The Board of Directors is pleased to present the 26th Annual Report on the business andoperations 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 financialresults for the year under review are given below:
1. FINANCIAL RESULTS:
The Company's financial and operational performance for the year ended March 31 2019is summarized below:
| || |
(Amount in Rupees)
|Particulars ||2018-19 ||2017-18 |
|Operating Income ||672952303 ||718384397 |
|Other Income ||1614414 ||959593 |
|Total Income ||674566717 ||719343990 |
|Less: Total Expenditure ||655666091 ||702806177 |
|Profit before tax ||18900626 ||16537813 |
|Less: Provision for Tax ||6266235 ||4900000 |
|Profit after tax ||12634391 ||11637813 |
|Add: Brought forward P&L balance from prev. year ||0 ||0 |
|Profit available for Appropriation ||12634391 ||11637813 |
|Less: Transfer to General Reserve ||12634391 ||11637813 |
The audited financial statements for FY 19 are recommended for adoption by theshareholders at the ensuing Annual General Meeting (AGM).
2. TRANSFER TO RESERVES
During the financial year 2018-19 the Company has transferred INR 12634391 (profitafter tax) to the general reserves.
3. STATE OF AFFAIRS
The Company had earned a profit of INR 12634391 from its operation during the year.
In view to expand the business of the company the Directors of the Board do notrecommend any dividend.
5. CHANGES IN SHARE CAPITAL IF ANY
During the year under review there has been no change in the authorized share capitalof your Company.
As on 31st March 2019 the authorised capital of Company is INR 70000000 (IndianRupees Seven Crore only) divided into 7000000 (Seventy Lakhs only) equity shares of INR10/- (Indian Rupees Ten only).
Your Company has during the year under review issued 310001 Bonus Equity Shares ofINR 10 each in the ratio of 1:20 i.e. 1 (one) new equity bonus share i.e. 1 (One) each forevery 20 (Twenty) existing equity shares of Rs 10/- each.
After considering the above bonus shares Company's paid up share capital as on 31stMarch 2019 is INR 65100150/- (Indian Rupees Six Crore Fifty One Lakhs One Hundred andFifty only) divided into 6510015 (Sixty Five Lakh Ten thousand Fifteen only) equityshares of INR 10 each.
The detailed break-up of the share capital is furnished in Note-11 to the Notesto 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 Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureA 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 requirementof four (4) Board Meetings as per the Companies Act 2013. The gap between two meetingsdid 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 theCompanies 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 09thNovember 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 andRemuneration Committee".
Further the policy formulated by the Nomination and Remuneration Committee onDirectors' Appointment and Remuneration including criteria for determiningqualifications positive attributes independence of a director and other matter providedunder 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 AttendAttended
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 therequirements of the Companies Act 2013. During the year stakeholder relationshipcommittee met 4 times.
|Sr. No. ||Name || |
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. AnuragMalhotra are the Independent Directors on the Board of your Company. Based upon theconfirmation/ disclosures received from Independent Directors the Board is of the opinionthat they meet the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 & the Rules made thereunder.
12. STATUTORY AUDITORS:
The Shareholders of the Company at the 23rd Annual General Meeting (AGM) held on 30thSeptember 2016 had appointed Vijay Darji and Associates Chartered Accountants Mumbai(Firm Registration No. 118614W) as the Statutory Auditors of the Company for one term offive consecutive years i.e. upto the conclusion of 28th AGM to be held in 2021 subject toratification of their appointment by the members at every AGM of the Company.
However the requirement to place the matter relating to ratification of appointment ofAuditors by the members at every Annual General Meeting is done away with videnotification 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 placedbefore 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 theaccounts of your Company for the FY 2018-19 and their report is annexed together with theexplanatory notes therein which are self-explanatory and therefore do not call for anyfurther explanation or comments from the Board under Section 134(3) of the Companies Act2013. The Auditors' Report does not contain any qualification reservation or adverseremark.
14. INTERNAL AUDITORS:
M/s Anu & Associates Chartered Accountants are the Internal Auditors of yourCompany
The Internal Auditors have reviewed the design and operating effectiveness of variousprocess covering the surveillance operational statutory compliances businessdevelopment administrative human resource financial & accounting aspects of yourCompany.
The Internal Auditors were satisfied with the management response on the observationand recommendations made by them during the course of their audit and have expressedsatisfaction 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-timePracticing Company Secretary to conduct the Secretarial Audit for the financial year2018-19.
The Secretarial audit report for the financial year ended 31st March 2019 is AnnexureB to this Report.
The Observations given by Secretarial Auditor in his Secretarial Audit Report areself-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 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
i. That in the preparation of the annual accounts the applicable accounting standardhad been followed along with proper explanation relating to material departures.
ii. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the Profit of the Company for that period.
iii. That the Directors have taken proper and sufficient care for the maintenances ofadequate accounting records in accordance with the provision of this Act for safeguardingthe 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 theprovisions 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
Proper systems are devised to ensure compliance with the provisions of all applicablelaws 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 manufacturingactivity your Company is not directly involved in any Research and Developmentactivities.
18. FOREIGN EXCHANGE EARNINGS & OUTGO:
The information required pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 on the foreign exchange earnings and outgo of theCompany during the FY 2018-19 is given below:
|Foreign Exchange Earnings and Outgo || |
|Particulars ||Amount (In Rs.) |
|A-Foreign Exchange Earnings (Exports) ||3918596.73 |
|Total ||3918596.73 |
|B- Foreign Exchange Outgo || |
|1. Expense (Imports) ||19034400 |
|2. Dividend on Equity Shares || |
|3. Dividend on Preference Shares (CCPS) || |
|Total ||19034400 |
Your Company had not invited any deposits from the public and as such no amount onaccount of principal or interest related thereto was outstanding as on the date of theBalance Sheet i.e. March 31 2019.
20. PARTICULARS OF EMPLOYEES:
The ratio of remuneration of each Director to the median employee's remuneration andother details in accordance with Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are forming part of this report as Annexure C.
Further in accordance with Section 197 (12) of the Companies Act 2013 read with Rule5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014a statement containing particulars of employees as stipulated therein also forms part ofthis 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 ofshares 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 belowRs. 10 Crores and net worth was below Rs. 25 Crores as on the last day of the previousfinancial year.
As on 31st March 2018 the Company's Paid up Capital is of Rs. 62000140/- (RupeesSix Crore Twenty Lakhs One Hundred Forty only) and Net worth is of INR 70138811/-(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 performanceBoard 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 allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors was held on 13.03.2019 performance ofnon-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent Directors at which the performance of the Board itscommittees 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 year2018-19 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 from23rd 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. 3rdOctober 2018 and Ms. Bharti Sethi was appointed as Company Secretary on 4th October2018 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 December2018.
Mr. Sanjeev Kumar Managing Director Mr. Sanjay Dhir CFO and Ms Nayandeep KaurCompany Secretary are Key Managerial personnel's as on 31st March 2019 as per theCompanies Act 2013.
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. SatishKumar (DIN 00763060) Director of the company will retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. Your Boardhas 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 readwith 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 andlegal conduct of business operations and to maintain these standards the Companyencourages its Directors and employees to come forward and freely communicate theirconcerns about illegal or unethical practices/ behaviour actual or suspected fraud orviolation of company's code of conduct or ethic policy to the appropriate authority sothat timely and speedy investigations can be undertaken and corrective action could betaken if warranted.
This Policy has been framed with a view to provide a mechanism inter alia enablingstakeholders including Directors individual employees of the Company to freelycommunicate their concerns about illegal or unethical practices and to report genuineconcerns or grievance as also to report to the management concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct orethics policy.
The Policy provides for (a) adequate safeguards against victimization of persons whouse this Mechanism; and provides (b) direct access to the Chairperson of the AuditCommittee of the Board of Directors of the Company.
Details of the Whistle Blower and Anti-fraud Policy are made available on the Company'swebsite www.zenlabsethica.com
26. SUBSIDIARIES/ ASSOCIATES/JOINT VENTURES
The Company has no subsidiary/Joint ventures/Associate Companies as per the provisionsof Companies Act 2013.
27. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNING AND OUTGO AS PER SECTION 217(1) COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES 1988. Though the operations ofyour Company are not energy intensive your Company takes adequate measures to reduceenergy consumption by using energy-efficient lightning in office computer systems andprocuring energy-efficient equipment's. As an on-going process your Company continuouslyevaluates new technologies and techniques to make infrastructure more energy efficient.Since your Company does not carry out any manufacturing activity the particularsregarding conservation of energy technology absorption and other particulars as requiredby 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 2013during the year were in the ordinary course of business and on arm's length basis and didnot attract provisions of Section 188 of Companies Act 2013. The details as requiredpursuant to clause (h) of sub section (3) of Section 134 of Companies Act 2013 in Form AOC-2' attached herewith as per Annexure D.
29. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
Your Company has during the year under review not given any loans guarantees orprovided security and has not made any investments in any body-corporate as specifiedunder Section 186 of the Companies Act 2013.
The particulars of loans guarantees and investments have been disclosed in thefinancial 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 theCompany between the end of the financial year of the Company to which the financialstatements relate and the date of the report.
31. RISK MANAGEMENT POLICY
The Company has adopted a Policy on Risk Management to ensure sustainable businessgrowth with stability and to promote a pro-active approach in reporting evaluating andresolving risks associated with the Company's business. In order to achieve the keyobjective this Policy establishes a structured and disciplined approach to RiskManagement in order to guide decisions on risk related issues.
In addition to above the Audit Committee of the Board has additional oversight in thearea of financial risks and controls. Major risk identified by the business and functionsare systematically addressed through mitigating actions on a continuous basis.
32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
There were no significant and material orders passed by the Regulators or Courts ortribunals during the financial year which would impact the going concern status of theCompany and its future operations.
33. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TOTHE FINANCIAL STATEMENTS
There are adequate systems of internal financial controls in the Company pursuant toprovisions of Section 134(q) r/w Rule 8(5)(viii) of Companies (Accounts) Rules 2014. TheBoard has adopted policies and procedures for ensuring orderly and efficient conduct ofits business including adherence to the companies Policies the safeguarding of itsassets prevention and detection of frauds and accuracy of the accounting records andtimely preparation of financial disclosures.
The Company has appointed M/s Anu & Associates Chartered Accountants as InternalAuditors for the financial year 2019-20.
The Internal Auditor monitors and evaluates the efficiency and adequacy of the internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies of the Company.
Based on the report of Internal Auditor process owners undertake corrective action intheir respective areas and thereby strengthen the controls. Significant audit observationsand recommendations along with corrective actions thereon are presented to the AuditCommittees of the Board.
34. CORPORATE SOCIAL RESPONSIBILITY
The Provisions of Section 134(3) (o) and Section 135 of the Companies Act 2013 readwith Rule 8 of Companies (CSR Policy) Rules 2014 regarding corporate socialresponsibility 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 theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
An Internal Complaints Committee has been set up to redress complaints receivedregarding 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 tosexual harassment.
36. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and analysis report as per Regulation 34 of the SEBI (ListingObligations & Disclosure requirements) Regulations 2015 is annexed to this BoardReport Annexure E.
Your Directors would like to express their appreciation for assistance and co-operationreceived from the financial institutions banks Government authorities customersvendors and members during the year under review. Your Directors also wish to place onrecord their deep sense of appreciation for the committed services by the executivesstaff 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 |