Zim Laboratories Ltd

The Board of Directors of our Company has pleasure in presenting the Board Report pursuant to Section 134(3) of the Companies Act, 2013, comprising the prescribed particulars and information as per the Companies (Management and Administration) Rules, 2014, and the Companies (Accounts) Rules, 2014, in respect of the year ended 31^st March, 2024, as follows:

a) Number of Meetings of the Board: 11

Pursuant to Section 134(5) of the Companies Act, 2013 (Act) our Directors hereby state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with a proper explanation relating to material departures.

ii) The directors had selected such accounting policies, applied them consistently, and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period.

iii) 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 and preventing and detecting fraud and other irregularities.

iv) The directors had prepared the annual accounts on a going-concern basis.

v) The directors have laid down internal financial controls to be followed by the company, and such internal financial controls are adequate and are operating effectively.

vi) 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.

c) Declaration by Independent Directors under Subsection 6 of Section 149:

The company has received the necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

d) Nomination and Remuneration Policy:

The criteria laid down in the Companies Act, 2013 and the Rules framed thereunder are complied with while appointing the Directors, including Independent Directors. The Nomination and Remuneration Policy has been formulated and approved by the Nomination and Remuneration Committee and Board of Directors, and the same is available on the website of the company at https://www.zimlab.in/investor-reports-policies.

e) Explanations or comments on a qualification/ reservation/adverse-remark/disclaimer made by:

1. Statutory Auditor: Not applicable since there is no qualification, reservation, adverse remark, or disclaimer by the auditor.

2. Secretarial Auditor: Not applicable since there is no qualification, reservation, adverse remark, or disclaimer by the auditor.

f) Particulars of loans, guarantees, or investments under Section 186:

g) Particulars of contracts or arrangements with related parties pursuant to Section 188(1)

During the year, there were no transactions with related parties that conflicted with the interests of the company. All transactions entered into by the company with related parties during the financial year were in the ordinary course of business and on an arm's length basis. Statements of transactions with related parties are periodically placed before the Audit Committee and are approved by the committee. Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC-2 is appended herewith as Annexure III to the Board's Report.

h) Annual Return:

The Annual Return of the Company as on 31^st March, 2024, in Form MGT-7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.zimlab.in/investor- reports-annual-reports.

i) The state of Company's affairs:

This part has been covered under the Management Discussion & Analysis Report, which forms part of the Annual Report.

j) The amount proposed to be carried to reserve : NIL

k) The amount of dividend payment recommended : NIL

l) Material changes and commitments, if any, affecting the financial position of the company, which has occurred between the end of the financial year and the date of the report : NIL

m) Conservation of energy, technology absorption, foreign exchange earnings and outgo:

A. Energy Conservation:

The Company manoeuvres to be energy efficient by deploying energy efficient technologies and being mindful in its approach to energy usage. The Company is working with a systematic approach towards energy conservation in the following ways:

of energy are:

• To reduce wastage of electricity, the Company has replaced some DX coils with chilled water for better and more effective cooling.

• To save energy and optimise cooling power, the Company has installed an energy-efficient pump.

• The Company has switched to energy-efficient LED (Light Emitting Diodes) lighting.

• To prevent leakages, the Company has switched to an auto-drain valve on its air compressor.

• To save power during the winter and monsoon seasons, the Company has installed an automatic temperature control system for its 300 TR cooling tower.

• The Company has switched to a three - way control valves on the AHU (Air Handling Unit).

• The Company has installed a 30 HP VFD (Variable Frequency Drive) on its air compressor to save power.

• The Company has maintained the power factor of its electrical supply by installing capacitors.

(ii) The steps taken by the Company for utilizing alternate sources of energy are:-

The Company has evaluated the feasibility of Solar Power System.

B. Technology Absorption:

Efforts made towards technology absorption:

• The company operates an independent R&D Centre recognized by DSIR. Our proficient R&D team specializes in developing differentiated generics in Pre-Formulation Intermediates (PFI) and Finished Formulations (FF) utilizing our proprietary non-infringing development and technology platforms in oral solid dosage form.

• Additionally, our team is steadfast in engaging in research to innovate and enhance processes, resulting in the creation of unique and proprietary methods. For example, we are actively working on and exploring electro spun nanofiber technology for applications in controlled drug delivery, tissue engineering, and wound healing.

• Moreover, we are committed to expanding our ODS products with Multi-layer film technology and pioneering 2D printing on OTF for flexible dosage forms. Furthermore, our dedication extends to advancing our non- infringing technology platforms and Thinoral? technology to develop distinctive products.

• We have made significant investments in hiring highly skilled and experienced staff and we have integrated cutting-edge technology and modern equipment.

Improvement, Cost Reduction, Product Development or Import Substitution:

• Currently, 10 New Innovative Products (NIP) are nearing completion and are in the process of filings, with a strategic focus on Key Developed and Pharmerging Markets, especially the EU.

• Additionally, ZIM is currently developing a basket of 6 to 8 New Innovative Products (NIP) targeting the EU, Regulated, and Pharmerging markets.

• A portfolio of 25 unique and highly differentiated Nutraceutical products is in development, leveraging our in-house R&D capabilities.

• In FY24, ZIM filed 3 NIP (Anti-Coagulant, Anti-biotic/Anti-infective, and Skin/Psoriasis) in the EU.

• The NIPs were developed using in-house non-infringing manufacturing processes and technology platforms, such as Micro Emulsion Coating Technology (MECT), Pellet Cold Forming Technology (PCFT), Rapid Gel Forming Technology (RGFT), and Matrix Pore Forming Technology (MPFT).

• In FY24, ZIM filed 39 FF dossiers, 22 of which were under ZIM's name. Additionally, ZIM submitted 40 NIP dossiers, with 30 under ZIM's name, across RoW, Developed, and Pharmerging markets.

• For the OTF business, ZIM and its partners submitted 51 dossiers, with 22 under ZIM's name in RoW, Developed, and Pharmerging markets.

• The OTF business marked a milestone with its first commercial order supplied in Europe for Sildenafil citrate 50 milligram ODS. The product was launched in Italy and Malta. Furthermore, our marketing partner in Canada received Marketing Authorization for the antiemetic Ondansetron OTF product using ZIM's dossier.

• ZIM and its partners obtained 27 FF and 9 OTF Marketing Authorizations.

• During the year, the R&D team achieved significant success with 13 granted patents (24 to date), and 3 patents currently under examination (55 to date).

the beginning of the financial year)- :

a. The details of technology imported: NIL

b. The year of import: N.A.

c. Whether the technology has been fully absorbed: N.A.

d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: N.A.

Development :

n) Risk Management Policy :

This part has been covered under the Management Discussion & Analysis Report, which forms part of the Annual Report.

o) Corporate Social Responsibility (CSR) :

The Corporate Social Responsibility policy approved by the Board at its meeting held on 29^th June, 2021 is available on the website of the company at https://www.zimlab.in/investor-reports-policies.

The policy, inter alia, covers the following:

• Guiding principles for selection, implementation, and monitoring of CSR activities, as well as the formulation of the Annual Action Plan.

• Roles and Responsibilities of the CSR Committee.

• CSR projects or programs that include focus areas such as Education, Sanitation, Healthcare, Women's Empowerment, and Environment Conservation.

• Approval Process for CSR Projects and Expenditure.

• Implementation and Monitoring of CSR Activities.

The Composition of Corporate Social Responsibility Committee during the Financial Year 2023-24 was as follows :

The Annual Report on CSR Activities is annexed as Annexure-I to the Board Report.

p) Board Evaluation:

Pursuant to the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rules, 2014, an annual evaluation was carried out by the Board of its own performance as well as that of its committees and individual Directors. The evaluation was done by the Board after seeking input from all Directors, inter alia covering different aspects, viz., composition and structure of the Board, attendance, including participation of the Directors at the Board and Committee meetings, observance of governance, quality of deliberation, and effectiveness of the procedures adopted by the Board.

In evaluating the performance of the individual Directors, criteria such as qualification, knowledge, attendance at meetings and participation in long-term strategic planning, leadership qualities, responsibilities assumed, interpersonal relationships, and analytical decision-making abilities were taken into consideration. In compliance with regulation 17(10) of the listing regulations, the Board carried out performance

evaluations of Independent Directors without the participation of the Directors being evaluated.

The Independent Directors evaluated the performance of the Chairman and Managing Director. The evaluation process has been explained in the Corporate Governance Report. The Board reviewed the evaluation results as collated by the Nomination and Remuneration Committee.

q) Financial Highlights:

r) Change in nature of business, if any: NIL

Details of Directors resigned during the year: NIL Details of Directors appointed during the year: NIL

Details of Key Managerial Personnel appointed or resigned during the year: NIL

Name of Director retiring by rotation: Mr. Prakash Sapkal, Whole-time Director (DIN: 02007385), who retires by rotation at the ensuing Annual General Meeting and, being willing and eligible, has offered himself for re-appointment.

t) Statement regarding the opinion of the Board with regard to the integrity, expertise, and experience (including proficiency) of the Independent Directors appointed during the year:

In the Board's opinion, the Independent Directors on the Board of the Company are persons of high repute and integrity who possess relevant expertise and experience in their respective fields.

u) Names of Companies which have become subsidiarles or ceased to be its Subsidiaries, joint ventures or associate companies, during the year :

On 05.03.2024, the company acquired 99% shares of "ZIMTAS PTY LTD", a company situated in Australia. Consequent to the acquisition, "ZIMTAS PTY LTD" became a subsidiary of the Company.

Further, 'ZIM Laboratories FZE' the wholly owned subsidiary of the company has incorporated a subsidiary 'ZIM Laboratories Middle East DMCC' in Dubai with effect from 28^th September, 2023.

As of 31.03.2024, the Company has five Subsidiaries and one step down subsidiary.

v) Details relating to deposits covered under Chapter V of the Act : NIL

w) The details of deposits that are not in compliance with the requirements of Chapter V of the Act are: The company has not accepted any deposits during the year.

x) The details of significant and material orders passed by the regulators, courts, or tribunals impacting the going concern status and the company's operations in the future : NIL

y) The details in respect of the adequacy of Internal Financial Controls with reference to the financial statements :

The details of Internal Financial Controls are separately covered under the Management Discussion & Analysis

Report which forms part of the Annual Report.

z) Details of the Employee Stock Option Scheme as of 31^st March, 2024 :

The ZIM Laboratories Employee Stock Option Scheme 2023, approved by the shareholders, is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations"). The disclosure required under the SBEB Regulations has been hosted on the website of the Company at https://www.zimlab.in/investor-reports-general-meeting

aa) Report on the performance and financial position of subsidiaries, viz.:

1. ZIM Laboratories FZE, Sharjah

2. ZIM Health Technologies Limited, India

3. SIA ZIM Laboratories Limited, Latvia

4. ZIM Thinorals Private Limited, India

5. ZIMTAS PTY LTD, Australia

In compliance with the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, salient features

of the financial statements, performance, and financial position of each subsidiary is given in Form AOC-I as Annexure VI.

The consolidated financial statements presented in this Annual Report includes financial results of the subsidiary companies. Copies of the financial statements of the subsidiary companies will be available on the Company's website www.zimlab.in

ab) Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

The company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

The company has complied with provisions relating to the constitution of an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, and trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed of during the year 2023-24:

i) No. of complaints received : NIL

ii) No. of complaints disposed off : NIL

ac) Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016, during the year along with their status as at the end of the financial year : Not

Applicable.

ad) Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof : Not Applicable.

ae) Disclosure under Section 148(1) of the Companies Act, 2013 :

The Company has maintained proper books of accounts as required pursuant to the Rules made by the Central Government for the maintenance of Cost records under sub-section (1) of section 148 of the Act in respect of Company's products.

af) In compliance with Regulation 34, read with Schedule V of the Listing Regulations, a Report on Corporate Governance for the year under review is annexed as Annexure IV to this report.

ag) The Secretarial Audit Report for the financial year ended 31^st March, 2024, is annexed as Annexure II to this report.

ah) Particulars of Employees and Related Disclosures:

The statement containing particulars in terms of Section 197(12) of the Companies Act 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report and is annexed as Annexure V.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in Rules 5(2) and 5(3) of the aforesaid rules forms part of this report. However, in terms of the first provision of Section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof such members may write to the Company Secretary, whereupon a copy would be sent.

ai) Other Disclosures :

During the Financial Year 2023-24:

• The Company has complied with the applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively.

• The Company has obtained Shareholders' approval through a Postal Ballot for the ‘ZIM Laboratories Employee Stock Option Scheme 2023' and the Approval of the grant of employee stock options to the eligible employees of the subsidiary company(ies) under the ‘ZIM Laboratories Employee Stock Option Scheme 2023'.

(aj) Acknowledgements

We take this opportunity to thank our employees for their dedicated service and contribution to the Company. We also thank our Bankers, business associates, and other stakeholders for their continued support to the Company.