Vedavaag Systems Ltd Management Discussions

1) Economic & Industry Overview

Indias growth continued to be underpinned by digital public infrastructure, resilient domestic demand, and public capex. For Vedavaag, three policy-aligned arenas remain structurally attractive: (i) Financial Inclusion via Business Correspondent (BC) networks. (ii) Edutech focused on learning outcomes and access.

(iii) System Integration IoT and other emerging technology projects.

2) Company Overview

Vedavaag operates an execution-first model at the last mile combining field presence with assisted digital journeys and disciplined governance. Our portfolio delivers essential services with measurable social impact and predictable operating rhythms.

Financial Inclusion (FI): Last-mile banking and protection/pension onboarding through the BC channel.

Edutech: Remote Teacher services for schools, hybrid community Tuition Points, and outcome-oriented Smart Test for JEE/NEET.

3) FY 2024 25 Performance Snapshot

Revenue: 72.64 crores : EBITDA: 12.10 crores : EBITDA Margin: 17 %

PAT: 6.74 crores : EPS: 2.91/-

Dividend (proposed): 0.50/- per share, face value of 10/- each

Strengthened FI playbooks: higher active points, improved per-point throughput, and tighter grievance SLAs.

Consolidated Edutech delivery: standardised lesson plans, micro-tests, and parent dashboards; expanded footprint with prudent unit-economics.

Business Correspondent role is created to fulfill the void of accessibility of Banking and other financial services to the common man across the country.

Reserve Bank of India (RBI) has been publishing a Financial Inclusion Index (FI Index) since 2021 and that is based on three main parameters, Access, Usage and Quality apart from some other parameters. The FI

Index climbed from 53.9 in March 2021 to 67.0 by March 2025, a huge jump that is 24.3 per cent OVER 2021, which highlights the continuous dedication of government to include every citizen in the growing digital financial infrastructure of the country, and it also implicitly highlights the importance of BC role.

Briefly the three parameters of FI Index are explained as follows:

Access (35% weight): Focuses on the availability and accessibility of financial services, including basic banking, insurance, and other financial products.

Usage (45% weight):Measures the extent to which people are using these available services. Quality (20% weight): A unique parameter that captures the quality of the financial services, including aspects like financial literacy, consumer protection, and addressing disparities or deficiencies in services. BCs are playing a significant role in furthering govt schemes such as PMJDY, PMSBY, PMJBY and APY to the hinter lands of India.

The reach and performance of some of these schemes is enumerated below to appreciate massive FI operations that are underway across India,

Pradhan Mantri Jan Dhan Yojana (PMJDY) HAS over 55.98 crore beneficiaries (as on 4 August 2025) Pradhan Mantri Suraksha Bima Yojana (PMSBY) Scheme as of March 19, 2025, has achieved a cumulative enrolment of 50.54 crore individuals, The scheme provides one year cover for accidental death and disability cover for death or disability on account of an accident with a premium of 20/- annually, which is renewed annually. On death, the nominee receives 2 lakhs.

Pradhan Mantri Jeevan Bima Yojana is an insurance scheme which offers life insurance cover for death due to any reason providing affordable insurance to broader population including poor and rural population. With the premium of 436/- annually per subscriber, the scheme offers the life cover of 2 lakhs . In the past ten years, over 23 crore Indians have been covered, and more than 9 lakh families have received timelyfinancial support after the loss of a loved one.

Atal Pension Yojana, monthly pension is provided to the people so that they can continue living a dignified life in old age. The scheme aimed at workers in the unorganized sector, who often lack formal pension coverage. To join the scheme, the age should be between 18 and 40 years and a savings bank account is required. Under the APY, guaranteed minimum pension of 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will be given at the age of 60 years depending on the contributions by the subscribers. Asof April 2025, APY has accumulated over 7.65 crore subscribers, mobilized a total corpus of 45,974.67 crore, and recorded increasing participation from women, who now comprise about 48%of all subscribers.

Context & Opportunity: The BC model continues to bridge gaps in access, usage, and quality of financial services at the last mile. Government-backed protection and pension schemes provide strong cross-sell anchors through the BC network.

Expanded active transacting points in select under-penetrated districts.

Deployed analytics-ledmicro-campaigns to lift transactions per point.

Tightened e-KYC hygiene, AML controls, and grievance TAT through SOPs and joint monitoring with partner banks/insurers.

1. Raise transactions/point/month and conversion to PMSBY/PMJBY/APY;

2. Increase agent productivity via targeted training and local literacy drives;

3. Scale maker checker and audit coverage to reduce operational risk

Key Risks & Mitigation: Cash handling and fraud (controls, audits); agent churn (incentives, training); rural liquidity cycles (cash-van routing and monitoring).

Vedavaag Edutech has focus on two services:

1. Smart Teacher services that facilitate teachers to teach less schools to provide quality education to the students

2. Smart Tuition Services that facilitate online tuition services on hybrid model at village level to enhance student preparedness for his curriculum courses and spoken English courses 3. Smart test Services that facilitate continuous testing for JEE / NEET aspirants who wish to improve their knowledge, speed and enhance their competitiveness.

Following are some of the indicators that help in assessing the opportunity in this space.

As per Time of India December 13, 2024, Indias education system faces a critical teacher shortage despite having over 11 crore educators, with over one million vacancies, especially in rural areas. The Key issues include low pay, job insecurity, inefficient recruitment, and underqualified teachers.

This sums up the opportunity of Remote Teacher Services and online Tuition Points the focus areas of Vedavaag Edutech.

During the year the company consolidated its learning in online delivery of education services by opening over 25 tuition centers and rendering remote teacher services for a dozen schools spread across India. The company desires to enhance this to over 100 tuition points and 25 schools in the current year. However, the income expected from these services will be limited as economies of scale demand much larger expansion.

Following are some of the key data points relevant for this business: Year-Wise JEE Main Appearance Data

Here is the year-wise breakdown of NEET appeared candidates:

Context & Opportunity: Persistent teacher shortages and uneven learning outcomes create demand for

Remote Teacher support and hybrid Tuition Points near communities, for parents.

Smart Teacher (Schools): Scheduled remote classes, centralised content, and monitoring. Smart Tuition (Community): Hybrid centres with attendance discipline, weekly micro-tests, and spoken-English add-ons.

Smart Test (JEE/NEET): Question banks, speed-drills, analytics, and rank-improvement plans.

Standardised delivery playbooks and centre manager KPIs (attendance, test velocity, average score lift, retention).

Consolidated a multi-location footprint; emphasised utilisation before expansion.

Built a teacher pipeline through partnerships and internal training.

Prudent expansion toward centre density and school count targets;

Stronger parent dashboards and counselling to improve conversion and retention;

Continuous content refresh and teacher upskilling.

Key Risks & Mitigation: Seasonality and conversions (staggered intakes, counsellor closures); teacher availability (training academy); affordability (tiered pricing, scholarships).

5) Financial Performance Discussion

Revenue Growth: Driven by FI throughput and Edutech contributionsgrew with footprint but remain modest pending scale economies.

Margins: Supported by mix (AMC/IoT layers, FI cross-sell), offset by training and content costs in Edutech.

Capex: Focused on continuity and technology that improves unit economics (e.g., telemetry, content platforms).

Liquidity: Adequate headroom; conservative leverage maintained.

6) Key Performance Indicators (Monitored Internally)

Financial Inclusion: Active BC points; transactions/point/month; PMSBY/PMJBY/APY conversions per 1,000 accounts; grievance TAT; audit exceptions/1,000 transactions

Edutech: Enrolments/centre; attendance %; monthly test velocity; average score lift; retention %; teacher utilisation.

7) Risks & Concerns

Operational: Field variability, agent/teacher churn, and SOP adherence addressed via training, audits, and data-driven coaching.

Regulatory/Compliance: KYC/AML norms, education standards, public tender requirements managed through compliance checklists and periodic reviews.

Financial: Receivable cycles and input-cost volatility mitigated via milestone terms, pricing discipline.

Technology & Data: Cybersecurity and data privacy covered by access controls, logging, and periodic security audits.

8) Internal Control Systems & Adequacy

Vedavaag maintains a layered control environment policy manuals, maker checker, field audits, MIS analytics, and external/internal audits. During the year, we strengthened cash-handling SOPs, digitised grievance tracking, and expanded audit coverage for centres and projects. Management believes internal controls are adequate and operating effectively for the size and complexity of operations.

9) Human Resources

People remain central to execution quality. We invested in structured onboarding, refresher trainings, and performance recognition for agents, teachers, and project teams. Emphasis remains on safety, inclusion, and measured career pathways to reduce churn.

We will:

1. Anchor stability in FI by scaling productive points, raising cross-sell, and deepening customer protection;

2. Scale Edutech thoughtfully towards density and demonstrable outcome lifts, recognising profitability follows tion; utilisa

3. Invest in backbone capabilities training, telemetry, data and dashboards to reduce variability and lift margins.

Statements in this MD&A describing the Companys objectives,projections,estimates,expectationsor predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ materially due to risks and uncertainties including, but not limited to, regulatory changes, challenges, and other factors. input-costvariations, field