Vama Industries Ltd Management Discussions

Competitive position of the Company

(a) Industry structure and developments

It is said "Revolution happens with every blink of an eye." The Technology Industry stands testimony to this statement. Change has become the order of the day in the case of Technology Industry. The latest edition being, the Fourth Industrial Revolutionwhich is nothing but an automation of traditional manufacturing and industrial practices, using smart technology. Large-scale machine-to-machine communication (M2M) and the internet of things (IoT) are integrated for increased automation, improved communication and self-monitoring, and production of smart machines that can analyze and diagnose issues without the need for human intervention.

Robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, internet of things, industrial internet ofthings, are going to play a deciding role in the decision making process in any walk of life for that matter.

There are four design principles identified as integral to the Fourth Industrial Revolution, which is commonly known as

"industry 4.0":

Interconnection the ability of machines, devices, sensors, and people to connect and communicate with each othervia the Internet of things, or the internet of people (IoP)

Information transparency the transparency offered by Industry 4.0 technology provides operators with comprehensive information to inform decisions. Inter-connectivity allows operators to collect immense amountsof data and information from all points in the manufacturing process, identify key areas that can benefit from improvement to increase functionality.

Technical assistance the technological facility of systems to assist humans in decision-making and problem-solving, and the ability to help humans with difficult or unsafe tasks

Decentralized decisions the ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomously as possible. Only in the case of exceptions, interference, or conflicting goals, are tasks delegated to a higher level.

The industry 4.0 has sweeping presence in the day to day functioning of our society. A close look into this aspect reveals the following examples:

3D printing

Mobile devices

Location detection technologies

Advanced human-machine interfaces

Authentication and fraud detection

Smart sensors

Internet of things (IoT) platforms

Big analytics and advanced processes

Customer interactions and customer profiling

Mainly these technologies can be summarized into four major components, defining the term "Industry 4.0" or "smartfactory":

Cyber-physical systems

On-demand availability of computer system resources

Cognitive computing

Biggest trends

In essence, the Fourth Industrial Revolution is the trend towards automation and data exchange in manufacturing technologiesand processes which include cyber-physical systems (CPS), IoT, industrial internet of things, cloud computing, cognitive computing, and artificial intelligence.

Smart factory

The Fourth Industrial Revolution fosters what has been called a "smart factory". Within modular structured smart factories,cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralized decisions.

Predictive maintenance

Predictive maintenance can identify maintenance issues in live allows machine owners to perform cost-effective maintenance and determine it ahead of time before the machinery fails or gets damaged. This helps in addressing the issuein advance and better preparedness on the part of the users. For example, a manufacturer or a maintenance firm in India can track and map if a particular machinery, under his radar, is operating beyond the specified parameters which may hamper its normal functioning and thus need to be addressed accordingly.

Smart sensors

Sensors and instrumentation drive the central forces of innovation, not only for Industry 4.0, but also for other "smart" megatrends, such as smart production, smart mobility, smart homes, smart cities and smart factories.

Smart sensors are devices, which generate the data and allow further functionality from self-monitoring and self-configurationto condition monitoring of complex processes. With the capability of wireless communication, they reduce installation effortto a great extent and help realize a dense array of sensors.

The importance of sensors, measurement science, and smart evaluation for Industry 4.0 has been recognized and acknowledged by various experts and has already led to the statement "Industry 4.0: nothing goes without sensor systems"

However, there are few issues, such as time synchronization error, data loss, and dealing with large amounts of harvested data, which limit the implementation of full-fledged systems. Moreover, additional limits on these functionalities representsthe battery power. One example of the integration of smart sensors in the electronic devices, is the case of smart watches, where sensors receive the data from the movement of the user, process the data and as a result, provide the user with the information about how many steps they have walked in a day and also converts the data into calories burned.

Source : Wikipedia

Adopting changing requirements with flexibility is a guidepost for Industry 4.0. The next wave, Industry 5.0,has also emerged recently. Industry 5.0 has a more collaborative approach than Industry 4.0, including even more collaboration between humans and robots.

While the theme of Industry 4.0 revolves around connectivity through cyber-physical systems, Industry 5.0 while also aligned with platforms made possible by Industry 4.0 also addresses the relationship between "man and machine," otherwise known as robots or cobots. Industry 4.0 laid the groundwork for human/machine collaboration, as well as machine-to-machine collaboration and connectivity between the plant, logistics, supply chain management, and the end user. Digital integration now promises to connect all stakeholders under a common platform.

In addition to these pieces, Industry 5.0 integrates human creativity and robotic precision, working toward a unique solution that will be the demand of the next decade. Together, Industry 4.0 and 5.0 have created a roadmap that industries must follow in order to endure.

Industry 4.0 and 5.0 both address basic considerations:

•Cyber-physical systems that connect the world•New technology-driven approach•Digital twins•Asset performance management•Product life cycle management•IIoT-driven total automation•Man/machine collaboration•Digital transformation•Cybersecurity

(b) Opportunities and Threats.

Opportunities and Threats are two sides of the same coin. The said two facets co-exists in every walk of our life. This assumes further significance in this hyper dynamic world of innovations and growing complexities that we keep pace with our business competitors.

Whether the entity is large, whether it is medium or if it is small, every entity is a competitor to the other, irrespective of itssize, its standing and its strengths. Large entities face structural problems whereas small entities face existential challenges.In the specific case of an IT services company, procuring new customers is significant for its very survival. Considering the factthat IT consulting firms primarily work on a contract basis, it is always important for them to focus on gaining new clients.

A contract isnt permanent. Because of this, while working with one or more clients, efforts are always being put into findingnew ones, which can become quite a nerve-wracking effort.

Threat of new entrants looms large on the IT industry. However, small-to-medium consulting services firms are challenging the bigger, more established firms with their ability to innovate and their agile pricing and service models.

The enablers and drivers of growth of the IT consulting industry have been several. First, innovation in frameworks and methodologies along with trained professionals have provided value-added services uniquely available from the consulting firm. Novelty and complexity have been a second driver.

Further, any outbreak of mass epidemic, like the Covid-19 or outbreak of war, like the Russia- Ukraine war may force the business entities to suspend and restrategise their business policies.

(c) Segment wise or product-wise performance

Company Performance Highlights:

ISO 9001: 2015 Quality Management System

ISO 20000-1: 2018 IT Service Management System

ISO 27001:2022 - Information Security Management System

Registered with National Small Industries Corporation (NSIC)

Registered with Software Technology Park of India (STPI)

Registered with Micro, Small & Medium Enterprises (MSME)

Business Operations:

IT Services and Consulting

Engineering Services

IT Infrastructure Solutions 36

Internet of Things

Cloud Technologies and Openstack Cloud Projects

BI and Analytics

Manual and Automation Testing

Software Development

Database Services

CAD and Engineering Data Management

Product Design and Development

Product Sales and Support

Data Center Implementation

High Performance Computing (HPC)

Remote Infrastructure Management Services

IT Infrastructure Consulting

Infrastructure Management Services

IOT Machine to Machine Communication Projects

Engineering Product Design Projects

Segment-wise performance:

The Companys operations may be clubbed together under one operating segment, i.e., IT related services. Thus it becomesthe reportable segment for the Company. The Companys business operations are divided into following heads and the revenue generated from each head is indicated below:

Standalone basis (Rs. In Lakhs)

Revenue	2024-25	2023-24
Sale of Goods Computers & Peripherals / Software	5740.97	79.18
Annual Maintenance Contract Service	436.81	103.20
~		-
Consultancy Services	11.40	84.62
IT Engineering Services	234.77	254.12
Total Revenue	6423.95	521.12
I

Consolidated Basis:

Revenue	2024-25	2023-24
Sale of Goods Computers & Peripherals / Software	5740.97	79.18
Annual Maintenance Contract Service	446.31	150.49
		-
Consultancy Services	6.47	84.62
IT Engineering Services	234.77	254.12
Total Revenue	6428.52	568.41

(d) Outlook

VAMA is engaged in providing solutions to Space and Defense customers and also supporting Cloud Projects to niche clients. Further, VAMA has also been implementing projects all over India for Defense, Space, C-DAC, sectors and is taking up turnkey projects.

Further, your Company has also been supporting High Performing Computing Services and cloud services which are in high demand globally. With India becoming a dominant player in the Space sector, ISRO has been launching multiple satellites and the need for Data Centre infrastructure is increasing rapidly. ISRO is trying to increase its capacity to deliver by scaling up the frequency of launches by building more satellites and lowering the cost of access to space. VAMA is bidding for infrastructure projects. With the growth in Space and Defense sectors we are confident that we will continue to get opportunities to work on major turnkey projects.

VAMA has increased the sales and marketing activities for the international market especially for the Engineering Services and ITES business. Vama is working on IOT Projects and support services for IOT. We are confident that with the increase in sales and marketing activities, our domestic as well as international business will report better performance. .

(e) Risks and concerns

To manage data confidentiality

To curb data breaches

To retain good talent and contain attrition among employees

To adapt to rapid technological changes and innovations

Cost competitiveness

To address and arrest assaults on internet infrastructure by hackers

Government policies and priorities

Fiscal policies and Industrial policies

Force majeure events and circumstances

The pandemics and wars

Political unrest within the country and in the countries, where the Company trades

Economy collapses in nations, where India a trade partner

(f) Internal control systems and their adequacy

The Company has adopted Internal control systems that are adequate and commensurate with its operations. The systems have been designed to ensure that assets and interest of the Company are protected and dependability of accounting data and itsaccuracy are ensured with proper checks and balances. The Internal Financial Controls have been documented, digitized andembedded in the business process.

Senior level management reviews are conducted in order to ascertain the effectiveness of the Internal Financial Controls. Further, it is also obtained through our management reviews, control self-assessment, continuous monitoring by functional experts as well as testing of the Internal Financial Control systems by the Internal Auditor during the course of audits. We believe that these systems provide reasonable assurance that our Internal Financial Controls are commensurate with the requirements of our organization.

(g) Discussion on financial performance with respect to operational performance

INCOME	2024-25	2023-24
Export Revenue
IT Services	239.34	301.41
Sales of computers & Peripherals	-	-
Domestic Revenue
Services / Consultancy / Projects	448.21	187.82
Sales of computers & Peripherals	5740.97	79.18
Other Income	18.16	5.49
Total Revenue	6446.68	573.90
EXPENDITURE	2024-25	2023-24
Material Consumed	4455.00	191.98
Changes in Inventories	1310.76	110.83
Employee Benefit Expenses	271.05	191.44
Finance Cost	21.02	163.94
Depreciation and Amortisation Expenses	38.68	25.29
Other Expenses	214.79	408.91
Total Expenditure	6311.3	1092.39

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed.

It is a universally accepted fact that, retaining good talent pool is the biggest challenge in the technology sector. Attrition among employees, especially at entry level is usually higher than other sectors. Employees have the generally tendency to shift their jobs and job profiles in pursuit of higher ambitions. Commensurate compensation packages is a related challenge in this Industry, driven by higher demands for good talent.

Our pro-human resources policy helps us in mitigating the employee attrition rate and maintain cordial relations across the organization. Further, our human resource strategy has enabled us to attract, integrate, develop and retain the best talent required for driving business growth.

No. of Employees

Category	Number of employees as on 31.03.2024
1 *Executive Directors	2
2 Key Managerial Personnel (KMP)	2
3 Other employees	49
Total	53

*V. Atchyuta Rama Raju is the Managing Director of the Company and also designated as KMP but counted under the category of "Executive Director" only.

(i) Details of significant changes (as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

On Standalone basis:

Ratio	Current Period	Previous Period	Explanation
Current Ratio	1.27	2.24	On account of significant decrease in Borrowings, consequently decrease in Current Liabilities
Debt Equity	0.06	0.14	On account of significant decrease in Borrowings i.e. repayment by the company
DSCR	13.33	(8.98)	On account of principal repayment and decrease in borrowings.
Return on Equity	0.12	(0.21)	ROE decreased due to decrease in the net income of the company.
Inventory Turnover Ratio	9.65	0.38	The inventory which was purchased earlier in anticipation of demand has been utilised due to new workorder in the current year.
Trade Receivables Turn Over	6.39	1.22	Due to higher turnover and efficient collection, the trade receivables ratio has increased substantially.
Trade Payables Turn Over	6.86	1.62	Due to timely realisation of the debtors the company has ensured to pay the creditors on time, thereby leading to a higher trade payables turnover ratio.
Net Capital Turn Over	8.11	0.41	Better, inventory turnover rario, accounts receivables turnover ratiio and trade payables turnover ratio, the net capital turnover ratio has improved.
Net Profit Ratio	2.38%	-86.81 %	On account of decrease in finance costs and other expenses and coupled with increase in turnover.
Return on Capital Employed	9.71%	-35.60 %	Due to increase in the Profitability the ROCE is increased.
Return on Investment	10.53%	-25.68 %	On account of decrease in finance costs and other expenses and coupled with increase in turnover.

(j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

On a standalone basis, the Company reported a net profit of Rs. 198.03 lakhs for the FY 2024-25, resulting in a Return on Net Worth of 0.12. In contrast, the Company incurred a net loss of Rs. 312.27 lakhs for FY 2023-24. Compared to the previous year, this represents a positive turnaround in Return on Net Worth. A detailed analysis can be found in the Directors Report..

2. Disclosure of Accounting Treatment

The Company has prepared financial statements which comply with IndAS applicable for periods ending on 31st March 2025, together with the comparative period data as at and for the year ended 31st March 2024, as described in the summary of significant accounting policies.

Primarily a treatment different from that prescribed in an Accounting Standard has not been followed in the preparationof financial statements. However, as regards amendments to certain accounting standards, the applicability / effect on the financial statement has been evaluated and been treated accordingly as explained in Note 1 of the standalone Financial Statements.

Further, the financial statements represent a true and fair view of the underlying business transactions.

Awards: Nil

Certifications:

ISO 9001: 2015 Quality Management System

ISO 20000-1: 2018 IT Service Management System

ISO 27001:2022 - Information Security Management System

Cautionary Statement

This report contains forward-looking statements extracted from reports of Government Authorities / Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. This report shouldbe read in conjunction with the financial statements included herein and the notes thereto. We assume no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.

	For and on behalf of the Board
	Sd/-
	V. Atchyuta Rama Raju
	Chairman and Managing Director
	DIN:00997493
Place: Hyderabad
Date: 02.09.2025