vimta labs ltd Directors report

Dear Members,

Your Directors are happy to present the 33^rd Annual Report together with the Standalone & Consolidated Audited Financial Statements of the Company for the year ended 31^st March 2023.

1. OUR COMPANY (State of the Companys affairs)

Vimta Labs Ltd., originally established in 1984 as a Partnership firm, is Indias most comprehensive contract research and testing organization, providing a wide range of services to biopharmaceutical, food, consumer goods, electronic, electrical, agrochemical, healthcare, medical device, power, cement, oil & gas, ores & minerals, infrastructure and many other industries, government organizations as well as other industry participants. Over the span of ~40 years, we have developed a track record of consistent quality, delivery and continuous innovation that has enabled us to grow faster than our underlying markets over the past four years and deliver strong financial results. We believe our scientific expertise, along with our cutting-edge technologies and knowledge of applicable regulatory requirements help our customers bring to market safe and quality products and maximize returns on their outsourcing spends. Broadly, these services include:

• Drug discovery, development, and drug life cycle management support services in the areas of preclinical research, clinical research, central lab, and analytical services for biopharmaceutical companies;

• Preclinical research and testing services for medical device companies;

• Contract research and testing for agrochemical and specialty chemical companies;

• Food testing and analytical development services to support manufacturers, processors, farmers, retailers, traders, exporters, regulators (viz. FSSAI, BIS, APEDA, EIC, etal);

- VIMTAs Life Sciences Food Lab is a National Reference Lab for testing of Water, Alcoholic & Non-Alcoholic Beverages;

- VIMTA setup and operates the National Food Laboratory at Navi Mumbai, under PPP model with FSSAI. The contract was awarded to VIMTA in 2021 with a term of 25 years;

• Clinical diagnostics services to patients, clinicians, hospitals;

• Environmental regulatory services such as impact assessments and post project monitoring, to various industries such as power, infrastructure, cement, oil & gas, mining etc;

• EMI/EMC testing for electronic and electrical products/ components.

1.1. OUR VISION

To be seen as an Indian organization with a global perspective that has created an integrated, quality driven, customer sensitive Contract Research and Testing service platform, thats the most comprehensive of its kind across the globe.

1.2. OUR CORE VALUES

• Integrity of service through honesty, responsibility and an uncompromising commitment to Quality and Customer service.

• Respect for all our team members, partners, customers, suppliers, and all other people our business interacts with.

1.3. OUR CREDO

The values, beliefs and principles that guide us in our decisions and actions.

We believe our work impacts the wellbeing of millions of people across the globe. Our responsibility is to the end consumers, patients, and all others who use the products we help discover or develop and test for quality. In protecting the interests for these key stakeholders, everything we do must be with integrity, honesty, responsibility and of high quality.

We are strongly committed to provide value to our customers in terms of scientific knowledge, time and cost. Regulatory and quality system compliance must be the corner stone for our services. Customers orders must be serviced as per promised timelines and accurately.

Our partner vendors must have fair and transparent opportunities to grow their business with us.

We are responsible to our employees to provide a safe, harmonious, and unbiased work environment where we are committed to each persons individual learning and development. Employees must feel valued and believe that each one of them contributes to the success and growth of the organization, and that their work impacts the society beneficially. We must respect them, recognize their merit, and encourage them to make suggestions and complaints. We must support the health and well-being of our employees and help them to fulfill the needs of their work-life balance. There must be equal opportunity for employment, development, and advancement for those qualified. We must have highly capable leaders and their actions must be just and ethical. Compensation must be fair and working conditions safe, clean, and orderly.

We acknowledge our responsibility to the communities and environment in which we live and work. We must be a good corporate citizen and contribute to the development of weaker sections of society. We must be a good corporate citizen and abide sincerely with all applicable laws and good governance practices. We must protect and even try to enrich the environment we live in, and also consciously use the natural resources that we are privileged to have.

Our final responsibility is to our shareholders. Our business must have intrinsic potential to flourish and make a sound profit. We must plan well for growth and sustainability and execute our plans well. We must pay close attention to the markets we work in and continuously evaluate the opportunities and risks to act upon. We must innovate our services to stay relevant to market needs and make investments with balance. We have to build state-of-the- art facilities, maintain current and reliable technologies, and use materials that befit the purpose of our activities. Capacities must be enhanced, and expansions must be pursued. Reserves must be created to provide for adverse times. When we operate according to these fundamental principles, the shareholders should realize a fair return.

1.4. OUR SERVICES

I. Biopharmaceutical industry services

From product discovery/development to release and post approval/marketing services, we offer the following integrated services to biopharmaceutical and vaccines industry.

• Preclinical/early development/studies

• IND/505 (b)(2) enabling/studies

• Invitro studies (IVPT, IVRT, IVBE studies)

• Clinical research and development

• Bioanalytical

• Analytical

• Central lab

The services are in accordance with Good Laboratory Practices (GLP), Good Clinical Practices (GCP) and current Good Manufacturing Practices (cGMP) requirements, as applicable.

Lab locations:

Hyderabad

Accreditations & Approvals

• Drug Controller General (India) - DCGI

• GLP by National GLP Compliance and Monitoring Authority (NGCMA)

• AAALAC

• Committee for Purpose of Control and Supervision of Experiments on Animals (CPCSEA)

• Accredited by National Accreditation Board for Testing and Calibration Laboratories for ISO 17025 & ISO 15189

• College of American Pathologists (CAP)

• Pre-approved by WHO for Good Practices for Pharmaceutical Quality Control Laboratories (GPPQCL)

• State Drug Control Administration (DCA)

II. Food & Agri Testing

Extensive quality (purity and nutrition analysis) and safety testing expertise in all categories of food, water, and beverages including specialty services such as GMO testing, testing for Dioxins & Furans, Trace Heavy Metals, Label Claims, Radioactive isotopes, Vitamins and Minerals, Packaging and shelf life.

Methods development and validation.

Lab locations:

Hyderabad, Bangalore, Pune, Ahmedabad, Mumbai, Noida, Visakhapatnam, Nellore.

Accreditations & Approvals

• ISO 17025 by National Accreditation Board for Testing and Calibration Laboratories

• Food Safety and Standard Authority of India (FSSAI)

• Recognized as National Reference Laboratory (NRL) for Water and Beverages testing

• Bureau of Indian Standards (BIS)

• Export Inspection Council (EIC)

• Agriculture Products Exports and Development Authority (APEDA)

• European Commission

• AGMARK

• Tea Board

III. Clinical Diagnostics

Patient care services through wide range of test panels in Hematology, Serology, Cytogenetics, Microbiology, Molecular Biology, Histopathology/ Cytopathology, Biochemistry.

Lab locations:

Hyderabad, Delhi, Kolkata, Varanasi, Bhubaneswar, Visakhapatnam, Vijayawada, Tirupati, Chennai.

Accreditations & Approvals

• ISO 15189 by National Accreditation Board for Testing and Calibration Laboratories

• College of American Pathologists (CAP)

IV. Environment testing

Environment essentially being a multi-disciplinary science, the range of services offered are also comprehensive and cater to the varied needs of industry, pollution control agencies and regulatory authorities, in a larger pursuit of a green globe.

Lab locations and branch offices:

Hyderabad, Coimbatore (moved to Chennai in 2023), Chennai, Noida, Kolkata.

Accreditations & Approvals

• Recognized by Ministry of Environment, Forest & Climate Change (MoEF & CC)

• ISO-18001 certified and Accredited by NABET-QCI for carrying out EIA and EMP studies

• Laboratory is ISO 17025 accredited by NABL (National Accreditation Board for Testing and Calibration Laboratories)

V. EMI/EMC testing

Regulatory compliance and due diligence require that electronic devices undergo EMI/EMC testing. The most common applications for EMI/EMC testing are for defence/ aerospace devices & components, consumer goods, medical devices, industrial devices, wireless and telecom products. EMI/EMC testing is a critical step in bringing a new product into market.

Lab Locations:

Hyderabad.

Accreditations & Approvals

• NABL (National Accreditation Board for Testing and Calibration Laboratories) Accredited as per ISO 17025

• TEC (Telecommunication Engineering Center, GOI) recognized.

1.5. SERVICES OF WHOLLY OWNED SUBSIDIARY - EMATC LABORATORIES PRIVATE LIMITED

Emtac is a wholly owned subsidiary of Vimta offering the following services, which complement the EMI/

EMC testing services at Vimta.

• Product safety testing for IEC/EN, BIS, TEC, BEE standards

• Product Environmental Testing

• Physical Security Product testing as per BIS and EN standards

• Product Certification Services

Lab Locations:

Hyderabad.

Accreditations & Approvals

• NABL (National Accreditation Board for Testing and Calibration Laboratories) Accredited as per ISO 17025

• NABCB (The National Accreditation Board for Certification Bodies) Accredited for Product Certification as per ISO/IEC 17065

• BIS approved

• TEC (Telecommunication Engineering Center, GOI) recognized

2. OUR COMPANYS PERFORMANCE

For F.Y 2022-23, your company recorded a consolidated revenue of 3,216.34 million as compared to 2,797.28 million in the previous year and standalone revenue of 3185.84 million as compared to 2,774.34 million in the previous year, which in terms of growth is 15% and 14.8 % at consolidated and standalone levels respectively, over previous year.

The EBIDTA for FY 2022-23 is 30.6% and 30.5% for consolidated and standalone levels respectively, which grew well when compared to 28.8% and 28.8%, of the previous year.

The Financial performance of the Company for the year ended 31^st March 2023 is summarized below:

( in Millions)

Particulars No.	Year Ended March 31, 2023		Year Ended March 31, 2022
	Standalone	Consolidated	Standalone	Consolidated
I Total Income	3,185.84	3,216.34	2,774.34	2,797.28
i) Expenses other than Finance costs and Depreciation	2,215.69	2,232.79	1,962.08	1,979.92
ii) Finance costs	26.44	26.45	14.96	14.98
iii) Depreciation	305.40	307.13	231.58	233.29
II Total Expenses (i+ii+iii)	2,547.53	2,566.37	2,208.62	2,228.19
PBT Before Exceptional Items (I-II)	638.31	649.97	565.72	569.09
Less: Exceptional Item	-	-	(12.24)	(12.24)
III PBT- After Exceptional Item	638.31	649.97	553.48	556.85
IV Tax Expense	165.32	168.25	142.90	143.55
V Profit After Tax (III-IV)	472.99	481.72	410.58	413.30
Other comprehensive (loss)/income	(0.22)	(0.26)	(2.03)	(2.03)
VI Total Comprehensive income for the year (V+VI)	472.77	481.46	408.55	411.27

3. MANAGEMENT DISCUSSION AND ANALYSIS

Macro Economy Global Economy

More than a year later, repercussions of Russias intervention in Ukraine and emergence of highly contagious variants of COVID-19 continue to have a bearing on several economies. Additionally, the global economic recovery is being hindered by the tightening of financial conditions worldwide. As a result, several economies are anticipated to experience a slowdown in income growth, along with an increase in unemployment in 2023. Despite the central banks efforts to tackle inflation by raising interest rates, achieving price stability may take longer than expected. In the long term, the prospect for economic growth appears less encouraging than it has been for several decades. Global demand remained dampened driven by various economic factors, however, the gradual decline in commodity prices and Chinas reopening of its economy, normalized shipping conditions are expected to slightly boost global demand.

Outlook - Global

The global growth outlook remained uncertain due to sticky high inflation, weakened demand, and the ongoing war. The global economic growth is expected to slow from 3.4% in 2022 to 2.8% in 2023, with advanced economies experiencing the highest deceleration from 2.7% growth in 2022 to an expected 1.3% growth in 2023.

Indian Economy

In the fiscal year 2022, the Indian economy saw substantial growth due to private consumption and investment, though slower than the year before. However, in the fiscal year 2023, Indias growth will be influenced by several factors, including the worldwide economic slowdown, restricted monetary conditions, and high oil prices. Despite these challenges, the governments conducive policies, decreased non-performing loans in banks, and considerable corporate deleveraging will serve as a boost to the economys growth.

Private consumption is likely to grow due to improved labour market conditions, consumer confidence, and increased capital expenditure by the government. Services sector is expected to see a strong recovery whereas agricultural sector expected to sustain the growth momentum in FY2023. Inflation is expected to further cool due to base effects and slowing demand, although adverse weather and higher global oil prices present downside risks.

Outlook - India

Indias GDP growth rate was 6.4% during FY2023 due to a combination of factors such as expected global economic slowdown, strict monetary policies, and high oil prices. Despite these obstacles, Indias growth rate remains higher than that of comparable economies, primarily due to strong domestic consumption and lower dependence on global demand.

Industry Overview

(Opportunities and Threats)

Testing, Inspection & Certification Market Global

According to the forecast, the global testing, inspection, and certification (TIC) market is expected to experience growth from USD 223.9 billion in 2023 to USD 265.0 billion by 2028, with a projected compound annual growth rate (CAGR) of 3.4% during the forecast period.

Several key factors are anticipated to contribute to the growth of the TIC market, including stringent government regulations aimed at ensuring product safety and environmental protection. Additionally, the deployment of Internet of Things (IoT) technologies necessitates interoperability testing, while the increasing trade in counterfeit and defective pharmaceutical products calls for robust TIC measures. Furthermore, the growing emphasis on digitalization to enhance customer experience and the escalating significance of food safety and hygiene are expected to drive the TIC markets growth in the foreseeable future.

Testing, Inspection and Certification (TIC) Market Forecast to 2028

By adopting secure and effective testing and inspection practices, companies can uphold optimal quality standards, enhance productivity, and maximize efficiency. Leveraging TIC practices allows companies to tailor their supply chain activities to their specific requirements, streamlining their business processes.

The growing transportation and logistics sector offers promising growth prospects for the TIC industry, driven by increasing global trade and the adoption of intelligent logistics systems. These systems enable the use of TIC solutions to ensure timely product delivery, reducing operational expenses across the value chain. Reliable TIC practices are crucial in optimizing supply chain operations and maximizing profitability in a highly competitive market.

Moreover, regional governments persistent endeavours to enhance transportation facilities, such as increasing frequency and improving safety measures for public vehicles, are driving the adoption of well-organized TIC practices. These efforts contribute to the establishment of a robust TIC environment, promoting efficient and safe transportation for people.

The COVID-19 pandemic has had a notable impact on the TIC market, with disruptions in manufacturing and production activities in various regions due to lockdown measures implemented by national governments. Despite these challenges, the healthcare sector has witnessed increased TIC practices, driven by the growing demand for healthcare services and related products, including medical supplies. Similarly, the consumer goods industry has also embraced TIC practices during the pandemic, as there has been a heightened demand for safe and high-quality food products to meet consumers needs.

In 2022, the testing segment dominated the TIC market, representing the highest revenue share of over 70%. This can be attributed to the widespread use of testing practices across industries such as automotive, energy & utilities, oil & gas, petroleum, and manufacturing. Implementing rigorous testing of products enables companies to uphold stringent quality parameters and meet customer requirements. As a result, companies in various sectors are increasing their operational expenditure on testing equipment investments, thereby driving market growth. The emphasis on maintaining high-quality standards and customer satisfaction is acting as a catalyst for the adoption of testing practices in the TIC market.

(Source: MarketsandMarkets, Grand View Research, and EY) India

India is a dynamic market for testing and inspection in the Asia-Pacific region, driven by its status as one of the fastest emerging economies in the region with significant growth in the production sector and increasing export of goods. The Indian TIC market is projected to grow at a CAGR of 8.03% and reach USD 14.93 billion by 2027. Among the fastest-growing sectors in the region, TIC activities for the healthcare sector are prominent. The competitive advantage of Indian pharmaceutical companies is bolstered by low production costs and robust R&D efforts, leading to increased exports. Furthermore, the Indian governments Pharma Vision 2020 initiative aims to establish India as a global leader in drug manufacturing. The potential for product recalls is also expected to drive the demand for TIC activities in the pharmaceutical industry.

In the consumer electronics sector, the Indian government has permitted 100% foreign direct investment (FDI) in electronic hardware manufacturing through the automatic route, which is expected to attract increased investment in the sector. The National Electronics Policy is also anticipated to further stimulate investment in the electronics industry. Additionally, the "Made in India" policy promotes domestic manufacturing, encouraging companies to produce their products in India and comply with Indian TIC standards.

The food industry in India is expected to drive significant growth in testing and inspection practices, fuelled by increasing concerns about food safety and the need to reduce food recalls. To improve transparency and accountability in food safety inspection and sampling, the Food Safety and Standards Authority of India (FSSAI), the countrys food regulator, has established a nationwide online platform. The FSSAI has urged states to adopt this system to eliminate discrepancies and ensure food safety officers are held accountable. Additionally, the FSSAI has developed inspection checklists to facilitate efficient inspections of Food Business Operators (FBOs) by food safety officers. These checklists are used to assess compliance with regulatory requirements and determine the level of adherence to each requirement. This emphasis on standardized inspection processes by the FSSAI is expected to drive growth in testing and inspection activities in the food industry in India. Indias EV Testing, Inspection and Certification Market is expected to grow at a significant rate on the back of growing EV adoption, rising focus by the Government to impose stricter regulatory standards on the automotive industry, increasing sales of EVs, among others. Statutory Indian bodies such as Bureau of Energy Efficiency, Structural Energy Research Centre and others have been playing a crucial role in enabling the EV sector by focusing on building standards, safety provisions, tariff categories. These, along with the growing consumer awareness on product quality and safety will drive the nations EV-TIC market in the times to come.

Outsourcing has emerged as a lucrative option for companies that are unable to invest in setting up their own testing laboratories. As the Asia-Pacific region, including countries like India and China, transitions from developing to developed status through rapid industrial growth, several TIC firms have emerged to meet the increasing demand for testing services. This demand is expected to drive the growth of the TIC market in the region. However, a key concern for clients in this area is the potential infringement of proprietary technology while obtaining necessary permissions to establish testing units.

(Source: Morder Intelligence Report, 6wresearch Report and EY)

Contract Research Organisation Market Global

The estimated value of the global CRO services market in revenue for 2023 is $76.6 billion, with a projected growth to reach $127.3 billion by 2028, representing a compound annual growth rate (CAGR) of 10.7% from 2023 to 2028. This

growth is primarily attributed to factors such as the continuous expansion of pharmaceutical, biopharmaceutical, and medical device R&D pipelines, as well as technological advancements in the clinical trials process. Additionally, the increasing demand for novel clinical trial designs to support cell and gene therapies is expected to create growth opportunities for companies operating in this market.

In the past decade, the field of drug discovery and development has witnessed consistent growth, with an increasing number of clinical studies being conducted and novel drug molecules advancing through various phases of the drug development cycle. According to the pharma R&D Annual Review 2022, the number of drugs in the R&D pipeline grew from 17,737 in 2020 to 20,109 in 2022. Additionally, data from clinicaltrials.gov shows that the number of registered studies increased from 32,517 in 2019 to 36,770 in 2022, at a CAGR of 4.2%. This growth in the R&D pipeline of novel drugs has resulted in an increased outsourcing of the drug development process, as companies seek to leverage external capabilities and access scientific and process innovations to develop cost-effective and efficient drug molecules. This trend is expected to drive the growth of the CRO services market.

(Source: MarketsandMarkets and EY)

India

The CRO market in India is projected to reach USD 979.8 million by 2030, with a CAGR of 7.5% during the period from 2022 to 2030.

The Indian CRO industry is driven by several factors, including the favourable climatic testing conditions in the country and the adoption of international norms and intellectual property rights. Regulatory agencies such as the Director Controller General of India (DCGI), the Indian Council of Medical Research (ICMR), and the Directorate General of Foreign Trade (DGFT) are actively working towards creating conducive conditions for research in India, which is further bolstering the industry.

The Indian government has taken significant steps to streamline regulations related to clinical trials to promote drug development and innovation. The removal of restrictions on the number of clinical trials investigators can conduct has facilitated the growth of the Contract Research Organizations (CROs) market in India. Mandating trial sites to maintain emergency medical care and rescue arrangements has further improved trial safety and led to the development of experienced investigators and key opinion leaders who are driving the growth of CROs in India. These regulatory changes have made India an attractive destination for clinical trials, resulting in increased clinical research in the country. It is important to note that ethical conduct and participant safety remain a priority, with strict adherence to good clinical practices (GCP) and ethical guidelines. The government and regulatory authorities such as the Central Drugs Standard Control Organization (CDSCO) continue to monitor and regulate clinical trials to ensure compliance with established standards. Overall, these changes have promoted clinical research, stimulated drug development, and fostered innovation in India.

The COVID-19 pandemic has had a significant impact on the CRO market in India. The global efforts towards developing a vaccine for the coronavirus have also influenced the development of other vaccines and medicines. During the peak of the pandemic, a substantial portion, accounting for 30% of all clinical trials in the US, focused on vaccines and therapies for COVID-19.

The In-vitro Diagnostics (IVD) contract research organization market in India is projected to grow at a CAGR of 9.0%, reaching US$ 314.92 million by 2028, up from US$ 172.00 million in 2021. This growth is attributed to factors such as increased demand for IVD diagnostics due to rising prevalence of autoimmune disorders, infectious diseases, cancer, and other conditions. Additionally, heightened awareness among people, a surge in clinical trials, high research and development expenditure in the region for IVD, and low operational costs in India are expected to promote market growth. Furthermore, the COVID-19 pandemic has further accelerated the need for clinical trials for the development of IVD testing kits for COVID-19, contributing to the overall growth of the IVD contract research organization market in India.

Clinical Diagnostics Industry Global

The global clinical diagnostics market reached a size of US$76.2 billion in 2022 and is expected to grow at a CAGR of 8.56% to reach US$124.7 billion by 2028.

Clinical diagnostics involve detecting, identifying, and monitoring diseases through a patients signs, symptoms, health history, and physical examination. These diagnostics include developing, manufacturing, and selling automated test systems, informatics systems, test kits, and specialized quality controls. They are widely used in hospitals, diagnostic laboratories, and point-of-care testing worldwide to aid in disease management, patient stratification, and predicting therapeutic efficacy to improve patient outcomes.

The market growth is driven by rising chronic disease prevalence, increasing adoption of automated platforms for disease management, growing awareness about laboratory tests, and healthcare providers using clinical diagnostics to develop targeted therapies. Furthermore, the market is positively influenced by the escalating demand for personalized medicine among patients.

(Source: Globe Newswire and EY)

India

The diagnostics industry in India is volume-driven and highly fragmented, with a few large, organized players and numerous small and regional players dominating 80-85% of the market. Factors such as higher life expectancy, changes in lifestyle, and a health-conscious population are expected to contribute to industry growth.

The COVID-19 pandemic led to an increase in demand for testing services, resulting in higher volumes and realizations for the industry. While the Indian government has promised to increase healthcare spending, pricing pressure remains a challenge for industry players, with stiff competition from small regional players.

Pathology and radiology are the two categories of the diagnostics industry, with pathology accounting for 58% of revenue and radiology for 42%. The industry offers potential for growth, especially in rural areas where there is a low penetration of testing centres, and consolidation may occur with the introduction of government healthcare policies. (Source: Groww and EY)

Environment Testing Industry

Global

The global environmental testing market was valued at USD 11.07 billion in 2022 and is projected to grow at a CAGR of 7.8% from 2023 to 2030. The increasing concern over environmental degradation due to industrial activities and pollution in many economies is driving the growth of the industry. Governments are investing in high-tech testing tools and services to maintain hygienic and environmental standards and safeguard the environment, leading to the growth of the market.

The demand for wastewater management is also expected to increase due to rising temperatures, depletion of freshwater resources, and the need to reduce carbon footprints. In addition, the industry is being driven by the privatization of testing services and the need for third-party testing. Service providers are adopting various strategies to gain a higher market share and meet changing technical demands from end-use industries. Finally, the COVID-19 pandemic has further emphasized the need for sustainable development and increased attention to Environmental, Social, and Governance (ESG) indices.

India

The Indian environmental testing market is projected to reach $391.3 million by 2026 due to increasing pollution levels in the country and the need to adhere to government regulations. Customized testing services and demand from regulatory bodies for regular testing are driving market growth, along with the need for specific testing methods to provide efficient results.

The National Water Mission, launched in 2009, highlights the need for conservation of water and equitable distribution across India, which has led to a greater need for environmental testing services. However, the high initial investments required for deploying environmental testing equipment, especially for high sensitivity sensors used in analytical instruments, pose a challenge for the market.

(Source: Industry Arc and EY)

Food Testing Industry

Global

The Food Safety Testing Market has surpassed a value of USD 19.5 billion in 2022 and is expected to grow at a 7% CAGR from 2023 to 2032, driven by the rising demand for food consumption globally. The market growth is fuelled by the increasing population suffering from foodborne illnesses due to contamination from various sources.

Rapid urbanization, surging consumer income, and changing dietary habits are expected to support industry growth. Rising concerns about product quality and recalls have led businesses to adopt food safety testing methods.

Meat, poultry, and seafood testing dominate the market share. The increasing need for proper food handling and preparation procedures to reduce the possibility of contamination will promote growth in the pathogens segment which is expected to reach USD 1 billion by 2032.

The rapid technology segment is expected to observe a 7% CAGR through 2032. Rapid technologies produce results in less than 48 hours, lowering the likelihood of contamination in products scheduled for testing and allows corrective actions to be performed in advance.

The market share from the processed food segment is expected to exceed USD 9.5 billion by 2032. Food safety is a critical concern for producers since contaminants can appear at any stage of production or supply.

The COVID-19 pandemic has positively amplified market revenue as technical solutions were adopted to safeguard food safety. The introduction of alternative rapid technologies and solutions for food testing is expected to complement industry development in the future.

(Source: GMI and EY)

India

The Indian food safety testing market is rapidly growing due to the high prevalence of foodborne illnesses in the country, particularly among young children. The market is expected to reach USD 923.4 million in 2027.

The Food Safety and Standards Authority of India (FSSAI) is a government-regulated organization that focuses on enhancing food safety testing procedures in the country. To this end, it has developed the "Food Safety on Wheels" initiative to provide mobile units for food testing. This initiative has been expanding and now has 60 mobile vans and 95 modified mobile vans operating in different states and union territories of the country. Additionally, according to a study conducted by the Ministry of Food Processing Industries, 585 of the total number of food products testing laboratories in the country have been accredited to international standards, such as ISO/IEC 17025/ NABL. Overall, the increasing demand for food safety testing services in India presents a significant growth opportunity for both government-regulated organizations and private players in the market.

(Source: Mordor Intelligence Report and EY)

Electrical and Electronics Testing Global

The worldwide market for testing, inspection, and certification (TIC) services in the electrical and electronics sector has experienced consistent growth in recent years. The key drivers behind this expansion include rising demand for household appliance testing, growing emphasis on electrical equipment validation, and the increasing trend of globalization and brand protection.

The market for Electromagnetic Compatibility (EMC) Testing is projected to grow significantly and reach $3.87 billion by 2028. EMC testing ensures that electronic and electrical devices do not emit excessive electromagnetic interference and continue to function as required in the presence of several electromagnetic phenomena. EMC is crucial for the installation of electrical equipment in various industries. As the number of electrical and electronic devices increases, governments are investing heavily in EMC testing. EMC testing services are in high demand by manufacturers to ensure compliance with regulatory standards, improve product marketability, and reduce manufacturing costs in pre-production phase. Consumer appliances and electronics are driving the growth of EMC testing applications due to the proliferation of wireless technologies and the interconnection of various systems and components in electronic devices.

India

India EMC testing market is expected to grow at a CAGR of 7.7% and reach $231.5 Million by 2028.

The manufacturing industry in India has emerged as a rapidly growing sector. The Indian government has introduced the "Make in India" program to bolster the manufacturing sector and establish it as a prominent global manufacturing hub. The objective of this initiative is to elevate the contribution of the manufacturing sector to 25% of the countrys GDP by the year 2022.

The electronics industry in the region is experiencing robust growth, fuelled by the increasing demand for advanced technological solutions. The widespread adoption of smartphones, smartwatches, and other electronic devices is a key driving force behind the markets expansion in the country. The consumer appliances and electronics segment of the electromagnetic compatibility (EMC) testing market is anticipated to reach a value of US$ 55.8 million by 2028, with a projected compound annual growth rate (CAGR) of 6.4% during the forecast period. Similarly, the automotive segment of the EMC testing market is estimated to be valued at US$ 49.2 million by 2028, with an expected CAGR of 9.3% during the forecast period.

(Source: Asia-Pacific EMC Testing Market Report and EY)

3.1 COMPANY 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 in various countries. 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 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 Companys growth. The Companys leading position in the domestic market should help it sustain its growth.

3.2 OUR STRENGTHS & STRATEGIES

Your company believes 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, sophisticated contract research and testing organization. Over the years it has developed wide range of capabilities and offers high-value, advanced testing services, including GMP lab services, bioanalytical, bioassays, ultra trace analyses and central laboratory infrastructure to support product research and development. VIMTA believes it is the leader in the domestic market for GMP analytical services and GLP nonclinical services. The GMP, GLP and GCP compliant facilities have been successfully audited more than 100 times during the year by customers, regulatory agencies, accrediting and certifying bodies, and Companys track record of quality has earned it a strong reputation in the market.

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 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 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 Rs.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 even military/ defense components. 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 in second to none in the domestic market. Geographic expansion of VIMTAs Environment offices into more States has been undertaken to reach more customers. 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 Companys revenues in environmental services.

VIMTAs clinical diagnostics laboratory services are spread across 9 cities including central reference lab in Hyderabad, regional reference labs and satellite labs. 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 thanks 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 contract 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 standalone services as well as a mix of full-service contracts. VIMTA leverages its experience in managing laboratory operations for 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 robustness of the business model and positions it for continued growth.

3.3 KEY FINANCIAL RATIOS

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

Key financial ratios:

Ratio	Financial Year 2022-23	Financial Year 2021-22
Debtors Turnover Ratio (in days)	90.03	98.66
Inventory Turnover Ratio (in days)	22.94	20.99
Interest Coverage Ratio	50.38	46.20
Current Ratio	2.86	2.60
Debt Equity Ratio	0.05	0.08
Operating Profit Margin*	20.18%	20.47%
Net Profit Margin**	15.14%	14.85%
Price Earning Ratio	13.94	16.85
Return on Capital Employed	21.95%	24.72%

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

Debt Equity Ratio: Debt-equity ratio improved due to debt repayments and higher cash accruals.

Price Earning Ratio: Price Earning ratio declined with increase in Earnings Per Share.

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

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

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

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

With the growth in business, the companys human resource strength grew by 16% and as on 31^st March 2023, Company had 1368 employees. Companys 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.

3.5 INFRASTRUCTURE

Vimta is one of Indias largest Contract Research & Testing Organisations, equipped with state of art Testing. Headquartered in Hyderabad, Vimta has a network of 20 laboratories, including 03 Environment branches, 09 Clinical Diagnostics branch/satellite lab, 08 Food branch labs in India. The total built up area of the labs is ~ 4,00,000 sq.ft.

3.6 INVESTMENTS

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 efficient and growth oriented.

It firmly believes that it is on a strong growth path and has made the right investments over the years. In order to sustain the growth momentum in coming years, company requires more capacities and therefore has embarked on almost doubling infrastructure capacities in its Life Sciences campus, Hyderabad. This significant investment is a strong reflection of the companys confidence on the increasing demand for its services.

3.7 RISKS & 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: Our business has been having sustained growth over the past few years and 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 personnels 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 managements continuous endeavour to develop strategies that would help the organization de-risk its business & grow with opportunities.

4. DIVIDEND

Your Directors have recommended a dividend of 2/- per equity share of 2/- each, for 2022-23 fiscal.

5. TRANSFER 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.

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

Year of Dividend - Final	No. of Shareholders who have not claimed	Unclaimed Amount (?)	Date of Declaration	Date of transfer to unpaid account	Last date of transfer to IEPF
2015-16	821	426444.00	02.09.2016	08.10.2016	08.10.2023
2016-17	Dividend Not Declared
2017-18	627	354280.00	25.08.2018	30.09.2018	29.09.2025
2018-19	506	325536.00	27.07.2019	01.09.2019	31.08.2026
2019-20	Dividend Not Declared
2020-21	2316	618666.00	05.07.2021	10.08.2021	09.08.2028
2021-22	674	317981.00	25.06.2022	31.07.2022	30.07.2029

6. TRANSFER TO RESERVES

No amount is proposed to be transferred to reserves during the year.

7. CORPORATE 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 and forms an integral part of this Boards Report.

8. ANNUAL 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/Anuual-Returns-2022-23. pdf.

9. CORPORATE SOCIAL RESPONSIBILITY

The Company as part of its Corporate Social Responsibility (CSR) initiative, undertook and supported many projects such as:

promoting health care; preventive health care;

eradicating hunger, poverty, and malnutrition;

promoting education especially among children and the differently abled and livelihood enhancement projects, and;

animal welfare, wherein it rescues and rehabilitates sick and needy animals.

During the year under review, the Company has spent a total sum of 62,45,570/- on the 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.

10. MEETINGS OF THE BOARD

During the year under review, four 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.

11. SHARE CAPITAL

As at the end of the year, the authorised Share Capital of the company stood at 7,00,00,000 (Rupees Seven Crore only) divided into 3,50,00,000 Equity shares of 2/- each and Paid-up Capital stood at 4,42,57,978 (Rupees Four Crore Forty-Two Lakh Fifty-Seven Thousand Nine Hundred and Seventy-Eight Only) divided in to 22,128,989 equity shares of 2/- each. During the year under review, the company has allotted 21,179 equity shares of 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.

12. ISSUE OF SHARES

During the year under review, the Company has not:

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

ii) 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.

13. FINANCING THE PURCHASE OF SHARES OF THE COMPANY

During the year under review, the company has not given, whether directly or indirectly, and whether 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.

14. EMPLOYEE STOCK OPTION PLAN

The members of the Company at their 31^st 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 held on 19^th September 2021 granted 507,769 Options in Tranche I, on 11^th May 2022 granted 17,961 Options in Tranche II, and on 26^th October 2022 granted 35,702 Options in Tranche III, out of the Total Grant of 663,234 Options. 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.

Further, during the year under review, the company allotted 21,179 equity shares of 2/- each to the Employees upon exercise of Employee Stock Options under "Vimta Labs Employee Stock Option Plan 2021."

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. 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.

15. CHANGES IN THE NATURE OF BUSINESS

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

16. 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.

17. 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 products, (bank safes/lockers, ATMs, home use lockers, fire wall doors etc.) certification company.

Emtac is located at 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. Its vision is to be one of the worlds most respected product testing and certification laboratory, recognized for its technical competence, quality, integrity and customer partnership.

Emtac is Indias 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 Indias 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 126% in the financial year 2022-23 at 58.38 million. Profit before tax for the financial year 2022-23 stands at 11.64 million compared to 3.35 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.

18. 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).

19. 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.

20. AUDITORS

a) Independent Auditors Report

During the year under review, the Companys 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.

b) 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 upon 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 eligible to continue to hold the office for rest of their tenure.

c) 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 3^rd May 2023, have reappointed M/s Chaitanya V & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 20232024. 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.

d) 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 3^rd May 2023 reappointed M/s Lavanya & Associates Cost Accountants (Firm Registration No. 101257) as Cost Auditors of the Company for the financial year 2023-2024. A resolution seeking ratification of remuneration payable to the Cost Auditors to conduct cost audit for the financial year 2023- 24 has been included in the notice convening 33^rd AGM of the Company. The necessary consent letter and certificate of eligibility was received from the cost auditors confirming their eligibility to be reappointed as the Cost Auditors of the Company.

e) 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.

f) 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 3rd May 2023 reappointed M/s D Hanumanta Raju & Co., Practicing Company Secretaries as Secretarial Auditors for the financial year 202324. 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 2022-23 in the prescribed form MR-3 is enclosed with this Report as Annexure VII.

g) Annual Secretarial Compliance Report

Secretarial Compliance Report for the financial year ended March 31, 2023, 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.

21. AUDIT 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.

22. 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.

23. POSTAL BALLOT

During the year under review, no postal ballot resolutions were passed.

24. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to 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 2023 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.

25. DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

a) Directors retiring by rotation

As per the provisions of the Companies Act and the Articles of Association of the Company, Mr. Harriman Vungal (DIN: 00242621), Executive Director - Operations, retires by rotation and being eligible, offered himself for re-appointment. The proposal for the re-appointment of Mr. Harriman Vungal is being placed at the AGM along with the necessary details. Subject to his reappointment as Director, Mr. Harriman will continue to be the Executive Director - Operations for the balance of his tenure.

b) Changes in Directorship/Committee Position

During the year under review, Ms. Y Prameela Rani, Independent Director of the Company was reappointed for a second/final term for five consecutive years with effect from 1^st December 2022 to 30^th November 2027. The said reappointment was passed at 32^nd Annual General Meeting held on 25^th June 2022.

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.

Audit Committee	Position
Mr. G Purnachandra Rao	Chairman
Ms. Y Prameela Rani	Member
Mr. Sanjay Dave	Member
Nomination and Remuneration Committee	Position
Mr. Sanjay Dave	Chairman
Mr. G Purnachandra Rao	Member
Ms. Y Prameela Rani	Member
Stakeholders Relationship Committee	Position
Ms. Y Prameela Rani	Chairperson
Mr. G Purnachandra Rao	Member
Mr. Sanjay Dave	Member
Corporate Social Responsibility Committee	Position
Ms. Harita Vasireddi	Chairperson
Mr. Harriman Vungal	Member
Mr. Sanjay Dave	Member

c) Disclosure by Directors

None of the Directors of your Company are disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Your 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.

d) Appointment of Dr. S P Vasireddi (DIN: 00242288) as Executive Chairman of the Company.

Dr. S P Vasireddis appointment as Non-Executive NonIndependent Director & Chairman of the Company was last approved at the Annual General Meeting held on 25^th August 2018 and he has been continuing in the same position till date.

Dr. S P Vasireddi has a rich experience of over 40 years in the contract research and testing industry. He is the founder of VIMTA and under his leadership and guidance the Company has not only prospered with good growth but also earned a significantly remarkable reputation in the industry. Dr. Vasireddi is known as the pioneer and visionary who built the contract research and testing industry in India. The world class laboratory infrastructure and cutting- edge technologies he introduced over the years put India on the global map as an outsourcing destination for quality, testing and contract research services.

Dr. Vasireddis vision, strategic insights, deep scientific and technical knowledge, and quick study abilities have enabled him to play a pivotal role in building numerous firsts and competitive edges for Vimta viz.,

• 1^st GOI gazette notified EPA laboratory in the country.

• 1^st CRO in Indias whos BA/BE study got approved by USFDA.

• 1^st ultra trace laboratory in country for testing dioxins and furans.

• 1^st Lab in Asia to be pre-qualified by WHO for GPQCL.

• 1^st Lab in India to offer Leachables and Extractables studies.

• 1^st Lab in India to introduce Customer Specific Contract Labs.

• 1^st Lab in India to be approved by European Commission for PCP trace analysis in Food exports to Europe.

• 1^st Lab in India to set up a truly world class contract research and testing laboratory facility.

• Only Lab in India to have a PPP with UNIDO for Analytical Laboratory Capacity Building in Developing/Underdeveloped Nations.

• 1^st lab in India to setup a pan India network of full- service food testing laboratories.

He brings critical expertise in laboratory business management and the Board is of the opinion that Dr S P Vasireddis rare expertise and closer guidance to companys leadership as an Executive Chairman, will be of immense value to the Company at this juncture of growth and expansion. Dr. Vasireddi is a Ph.D. in Chemistry from Nagpur University.

Dr. Vasireddis past and present associations include:

• Member of Central Advisory Committee-Food Safety & Standards Authority of India (FSSAI).

• Member of the Governing Board of NABL.

• Chairperson- ABL, Risk Management Committee.

• Member of National Committee-CII National Committee on Drugs and Pharmaceuticals.

• Member of Research Council-National Physical Laboratories, India.

• Chairman of Calibration Committee-National Physical Laboratories, India.

• Founder of Association of Contract Research Organizations (ACRO), India.

The Board based on the recommendations of the Nomination Remuneration Committee, recommends him as Executive Chairman of the Company for a period of 3 years w.e.f., 01.07.2023 for the approval of the shareholders. Dr. S P Vasireddi has consented to accept the proposed appointment. Board looks forward to his contributions as the company expands its scale and reach into new markets significantly.

He will attain the age of 75 years on 1^st July 2023, and as per the provisions of section 196(3)(a) of the Companies Act, 2013, appointing him as Executive Chairman requires approval of members by way of a special resolution. Further, as the proposed remuneration to the Executive Director together with the remuneration of other whole time Directors who are promoters or members of the promoter group, in aggregate, exceeds 5% of the net profits of the Company, approval of Members is sought by way of a Special Resolution as required under Regulation

17(6)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Dr. S P Vasireddi, Non-Executive Chairman holds 3,598,525 equity shares in the company. Except Dr. S P Vasireddi, Non-Executive Chairman and Mrs. Harita Vasireddi, Managing Director being daughter of Dr. S P Vasireddi none of the other Directors/Key Managerial Personnel are in anyway concerned or interested in his appointment.

e) Changes in the Key Managerial Personnel

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. There has been no change in the Key Managerial Personnel during the financial year under review.

f) Declaration by Independent Directors

As per the requirement of section 149(7) of the Act, all the Independent Directors of the Company have submitted their respective declarations 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.

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

26. 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 and https://vimta. com/wp-content/uploads/Board-Diversity-Policy.pdf

27. 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 base, 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 initiatives are undertaken. Training and skill development programs are continuously delivered to promote a learning culture. Special skill development and training programs are conducted for identified special talent pool. Keeping pace with technological advancements, more and more HR processes are 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 Companys profitable growth. Your Company appreciates the spirit and the contributions of its dedicated employees.

28. PARTICLUARS 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 arms 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 on dealing with the related party transactions 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 developed a Policy on Related Party Transactions including the latest amendments thereof for the purpose of identification and monitoring of such transactions.

29. 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.

30. RISK MANAGEMENT POLICY

Your Company continues to have an effective Risk Management policy in place. The management and the Board oversees the 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.

31. 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 its own, that of its committees and individual directors.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards 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 exercise carried out to evaluate the performance of individual Directors included parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. 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. The Directors expressed their satisfaction with the evaluation process.

32. 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.

33. PREVENTION OF INSIDER TRADING

Pursuant to SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has adopted 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.

34. POLICY ON 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 to the complaints under the above Act. During the financial year ended 31^st March 2023, the Company has not received any complaint from any woman employee pertaining to any sexual harassment.

35. VIGIL 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

36. 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. They 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.

37. 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 is appended to this Annual Report.

38. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The company has adequate internal financial controls with reference to the financial statements in place 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 Companys internal financial controls with reference to the financial statements were adequate and effective during the year ended 31^st March 2023.

39. 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.

40. 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.

41. Material changes and commitments if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

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 Companys 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 Companys 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, bankers, and all other stakeholders for their continued support to the Company.

Date: 03rd May 2023	For and on behalf of the Board, Dr. Sivalinga Prasad Vasireddi
Place: Hyderabad	Non-Executive Chairman
	(DIN: 00242288)