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Zota Health Care Ltd.

BSE: 538426 Sector: Health care
NSE: ZOTA ISIN Code: INE358U01012
BSE 05:30 | 01 Jan Zota Health Care Ltd
NSE 00:00 | 26 Nov 358.50 -7.65
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Zota Health Care Ltd. (ZOTA) - Director Report

Company director report

Your directors are please to present the Annual Report of the Company accompanying theAudited statement of Accounts for the financial year ended March 312020.

CORPORATE INFORMATION:

The Company was incorporated under the provisions of the Companies Act 1956; havingbeen domiciled in India since the year 2000. The Company deals in Manufacturing &Trading of the Pharmaceutical Products. The Company caters both the domestic and theinternational markets.

FINANCIAL RESULTS

Particulars

Standalone

Consolidated

For the year Ended 31-03-2020 For the year Ended 31-03-2019 For the year Ended 31-03-2020 For the year Ended 31-03-2019
Revenue from operations 9511.27 8562.94 9511.27 8562.94
Other Income 151.30 154.47 151.30 154.47
Profit before tax and Exceptional Items 388.02 785.92 386.16 785.57
Exceptional Items - - - -
Profit before Taxation 388.02 785.92 386.16 785.57
Income Tax 105.60 234.77 105.60 234.77
Deferred Tax 6.40 (4.03) 6.40 (4.03)
Profit after Taxation 276.02 555.18 274.15 554.83

DIVIDEND

The Board of Directors are gratified to recommend the final dividend at the rate of 10%i.e. Re.1/- per equity share for the financial year 2019- 20.The dividend will be paid toall the entitled members within the time frame specified in the Companies Act 2013if thesame be approved in this Annual General Meeting.

INVESTOR EDUCATION ANDPROTECTION FUND:

Since no requirement arose during the year to transfer any amount to the Investor andEducation Protection Fund the company did not transfer any amount to the said fund.

TRANSFER TO RESERVE

Company did not propose any amount to be transferred to its General Reserve for thefinancial year 2019-20.

STATEMENT OF COMPANY'S AFFAIRS

Revenues in financial year 2019-20 grew by 11% YoY augmented by higher revenue growthof DAVAINDIA i.e. of 103%. Rise in employee and other expenses led to a fall in EBITDA by35% to Rs. 603 lakhs. PAT lower by 50% and stood at Rs. 275 lakhs led by increaseddepreciation. Performance of various business verticals of the Company during financialyear 2019-20 is as below:

DOMESTIC BUSINESS*:-

• In FY20 domestic revenue was up by 11% over the prior year.

• In FY20 EBITDA came in at Rs. 240 Lakhs with margins at 3.2%.

• PAT at Rs. 23 lakhs in FY20.

*Domestic revenue includes revenue of DAVAINDIA.

EXPORT BUSINESS:

• Exports revenues grew 10% at Rs. 1989 Lakhs in FY20 with better utilisationsand export to newer countries in FY20.

• EBITDA at Rs. 365 lakhs with healthy margins of 18.4% which was higher by440bps.

• PAT grew 23% at Rs. 265 lakhs for FY20 and PAT margins at 13%.

DAVAINDIA:

• Operationally Davaindia revenues are gaining traction are aligned as per themanagement's vision. Stronger growth in FY20 at 103%.

• The management's focus on DAVAINDIA expansions has been inline and isunderscored with addition of new stores in the state of Gujarat Maharashtra MadhyaPradesh and Uttar Pradesh taking the total stores count to 252 as at March 312020.

• A higher number of ~ 1338 SKU's has enabled Davaindia to better serve customersacross all ailment segments. Thus increasing its customer spends across varied pricepoints the average wallet spends was Rs. 159.

• The company has adopted various marketing and communication channels like printTV and other mediums to increase top of the mind brand recall in the minds of thecustomers. This exercise that begun to gain traction and has witnessed wallet shareincrease among its users.

COVID-19 IMPACT ON BUSINESS

Due to COVID-19 outbreak throughout the globe our manufacturing plant was remained shutfrom March 23 2020 to April 16 2020; due to this dispatches of goods to variouscountries have been affected.

Moreover due to lockdowns imposed in various states dispatches of the goods tocustomers have adversely impacted. However as per the different directives issued by thevarious government authorities the Company has resumed operations in phased manner w.e.f.April 17 2020. The Company has ascertained the impact of this pandemic and madeassessment that the impact of COVID-19 on company's business is likely to short to mediumterm. However as company is falling under essential commodities the company's businesswas not that affected as compared to overall economy.

The Company has done assessment of its liquidity position and expects to fully recoverthe carrying amount of receivables investments intangible assets and other assets. TheCompany has also evaluated the inventory in hands and found it's sufficient to honor thefuture orders. However at this stage it's uncertain to evaluate the duration of thepandemic if the current pandemic situation remains lasted for long period then the impactmay be different from the estimates.

MATERIAL CHANGES

Thereare no Material changes occurred between the end of the financial year of thecompany to which the financial statements related and the date of the report which isaffecting the financial position of the company.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as required under Section 92(3) of the Companies Act 2013and Rule 12 (1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed as (Annexure - 1)which forms an Essential part of this report. This Report isalso available on the Company's website viz. www.zotahealthcare. com

COMMENTS ON AUDITOR'S REPORT

The notes referred to in the Auditor's Report are self-explanatory and they do not callfor 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 ten (10) directors; one Non-Executive Chairmanone Managing Director three Whole-time Directors and remaining five being IndependentDirectors. As on the date of this report the Board of the company constitutes of thefollowing directors:

Name of Directors Category & Designation
Mr. Ketankumar Chandulal Zota Non-Executive Chairman
Mr. Moxesh Ketanbhai Zota Executive Managing Director
Mr. HimanshuMuktilal 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

During the year Mr. Shailesh Sevantilal Shah and Mr. Mahesh Mavjibhai Prajapati wereceased from the directorship of the Company due to completion of their term as theNon-Executive Independent Directors. Further in place of ceased directors members of thecompany in its 19th Annual General Meeting held on September 212019 have appointed Mr.Dhiren Prafulbhai Shah and Mrs. Jayshreeben Nileshkumar Mehta as the Non-ExecutiveIndependent Directors. The Board of Directors of the Company in its meeting held on May30 2019 have appointed Mrs. Bhumi Maulik Doshi and Mr. Vitrag Sureshkumar as theAdditional Non-executive Independent

Directors of the Company further their appointments have been regularized by themembers in 19th Annual General Meeting of the company duly held and conducted on September212019.

Pursuant to Sections 149 152 and other applicable provisions of the Companies Act2013 one-third of the directors of the company are liable to retire by rotation and ifeligible they can offer themselves for the re-appointment. In this Annual General MeetingMr. Himanshu Muktilal Zota Whole-time Director of the Company is liable to retire byrotation 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

MEETING OF THE BOARD OF DIRECTORS:

The Board of Directors of the company have met ten (10) times during the year. Detailsof the same are stated as below:

Sr. No. Date of Meeting Board Strength No. of Director Present
1 10/05/2019 8 6
2 30/05/2019 10 8
3 10/06/2019 10 8
4 15/07/2019 10 9
5 29/07/2019 10 9
6 21/08/2019 10 8
7 23/09/2019 10 10
8 14/11/2019 10 9
9 03/12/2019 10 10
10 07/02/2020 10 9

DEPOSITS

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

RELATED PARTY TRANSACTION

With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188 of the Companies Act 2013 read withRegulations 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015; entered by the Company during the financial year were in ordinary course ofbusiness and at arm's length basis. Details of the related party transactions made duringthe year are attached as Annexure-2 in form AOC-2 for your kind perusal and information.

LOANS GUARANTEES AND INVESTMENT

With reference to Section 134(3)(g) of the Companies Act 2013; loans guarantees andinvestments made by the company under Section 186 of the Companies Act 2013 are as below:

Dale of transaction Name of the Company Purpose of Transaction Amount involved in Transaction
1 Earlier year Prime Co-op .Bank Investment in equity shares 100
2 03/12/2019 DavaIndia Health Mart Limited Subscription 1000000
3 16/02/2019 Zota Healthcare Nig. Ltd. * Subscription 197300
4 07/06/2018 Zota Healthcare Lanka (Pvt) Ltd Subscription 86680

* Incorporation of Zota Healthcare Nig. Ltd. is under process.

CORPORATE SOCIAL RESPONSIBILITY

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

The company has carried out varied CSR activities during the financial year 2019-20the details of the same are as per Annexure - 3. Corporate Social Responsibility Committeeof the board has met two (2) times during the last year. Details of the CSR committeemeetings are stated as below:

Dale of Meeting Strength of Committee No. of Members Present
1 12/06/2019 3 3
2 21/03/2020 3 3

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors had given duly signed declarations; stating that they metthe criteria's of independence as provided in Section 149(6) of the Companies Act 2013and Regulations 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 theintegrity requisite experience and expertise relevant for the industry in which thecompany operates. Further all the Independent Directors of the Company have successfullyregistered with the Independent Director's Databank of the Indian Institute of CorporateAffairs. The online proficiency self- assessment test conduct by the said institute is yetto be passed by them.

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to the provisions of Section 178 of the Companies Act

2013 read with Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015; the Company has formulated nomination and remunerationcommittee comprising of three non-executive directors Composition of the Committee is asfollows:

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

During the year three (3) meetings of the nomination and remuneration committee wereheld. Details of the Meetings are stated as below:

Date of Meeting Strength of Committee No. of Members Present
1 21/05/2019 3 2
2 14/08/2019 3 2
3 21/09/2019 3 2

Term of Reference of the Committee

• To identify persons who are qualified to become Directors and who may beappointed in senior management in accordance with the criteria laid down recommend to theBoard their appointment and removal and shall carry out evaluation of every Director'sperformance.

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

• The Nomination and Remuneration Committee shall while formulating the policyensure that:

• the level and composition of remuneration is reasonable and sufficient toattract retain and motivate Directors of the quality required to run the Companysuccessfully;

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

• remuneration to Directors Key Managerial Personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance 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 delegatedto 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 anyproposed changes to the Board for approval from time to time.

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

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

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

• Remuneration to Executive Directors:

The Board of directors in its duly held meeting after considering the recommendationsreceived from Company's

Nomination and Remuneration Committee approve the remuneration to be payable to theexecutive directors of the Company. The remuneration of the executive directors isapproved by considering varied norms like qualification experience responsibilitiesvalue addition to the Company and financial position of the Company. The board ofdirectors takes the permission of the members if required for payment of remuneration tothe aforesaid directors.

• Remuneration to Non-Executive Directors:

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

The detailed policy on directors' appointment and remuneration is available on thebelow link: http://www.zotahealthcare.com/ wpcontent/uploads/2019/08/Policy onAppointment and Remuneration for Directors Key Managerial Personnel and Senior ManagementEmplovee.pdf

AUDIT COMMITTEE:

Pursuant to requirement of Section 177(1) of the Companies Act 2013 read withRegulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015; the Company has formulated Audit Committee. The composition of the Audit Committeeas 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 asstated below:

Sr. No. Date of Meeting Strength of Committee No. of Members Present
1 30/05/2019 3 2
2 17/08/2019 4 4
3 14/11/2019 4 4
4 07/02/2020 4 4

The Whole term of references of audit committee are to recommend for appointment of theStatutory Auditor Internal Auditor and Chief Financial Officer approve related partytransactions examination of financial statements and auditor's report scrutinize intercorporate loans and investments evaluation of Internal Financial Control and RiskManagement review and monitor auditors independence and performance and effectiveness ofaudit process review Internal Audit Reports monitor and review compliances of theprovisions of the SEBI (Prohibition of Insider Trading) Regulations 2015 monitor andreview the utilization of fund raised through IPO FPO Right Issue and PreferentialIssues and any other terms of reference as prescribed under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and under other applicable rules andregulations if any.

STAKEHOLDERSRELATIONSHIP COMMITTEE

Pursuant to the provisions of Section 178 of the Companies Act

2013 read with Regulation 20 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015; and to solve the investor's grievancesthe Company hasformulated Stakeholder Relationship Committee. 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 three (3) times detailsof the meetings are as follows:

Sr. No. Date of Meeting Strength of Committee No. of Members Present
1 24/06/2019 3 2
2 08/01/2020 3 3
3 16/03/2020 3 3

VIGIL MECHANISM

The Company has established a Vigil Mechanism to deal with instances of fraud andmismanagement if any. The policy has a systematic mechanism for directors and employeesto report concern about unethical behavior actual or suspected fraud or violation of theCompany's Code of Conduct or policy. The detailed Whistle Blower Policy & VigilMechanism available on below link: http://www.zotahealthcare.com/wp-content/uploads/2019/11/VIGILMECHANISM.pdf

RISK MANAGEMENT

Risks are events situations or circumstances which may lead to negative consequenceson the Company's business. Risk Management is a structured approach to manage uncertainty.An enterprise wide approach to Risk Management is being adopted by the Company and keyrisks will now be managed within a unitary framework. As a formal roll-out all businessdivisions and corporate functions will embrace Risk Management Policy and Guidelines andmake use of these in their decision making. Key business risks and their mitigation areconsidered in the annual/strategic business plans and in periodic management reviews. Therisk management process over the period of time will become embedded into the Company'sbusiness 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 directorshereby confirm:

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

B. 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 if the Company at the end of thefinancial 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 ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company for preventing and detecting fraud and other irregulations;

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 thecompany and that such internal financial controls are adequate and were operatingeffectively;

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

BOARD EVALUATION

The performance evaluation of the board its Committees and the Independent directorsof the company was evaluated by the board after seeking inputs from all the directors onthe basis of the criteria such as participation in strategy formulation and decisionmaking; participation in Board and Committee meetings; Directions views andrecommendations given to the Company etc.

The board reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In addition the chairman was also evaluated onthe key aspects of his role.

In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The Performance evaluations of the Independent directors were done by theentire board excluding the independent directors who were being evaluated did notparticipate in the same.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has a well-placed proper and adequate internal financial control systemwhich ensures that all the assets are safeguarded and protected and that the transactionsare authorized recorded and reported correctly. The internal audit covers a wide varietyof operational matters and ensures compliance with specific standard with regards toavailability and suitability of policies and procedures. During the year no reportablematerial 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 ortribunals impacting the going concern status and Company's operations in future.

REPORTING OF FRAUD BY AUDITOR'S

During the year under review neither the Statutory Auditor nor the Secretarial Auditorhas reported to the Audit Committee any instances of fraud committed against the Companyby its Officers or Employees the details of the same would need to be mentioned if anyin the Director's Report.

CORPORATE GOVERNANCE:

Your Company has incorporated the appropriate standards for the corporate governance.During the year the Company has migrated from SME platform (NSE EMERGE) to the main boardof National Stock Exchange (NSE) w.e.f. August 19 2019. Pursuant to Regulation 15(2) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the SME's arenot required to mandatorily comply with the provisions of certain regulations of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and as the companywas SME listed prior to the said date of migration to the main board of NSE company hasnot filed the Corporate Governance Report for the quarters ended prior to and on June 302019 to the Stock Exchange. However the Company has complied with major requirements ofCorporate Governance norms. Further post Migration of the Company to the main board ofNSE Company has filed all the quarterly compliance reports on corporate governance withinthe 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 otherCorporate Governance norms mentioned under the said regulation dully complied by theCompany. Moreover as per Regulation 34(3) read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 company gives the corporategovernance report in its annual report. Corporate Governance Report is as per Annexure -4.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING

With reference to Section 134(3) (m) of the Companies Act 2013 the details ofconservation of energy technology absorption and foreign exchange earnings are as perAnnexure - 5.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

SECRETERIAL AUDITOR

Your board has appointed the PCS Ranjit Kejriwal as secretarial Auditor of the companyfor the period of 5 consecutive years starting from financial year 2016-17. TheSecretarial Audit Report for the financial year 2019-20 which has been received from thePCS Ranjit Kejriwal is attached as Annexure - 6. Report of the Secretarial Auditor isself-explanatory and need not any further clarification.

COST AUDITOR

During the year as per the provisions of Section 148(1) of the Companies Act 2013the Company has maintained and prepared the cost records. However as the manufacturingunit of the Company is situated in Special Economic Zone so requirement of appointment ofthe 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 Section197(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 Disclosurepertaining to remuneration as required under section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 are as per Annexure - 7.

CEO/ CFO CERTIFICATION

In terms of Regulation 17(8) of the SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015; the CFO has certified to the Board of Directors of theCompany with regard to the financial statements and other matters specified in the saidregulation for the financial year 2019-20. The certificate received from CFO is attachedherewith as per Annexure - 8.

CODE OF CONDUCT

The Board of Directors has formulated and adopted the Code of Conduct for Board ofDirectors and Senior Management Personnel from May 30 2018. During the year Board ofDirectors and Senior Management Personnel has complied with general duties rules actsand regulations. In this regard certificate from Managing Directors as required underSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 hasbeen received by the Board and the same is attached herewith as per Annexure - 9.

Code of Conduct form Board of Directors and Senior Management Personnel effective fromMay 30 2018 is available on below link: http://www.zotahealthcare.com/wpcontent/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 theCompany is managed in a best interest of stakeholders. The key fundamental principles ofcorporate governance are transparency and accountability. At Zota Company's core businessobjective is to achieve growth with transparency accountability and with independency.Company has adopted various corporate governance standard and doing business in ethicalway by which Company has enhance stakeholders trust shareholders wealth creation byimproving 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 conditionsof Corporate Governance as required under Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached herewith as per Annexure - 10.

SHARE CAPITAL

During the year the Company has issued Bonus Equity Shares amounting Rs. 70169750on July 29 2019 in the ratio of 4:10 [i.e. 4 (Four) fully paid up equity shares forevery 10 (Ten) equity shares held]. Apart from this Companyhas not issued any shares withdifferent rights sweat equity shares or employee stock options. As on the date of thisreport the paid up Share Capital of the Company stood at Rs. 24.56 crores.

SUBSIDIARIES JOINT VENTURE AND ASSOCIATE COMPANIES

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 anycommercial operations in Sri Lanka and the financial performance of the same are as below:

Particulars Amount (in Rs.)
total assets 72422
total revenues NIL
total net loss (19290)

DavaIndia Health Mart Limited

During the year the Company has incorporated DavaIndia Health Mart Limited as a whollyowned subsidiary company. During the year under review DavaIndia Health Mart Limited hasnot commenced any commercial operations and the financial performance of the same are asbelow:

Particulars Amount (in Rs.)
total assets 1010000
total revenues NIL
total net loss (166184)

CONSOLIDATED FINANCIAL STATEMENTS

The Statutory Auditor of the Company have provided the Consolidated FinancialStatements of the company and the same is forming a part of this Report. The ConsolidatedFinancial Statements includes financial statements of the following companies:

M/s Zota Health Care Limited - Parant 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 financialstatements of Subsidiaries is given in Form AOC-1 which forms an essential part of thisReport and is attached herewith as per Annexure - 11.

MATERIAL SUBSIDIARY

The Company has formulated the Policy on Material Subsidiary indicating therein thethreshold limit of Material Subsidiary as specified under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. During the year the Company does not haveany Material Subsidiary. The Policy on Material Subsidiary is available on the Company'swebsite and can be accessed from following link: http://www.zotahealthcare.com/wp-content/uploads/2019/08/Policyon Material Subsidiary.pdf

BUSINESS RESPONSIBILITY REPORT

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Business Responsibility Report describing the initiatives taken bythe Company from an environmental social and governance perspective is attached as a partof the Annual Report and is attached herewith as per Annexure - 12.

SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI)

The Company complies with all applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India (ICSI).

SEXUAL HARASSMENT OF WOMEN

The constitution of the Internal Complaints Committee of the company is in accordancewith the provisions relating to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. During the year there were no cases filed pursuantto the aforesaid Act.

ACKNOWLEDGEMENT:

We hereby appreciates and acknowledges the full support and coordination of ourBankers Auditors RTA and members during the year.

Place: Surat For the Board of Director
Date: 25.08.2020 ZOTA HEALTH CARE LIMITED
Sd/- Sd/-
Moxesh Ketanbhai Zota Himanshu Muktilal Zota
Managing Director Whole-time Director
DIN:07625219 DIN:01097722

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