Zim Laboratories Ltd Directors Report

The Board of Directors of our Company has pleasure in
presenting the 42^nd 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, 2026, as follows:

a) Number of Meetings of the Board : 11

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) Reporting of Frauds by Auditors :

None of the Auditors of the Company has identified
and reported any fraud as specified under the second
proviso of Section 143(12) of the Act.

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

a) Loan : NIL

b) Guarantee : NIL

c) Investment : 381.20 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 2026, also forms part of the Notes to the
financial statements provided in the Annual Report.

h) 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.

The members can refer to policy on related party
transaction on the website of the Company at https://
www.zimlab.in/investors/policies .

i) Annual Return:

The Annual Return of the Company as on 31^st March,
2026, 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/investors/
annual-reports.

j) The state of Companys affairs:

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

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

l) The amount of dividend payment recommended : NIL

m) 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

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

A. Energy Conservation:

Zim remains committed to the continual
improvement of energy performance and the
conservation of energy across all its operations.
A dedicated team actively works to ensure the
efficient utilization of energy resources through
systematic monitoring and control mechanisms.
Energy consumption is closely tracked at
both equipment and plant levels, with regular
benchmarking exercises conducted to identify
improvement opportunities.

Periodic energy gap assessments are carried
out to evaluate current performance against
defined standards, enabling the identification and
implementation of targeted energy conservation
projects. These initiatives are focused on optimizing
operational efficiency, reducing energy intensity,
and minimizing environmental impact.

The ongoing energy conservation measures are
expected to significantly reduce carbon emissions
and contribute to the organizations broader
decarbonization goals, reinforcing its commitment
to sustainable and responsible operations.

The steps taken or impact on conservation
of energy are:

- To reduce energy losses, the company has
replaced old chilled water pipelines with new,
efficient pipelines, resulting in approximately
10% energy savings due to improved
cooling efficiency.

- The company has upgraded from a
1500 KVA transformer to a 2500 KVA
transformer, consolidating the electrical
load onto a single transformer, thereby
improving load management and reducing
operational inefficiencies.

- A Zero Liquid Discharge (ZLD) plant with
a capacity of 150 KLD has been installed,
treating wastewater and generating an
average of 100 KL/day of recycled water,
which is utilized for utility purposes, reducing
fresh water consumption.

- Optimization (atomization) of the recycled
water distribution pipeline network has been
carried out, minimizing water losses.

- Condensate recovery systems are
implemented, and recovered hot water is
reused as boiler feed, reducing fresh water
usage and lowering boiler fuel consumption.

- Proper insulation and cladding have been
installed on all chilled water pipelines to
enhance cooling efficiency and minimize
energy losses.

- Automation and interlocking of equipment to
avoid idle running and ensure operation only
when required.

- Implementation of a Testo Monitoring
System for real-time tracking of area
temperature and relative humidity, enabling
data-driven decision-making and prompt
corrective actions.

Steps taken by the Company for utilising
alternate sources of energy

- As part of its commitment towards clean
energy adoption, the Company has deployed
electric E-kart for internal transport activities.
This has led to a reduction in diesel/petrol
consumption, minimized greenhouse gas
emissions, and promoted eco-friendly mobility
within the facility.

- Various initiatives are currently under
evaluation to adopt sustainable and
renewable energy solutions in operations.

- 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. , We have also
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.

- ZIM is in process of incorporating a subsidiary
in Chile, LATAM for expansion of its Business.

Derived Benefits such as Product

Improvement, Cost Reduction, Product

Development or Import Substitution:

- In FY26, ZIM completed 14 NIP filings, 29 ODS
filings, and 14 FF generic filings to various
MOH across Pharmerging, and RoW markets.

- In FY26, ZIM received 5 NIP, 25 ODS and 4
FF Market Authorisations from MOH.

- 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.

- ZIMs subsidiary ZIMTAS PTY LTD, received
Marketing Authorisation for "Rizatriptan
Benzoate Orally Disintegrating Strips" and
"Tamsulosin Hydrochloride and Dutasteride
Capsules" in Australia.

- ZIM has also collaborated with Globalpharma
Co. (L.L.C.) to Commercialize Oral Thin Film
Products in the GCC Region.

- ZIM has received Permission to manufacture
and market FDC of Naproxen Delayed Release
and Esomeprazole capsule (375mg/500mg +
20mg/ 20mg) received from the Central Drugs
Standard Control Organisation (CDSCO) -
Directorate General of Health Services.

- 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.

- The R&D team comprises of 101 members,
including 2 PhDs and 85 Postgraduates.

I n 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:

i) Revenue expenses : 1,994.08 Lakhs

ii) Capital expenses : 36.63 Lakhs

C. Foreign Exchange earnings and outgo :

i) Foreign exchange earned :

32,999 Lakhs

ii) Expenditure in foreign exchange :

6,128 Lakhs

o) Risk Management Policy :

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

p) Corporate Social Responsibility (CSR) :

The Corporate Social Responsibility policy approved by
the Board at its meeting held on 19^th September, 2025 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
& Board.

- 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 2025-26 was
as follows:

(i)	Dr. Kamlesh Shende	: 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.

q) 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

r) Financial Highlights:

Particulars	Standalone ( In Lakhs)		Consolidated ( In Lakhs)
	FY 2026	FY 2025	FY 2026	FY 2025
Revenue	37,048.15	37,563.55	37,440.01	37,903.10
Other Income	1,138.99	562.09	1138.30	578.41
Total Income	38,187.14	38,125.64	38,578.31	38,481.51
Operating expenditures	34,090.15	33,236.71	34,439.00	33,530.41
Profit before interest, depreciation and tax	4,096.99	4,888.93	4,139.31	4,951.10
Less: Finance costs	1,320.23	1,138.58	1,320.23	1,138.82
Depreciation and amortization	1,936.74	1,989.14	1,997.80	2,011.34
Profit/(Loss) before exceptional item and tax	840.02	1,761.21	821.28	1,800.94
Exceptional Items- loss	-	-	-	-

 

Particulars	Standalone ( In Lakhs)		Consolidated ( In Lakhs)
	FY 2026	FY 2025	FY 2026	FY 2025
Profit/(Loss) before tax	840.02	1,761.21	821.28	1,800.94
Tax expense	243.50	586.81	237.47	584.44
Profit/(Loss) after tax	596.52	1,174.40	583.81	1,216.50
Opening balance in Retained Earnings	16,393.98	15,273.42	16,905.83	15,743.15
Profit available for appropriation	16,990.50	16,447.82	17,489.64	16,959.67
Less: Appropriations	-	-	-	-
Dividend	-	-	-	-
Dividend distribution tax	-	-	-	-
Transfer from other comprehensive income	(9.82)	(53.84)	(9.82)	(53.84)
Closing balance in Retained Earnings	16,980.68	16,393.98	17,479.82	16,905.83

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

t) 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 March, 2025 have reappointed Dr. Kamlesh
Shende (DIN: 09537666) and appointed Mr. Ashok
Bhatia (DIN: 02090239) as the Independent Director of
the Company respectively for a period of three years
commencing from 01^st April, 2025 to 31^st March, 2028
subject to approval of shareholders. The Shareholders
in the annual General Meeting held on 27^th June 2025
have passed the Special Resolution for their appointment
/ reappointment.

The Board of Directors on the recommendation of
Nomination & Remuneration Committee, in its meeting
held on 11^th September, 2025 have reappointed Mr. Niraj
Dhadiwal (DIN: 02007428) and Mr. Prakash Sapkal (DIN:
02007385) as Whole-Time Directors of the Company for
a period of two years commencing from 01^st October,
2025 to 30^th September, 2027 subject to approval
of shareholders. The Shareholders vide Postal Ballot
dated 13^th November, 2025 have passed the Special
Resolution for their reappointment.

Details of Directors ceased: NIL

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 of the Notice.

u) 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 Boards opinion, the Independent Director
appointed during the year on the Board of the
Company is a person of high repute and integrity who
possess relevant expertise and experience in their
respective fields.

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

The Company had one step-down subsidiary, ZIM
Laboratories Limited Middle East DMCC, Dubai, which
ceased its operations and accordingly dissolved on 23^rd
February, 2026.

The Board of Directors in their meeting held on 11^th
February, 2026 have considered and approved the
Incorporation of Wholly owned subsidiary of the
Company in Chile, LATAM region and the process of
incorporation is under process.

w) Details relating to deposits covered under
Chapter V of the Act: nil

x) 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.

y) 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

z) 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.

aa) 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.

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
2025-26:

No. of complaints filed : 1

No. of complaints disposed off : 1

Number of complaints pending for more than ninety
days : NIL

Number of Complaints pending as on the end of the
year : 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) Details of the Employee Stock Option
Scheme as of 31^st March, 2026:

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 SBEB Regulations has been
hosted on the website of the Company at https://www.
zimlab.in/investor-reports-general-meetinq .

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 previous year, 6,87,257
options were granted to the eligible employees under
the Scheme. During the current financial year 10,000
options were exercised by the eligible employees under
the Scheme.

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

1. ZIM Laboratories FZE, Sharjah

2. ZIM Health Technologies Limited, India

3. ZIM Thinorals Private Limited, India

4. SIA ZIM Laboratories Limited, Latvia

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 1 29(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

ag) 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.

ah) The Secretarial Audit Report for the financial year ended
31^st March, 2026 is annexed as Annexure II to this
report.ai)

ai) 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.

wcivicw rvcpuuo uiuicmci no

(aj) 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.

(ak) Compliance of the Provisions relating to The
Maternity Benefit Act, 1961:

The Company is in compliance with all applicable
provisions of the Maternity Benefit Act, 1961.

(al) 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.