Vedavaag Systems Ltd Directors Report.

Dear Shareholders

Your directors have immense pleasure in presenting the 23rd Directors Report of your company together with the Audited Standalone and Consolidated Financial Statements for the year ended, 31st March, 2021.

FINANCIAL HIGHLIGHTS

(Rs. In lacs)

Consolidated

Standalone

Particulars 2021 2020 2021 2020
Total Income 7,272.16 7,744.64 5,641.63 6,261.51
Total Expenditure 5,729.49 6,339.29 4,611.97 5,285.34
Gross profit before depreciation and Tax 1,542.67 1,405.34 1,029.66 976.17
Depreciation 576.41 570.66 233.42 262.36
Profit Before tax 966.25 834.68 796.23 713.80
Provision for tax 243.96 164..24 212.41 163.73
Deferred Tax 22.11 45.75 -5.53 13.00
Profit after tax 700.18 624.69 589.35 537.07

As you are aware, your Company provides customised Financial Inclusion, Insurance and other services at micro level. It delivers innovative solutions and in turn adds value to the business throughout all the segments. The company delivers high quality products and services which help to leverage market opportunities and gain competitive advantage.

1. Dividend:

Based on the Companys Performance, the Directors have recommended a final Dividend of Rs.0.60 per equity share. In terms of regulation 43 A of SEBI (Listing Obligation and Disclosure Requirement), the company has not yet formulated its dividend policy.

The Dividend Distribution Tax Payable by the Company in declaration of Dividend has been abolished w.e.f. 1st April 2020. Pursuant to this amendment and consequential amendment brought vide Finance Act 2020, as the dividend paid by the Companies is taxable in the hands of Shareholders, the Company would be under an obligation to deduct tax at source (TDS) in accordance with the Provisions of Income Tax Act 1961 (as amended from time to time).

2. Transfer to Reserves:

During the Financial Year 2020-21, your Company has not transferred any amount to General Reserves.

3. Public Deposits:

Your company has not accepted any deposits falling within the meaning of section 73 of the Companies Act 2013, read with Companies (Acceptance of Deposits) rules 2014 during the Financial Year.

4. Share Capital:

There was no public issue, right issue or preferential issue during the Year. The paid-up Share Capital of the Company as on 31st March 2021 stands as 2,29,25,000 Shares of Rs.10 Each.

5. Subsidiary Companies:

Your company has three Wholly Owned Subsidiary Companies as on 31st March, 2021 viz., VSL Data Systems Private Limited, Vagdevi Sark Edutech Private Limited, Vedavag Common Service Centres Private Limited.

Pursuant to Provisions of Section 129(3) of the Companies Act 2013, a statement containing the salient features of financial statements of the Companys Subsidiaries in the form AOC -2 is annexed (Annexure-2) to this report.

6. Directors Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, your Directors confirm as under:

> In the preparation of the Annual Accounts, the applicable Accounting Standards read with requirements set out under Schedule III to the Companies Act, 2013 have been followed and there are no material departures from the same.

> 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 your Company at the end of the financial year ended 31st March, 2021 and the Profit of the Company for the year under review.

> The Directors 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.

> The Directors have prepared the annual accounts on a ‘going concern basis.

> The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively.

> The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

7. Management Discussion and Analysis

Pursuant to the provisions of Regulation 34 read with Schedule 5 of the SEBI (Listing Obligation and Disclosure Requirement) regulation 2015, a report on Management Discussion and Analysis is enclosed as Annexure- 4.

8. Directors and Key Managerial Personal:

During the year under review, the following changes occurred in the Composition of the Board and Key Managerial Personnel of Your Company.

Pursuant to Section 152 of the Companies Act 2013, Mrs. J. Sujatha (DIN 07014640) Director will retire at the ensuing Annual general Meeting and being eligible offers herself for Re-appointment. The Board recommends her reappointment.

Pursuant to provisions of section 149 of the companies Act 2013, the Independent Directors have submitted declaration that each meet criteria of Independence as provided under Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015.

Mr. D. Ramesh Sinha who was appointed as Non-executive and Non-independent Director is redesignated as Nonexecutive Independent Director vide Board Meeting Dated 02nd September 2021, the same has been placed in the forthcoming Annual General for shareholders approval.

Pursuant to provisions of section 149 of the companies Act 2013, the Independent Directors have submitted declaration that each meet criteria of Independence as provided under Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015.

Pursuant to Section 161 of the Companies Act Mr. Jonnavittula Ananth was appointed as Additional director in the Category of Promoter Director Vide Board Meeting Held on 2nd September 2021.

9. Number of Board Meetings:

During the year, eight (8) meetings of the Board of Directors were held. The requisite details of the Directors present are provided under Corporate Governance report which forms part of this report.

10. Board Evaluation and Assessment:

Pursuant to the provisions of the Act, and Regulation 17 of SEBI (LODR) Regulations, 2015, the Board had carried out an annual evaluation of the Directors individually and of the committees of the Board by seeking the inputs of Directors on various aspects of the Board/Corporate Governance. The Board has reviewed the performance of Individual Directors and Chairperson.

The performance of the committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of criteria such as compositions of committees, effectiveness of committee meetings.

11. Policy on Directors appointment and remuneration:

The Policy of the Company on Directors appointment and remuneration including the criteria for determining qualifications, positive attributes, Independence of Directors and other matters are adopted as per the provisions of the Companies act 2013.

12. Internal Controls:

The companys internal control system has been established on the values of integrity and operational excellence. The companys internal control system is periodically tested and supplemented by extensive program.

> Financial propriety of business transactions.

> Safeguarding the assets of the Company.

> Compliance with prevalent statues, regulations, management authorization, policies and procedures.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

13. Audit Committee:

The Audit Committee consists of three Directors as on March 31st, 2021. The committee is constituted as per Provisions of Companies Act 2013 read with rules made there under and SEBI (Listing Obligation and Disclosure Requirements) amended from time to time.

During the year, the Audit Committee met four times i.e., on 30th June, 2020, 14th September, 2020, 29th October, 2020, 13th February 2021.

14. Auditors:

At the 22st Annual General Meeting of the company M/S PARY & CO were appointed as Statutory Auditors of the company for one year i.e., till conclusion of 23rd AGM. The same auditors have been re-appointed as statutory auditors to hold office from conclusion of 23rd Annual General Meeting till the conclusion of 24th Annual General Meeting.

15. Secretarial Auditors report:

The Secretarial audit report is attached in the Annexure-5

16. Corporate Social Responsibility:

The Annual Report of Corporate Social Responsibility has been provided in Annexure-7. The Constitution of CSR Committee forms integral part of the report. The Composition of CSR Committee is disclosed in the said Annual Report and in the Corporate Governance Section.

17. Conservation of Energy, research and Development, Technology Absorption, Foreign exchange Earnings and Outgo:

Information on conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided hereunder:

1. Conservation of Energy: The operations of the company involve low energy consumption; adequate measures have been taken to conserve energy.

2. Technology Absorption: Since Business and technologies are changing constantly, investment in Research and development activities are of paramount importance. Your Company continues its focus on quality up gradation of product and service development.

3. Foreign Exchange: Foreign Exchange earnings and outgo: NIL

18. Particulars of Loans, Guarantees and Investments:

The particulars of loans, guarantees and Investments have been disclosed in the financial statements.

19. Related party Transaction: The Company has formulated related party transaction policy:

The transactions with related parties were in ordinary course of Business and on arms length pricing basis Suitable disclosure in the Accounting Standards (INAS) has been made in the notes of the Financial Statements. There were no material significant related party transactions.

As prescribed under Section 134(3) (h) of the Companies Act 2013 read with Rule 8 (2) of the Companies (Account) Rules 2014, particulars of contracts /arrangements with related parties are given on the Form AOC-2 annexed in the Annexure-2 of the report.

20. Extract of Annual Return:

As per the requirement of section 92(3) of the Act and rules framed there under, the extract of annual return for the Financial Year 2019 is given in Annexure-6 in the prescribed form no MGT-9 which is part of the report.

21. Particulars of Employees:

The information required under Section 197 of the Companies Act 2013, read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-3. The Company affirms that the remuneration is as per remuneration policy of the Company.

22. Particulars Relating to the sexual harassment of women at workplace (Prevention, Prohibition and redressal) Act 2013.

Your company has always provided a safe, harassment free workplace for every individual through its various policies and practices. The company always endeavours to create and provide an environment that is free from discrimination and harassment

23. Corporate Governance:

Your Company understands the significance related to Corporate Governance Report. A report on Corporate Governance pursuant to provisions of Corporate Governance code stipulated under SEBI Listing Obligations and Disclosure Requirements forms part of Annual report. Details of various Board Committees are also provided along with Auditor Certificate regarding compliance of conditions of Corporate Governance is enclosed in Annexure - 8.

24. Whistle Blower Policy:

The Company has formulated Whistle Blower Policy in terms of section 177(9) of the Companies Act 2013 the details of which are provided in Corporate Governance Report.

25. CEO/CFO certification:

Pursuant to Provisions of Regulation 17 of SEBI (LODR) regulations, 2015, a declaration by Managing Director of the Company declaring that all the members of the Board and Senior Management Personnel of the company have affirmed compliance with code of conduct of the company.

26. Acknowledgements:

The Directors thank the Companys, Bankers, Employees, Customers, Vendors, CSPs and Investors for their continuous support.

Your directors wish to place on record their deep sense of appreciation for the committed services of the associates of the company at all levels.

For and on Behalf of the Board
Sd/-
J. Murali Krishna
Place: Hyderabad Managing Director
Date: 02/09/2021 DIN: 00016054