Zim Laboratories Ltd Directors Report

The Board of Directors of our Company has pleasure in presenting the 41^st Annual 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, 2025, as follows:

a) Number of Meetings of the Board : 1 1

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 Sub-section (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. For appointment of an Independent Director, the independence criteria defined in Section 149(6) of the Act, and Regulation 16( 1 )(b) of the SEBI Listing Regulations are also considered. The Nomination and Remuneration Policy has been formulated and approved by the Nomination and Remuneration Committee and Board of Directors in accordance with Section 178(3) of the Act and Regulation 19(4) of the SEBI (LODR) Regulations, 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 : Rs 385.09 lakhs

Details of Loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31 March 2025, also forms part of the Notes to the financial statements provided in this Annual Report.

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, 2025, 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 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:

ZIM is dedicated to enhancing energy efficiency and conserving energy across its operations. A committed team actively works to ensure the optimal use of energy, closely monitoring equipment and plant-wise energy consumption. Regular benchmarking and energy gap assessments are conducted to identify opportunities for improvement. Energy conservation projects are continuously identified, developed, and implemented, all aimed at reducing carbon emissions and advancing the organizations decarbonization efforts. These initiatives contribute to a more sustainable future by minimizing environmental impact and enhancing overall energy performance.

(i) The steps taken or impact on

conservation of energy are:

• To minimize electricity wastage, the company has replaced certain DX coils with chilled water systems, ensuring more efficient and effective cooling.

• Power factor optimization has been achieved by installing capacitors, maintaining a stable electrical supply.

• Energy-efficient pumps and LED lighting have been installed across the facility to reduce energy consumption.

• Variable Frequency Drives (VFDs) have been implemented to enhance

the energy performance of pumping systems and compressors.

• Condensate recovery has been improved by utilizing hot water in select AHUs, leading to a reduction in water usage on-site.

• Duct leakage in the HVAC system has been minimized through regular audits and the application of advanced sealing technology.

• Motion sensors have been installed in various locations to reduce unnecessary energy consumption.

• The belt drive motor of AHUs has been upgraded to a self-driven motor with a VFD, improving energy efficiency.

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

The company is currently exploring initiatives for various systems of renewable energy as part of its efforts to increase the utilization of alternative renewable energy sources.

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

B. Technology Absorption:

Efforts made towards technology absorption:

At ZIM Laboratories, we are committed to continuous innovation and the absorption of cutting-edge technologies to drive growth and enhance our product offerings. The following outlines our key efforts in this area:

• ZIM operates an independent R&D Centre, recognized by the Department of Scientific and Industrial Research (DSIR). Our R&D team specializes in developing differentiated generics, focusing on Pre- Formulation Intermediates (PFI) and Finished Formulations (FF) using proprietary, non- infringing technology platforms for oral solid dosage forms.

• We are dedicated to advancing drug delivery systems through innovations such as electrospun nanofiber technology for controlled drug delivery, tissue engineering, and wound healing.

• Our R&D efforts also focus on improving manufacturing processes, including exploration of Multi-layer film technology for oral solid dosage forms and pioneering 2D

printing on Oral Thin Films (OTF) for flexible dosage forms.

• We have invested in proprietary, non- infringing technology platforms, such as Thinoral? technology, which enable the creation of unique and effective products without infringing on existing patents.

• To support our technology absorption efforts, ZIM has made significant investments in recruiting skilled and experienced personnel and integrating modern, state-of-the-art equipment, ensuring our R&D capabilities remain at the forefront of innovation.

• ZIM Laboratories Limited maintains a global footprint through subsidiaries in key markets including Europe, North America, Middle East, UAE, Australia, and India. Recently, in November 2024, we established a Scientific Office in the UAE to facilitate registration, marketing of our Pharma and Nutraceutical products, and expansion of operations in the MENA region.

• Our subsidiaries and Scientific Office enable seamless transfer of knowledge, practices, and innovative solutions across borders, leveraging local insights and ensuring alignment with specific regulatory requirements and market needs in each region.

Derived Benefits such as Product

Improvement, Cost Reduction, Product

Development or Import Substitution:

• ZIM is progressing toward the completion of 10 New Innovative Products (NIP), with 7 already filed in the EU; Filings are targeted at the EU, key Pharmerging markets, and the Rest of the World (RoW).

• In November 2024, ZIMs Scientific Office was established in the Middle East, complementing ongoing regulatory filings for innovative products through our Australian Subsidiary ZIMTAS Pty Ltd.

• 1 NIP and 1 OTF filings were completed in Australia through ZIMTAS Pty. Ltd.

• In FY25, ZIM completed 23 NIP filings for 6 molecules, 17 OTF filings for 5 molecules, and 10 FF filings for 5 molecules across Regulated, Pharmerging, and RoW markets.

• 5 NIP filings for 4 molecules and 6 OTF filings for 2 molecules were completed in the EU, bringing cumulative EU strengthening our

regulatory Innovative Products pipeline and global market readiness.

• ZIM received 2 NIP Marketing Authorizations in the EU during FY25 for Azithromycin Oral Suspension and Dimethyl Fumarate.

• ZIMs co-development partner, Neuraxpharm, received a Marketing Authorization for Buprenorphine Sublingual Films across Europe—a key milestone in the OTF segment.

• ZIM and its partners secured 6 NIP, 7 OTF, and 14 FF Marketing Authorizations during the year across Regulated, Pharmerging, & RoW markets.

• In line with the global expansion strategy, ZIM entered into strategic collaborations, including a partnership with a local UAE company to scale our Oral Thin Films (OTF) footprint across the GCC region.

• ZIM is developing a portfolio of 12 NIP, with 8 already completed. The remaining are expected to be finalized and filed through FY26, focusing on the EU, Regulated, and Pharmerging markets.

• The R&D team comprises 90 scientists, including 2 PhDs and 76 postgraduates.

In case of imported technology (imported during the last three years reckoned from 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.

The expenditure incurred on Research and

Development:

Revenue expenses : Rs 2,171.63 Lakhs

Capital expenses : Rs 132 Lakhs

C. Foreign Exchange earnings and outgo :

i) Foreign exchange : Rs 30,424 Lakhs earned

ii) Expenditure in : Rs 3,751 Lakhs foreign exchange

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, 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 2024-25 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 Boards 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 (Rs. In Lakhs)		Consolidated (Rs. In Lakhs)
	FY 2025	FY 2024	FY 2025	FY 2024
Revenue	37,563.55	36,547.32	37,903.10	36,742.44
Other Income	562.09	469.10	578.41	518.39
Total Income	38,125.64	37,016.42	38,481.51	37,260.83
Operating expenditures	33,236.71	32,537.08	33,530.41	32,608.97
Profit before interest, depreciation, and tax	4,861.46	4,479.34	4,951.10	4,651.86
Less: Finance costs	1,138.58	692.44	1,138.82	692.44
Depreciation and amortisation	1,989.14	1,482.93	2,011.34	1,595.18
Profit/ (Loss) before exceptional items and tax	1,761.21	2,303.97	1,800.94	2,364.24
Exceptional Items - loss	-	-	-	-
Profit/(Loss) before tax	1,761.21	2,303.97	1,800.94	2,364.24
Tax expense	586.81	628.42	584.44	639.61
Profit/(Loss) after tax	1,174.40	1,675.55	1,216.50	1,724.63
Opening balance in Retained Earnings	15,273.42	13,636.06	15,743.15	14,056.70
Profit available for appropriation	16,447.82	15,311.61	16,959.67	15,781.34
Less: Appropriations	-	-	-	-
Dividend	-	-	-	-
Dividend distribution tax	-	-	-	-
Transfer from other comprehensive income	(53.84)	(38.19)	(53.84)	(38.19)
Closing balance in Retained Earnings	16,393.98	15,273.42	16,905.83	15,743.15

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

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

Details of Directors appointed:

The Board of Directors on the recommendation of Nomination & Remuneration Committee, in its meeting held on 28^th Day of March, 2025 have appointed Mr. Ashok Bhatia (DIN: 02090239) as an Independent Director (Additional Director) of the Company for a period of three years effective from 01^st day of April, 2025 to 31^st March,2028, subject to approval of shareholders in the ensuing Annual General Meeting. A resolution seeking shareholders approval for his appointment forms a part of the Notice of the Annual General Meeting.

The Board of Directors on the recommendation of Nomination & Remuneration Committee, in its meeting held on 28^th Day of March, 2025 reappointed Dr. Kamlesh Shende (DIN: 09537666) as an Independent Director of the Company for the further term of three years effective from 01^st day of April, 2025 to 31^st March,2028, subject to approval of shareholders in the ensuing Annual General Meeting. A resolution seeking shareholders approval for his re-appointment forms a part of the Notice of the Annual General Meeting.

Details of Directors ceased:

Dr. Kakasaheb Mahadik (DIN: 08688418), ceased to be Independent Director of the Company with effect from 01^st April, 2025 upon completion of his term as an Independent Director. The Board places on record its appreciation for his invaluable contribution and guidance.

Details of Directors resigned during the year: NIL

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

Details of Director Retiring by Rotation :

Mr. Zulfiquar Kamal, Whole-time Director (DIN: 01786763), who retires by rotation at the ensuing Annual General Meeting and, being willing and eligible, has offered himself for re-appointment. A resolution seeking Shareholders approval for his re-appointment along with other required details forms part ofthe Notice of the Annual General Meeting.

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

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

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

‘ZIM Laboratories FZE the wholly owned subsidiary of the company has incorporated a subsidiary ZIM SCIENTIFIC OFFICE L.L.C in Dubai with effect from 15^th November, 2024.

As of 31.03.2025, the Company has five Subsidiaries and two step down subsidiaries.

v) Details relating to deposits covered under Chapter V ofthe 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 ofthe Annual Report.

z) Details of the Employee Stock Option Scheme as of 31st March, 2025:

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 SEBI SBEB Regulations and a certificate from the Secretarial Auditors, confirming implementation of the Plan in accordance with SEBI Regulations and shareholders resolution has been hosted on the website of the Company at https://www.zimlab.in/investor-reports- qeneral-meetinq

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

6. ZIM Laboratories Middle East DMCC, UAE, Step Down Subsidiary

7. ZIM SCIENTIFIC OFFICE L.L.C, Dubai, Step Down Subsidiary

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 Companys 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 2024-25:

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 Companys 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, 2025 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 ofthe Company during business hours on working days up to the date ofthe 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) Compliance of Applicable Secretarial Standards:

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.

(aj) ZIM Laboratories Employee Stock Option Scheme 2023

The Company has obtained Shareholders approval on 28^th January, 2024 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. During the financial year 6,87,257 options were granted to the eligible employees under the Scheme.

(ak) 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.