Committee.

8. NOMINATION AND REMUNERATION COMMITTEE

The composition, powers, role and terms of reference of the Nomination and Remuneration Committee are in accordance with the requirements mandated under Section 178 of the Act. Apart from the above, the Committee also carries out such functions/responsibilities entrusted on it by the Board of Directors from time to time.

During the year under review, 3 (Three) Meetings of the Committee were held as follows:

Meeting 1st Meeting 2nd Meeting 3rd Meeting
Date 3rd July, 2021 3rd September, 2021 26th March, 2022

Composition of NRC and details of attendance of the Members at Meetings of the Committee are as follows:

Sr. No. Name Number of meetings during the financial year 2021-22
Entitled to Attend Attended
1 Mr. Ashok Kumar Gupta (Chairman & Member) 3 3
2 Mr. Chander Sheel Baweja (Member) 1 1
3 Mr. Satish Kumar (Member) 1 NIL
4 Mr. Anurag Malhotra (Member) 2 1
5 Mr. Kuldeep Singh (Member) 2 2

9. STAKEHOLDER RELATIONSHIP COMMITTEE

The composition, powers, role and terms of reference of the Committee are in accordance with the requirements mandated under Section 178 of the Act.

During the year stakeholder relationship committee met 8 times.

Sr. No. Name Number of meetings during the financial year 2020-21
Entitled to Attend Attended
1 Mr. Satish Kumar- (Chairman & Member) 5 5
2 Ms. Him Jyoti (Member) 8 7
3 Mr. Ashok Kumar Gupta (Member) 8 8
4 Mr. Anurag Malhotra (Chairman & Member) 8 6

* Mr. Satish Kumar (DIN: 00763060) resigned from the position of Directorship on 03/09/2021.

10. DECLARATION OF INDEPENDENT DIRECTORS:

All the Independent Directors of the Company have given their declarations to the Company under Section 149(7) of the Act that they meet the criteria of independence as provided under Section 149(6) of the Act and are not disqualified from continuing as Independent Directors. Based on the disclosures received, the Board is of the opinion that, all the Independent Directors fulfill the conditions specified in the Act and Listing Regulations and are independent of the management.

11. STATUTORY AUDITORS:

In terms of provisions of the Companies Act, 2013, M/s. N Kumar Chhabra & Co., Chartered Accountants, Chandigarh (Registration No.000837N), had been appointed as Statutory Auditors of the Company in the 28th Annual General Meeting held on September 30, 2021 to hold the office from the conclusion of the said Annual General Meeting until the conclusion of the 33rd Annual General Meeting to be held in year 2026.

Pursuant to Section 139 and 141 of the Act and relevant Rules prescribed thereunder, the Statutory Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Statutory Auditor of the company have audited the accounts of your Company for the FY 2021-22 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.

12. 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.

13. SECRETARIAL AUDITOR & REPORT

Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Jaspreet Dhawan & Associates, a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for year ended March 31, 2022.

The Report of the Secretarial Audit is annexed herewith as Annexure - A. The said Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks and disclaimer.

14. 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:

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.

15. 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.

16. 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 2021-22 is given below:

Foreign Exchange Earnings and Outgo
Particulars Current Year Previous Year
A-Foreign Exchange Earnings - 87,30,525.03
(Exports)
Total - 87,30,525.03
B- Foreign Exchange Outgo -
1. Expense (Imports) - 1,18,13,987.63
2. Dividend on Equity - -
Shares
3. Dividend on Preference

-

-

Shares (CCPS)
Total - 1,18,13,987.63

17. DEPOSITS:

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, 2022.

18. PARTICULARS OF EMPLOYEES:

The ratio of remuneration of each Director to the median employee?s 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 B.

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 B.

19. BUY BACK OF SHARES:

During the year under review, your Company has not announced any scheme for buy back of shares from its shareholders.

20. CORPORATE GOVERNANCE:

The company falls under the exemption criteria as provided under Regulation 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, 2022, the Company?s Paid up Capital is of Rs. 6,51,00,150/- (Rupees Six Crore Fifty One Lakhs and One Hundred Fifty only) and Net worth INR 9,37,46,000/- (Indian Rupees Nine Crore Thirty Seven Lakh Forty Six Thousand Only).

Hence, compliance with Corporate Governance provisions as per Listing Obligations & Disclosure requirements (LODR) Regulations, 2015 are not applicable to company.

21. 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 15.03.2022, performance of nonindependent 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.

22. DIRECTORS / KEY MANAGERIAL PERSONNEL APPOINTED / RESIGNED DURING THE FINANCIAL YEAR UNDER REVIEW AND UP TO THE DATE OF THIS REPORT:

During the period under review following changes took place in the composition of Board of directors and Key Managerial Personnel of company:

NAME DIN/PAN DESIGNATION DATE OF APPOINTMENT/ CHANGE IN DESIGNATION /CESSATION NATURE OF CHANGE
Mr. Chander Sheel Baweja 00763060 Independent Director 03/09/2021 RESIGNATION
Mr. Satish Kumar 00763060 Non-Executive, Non-Independent Director 03/09/2021 RESIGNATION
Mr. Harpreet Singh 00834180 Non-Executive, Non-Independent Director 03/09/2021 RESIGNATION
Ginny Uppal AEDPU1155P Company Secretary & Compliance officer 30/06/2021 RESIGNATION
Divya Gupta BFSPG1861D Company Secretary & Compliance officer 10/07/2021 APPOINTMENT

After the closure of financial year and before the date of signing of Board report following changes took place in the Key Managerial Personnel of company:

NAME DIN/PAN DESIGNATION DATE OF APPOINTMENT/ CHANGE IN DESIGNATION /CESSATION NATURE OF CHANGE
Divya Gupta BFSPG1861D Company Secretary & Compliance officer 03/06/2022 RESIGNATION
Tanvi Chhabra ARXPC9818N Company Secretary & Compliance officer 30/06/2022 APPOINTMENT

23. 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 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/ behavior, actual or suspected, fraud or violation of company?s 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 Company?s 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 Policy are made available on the Company?s website www.zenlabsethica.com.

24. SUBSIDIARIES/ ASSOCIATES/JOINT VENTURES

The Company has no subsidiary/Joint ventures/Associate Companies as per the provisions of Companies Act, 2013.

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered by the Company during FY 2021-22 with related parties were on an arm?s length basis and in the ordinary course of business. There were no material Related Party Transactions (RPTs) undertaken by the Company during the year that require Shareholders? approval under Section 188 of the Act. The approval of the Audit Committee was sought for all RPTs. Certain transactions which were repetitive in nature were approved through omnibus route. All the transactions were in compliance with the applicable provisions of the Act and SEBI Listing Regulations.

The details as required pursuant to clause (h) of sub section (3) of Section 134 of Companies Act, 2013 in Form ‘AOC-2? attached herewith as per Annexure C.

26. 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, 2022.

27. 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.

28. 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 Company?s 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.

29. 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.

30. 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 2021-22.

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.

31. 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.

32. 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.

33. 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 as per Annexure D.

34. STATEMENT REGARDING COMPLIANCE OF SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

35. ACKNOWLEDGEMENTS:

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
Sd/- Sd/-
Sanjeev Kumar Sanjay Dhir
Date: 05th September, 2022 Managing Director WholeTime Director
Place: Chandigarh DIN: 01154896 DIN: 02452461