Economic OverView Global Economy Review
The global economy exhibited remarkable resilience in 2023. The International Monetary Fund (IMF) has revised its projection for global economic growth in 2023 from 3.0% in its October 2023 outlook to 3.1% in January 2024. Despite ongoing geopolitical challenges, volatility in energy and food markets, and aggressive monetary tightening, global economic growth has decelerated but not halted. Global ?nflation continues to recede faster than expected. It declined from 8.7% in 2022 to 6.8% in 2023.
Economic growth in several Emerging Markets and Developing Economies (EMDEs) has exceeded expectations in 2023. The US economy has experienced the strongest recovery among major economies, and its GDP increased from 1.9% in 2022 to 2.5% in 2023. The European Union (EU) has demonstrated resilience in navigating through unprecedented shocks from the prolonged Russia-Ukraine war and higher interest rates. Although its GDP growth contracted from 3.6% in 2022 to
0.6% in 2023, the EU managed to avoid a recession in 2023.
Outlook
In 2024, analysts expect the global economy to sustain its resilience. The IMF forecasts global growth of 3.1% in 2024, with a slight uptick to 3.2% in 2025.
Higher interest rates will impact the global economic outlook for 2024, carrying the risk of a resurgence in inflation due to persistent core inflation and shifts in the anticipated monetary stance. Analysts expect global headline inflation to decrease to 5.8% in 2024 and to 4.4% in 2025. Furthermore, the ongoing Russia-Ukraine conflict has the potential to dampen the overall economic outlook of the EU. The escalation of geopolitical conflict in the Middle East and the Red Sea route could elevate logistics costs, energy, and commodity prices, raise the risks of supply disruptions, and pose downside risks to the global economy. However, faster disinflation and steady growth have diminished the possibility of a severe economic downturn, and the risks to global economic expansion are broadly balanced. After experiencing rapid expansion in
2023, the Asia-Pacific (APAC) region is expected to be the fastest-growing region of the world economy in 2024, supported by robust domestic demand in East Asia and India. (Source: IMF Economic Outlook Update January 2024, S&P Global)
Indian Economy Review
The Indian economy is shining as a beacon of hope and emerged as a top performer in FY 2023-24. It is the fifth- largest economy in the world and is poised to retain its position as the worlds fastest-growing major economy. As per the first advance estimates released by the National Statistical Office (NSO), real GDP is expected to grow by 7.3% in FY 2023- 24 as opposed to 7.2% in FY 2022-23, driven by buoyant domestic demand, moderate inflation, a stable interest rate environment, and strong investment activity. Despite repetitive food price shocks, CPI inflation is on a downward trajectory and eased to 5.10% in January 2024 from 5.69% in December 2023. The RBI keeps the policy repo rate unchanged at 6.50% and retains the CPI inflation forecast at 5.4% in FY 2023-24. Furthermore, the Index of Industrial Production (IIP) shows that the output of Indias industry grew by 6.1% in the first three quarters of FY 2023-24, compared to 5.5% in the corresponding period of last year. The Manufacturing sectors recorded a higher growth rate of 5.6%.
The Interim Budget 2024 outlines a multi-pronged economic management strategy and sets the foundation for the vision of a Viksit Bharat (Developed India) by 2047. The government continued with its robust spending on capital expenditure, which grew by 11.1% to 11.1 Lakh Crores for FY 2024-25. The primary focus has been on enhancing the countrys infrastructure.
Outlook
Despite the challenges posed by a volatile global macro environment, Indias economic outlook remains optimistic, backed by stronger consumer demand and private investment, physical and digital infrastructure enhancements, augmented capital expenditure, and the governments proactive policy measures. The IMF expects the Indian economy to advance steadily to 6.5% in 2024.
Indias economic outlook faces potential risks stemming from headwinds from geopolitical tensions, volatility in global financial markets, and geoeconomic fragmentation. However, the Indian economy is well-positioned to navigate forthcoming uncertainties. Its advantageous geopolitical position will help it capitalise on supply chain diversificaron and reshoring, increase its global competitiveness, and boost exports. The Indian economy is poised to ascend as a global economic powerhouse, aiming to secure the status of the third-largest economy in the world by 2030.
(Source: Ministry of Statistics & Programme Implementation, Reserve Bank of India, Ministry of Finance, IMF Economic Outlook Update January 2024, Economic Times)
Industry Overview
Global Pharmaceutical Industry
IQVIAs report ‘The Global Use of Medicines 2024: Outlook through 2028 estimates global spending on medicines at US$ 1.60 trillion in 2023 and projects it to continue growing, reaching US$ 2.3 trillion by 2028. This growth is driven by existing branded medicines in the leading ten developed markets, which will grow by US$ 385 billion.
The global use of medicines remained f?at in 2023 but is anticipated to grow at an average annual rate of 2.3% over the next five years. The growth will be primarily driven by China, India, and other Asian markets, all of which are growing faster at a CAGR of 3%. Furthermore, medicine use in Asia and Latin America has grown more rapidly than in other regions, and this trend will continue through 2028.
Medicine use has been growing across therapy areas, with the highest growth in immunology, endocrinology, and oncology. The two leading global therapy areas- oncology and immunology, are projected to grow at a CAGR of 14-17% and 2-5%, respectively, through 2028. The key growth area for medicines in the next five years is biotech, which, despite slow growt,h will increase by 9.5%-12.5% and contribute to a projected expenditure of US$ 890 billion in 2028. This represents 39% of the global market and will include numerous areas of greatest activity for novel medicines.
(Source: IQVIA: Global Use of Medicines 2024 - Outlook to 2028) Indian Pharmaceutical Industry
The Indian pharmaceutical industry has experienced steady growth over the last few years, with a focus on generic medicines. The rapid expansion of generic drug manufacturing is a significant trend, and it solidifies Indias position as a global pharmaceutical hub. The pharmaceutical industry values India at US$54.6 billion in 2023. According
In developed countries, the introduction of new products, wider use of existing branded medicines, and patent expires are expected to drive the growth of medicine spending. In 2024, Eastern Europe is expected to return to trends present before the start of the Ukraine conflict in terms of volume growth. Medicine spending in Europe is expected to increase by US$70 billion through 2028, driven by new brands and offset by generics and biosimilars.
The increasing usage of generic drugs and branded generics is expected to primarily fuel the projected growth of Pharmerging markets at a CAGR of 10-13% between 2024-28. Pharmerging and lower-income countries have a lower share of spending on originator products, with a greater focus on either generics or non-original branded products, which are typically priced lower.
to IQVIAs projections, spending on medicines in India is expected to reach US$ 38-42 billion by 2028. In India, the chronic therapeutic areas (TAs) witnessed a 10% growth based on the previous period growth (PPG) metrics in the second quarter of 2023, followed by Chronic Respiratory at 14% (PPG) and Neuro/CNS at 9% (PPG). Antineoplastic, Pain, Uro, and Hormones also registered double-digit growth.
Pharmaceutical exports are estimated to reach US$ 28 billion in FY24, registering 10.2% growth, primarily due to drug shortages in the US and Europe and a revival in demand in Africa. This will create huge opportunities for Indian pharmaceutical companies.
Various government schemes, including the PLI scheme and the Strengthening of Pharmaceutical Industry (SPI) scheme, have propelled the expansion of the Pharmaceutical sector. The flagship scheme, Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), has achieved the target of opening
10,000 retail outlets to provide quality generic medicines at affordable prices. Additionally, 206 medicines have been added to the product basket in 2023. Furthermore, the Indian pharmaceutical sector attracted an FDI inflow of 4,456 Crores from April 2023 to September 2023.
The growth momentum of the Indian pharmaceutical industry is expected to continue in the coming years, supported by favourable government policies, heightened foreign investment, growing healthcare expenditure, rapid adoption of innovation and technology, and an emphasis on domestic manufacturing of quality pharmaceutical products.
(Source: IMARC Group, IQVIA: Indian Pharmaceutical Market Quarterly Insights Report Apr- June, FICCI, IQVIA: Global Use of Medicines 2024 - Outlook to 2028, Ministry of Chemicals and Fertilizers)
Company OverView
Incorporated in 1984, ZIM Laboratories Limited (hereinafter referred to as "ZIM" or "the Company") is engaged in the development, manufacturing, and supply of differentiated generic pharmaceutical and nutraceutical products in oral solid dosage forms, both as Pre- Formulation intermediates (PFI) and Finished Formulations (FF), for certain key therapeutic segments. The Companys differentiated product pipeline, called the New Innovative Products (NIP), which are complex generics, have been developed using ZIMs non-infringing proprietary technology platforms such as Micro - Emulsion Coating Technology (MECT), Pellet Cold Forming Technology (PCFT), Rapid Gelation Drug Release Technology (RGDRT), and Matrix Pore Forming Tablet Technology (MAPOTAB). The NIP and the OTF are key to the Companys strategy for developing and increasing market revenue.
The Company has developed its technology platforms to be Therapy agnostic, and some key therapy areas include Urology, Gastroenterology, NSAIDs, Central Nervous System and Nutraceuticals.
The Companys fundamental strength lies in its robust in- house R&D centre, supported by an experienced team. This R&D team provides various drug delivery solutions and comprehensive technology platforms, encompassing product conceptualisation, product development, dossier development and filing, manufacturing & supplies (end-to- end product development). The Company is consistently pursuing its mission to deliver high-quality and accessible pharmaceutical and nutraceutical products that provide patient convenience and treatment adherence. It is committed to expanding its Nutraceutical business vertical, which aligns with its pharmaceutical product line, to create a holistic healthcare approach.
The Companys state-of-the-art manufacturing unit, located in Nagpur, is equipped with internationally accredited infrastructure, seamlessly integrating advanced technology for manufacturing excellence. These facilities are certified under EU-GMP, WHO-GMP, ISO 9001, and NSF/ANSI 455-2
standards and stand as a testament to the Companys commitment to excellence.
Export Business
The Companys revenue majorly comprises exports, with a contribution of 78% in FY24. The Company exports differentiated Pharmaceutical and Nutraceutical generic products.
The Company predominantly exports to the RoW and Pharmerging markets, with key regions such as Asia (Ex India) , the Middle East and North Africa (MENA) and Africa. It also caters to the major developed markets, such as Europe, Brazil, Canada, South Africa, and Australia. In FY24, the Company witnessed substantial growth in its business in Asia (Ex India) and India in line with its strategy. The exports to Regulated Markets such as Europe, also increased to 42 Mn in FY24 vs. 31 Mn in FY23.
The Company is focused on expanding its footprint in high- potential markets in the Key developed and Pharmerging* countries with its New Innovative Products (NIP) and Oral thin films (OTF). ZIM exports its products as Pre - Formulation Intermediates in countries where regulations mandate PFI imports and localisation is promoted. The PFI exports business is based on deep rooted long-term partnerships with local manufacturers and distributors who market these products.
ZIMs Finished Formulations (FF) business is growing in line with its strategic initiatives. Its business development team will continue to promote Finished Formulations (FF) products to global distribution and marketing partners. who market the FF products under their own brand name or under ZIMs brand within the respective countries.
The Company filed 40 New Innovative Products (NIP) dossiers for 9 products, 39 Finished Formulations (FF) dossiers for 26 products, and 51 Oral Thin Films (OTF) dossiers for 17 products dossiers for registration in FY24 across Pharmerging, RoW, and Developed countries.
The Company received 27 FF and 9 OTF registrations. 3 NIP dossiers were filed in the EU under ZIMs name. With a presence in over 50 countries, the Company has strengthened its position in the industry.
Domestic Business
The Companys domestic business was valued at 804 Mn in FY24 and comprised 22% of its Total Operating Income. Its domestic business focuses on sales to central and state government agencies and partnerships with private Pharma and Nutra companies to supply unique and differentiated products, including NIP and OTF. The primary focus of ZIMs government business lies in supplying pharmaceutical products under the ‘Jan Aushadhi, Central Government Health Scheme (CGHS), Employees State Insurance Corporation (ESIC), Railways, etc. This segment consists of the Companys differentiated and high-margin generic
products that provide a certain threshold net contribution % to mitigate risks associated with fluctuating raw material prices and payment delays. In FY24, some of the top Nutraceutical products of the company experienced a rise in orders from state governments. Additionally, the formulation business gained momentum in India through collaborations with prominent Indian pharmaceutical companies, particularly for ZIMs unique urology products.
ZIM also partners with other Indian Pharma companies to license and supply New Innovative Products (NIP) and Oral thin films (OTF). ZIM has already supplied its urology NIP to a big pharma company in India, along with the ongoing supply of its Oral thin films such as Sildenafil, Nicotine, Vitamin D3 and, more to large Indian pharma companies.
The Company also supplies its differentiated Nutraceutical products, as Oral thin films (OTF) or Pellets in Capsules, to
brands that market then via E-commerce/ online or offline through distributors.
R&D Initiatives
The Companys high focus on R&D and robust pipeline of innovative products demonstrate its dedication to developing unique and differentiated generics with innovative drug delivery techniques using non-infringing proprietary manufacturing processes. It continues to invest significantly to enhance its R&D capabilities. ZIMs investment in R&D reached approximately 9.7% of revenues in FY24, while spending on BE studies and registrations amounted to 103 Mn in the same fiscal year, reflecting the Companys commitment to developing cutting-edge healthcare solutions and strengthening its position as a provider of high-quality, affordable medicines.
Please refer to the section ‘R&D Capabilities for more details.
Financial Overview
*Earnings for Debt Service = Net Profit after tax + Depreciation and amortisation expense + Finance costs, Debt Service = Principal Repayments +Finance costs (recognised)
Outlook
Leveraging its well-established expertise in drug manufacturing, ZIM Labs is strategically positioned to seize opportunities in both domestic and international markets. Its established presence in domestic and RoW markets, strong product portfolio focusing on New Innovative Products, and new product launches are expected to drive profitability and bolster its growth. ZIM remains committed to consistently investing in R&D, exploring emerging technologies, and enhancing its product portfolio to meet the evolving needs of the market. The Company aims to leverage its existing product basket to grow the PFI business in current markets as well as expand into more stable markets. The Company is focussed on increasing its Finished Formulation Business in Target markets by increasing filings for NIP and OTF products as well as high potential Finished Formulations.
During FY24, the Company filed 3 New Innovative Products (NIP) in the EU under ZIMs name, making a total of 5 NIP filed in the EU to date. ZIM and its partners filed 40 NIP dossiers for 9 products, 30 of which were under ZIMs name, and filed 39 Finished Formulations (FF) dossiers for 26 products, 22 of which were under ZIMs name, in RoW, Developed, and Pharmerging markets. Additionally, 27 FF Marketing Authorizations (MAs) were received in FY24, 9 of which were under ZIMs name. For the Oral Thin Film (OTF) business, ZIM and its partners filed 51 dossiers for 17 products, 22 of which were under ZIMs name. Furthermore, 9 OTF Marketing Authorizations (MAs) were received.
Currently, we are in the process of developing 6 to 8 NIP for our robust pipeline. The Company plans to file 4 - 6 NIP in Regulated, Pharmerging, and Developed markets during FY25.
The Company remains committed to obtaining plant accreditations for countries where dossiers are being filed, developing new products, upgrading dossiers, and filing for the registration of products across target markets.
Key Risks and Mitigations
The key risks and their corresponding mitigation measures are outlined below:
• Geopolitical and Economic risk
Geopolitical issues, including supply chain disruption, subdued global economic conditions, ?nflation, changes in government policies, trade disputes and sanctions, and currency unavailability in a few markets, expose the company to potential challenges and uncertainties. These factors can pose risks to the companys plans, operations, supply chains, and market access, potentially dampening its export business.
Mitigation
The Companys diversified business portfolio is spread across multiple countries, reduces its dependence on
The Company remains committed to obtaining plant accreditations for countries where dossiers are being filed, developing new products, upgrading dossiers, and filing for registration of products across the target markets.
any specific geographical region, and enables it to mitigate the country-specific market slowdown. This has been evident in the Companys increased revenue contribution from SE Asia and Regulated markets. It is actively registering several of its products in the Developed and Pharmerging markets to further mitigate the geographical concentration risk. Furthermore, the Company evaluates various strategic sourcing and supply alternatives. It has identified alternate sources for the supply of some of the raw materials and excipients, including many from India.
• Registration and manufacturing approval delays
Delays in registration, marketing approval, plant audits, accreditations, and manufacturing approvals for Target markets, and the launch and commercialisation of New Innovative Products (NIP) in the Developed and Pharmerging markets could impact the Companys financial performance.
Mitigation
The Company has experienced robust growth in the RoW markets, and alongside the filing of NIP, it is enhancing existing product dossiers for broader RoW market expansion. The company is also filing NIP products in the RoW and pharmaceutical markets to offset any potential delays from regulatory market filings. The Company also works with expert consultants in regulated markets who are aware of regulatory laws and can help the Company prevent any additional delays.
• Competition risk
The Company might face competition from larger domestic and multinational pharmaceutical companies, potentially diminishing the attractiveness of its products for commercialisation and adding pressure on profit margins.
Mitigation
The Companys New Innovative Products (NIP) and Oral thin films (OTF) product lines, along with other differentiated generic products, are part of its development strategy to secure a competitive edge over other pharmaceutical firms in the market The NIP may also be the first generics in some of the markets, and the Company expects higher margins from these markets.
• Compliance and regulatory risk
The Company operates in a complex regulatory environment and is exposed to regulatory risk due to intricate compliance requirements in the domestic market as well as countries where it exports. Its global presence requires in-depth knowledge of regulatory and compliance norms in various countries. Furthermore, regulatory guidelines strictly govern the manufacturing of ZIMs products, including quality standards, and any material audit findings could adversely impact the business.
Mitigation
The Company fully dedicates itself to quality and implements robust quality processes and systems at its developmental and manufacturing facilities to ensure the safety and quality of every product. ZIM consistently invests in equipment, processes, and systems to ensure full compliance with manufacturing and audit norms. Its manufacturing units are certified EU-GMP and NSF ANSI 455 -2, and it regularly complies with third-party audit checks. Furthermore, the Companys experienced regulatory team addresses compliance norms, queries, and observations for multiple filings and registrations. The Company also works with expert regulatory consultants with expertise in the compliance and regulatory laws of the countries where it files the products. Additionally, ZIM maintains strong relationships with partners in the target filing country to stay up-to-date on the latest regulatory norms.
Opportunities and Challenges
Opportunities
• Growth in demand for Indian generic drugs: The Indian generic drugs market is witnessing a strong upward trend, fuelled by the persistent demand for Indian generic drugs across global markets. Over 50% of the generic drug requirement in Africa is supplied by India.
• Increased regulatory compliance for Indian manufacturing plants: The Indian government has taken measures to ensure quality control of pharmaceutical products manufactured in India. It notified pharmaceutical companies to adhere to new manufacturing standards under the revised Schedule M guidelines issued on December 28, 2023, and implement Good Manufacturing Practices (GMP). The Central Drugs Standard Control Organization (CDSCO), along with
State Drugs Controllers (SDCs), have conducted risk- based inspections of 275 drug manufacturing units (as of February 9, 2024) in the country to assess regulatory compliance. ZIM maintains the highest quality standards and the stricter regulations will help the company as a key manufacturen
• China plus one diversification strategy: Indian companies are expected to benefit from the China plus one diversification strategy as global companies actively explore alternatives to Chinese contractors, driven by concerns over geopolitical tensions and supply chain vulnerabilities. India has greater appeal as an attractive alternative, and it has tremendous potential to emerge as a reliable base for the manufacture of raw materials and pharmaceutical production. Moreover, growth in domestic manufacturing will reduce Indias reliance on the import of key active pharmaceutical ingredients (APIs) from China.
Challenges
• Counterfeit and sub-standard drugs: The pharmaceutical industry has been grappling with issues related to counterfeit or spurious drugs. The WHO reports that India produces 35% of the worlds spurious drugs. The presence of fake and substandard drugs on the market erodes trust and tarnishes the industrys image.
• Data breaches and cyber threats: The data collected by pharmaceutical companies, including proprietary information about patented drugs, data related to pharmaceutical advances and technologies, and patient information, is highly sensitive and valuable. Hence, the pharmaceutical industry is vulnerable to cybersecurity and data breach threats.
• Fluctuations in costs of key ingredients: Volatility in prices of active pharmaceutical ingredients (APIs) and intermediates due to several factors, including inflation, changes in government policies, fluctuations in foreign exchange rates, and demand and supply conditions, may impact manufacturing cost and profit margins.
• Investment in R&D: Elevated expenses in R&D result in increased capital and operational costs, creating pressure on profit margins.
Information and Technology
ZIMs commitment to technological advancement is integral to its operational efficiency and strategic vision. Its robust Information Technology (IT) infrastructure, highlights key initiatives aimed at enhancing transparency, efficiency, and compliance across its operations.
Robust IT Infrastructure:
ZIMs IT infrastructure is anchored by an efficient ERP system, integrating five key software platforms covering engineering, finance, material management, manufacturing, and quality
operations. This integration ensures precise oversight, enhancing agility and efficiency in the Companys operations.
Enhancing Transparency and Efficiency:
ZIM improves transparency and efficiency using advanced MIS dashboards. These dashboards provide visibility into various manufacturing stages, displaying key metrics like R&D-related MIS, machine utilisation, and pending sales orders, enabling rapid bottleneck identification and process optimisation.
Investment in HRMS (Human Resource Management System) Modernisation:
ZIM invests in HRMS modernisation to streamline recruitment and enhance performance tracking, fostering talent optimisation and organisational agility.
Long-term QMS Modernisation Initiative:
ZIM is committed to achieving quality excellence through QMS (Quality Management System) modernisation. Starting with the implementation of a DMS (Document Management System), followed by a TMS (Transportation Management System) and e-BMR (Electronic Batch Manufacturing Record) system, this initiative revolutionises its quality assurance processes. These advancements reduce paper usage and enable remote audits, highlighting the Companys dedication to sustainability and operational resilience.
In conclusion, ZIMs proactive approach to IT innovation underscores its unwavering commitment to operational excellence, compliance, and sustainable growth. By continually harnessing technology as a strategic enabler, the Company is poised to navigate evolving market dynamics and capitalise on emerging opportunities, thereby delivering enduring value to its stakeholders.
Human Resources
During the past financial year, the Company achieved notable strides in its Human Resources, particularly in improving workforce diversity with 15% female representation. Demonstrating unwavering dedication to a non-discriminatory policy, the Company ensures equal opportunities for all employees, irrespective of age, gender, ethnic origin, or physical disability. To maintain fairness and transparency, we established a dedicated risk management subcommittee for HR. This committee, comprising senior management members, meticulously reviews critical decisions pertaining to employee matters, encompassing disciplinary actions, career advancements, and recognition of outstanding contributions. Furthermore, the Company introduced the NPS scheme to enhance employee welfare and engagement. Its foundational HR policies continue to prioritise the alignment of company interests with employee rights.
The Company has implemented measures to enhance safety in its manufacturing facilities, including the deployment of intrinsically safe Powered Air-Purifying Respirators (PAPRs) in high-risk zones. Safety is a fundamental element of the
During the past financial year, the Company achieved notable strides in its Human Resources, particularly by improving workforce diversity with 15% female representation.
Companys operations, guided by the principle of prevention. The Company takes pride in its well-established Internal Complaints Committee (ICC), which diligently monitors and resolves complaints concerning sexual harassment, maintaining a zero-complaint status over the past year.
Furthermore, the Company has experienced significant growth and organisational development, especially in senior managerial positions. The company made over 60% of managerial appointments with the explicit goal of bolstering its commitment to quality assurance and operational excellence. Additionally, the Company reinforced its technical team to enhance customer service, reflecting its dedication to delivering exceptional service. As of March 31, 2024, the Company had 556 employees.
Internal Control Systems and Their Adequacy
The Company has an efficient internal control system, commensurate with the nature of its business and the size and complexity of its operations. The risk management framework, financial control, internal audit, and effective corporate governance lay the groundwork for internal control. The internal control structure ensures that operations are efficient and aligned with the strategic objectives of the company. It also ensures regulatory compliance and assists in the implementation of the plans. The Company has also adopted policies and procedures covering all financial, operating, and compliance functions. These controls and processes have been designed to provide reasonable assurance over:
• Compliance with applicable laws and regulations;
• Accuracy and completeness of the accounting records;
• Timely preparation of reliable financial information;
• Effectiveness and efficiency of operations.
• Safeguarding assets from unauthorised use or losses;
• Prevention and detection of frauds and errors;
The Company has also implemented preventive and detection controls to identify and mitigate the associated risks. The Company has a Whistle Blower mechanism in place to enable the Directors, employees, and all stakeholders of the Company to report genuine concerns. The details with respect to the whistle-blower issues are reported to the Audit Committee and the Board for taking corrective action on the same.
The Management, in consultation with the Internal Auditors, designs the scope of the internal audit, which covers businesses, functions, risks, compliance requirements, and internal controls prevalent in the Company, along with Internal Financial Controls (IFC) testing. The current system of IFC is aligned with the requirements of the Companies Act, 2013.
The scope of the internal audit is approved by the Audit Committee and the Board at the beginning of every year and is divided into four phases, covering one phase in each quarter. Every quarter, the Audit Committee and the Board are presented with the key control issues and the action taken on the issues highlighted in the previous audit reports.
The management conducts frequent meetings with the Internal Auditors, and the focus of the discussions is on the measures adopted by the Company to strengthen controls and enhance the efficiency of the internal control mechanisms prevalent in the Company.
The Company recognises the fact that any internal control framework would have some inherent limitations, and therefore, the Management, the Audit Committee, and the Risk Management Committee regularly review the adequacy of the internal control systems and internal audit findings and recommend corrective action plans for the improvement of the business process and internal control system.
Disclaimer
The Management Discussion and Analysis contains statements about expected future events and the financial and operating results of ZIM Laboratories Limited and may be construed as forward-looking. The company must make assumptions to create these statements, which are subject to inherent risks and uncertainties. Significant risk exists that the assumptions, predictions, and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements, as several factors could cause assumptions, actual future results, and events to differ materially from those expressed or implied in the forward-looking statements. As a result, the assumptions, qualifications, and risk factors referred to in the Management Discussion and Analysis of ZIM Laboratories Limiteds Annual Report of FY24 disclaim and qualify this document in its entirety.
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