Vanta Bioscience Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting herewith the 5th Annual Report on the business of the Company together with the Audited Financial Statements for the financial year ended March 31, 2021.

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), recipients, 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 31.03.2021 31.03.2020 31.03.2021 31.03.2020
Total Revenue 10,05,98,749 14,22,18,550 10,07,27,947 14,25,30,128
Total Expenses 9,45,48,742 12,93,38,113 9,48,35,642 12,91,11,363
Profit before Tax 60,50,007 1,28,80,437 58,92,305 1,34,18,765
Current Tax 9,70,706 21,64,199 10,32,170 23,53,969
MAT Credit Availed 9,41,205 9,44,986 9,41,205 9,44,986
Deferred Tax 13,17,721 18,81,192 13,17,721 18,81,192
Profit after Tax 47,02,785 97,80,032 44,83,619 1,01,28,590
Less: Minority Interest - - -11,861 83,444
Profit 47,02,785 97,80,032 44,95,480 1,00,45,146

There were no changes in the nature of business of the Company.

DIVIDEND

The Board has not recommended any dividend for the financial year 2020-21.

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. However, the Company has outstanding loans from Mr. Dopesh Raja Mulakala (DIN 01176660), Managing Director of the Company. Details of the same are disclosed in Note 7 of the Financial Statements.

SUBSIDIARIES

Your Company has 2 subsidiaries, details of which are given below:

• Vanta Clinical Research Limited ("VCRL")

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

The paid up capital of VCRL as on March 31, 2021 was Rs. 3,00,00,000/-. There were no operations during the year under review. The Company had incurred a total expenditure of Rs. 1,73,704/- and accordingly had a Loss after Tax Rs. 1,71,721/-

VCRL is a 100% subsidiary of our Company and has contributed accordingly to the overall performance of the Company.

• Vayam Research Solutions Limited ("Vavam")

Vayam is a subsidiary of VCRL 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.

As on March 31, 2021, VCRL holds 30,00,000 equity shares of Rs. 10/- each which is 57% of the total shareholding of Vayam. Accordingly, Vayam is a step down subsidiary of Vanta Bioscience Limited.

The paid up capital of Vayam as on March 31, 2021 was Rs. 5,30,00,000/-. The total revenue earned during the year was Rs. 14,27,215/- as against a total expenditure of Rs. 14,13,196/-. The loss after tax was Rs. 47,445/-

Vayam is a step down subsidiary of our Company and has accordingly contributed to the overall performance of the Company.

During the year under review, the shareholding of VCRL in Vayam has come down to 57% from 75.38% due to issue of shares and increase in paid up capital in Vayam.

The statement containing the salient features of the subsidiaries, its highlights of performance and their contribution to the overall performance of the Company as per sub-sections (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 and other applicable provisions of the Companies Act 2013 are disclosed in Form AOC-1 and the same 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 Company www.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, 2021. There were no companies which have ceased to be our subsidiaries, joint ventures or associate companies during the financial year 2020-21. There was a reduction in percentage of holding of VCRL in Vayam i.e., from 75.38% to 57%, however, the Company still remains a subsidiary of VCRL and a step down subsidiary of our Company.

DETAILS OF DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013, Dr. Vyasmurti Madhavrao Shingatgeri (DIN: 07728757), Whole Time Director of the Company is liable to retire by rotation, being eligible offers himself for re-appointment.

During the year under review, the following changes took place:

Name of Director Type of change With effect from
Mr. Dopesh Raja Mulakala (DIN:01176660) Re-appointed as Managing Director of the Company for a period of 3 years in the Board Meeting held on March 10, 2020 and approved by the shareholders in the AGM held on September 30, 2020. April 18, 2020
Dr. Vyas Murti Madhavrao Shingeteri (DIN: 07728757) Re-appointed as Whole Time Director of the Company for a period of 3 years in the Board Meeting held on March 10, 2020 and approved by the shareholders in the AGM held on September 30, 2020. April 1, 2020
Mr. Sadhanala Venkata Rao (DIN:02906370) Resigned as CEO & Whole Time Director of the Company January 05, 2021

Apart from above, there were no changes that took place on the Board of the Company.

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.

All the independent directors shall complete the online proficiency self-assessment test with in the time line as prescribed under the Act.

DETAILS OF KEY MANAGERIAL PERSONNELS

Mr. Dopesh Raja Mulakala, Managing Director (DIN: 01176660), 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 as on 31.03.2021.

Subsequently the closure of financial year, Mr. Kiran Kumar Annabatula resigned as the Chief Financial Officer of the Company w.e.f 11.11.2021 and Mr. Dokka Venkata Sathya Murali was appointed as the Chief Financial Officer in his place w.e.f 11.11.2021.

MEETINGS OF THE BOARD AND COMMITTEES

During the year under review, Five (5) Board Meetings, Four (4) 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.

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 individual directors 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. The Company has proper systems, processes in place for the purpose of evaluation of the Board individually and as a whole.

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, 2018 for a period of 5 years from the conclusion of the 2nd Annual General Meeting of the Company held on August 21, 2018 till the conclusion of 7th Annual General Meeting. Accordingly, the said auditors have carried out the audit for FY 2020-21.

AUDITORS REPORT

The Auditors Report does not contain any qualifications, observations or remarks. 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 2020-21, as required under Section 204 of the Companies Act, 2013 and rules there-under. The secretarial audit report for FY 2020-21 forms part of this Annual Report as Annexure - II.

There are no 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) and 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.

During the year under review, there was no change in the authorized and paid up share capital of the Company.

AUDIT COMMITTEE

The Company has a duly constituted Audit Committee. The Audit Committee comprises of:

Name of Director Status in Committee Nature of Directorship
Dr. Padmanabhuni Venkata Appaii 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 and all other matters as required under the Companies Act and SEBI (LODR) 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 Company has a duly constituted Stakeholders Relationship Committee. The Stakeholders Relationship Committee comprises of:

Name of Director Status in Committee Nature of Directorship
Dr. Padmanabhuni Venkata Appaii 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". The Committee has formulated a policy which provides for Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters and 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.

The Nomination and remuneration policy of the Company available on the website of the company at www.vantabio.com. There was no change in the policy during the year under review.

The Nomination and Remuneration Committee 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 had 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 2020-21 till the financial year 2022-2023. Accordingly, they have carried out the internal audit for FY 2020-21. There were no observations or remarks reported by the said auditors of the Company during the year under review.

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, 2021 the 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, 2021 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. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

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-III.

ANNUAL RETURN

Form MGT 7 - the annual return of the Company for FY 2020-21 shall also be uploaded on the website of the Company. The link of the same is https://www.vantabio.com/investor-relations/

PARTICULARS OF EMPLOYEES

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

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 and accordingly disclosure under Rule (2) is not required.

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 - VI to this report.

PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS

The loans, investment and guarantees provided by the Company during the year has not exceeded the limit approved by the shareholders in accordance with Section 186 of the Companies Act, 2013. The Company is in compliance with the provisions of Section 186 of the Companies Act.

The Company has investments in its Wholly Owned Subsidiary - Vanta Clinical Research Limited. Details of the same are disclosed in Note 12 of the financial statements.

LISTING ON SME PLATFORM OF BSE

The equity shares of the Company are listed on the SME Platform of BSE Ltd. The Company confirms that the annual listing fees to the stock exchanges for the financial year 2020-21 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 and in the ordinary course of business. These related party transactions have been entered considering the business requirements, administrative convenience and in the best interest of the Companies.

The Company has entered into any transactions with person or entity belonging to the promoter/promoter group which holds 10% or more shareholding in our Company. Details of the same are disclosed in Note 31 of the financial statements.

DISCLOSURE OF RELATED PARTY TRANSACTIONS WITH SUBSIDIARIES

The Company has invested an amount of Rs. 3,00,00,000/- (Rupees Three Crore Only) towards subscription to the equity shares of its Wholly owned subsidiary - Vanta Clinical Research Limited. Further, the Company has also entered transactions with both its subsidiaries- Vanta Clinical Research Limited and Vayam Research Solutions Limited.

Details of all related party transactions with the subsidiary companies are disclosed in Note 31 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.

6. There was no instance of one time settlement with any Bank or financial institution.

7. An application has been filed under Section 9 of Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Hyderabad Bench by Mr. S Venkata Rao (Whole Time Director & CEO of the Company who has resigned w.e.f closing hours of January 04, 2021) alleging to a default in payment of salary and interest thereon aggregating to Rs. 1.18 Cr and seeking initiation of Corporate Insolvency Resolution Process against the Company. This claim made by the applicant is being disputed by the company. Except as stated, here in, there is no proceeding pending under the Insolvency and Bankruptcy code, 2016.

8. There are no shares lying in Demat suspense account or unclaimed suspense account.

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.

INSIDER TRADING REGULATIONS

Based on the requirements under 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.

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. 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 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.