Vedavaag Systems Ltd Directors Report.

Dear Shareholders,

Your Directors have immense pleasure in presenting the 21st Directors Report of your Company together with the Audited Standalone and Consolidated Financial Statements for the year ended, 31st March, 2019.

FINANCIAL HIGHLIGHTS :

Consolidated Standalone
2019 2018 2019 2018
Total Income 7824.03 9210.29 6108.33 7492.59
Total Expenditure 6089.05 6648.99 4695.00 5737.10
Gross profit before depreciation and Tax 1734.98 2561.30 1413.33 1755.49
Depreciation 455.84 405.56 275.09 271.59
Profit Before tax 1279.14 2155.74 1138.24 1483.90
Provision for tax 268.14 493.17 225.86 308.06
Deffered Tax 11.93 163.83 10.11 127.60
Profit after tax 999.07 1498.74 902.27 1048.25

1) COMPANYS PERFORMANCE :

As you are aware, your Company Provides customised Financial Inclusion, Insurance Service 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 .

During the year the Company has Standalone total income of Rs 6108.33 as on March 2019 as against Rs 7492.59 as on March 2018 which shows decrease in revenue by 18.5%. The Company has earned Profit after tax for the Financial Year 2019 Rs 902.27 as compared to the previous year i.e March 31st 2018 Rs 1048.25 which shows decrease in profit 14%.

2) Dividend :

Based on the Companys Performance, the Directors have recommended a final Dividend of Rs. 1.00 per equity share. In terms of regulation 43 A of SEBI(Listing Obligation and Disclosure Requirement), the company has formulated its dividend policy.

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 :

Your Company at its Extra Ordinary General Meeting held on 4th January 2017, has issued 1,00,00,000 Convertible Equity Warrants on Preferential basis to promoters and non-promoters at Rs 39 Per share. Your Company obtained in principle approval for the same as on 13th January 2017, the allotment for which was done on 18th January 2017.

According to SEBI ICDR regulation , the Warrants issued on Preferential basis to Promoters and Non-promoters are convertible in equity shares at any time before expiry of 18 months from the date of issue of warrants (i.e on or before 17th July 2018).Pursuant to which the Company has allotted 6,990,000 equity shares of Rs10 each with premium of Rs 29 after receipt of amounts from Promoters and Non-promoters namely, Mr. G. Kaladhar, Mr. M. Satya Sankar, Mr. P. Purushottam, Mr. S. Abheeshta, Mr. J. Muralikrishna and Mr. J. S. R. Durga Prasad during the year, whereby the Share capital of the Company as on 31st March 2019 stands at 22925000 shares of Rs 10 each.

5) Subsidiary Companies :

Your Company has three Wholly Owned Subsidiary Companies as on March 31st 2019, namely VSL Data Systems Private Limited, Vagdevi Sark Edutech Private Limited, Vedavaag 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-1 is Annexed (Annexure-1) 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:

I. 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.

II. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of your Company at the end of the financial year ended 31st March, 2019 and the Profit of the Company for the year under review.

III. 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.

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

V. 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.

VI. 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) Directors and Key Managerial Personnel :

Pursuant to provisions of section 149 of the companies Act 2013, the Independent Directors have submitted a Declaration, that each of them 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.

Mrs. J. Sujatha who retires by rotation and being eligible offers herself for re-appointment. A Resolution seeking her re-appointment forms part of notice.

8) Number of Board Meetings :

Twelve Board Meetings were held during the year of review. For details of meetings please refer to the Corporate Governance Report (Annexure 7) which is part of this report.

9) 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 Member on the basis of criteria such as compositions of committees , effectiveness of committee Meetings.

10) Policy on Directors appointment and remuneration :

The companys policy on Directors appointment and remuneration and other matters provided under section 178(3) of the act has been disclosed in the Corporate Governance Report (Annexure 7).

11) 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 .

12) Audit Committee :

The details pertaining to composition of audit committee and all other committees are included in Corporate Governance Report which is in part (Annexure 7) of the report.

13) Auditors :

At the 20th 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 21st AGM, the same auditors have been proposed to be re-appointed as statutory auditors to hold office from conclusion of 21st Annual General Meeting until the conclusion of 22nd Annual General Meeting.

14) Secretarial Auditors report :

The Secretarial Audit Report is attached in the Annexure-4. Replies to the Secretaril Audit Report : a) The Company is in the process of opening new listing application for the rejected cases.

b) The Company is in the processes of finding suitable projects for spending remaining CSR amount.

15) Corporate Social Responsibility :

A brief outline of the Corporate Social responsibility (CSR) policy of the Company and the initiatives taken by the Company on CSR activities during the year under review are set out in

(Annexure-6) of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) rules, 2014.

16) 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 is of parmount importance . Your company continues its focus on quality up gradation of product and service development.

3. Conservation of Energy, Technology Asborption & Foreign Exchange earnings and outgo : Nil.

17) 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 -3.

18) Particulars of Loans , Guarantees and Investments :

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

19) Related party Transactions :

All the related party transactions entered by the Company during the financial year 2018-2019 were in compliance of section 188 of the companies Act 2013, and rules framed there under, there are no material contracts or arrangements or transactions at arms length basis. All the related party transactions were placed before audit Committee for their prior approval in accordance with the requirement of SEBI LODR .The transactions entered are periodically placed before audit committee for review.

There are no materially significant related party made by the Company with promoters, directors an key managerial personnel , which may have a potential conflict with the interest of company at large. Please refer Annexure-2.

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 -5) in the prescribed form no MGT-9 which is part of the report.

21) Particulars relating to the sexual harassment of women at work Place (Prevention, Prohibition and readdressal) 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 .

22) 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 and condition of Corporate Governance is enclosed in Annexure -7.

23) 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.

24) 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.

25) Acknowledgements :

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

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

Date : 03-09-2019 By Order of the the Board of Directors
Place : Hyderabad For VEDAVAAG SYSTEMS LIMITED
J. MURALI KRISHNA
Managing Director
DIN : 00016054