Vimta Labs Ltd

Dear Members,

Your Directors are happy to present the 34^th Annual Report together with the Standalone & Consolidated Audited Financial Statements of the Company for the year ended 31^st March 2024.

1. OUR COMPANY'S PERFORMANCE

For F.Y 2023-24, company recorded a consolidated revenue of Rs. 3,222.68 million as compared to Rs. 3,216.34 million in the previous year and standalone revenue of Rs. 3,169.01 million as compared to Rs. 3185.84 million in the previous year.

The EBITDA for FY 2023-24 is 28.2% and 27.7% for consolidated and standalone levels respectively, compared to 30.6% and 30.5%, of the previous year.

The Financial performance of the Company for the year ended 31^st March 2024 with the comparative figures of previous years is summarized below:

(Rs. in Millions)

2. MANAGEMENT DISCUSSION AND ANALYSIS

Macro Economy

Global Economy

The global economy continues to navigate a complex landscape, marked by geopolitical tensions and mounting cost-of-living concerns. Nevertheless, its resilience remains evident, with inflation receding more rapidly than anticipated, mostly owing to supply chain efficiencies and decisive monetary policies, including interest rate adjustments by central banks aimed at curbing inflation. Despite these encouraging signs, potential slowdowns loom in 2024, triggered largely by persistently high interest rates and scaled-back government spending in response to national debt levels.

In late 2023, major economies witnessed a surge in growth, fuelled by government spending, rising disposable incomes, and pandemic savings. However, the upswing was uneven. The Eurozone, for instance, faced weak consumer confidence, high energy prices, and declining manufacturing, while low-income economies remained below pre-pandemic growth due to high borrowing costs.

On a positive note, favourable improvements in supply chain and moderating energy prices have curbed inflation, bringing headline and core rates closer to pre-pandemic levels. This easing inflation could possibly lead to future rate cuts, potentially boosting stock markets. The decline in inflation reflects both receding energy shocks and easing labour market tightness. Although job vacancies have seen a dip and unemployment rates are marginally rising, an increase in labour supply including immigration, is contributing to the overall picture.

Despite these favourable trends, the challenge of high long-term borrowing costs persists, fuelled by escalating government debts. Monetary policies continue to vary significantly across different countries, with some central banks lowering rates and others maintaining them to ensure economic stability. More importantly, controlled wage growth is preventing a wage-price spiral, ensuring that both near-term and long-term inflation expectations are anchored.

Outlook

Global growth is forecasted to hold near 3.1% in 2024, with a modest uptick to 3.2% in 2025, on the back of improved prospects in China, the US, and some emerging economies. That said, tighter monetary policy, reduced fiscal stimulus, and sluggish productivity will keep growth below historical averages. Advanced economies are expected to face a temporary slowdown in 2024, followed by a rebound, while emerging markets will likely see stable, but uneven, growth across regions.

Indian Economy

As global economy finds itself at a precarious crossroads in 2024, marked by a narrow escape from recession and ongoing volatility, geopolitical tensions have intensified, leading to economic fragmentation and financial instability. In the midst of this turbulence, India has emerged as a significant economic and geopolitical force. Its strategic decisions are poised to potentially elevate it to the world's third-largest economy within the next five years and achieve developed nation status by 2047. India's path could exemplify a model for inclusive growth, digital innovation, and climate action.

In 2023, India reached a significant milestone by assuming the presidency of the G20, the world's foremost global economic forum, where it highlighted its economic strength and adept diplomacy on a global stage. Economically, India emerged as a pivotal driver of global growth, accounting for 16% of the total global growth in 2023. Its impressive growth rate of 7.2% during the fiscal year 2022-2023 was the second highest among G20 nations, nearly doubling the average growth rate of emerging market economies for that period.

Looking ahead, India's economy has the potential to reach $7 trillion by 2031, driven by domestic reforms, infrastructure development, and focus on emerging sectors. Despite shortterm challenges like global economic slowdown, India remains well-positioned for long-term success. Continued disinflation, favourable monsoon, and increased private investment are expected to support growth, making India the fastest-growing large economy. Diversification and attracting private investment will further capitalize on global opportunities, sustaining robust growth.

Outlook

India's GDP growth is projected to ease to 6.8%, with inflation and interest rates likely peaking. Potential interest rate cuts could begin as early as June 2024. While government infrastructure spending may soften, private investments are expected to remain robust, driven by emerging sectors. Government initiatives to support rural areas aim to maintain income levels and consumer demand. However, factors like monsoon performance, global oil prices, and logistics disruptions remain crucial for managing both growth and inflation.

(Source: CRISIL_ Outlook Mar 2024, World Economic Forum & EY)

Industry Overview (Opportunities and Threats)

Pharmaceutical Analytical Testing

Global

The market for pharmaceutical analytical testing is projected to reach USD 13.43 billion by 2029, reflecting a growth rate of 8.41% annually between 2024 and 2029.

The COVID-19 pandemic significantly impacted the pharmaceutical analytical testing landscape. The urgent need to develop vaccines and treatments for the coronavirus disease propelled a surge in new drug candidate creation. Analytical testing is crucial throughout drug development, ensuring accuracy, efficiency, and safety at every stage. The rapid response to COVID-19 drove the development of biosimilars, combination therapies, and innovative vaccines. This, in turn, increased the demand for advanced bioanalytical testing techniques, such as electrophoresis, electrochemical and titrimetric assays, and immunoassays.

Beyond the pandemic's influence, several other factors are contributing to market growth:

Rising Number of Clinical Trials: The increasing number of clinical trials globally necessitates robust analytical testing procedures.

Focus on Biologics and Biosimilars: The growing focus on developing and testing biologics and biosimilars creates further demand for specialized analytical testing.

Outsourcing Lab Testing: The trend of pharmaceutical companies outsourcing their laboratory testing needs to specialized firms is another key driver.

The need for stringent quality control measures in the pharmaceutical industry is paramount. According to FDA drug recall statistics, a significant number of drugs are recalled annually, highlighting the importance of thorough testing before medications reach the market. Analytical testing plays a critical role in guaranteeing the safety and efficacy of drugs, ultimately protecting public health and ensuring the effectiveness of treatment options.

(Source: Morder Intelligence & EY)

India

The market is propelled by innovation in the pharmaceutical industry, a heightened focus on regulation, a growing number of end-users, and the cost benefits of outsourcing. To ensure long-term sustainability, pharmaceutical companies must boost their R&D spending and invest in drug discovery. Additionally, the increasing need for product safety and quality, along with evolving regulations for in vivo and in vitro tests, are expected to further drive market growth.

The demand for specific types of tests has surged due to the development of combination products, biosimilars, and other new medicines. Market growth is driven by several key factors, including stringent regulations, the need to meet regulatory standards, rising demand for biosimilars and biopharmaceutical products, a growing pipeline of products, and enhanced efficiencies.

The growth of the pharmaceutical analytical testing outsourcing market in the region faces significant challenges due to increased reliance on unreliable outsourced manufacturing organizations. Additional obstacles include a shortage of experienced specialists, a lack of well-established healthcare infrastructure, high operational costs, changes in Good Manufacturing Practices (GMP), evolving regulatory policies, and the demand for shorter turnaround times. These factors collectively threaten to impede the expansion of the market.

(Source: APAC Market Data Forecast & EY)

Testing, Inspection & Certification Market

Global

Testing, Inspection and Certification (TIC) services are instrumental in guaranteeing that infrastructure, products, and services meet stringent safety and quality standards across various regulations. The consistent demand for regular inspections and testing across industries, regardless of seasonal fluctuations, is a key driver of this market's anticipated growth.

Several factors are fuelling this expansion: stricter regulations in sectors like healthcare and automotive, the incorporation of AI and IoT for enhanced testing capabilities, the growing need to comply with diverse standards in a globalised world, and an intensified focus on quality, safety, and sustainability.

The global TIC market is projected to balloon to $280.6 billion by 2029, reflecting a steady growth rate of 3.8% from its $233.2 billion value in 2024. The Asia-Pacific region is expected to dominate the TIC market due to the rise of emerging economies like India, China, Japan, and South Korea. Their growing industrial bases, export booms, stricter regulations, and rapid urbanization are driving the demand for TIC services.

That said, globalisation is also a double-edged sword. While it necessitates TIC services throughout complex supply chains to maintain quality, it also creates challenges. Proliferation of labs, complex logistics, and the ever-increasing need for efficiency are putting a strain on the industry.

The biggest hurdle remains the lack of standardised TIC regulations globally. This inconsistency poses a huge challenge for businesses to operate seamlessly across borders and ensure consistent quality and compliance.

(Source: Mordar Intelligence , Markets and markets & EY)

India

India is a prominent market for Testing, Inspection, and Certification (TIC) services in the Asia Pacific region, with an expected CAGR of 4.4% from 2023 to 2030. This growth is propelled by escalating demand from businesses and organisations for reliable TIC methodologies. Adherence to rigorous testing and inspection protocols is imperative for businesses to uphold optimal quality, productivity, and efficiency levels. Employing TIC strategies enable businesses to customise their supply chain operations, thereby enhancing corporate processes.

The market holds significant potential, driven by regulations, trade, domestic consumption, the expansion of renewable energy production and infrastructure projects.

The market is divided into two categories: Application and Sourcing type.

•By application: The market caters to various sectors including consumer goods & retail, agriculture & food, chemicals, infrastructure, manufacturing, medical & life sciences, mining, oil & gas, automotive, public sector, and IT, telecom & others.

•By sourcing type: Businesses can choose between inhouse testing capabilities or outsourcing services.

(Source: KBV Research & EY)

CRO Services Market Global

The global contract research organisation (CRO) services market is projected to surge from $82 billion in 2024 to $129 billion by 2029, reflecting a robust CAGR of 9.6%. This growth is fuelled by pipeline of drug development projects for therapeutics and medical devices. Advancements in technology, particularly in precision/personalised medicine, are driving the outsourcing of development services to CROs. Additionally, rising clinical trial outsourcing is driving its surge in developing countries. CROs are actively expanding their global networks to enhance customer service.

North America currently dominates the CRO services market, and this trend is expected to persist on the back of an ever- expanding drug development pipeline and a growing number of drugs entering clinical trials. Pharmaceutical, biotech, and academic institutions increasingly outsource development activities to leverage CRO expertise in infrastructure, therapeutic areas, regulatory compliance, and more.

The burgeoning field of precision/personalised medicine presents another growth opportunity. The number of FDA- approved personalised medicines has witnessed a significant rise, with over 50 approvals between 2020 and 2022. However, patient recruitment and retention remain a challenge due to shortage of skilled professionals and lack of patient-centric approaches in clinical trials. Decentralised clinical trials (DCTs) are expected to mitigate this hurdle.

(Source: Markets And Markets, Grand View Research, Technavio & EY)

India

India's CRO sector is flourishing, with a projected CAGR of 10.75% to reach $2.5 billion by 2030. This growth is driven by specialised research and development service providers assisting pharmaceutical and biotech companies across various stages of drug development (discovery, pre-clinical, clinical, bio equivalence/bio availability).

India is a preferred destination for global clinical trials because of significant cost advantage, improved regulatory environment and hospitals infrastructure, growing access to larger patient populations and physicians propelled by expansion of private hospitals into tier 2 and tier 3 cities of India. The clinical trials market is dominated by Phase II and III trials which are growing at 15% to 18%.

Likewise, India is also a large global hub for small molecules and biosimilar bioequivalence studies as India is the major supplier of generic drugs worldwide. Globally this market is close to USD 700 million and estimated to grow at a CAGR of 8.4%. The growth of bioequivalence studies is driven by expanding pharmaceutical market, rising healthcare costs, advancing scientific technologies, and rising chronic illnesses.

The Indian pre-clinical CRO segment, is expected to reach $393.6 million by 2030, growing at a CAGR of 11.4%. Multiple factors fuel this expansion: cost advantages, a skilled workforce, rising technological advances, favourable regulatory environment, and a rising trend of global R&D outsourcing. Furthermore, the biopharmaceutical companies dominated the market in 2023, particularly small and mid-sized businesses that lack enough preclinical drug development facilities or experience. In the coming years, this is predicted to increase demand for preclinical CRO services.

According to a 2023 study by India's Department of Pharmaceuticals, leading pharmaceutical companies' R&D spending surpassed $138 billion in 2022, reflecting a sustained upward trend. The overall market benefits from the growing international preference for outsourcing R&D activities. Pharmaceutical, biotech, medical device, and agrochemical companies leverage CRO expertise to conduct pre-clinical research, allowing them to focus on core competencies. Advancements in automation and robotics further enhance efficiency and expedite experiment completion.

(Source: Grandview Research, Study on CRO sector in India & EY)

Environment Testing Industry Global

The global environmental testing market is projected to reach $20.16 billion by 2030, driven by a robust CAGR of 7.8%. Stringent environmental regulations and active enforcement by organisations like the OEFA and EPA are key factors fuelling this growth.

Environmental testing services have seen increased utilisation across sectors like personal care and pharmaceuticals during the pandemic. Regulatory bodies mandate routine testing and inspection of environmental waste, further propelling market expansion. Additionally, rising public awareness of environmental issues and the development of faster contaminant detection methods are creating lucrative new market opportunities. These factors are expected to significantly boost demand for environmental testing services in the coming years.

(Source: Grand View Research & EY)

India

India's environmental testing market, valued at $240.15 million in 2023, is poised for steady growth at a CAGR of 7.94% from 2025 to 2029. This expansion is driven by several key factors:

•Deteriorating air, water, and soil quality: Rising pollution levels necessitate frequent environmental testing to monitor and manage these concerns.

•Stricter environmental regulations: The Indian government's implementation of stringent environmental standards compel industries to comply, leading to a surge in testing demand.

•Western India's dominance: This region houses a high concentration of industries (pharmaceuticals, chemicals, petroleum) with significant environmental impact. Consequently, extensive testing is required to ensure compliance and mitigate environmental risks. Stringent environmental regulations in states like Maharashtra and Gujarat further propel market growth by mandating regular testing for industrial activities.

•Heightened public awareness: Growing public concern about environmental issues fosters increased demand for testing services.

•Industrial expansion: The expansion of sectors like agriculture, pharmaceuticals, and food & beverages, all of which require environmental testing as part of their operations, also contributes to market growth.

(Source: Techsciresearch & EY)

Food Testing Industry

Global

The global food safety testing market, valued at over $21.6 billion in 2023, is projected to expand at a healthy CAGR of 8.1% from 2024 to 2032, owing to the worldwide surge in food consumption and the growing need for secure food supplies, particularly in developing nations like India, Indonesia, and Brazil.

A significant factor is the rising incidence of foodborne illnesses caused by contaminated food. This public health concern, coupled with increased consumer awareness and demand for transparency in food production, is driving the market towards stricter testing protocols. Stringent regulations like the FSMA in the US and EU further compel food manufacturers to implement rigorous safety measures.

The market is witnessing a shift towards more comprehensive testing methods that go beyond traditional pathogen detection. This includes testing for chemicals, toxins, and GMOs, reflecting the growing consumer demand for organic and non-GMO products.

North America and Europe currently dominate the market due to established regulatory environments and high consumer awareness. However, emerging markets in Asia-Pacific are experiencing rapid growth, driven by urbanisation, evolving dietary habits, and strengthening regulatory frameworks.

(Source: GMI Research, Mordar Intelligence, Imarcgroup & EY)

India

The Indian food safety testing market, valued at $55.25 million in 2023, is poised for impressive growth at a CAGR of 7.18% through 2029. This surge is driven by a growing national focus on food safety and quality.

India's increasing population and rising consumer awareness about foodborne illnesses are fuelling a demand for robust testing mechanisms that aim to safeguard the integrity of the food supply chain and prevent illnesses.

A key driver of this market is the stringent regulatory framework established by the Food Safety and Standards Authority of India (FSSAI). The FSSAI acts as a watchdog, setting standards, regulating food production and distribution, and ensuring compliance with safety guidelines. These regulations directly influence the market, as food producers and manufacturers must Source: Techsci Research & EY to rigorous quality and safety testing protocols.

(Source: Techsci Research & EY)

Electrical and Electronics Testing

Global

The global market for Electromagnetic Compatibility (EMC) testing is projected to grow steadily, reaching $3.8 billion by 2032 from $2.5 billion in 2023. This represents a CAGR of 4.9%. Several factors are driving this expansion:

•Increased demand for certification services: Businesses are increasingly seeking certification to ensure their products comply with regulations.

•Rising consumer electronics demand: The growing popularity of consumer electronics fuels the need for EMC testing.

•Developments in 5G infrastructure: As 5G technology rolls out, robust EMC testing becomes crucial.

EMC testing verifies the proper functionality of electronic and electrical equipment within their intended electromagnetic environment. It ensures products operate without interfering with other devices or being affected by external electromagnetic disturbances.

The market for EMC testing is expected to experience significant growth in the coming years due to several additional factors:

•Stricter security requirements: Mandatory EMC testing for medical devices, for instance, is becoming more common.

•Standardisation of electronic devices: Widespread standardisation across electronic products strengthens the need for EMC testing.

•Focus on brand reputation: Companies increasingly recognise the value of EMC testing in maintaining brand reputation.

The rise of new mobile network technologies like LTE, and 5G, require specialised testing equipment to guarantee quality and reliability. This, in turn, fuels the growth of the EMC testing market.

(Source: straitsresearch & EY)

India

Rising disposable income in developing nations like India is fuelling a significant market for high-tech consumer devices such as smart wearables, smartphones, smart appliances, and electric vehicles. This trend, coupled with Asia-Pacific's (APAC) established role in mass producing electronics for various sectors, is propelling the region's electromagnetic compatibility (EMC) testing market.

India in particular, is experiencing remarkable growth in its EMC testing market due to several factors:

•Rise in Manufacturing Facilities: The increasing number of manufacturing units in India, driven by the government's "Make in India" initiative, necessitates robust EMC testing to ensure product compliance.

•Skilled Workforce Availability: A readily available pool of skilled personnel further strengthens India's position as a manufacturing hub and drives the demand for EMC testing services.

(Source: Asia-Pacific EMC Testing Market to 2028 & EY)

Clinical Diagnostics Industry Global

The clinical diagnostics market is poised for steady growth, projected to reach $109.92 billion by 2029 from $84.18 billion in 2024, a CAGR of 5.48%. The COVID-19 pandemic significantly accelerated this growth due to a surge in testing needs. The demand for diagnostics is expected to remain stable in the post pandemic period, contributing to market growth over the next five years.

Beyond the pandemic, the rising prevalence of chronic diseases is driving demand for healthcare services, and clinical diagnostics play a crucial role in disease prevention, detection, and management. This increasing burden of chronic illness is another key factor propelling the overall market forward.

(Source: Mordar Intelligence & EY)

India

India's diagnostic services market is experiencing significant growth, jumping from $14.57 billion in 2022 to $16.23 billion in 2023. By FY32, the market is projected to reach a staggering $43.57 billion.

The market comprises two main segments: pathology testing (60% share) and imaging diagnostics (40% share). While the radiology segment thrives due to rising demand for imaging services, pathology testing has also grown due to increased adoption of preventive health check-ups.

Several factors continue to contribute to this growth: Increased healthcare spending by a growing elderly population, rising income levels leading to greater ability to afford diagnostics, growing awareness of the importance of preventive testing, introduction of advanced diagnostic tests, expanding health insurance coverage, government initiatives focused on healthcare.

Post-pandemic, diagnostic services have become even more critical, playing a vital role throughout the healthcare journey - from early disease detection to treatment and post-treatment monitoring.

(Source: The Hindu & EY)

2.1COMPANY OUTLOOK

Your Company is positive about its growth prospects in the biopharmaceutical, food, environmental, and electronics & electrical contract testing and research markets all of which have a strong positive outlook despite the current global economic uncertainties, large competition, and stricter regulatory compliance requirements. The Company has a strong customer base, and promising pipelines which give it good visibility of growth over the medium term. Over the long term, the Company expects it would strategically look at acquisition opportunities or alliances or partnerships to enhance its market reach, capabilities and service portfolio, to gain further market share. Penetration into overseas markets would be an important lever of growth going forward. Domestic market continues to hold immense potential led by economic growth in the country. However, inflationary pressures in terms of cost of manpower, technology and material, and pricing pressures due to proliferation of laboratories in the country will be the key risks to watch out for. VIMTA continues to maintain its dominance in the domestic food testing and contract research services to biopharmaceuticals industry. Its expansion into electronic and electrical products testing services should contribute to the Company's growth. The Company's leading position in the domestic market in addition to its business development overseas should help it sustain its growth.

2.2OUR STRENGTHS & STRATEGIES

VIMTA believes that it is well-positioned to serve the global biopharmaceutical, agrochemical, specialty chemical and medical device industries through its integrated product development services. VIMTA provides services to its customers through processes and procedures that are oriented to deliver strong compliance to regulatory requirements, thereby maintaining the integrity of data and the reports, and minimizing risks to the customers. VIMTA has a track record of strong science and quality over a 40-year history, earning it a reputation as a leading, high quality, sophisticated contract research and testing organization. Over the years it has developed wide range of capabilities and offers high-value, advanced testing services to support product research and development. VIMTA believes it is amongst the leaders in the domestic market for GMP analytical services and GLP nonclinical services. The GMP, GLP and GCP compliant services have been successfully audited more than 100 times during the year by customers, regulatory agencies, accrediting and certifying bodies.

Similarly, in food testing business, VIMTA is recognized as the leader not only in its testing expertise, technologies, and quality, but also in its scale. VIMTA has the largest pan India network of full fledged laboratories positioning it to take more market share within the industry and continue to grow. It is counted as a center of excellence for the country by the government organizations as well.

In both food and above-mentioned product development services for biopharmaceutical companies, the broad spectrum of our services, cutting edge instrumentation and facilities with large footprint allows VIMTA to offer a comprehensive set of scientific laboratory services. Further, the scale of services enables us to continuously develop and refine our expertise and enhance our ability to bend the cost and time curve of services to our customers.

In Electronics and Electrical testing, VIMTA has invested over ' 300 million in capital expenditure to set up a state- of-the-art EMI/EMC testing facility which has capabilities to test electronics used for military/defense components as well. VIMTA believes that this capability is a differentiated offering to the industries in the domestic market. The safety and environment tests capabilities of Emtac Laboratories Pvt. Ltd., the WOS of VIMTA, complement well the EMI/EMC services. In future years the breadth of the menu offered by Emtac will be strengthened to widen the customer base, which will benefit VIMTA as well in expanding its reach in the market.

The environmental services comprise of again a diverse range of offerings. The experience of the company and its team in environmental services is second to none in the domestic market. Company has long-standing relationships with its customers as demonstrated by having provided services for decade or more to several of its top customers. These relationships tend to have larger and longer-term contracts, which provide stability and visibility to Company's revenues in environmental services.

VIMTA's clinical diagnostics laboratory services are spread across multiple cities including a central reference lab in Hyderabad. Company has a strong B2B reputation in the local markets. Despite the tough market conditions in diagnostics industry, company has been able to retain its customers owing to its reputation as a high quality service provider. Company will focus on B2B business to grow its reach in its local markets and in the future should be able to grow through professional partnerships with hospitals and other healthcare centers.

Across all its business units, the company believes that the technical and scientific expertise of its dedicated employees provides it with a competitive advantage. With a large pool of scientists holding advanced, masters or equivalent degrees, including PhDs, VIMTA has an edge due to the varied-scientific talent pool. The cross pollination of scientific domain expertise is leveraged often to create innovative as well as comprehensive solutions for customers across industries.

VIMTA has strategically developed and oriented its research and testing laboratory services towards the lucratively growing industries and their outsourcing needs, to position itself to win high value-add business. The service model is focused on providing to customers both stand-alone services as well as a mix of full-service contracts. VIMTA leverages its experience in managing laboratory operations for over 40 years, to create efficient processes delivering quality outputs that helps in maintaining long term stable customer relationships. Furthermore, company is focused on continuous operational improvements and prudent cost management. Company believes that its strong financial profile demonstrates the quality and efficiency of the business model and positions it for continued growth.

2.3KEY FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure Requirements), Regulations as amended in 2018, following are the details of key financial ratios and significant changes (changes of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratio.

Brief reasons for significant change in the ratios when compared to previous year are as under:

Interest Coverage Ratio: Interest Coverage ratio fell with decrease in EBIT.

Price Earning Ratio: Price Earning ratio improved with increase in market price.

Return on Capital Employed: ROCE declined due to increase in total equity & decrease in EBIT.

*Operating Profit Margin: Operating EBTDA to Revenue from Operations.

**Net Profit Margin: Net Profit to Revenue from Operations.

2.4MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED

The company's human resource strength stands at 1428 as on March 31, 2024. Company's focus is on increasing productivity of manpower and engaging them well for achieving greater connect to business goals and objectives. Company has increased reliance on technology to drive these initiatives.

2.5INFRASTRUCTURE

Vimta is one of India's largest Contract Research & Testing Organisations, Headquartered in Hyderabad, Vimta on 31^st March, 2024 has a network of 17 laboratories, including 01 Environment branch, 09 Clinical Diagnostics branches/ satellite labs, 08 Food branch labs in India. The total built up area of the labs is ~ 4,00,000 sq.ft.

2.6INVESTMENTS

VIMTA has consistently been committed to adding and improving its capabilities and service offerings. The broad range of industries that it serves and likewise its wide spectrum of services, are leveraged to stay resilient and pursue long term strategic objectives for growth. Company believes that the contract research and testing industry is constantly evolving, giving rise to newer opportunities. VIMTA is adept at evaluating opportunities in a disciplined manner that is both capital intelligent and growth oriented.

Despite a flat performance in FY 2024, Company firmly believes that it is on a strong growth path and has made the right investments with a capex outgo to the tune of ' 771 Mns including infrastructure expansion at Vimta Life Sciences facility, Genome Valley, Hyderabad, India during the year. The significant investments are a strong reflection of the company's confidence on the market opportunities and its growth strategies.

2.7RISKS & CONCERNS

Risks are inherent to any business. They are managed by the Company through a risk management process of risk identification and risk mitigation, through risk reduction strategies & plans and continuous monitoring of the effectiveness of the risk mitigation measures to control them.

The Risk Management Committee duly constituted by the Board has formulated a Risk Management Policy for dealing with different kinds of risks attributable to the operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures and this is reviewed periodically by the Audit Committee and the Board. The Company has adequate internal control systems and procedures to combat risks.

Vimta continues to strive to stay ahead on the competition curve through creation of new service opportunities, operational excellence and uncompromising commitment to quality, regulatory compliance, and customer service. However, there may be certain risk factors that could adversely impact business.

Quality related risks: Poor performance in regulatory audits and accreditation body audits could adversely impact our business. Maintaining quality and compliance is part of every activity in the organization. The management leads the quality culture, understanding very well that this is critical for business success and survival. However, unforeseen poor or inadequate performance by employees could lead to regulatory risks. There are adequate built in controls and checks to mitigate this risk. Nevertheless, these risks cannot be ruled out.

IT related risks: Our ability to serve customers effectively depends on the reliability of our data & information management and communication systems. We leverage computerized technologies and IT tools to perform many business critical activities hence we depend on the efficient and uninterrupted operation of our data & information management and communication systems, including systems we use in the laboratory, data management systems, systems used to deliver services to our customers, and failures in, breach of, or unauthorized access to or use of these systems or data contained therein may materially limit our operations and result in significant harm to our business. IT risk management is a part of our quality management system and thus the security and operation of our data management systems and communication systems, including data management systems and communication systems. Cyber-attacks could lead to disruption in operations. These are addressed through adequate back-up mechanisms and Disaster recovery process. A dedicated team is set up to constantly keep upgrading the IT Assets and implement the latest technologies to keep the environment safe and secure. Despite the extensive risk mitigation measures in place, the risk of disruption to our operations and business cannot be completely ruled out.

Service failure related risks: We are a scientific services organization and quality of service to the customers is critical for growth of our business. Quality of service is related to our ability to deliver reports and projects with scientifically reliable and accurate information; compliance to contractual requirements, regulations, standards, guidelines as applicable; and service customers with professional and ethical conduct. If we fail to perform our services per these expectations, we could lose confidence of our customers who may choose not to award further work to us or make claims against us for breach of our contractual obligations. Any such action could have a material adverse effect on our reputation, business, results of operations, financial condition and/ or cash flows. Our mitigation strategy is directed towards continuously strengthening our capabilities and learning and implementing best practices. Further, stringent review systems and suitable preventive actions are in place.

Financial risks: Vimta makes continuous investments in capacity expansion, market reach and new business streams. These investments are based on good business judgement through market study, backed by strong planning and risk mitigation measures. However, time factors and market dynamics could delay results and/ or create risks in obtaining returns on such investment. Other financial risks include bad debts from customers for various reasons; and liquidity risks as a result of any poor cash flows that could further lead to non-servicing of loans. Your company has dedicated groups for customer relations management and credit control. There are adequate checks to identify risky customer accounts and control business with them to minimize risks. Nevertheless, these risks cannot be completely ruled out.

Data risks: As a third-party provider of services, we often get into various service agreements, with customers including requirements on data confidentiality, data security and IP protection. Given the large scale of human resources involved in our organization, and the inherent vulnerability of IT solutions deployed, we may be at risk as a result of unintentional violations of customer contracts and agreements, which could further lead to significant legal risks for the business. This is mitigated through strong physical security and electronic security systems; trainings to employees, business continuity processes such as electronic data disaster recovery systems; confidentiality oaths from employees; well-propagated whistle blower policies etc. Nevertheless, these risks cannot be completely ruled out.

Growth and personnel related risks: Growth if not managed well places a strain on human, operational and financial resources. To manage our growth, we must continue to attract and retain talented staff across the business operations. Management pays strong attention to continuously building and improving operating and administrative systems to enhance productivity of personnel and processes and also to have a stronger administrative control on the businesses spread at various locations across the country. Given the dependency of business on quality of personnel there are inherent risks associated with personnel's abilities and ethical conduct, which may impact adversely customer satisfaction. Thus, if we are unable to manage our growth effectively, we could lose business from our customers. Further, if we are unable to recruit, retain and motivate key personnel, our business could be adversely affected. Our success depends on the collective performance, contribution and expertise of our senior management team and other key personnel throughout our businesses, including qualified management, professional, operational, scientific, technical, and business development personnel. There is significant competition for qualified personnel in all the industries that we operate in, particularly personnel with significant experience and expertise. The loss of any key executive, or our inability to continue to recruit, retain and motivate key personnel in a timely fashion, may adversely impact our ability to compete effectively and grow our business and negatively affect our ability to meet our short and long-term business and financial goals. Company takes several steps to maintain a motivated and engaged team. Initiatives such as ESOPs to attract & retain talent, rewards and recognition programs, personnel competency enlargement programs etc., are among the many best practices followed by the company. Nevertheless, the risks related to growth and personnel cannot be completely ruled out.

Other risks: A few more such risks and concerns are, change in regulations and regulatory environment; downturn in economies that our business operates in; steep drop-in service prices from competition; increase in prices of input material; changes in laws such as tax laws etc. External risks also include foreign exchange risks; interest rate risks; risks from terrorism etc. Further there are also risks of critical equipment breakdowns, power breakouts, short supply of any input material or consumable, fire, and other natural calamities. These are handled through a robust business continuity plan where adequate backups are created and tested from time to time for their effectiveness, nevertheless these risks cannot be completely ruled out.

It is possible that the above list of risks does not cover all risks exhaustively. However, being an experienced organization, the mitigation measures are in-built into the organization, its strategy and processes, which have so far helped the organization go through, and grow through, various phases of business and the market situations. It will be management's continuous endeavour to develop strategies that would help the organization de-risk its business & grow with opportunities.

3DIVIDEND

Your Directors have recommended a dividend of ' 2/- per equity share of ' 2/- each, for 2023-24 fiscal, Subject to approval of members.

4TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION & PROTECTION FUND (IEPF)

Members may please note that as per the provisions of Sections 124 & 125 of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, dividends that remain unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred to the Investor Education & Protection Fund.

The details of the unclaimed dividends and the due dates on which those are liable to be transferred to the Investor Education & Protection Fund are given below:

5TRANSFER TO RESERVES

No amount is either required or proposed to be transferred to reserves of the Company.

6CORPORATE GOVERNANCE REPORT

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate governance along with a certificate from a practicing Company Secretary on its compliance, forms an integral part of this Board's Report.

7ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, (as amended), a copy of the Annual Return of the Company will be uploaded on the website of the Company, which can be accessed at https:// vimta.com/wp-content/uploads/MGT-7.pdf.

8 CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the Company has spent a total sum of Rs. 1,00,78,201/- on CSR activities as approved by the CSR Committee. Disclosures as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure I to this report.

9 MEETINGS OF THE BOARD

During the year under review, six Meetings of the Board were convened and held, the details of which are given in the Corporate Governance Report, which forms part of this report. The intervening gap between the Meetings was within the limits prescribed under the Companies Act, 2013.

10SHARE CAPITAL

As at the end of the year, following is the status on share capital:

1.Authorised share capital: Rs. 70,000,000 (Rupees Seventy million) divided into 35,000,000 equity share of Rs. 2/- each.

2.Paid up capital: Rs. 44,341,166 (Rupees forty-four million, three hundred and forty one thousand, and one hundred and sixty-six) divided into 2,21,70,583 (Two Crore twenty one lacs seventy thousand five hundred and eighty three) equity shares of Rs. 2/- each

3.ESOPs allotted: 41,594 equity shares of Rs. 2/- each to the Employees upon exercise of Employee Stock Options under "Vimta Labs Employee Stock Option Plan 2021". Disclosure under Section 67(3)(c) of the Act in respect of voting rights not exercised directly by the employees of the Company is not applicable.

11ISSUE OF SHARES

During the year under review, the Company has not:

Issued any shares with differential voting rights pursuant to provisions of Rule 4 of the Companies (Share Capital and Debenture) Rules, 2014.

Issued any sweat equity shares to any of its employees, pursuant to the provisions of Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014.

12FINANCING THE PURCHASE OF SHARES OF THE COMPANY

During the year under review, the company has not given, either directly or indirectly, nor by means of a loan, guarantee, the provision of security or otherwise, financial assistance for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company in violation of the provisions of Section 67 of the Companies Act, 2013.

13EMPLOYEE STOCK OPTION PLAN

The members of the Company at their 31st Annual General Meeting held on 5^th July 2021, had granted approval for "Vimta Labs Employee Stock Option Plan 2021" and grant of stock options to the Eligible Employees of the Company under the scheme. The Company has obtained In-principle approval from Stock Exchanges for Vimta Labs Employee Stock Option Plan 2021 for issue of 663,234 Options. Out of which Nomination and Remuneration Committee at its meeting granted Options at various stages as mentioned below:

Further, during the year under review, the company allotted 41,594 equity shares of ' 2/- each to the Employees upon exercise of Employee Stock Options under "Vimta Labs Employee Stock Option Plan 2021."

The details of "Vimta Labs Employee Stock Option Plan 2021" form part of the Notes to Accounts of the Financial Statements in this Annual Report.

The disclosures pursuant to Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 can be accessed at https:// vimta.com/wp-content/uploads/Disclosures-pursuant- to-Regulation-14-of-the-Securities-and-Exchange-

Board-of-India-Share-Based-Employee-Benefits- Regulations-2014-1.pdf and the same are enclosed as Annexure II to this report together with a certificate obtained from the Secretarial Auditors confirming compliance with the Companies Act, 2013 and the SEBI (SBEB) Regulations, which is enclosed as Annexure III to this report.

14 CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year under review.

15 PARTICULARS OF DEPOSITS

During the year under review, the company has not accepted any deposit pursuant to the provisions of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, there is no non-compliance with the requirements of Chapter V of the Companies Act.

16 SUBSIDIARIES

EMTAC laboratories Private Limited, established in 2014, became a wholly owned subsidiary (WOS) of Vimta Labs Ltd in March 2020. Its principal business is testing and certification. It provides safety/performance testing services for electrical, electronic, and mechanical products and is also a physical security product, (bank safes/lockers, ATMs, home use lockers, fire wall doors etc.) certification company.

Emtac is located in Hyderabad, India. Its laboratory division is accredited to ISO 17025 by National Accreditation Board for Testing and Calibration Laboratories (NABL) and the certification division is accredited to ISO 17065 by NABCB (National Accreditation Board for Certification Bodies). It is also a Bureau of Indian Standards (BIS) approved and Telecommunication Engineering Center (TEC) designated laboratory.

Emtac is India's First Laboratory to be awarded NABL accreditation for Physical Security Products and also the first Laboratory in Telangana state to be accredited by NABL for safety testing of IT Products (viz., mobile phones, CCTV cameras, laptop components, cash registers, set top boxes, adapters etc.), UPS, LED lights, Electric Fans, Power banks, etc. It is one of the very few labs recognized by BIS for testing of table fans. It has a very strong technical team, which has made India's first ATM testing standard.

Emtac was strategically acquired by Vimta to complement its entry into electronic and electrical testing space. While Vimta offers EMI/EMC testing for consumer durables, defence, avionics, automotive, IT, wireless, telecom, medical and other industrial equipment and components, Emtac complements with safety and Environmental testing along with certification services to offer comprehensively packaged testing and certification services.

Emtac recorded revenues with a growth of 73% in the financial year 2023-24 at Rs. 100.98 million. Profit before tax for the financial year 2023-24 stands at Rs. 29.44 million compared to Rs. 11.64 million in the previous year.

The statement containing the salient features of the financial statements of the wholly owned subsidiary as per sub-section (3) of Section 129 of the Companies Act, 2013 in Form AOC-1 is annexed as Annexure IV to this report.

During the year, no other company has become or ceased to be a subsidiary or joint venture or associate company of this company.

AMALAGAMATION OF EMTAC LABORATORIES PVT LTD INTO AND WITH ITS PARENT COMPANY VIMTA LABS LTD.

Company is working on merging its subsidiary, EMTAC Laboratories Pvt. Ltd. This merger, currently undergoing judicial and regulatory review, is expected to be completed by the end of this financial year 2024-25.

The merger aims to consolidate the Company's market presence and is expected to enhance operational efficiency, sharpen strategic focus, and improve agility with the support of the Company's leadership. Additionally, it will better facilitate resource utilization, leading to reduced overhead and corporate costs.

Holding Subsidiary, Vimta is also engaged in the business of testing Electromagnetic interference (EMI)/ Electromagnetic compatibility (EMC) and requires no changes to be made to Company's organizational and operating structure and moreover enhances business efficiency, strengthens competitive power, enhances customer base, achieves economies of scale thereby lowering the cost of financing and increasing corporate value. Board considered the proposal of amalgamation at its meeting held on 30^th March 2024, and approved the Scheme of Amalgamation of Emtac Laboratories Private Limited ("Transferor Company") with Vimta Labs Limited ("Transferee Company") under the provisions of Sections 230 to 232 of the Companies Act, 2013. The Scheme is under process and subject to necessary statutory and regulatory approvals under the applicable laws, including approval of the jurisdictional National Company Law Tribunal.

17.PARTICULARS OF LOANS AND GUARANTEE GIVEN, SECURITY PROVIDED AND INVESTMENT MADE

As required under Section 186(4) of the Act, your Directors report includes Particulars of Loans, Guarantee given and security provided and investment made details, are shown in Annexure V and Notes to the Financial Statements (Refer Note 42 of Standalone Financial Statements).

18.PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure VI to this Report.

If any Member is interested in obtaining information pursuant to Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, such Member may write to the Company Secretary at the Registered Office in this regard.

19 AUDITORS

19.1 Independent Auditor's Report

During the year under review, the Company's auditors have not made any qualification, reservation or adverse remark or disclaimer in their Report on the financial statements of the Company and there were no instances of frauds reported by the auditors under section 143(12) of the Companies Act, 2013.

19.2 Statutory Auditors

Pursuant to the provisions of sections 139,142 and other applicable provisions of the Act read with the rules made thereunder, M/s Gattamaneni & Co., Chartered Accountants (Firm Reg. No. 009303S) were appointed Statutory Auditors of the Company for a term of five consecutive years from the conclusion of the 32^nd Annual General Meeting (AGM) held on 25^th June 2022 on a remuneration mutually agreed by the Board of Directors and the Auditors. They hold office until the conclusion of the 37^th Annual General Meeting to be held in the calendar year 2027. The auditors have confirmed that they hold valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India and are eligible to continue to hold the office for rest of their tenure.

19.3 Internal Auditors

Pursuant to the provisions of section 138 of the Act and based on the recommendations of Audit Committee, the Board of Directors at their meeting held on 18^th May 2024, have reappointed M/s Chaitanya V & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 2024-2025. M/s Chaitanya V & Associates, Chartered Accountants, have confirmed their willingness to be reappointed as the Internal Auditors of the Company. Further, the Audit Committee in consultation with Internal Auditors, formulated the scope, functioning periodicity and methodology for conducting the Internal Audit.

19.4 Cost Auditors

Pursuant to the provisions of section 148 of the Act read with the Companies (Audit and Auditors) Rules 2014, and based on the recommendations of Audit Committee, Board of Directors at their meeting held on 18^th May 2024 reappointed M/s Lavanya & Associates Cost Accountants (Firm Registration No. 101257) as Cost Auditors of the Company for the financial year 2024-2025. A resolution seeking ratification of remuneration payable to the Cost Auditors to conduct cost audit for the financial year 202425 has been included in the notice convening 34^th AGM of the Company. The necessary consent letter and certificate of eligibility was received from the cost auditors confirming their eligibility to be re- appointed as the Cost Auditors of the Company.

19.5 Maintenance of cost records

The Company has made and maintained the cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

19.6 Secretarial Auditors

Pursuant to the provisions of section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and based on the recommendations of the Audit Committee, the Board of Directors at their meeting held on 18^th May 2024 reappointed M/s D Hanumanta Raju & Co., Practicing Company Secretaries as Secretarial Auditors for the financial year 2024-2025. The consent letter and certificate of eligibility was received from M/s D Hanumanta Raju & Co., confirming their eligibility for the appointment.

The Secretarial Audit Report for the financial year 2023-24 in the prescribed form MR-3 is enclosed with this Report as Annexure VII.

19.7 Annual Secretarial Compliance Report

Secretarial Compliance Report for the financial year ended March 31, 2024, on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s D Hanumanta Raju & Co., Practicing Company Secretaries and submitted to both the stock exchanges.

20AUDIT COMMITTEE

The Board has constituted the Audit Committee as per the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The composition, attendance, powers and role of the Audit Committee are included in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

21 COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND ANNUAL GENERAL MEETINGS

During the year under review, the Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India as applicable to Board Meetings and Annual General Meetings.

22 POSTAL BALLOT

During the year under review, postal ballot notice dated 31^st January 2024 was sent to the shareholders as per the provisions of Section 110 of the Companies Act, 2013 read with Rule 22 the Companies (Management and Administration Rules), 2014, seeking shareholders' approval for Re-appointment of Mr. Purnachandra Rao Gutta, Independent Director and Mr. Sanjay Dave, Independent Director of the Company and Reappointment of Ms. Harita Vasireddi, Managing Director, Mr. Harriman Vungal, Executive Director - Operations and Mr. Satya Sreenivas Neerukonda as Executive Director of the Company. The shareholders through E-Voting have approved the resolutions with requisite majority. The postal ballot results were passed on 26^th March 2024.

23DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(5) of the Act, based on the representations received from the Operating Management, the Board of Directors, to the best of their knowledge and belief state that:

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

ii.They had selected such accounting policies as mentioned in the notes to the financial statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March 2024 and of the profit and loss of the Company for the year ended on that date;

iii.They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. They had prepared the annual accounts on a going concern basis;

v.They had laid down proper internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and

vi.They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

24 DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has an optimum combination of Executive, Non-Executive and Independent Directors.

24.1 Directors retiring by rotation

Dr S P Vasireddi (DIN: 00242288), Executive Chairman, retires by rotation and being eligible, offered himself for re-appointment. The proposal for the re-appointment of Dr S P Vasireddi is being placed at the AGM along with the necessary details.

24.2 Changes in Directorship/Committee Position

During the year under review, Dr. S P Vasireddi, was appointed Executive Chairman of the Company with effect from 1^st July 2023 to 30^th June 2026. The said appointment was approved the at 33^rd Annual General Meeting held on 28^th June 2023.

Apart from the above, there was no change in the designation/ terms of Directorship.

Currently, the Board has four committees: The Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee and Corporate Social Responsibility Committee. The composition of the committees is given below.

24.3 Disclosure by Directors

None of the Directors of the Company are disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Directors have made necessary disclosures to this effect as required under the Companies Act, 2013. Further, the Company has obtained Certificate pursuant to Regulation 34(3) and Schedule of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from M/s D Hanumanta Raju & Co., Practicing Company Secretaries, Secretarial Auditors and attached the same to this report.

24.4 Appointment/ Re-appointment

i.Mr. Purnachandra Rao Gutta (DIN: 00876934) was reappointed as an independent director, not liable to retire by rotation, for the second and final term of five years commencing from 11^th May 2024 to 10^th May 2029;

ii.Mr. Sanjay Dave (DIN: 08450232) was reappointed as an independent director, not liable to retire by rotation, for the second and final term of five years commencing from 11^th May 2024 to 10^th May 2029;

iii.Ms. Harita Vasireddi (DIN 00242512), was reappointed as Managing Director, not liable to retire by rotation, for a period of five years from 14^th July 2024 to 13^th July 2029;

iv.Mr. Harriman Vungal (DIN 00242621), was reappointed as an Executive Director - Operations, liable to retire by rotation, for a period of three years from 14^th July, 2024 to 13^th July, 2027; and

v.Mr. Satya Sreenivas Neerukonda (DIN 00269814) was reappointed as an Executive Director, liable to retire by rotation, for a period of five years from 14^th July, 2024 to 13^th July, 2029.

The approval of members through special resolutions was taken by means of Postal Ballot, through Electronic Voting (e-voting) for the above reappointments. The resolutions were approved by requisite majority on 26^th March 2024.

24.5 Changes in the Key Managerial Personnel

Dr. S P Vasireddi, Executive Chairman, Ms. Harita Vasireddi, Managing Director, Mr. Harriman Vungal, Executive Director - Operations, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. D.R. Narahai Naidu, Chief Financial Officer and Ms. Sujani Vasireddi, Company Secretary are Key Managerial Personnel of the Company within the meaning of Section(s) 2(51), and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Dr. S P Vasireddi has been appointed Executive Chairman w.e.f. 01^st July 2023. Apart from the said appointment and reappointment of others of other whole time directors there has been no change in the Key Managerial Personnel during the financial year under review.

24.6 Declaration by Independent Directors

As per the requirements of section 149(7) of the Act, all the Independent Directors of the Company have submitted their respective declaration that they fulfil the criteria of independence under Section 149 of the Act, read with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

24.7 During the year under review, no new Independent Director was appointed.

25 POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

Based on the recommendation of Nomination & Remuneration Committee, the Board of Directors approved and adopted a Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and other employees of the Company as required under Section 178(3) of the Act.

The Nomination and Remuneration Policy and Board Diversity Policy is set out as Annexure VIII, and the same can be accessed at https://vimta.com/wp-content/uploads/ Nomination-Remuneration-Policy.pdf https://vimta.com/ wp-content/uploads/Board-Diversitv-Policv.pdf

26 HUMAN RESOURCES

Our success depends on the collective performance, contribution and expertise of our senior management team and several key personnel throughout our organization, including scientific, technical, administrative, and other business enabling functions such as business development. With close to 1400 employee strength, the company leverages the diverse and abundant skills and domain expertise to build a scientifically strong and quality driven organization. Vimta believes that its Human Resources is the key to achieve business growth. Thus, to ensure employee satisfaction, the Company offers a safe, conducive, and productive environment. Endeavours are continuous to attract new talent and ensure the retention of existing employees. To establish a strong, connect with employees, several employee engagement activities are undertaken. Training and skill development programs are offered continuously delivered to promote a learning culture. Special skill development and training programs are conducted for identified talent pool. Keeping pace with technological advancements, HR processes are continued to be digitalised with substantial investments. The employees are sufficiently empowered, and company believes that such work environment propels the team to achieve higher levels of performance. The unflinching commitment of its employees is the driving force behind the Company's profitable growth. Company appreciates the spirit and the contributions of its dedicated employees.

27 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the contracts/ arrangements/ transactions entered by the Company during the year under review with related parties were in the ordinary course of business and at arm's length basis. The particulars of such contracts or arrangements with related parties, pursuant to the provisions of section 134(3)(h) and Rule 8 of the Companies (Accounts) Rules, 2014, in the prescribed form AOC-2, is enclosed as Annexure IX to this report.

The policy on materiality of related party transactions and the dealings is uploaded on the website of the Company, which can be accessed at https://vimta.com/wp-content/ uploads/Related-Party-Transaction-Policy.pdf

All the related party transactions are placed before the Audit Committee and also before the Board for their respective approval. Omnibus approval of the Audit Committee is obtained as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the transactions which can be foreseen and are repetitive in nature. The Company has a Policy on Related Party Transactions including the latest amendments thereof for the purpose of identification and monitoring of such transactions.

28 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is enclosed as Annexure X to this report.

29 RISK MANAGEMENT POLICY

Your Company continues implementation of effective Risk Management policy. The management and the Board oversees the implementation of risk management policy including identification, impact assessment and mitigation plans. The details of risks perceived by the Management are reported in the Management Discussion and Analysis Report.

30 ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of itself, that of its committees and individual directors.

A structured evaluation was performed, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance aspects.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. All the evaluations had satisfactory outcomes.

31 CODE OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

The Company has a comprehensive Code of Conduct (the Code) in place, pursuant to Regulation 17(5) of Listing Regulations, applicable to all the senior management personnel and Directors including Independent Directors to such extent as may be applicable to them depending on their roles and responsibilities. The Code covers duties of Independent Directors and also gives guidance needed for ethical conduct of business and compliance of law. Further, a policy on obligation of Directors and senior management personnel for disclosure of committee positions and commercial transitions pursuant to Regulation 26(2) (5) and (6) of Listing Regulation is in place. All the Directors and senior management confirmed the compliance to the Code of Conduct. Declaration on compliance with Code of Conduct is annexed as Annexure XI to the Corporate Governance Report.

32 PREVENTION OF INSIDER TRADING

Pursuant to SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has adopted and complied to the Code of Internal Procedures and Conduct for regulating, monitoring and reporting of trading by designated persons and their immediate relatives along with Code of Fair Disclosures.

33 PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company formed a committee to attend to the complaints under the above Act. During the financial year ended 31^st March 2024, the Company has not received any complaint from any woman employee pertaining to any sexual harassment.

34VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy in place, framed to deal with instances of fraud and mismanagement, if any in the Company. The Policy provides for adequate safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company, which can be accessed at https://vimta.com/wp-content/uploads/ Whistle-Blower-Policy.pdf

35 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

A robust internal control mechanism is a prerequisite to ensure that an organisation functions ethically, complies with all legal and regulatory requirements and observes the generally accepted principles of good governance.

Your Company has adequate internal control systems for business processes, efficiency in its operations, and compliance with all the applicable laws and regulations. Regular internal checks and audits ensure that the responsibilities are being effectively executed. In-depth review of internal controls, accounting procedures and policies of Company is conducted. Your Company has adopted adequate internal controls and audit system commensurate with its size and nature of business. Internal financial control with reference to financial statement is adhered.

Internal audit is carried on a quarterly basis. The internal auditors report directly to the Audit Committee of the Board, which ensures process independence. The Audit Committee reviews the adequacy and efficacy of the internal controls, as well as the effectiveness of the risk management process across the Company. After reviewing the findings and suggestions, the Audit Committee directs the respective departments through Board to implement the same.

36 CASH FLOW STATEMENT

In due compliance of the listing agreement and in accordance with the requirements prescribed by SEBI, the cash flow statement is prepared and appended to this Annual Report.

37 ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The company has adequate internal financial controls in place with reference to the financial statements and the same were operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board believes that the Company's internal financial controls with reference to the financial statements were adequate and effective during the year ended 31^st March 2024.

38 PROCEEDINGS UNDER THE INSOLVENCY & BANKRUPTCY CODE, 2016 (31 OF 2016)

During the year, the company has not made any applications under the Insolvency and Bankruptcy Code, 2016, nor any proceeding is pending under the said code.

39 BORROWINGS

During the year under review, the company has not approached its Bankers/Financial Institutions for one time settlement in respect of its borrowings. Accordingly, no valuation was done during the year under review.

40 SCHEME OF AMALGAMATION

During the year under review, Emtac Laboratories Private Limited (the Amalgamating / Transferor Company) and Vimta Labs Limited (the Amalgamated/Transferee Company) entered into a Scheme of Amalgamation whereby the Transferor Company shall be amalgamated with Transferee Company, effective 01.04.2024, being the Appointed Date. Considering various advantages that would endure upon the proposed amalgamation, such as dedicated focus on the respective business, administrative convenience and efficient utilization of resources, the Board of Directors of both the said Companies, in their respective Meetings, have approved the amalgamation Scheme for the amalgamation.

Both the said Companies are in the process of obtaining NOC from the respective secured creditors and unsecured creditors and also necessary statutory and regulatory approvals under the applicable laws, including approval of the jurisdictional National Company Law Tribunal.

41 MATERIAL CHANGES

No material changes have occurred subsequent to the end of the financial year of the Company to which the financial statements relate and till the date of the report, that have an impact on the financial position of the Company.

42 PARTICULARS OF SIGNIFICANT/MATERIAL ORDERS PASSED, IF ANY

During the year under review, there were no significant and material orders passed by any Regulator or Court or Tribunals which would impact the going concern status of the Company's operations in future.

43 GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has taken a green initiative in Corporate Governance by allowing paperless compliances by the Companies and permitted the service of Annual Reports and documents to the shareholders through electronic mode subject to certain conditions. Members who have not yet registered their email addresses are requested to register the same with their Depositories in case the shares are held by them in electronic form, and with Company's Registrars and Transfer Agents, CIL Securities Limited, in case the shares are held by them in physical form.

44 ACKNOWLEDGEMENTS

The Directors record their deep appreciation for the contributions made by the employees at all levels, for their sincerity, hard work, solidarity, and dedicated support to the Company during the year. The Directors also wish to place on record their gratitude to shareholders, customers, vendors, consultants, central and state government departments, bankers, and all other stakeholders for their continued support to the Company.