zim laboratories ltd Directors report

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, 2023, as follows:

a) Number of Meetings of the Board : 10

b) Directors Responsibility Statement:

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:

a)	Loan :	NIL
b)	Guarantee :	NIL
c)	Investment :	NIL

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 arms 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 Boards Report.

h) Annual Return:

The Annual Return of the Company as on 31^st March, 2023 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/ annual_reports/.

i) The state of Companys 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 systematic approach towards energy conservation in the following ways:

(i) The steps taken or impact on conservation

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 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.

(iii) The capital investment on energy conservation equipment: NIL

B. Technology Absorption:

Efforts made towards technology absorption:

• The company has an independent R&D center recognized by DSIR. The R&D team is capable of developing differentiated generics in Pre-Formulation Intermediates (PFI) and Finished Formulations (FF) using our in-house non infringing development and technology platforms

• The team is researching constantly to develop and innovate on processes thus ensuring unique development and proprietary processes.

• I nvestments have been made in employing highly skilled and experienced staff as well as incorporating cutting-edge technology and modern equipment.

Benefits derived like product improvement,

cost reduction, product development or

import substitution:

• 10 NIP (New Innovative Products) are under various stages of development and filings with a focus on Key Developed and Pharmerging Markets*

• A basket of 15 unique and differentiated Nutraceutical products are under development leveraging on our in house R&D.

• In FY23, ZIM filed 2 NIP (Urology and Gastrointestinal) in the EU.

• Several RoW product Dossiers are also being upgraded for filing in Key Developed and Pharmerging Markets*.

• The NIP were developed using In -house non infringing manufacturing process and technology platforms like Micro Emulsion Coating Technology (MECT), Pellet Cold Forming Technology (PCFT), Rapid Gel Forming Technology (RGFT), and Matrix Pore Forming Technology (MPFT).

• 5 Marketing Authorizations were also received on ZIMs Dossiers in the EU in FY23.

• 1 MA (Marketing Authorization) received for EU in OTF in FY23: Sildenafil Citrate 50mg

ODS in Spain; in addition, Tadalafil ODS has also been filed for registration in the EU; and ZIM has received its first commercial order for OTF in Rx from the EU.

• R&D team also has 11 Patents granted and 65 under examination.

In case of imported technology:

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.

The expenditure incurred on Research and

Development :

Revenue expenses	: 1,873.83 lakhs
Capital expenses	: 200.34 lakhs

C. Foreign Exchange earnings and outgo

i) Foreign exchange earned :	30,882 Lakhs
ii) Expenditure in foreign
exchange :	4,853 Lakhs

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 programmes that include focus areas such as Education, Sanitation, Healthcare, Womens 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 2022-23 was as follows :

(i)	Dr. Kakasaheb Mahadik :	Chairman
(ii)	Mr. Padmakar Joshi :	Member
(iii)	Mr. Niraj Dhadiwal :	Member

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:

Particulars	Standalone		Consolidated
	FY 2023	FY 2022	FY 2023	FY 2022
Revenue	39,653.13	32,949.37	39,852.71	33,342.68
Other Income	643.06	450.62	641.32	440.27
Total Income	40,296.19	33,399.99	40,494.03	33,782.95
Operating expenditures	34,534.02	29,155.97	34,654.09	29,244.77
Profit before interest, depreciation, and tax	5,762.17	4,244.02	5,839.94	4,538.18
Less: Finance costs	557.54	830.62	557.54	830.62
Depreciation and amortisation	1,612.83	1,483.74	1,746.90	1,603.31
Profit/ (Loss) before exceptional items and tax	3,591.80	1,929.66	3,535.50	2,104.25
Exceptional Items - loss	-	-	-	-
Profit/(Loss) before tax	3,591.80	1,929.66	3,535.50	2,104.25
Tax expense	1,090.92	628.38	1,092.05	649.21
Profit/(Loss) after tax	2,500.88	1,301.28	2,443.45	1,455.04
Opening balance in Retained Earnings	11,181.34	9,875.50	11,659.41	10,199.81
Profit available for appropriation	13,682.22	11,176.78	14,102.86	11,654.85
Less: Appropriations	-	-	-	-
Dividend	-	-	-	-
Dividend distribution tax	-	-	-	-
Transfer from other comprehensive income	(46.16)	4.56	(46.16)	4.56
Closing balance in Retained Earnings	13,636.06	11,181.34	14056.70	11,659.41

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

s) The details of Directors or Key Managerial Personnel who were appointed or have resigned during the year:

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

The Board of Directors of the company, in its meetings held on 30^th March, 2022 and 21^st May, 2022 had appointed/re- appointed the Directors on the Board of the Company subject to the approval of shareholders. The Shareholders in their Extraordinary General Meeting held on 29^th June, 2022, has approved such appointments/re-appointments. The details of the Directors appointed/re-appointed are mentioned below:

Sr. No.	Name of Director	Appointment / Re-appointment	DIN	Effective Date of Appointment/ Re-appointment
1.	Dr. Kakasaheb Ramoo Mahadik	Appointment	08688418	01.04.2022
2.	Dr. Kamlesh Shende	Appointment	09537666	01.04.2022
3.	Mrs. Kavita Loya	Re-appointment	07943519	21.09.2022
4.	Mr. Padmakar Joshi	Re-appointment	07944709	21.09.2022
5.	Dr. Anwar Siraj Daud	Re-appointment	00023529	01.08.2022
6.	Mr. Zulfiquar Kamal	Re-appointment	01786763	19.10.2022
7.	Mr. Niraj Dhadiwal	Re-appointment	02007428	01.10.2022
8.	Mr. Prakash Sapkal	Re-appointment	02007385	01.10.2022

The necessary declaration with respect to such appointments/ re-appointments has been received from the Directors of the company. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Name of Director retiring by rotation: Mr. Niraj Dhadiwal, Director (Business Development) (DIN: 02007428),

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:

I n the Boards opinion, the Independent Directors are persons of high repute and integrity who possess relevant expertise and experience in their respective fields.

u) Names of Companies which have become subsidiaries , during the year: NIL

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 companys 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 31st March, 2023: NIL

aa) Report on the performance and financial position of wholly-owned 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

I n 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.

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 the summary of sexual harassment complaints received and disposed of during the year 2022-23.

No. of complaints received	: NIL
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 Companys products.

af) I n 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, 2023 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 the 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 2022-23:

• 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 listed its shares on the National Stock Exchange of India Limited (NSE) on 25^th November, 2022.

• The Company has increased its Authorised Capital to 75.00 Crores.

• The Company has issued and allotted Bonus Shares in the ratio of 2:1 (two equity shares for each share held by the shareholder) to the existing equity shareholders of the Company aggregating to 3,24,83,876 equity shares. Consequent to allotment of Bonus Shares, the Paid-up Capital of the Company has increased to 48.72 crore.

(aj) Acknowledgements

We take this opportunity to thank the 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.

For and on behalf of the Board of Directors
	(Anwar Siraj Daud)
Place: Nagpur	Chairman
Date: 16th June, 2023	00023529