Vidhi Specialty Food Ingredients Ltd

To,

The Members,

Your Directors are presenting the Thirty-First Annual Report on the business and operations of your Company together with the Audited Financial Statement for the financial year ended March 31,2024.

The financial highlights of the Company on standalone basis are as follows:

The financial performance of the Company, during the year under review, is described as follows -

The financial performance is discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report.

The Company has manufactured 4507.19 MT of food colours against 4250.02 MT in the previous year. The Dahej plant began production on December 12, 2023, following a successful trial run that began on August 27, 2023. With this addition, the Company's overall capacity has more than doubled from 325 metric tons per month to 675 metric tons per month. The Board strive for bright future for your Company with overall growth in turnover as well as profit with expansion of its production facility.

The Company is engaged in the business of manufacturing and trading in synthetic food colours and chemicals. There was no change in nature of business activity during the year.

Your Directors are pleased to recommend a final dividend of Rs. 1/- (Rupees One Only) per equity share of Rs. 1/- each fully paid up (i.e. 100%) for the financial year ended March 31, 2024. The total outflow on account of final dividend will be Rs. 499.45 Lakhs. The dividend payment is subject to the approval of the Members at the ensuing Annual General Meeting (‘AGM') and be paid to the Members whose names appear in the Register of Members/Beneficial Holders as on Book Closure Date fixed for the said purpose.

The dividend, if declared at the AGM, would be paid/dispatched within thirty days from the date of declaration of dividend to those persons or their mandates:

• whose names appear as beneficial owners as at the end of the business hours on Tuesday, September 17, 2024 in the list of the Beneficial Owners to be obtained from the Depositories, i.e. National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL], in respect of the shares held in electronic/dematerialized mode; and

• whose names appear as Members in the Register of Members of the Company as on Tuesday, September 17, 2024 in respect of the shares held in physical mode.

In line with our focus on enhancing shareholder returns and in view of the Company's strong cash generation and positive growth momentum, the Board of Directors had decided to distribute profits to its Members and accordingly the Board of Directors had declared interim dividend during the financial year 2023-24 as per details given below:

Total dividend pay out for the year 2023-24 (including final dividend to be declared in the ensuing AGM) is doubled to Rs. 2/- per equity share of Rs.1/- each against Rs.1/- per equity share for previous year.

The Board, during the year under review, has transferred Nil amount to General Reserves.

Pursuant to the applicable provisions of the Companies Act, 2013 ("the Act"), read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Since last Board Report, the Company has transferred the unclaimed and unpaid dividend amount in IEPF as per details given below:

As per the requirements of the IEPF Rules, the Company has transferred 10,521 Equity Shares on which dividends were unclaimed for seven consecutive years. Further, the details of unclaimed dividend and due dates for transfer of unclaimed dividend to IEPF account has been given in Notes to the Notice calling Thirty-First AGM and are also available on our website, at httDs://vidhifoodcolors.com/investor-relation/unclaimed-dividends/

The Company has a Wholly-owned Subsidiary Company namely, Arjun Food Colorants Manufacturing Private Limited, as on March 31,2024. However, the Company did not have any Joint Venture or Associate Company during the year under review. During the year under report no Company become or ceased to be Subsidiary, Joint Ventures or Associate Companies.

Arjun Food Colorants Manufacturing Private Limited did not have any business operation during the year 2023-24. Hence, there was no income from operation. However, the Company has incurred total expenses of Rs. 5.30 lakhs during the year as compared to expenses of Rs. 3.50 lakhs in the previous year. The Loss after tax of the Company during the year was Rs. 5.30 lakhs as compared to Loss after Tax of Rs. 3.50 lakhs in the previous year. Since there was no business income, the said Company has not contributed to the turnover/performance of the Company but due to losses, it has negatively impacted on consolidated profits of the Company.

As required pursuant to first proviso to sub section (3) of section 129 read with Rule 5 of Companies (Accounts) Rules, 2014, Form AOC-1 forms part of this report, appended as Annexure A

Further, pursuant to the provisions of Section 136 of the Act, the Standalone as well as Consolidated financial statements of the Company along with and all other documents required to be attached thereto and separate audited financial statement in respect of the subsidiary is available on the website of the Company at https://vidhifoodcolors.com/INVPDFDocs/SubsidiariesFinancials/2023-24/Financial%20 Statements %20Ariun%20Food%20Colorants%20Private%20Limited 2023-24.pdf

Your Company has not accepted any deposits from the public and there was no deposit was outstanding to be paid. Since there was no such outstanding as on start of the financial year, there is no question of payment on account of principal or interest on public deposits arises.

As on the date of this Report, your Company had Nine (9) Directors consisting of 5 (Five) Independent Directors, 3 (Three) Executive Directors and 1(One) Non-Executive Director (Promoter). The said Directors include 1 (One) Independent Woman Director, 1 (One) Executive Woman Director and 1 (One) Non-executive Woman Director.

During the financial year 2023-24, above there was no change in Directors or Key Managerial Personnel by way of appointment, resignation, death or cessation except, at the 30^th AGM Mr. Mihir B. Manek (DIN:00650613) was re-appointed as Director pursuant to Section 152(6) of the Act.

In pursuance of the provisions of Section 152(6) of the Act and Articles of Association of the Company, Mrs. Pravina B. Manek (DIN: 00416533), retires by rotation from the Board in the ensuing AGM and, being eligible for re-appointment, has offered herself for reappointment. The Board of Directors recommends her re-appointment to the Members of the Company.

A resolution seeking shareholders' Approval for her re-appointment along with other required details forms part of the Notice convening 31^st AGM.

Mrs. Jyoti Sunil Modi (DIN: 08699101) who was appointed by the Board of Directors as an Additional Independent Director of the Company w.e.f. March 19, 2020 for a period of five years, holds office of Independent Director up to March 18, 2025.

In terms of Section 149 and other applicable provisions of the Act, Mrs. Jyoti Sunil Modi (DIN: 08699101), being eligible, is proposed to be re-appointed as Independent Director on the recommendation of the Nomination & Remuneration Committee and on the basis of the outcome of her performance evaluation up to the Financial Year 2023-24, for a second term of 5 (five) consecutive years commencing from March 19, 2025 to March 18, 2030 subject to the approval of the Members at the 31^st AGM by passing Special Resolution.

The second term of five consecutive years of Mr. Prafullachandra Shah (DIN: 00417022) and Mr. Nirenbhai Desai (DIN: 01978382) as Independent Directors of the Company was valid till September 26, 2024 and of Mr. Rahul Berde (DIN: 06981981) was valid till September 29, 2024. In order to comply with the requirements of Regulation 17 and any other regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to appoint minimum two Independent Directors on the Board of the Company on or before their terms expires.

In order to comply with the requirements of the Act and the Listing Regulations Mrs. Pranali Prathamesh Govekar (DIN: 10727843) and Mr. Anil Popatlal Udeshi (DIN: 08285657) were appointed as an Additional Independent (Non-Executive) Directors u/s 149,160 and 161 of the Act w.e.f. August 08, 2024 for a period of five years i.e. upto August 07, 2029 subject to the approval of the Members of the Company in the 31^st AGM.

The Company has received declarations from all the Independent Directors of the Company pursuant to the provisions of Section 149(7) of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations stating that they meet the criteria of independence as provided under the Act and the Listing Regulations and that they are not disqualified to become Directors under the Act; and in the opinion of the Board of Directors, all the Independent Directors fulfill the criteria of independence as provided under the Act read with the Listing Regulations and that they are independent of the Management.

Further, at the time of the appointment of an Independent Director, the Company issues a formal letter of appointment out lining his role, function, duties and

responsibilities. The format of the letter of appointment is available on our website at

Brief resume and other details of the Director proposed to be appointed/re-appointed, as stipulated under the Listing Regulations and Secretarial Standard-2, has been furnished separately in the Notice convening the AGM read with the Annexure thereto forming part of this Annual Report.

Pursuant to the provisions of Section 203 of the Act following persons are designated as Key Managerial Personnel (KMP) as on March 31,2024:

• Mr. Bipin Madhavji Manek(DIN: 00416441),Chairman and Managing Director

• Mr. Mitesh Dinesh Manek, Chief Financial Officer

• Ms. Vishakha Pandya (Membership No. A59436), Company Secretary and Compliance Officer of the Company

The Board of Directors is committed to continued improvement in its effectiveness. Accordingly, formal evaluation of Board's, it's Committee and Directors performance is carried out annually. This was designed to ensure, amongst other things, that the Board, its Committees and each Director continue to contribute effectively.

As per Section 134(3)(p) of the Act, a statement indicating the manner in which formal annual evaluation was made by the Board of their performance and that of its Committees and individual Directors, has to be furnished to the Members as part of the Board's Report.

As per provisions of Section 178(2) of the Act, Nomination and Remuneration Committee shall specify the manner for effective evaluation of performance of Board, its Committees and individual Directors to be carried out. Further, the Independent Directors, as part of their mandate under Schedule IV of the Act, need to make an evaluation of performance of the Board, it's Committee and constituents of the Board apart from their selfevaluation. Under this process, a structured questionnaire was prepared after taking into consideration inputs received from the Directors, setting out parameters of evaluation; the questionnaire for evaluation are to be filled in, consolidated and discussed with the Chairman. The evaluation by the Independent Directors has been undertaken at their meeting held on February 07, 2024. The Board of Directors undertook evaluation of Independent Directors at their meeting held on February 07, 2024 and placed on its record that the Independent Directors have the requisite qualification, expertise and track record for performing their duties as envisaged under the Law, and they add value in the decision making process of the Board.

The criteria for evaluation of performance of Directors, the Board as a whole and the Board's Committee, as specified by Nomination and Remuneration Committee, are summarized in the table given below:

At the time of appointment of Independent Director, through the induction process, he/she is familiarized with the Company, the Director's roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. A presentation is made before the Board Members on the Board Meeting date covering various areas including business, strategy, financial performance and forecast, compliances/regulatory updates, audit reports, risk assessment and mitigation, industry, roles, rights, responsibilities of Independent Directors, etc. The Familiarization Program aims to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. All Independent Directors attended the orientation and familiarization programs held during the financial year 2023-24.

The details of training and familiarization programs are available on our website at https://vidhifoodcolors.com/investor-relation/codes-policies/

The Board, on the recommendation of the Nomination and Remuneration Committee, has framed the policy for selection and appointment of Directors including determining qualifications and independence of a Independent Director, Key Managerial Personnel ("KMP"), Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 134(3) of the Companies Act, 2013, the nomination and remuneration policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available on the Company's website at https://vidhifoodcolors.com/investor-relation/codes-policies/

We affirm that the remuneration paid to Directors, Senior Management and other employees is in accordance with the remuneration policy of the company.

The Board of Directors met Four (4) times during the Financial Year under review. The intervening gap between any two meetings was not more than 120 days as prescribed under the Act. Details of the dates of Board Meetings and the attendance of the Directors at the Board Meetings are provided separately in the Report on Corporate Governance.

As on March 31,2024, the Board had five Committees namely,Audit Committee, Nomination and Remuneration Committee, Stakeholder's Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee.

The Composition of all the Committees is in line with the requirement of the Act and the Listing Regulations. During the year, all the recommendations made by the Committees were accepted by the Board.

A detailed note on the composition, number and dates of meetings held and attendance of Committee Members for the Audit Committee, Nomination and Remuneration Committee, Stakeholder's Relationship Committee and Risk Management Committee is provided separately in the Report on Corporate Governance and details of Corporate Social Responsibility Committee are provided in this Report under separate heading.

Since net profit of the Company is in excess of Rs. 5 Crores, the provisions of Section 135 of the Act regarding Corporate Social Responsibility became applicable to the Company. The constitution, composition, quorum requirements, terms of reference, role, powers, rights and obligations of CSR Committee are in conformity with the provisions of Section 135 and all other applicable provisions of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and all other applicable Rules made under the Act.

4 (Four) Committee Meeting were held during the financial year under review, on May 26, 2023, August 11, 2023, November 08, 2023 and February 07, 2024. All the Committee Members has attended all such meetings.

The CSR Committee comprises of the following Directors as on the date of this Report:

Brief description of terms of reference of the Committee inter-alia includes:

• formulate and recommend to the Board of Directors (Board), a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Act;

• formulate and recommend to the Board, an annual action plan in pursuance of its CSR policy.

• recommend the Board alteration in annual action plan at any time during the financial year with reasonable justification.

• Recommend CSR activities;

• recommend to the Board the amount of expenditure to be incurred on the CSR activities;

• monitor the CSR Policy of the Company from time to time;

• institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the Company; and

• carry out any other functions as authorized by the Board from time to time or as enforced by statutory/ regulatory authorities.

The CSR Policy of the Company is available on the Company's website at:

httos://vidhifoodcolors.com/INVPDFDocs/9.%20Codes%20and%20Polices/4.%20CSR%20Policv.odf

Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure B to this Report.

The Company has a ‘Whistle Blower Policy'/‘Vigil Mechanism' in place as per Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations. The objective of the Vigil Mechanism is to provide the employees, Directors, customers, contractors and other stakeholders of the Company an impartial and fair avenue to raise concerns and seek their redressal, in line with the Company's commitment to the highest possible standards of ethical, moral and legal business conduct and fair dealings with all its stakeholders and constituents and its commitment to open communication channels. The Company is also committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization for whistleblowing in good faith. The Board of Directors affirms and confirms that no personnel have been denied access to the Audit Committee. The Policy contains the provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases.

Vigil Mechanism cum Whistle Blower Policy is available on the Company's website at: httos://Vidhiioodcolors.com/INVPDFDocs/9.%20Codes%20and%20Polices/13.%20Viail%20Mechanism%20Cum%20Whistle%20Blowei%20Policv.odf

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IndAS) notified under section 133 of the Act. The Company has received an unmodified opinion in the Auditors' Report for the financial year 2023-24.

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Hemanshu Kapadia & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2023-24 and issue Secretarial Audit Report. Secretarial Audit Report issued by M/s. Hemanshu Kapadia & Associates for the financial year 2023-24, on August 08, 2024, in Form MR-3 forms part of this report and annexed hereto as Annexure C.

The Secretarial Auditor has qualified the Secretarial Audit Report. The observations of the Secretarial Auditors and the reply of the Management for the same are as under :

On the recommendation of the Audit Committee and the Board, the Member in their Twenty-Ninth AGM had appointed M/s. Bhuta Shah & Co. LLP, Chartered Accountants (Firm Registration No.: 101474W/W100100), as the Statutory Auditors of the Company to hold office for a term of five consecutive financial years from the conclusion of the Twenty-Ninth AGM of the Company till the conclusion of the Thirty-Fourth AGM to be held for the financial year 2026-27.

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and on the basis of the recommendation of the Audit Committee, the Board in their meeting held on May 29, 2024 had appointed M/s. Hemanshu Kapadia & Associates, Practicing Company Secretaries (FCS: 3477 and C.P. No.: 2285), to undertake the Secretarial Audit of the Company for the financial year 2024-25 and issue Secretarial Audit Report as required under the Act.

Pursuant to the provisions of Section 138 of the Act read with Rule 13 of Companies (Accounts) Rules, 2014 and on the basis of the recommendation of Audit Committee, the Board of Directors in their meeting held on May 29, 2024 had appointed M/s. Jayesh Kothari & Co., Chartered Accountants, (FRN: 148528W) as the Internal Auditors of the Company for the financial year 2024-25.

The information as per Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 with respect to Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo are given in Annexure D to this Report.

The information required to be disclosed with respect to the remuneration of Directors and KMPs in the Board's Report pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the financial year 2023-24, is appended as Annexure E to the Board's Report.

The names of top ten employees of the Company in terms of remuneration drawn as required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the financial year 2023-24, is appended as Annexure E to the Board's Report.

No Managing Director or Whole-time Director of the Company were paid any remuneration or commission from any of its Subsidiary Company.

Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return is placed on website of the Company and which shall be treated as part of this Report. The link is as follows:

httos://vidhifoodcolors.com/INVPDFDocs/4.%20Annual%20Reoorts/2023-24/Form MGT 7 Vidhi March%202024.pdf

During the financial year under review, the Company has not issued:

• any equity shares with differential rights as to dividend, voting or otherwise;

• any equity shares (including sweat equity shares) to employees of the Company under any scheme;

• any sweat equity shares; and

• any other type of shares/securities.

The Company's equity shares are listed on BSE Ltd. (BSE) and National Stock Exchange of India Limited (NSE). The stock code of the Company at BSE is 531717 and the symbol for NSE is VIDHIING.

Management Discussion and Analysis Report for the financial year under review as stipulated under regulation 34 of the Listing Regulations is set out in a separate section forming part of the Annual Report.

The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated under the Listing Regulations. A separate Report on Corporate Governance is enclosed as a part of the Annual Report along with the Certificate from the Practicing Company Secretary on Corporate Governance.

As stipulated under section 134(3)(c) read with Section 134(5) of the Act, your Directors hereby state and confirm that:

a) in the preparation of the annual accounts for the financial year ended on March 31,2024, the applicable accounting standards have been followed and that there are no material departures from the same;

b) they 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 at the end of the financial year ended on March 31,2024 and of the profit and loss of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and operating effectively during the financial year ended March 31,2024; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively during the financial year ended March 31,2024.

During the financial year under review, the Company has not entered into any contracts/arrangements/ transactions with related parties which could be considered material in accordance with the Company's Policy on materiality of related party transactions. All contracts/arrangements/transactions entered into by the Company during the financial year under review with related parties were in the ordinary course of business and on an arm's length basis but not material in nature. Accordingly, the disclosure of related party transactions to be provided under section 134(3)(h) of the Act in Form AOC-2 is not applicable.

The details of transactions entered into with related parties, as per Accounting Standards, are disclosed in the Note No. 28 of the Financial Statement.

The Company's Policy on Materiality of related party transactions and dealing with related party transactions is available on the Company's website at:

https://vidhifoodcolors.com/INVPDFDocs/9.%20Codes%20and%20Polices/11.%20Policy%20on%2Related%20Party%20Transactions.pdf

During the year under Report the Company has not given any loan, except, loan to employees and loan to Wholly-owned Subsidiary Company for working capital, or given guarantee or provided securities as covered under section 186 of the Act. Further, the Company has not made any fresh investment during the year. However, the investment made in previous years in the Subsidiary Company is continuing.

The details of loan given and Investment made by the Company have been given in note no. 5 of the Financial Statement.

The Company is exposed to inherent uncertainties owing to the sector in which it operates. A key factor in determining a Company's capacity to create sustainable value is the risks that the Company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a Company's operating environment and they emerge on a regular basis. The Company's Risk Management process focuses on ensuring that these risks are identified on a timely basis and addressed.

The Risk Management Committee (‘RMC') of the Board provides oversight and sets the tone for implementing the Enterprise Risk Management ("ERM") framework across the organization. It reviews the status of key risks, progress of ERM implementation across locations and any exceptions as flagged to it, on periodic basis. The Committee oversees enterprise risk management framework to ensure execution of decided strategies with focus on action and monitoring risks arising out of unintended consequences of decisions or actions and related to performance, operations, compliance, incidents, processes, systems and transactions are managed appropriately. The Company believes that the overall risk exposure of present and future risks remains within risk capacity.

During the year under Report, the Company is keeping track to proactively manage risks and ensure health and safety of employees, while simultaneously ensuring growing business operation without any interruption.

The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has in place adequate internal financial controls with reference to financial statements. The Company's internal control systems, including internal financial controls, are commensurate with the nature of its business and the size and complexity of its operations and the same are adequate and operating effectively. These systems are periodically tested and no reportable material weakness in the design or operation was observed. The Audit Committee reviews adequacy and effectiveness of the Company's internal control system including internal financial controls.

Your Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the aforesaid Act, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy is gender neutral.

We are pleased to inform you that no complaints pertaining to sexual harassment were received during the Financial Year 2023-24 and pending as on March 31,2024.

The Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the Central Government.

As per Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the maintenance of cost records is not mandated for the products manufactured by the Company.

The Listing Regulations mandate the inclusion of the Business Responsibility and Sustainability Reporting (BRSR) from 2022-23 in lieu of the Business Responsibility Report (BRR) as part of the Annual Report for the top 1,000 listed entities based on market capitalization. Since your Company falls under Top 1,000 Companies by Market Cap, Pursuant to Regulation 34(2)(f) of the Listing Regulations and SEBI circular no. SEBI/LAD-NRO/ GN/2021/22 dated May 5, 2021, your Company provides the prescribed disclosures in new reporting requirements on Environmental, Social and Governance ("ESG") parameters called the Business Responsibility and Sustainability Report ("BRSR") which includes performance against the nine principles of the National Guidelines on Responsible Business Conduct and the report under each principle which is divided into essential and leadership indicators.

The BRSR in the format prescribed by SEBI is annexed to the Annual Report as Annexure F.

Also, a detailed BRSR Report describing various initiatives, actions and process of the Company towards the ESG endeavor can be accessed at

https://vidhifoodcolors.com/INVPDFDocs/4.%20Annual%20Reports/2023-24/BUSINESS%20RESP0NSIBILITY%20&%20SUSTAINABILITY%20REPQRTING%20 2023-24.pdf

The Company has formulated a Dividend Distribution Policy as required under regulation 43A of the Listing Regulations. The said Policy is uploaded on the Company's website. The weblink of the same is as follows:

https://vidhifoodcolors.eom/INVPDFDocs/9.%20Codes%20and%20Polices/18.%20Dividend%20Distribution%20Policv.pdf

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

a) Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report;

b) Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Act);

c) The details of application made and proceeding pending under the Insolvency and Bankruptcy Code, 2016;

d) The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions;

e) Significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future; and

f) Details in respect of frauds reported by the Auditors under section 143(12) other than those which are reportable to the Central Government, as there were no such frauds reported by the Auditors.

Your Board wish to place on record their appreciation and acknowledge with gratitude the support and cooperation extended by the Government Authorities, Bankers, Customers, Employees and Members during the year under review and look forward to their continued support.

[Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies

(Accounts) Rules, 2014]

1. Names of subsidiaries which are yet to commence operations: Arjun Food Colorants Manufacturing Private Limited

2. Names of subsidiaries which have been liquidated or sold during the year: Not Applicable

1. A brief outline on Company's Corporate Social Responsibility (CSR) Policy:

Vidhi Specialty Food Ingredients Limited (‘Vidhi'/‘the Company') considers CSR as its commitment to its stakeholders, including the society at large, to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical.

The Company's CSR Policy aims to develop and implement a long-term vision and strategy for Vidhi's CSR initiatives including formulating relevant potential CSR activities, their timely and expeditious implementation and establishing an overview mechanism of the activities undertaken/to be undertaken, in synchronization with the various eligible activities prescribed under schedule VII of the Companies Act, 2013.

The CSR Policy is available on the Company's website at:

CSR Committee Composition - https://vidhifoodcolors.com/investor-relation/directors-committees/ CSR Policy - httDs://vidhifoodcolors.com/INVPDFDocs/9.%20Codes%20and%20Polices/4.%2 CSR%20Policv.pdf CSR Projects - httos://vidhifoodcolors.com/investor-relation/csr-activities/

4. Executive Summary along with web-link(s) of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable: Not Applicable

5. a) Average net profit of the Company as per sub-section (5) of Section 135: '.59,60,54,341/-

b) Two percent of average net profit of the Company as per sub-section (5) of Section 135:

'.1,19,21,087/-

c) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Nil

d) Amount required to be set off for the financial year, if any: '. 1,70,204/-

e) Total CSR obligation for the financial year [(b)+ (c)-(d)]: '. 1,17,50,883/-

*please refer note given below the table given in clause (f).

f) Excess amount for set off, if any:

If Yes, enter the number of Capital assets created/ acquired Not Applicable

Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/ Municipal Corporation/ Gram panchayat are to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5): Not Applicable

To,

The Members,

CIN: L24110MH1994PLC076156

E/27, Commerce Centre 78, Tardeo Road,

Mumbai - 400034

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Vidhi Specialty Food Ingredients Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31,2024 ("the audit period") complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31,2024, according to the provisions of:

i. The Companies Act, 2013 (the Act) and the Rules made there under;

ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the Rules made there under;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (Not Applicable to the Company as during the Audit period there were no Foreign Direct Investments, Overseas Direct Investments in the Company and no External Commercial Borrowings were made by the Company);

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not Applicable to the Company during the Audit period);

d. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as applicable (Not Applicable to the Company during the Audit period);

e. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (Not Applicable to the Company during the Audit period as the Company has not issued any Non-Convertible Securities);

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (Not Applicable to the Company during the Audit period as delisting of securities did not take place);

and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not Applicable to the Company during the Audit period as the Company has not bought back its securities).

i. The following industry specific laws and regulations, as informed and certified by the Audit Committee of the Company which are specifically applicable to the Company based on Food Colour Manufacturing Industry:

• The Food Safety & Standards Act, 2006;

• The Food Safety and Standards (Laboratory and Sampling Analysis) Regulations, 2011;

• The Food Safety and Standards (Packaging) Regulations, 2018;

• Food Safety and Standards (Labelling and Display) Regulations, 2020

• The Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011;

• The Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011;

• The Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011; and

• The Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards (SS-1 and SS-2) issued by the Institute of Company Secretaries of India and as notified by the Central Government, and

(ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), as amended from time to time.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned above (wherever applicable); subject to following observation:

We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. There was no change in the composition of the Board of Directors during the period under review.

Notices of the Board/Committee Meetings were given to all the Directors along with the agenda and detailed notes on agenda at least seven days in advance, except where meeting was called and held at shorter notice, in compliance with the provisions of the Companies Act, 2013, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

As per the minutes of the meetings held during the year and signed by the Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded. Further, as confirmed by the Management, mechanism to capture and record the dissenting Members' views as a part of the minutes, exist.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period there were no instances of:

(i) Public/Rights/Preferential issue of shares/debentures/sweat equity;

(ii) Redemption/buy-back of securities;

(iii) Merger/amalgamation/reconstruction, etc.; and

(iv) Foreign Technical Collaborations.

For Hemanshu Kapadia & Associates

Practising Company Secretaries Peer Review Certificate No.: 1620/2021

To,

The Members,

(CIN: L24110MH1994PLC076156)

E/27, Commerce Centre 78, Tardeo Road,

Mumbai - 400034

Our report of even date is to be read along with the letter.

1. Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required we have obtained the Management representation about the compliance of laws, rules and regulations and happenings of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the Management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

The Company is continuously reviewing various proposals for reduction in consumption of energy, mainly by way of replacement of existing equipments by modern and energy efficient equipments. Your Company has always considered energy and natural resource conservation as a focus area and has been consciously making efforts towards improving the energy performance year after year. Energy efficiency improvement initiatives have been implemented across all the plants and offices by undertaking various energy and resource conservation steps for sustainable development.

In addition to this, the Company had set-up 2 MW Solar Power Plant at Village: Rambhapur, Tal: Murtizapur, Dist: Akola, Maharashtra. 100% of electricity generated through above solar power plant is utilised for captive use for Company's Plant situated in Roha. This project supports the Company's green energy requirements for its manufacturing units. It also help the Company reducing carbon emissions.

Further, the Company ensures adopting and following below mentioned energy saving measures:

a) LED bulbs installed to save energy;

b) Switching off equipments whenever not in use;

c) Printing only important documents;

d) Improvement in low insulation;

e) Periodic desertion of Boiler;

f) Use of energy efficient electric equipments;

g) Regular maintenance of Machines and equipments;

h) Use of natural lightning and natural ventilation; and

i) Educating employees and workers for energy conservation and creating awareness amongst the employees and workers.

a) Installation of Solar Power Plant;

b) Few batch processes scaled up/modified for saving of energy and time;

c) The Company will take continuous steps to use the alternate sources by using cost effective fuels; and

d) Power factor kept unity, few capacitors replaced resulting in significant cost savings.

For the year under review, the total capital investment on energy conservation equipment is NIL.

Your Company has continued its endeavor to absorb advanced technologies for its product range to meet the requirements of a globally competitive market. Further, the Company is taking efforts to further improve quality of the products. The Company strives to achieve innovations in its operations.

Not Applicable as the Company has not absorbed new technology during the year.

No technology was imported during the preceding three years proceeding to the reporting year.

The Company has an exclusive and dedicated Research & Development Division (R&D Division) attached to its major production centre. It carries out development of new products besides improvement of existing products and production processes. R&D Division is playing a pivotal role not only in the case of new products already launched but also those on the anvil. R&D Division is entrusted with the responsibility to develop ways and means to minimize the adverse effect of quality deterioration, if any. R&D Division of the Company has a team of trained and dedicated personnel to further strengthen its activities.

The Specific areas in which R&D is carried out are:

• Development of production processes to meet specific customer requirements;

• Development of new products, especially line extension of existing products and new applications for the same;

• Development of new process techniques for cost optimization as well as fuel and energy conservation; and

• Reduction in water consumption.

(Rs. in lakhs

The Company's products are distributed over 80 countries across 6 continents. The Company continues to improve its export earning and increase in global presence. The Company has continued to maintain focus and avail of export opportunities based on economic consideration. The total Foreign Exchange Earning and Outgo in terms of actual inflow and outflow during the year was as follows:

(Rs. in lakhs

The percentage increase in remuneration of each Director during the Financial Year 2023-24, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2023-24 are as under:

The median remuneration of employees of the Company during the Financial Year was Rs. 3,81,769/- and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year is provided in the above table.

In the Financial Year, there was an increase of 5.61% in the median remuneration of employees.

There were 96 (Including KMPs) permanent employees on the pay roll of the Company as on March 31, 2024.

Average percentile increase made in the salaries of employees other than the managerial personnel in the Financial Year i.e. 2023-24 was 7.52% whereas there was percentile increase in the managerial remuneration for the Financial Year 2023-24 was 50%.

The percentile increase in the managerial remuneration is greater than the average percentile increase in the salaries of the employees other than the managerial remuneration because the managerial personnel get remuneration by way of percentage of net profit of the Company. Even though there was slight decrease in profit but the Managerial Personnel were paid remuneration upto the maximum allowed limit under the Companies Act whereas in previous year they were paid less than the allowed limit, hence the percentile increase in the remuneration to managerial personnel has been more than average percentile increase made in the salaries of employees other than the managerial personnel.

It is hereby affirmed that the remuneration paid is as per the Policy for Remuneration of the Directors, Key Managerial Personnel and other employees.