Vivimed Labs Ltd Directors Report

Your Directors have pleasure in presenting the 37^th Annual Report of your Company for the financial year ended 31^st March, 2025.

FINANCIAL RESULTS

The financial performance of your Company for the year ended 31^st March, 2025 is summarized below:

(Rs. in million)

	Standalone		Consolidated
	Year ended 31.03.2025	Year ended 31.03.2024	Year ended 31.03.2025	Year ended 31.03.2024
Gross Income	1077.89	1463.69	1206.4	1590.47
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)	(103.34)	(240.68)	(86.77)	(234.51)
Finance Charges	25.31	19.04	29.47	24.32
Depreciation/Amortization	186.31	184.1	202.24	199.41
Net Profit Before Tax	(314.96)	(443.82)	(318.48)	(458.24)
Provision for Tax	-	-	(1.13)	(3.77)
Net Profit After Tax carried to Balance Sheet	(314.96)	(443.82)	(319.61)	(454.46)

OVERVIEW OF COMPANYS FINANCIAL PERFOMANCE

On a consolidated basis for FY2025, your Company reported total revenue of Rs. 1206.4 million as against Rs.1590.47million. EBITDA for FY2025 was Rs. (86.77) million compared to Rs. (234.51) million in the previous year. Net profit after tax for the group for the current year is Rs. (319.61) million as against Rs. (454.46) million in the previous year.

Total revenue for FY2025 from operations on standalone basis is Rs.1077.89million as against Rs.1463.69 million in the previous year. FY2025 EBITDA was Rs. (103.34) million compared to Rs. (240.68) million in the previous year. The Profit after Tax for the current year is Rs. (314.96) million as against Rs. (443.82) million in the previous year.

OUTLOOK:

Business prospects may remain positive because of the growing global demand for generics and opportunities provided by the expiry of patents in developed markets.

MANAGEMENT DISCUSSION & ANALYSIS:

Various business aspects including market conditions, business opportunities, challenges etc. have been discussed at length in the Management Discussion and Analysis (MD&A), which forms part of this Annual Report.

DIVIDEND

Due to loses, the board of directors of the company have not recommend any dividend for the year FY2025.

TRANSFER TO RESERVES:

Due to loses your Company propose to transfer loses to Reserves.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs.111,00,00,000/- (Rupees One Hundred Eleven Crores only) comprising 20,00,00,000 (Twenty crores) Equity Shares of Rs.2/- (Rupees Two Only) each, and 71,00,00 (Seven Lakh Ten Thousand only) Preference Shares of the Company with a par value of Rs.1,000/- (Rupees One Thousand only) each. The paid-up share capital of the Company is Rs.16,58,27,830/- (Rupees Sixteen Crores Fifty Eight lakhs Twenty seven thousand Eight hundred and thirty only) comprising 8,29,13,915 (Eight crores Twenty nine lakhs thirteen thousand nine hundred and fifteen only) Equity Shares of Rs.2/- (Rupees Two Only) each.

TRANSFER TO THE INVESTOR EDUCATION & PROTECTION FUND (IEPF):

In terms of Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, unclaimed dividend amounting to Rs.68,098/- (Sixty eight thousand and ninety eight rupees only) for the financial year 2016-2017, was transferred during the year under review to the Investor Education and Protection Fund established by the Central Government.

SUBSIDIARIES / ASSOCIATE COMPANIES

The statement containing the salient features of the Financial Statements of the Companys subsidiaries/ associate companies is given in Form AOC-1, provided in Notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries and associate companies and their contribution to the overall performance of the Company during the financial year is given under Annexure 1 to the Consolidated Financial Statements forming part of the Annual Report.

CHANGE IN THE NATURE OF THE BUSINESS, IF ANY:

There is no change in the nature of the business of the Company or any of its subsidiaries or associates, during the year under review.

MATERIAL CHANGES AFFECTING THE COMPANY:

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company. The lead banker of the Company (SBI) has filed petition against the Company for recovery of their dues in DRT. The Company is negotiating one time settlement/ restructuring of loans with the bankers.

FIXED DEPOSITS:

The Company did not accept any fixed deposits.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Manohar Rao Varalwar (Whole Time Director) of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment, the Board of Directors on the recommendation of the Nomination and Remuneration Committee, has decided to re-appoint Mr. Manohar Rao Varalwar, Director of the Company.

Ms. Subbarathnamma Palepu & Mr. Jarugula Siva Prasad, (appointed as an Independent Directors (under Non-Executive category) of the Company, to hold office for a term of five consecutive years i.e., from December 11, 2024 till December 10, 2029 and not liable to retire by rotation) and Ms. Aparna Bidarkar, (appointed as an Independent Director, not liable to retire by rotation and to hold office for a term of 5 (five) consecutive years with effect from February 14, 2022 to February 13, 2027) are the Independent Directors of your Company in accordance with the provisions of the Companies Act, 2013 and SEBI (LODR) 2015 (including any statutory modification(s) or reenactment(s) for the time being in force).

Mr. Subhash Varalwar (Non-executive non independent Director) of the Company resigned on 11-12-2024 due to ill health (confirmed that there is no other material reason other than this). The Board appreciated and put on record the valuable services rendered by Mr. Subhash Varalwar during his tenure of directorship in the Company.

Mr. Hari Gopal Jamalapuram, Non-Executive/ Independent Director of the Company demised on 18-11-2024. The Board expressed its condolences and appreciated and put on record the valuable services rendered by Mr. Hari Gopal Jamalapuram during his tenure of directorship in the Company.

Mr. Santosh Varalwar was re-appointed as Managing Director of the Company in 32^nd Annual General Meeting held on 30^th December,2020 for a period of five years w.e.f.14^th August 2020. Mr. Manohar Rao Varalwar was re-appointed as a WTD by the members in the 32^nd Annual General Meeting held on 30^th December,2020 for a period of five years w.e.f.14^th August 2020, Mr. Sandeep Varalwar was reappointed as a WTD by the members in the 32^nd Annual General Meeting held on 30^th December,2020 for a period of five years w.e.f.14^th August 2020. The current term of them as Managing Director/ whole Time Directors of the Company expires on August 13, 2025

In view of their consistent efforts which have contributed to the growth of the organisation and the sincere service rendered for the better performance of the organization during their tenure as Managing Director /whole time Directors, the Board of Directors on the recommendation of the Nomination and Remuneration Committee, has decided to re-appoint Mr. Santosh Varalwar as Managing Director and Mr. Manohar Rao Varalwar and Mr. Sandeep Varalwar as whole time Directors of the Company for a further period of 5 (five) years effective from August 14, 2025 under Section 196, 197, 203 read with Schedule V of the Companies Act, 2013 and rules made thereunder. The approval of the members is being sought to the terms, conditions and stipulations for the reappointment of Mr. Santosh Varalwar as Managing Director and Mr. Manohar Rao Varalwar and Mr. Sandeep Varalwar as Whole time Directors and the remuneration payable to them and resolution pertaining to the same is contained in the notice calling Annual General Meeting.

Mr. Santosh Varalwar, Managing Director, Dr. Manohar rao Varalwar,

Whole Time Director, Mr. Sandeep Varalwar, Whole Time Director, Mr. Phaninder Nath Peta Sonti, CFO (appointed on 10.01.2025) and Mr. K. Yugandhar, Company Secretary, are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or reenactment(s) for the time being in force).

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1) (b) of Listing Regulations (including any statutory modification(s) or reenactments) for the time being in force).In the opinion of the Board, the Independent Directors of the Company fulfil the conditions specified in the Act and Listing Regulations and are independent of the management.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The Board of Directors has complete access to the information within the Company. Independent Directors have the freedom to interact with the Companys management. Interactions happen during Board / Committee meetings, when CXOs are asked to make presentations about performance of the Company to the Board. Apart from this, they also have independent interactions with the Statutory Auditors, the Internal Auditors and external advisors appointed from time to time. Further, they meet without the presence of any management personnel and their meetings are conducted informally to enable the Independent Directors to discuss matters pertaining to the Companys affairs and put forth their combined views to the Board of Directors of the Company.

BOARD EVALUATION:

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the NonExecutive Directors and Executive Directors. Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for annual evaluation of the performance of the Board, its Committees and individual Directors was carried out in accordance with the policies in force.

DECLARATION FROM INDEPENDENT DIRECTORS:

The independent directors have submitted the declaration of independence stating that they meet the criteria of independence as prescribed in sub-section (6) of Section 149 of the Companies Act, 2013 as well as under Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIVIDEND DISTRIBUTION POLICY:

The web link of the Dividend Distribution Policy has been provided below for the perusal of the shareholders. https://www.vivimedlabs . com/other-data/

BOARD MEETINGS:

The Board and Committee meetings are pre-scheduled and a tentative calendar of the meetings shall be finalized in consultation with the Directors to facilitate them to plan their schedule. However, in case of urgent business needs, approval is taken by passing resolutions through circulation.

During the year under review, Seven (7) board meetings were held. The details of the meetings including the composition of various committees are provided in the Report on Corporate Governance.

PERFORMANCE EVALUATION:

The formal annual evaluation of the performance of the Board as well as non-independent directors was undertaken by the Nomination and Remuneration Committee. The performance of Board Committees and of individual independent directors was undertaken by the Board members. The manner of the evaluation of the Board and other Committees has been determined by the Nomination and Remuneration Committee as per SEBI circulars.

RISK MANAGEMENT:

Your Company had formulated a risk management policy for dealing with different kinds of risks that it faces in the day-to-day operations of the Company. Risk Management Policy of the company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal financial control systems and procedures to mitigate the risk. The risk management procedure is reviewed by the Risk Management Committee and Board of Directors on a regular basis at the time of review of quarterly financial results of the Company. Further, your Company had constituted a Risk Management Committee which lays down various risk mitigating practices that your Company is required to implement in the Company.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of your Company for the financial year FY2025 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, applicable Accounting Standards and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "Listing Regulations").The consolidated financial statements have been prepared on the basis of audited/ unaudited financial statements of your Company, its subsidiaries and associate companies, as approved by the respective Board of Directors.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) 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 a true and fair view of the state of affairs of the Company as at March 31,2025 and of the profit / loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis for the financial year ended March 31,2025;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters are adopted as per the provisions of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

The nomination and remuneration policy is adopted by the Board and the salient features of the policy are as follows:

• Non-Executive and Independent Directors ("NEDs") will be paid remuneration by way of sitting fees and commission. The remuneration/ commission/compensation to the NEDs will be determined by the Nomination and Remuneration Committee ("Compensation Committee") and recommended to the Board for its approval.

• The payment of the Commission to the NEDs will be placed before the Board every year for its consideration and approval. The sitting fee payable to the NEDs for attending the Board and Compensation Committee meetings will be fixed, subject to the statutory ceiling.

• The fee will be reviewed periodically and aligned to comparable best in class companies.

• NEDs will not be eligible to receive stock options under the existing employee stock option scheme(s) ("ESOP") of the Company.

• The compensation paid to the executive directors (including the Managing Director) will be within the scale approved by the shareholders. The elements of the total compensation, approved by the Compensation Committee will be within the overall limits specified under the Act.

• The Companys total compensation for Directors and Key Managerial Personnel as defined under the Act / other employees will consist of:

- fixed compensation

- variable compensation in the form of annual incentive

- benefits

- work related facilities and perquisites Changes made to the policy: Nil

The Nomination and Remuneration Policy is placed on the Companys website and the following is web address of the said policy. https://www.vivimedlabs.com/wp-content/uploads/2020/09/ REMUNERATION-POLICY.pdf

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES:

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment(s) for the time being in force).The salient aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this report.

The Managing Director/ other whole time Directors of your Company does not receive remuneration from any of the subsidiaries of your Company.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure-2 to this report and is also available on the website of your Company (www.vivimedlabs.com ).

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company www.vivimedlabs.com .

HUMAN RESOURCES:

The management believes that the competent and committed human resources are vitally important to attain success in the organization. In line with this philosophy, utmost care is being exercised to attract quality resources and suitable training is imparted on various skill-sets and behavior. Annual sports and games were conducted across the organization to enhance the competitive spirit and encourage bonding teamwork among the employees.

LOANS, GUARANTEES & INVESTMENTS

Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31^st March, 2025, are set out in the Standalone Financial Statements forming part of this report.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below.

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by their respective Statutory Auditors for consolidation.

Your Company operates in SAP, an ERP system, and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. Your Company has automated processes to ensure accurate and timely updation of various master data in the underlying ERP system.

Your Company has a robust financial closure self-certification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

Your Company operates a shared service center which handles all payments made by your Company. This center ensures adherence to all policies laid down by the management.

Your Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/ validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Statutory Auditors and Audit Committee.

The Management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.

Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update accounting information accurately and in a timely manner. Any noncompliance noticed is to be reported and actioned upon in line with the Whistle Blower Policy.

Your Company gets its Standalone accounts limited review every quarter by its Statutory Auditors.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

EMPLOYEES STOCK OPTION SCHEMES

The Company has granted 25,00,000 options to eligible employees under the Vivimed Labs ESOP 2017 at Rs.35/- per option (exercise price) in FY2019. The shares covered by such options are 25,00,000 equity shares of Rs.2/- each(face value).

Pursuant to regulation 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, certificate from NVSS Suryanarayana Rao, the practicing company secretary is given as Annexure-3 to the Boards report.

Disclosure with respect to the Employees Stock Option Scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is available on the Companys website.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Companys operations in future.

INSURANCE:

All properties and insurable interests of the Company including buildings, plant and machinery and stocks have been fully insured.

AUDITORS AND AUDITORS REPORT

AUDITORS

(I) STATUTORY AUDITOR

Pursuant to the provisions of Section 139(8), 141 and 142 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s.SVRL & Co., Chartered Accountants, as Statutory Auditors of the Company, for a second term of five (5) consecutive years from the conclusion of 36^th AGM till the conclusion of 41^st AGM of the Company, subject to the approval of the Members in the ensuing AGM (for conducting audit from FY2025 to FY2029).

They have confirmed their eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.

The Auditors Report for the financial year ended March 31, 2025, has been issued with an modified opinion, by the Statutory Auditors.

During the year under review, there were audit qualifications on your Companys financial statements.

STATEMENT OF IMPACT OF AUDIT QUALIFICATIONS (FOR AUDIT REPORT WITH MODIFIED OPINION) SUBMITTED ALONG WITH ANNUAL AUDITED FINANCIAL RESULTS - STANDALONE BASIS - VIVIMED LABS LIMITED

Statement of Impact of Audit Qualifications for the Financial Year Ended March 31, 2025 (Regulation 33 / 52 of the SEBI (LODR) (Amendment), Regulations, 2016

(Rupees in Millions)

S. Particulars No.	Audited Figures (as reported before adjustment)	Adjusted Figures
1. Turnover/ Total Income	1,077.89	1,077.89
2. Total Expenditure	1,392.85	1,967.29
3. Net Profit / (Loss)	(314.96)	(889.40)
4. Earnings Per Share	(3.80)	(10.73)
5. Total Assets	6,389.52	6,389.52
6. Total Liabilities	5,804.61	6,379.05
7. Net Worth	584.91	10.47
8. Any Other Financial Items (as felt appropriate by the Management)	Nil	Nil

II Audit Qualification:

1 a. Details of Audit Qualification:

As disclosed in Note 3 to the statement, the Company has not recognized interest expense of approximately Rs.574.44 million on an accrual basis, citing non-availability of bank confirmations as of March 31,2025. This is not in compliance with Indian accounting standards, which require accrual-based accounting and recognition of borrowing costs when accrued. Consequently, the reported loss is understated by the said amount. The Company is also in ongoing discussions with its bankers for settlement, which have not yet concluded. Due to the uncertainty and lack of finalized terms, the impact of such settlement, if any, has not been accounted for and remains unquantified.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 2^nd time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company is engaged in the negotiations with its Bankers for a settlement and is confident for settlement with Banks. Hence, the company has not recorded interest on outstanding loan for the year 2024-25.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

2 a. Details of Audit Qualification:

We were unable to obtain direct external confirmations in respect of the Companys current and non-current bank borrowings total amounting to Rs.3744.56 (as referred in note 16a, 16b). Consequently, we are unable to comment on the completeness, accuracy, and existence of these borrowings. As a result, we are unable to determine whether any adjustments may be necessary in respect of these balances.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 1^st time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company has defaulted in repayment of dues to banks and Financial Institution and all the loan accounts outstanding are classified as NPA by the banks. The balance confirmations from Lenders are not forthcoming. Further, the Company is engaged in the negotiations with its Bankers for a settlement and is confident for settlement with Banks.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

3 a. Details of Audit Qualification:

The Company has disclosed related party transactions in the statement, including items such as investments, receivables, payables, advances, purchases, and sales. Further, balances pertaining to creditors, debtors, other current assets and bank accounts are subject to external confirmation. While we note that the Company has initiated the process of obtaining these confirmations, the confirmations have not yet been received. In the absence of these confirmations, we are unable to comment on the accuracy, completeness, and validity of the reported balances and related party transactions.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 2^nd Time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company has the system of periodical reconciliation of balances with vendors, customer and related parties. The statutory auditors requested for balance confirmation letters from all. We have requested for the balance confirmation letters. On receipt of the same we will submit them to statutory auditors.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

4 a. Details of Audit Qualification:

The Company has not identified parties covered under the Micro, Small and Medium Enterprises Development Act, 2006. Consequently, disclosures required under Section 22 of the MSMED Act, 2006 and Section 134 of the Companies Act, 2013, including provision for interest on delayed payments, have not been made Due to the absence of relevant data and confirmations, the financial impact of nonprovision of such interest is not ascertainable.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 1^st Time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The company has initiated the process of obtaining the confirmations and relevant documents regarding MSME certificates from Vendors. However, no such confirmations have been received so far.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL 5.

a. Details of Audit Qualification:

The Companys investments in subsidiaries and associates amounting to Rs.587.83million have not been assessed for impairment, despite the presence of indicators for impairment. However, in the absence of independent valuer reports or sufficient appropriate evidence, we are unable to derive the impact, if any, on these investments.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 1^st Time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company is anticipating certain business opportunity in coming years in its subsidiaries. The company has assessed based on projected business plans that impairment provision is not required at present.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

STATEMENT OF IMPACT OF AUDIT QUALIFICATIONS (FOR AUDIT REPORT WITH MODIFIED OPINION) SUBMITTED ALONG WITH ANNUAL AUDITED FINANCIAL RESULTS - CONSOLIDATED BASIS - VIVIMED LABS LIMITED

Statement of Impact of Audit Qualifications for the Financial Year Ended March 31, 2025 (Regulation 33 / 52 of the SEBI (LODR) (Amendment), Regulations, 2016

(Rs. in Millions)

Sr. No. Particulars	Audited Figures (as reported before adjustment)	Adjusted Figures
1. Turnover/ Total Income	1,206.40	1,206.40
2. Total Expenditure	1,526.01	2,100.45
3. Net Profit / (Loss)	(319.61)	(894.05)
4. Earnings Per Share	(3.85)	(10.78)
5. Total Assets	9,208.34	9,208.34
6. Total Liabilities	9,560.03	10,134.47
7. Net Worth	(351.69)	(926.13)
8. Any Other Financial Items (as felt appropriate by the Management)	Nil	Nil

II Audit Qualification:

1 a. Details of Audit Qualification:

As disclosed in Note 3 to the statement, the Company has not recognized interest expense of approximately Rs.574.44 million on an accrual basis, citing non-availability of bank confirmations as of March 31,2025. This is not in compliance with Indian accounting standards, which require accrual-based accounting and recognition of borrowing costs when accrued. Consequently, the reported loss is understated by the said amount. The Company is also in ongoing discussions with its bankers for settlement, which have not yet concluded. Due to the uncertainty and lack of finalized terms, the impact of such settlement, if any, has not been accounted for and remains unquantified.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 2^nd time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company is engaged in the negotiations with its Bankers for a settlement and is confident for settlement with Banks. Hence, the company has not recorded interest on outstanding loan for the year 2024-25.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

2. a. Details of Audit Qualification:

We were unable to obtain direct external confirmations in respect of the Companys current and non-current bank borrowings total amounting to Rs.3744.56 (as referred in note 16a, 16b). Consequently, we are unable to comment on the completeness, accuracy, and existence of these borrowings. As a result, we are unable to determine whether any adjustments may be necessary in respect of these balances.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 1^st time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company has defaulted in repayment of dues to banks and Financial Institution and all the loan accounts outstanding are classified as NPA by the banks. The balance confirmations from Lenders are not forthcoming. Further, the Company is engaged in the negotiations with its Bankers for a settlement and is confident for settlement with Banks.\

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

a. Details of Audit Qualification:

3 The Company has disclosed related party transactions in the statement, including items such as investments, receivables, payables, advances, purchases, and sales. Further, balances pertaining to creditors, debtors, other current assets and bank accounts are subject to external confirmation. While we note that the Company has initiated the process of obtaining these confirmations, the confirmations have not yet been received. In the absence of these confirmations, we are unable to comment on the accuracy, completeness, and validity of the reported balances and related party transactions.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 2^nd Time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The Company has the system of periodical reconciliation of balances with vendors, customer and related parties. The statutory auditors requested for balance confirmation letters from all. We have requested for the balance confirmation letters. On receipt of the same we will submit them to statutory auditors.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

4 a. Details of Audit Qualification:

The Company has not identified parties covered under the Micro, Small and Medium Enterprises Development Act, 2006. Consequently, disclosures required under Section 22 of the MSMED Act, 2006 and Section 134 of the Companies Act, 2013, including provision for interest on delayed payments, have not been made Due to the absence of relevant data and confirmations, the financial impact of nonprovision of such interest is not ascertainable.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of Qualification : 1^st Time

d. For Audit Qualification(s) where the impact is quantified by the Auditor, Managements Views:

The company has initiated the process of obtaining the confirmations and relevant documents regarding MSME certificates from Vendors. However, no such confirmations have been received so far.

e. For Audit Qualification(s) where the impact is not quantified by the Auditor: NIL

(II) COST AUDITORS:

In accordance with Section 148 of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendments Rules, 2014, the Company maintains the cost records in respect of its business.

Your Board has appointed M/s.J K & Co, Cost Accountants, (Firm Registration No. 004010), as the Cost Auditors of the Company for the Financial Year 2025-26. As required by the Act, the remuneration of the Cost Auditors has to be ratified by the Members and accordingly the resolution relating to the Cost Auditors is being placed before the Members for their ratification.

(IN) SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. N. V. S. S. Suryanarayana Rao, Practicing Company Secretary (Certificate of Practice No.2886), to undertake the Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report issued in Form MR-3 is in Annexure -4 to this Report. There are no qualifications, reservations or adverse remarks in the Secretarial Audit Report.

Pursuant to the Regulation 24A & other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") read with provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions of the Companies Act, 2013, if any ("the Act"), the Audit Committee and the Board of Directors at their respective meetings held on 13.08.2025 have approved subject to approval of Members, appointment of Mr. NVSS Suryanarayana Rao, Peer Reviewed Company Secretary in Practice as Secretarial Auditors for a term of 5(Five) consecutive years from April 1, 2025 till March 31, 2030. The approval of the members is being sought to the terms, conditions and stipulations for the appointment of Mr. NVSS Suryanarayana Rao, Peer Reviewed Company Secretary in Practice as Secretarial Auditors and the remuneration payable to them and resolution pertaining to the same is contained in the notice calling Annual General Meeting.

AUDITORSQUALIFICATIONS/RESERVATIONS/ ADVERSE REMARKS/FRAUDS REPORTED:

There are no Auditors Qualifications or reservations or adverse remarks on the financial statements of the Company. The Auditors have not reported any frauds to the Audit Committee as prescribed under Sec. 143(12) of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/ REGULATORS:

There are no significant and material orders passed by the Courts or Regulators against the Company.

DISCLOSURES:

AUDIT COMMITTEE

The Audit Committee comprises majority of Independent Directors namely Mr. Jarugula Siva Prasad Ms. Aparna Bidarkar, Mr. Sandeep Varalwar and Ms. Subbarathnamma Palepu as members. During the year all the recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM

The Company has a Vigil mechanism and a Whistle - blower policy in accordance with provisions of the Act and Listing Regulations, under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Protected disclosures can be made by a whistle blower through a dedicated e-mail, or a letter to the Chairman of the Audit Committee.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at: www.vivimedlabs.com

CODEOF CONDUCT

A declaration regarding compliance with the code of conduct signed by the Companys Managing Director is published in the Corporate Governance Report which forms part of the annual report.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure -5 to the Boards Report.

ANNUAL RETURN:

As required 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 shall be placed on the Website of the Company at https://www.vivimedlabs . com/other-data/.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended thereof, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this Report.

MAINTENANCE OF COST RECORDS SPECIFIED BY THE CENTRAL GOVERNMENT UNDER SECTION 148 OF THE COMPANIES ACT, 2013

The Company has complied with the provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 during the year under review.

POLICY ON SEXUAL HARASSMENT AND CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has a Policy on"Prevention of Sexual Harassment of Women at Workplace" for the matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" and constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not received any complaints pertaining to Sexual Harassment.

The Company regularly conducts awareness programs for its employees.

DECLARATION FROM INDEPENDENT DIRECTORS:

The independent directors have submitted the declaration of independence stating that they meet the criteria of independence as prescribed in sub-section (6) of Section 149 of the Companies Act, 2013 as well as under Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

GENERAL

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

• Details relating to deposits covered under Chapter V of the Act.

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

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employee Stock Option Scheme referred to in this Report.

• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• 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.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

RELATED PARTY TRANSACTIONS:

In accordance with Sec 134(h) of the Companies Act, 2013 and Rule 8(2) of Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with the Related Parties referred to in Sec.188(1) of the Act, have been provided in Form AOC-2 and attached the same as Annexure-6. The details of related party disclosures as stated in the notes to the financial statements forms part of this annual report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors had framed the policy on Corporate Social Responsibility and the Projects and Programs undertaken by the Company during the year under review have been provided in Annexure - 7 and forms part of this Report.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Companys bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board

Place: Hyderabad	Sd/-
Date: 13.08.2025	Santosh Varalwar
	Managing Director
	DIN:00054763
	Sd/-
	Manohar Rao Varalwar
	Chairman cum Whole time Director
	DIN:00059815