Vedavaag Systems Ltd Directors Report

Dear Members

Your directors have pleasure in presenting the 28^th Directors Report of your company together with the audited Standalone and Consolidated Financial Statements for the year ended, March 31, 2026.

1. Financial Summary

Standalone:

Particulars	2025-26	2024-25
Revenue from Operations	9529.45	7250.06
Other Income	11.62	14.32
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	914.44	1210.45
Less: Depreciation	245.90	188.51
Profit before Finance Costs, Exceptional items and Tax Expense	668.54	1021.94
Less: Finance Cost	136.99	115.71
Profit before Exceptional items and Tax Expense	531.55	906.23
Add/(less): Exceptional items	0	0
Profit before Tax Expense	531.55	906.23
Less: Tax Expense (Current & Deferred)	155.1	231.46
Profit for the year	376.45	674.77
Consolidated:
Particulars	2025-26	2024-25
Revenue from Operations	12854.14	10578.72
Other Income	13.97	14.32
Profit before Depreciation, Finance Costs, Exceptional items and Tax Expense	1243.88	1576.70
Less: Depreciation	383.62	326.54
Profit before Finance Costs, Exceptional items and Tax Expense	860.26	1250.16
Less: Finance Cost	136.99	115.71
Profit before Exceptional items and Tax Expense	723.27	1134.45
Add/(less): Exceptional items	0	0
Profit before Tax Expense	723.27	1134.45
Less: Tax Expense (Current & Deferred)	202.99	293.14
Profit for the year	520.28	841.31

2. Transfer to Reserves:

The Board of Directors of your Company has decided not to transfer any amount to the reserves for the year under review.

3. Unclaimed dividend and shares to the investor education and protection fund

Members are requested to claim dividend(s) which have remained unclaimed, by sending a request to the Company at e-mail ID cs@vedavaae.com or to the Companys Registrar and Share Transfer Agent (RTA) at e-mail info@vccipl.com or to their postal address - Venture Capital and Corporate Investments Private Limited - Door No. 4-50/PII/57/4 & 5th Floors, Plot No. 57, Jayabheri Enclave, Phase II, Gachibowli, Gachibowli, Hyderabad, Seri Lingampally, Telangana, India, 500032.

The Company is required to transfer unclaimed or unpaid amounts or shares to the Investor Education and Protection Fund (IEPF) during the FY 2025-26 and the same shall be transferred to IEPF account in due course of time.

The list of shareholders with unclaimed dividends has been updated on the Companys website at: https://www.vedavaae.com/Disclosures

4. State of the Companys Affairs:

The Company continues to provide Financial Inclusion, Insurance, and other micro-level services. It remains focused on delivering innovative, value- driven solutions across various segments, thereby strengthening its market position. By offering high-quality products and services, the Company effectively leverages emerging opportunities and maintains a competitive edge. There was no change in the nature of business of the Company during the year under review. On Standalone basis the revenue from operations for FY 2025-26 was Rs. 9529.45 lakhs as compared to revenue of Rs. 7250.06 lakhs for FY 2024-25 and net profit was Rs. 376.46 lakhs as compared to Rs. 674.77 lakhs for the FY 2024-25.

The consolidated revenue from operations was Rs. 12854.14 lakhs as compared to revenue of Rs. 10578.72 lakhs for FY 2024-25 and net profit was Rs. 520.28 lakhs as compared to Rs. 841.31 lakhs for the FY 2024-25.

During the year under review there were no significant or material orders passed by regulators, courts or tribunals impacting the Companys operations in future.

5. 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.

6. Share Capital:

a) Equity:

During the year under review the authorized and paid-up share capital of the Company is increased as detailed below.

The Authorized share capital of the Company as on March 31, 2026 is Rs. 32,00,00,000/- divided into 3,20,00,000 Equity Shares of Rs. 10/- each fully paid up. The paid-up share capital of the Company as on March 31, 2026 is Rs. 23,46,42,000/- divided into 2,34,64,200 Equity Shares of Rs. 10/- each fully paid- up.

Warrants Issue and Conversion details as on March 31, 2026:

During the year the Company has allotted 2,45,500 Equity share on conversion of warrants.

Listing approval for the said shares was received on August 18, 2025 and trading approval was granted on August 28, 2025.

1. Date of receipt of In-principle approval from BSE for issue of Warrants: 08-10-2024

2. No. of securities allotted (along with date of allotment): 7938000 Securities on 23-10-2024

3. Less: No. of securities converted for the period ending March 31, 2025: 293700

4. Less: No. of securities converted for the period ending March 31, 2026: 245500

Balance no. of securities to be converted into equity shares: 7398800

During the year FY 2026-27 the Company has forfeited 7398800 unconvertible warrants and the same has been intimated to the BSE on May 04, 2026.

7. Listing of Equity Shares

The Companys Equity Shares are listed on Stock Exchange i.e., on BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001, Maharashtra, India.

The Company has paid Annual Listing Fees to the Stock Exchange for the FY 2026-27.

8. Subsidiary, Associate and Joint Venture Companies:

Your company has 4 wholly owned subsidiary Companies as on March 31, 2026 viz., VSL Datasystems Private Limited, Vedavaag Edutech Private Limited, Vedavag Common Service Centres Private Limited and Vedavaag Financial Insurance Broking Services Private Limited (formerly Vedavaag Financial Services Private Limited).

Pursuant to Provisions of Section 129 of the Companies Act 2013, read with rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of financial statements of the Companys Subsidiaries in the form AOC -1 is annexed (Annexure-1) to this report. The detailed policy for determining material subsidiaries as approved by the Board is uploaded on the Companys website https://vedavaag.com.

9. Details of the Companies which have become or ceased to be Subsidiaries, joint ventures or associates during the year

During the Financial Year 2025-26, the Company did not incorporate any subsidiary, joint venture, or associate company, and no subsidiary, joint venture, or associate company ceased to exist during the year.

10. Performance and Contribution of Each of the Subsidiaries, Associates and Joint Ventures

As per Rule 8 of Companies (Accounts) Rules, 2014, a Report on the Financial performance of Subsidiaries along with their contribution to the overall performance of the Company during the Financial Year ended 31 March 2026 is appended to this Report as Annexure - I.

11. Consolidated Financial Statements

The Consolidated Financial Statements are prepared in accordance with Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies act, 2013. The Consolidated Financial Statements for the Financial Year ended March 31, 2026 forms part of the Annual Report. As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate Audited accounts of its Subsidiaries on its website http://vedavaae.com.

12. Directors Responsibility Statement

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors Responsibility Statement, the Board of Directors of the Company hereby confirm that:

> in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

> 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 the Company at the end of the financial year ended March 31, 2026 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 had 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 were 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.

13. 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- 5.

14. Key Managerial Personnel:

KMPs of the Company as per Section 203 of Companies Act, 2013

1) Mr. Jonnavittula Murali Krishna Managing Director

2) Mr. Tirumalabukkapatnam Krishna Mohan Chief Financial Officer

3) Mr. Saiteja Ivaturi

Company Secretary & Compliance Officer

15. Composition of Board

During the year under review the composition of the Board is as stated below:

Mr. Jonnavittula Murali Krishna

Managing Director - DIN: 00016054

Mr. Srinivas Pannala

Independent Director - DIN: 00018295

*Mr. SPVM Subramanyam

Independent Director - DIN: 05107840

Mr. Raghavacharya Vasudevan

Independent Director - DIN: 01798811

Mrs. Jonnavittula Sujata

Non-Executive Non-Independent Woman Director DIN: 07014640

Dr. Jonnavittula Ananth

Non-Executive Non-Independent Director DIN:09300935

During the year under review, Mr. Subramanyam Sripati Panditaradhyula Venkata Mallikarjuna (Mr. SPVM Subramanyam) was appointed as an Additional Director in the capacity of an Independent Director with effect from August 30, 2025. His appointment was regularised by the shareholders at the Annual General Meeting held on September 29, 2025.

Further, Mr. N. Pradeep Kumar ceased to be an Independent Director of the Company with effect from September 29, 2025, upon completion of his term of five (5) consecutive years, in accordance with the provisions of Section 149 of the Companies Act, 2013. The Board places on record its appreciation for the valuable contributions made by Mr. Pradeep Kumar Narsupalli during his tenure.

None of the Directors are disqualified under the provisions of Companies Act, 2013.

16. Number of Board Meetings:

The Board met 6 (Six) times during the financial year and the details of Board Meetings were given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was well within the period prescribed under the provisions of the Companies Act, 2013.

17. Board Committees

In terms of the requirements of the Companies Act, 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as a part of the best corporate governance practices, the terms of reference and the constitution of these Committees is in compliance with the applicable laws and to ensure focused attention on business and for better governance and accountability.

The Board has constituted Audit Committee, Stakeholders Relationship Committee, Nomination, Remuneration & Compensation Committee and Corporate Social Responsibility Committee. The Details of each of these committees outlining their composition, terms of reference and number of meetings held during 2025-26, are outlined in the Corporate Governance Report forming part of this annual report.

During 2025-26, recommendations made by the Committees to the Board of Directors were accepted by the Board, after due deliberations.

18. Statement on declaration given by Independent Directors under Section 149

The Company has received declaration of independence from all the Independent Directors as stipulated under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, confirming that they meet the criteria of independence, which has been duly assessed by the Board as part of their annual performance evaluation exercise.

Further, in terms of Regulation 25(8) of the SEBI Listing Regulations, Independent Directors have also confirmed that they are not aware of any circumstances or situations, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an

objective independent judgement and without any external influence.

19. Meeting of Independent Directors

A separate meeting of the Independent Directors was held on February 13, 2026 with no participation of Non-Independent Directors or the Management of the Company, inter-alia, to discuss evaluation of the performance of Non-Independent Directors, the Board as a whole, evaluation of the performance of the Chairman, taking into account the views of the Executive and Non- Executive Directors and the evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.

20. Board Evaluation and Assessment:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had carried out an annual evaluation of its own performance and that of its committees as well as performance of the Director individually. Feedback was sought by way of structured questionnaire covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on the response received from Directors.

The evaluation is performed by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors. The criteria for evaluation are broadly based on the Guidance Note on Board Evaluation issued by Securities Exchange Board of India.

The Board and Nomination and remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual directors to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.,

At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by entire board excluding the independent director being evaluated.

21. Familiarization Programmes

The Members of the Board of the Company have been provided with all the documents to enable them to familiarize themselves with the Company, its management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates. All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement and also on regulatory changes from time to time by the senior management personnel.

The detailed policy on the familiarisation programme is available on the website at www.vedavaae.com.

22. Code of Conduct:

The Company has laid down a Code of Conduct which has been effectively adopted by the Board Members and Senior Management Personnel of the Company.

The detailed policy on the Code of Conduct is available on the website at www.vedavaag.com

23. 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.

24. 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.

25. Composition of Committee: Audit Committee

S.No Name of Member	Position
1 Mr. Pannala Srinivas	Chairman
2 Mr. Raghavacharya Vasudevan	Member
3 Mrs. Sujatha Jonnavittula	Member
Nomination and Remuneration Committee:
S.No Name of Member	Position
1 Mr. Srinivas Pannala	Chairman
2 Mrs. Sujatha Jonnavittula	Member
3 *Mr. Pradeep Kumar Narsupalli	Member
4 *Mr. SPVM Subramanyam	Member

*The Nomination and Remuneration Committee (NRC) of the Board was reconstituted on August 30, 2025, in view of upcoming cessation of Mr. N Pradeep Kumar (Independent Director), by appointing Mr. SPVM Subramanyam (Independent Director) as a member of the Committee.

Stakeholders Relationship Committee

Name of Member	Position
Mr. Srinivas Pannala	Chairman
Mrs. Sujatha Jonnavittula	Member
*Mr. Pradeep Kumar Narsupalli	Member
*Mr. SPVM Subramanyam	Member

*The Stakeholders Relationship Committee (SRC) Committee of the Board was reconstituted on August 30, 2025, in view of upcoming cessation of Mr. N Pradeep Kumar (Independent Director), by appointing Mr. SPVM Subramanyam (Independent Director) as a Chairman of the Committee.

Corporate Social Responsibility (CSR) Committee

Name of Member	Position
Mr. Jonnavittula Murali Krishna	Chairman
Mr. Raghavacharya Vasudevan	Member
Mrs. Sujatha Jonnavittula	Member

Further details with respect to the aforesaid Committees are provided in the Corporate Governance Report attached herewith.

26. Auditors:

M/S PARY & Co., Chartered Accountants, Hyderabad were appointed as statutory auditors of the Company for a further period of Five year i.e., till the conclusion of 30^th Annual General Meeting of the Company.

Explanation to Auditors Observation:

Observation:

1. There were no undisputed amounts payable in respect of GST, Provident Fund and Employee State Insurance in arrears as at 31.03.2026 for a period of more than six months from the date they became payable except Income tax of Rs. 32.30 lakhs on account of TDS mismatch and TDS of Rs. 31.15 lakhs for the current year aggregating to Rs. 63.45 lakhs are payable as on date of Audit Report.

2. As per the information and explanation given to us the Company is liable for overdue interest on delayed loan repayment of Axis bank and pending quantification of the liability by the bank and on account payment of Rs. 0.64 Crores was made as on 31st March 2026.

Managements Reply:

1. The TDS Liability for the year is being paid. As regards of income tax of earlier years, the company is in the process of reconciliation of TDS receivables from customers year-wise. Based on the outcome, appropriate action will be taken.

2. The company has availed the said loan for execution of Abhayam Project, which was delayed due to Covid Pandemic. Company has requested the bank to finalize balance amount payable to close the account which is pending till date. However, the company has made on account payment of Rs.0.64 crores as on 31.03.2026.

27. Secretarial Auditors report:

The Secretarial Audit Report issued by M/s. VCSR & Associates, Practicing Company Secretaries, Hyderabad for 2025-26 is annexed as Annexure- IV to this Report. The Secretarial Auditors Report to the Members does not contain any qualification or reservation which has any material adverse effect on the functioning of the Company.

28. Vigil Mechanism / Whistle Blower Policy

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Companys Whistle Blower Policy.

The Company has adopted a Whistle Blower Policy establishing a formal vigil mechanism for the Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics.

It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and provides direct access to the Chairperson of the Audit Committee in exceptional cases. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The policy of vigil mechanism is available on the Companys website. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company are covered under the Whistle Blower Policy. The brief detail about this mechanism may be accessed on the Companys website at the weblink: www. vedvaae.com.

29. Internal Auditors

The Board of Directors of the Company has appointed M/s Naga Chaitanya and Associates, Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the Financial Year 2025

26.

30. Maintenance of cost records specified by the Central Government under Section 148 of the Companies Act, 2013

The provisions relating to maintenance of Cost Records as specified by the Central Government under Section 148 of the Companies Act, 2013 is not applicable to the Company

31. Corporate Social Responsibility (CSR):

The brief outline of the CSR policy of the Company and the CSR activities taken up by the Company during the year is appended to this report as Annexure-3 in the format prescribed in the Companies (Corporate Social Responsibility Policy), 2014. The Constitution of CSR Committee forms integral part of the report. The detailed CSR policy is available on the website of the Company.

32. 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 for the year ended March 31, 2026: Nil.

Foreign Exchange Outgo for the year ended March 31, 2026: Rs. Rs. 4,36,082/-

33. Particulars of Loans, Guarantees and Investments under Section 186:

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of notes to the financial statements provided in this Annual Report.

34. Particulars of Contracts or Arrangements with Related Parties:

During the year on review, the Board confirms that:

a) The Company didnt enter into any contracts or arrangements or transactions that are not at arms lengths with the related parties during the financial year 2025-26.

b) The Vigil Mechanism as envisaged in the Companies Act, 2013, the rules prescribed thereunder and the SEBI (LODR) Regulations, 2015 is implemented through the Companys Whistle Blower Policy.

Therefore, as prescribed under Section 134(3) of the Companies Act 2013 read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 the disclosures under Form AOC-2 are not applicable for the Company for the year ended March 31, 2026.

35. Extract of Annual Return:

In accordance with Section 134 (3) (a) of the Companies Act, 2013, the Annual return in the prescribed format is available on the website of the Company www.vedavaae.com.

36. Particulars of Employees:

The information required under Section 197 of the Companies Act 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure-2 to the Board Report.

37. 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. The Company has not received any complaints during the year. The Company regularly conducts awareness programme for its employees.

Summary of Sexual harassment complaints received and disposed of during the year:

Particulars	Status
No. of complaints filed during the year	Nil
No. of complaints disposed of during the year	NA
No. of complaints pending as on end of the financial year	NA

38. Details of material subsidiary and date of appointment of Statutory Auditor of such subsidiary

VSL Datasystems Private Limited is material subsidiary of the Company, it is incorporated on January 05, 2001 and M/s P Murali & Co., Chartered Accountants, Hyderabad was re-appointed as Statutory Auditor of the Company for a term of 5 years i.e., from April 01, 2022 to March 31, 2027.

39. Corporate Governance

Your Company is committed to implement the sound corporate governance practices with a view to bring transparency and in its operations and maximize shareholders value.

The Report on Corporate Governance as stipulated under Regulation 34 read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015 forms part of the Annual Report as Annexure-6.

40. The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

There have been no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

During the year under review, no application was made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

41. Material changes and commitments

There are no material changes and commitments affecting the financial position of the Company which occurred between the Financial Year ended March 31, 2026 to which the Financial Statements relates and the date of signing of this report.

42. Prevention of Insider Trading Code

The Company has adopted a Code of Conduct for Prevention of Insider Trading, in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015, as amended from time to time.

43. Compliance with Secretarial Standards

The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.

44. MD and CFO certification:

As required under the listing regulations, the Managing Director and the Chief Financial Officer Certification is attached to this Report.

45. 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 of Directors
	Sd/-	Sd/-
	J. Murali Krishna	J. Sujatha
	Managing Director	Director
	DIN:00016054	DIN: 07014640
Place: Hyderabad
Date : 29-08-2026