D. Terms/rights attached to equity shares
The Company has one class of equity shares having par value of ' 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
E. Equity shares movement during 5 years preceding March 31,2024
Equity shares issued as bonus
The Company allotted 7016975 equity shares of ' 10/- each as fully paid up bonus shares by capitalisation of profits transferred from Securities Premium amounting to ' 701.69 lakhs in the quarter ended September 30, 2019, pursuant to an ordinary resolution passed after taking the consent of shareholders through postal ballot.
Equity shares issued
The Company has issued 6,87,000 equity shares at the rate of '303 per equity shares which includes premium of ' 293 per equity shares on a Preferential basis to the non-promoter group category on 18.07.2023 fter taking approval of shareholders by passing a special resolution on 12.07.2023.
The Company has issued 6,00,000 equity shares at the rate of '280 per equity shares which includes premium of '270 per equity shares on a Preferential basis to the non-promoter group category on 16.09.2021 after taking approval of shareholders by passing a special resolution on 07.09.2021.
H. Employee Stock Option Scheme
• As on March 31,2024, the Company has in place the Employee Stock Option Scheme named Zota Health Care - Employee Stock Option Plan 2022' (“ZHL ESOP 2022"). The grant of options to the employee under the ZHL ESOP 2022 is on the basis of their performance and other eligibility criteria.
• Options granted under the ZHL ESOP 2022 can be exercised anytime within a period of 7 years from the date of grant.
• During the year ended March 31, 2024, under the ZHL ESOP 2022, the Company has granted 12,800 optioned to the eligible employee at the exercise price of ' 10/- each.
• During the year, the Company has debited to the Statement of Profit and Loss ' 34.87 lakhs towards the stock options granted to their employees, pursuant the ZHL ESOP 2022 scheme.
Nature and purpose of reserves:
1. Securities premium
Securities premium is created when shares are issued at premium. This is utilised in accordance with the provisions of the Companies Act, 2013.
2. Retained earnings
This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.
Cash Credit and Overdraft facilty have been taken from the various banks against the mortgage of property (branch office) situated at Bhagwan Aiyappa Complex, Pandesara, Surat and hypothecation of current assets as well as against the fixed deposits.
The monthly Returns or the Current Assets Statements filed by the Company with the Bank are in the agreement with the books of accounts.
As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Key Management personnel and their relatives is not ascertainable and, therefore, not included above.
The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash.
#For investment in equity instrument made in Prime Co-Op Bank, the cost (i.e. carrying value) represents the best estimate of fair value considering the nature of the investment.
"Considering the geopolitical situation in Nigeria, the Board has decided not to proceed further for incorporating wholly owned subsidiary in Nigeria, accordingly the provision for the investment in the said subsidiary has been reversed during the financial year.
Fair value of financial assets/liabilities measured at amortised cost
The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, current loans, other financial assets, trade payables, other financial liabilities are considered to be the same as their fair values, as they are current in nature.
6. Post employment employee benefits plans Gratuity
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement in terms of provisions of the Payment of Gratuity Act or as per the Company's Scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn base salary.
Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company's financial statements as at the Balance Sheet date:
1 Estimates of future salary increase are based on inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market. This assumption has been determined in consultation with the Company.
2 Discount Rate used for valuing liabilities is based on yields (as on valuation date) of Government Bonds with a tenure similar to the expected working lifetime of the employees.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.
vii) Risk exposure:
Gratuity is a defined benefit plan and Company is exposed to the Following Risks:
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage pay- out based on pay as you go basis from own funds.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
8. All known liabilities have been provided for in the books of accounts for the year under report.
9. Balances of depositors, sundry debtors, creditors and loans and advances are subject to confirmation and reconciliation.
10. The quantity and value of closing stock is certified by the management as true and correct.
11. Previous year's figures have been regrouped/recast wherever necessary to conform to current interim period's presentation.
12. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006
On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:
15. The Company does not have any contingent liabilities as on 31.03.2024 (Previous Year - Nil).
16. Operating Segment
Based on the “management approach” as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Company's performance and allocates resources based on an analysis of various performance indicators of business the segment/s in which the Company operates. The Company is primarily engaged in the business of manufacturing and marketing of Pharmaceutical products which the Management and CODM recognise as the sole business segment. Hence, disclosure of segment-wise information is not required and accordingly not provided.
17. the Company is primarily engaged in the business of manufacturing and marketing of Pharmaceutical products. The Company has adopted Ind AS 115 'Revenue from Contracts with Customers' effective 1 April 2018. The Company does not enter into contracts with customers and hence, the disclosures regarding Disaggregation of revenue and Performance obligations under Ind AS 115 are not provided.
18. The code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment benefits received Presidential assent in September, 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company is in the process of assessing the impact of the Code and will record the same, if any, in the year the Code becomes effective.
19. Financial Risk Management
The Company's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
The Company's financial liabilities comprise of trade payable and other liabilities to manage its operation and financial assets includes trade receivables, security deposit and loans and advances etc. arises from its operation.
The Company has established risk management policies and risk assessment processes to identify and analyse the risks faced by the Company and to reduce the risk to acceptable lower level by setting appropriate risk limits and controls, and to monitor such risks and compliance with the same.
Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer/counterparty to a contract fails to meet its contractual obligations, the maximum exposure to the credit risk at the reporting date is carrying value of trade receivables.
Credit risk are managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.
Trade receivables
The Company have low risk of non-recovery of its receivables as its working on franchise module in which good are sold only to contracted party due to this Company does not make any provision for doubtful debt any bad debt arise due to uncontrollable situation are written off at the year end.
Write off policy of Company include, indicator that there are no reasonable expectation of recovery and information about the policy for financial assets that are written-off but are still subject to enforcement activity.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due.
The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
The Company has Fixed Deposits with bank of ' 469.95 lakhs as on March 31,2024 as against ' 751.60 lakhs as on March 31, 2023.
Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company's exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.
Explanation for Change in the Ratio by more than 25% as compared to previous year:
1During the year the Company has taken loan from various banks for the working capital requirement and accordingly borrowings of the Company increased as compared to no debt in the preceding financial year.
2During the year the Company has taken loan from various banks for the working capital requirement, accordingly the Company has incurred the interest payments on the same as compared to no interest in the preceding year.
3As the Company's main object is to expand the Davainida network, the operational expenses during the year has surged and due to this net income during the year has declined as compared to the preceding financial year.
4As the Company's main object is to expand the Davainida network, the operational expenses during the year has surged and due to this net income during the year has declined as compared to the preceding financial year.
5As the Company's main object is to expand the Davainida network, the operational expenses during the year has surged which resulted in declining of net income and increase in current liability during the year as compared to the preceding financial year. Further during the year pursuant to allotment of equity shares and fully convertible warrants, equity and other equity have surged.
6As the Company's main object is to expand the Davainida network, the operational expenses during the year has surged which resulted in declining of net income during the year as compared to the preceding financial year. Further during the year pursuant to allotment of equity shares and fully convertible warrants, equity and other equity have surged.
27. Other Statutory Information
(i) The Title deeds of immovable properties are held in the name of the Company only.
(ii) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in crypto currency or virtual currency during the year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(b) Provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
(vii) The Company does not have layers of subsidiaries beyond the prescribed number with respect to the Companies (Restriction on number of layers) Rules, 2017.
(viii) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(ix) The Company does not have any transactions with companies struck off.
(x) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
29. These Financial Statements were authorised for issue in accordance with the resolution of the Board of Directors in its meeting held on 29th May, 2024.