zota health care ltd Directors report

Your directors are glad to present the Annual Report of the Company, accompanying the Audited statement of Accounts for the financial year ended 31 March, 2023.

CORPORATE INFORMATION

Our Company having been incorporated under the provisions of the Companies Act, 1956 and having the permanence presence in India since the year 2000. The Companys business vertices includes Manufacturing, Trading and Export of the Pharmaceutical Products. The Company caters both the domestic and the international markets.

FINANCIAL RESULTS

( in Lakhs)

Particulars	Standalone		Consolidated
	For The Year Ended 31 March, 2023	For The Year Ended 31 March, 2022	For The Year Ended 31 March, 2023	For The Year Ended 31 March, 2022
Revenue from operations	13836.60	13153.33	13995.69	13119.31
Other Income	255.87	164.56	195.61	163.04
Profit/ (loss) before tax and Exceptional Items	808.50	1419.14	(522.89)	1243.48
Exceptional Items	53.79	-	53.79	-
Profit/ (loss) before Taxation	862.29	1419.14	(469.10)	1243.48
Income Tax	204.68	368.84	204.69	368.85
Deferred Tax	1.75	7.71	96.51	16.13
Profit after Taxation	659.35	1058.01	577.28	890.76

DIVIDEND

The Board of Directors are gratified to recommend the final dividend at the rate of 10% i.e. 1/- per equity share for the financial year 2022-23. The dividend will be paid to all the entitled members within the time frame as specified in the Companies Act, 2013; if the same be approved in this Annual General Meeting.

INVESTOR EDUCATION AND PROTECTION FUND

During the financial year ended 31 March, 2023; the Company has transferred 14,466/- to the Investor and Education Protection Fund (‘IEPF) in respect of the unclaimed dividend of Company for financial year 2014-15. Further, there were no shares on which dividend has been unclaimed/unpaid for seven consecutive years; hence no shares were liable to be transferred to the IEPF Authority.

TRANSFER TO RESERVE

Considering the financial position of the company; company has not transferred any amount to its General Reserve for the financial year 2022-23.

STATEMENT OF COMPANYS AFFAIRS

The fiscal year 2022-23 has remained intact and in-line with the growth prospects set out in the fiscal year 2021-22. In light of the future requirements, the Company has improved the basic infrastructures which includes but not limited to shifting entire dispatch to the new third-party state-of-art modern central warehouse and plant upgradation exercise at Surat Special Economic Zone. The new central warehouse will helps company to take competitive edged in foreseeable future and deliver our goods to the customers at shorter period of time. Further, the upgraded plant at SEZ Plant will boost manufacturing efficiency and will also help us to get EU GMP approved the plant.

Due to infrastructural improvements during the fiscal year 2022-23 the overall performance of the Company has remained fiattish. The Revenues from operations in financial year 2022-23 grew by 5.2% YoY driven by higher revenue growth of Davaindia.

During the year, Revenues from Davaindia has been grew by 30.40% YoY and Revenues from Domestic business has remained subdued and the same has been declined marginally by (0.5%) on YoY basis. Revenue of Export business has been declined due to unviability of the plant due to plant upgradation exercise and the same has been declined by (18.1%) on YoY basis. During the year, EBITDA stood at 1056.81 Lakhs as compared to 1699.51 Lakhs during the preceding financial year. PAT stood at 659.4 Lakhs as compared to 1058.01 Lakhs during the preceding financial year due to high operation expenses of Davaindia. Performance of various business verticals of the Company during financial year 2022-23 is as below:

DOMESTIC BUSINESS*

During the year, with ever increasing awareness of generic drugs and larger network of Davaindia Generic Pharmacy Chain have pushed sales of Davaindia resulted in increased sales of Davaindia, helps to improve the overall sales of Domestic business. During the year, domestic Revenue was up by 12.14% on YoY basis at 11369.85 Lakhs. EBITDA was at 627.90 Lakhs due to optimized operational expenses of Davaindia and PAT was up by at 535.45 Lakhs in FY23.

*Here, Domestic business includes operations of DAVAINDIA.

EXPORT BUSINESS

During the year, the revenue from Export business has been declined on account of unviability of plant due to plant upgradation exercise carried out during the Q3FY243 & Q4FY23. In FY 23 Exports Revenues decreased by 18.1% at 2466.75 Lakhs. EBITDA at 428.91 Lakhs with healthy margins of 16.66% and PAT at 329.80 Lakhs for FY23.

DAVAINDIA

• During the FY22 Revenues from Davaindia operations has grown 30.39% on YoY at 5419.4 Lakhs.

• Davaindia has led the revolution of patients opting for generic medicines against branded counterparts. As of FY23, Davaindia has catered to more than 8.5 million happy customers.

• Davaindia expansions continues, in FY23 taking the total operational stores count to 594 which included 493 Franchisee Owned Franchisee Operated (FOFO) and 101 Company Owned Company Operated (COCO) stores, which are being operated by M/s Davaindia Health Mart Limited, the wholly owned subsidiary of the Company.

• A higher number of ~ 1,700 SKUs with around 100% of Private Label Products has enabled Davaindia to better serve customers across all segments.

• The company has adopted various marketing and communication channels like print, T.V and other mediums to increase top of the mind brand recall in the minds of the customers. This exercise that begun to gain traction and has witnessed wallet share increase among its users. Thus increasing its customer spends across varied price points. Quarter-wise number of customers severed and the average wallet spends have been increased QoQ basis during the FY23 are as below:

Particulars	Quarter Ended
	Q1-FY23	Q2-FY23	Q3-FY23	Q4-FY23
No. of Customers Served (in Lakhs)	6.4	7.6	8.6	9.4
Average Wallet Spends ()	248	254	269	268

Note: Figures shown herein above included operation of FOFO & COCO stores.

COVID-19 IMPACT ON BUSINESS

The Company has made assessment of the possible effects of COVID-19 pandemic on its current and future operations, liquidity position and cash flow using internal and external sources of information. The Company is continuously monitoring the impact of COVID-19 and does not see any significant impact on its operations and financial position as at 31 March, 2023.

MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR

After completion of financial year on 18 July, 2023; the Company has issued and allotted 6,87,000 equity shares on preferential basis to the persons covered under non-promoter group category at the rate of 303/- per equity shares, which included premium of 293/- per equity share, on the same date the Company has also issued and allotted 6,87,000 fully convertible warrants at the issue price of 303/- out of which 25% upfront money i.e. 75.75/- per warrant has already been received by the Company, balance 75% payment against the warrant has to be received within 18 months from the date of allotment. On receipt of full amount of warrant issue price, the warrant will be convertible into fully paid up equity share capital. Apart from this there are no Material changes occurred between the end of the financial year of the company to which the financial statements related and the date of the report, which is affecting the financial position of the company.

ANNUAL RETURN

The draft of the Annual Return as required under Section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 in Form MGT-7 is available on the Companys website viz. www.zotahealthcare.com

COMMENTS ON AUDITORS REPORT

The notes referred to in the Auditors Report are self-explanatory and they do not call for any further explanation, as required under Section 134 of the Companies Act, 2013.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the Company comprises of Twelve (12) directors; one Non-Executive Chairman, one Managing Director, three Whole-time Directors, one Additional Executive Director, one Additional Non-Executive Independent Director and remaining five being the Non-Executive Independent Directors. As on the date of this report, the composition of the Board of the company as follows:

Name of Directors	Category & Designation
Mr. Ketankumar Chandulal Zota	Non-Executive Chairman
Mr. Moxesh Ketanbhai Zota	Executive Managing Director
Mr. Himanshu Muktilal Zota	Executive Whole-Time Director
Mr. Manukant Chandulal Zota	Executive Whole-Time Director
Mr. Kamlesh Rajanikant Zota	Executive Whole-Time Director
Mrs. Varshabahen Gaurang Mehta	Non-Executive Independent Director
Mrs. Bhumi Maulik Doshi	Non-Executive Independent Director
Mr. Vitrag Sureshkumar Modi	Non-Executive Independent Director
Mr. Dhiren Prafulbhai Shah	Non-Executive Independent Director
Mrs. Jayshreeben Nileshkumar Mehta	Non-Executive Independent Director
Mr. Laxmi Kant Sharma*	Additional Executive Director
Mr. Dhaval Chandubhai Patwa*	Additional Non-Executive Independent Director

*Appointments of Mr. Laxmi Kant Sharma and Mr. Dhaval Chandubhai Patwa have been made after the completion of financial year 2022-23; on 26 August, 2023.

Pursuant to Sections 149, 152 and other applicable provisions of the Companies Act, 2013, one-third of the directors of the company are liable to retire by rotation, and if eligible, they can offer themselves for the re-appointment. In this Annual General Meeting Mr. Himanshu Muktilal Zota, Whole-Time Director of the Company is liable to retire by rotation and being eligible to offer himself for re-appointment.

As per Section 2(51) and 203 of the Companies Act, 2013; the Key Managerial Personnel (KMP) of the Company are as follows:

Name of Directors	Category & Designation
Mr. Moxesh Ketanbhai Zota	Managing Director
Mr. Himanshu Muktilal Zota	Whole-Time Director
Mr. Manukant Chandulal Zota	Whole-Time Director
Mr. Kamlesh Rajanikant Zota	Whole-Time Director
Mr. Viral Mandviwala	Chief Financial Officer
Mr. Ashvin Variya	Company Secretary
Dr. Sujit Paul	Chief Executive Officer

Dr. Sujit Paul as the Chief Executive Officer of the Company w.e.f. January 16, 2023. Apart from this during the year there was no change in the Key Managerial Personnel of the Company. \

MEETING OF THE BOARD OF DIRECTORS

The Board of Directors of the company have met Six (6) times during the year. Details of the same are stated as below:

Sr. No.	Date of Meeting	Board Strength	No. of Director Present
1	30/05/2022	10	10
2	13/08/2022	10	10
3	02/09/2022	10	10
4	14/11/2022	10	10
5	11/01/2023	10	10
6	13/02/2023	10	10

DEPOSITS

During the year, the Company has not accepted any deposits from public within the meaning of the Section 73 of the Companies Act, 2013.

RELATED PARTY TRANSACTION

The Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties. The Material Related Party Transactions approved by the Members of the Company are also reviewed/monitored on quarterly basis by the Audit Committee of the Company as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188 of the Companies Act, 2013 read with Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; entered by the Company during the financial year, were in ordinary course of business and at arms length basis. Details of the related party transactions made during the year are attached as Annexure-1 in form AOC-2 for your kind perusal and information.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Companys website and can be accessed at chrome- https://www. zotahealthcare.com/wp-content/uploads/2022/02/Policy-on-Related-Party-Transactions.pdf.

LOANS, GUARANTEES AND INVESTMENT

With reference to Section 134(3)(g) of the Companies Act, 2013; loans, guarantees and investments made by the company under Section 186 of the Companies Act, 2013 are furnished in the financial statements of the Company.

CORPORATE SOCIAL RESPONSIBILITY "Finding ourselves in the service of society"

In alignment with the purpose stated above our Company has from the very beginning of applicability of Corporate Social Responsibility, made and continuous to make and endeavor to cover maximum programs/initiatives for discharging the social responsibility. Over the years, under various Corporate Social Responsibility initiatives; the Company has mainly covered three main pillars of balanced social growth of the people that are Health, Education and Environment.

THE COMPANY DURING THE YEAR UNDER REVIEW YOUR COMPANY CONTINUED TO FOCUS ON THE ANIMAL WELFARE AND PROMOTING EDUCATION OBJECTIVES.

On the basis of receipt of recommendations from the Corporate Social Responsibility (‘CSR) Committee, the Board has framed the Corporate Social Responsibility Policy and adopted the same. The detailed CSR policy of the Company is available on the link: http://www. zotahealthcare.com/wp-content/uploads/2019/08/ Corporate_Social_Responsibility_Policy.pdf

The company has carried out varied CSR activities during the financial year 2022-23, the details of the same are as per Annexure -2. Corporate Social Responsibility Committee of the Board has met two (2) times during the last year. Details of the CSR committee meetings are stated as below:

Sr. No.	Date of Meeting	Strength of Committee	No. of Members Present
1	09/04/2022	3	3
2	29/07/2022	3	3

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company have given their duly signed declarations affirming that they have met the criterias of independence as specified under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In the opinion of Board, the Independent Directors of the company possess the integrity, requisite experience and expertise, relevant for the industry in which the company operates. All the Independent Directors of the Company have successfully registered with the Independent Directors Databank of the Indian Institute of Corporate Affairs. Apart from Mrs. Varshabahen Gaurang Mehta, Independent Director of the Company, who has got exemption from clearing the pro_ciency self- assessment test; the online proficiency self- assessment test as conducted by the said institute has been cleared by all the remaining Independent Directors.

NOMINATION AND REMUNERATION COMMITTEE

The Committee members including the Chairman of the Committee are Independent Directors. Composition of the Committee is as follows:

Mrs. Varshabahen Gaurang Mehta	- Chairman & Member
Mr. Dhiren Prafulbhai Shah	- Member
Mr. Jayshreeben Nileshkumar Mehta	- Member

During the year, the members of Committee met only once. Details of the Meetings are stated as below:

Sr. No.	Date of Meeting	Strength of Committee	No. of Members Present
1	03/01/2023	3	3

Terms of Reference of the Committee

• To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every Directors performance.

• To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

• The Nomination and Remuneration Committee shall, while formulating the policy ensure that:

• the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

• relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:

• Regularly review the Human Resource function of the Company.

• Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time.

• Make reports to the Board as appropriate.

• Review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.

• Any other work and policy, related and incidental to the objectives of the committee as per provisions of the Act and rules made there under.

• Any other terms of reference as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and under other applicable rules and regulations, if any.

• The Committee also administers the Companys Employee Stock Option Schemes formulated from time to time including "Zota- Employee Stock Option Plan- 2022" and takes appropriate decisions in terms of the concerned Scheme(s).

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

• Remuneration to Executive Directors:

The Board of Directors in its duly held meeting, after considering the recommendations received from Companys Nomination and Remuneration Committee, approve the remuneration to be payable to the executive directors of the Company. The remuneration of the executive directors is approved by considering varied norms like qualification, experience, responsibilities, value addition to the Company and financial position of the Company. The Board of Directors takes the permission of the members, if required, for payment of remuneration to the aforesaid directors.

• Remuneration to Non-Executive Directors:

During the year, apart from sitting fees Company has not paid any remuneration to the Non-Executive and Independent Directors.

The detailed policy on directors appointment and remuneration is available on the below link: http://www.zotahealthcare.com/wp-content/ uploads/2019/08/Policy_on_Appointment_and_ Remuneration_for_Directors_Key_Managerial_ Personnel_and_Senior_Management_Employee.pdf

AUDIT COMMITTEE

The members of Audit Committee of the Company including the Chairman are Independent Directors except Mr. Himanshu Muktilal Zota and possess requisite qualifications and strong financial knowledge. The composition of the Audit Committee as on date is as follows:

Mr. Vitrag Sureshkumar Modi	- Chairman & Member
Mrs. Varshabahen Gaurang Mehta	- Member
Mrs. Bhumi Maulik Doshi	- Member
Mr. Himanshu Muktilal Zota	- Member

During the year, Audit Committee has met four (4) times, details of the same are as stated below:

Sr. No.	Date of Meeting	Strength of Committee	No. of Members Present
1	30/05/2022	4	4
2	13/08/2022	4	4
3	14/11/2022	4	4
4	13/02/2023	4	4

The Whole term of references of audit committee are to recommend for appointment of the Statutory Auditor, Internal Auditor and Chief Financial Officer, approve related party transactions, examination of financial statements and auditors report, scrutinize inter corporate loans and investments, evaluation of Internal Financial Control and Risk Management, review and monitor auditors independence and performance and effectiveness of audit process, review Internal Audit Reports, monitor and review compliances of the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, monitor and review the utilization of fund raised through IPO, FPO, Right Issue and Preferential Issues and any other terms of reference as prescribed under Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and under other applicable rules and regulations, if any.

STAKEHOLDERS RELATIONSHIP COMMITTEE

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; and to solve the investors grievances, the Company has formulated the Stakeholder Relationship Committee; the composition of the Committee is as follows:

Mr. Jayshreeben Nileshkumar Mehta	- Chairman & Member
Mr. Manukant Chandulal Zota	- Member
Mr. Himanshu Muktilal Zota	- Member

During the year, Stakeholders Relationship Committee has met one (1) time, details of the meeting is as follows:

Sr. No.	Date of Meeting	Strength of Committee	No. of Members Present
1	29/03/2023	3	3

INDEPENDENT DIRECTORS MEETING

The Independent Directors met on 29 March, 2023, without the attendance of Non-Independent Directors. The Independent Directors reviewed the performance of Non-Independent Directors, the Committees and the Board as a whole along with the performance of the Chairman of the Company, taking into account the views of Executive Directors and assessed the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

VIGIL MECHANISM/WHISTLE BLOWER

The Company has established a Vigil Mechanism & a Whistle Blower System to deal with instances of fraud and mismanagement, if any. The policy has a systematic mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or policy and makes provision for direct access to the Chairman of the Audit Committee. The detailed Whistle Blower Policy & Vigil Mechanism available on below link: http://www.zotahealthcare.com/wp-content/ uploads/2019/11/VIGIL_MECHANISM.pdf

RISK MANAGEMENT

Risks are events, situations or circumstances which may lead to negative consequences on the Companys business. Risk Management is a structured approach to manage uncertainty. An enterprise wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework. As a formal roll-out, all business divisions and corporate functions will embrace Risk Management Policy and Guidelines, and make use of these in their decision making. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. Risk management process has been established across the Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives and all the major functions and revolves around the objectives of the organization. The risk management process over the period of time will become embedded into the Companys business system and processes, such that our responses to risk remain current and dynamic.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, your directors hereby confirm:

A. That in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departments;

B. 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 if the Company at the end of the financial year and of the profit and loss of the Company for that period;

C. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;

D. That the directors had prepared the annual accounts on a going concern basis;

E. 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;

F. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION

The performance evaluation of the Board, its Committees and the Independent Directors of the company were evaluated by the Board after obtaining inputs from all the directors on the fixed benchmark for the performance evaluation such as participation in strategy formulation and decision making; participation in Board and Committee meetings; Directions, views and recommendations given to the Company, etc.

The Board 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, 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 Performance evaluations of the Independent directors were done by the entire board, excluding the independent directors who were being evaluated did not participate in the same.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has a well-placed, proper and adequate internal financial control system which ensures that all the assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The internal audit covers a wide variety of operational matters and ensures compliance with specific standard with regards to availability and suitability of policies and procedures. During the year no reportable material weakness in the design or operation were observed.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS

No significant and material orders were passed by the regulators or the courts or tribunals impacting the going concern status and Companys operations in future.

REPORTING OF FRAUD BY AUDITORS

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor has reported to the Audit Committee any instances of fraud committed against the Company by its

Officers or Employees; the details of the same would need to be mentioned, if any, in the Directors Report.

CORPORATE GOVERNANCE

Your Company has incorporated the appropriate standards for the corporate governance. The Company has filed all the quarterly compliance reports on corporate governance within the due time line to the Stock Exchange, as specified in Regulation 27(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other Corporate Governance norms mentioned under the said regulation dully complied by the Company. Moreover, as per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 company gives the Corporate Governance Report in its Annual Report. Corporate Governance Report is as per Annexure - 3.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING

With reference to Section 134(3) (m) of the Companies Act, 2013, the details of conservation of energy, technology absorption and foreign exchange earnings are as per Annexure - 4.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an essential part of this Report.

SECRETARIAL AUDITOR

Your Board has appointed the PCS Ranjit Binod Kejriwal, as Secretarial Auditor of the Company for the period of 5 consecutive years starting from financial year 2021-22. Mr. Ranjit Binod Kejriwal is a peer reviewed auditor. The Secretarial Audit Report for the financial year 2022-23, which has been received from the PCS Ranjit Binod Kejriwal is attached as Annexure - 5. Report of the Secretarial Auditor is self-explanatory and need not any further clarification.

COST AUDITOR

During the year, as per the provisions of Section 148 of the Companies Act, 2013, Cost Audit is applicable for following businesses such as Coffee, Drugs and Pharmaceuticals, Insecticides, Milk Powder, Organic Chemicals, Other Machinery, Petroleum Products and Tea, etc. The Company has maintained and prepared the cost records. However, as the manufacturing unit of the Company is situated in Special Economic Zone, so the requirement of appointment of the Cost Auditor is not applicable to the Company.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

There was no employee drawing remuneration in excess of limits prescribed under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Disclosure pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 are as per Annexure - 6.

CEO & CFO CERTIFICATION

In terms of Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015; the CEO & CFO have certified to the Board of Directors of the Company with regard to the financial statements and other matters specified in the said regulation for the financial year 2022-23. The certificate received from CEO & CFO is attached herewith as per Annexure - 7.

CODE OF CONDUCT

The Board of Directors has formulated and adopted the Code of Conduct for Board of Directors and Senior Management Personnel from 30 May, 2018. During the year, Board of Directors and Senior Management Personnel has complied with general duties, rules, acts and regulations. In this regard the Board has received a certificate from the Chief Executive Officer as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the same is attached herewith as per Annexure - 8.

Code of Conduct for Board of Directors and Senior Management Personnel being effective from 30 May, 2018 is available on below link: http://www.zotahealthcare. com/wp-content/uploads/2019/08/Code_of_Conduct_ for_Board_Members_and_Senior_Management_ Personnel.pdf

CERTIFICATE ON CORPORATE GOVERNANCE

Corporate Governance is a set of process, practice and system which ensure that the Company is managed in a best interest of stakeholders. The key fundamental principles of corporate governance are transparency and accountability. At Zota, Companys core business objective is to achieve growth with transparency, accountability and with independency. Company has adopted various corporate governance standard and doing business in ethical way by which Company has enhance stakeholders trust, shareholders wealth creation by improving shares valuation, market capitalization, etc.

A certificate received from M/s Shivangi Parekh & Co., Chartered Accountants, Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance, as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith as per Annexure - 9.

SHARE CAPITAL

During the year, the Company has not issued and allotted any shares. However, after completion of financial year on 18 July, 2023; the Company has issued and allotted 6,87,000 equity shares on preferential basis to the persons covered under non-promoter group category at the rate of 303/- per equity shares, which included premium of 293/- per equity share, on the same date the Company has also issued and allotted 6,87,000 fully convertible warrants at the issue price of 303/- out of which 25% upfront money i.e. 75.75/- per warrant has already been received by the Company, balance 75% payment against the warrant has to be received within 18 months from the date of allotment. On receipt of full amount of warrant issue price, the warrant will be convertible into fully paid up equity share capital. Apart from this the Company has not issued any shares including shares with different rights, sweat equity shares or employee stock options. As on the date of this report the paid up Share Capital of the Company stood at 25.85 crores and on fully diluted basis it stood at 26.53 crores.

UTILISATION OF FUNDS

The details of utilization of funds raised through preferential allotment as at 31 March, 2023 are as below:

Original Object	Original allocation ( in Lakhs)	No. of Members Present( in Lakhs)
Expansion of DAVAINDIA Project	1500.00	1500.00
Working capital requirement	150.00	150.00
General Corporate Purpose	30.00	30.00

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year, no Company has become Subsidiary, Joint Venture and Associate Company of the Company and no Company has ceased as the Subsidiary, Joint Venture and Associate Company of the Company.

As at 31 March, 2023; The Company has two Wholly Owned Subsidiary Companies as below:

1) M/s Zota Healthcare Lanka (Pvt) Ltd (incorporated in Sri Lanka)

2) M/s DavaIndia Health Mart Limited

PERFORMANCE OF SUBSIDIARY COMPANIES Zota Healthcare Lanka (Pvt) Ltd

During the year under review Zota Healthcare Lanka (Pvt) Ltd has not commenced any commercial operations in Sri Lanka and the financial performance of the same are as below:

Particulars	Amount ( in Lakhs)
total assets	0.95
total revenues	0.00
total net profit	(0.08)

Davaindia Health Mart Limited

Davaindia Health Mart Limited (WOS) is engaged in the business of retail trading of pharmaceutical, nutraceutical, OTC, ayurvedic and cosmetic products. For the business purpose as stated above, the WOS has launched the Company Owned Company Operated (COCO) stores of Davaindia a retail generic pharmacy chain. The financial performance of the WOS for the financial year ended 31 March, 2023 are as below:

Particulars	Amount ( in Lakhs)
total assets	6619.11
total revenues	1460.95
total net loss	(1129.04)

CONSOLIDATED FINANCIAL STATEMENTS

The Statutory Auditor of the Company have provided the Consolidated Financial Statements of the company and the same is forming a part of this Report. The Consolidated Financial Statements includes financial statements of the following companies: M/s Zota Health Care Limited – Parent Company

M/s Zota Healthcare Lanka (Pvt) Ltd - Wholly Owned Subsidiary Company

M/s Davaindia Health Mart Limited - Wholly Owned Subsidiary Company

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries is given in Form AOC-1 which forms an essential part of this Report and is attached herewith as per

Annexure - 10.

MATERIAL SUBSIDIARY

The Company has formulated the Policy on Material Subsidiary, indicating therein the threshold limit of Material Subsidiary as specified under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, the Company does not have any Material Subsidiary. The Policy on Material Subsidiary is available on the Companys website and can be accessed from following link: http://www.zotahealthcare.com/wp-content/uploads/2019/08/Policy_on_Material_Subsidiary. pdf

ESOP PLAN

Pursuant to the approval of the Members at the Extraordinary General Meeting held on 17 February, 2023, the Company adopted the ‘Zota Health Care - Employee Stock Option Plan 2022 ("ZHL ESOP 2022"). With a view to reward the eligible and potential Employees for their performance and to motivate them to contribute to the growth and profitability of the Company. The Company also intends to use this Scheme to attract and retain talents in the organization. The Company views Employee Stock Options as a means that would enable the Employees to get a Share in the value they create for the Company in future. The Company has ‘Employee Stock Option Scheme namely, Zota Health Care - Employee Stock Option Plan 2022 ("ZHL ESOP 2022"), stock options under ZHL ESOP 2022 are yet to be granted.

The details of ZHL ESOP 2022 pursuant to SEBI (Share Based Employee Benefits and Sweat Equity), Regulations, 2021, as at 31 March, 2023 is uploaded on the website of the Company web link: https://www.zotahealthcare.com/wp-content/ uploads/2023/09/ESOP_Disclosure_2022-23.pdf. In terms of Regulation 13 SEBI (Share Based Employee Benefits and Sweat Equity), Regulations, 2021, the Certificate from PCS Ranjit Kejriwal, Secretarial Auditor, would be placed before the shareholders at the ensuing AGM and is also attached herewith as Annexure - 11.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility & Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of the Annual Report as an Annexure - 12 and is also made available on the Website of the Company at https://www.zotahealthcare.com/wp-content/ uploads/2023/09/Zota-AR23_BRSR.pdf

SEXUAL HARASSMENT OF WOMEN

The constitution of the Internal Complaints Committee of the company is in accordance with the provisions relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, there were no cases filed pursuant to the aforesaid Act.

OTHER DISCLOSURES

There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

CYBER SECURITY INCIDENT

During the year, there are no incidents of cyber security breach reported.

ACKNOWLEDGEMENT

We hereby sincerely recognize and admire the comprehensive support and cooperation of our Bankers, Auditors, RTA and members during the year.

For and on behalf of the Board

ZOTA HEALTH CARE LIMITED

	Sd\-	Sd\-
	Moxesh K. Zota	Himanshu M. Zota
Date: 4 September, 2023	(Managing Director)	(Whole-Time Director)
Place: Surat	(Din: 07625219)	(Din: 01097722)