Vanta Bioscience Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting herewith the 3rd Annual Report on the business of the Company together with the Financial Statements for the financial year ended March 31, 2019.

OUR BUSINESS

Vanta Bioscience Limited (VBS) is a preclinical contract research organization, offering a host of preclinical safety assessment services for clientele from Pharmaceutical, Medical Devices, Nutraceuticals, Feed Additive, Biotech, Agrochemicals, Cosmetics, and Chemical industries. In addition, we also provide risk assessment services for evaluating the safety of the Active Pharmaceutical Ingredients (API), excipients, extractable and leachables including pharmaceutical impurities resulting due to manufacturing process or due to degradation of the product. VBS also provides expert services for determination of health based exposure limits (e.g. permitted daily exposure (PDE) or allowable daily exposure (ADE) including occupational exposure limits (OEL) for pharmaceutical manufacturers.

FINANCIAL HIGHLIGHTS

The following are the financial highlights of the Company: (Amount in Rs.)
Standalone Basis Consolidated Basis
PARTICULARS 31.03.2019 31.03.2018 31.03.2019*
Total Revenue 12,65,36,666 4,03,87,179 12,65,36,666
Total Expenses 11,55,60,585 3,72,37,602 11,55,05,005
Profit before Tax 1,09,76,081 31,49,577 1,10,31,661
Current Tax 22,89,357 6,00,152 23,03,808
Deferred Tax 17,49,145 22,76,497 17,49,145
Profit after Tax 69,37,578 2,72,928 69,78,707
Less:Minority Interest 0 0 13,915
Profit 69,37,578 2,72,928 69,64,792

This year being the First year on Consolidation Basis, figures only for the Year ended 31.03.2019 have been provided..

DIVIDEND

The Board has not recommended any dividend for the financial year 2018-19.

TRANSFER TO RESERVES

No amount has been transferred to general reserves during the year under review. Reserves and Surplus are disclosed in Note 4 of the financial statements.

DEPOSITS

The Company has neither accepted nor renewed any deposits from public as defined under the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.

SUBSIDIARIES:

During the year under review, the Company has incorporated two (2) subsidiary companies in the name of Vanta Clinical Research Limited and Vayam Research Solutions Limited. Details of the same are given below:

??Vanta Clinical Research Limited (VCRL)

VCRL was incorporated as a Wholly Owned Subsidiary of Vanta Bioscience Limited on September 12, 2018 with the object of dealing in the business of Research & Development in the field of discovery and development of drugs, biologicals, vaccines, gene-based therapies in vitro, ex-vivo and in vivo techniques for screening and evaluation of drugs, dermaceuticals and cosmetics, clinical data management, statistical analysis, pharmacovigilance, medical writing, bio informatics, computer-aided drug designing, biotechnology, life sciences, diagnostic services and such other similar activites.

The paid up capital of VCRL as on March 31, 2019 was Rs. 2,00,00,000/-. The total revenue earned during the year was Rs. 3,50,000/- as against a total expenditure of Rs. 3,40,851/-.

The Profit after tax was Rs. 12,731/-.

VCRL is a 100% subsidiary of our Company and has contributed an amount of Rs. 12,731/-to the overall performance of the Company.

??Vayam Research Solutions Limited (VRSL)

VRSL was incorporated as a 51% Subsidiary of VCRL on October 10, 2018 with the object of carrying business of providing research and development, full range of clinical studies in the areas of pharmaceuticals industry, agro, chemical, food cosmetics and medical devices. Accordingly, VRSL is a step down subsidiary of Vanta Bioscience Limited.

The Company has purchased the assets from Emcure Pharmaceuticals Limited, Pune by way of an "Agreement for Sale of Goods and Equipment" dated April 04, 2019. The Company will start conducting Bioequivalence studies from the site, as soon as DCGIs approval is obtained.

The paid up capital of VRSL as on March 31, 2019 was Rs. 2,00,00,000/-. The total revenue earned during the year was Rs. 4,50,000/-as against a total expenditure of Rs. 4,11,624/-.

The Profit after tax was Rs. 28,398/-.

VRSL is a step down subsidiary of our Company and has contributed an amount of Rs. 14,483/- to the overall performance of the Company.

The Statement containing the salient features of the subsidiaries as per sub-sections (3) of section129 read with rule 5 of Companies (Accounts) Rules, 2014 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure-I to this report.

The Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Companywww.vantabio.com. Further, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company. Shareholders interested in obtaining a physical copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary requesting for the same.

There were no associates or joint ventures of the Company as on the end of financial year March 31, 2019. There were no companies which have ceased to be our subsidiaries, joint ventures or associate companies during the financial year 2018-19.

Vanta Clinical Research Limited and Vayam Research Solutions Limited have become subsidiaries of our Company during the year under review.

DETAILS OF DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Sadhanala Venkata Rao (DIN: 02906370), CEO & Whole Time Director of the Company is liable to retire by rotation, being eligible offers himself for re-appointment.

During the year under review, there were no changes that took place on the Board of the Company.

The following changes took place after the financial year March 31, 2019 upto the date of this Annual Report:

S. No Name of the Director Type of Change W.e.f
1 Dr. Jang Bahadur Gupta (DIN 07751205) Resignation as Independent Director May 22, 2019
2 Dr. Yogeswara Rao Danda (DIN 00694803) Appointment as Additional Director under Independent Category May 22, 2019

INDEPENDENT DIRECTORS:

The Independent Directors of the Company have given the declaration and confirmation to the Company as required under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet the criteria of independence and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

DETAILS OF KEY MANAGERIAL PERSONNELS

During the year under review, Mr. Kiran Kumar Annabatula was appointed as Chief Financial Officer of the Company w.e.f July 04, 2018.

Accordingly, Mr. Dopesh Raja Mulakala, Managing Director (DIN: 01176660), Mr. Sadhanala Venkata Rao, CEO &Whole Time Director (DIN:02906370), Dr. Vyasmurti Madhavrao Shingatgeri, Whole Time Director (DIN: 07728757) Mr. Kiran Kumar Annabatula, Chief Financial Officer and Mr. Zoheb Sultan Ali Sayani, Company Secretary are Key Managerial Personnels of the Company.

Except as stated hereabove, there were no other appointments or resignations of key managerial personnels during the year under review.

MEETINGS OF THE BOARD AND COMMITTEES

During the year under review, Nine (9) Board Meetings, five (5) Audit Committee meetings, two (2) Nomination and Remuneration Committees and two (2) Stakeholders Relationship Committee meeting were held.

The Board and committee meetings of the Company were held in compliance with all the applicable provisions of the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and the secretarial standards.

An extra ordinary general meeting of members was held on September 29, 2018 for obtaining the approval of shareholders for issue of 13,74,000 equity shares of Rs. 10/- each on preferential basis.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board evaluated the effectiveness of its functioning and that of the Committees and of individualdirectors by seeking their inputs on various aspects of Board/Committee Governance. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfilment of Directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The Chairman of the Board had one-on-one meetings with the Independent Directors. These meetings were intended to obtain Directors inputs on effectiveness of Board/Committee processes. Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non-Executive Directors.

ANNUAL REPORT - 2018-19

STATUTORY AUDITORS

M/s. Mathesh & Ramana, Chartered Accountants (FRN 002020S) were appointed as the statutory auditors of the Company by the members in their 2nd AGM held on August 21, 2018for a period of 5 yearsfrom the conclusion of the 2ndAnnual General Meeting of the Company held on August 21, 2018 till the conclusion of 7th Annual General Meeting.

AUDITORS REPORT

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

There were no frauds reported by the Statutory Auditors of the Company during the year under review.

SECRETARIAL AUDIT REPORT

Tapasvilal Deora & Associates, Practicing Company Secretary were appointed to conduct the secretarial audit of the Company for the financial year 2018-19, as required under Section 204 of the Companies Act, 2013 and rules there-under. The secretarial audit report for FY 2018-19 forms part of this Annual Report as Annexure - II.

The Report contains a qualification and managements reply is given below

S. No. Particulars Managements Reply
1 There were certain discrepancies/lapses in compliance with erstwhile Regulation 72(2) and certain other provisions of erstwhile Chapter VII SEBI (ICDR) Regulations, 2009 in connection with preferential issue. (currently Chapter V of SEBI (ICDR) Regulations, 2018) The said lapse has occurred as the said subscribers did not provide the requisite information to the Company. Accordingly, shares were not allotted to these shareholders under preferential issue.
Subsequently, the matter was resolved and the Company received necessary approvals from BSE Ltd, NSDL and CDSL.

There are no other observations, qualifications or remarks in the report and is self-explanatory and do not call for any further comments.

CHANGES IN THE AUTHORIZED AND PAID UP CAPITAL

The Authorized Share Capital of the Company is Rs. 7,50,00,000/- (Rupees Seven Crore and Fifty Lakhs only). During the year under review, there was no change in the authorized share capital of the Company.

During the year under review, the shareholders of the Company in their EGM held on September 29, 2018 approved preferential issue of 13,74,000 equity shares of Rs.10/- at a premium of Rs. 75/- to Promoters and Non Promoters in accordance with the provisions of the Companies Act, 2013 and the SEBI (ICDR) Regulations. Subsequently, the Board of Directors of the Company in their meeting held on November 28, 2018 approved the allotment of 5,84,000 equity shares of Rs. 10/- each to Promoter and Non Promoters.

Accordingly, the paid up capital of the Company as at the end of the financial year was Rs.6,31,20,000/- (Rupees Six Crore Thirty-One Lakh and Twenty Thousand Only) comprising of 63,12,000 (Sixty Three Lakh and Twelve Thousand) equity shares of Rs. 10/- (Rupees Ten Only) each.

UTILIZATION OF PROCEEDS FROM PREFENTIAL ISSUE,

The Company during the year issued 5,84,000 equity shares of Rs. 10/- each at a premium of Rs. 75/- on preferential basis and their utilization is as follows: - (Amount In Lakhs)

Proceeds from Preferential Allotment 496.40
Utilization
Investment in Subsidiary 200.00
General Corporate & Working Capital 76.40
Issue Expenses 25.00
Balance -Investment in liquid funds 195.00
Total 496.40

AUDIT COMMITTEE

The Audit Committee was re-constituted at the meeting of the Board dated May 22, 2019. The Audit Committee comprises of:

Name of Director Status in Committee Nature of Directorship
Dr. Padmanabhuni Venkata Appaji Chairman Independent Director
Dr. Yogeswara Rao Danda Member Independent Director
Mr. Dopesh Raja Mulakala Member Managing Director

The Committee inter alia reviews the Internal Control System, Reports of Internal Auditors and Compliance of various regulations. The Committee also reviews the financial statements before they are placed before the Board. The Board of Directors of the Company have accepted all the recommendations given by the Audit Committee.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee at the meeting of the Board dated May 22, 2019. The Stakeholders Relationship Committee comprises of:

Name of Director Status in Committee Nature of Directorship
Dr. Padmanabhuni Venkata Appaji Chairman Independent Director
Dr. Yogeswara Rao Danda Member Independent Director
Mr. Dopesh Raja Mulakala Member Managing Director

NOMINATION AND REMUNERATION POLICY

A committee of the Board has been formed which is named as "Nomination and Remuneration Committee" which has been entrusted with the task to recommend a policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and evaluation of their performance and to recommend the same to the Board from time to time. Nomination and Remuneration Policy of the Company is enclosed herewith as Annexure - III.

The Nomination and Remuneration Committee was re-constituted at the meeting of the Board dated May 22, 2019 and include the following:

Name of Director Status in Committee Nature of Directorship
Dr. Yogeswara Rao Danda Chairman Independent Director
Dr. Padmanabhuni Venkata Appaji Member Independent Director
Dr. Kathyayani Gonuguntla Member Independent Director

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 in connection with corporate social responsibility are not applicable to the Company.

VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and the applicable SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Vigil Mechanism or Whistle-Blower Policy for directors, employees and other stakeholders to report genuine concerns has been established. The same is also uploaded on the website of the Company - www.vantabio.com

RISK MANAGEMENT POLICY

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. There are no material risks which threaten the very existence of the company.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls which commensurate with the size of the business of the Company.

The Board has appointed M/s. K B S & Associates., Chartered Accountants (FRN 011208S) as the Internal Auditors of the Company for conducting the Internal Audit of the Company for a period of 3 financial years i.e. from the financial year 2017 - 2018 till the financial year 2019-2020.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors confirm that: i. in preparation of annual accounts for the financial year ended March 31, 2019the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2019 and of the profit and loss of the Company for the year; iii. the Directors have taken proper and sufficient care for their 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. the Directors had prepared the annual accounts on a going concern basis;. v. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi. theDirectors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure-IV.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure -V.

PARTICULARS OF EMPLOYEES

Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the financial year no employee was in receipt of remuneration of Rs. 1.02 Crore or more, or where employed for part of the year was in receipt of Rs. 8.5 Lakh or more a month.

Disclosure under Rule 5 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - VI.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure - VII to this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not granted any Loans or given guarantees under Section 186 of the Companies Act, 2013.

The Company has investment in mutual funds. Further, the Company has invested in its Wholly Owned Subsidiary -Vanta Clinical Research Limited. Details of the same are disclosed in Note 12 and 14 of the financial statements.

LISTING ON SME PLATFORM OF BSE

Pursuant to the initial public offering, the equity shares of the Company were listed on the SME Platform of BSE Ltd. w.e.f October 06, 2017 vide BSE Notice 20171005-33 dated October 05, 2017. The Company confirms that the annual listing fees to the stock exchanges for the financial year 2019-20 have been paid.

COST RECORDS

The provisions of cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 are not applicable to the Company.

RELATED PARTY TRANSACTIONS

There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. All related party transactions entered by the Company under Section 188 of the Companies Act, 2013 are at arms length. These related party transactions have been entered considering the business requirements, administrative convenience and in thebest interest of the Company.

The Company has not entered into any transactions with any person or entity belonging to the promoter/promoter group which holds 10% or more shareholding in our Company.

DISCLOSURE OF RELATED PARTY TRASACTIONS WITH SUBSIDIARIES

The Company has invested an amount of Rs. 2,00,000,000/- (Rupees Two Crore) towards subscription to the equity shares of its Wholly owned subsidiary - Vanta Clinical Research Limited. Further, the Company has also entered business transactions with both its subsidiaries- Vanta Clinical Research Limited and Vayam Research Solutions Limited Details of all related party transactions with Promoters and the subsidiary companies are disclosed in Note 32 of the financial statements.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

4. No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year and date of report.

5. No change in the nature of business of the Company.

The Company has complied with all the provisions of the secretarial standards as applicable to the Company. The Company being listed on SME Exchange. Para C, D and E of Schedule V of SEBI (LODR) Regulations, 2015 in connection with disclosures in the annual report are not applicable to the Company.

INISDER TRADING REGULATIONS

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 1992 read with SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the code of conduct for prevention of insider trading and the Code for Corporate Disclosures ("Code"), as approved by the Board from time to time, are in force by the Company. The objective of this Code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, designated employees and other employees.

The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, designated employees and other employees from trading in the securities of Vanta Bioscience Limited at the time when there is unpublished price sensitive information.

POLICY ON PRESERVATION OF THE DOCUMENTS

The Company has formulated a Policy pursuant to Regulation 9 of the Securities Exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015 ("Regulations") on Preservation of the Documents to ensure safe keeping of the records and safeguard the Documents from getting manhandled, while at the same time avoiding superfluous inventory of Documents.

OBLIGATION OF THE COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In order to prevent Sexual Harassment of Women at Workplace a new act "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" has been notified on 9th December, 2013. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. The Company has adopted "Anti-Sexual Harassment Policy" constituted "Redressal Committee" as required under section 4 (1) of Sexual harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there were no cases filed/registered pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the continued patronage extended to the Company by bankers, dealers, customers, suppliers, employees and shareholders. The trust reposed in your Company by its esteemed customers helped stabilized growth during the year review.

Your Company also acknowledges the support and guidance received from its Bankers, other government agencies during the year under review and look forward to continuing support.

For and on behalf of the Board
Sd/- Sd/-
Dopesh RajaMulakala Sadhanala Venkata Rao
Managing Director CEO & Whole Time Director
DIN: 01176660 DIN: 02906370
August 27, 2019
Secunderabad.