Virtual Galaxy Infotech Ltd Directors Report

TO

THE MEMBERS OF THE COMPANY

Your Directors are pleased to present 29th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2026.

1. FINANCIAL HIGHLIGHTS

(figures in Lakhs)

S. NO. PARTICULARS	FINANCIAL YEAR ENDED 31st MARCH, 2026	FINANCIAL YEAR ENDED March 31st, 2025
1. Revenue from Operations	18,205.64	12,014.35
2. Other Income	127.46	28.85
3. Total Income	18,333.10	12,043.20
4 Profit before Depreciation & Amortization Expenses	8252.09	5298.19
5. Less: Depreciation and Amortization Expenses	1,803.60	764.78
6. Profit before Tax	6448.49	4,533.41
7. Less: Provision for Tax	1,839.19	1,321.58
8. Profit after Tax	4,609.30	3,211.83
9. Earnings per share (EPS)	19.20	19.12

2. STATE OF THE COMPANYS AFFAIRS (Rs. in Lakhs)

Your company during the year under review, the Company reported revenue from operations of Rs.18,205.64 Lakhs as compared to Rs.12,014.35 Lakhs in the previous year. The net profit of the year under review is amounting to Rs. 4,609.30 Lakhs as against Profit of Rs. 3,211.83 Lakhs reported in the Previous Year.

3. RESERVES AND SURPLUS (Rs. In Lakhs):

The company has reserves and surplus of Rs. 19,358.61 lakhs in the present financial year (FY 2025-26) as against the Reserve and Surplus of Rs. 7,489.27 lakhs during the previous financial year (FY 2024-25).

4. CHANGE IN NATURE OF BUSINESS

During the year under review, there was no change in main business activities of the Company.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

6. INITIAL PUBLIC OFFER AND LISTING INFORMATIO

The Shares of the Company were listed on the SME Board of National Stock Exchange of India Limited, i.e. NSE Emerge, on May 19, 2025. The Company has paid the annual listing fee for the financial year 2025-2026. The Equity Shares of the Company are in dematerialized form and has the electronic connectivity under ISIN No. INE0VRH01015.

7. STATEMENT OF UTILIZATION OF FUNDS RAISED THROUGH IPO UNDER REGULATIONS 32 (1), (2) AND (3) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

During the year under review, the Company came up with an Initial Public Offer ("IPO") and allotted 65,70,000 equity shares of face value Rs.10/- each at an issue price of Rs.142/- per equity share, including a premium of Rs.132/- per equity share, aggregating to Rs.9,329 lakhs. The Company successfully raised the said amount through the IPO. Pursuant to Regulations 32(1), 32(2) and 32(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the statements of deviation and variation for the quarter ended September 30, 2025, the quarter ended December 31, 2025, and the quarter and year ended March 31, 2026 were reviewed by the Audit Committee and the Board of Directors and were duly filed with the Stock Exchange.

As an SME-listed entity, the Company is subject to the periodic reporting requirements applicable to entities listed on the SME Exchange. The Company voluntarily adopted quarterly financial reporting with effect from November 14, 2025.

Sl. No Item Head	Original cost (as per the Offer Document) in Rs. Lakh	Revised Cost in Rs. Lakh	Amount utilized At the end of the Q4FY26	Unutilised amount in Rs. Lakh
1 Purchase of Land on lease at MIHAN SEZ, Nagpur, Maharashtra*	0.00	630.00	628.08	1.92
2 Working Capital Requirement*	0.00	2,796.83	2,796.83	-
3 Repayment/ prepayment of certain borrowings availed by the company	300.00	300.00	300.00
4 Investment in procuring GPU, server & storage system at Data Centre	505.00	505.00	505.00
5 Funding of expenditure related to enhancement, maintenance and upgrading existing products through manpower hiring	1,890.00	1,890.00		1,890.00
6 Funding for business development and marketing activities	1,406.00	1,406.00	353.00	1053.00
7 General corporate purpose	605.54	605.54	605.54	-
Total	8133.37	8133.37	5188.16	2945.21

* The object of the IPO titled "Capital expenditure towards setting up an additional development facility in Nagpur, Maharashtra" was revised and reallocated pursuant to the approval of the shareholders at the Extra-Ordinary General Meeting (EGM) held on 29 September 2025, towards "Capital expenditure for purchase of land on lease at MIHAN SEZ, Nagpur" amounting to Rs. 630 Lakhs and "Working Capital Requirement" amounting to Rs. 2,796.83 Lakhs.

8. DIVIDEND

During the financial year under review, the Board of Directors declared an interim dividend of Rs.1/- per equity share of Rs.10/- each, aggregating to Rs.248.6864 lakhs. In view of the financial performance and future business requirements of the Company, the Board of Directors has not recommended any further final dividend for the financial year ended March 31, 2026. Accordingly, the total dividend declared for FY 2025-26 is Rs.1/- per equity share, being 10% of the face value of the equity share. The Dividend Distribution Policy has been uploaded on the Companys website at https://www.vgipl.com/investors_info/corporate-governance.

9. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to provisions of Section 125 of the Act, the dividends which have remained unpaid/ unclaimed for a period of Seven (07) years from the date of transfer the unpaid dividend amount is mandatorily required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. The provisions of above section are not applicable to the Company since no dividend was lying in unpaid dividend account.

10. SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary Company, Joint Venture or Associate Company within the meaning of the Companies Act, 2013 during the financial year under review. Accordingly, the requirement of providing details of the performance and financial position of such entities in Form AOC-1 is not applicable to the Company.

11. SHARE CAPITAL STRUCTURE OF THE COMPANY

A. AUTHORIZED CAPITAL AND CHANGES THEREON IF ANY:

During the year under review, the Company has increased its Authorized Share Capital from Rs. 25,00,00,000/- (Rupees Twenty Five Crores only) divided into 2,50,00,000 (Two Crores Fifty Lakhs only) equity shares of Rs. 10/- (Rupees Ten Only) each to Rs. 30,00,00,000/- (Rupees Thirty Crores only) divided into 3,00,00,000 (Three Crores only) equity shares of Rs. 10/- (Rupees Ten only) in its Extra- Ordinary General Meeting held on March 17th, 2026.

B. PAID UP CAPITAL AND CHANGES THEREON, IF ANY:

The Issued, Subscribed and Paid-up capital is Rs. 24,86,86,350/- (Rupees Twenty-Four Crore Eighty-Six Lakh Eighty-Six Thousand Three Hundred Fifty only) divided into 2,48,68,635 (Two Crore Forty-Eight Lakh Sixty-Eight Thousand Six Hundred Thirty-Five) equity shares of Rs. 10/- (Rupees Ten only) each.

During the year under review, the Company had issued Shares by way of following Allotments:

S. No. Type of Issue	Date of allotment	No. of Shares Issued	Total Amount at face value (in lakh)
1. Initial Public Offer	May 19, 2025	65,70,000	657.00

The Issued, Subscribed and Paid-up capital of the Company has been increased from Rs. 18,29,86,350/- (Rupees Eighteen Crores Twenty Nine Lacs Eighty-Six Thousand Three Hundred Fifty Only) to Rs. 24,86,86,350/- (Rupees Twenty-Four Crore Eighty-Six Lakh Eighty-Six Thousand Three Hundred Fifty only).

C. WARRANTS

The Company has issued 12,43,432 warrants convertible into Equity at a price of INR 159 per warrant pursuant to a duly convened Extraordinary General Meeting (EGM) held on March 17th, 2026, subject to receipt of the full consideration for the said warrants. Subsequently, the Company received 25% of the warrant subscription amount on April 21, 2026, and in the Board Meeting held on April 23, 2026, the Board approved the allotment of the said warrants. The warrants shall be converted into equity shares upon receipt of the balance consideration in accordance with applicable laws.

12. CHANGE IN REGISTERED ADDRESS

During the financial year under review, the Company shifted its Registered Office within the city from 03, Central Excise Colony, Behind Mahatme Eye Bank, Chhatrapati Square, Ring Road, Nagpur, Maharashtra - 440015 to Plot No. 26, The Nagpur Divisional Insurance Employees Co-operative Housing Society Limited, Vivekanand Nagar, Nagpur, Maharashtra - 440015, with effect from 14 November 2025.

The change was effected in compliance with the applicable provisions of the Companies Act, 2013 and did not result in any change in the jurisdiction of the Registrar of Companies.

13. CHANGE IN MANAGEMENT

In view of the appointments of Directors in the Board of the Company, there were no material changes. Following is the Composition of the Board:

Sr. No. Name of Director	Designation	Status
1. Sachin Purushottam Pande	Managing Director	Promoter
2. Avinash Narayanrao Shende	Chairman & Executive Director	Promoter
3. Asit Oberoi	Non-Executive Director	Non Promoter
4. Bhanupriya Nikhil Thakur	Independent Woman Director	Non Promoter
5. Ayush Munnalal Sharma	Independent Director	Non Promoter
6. Jaideep Narayan Pawar	Independent Director	Non Promoter

As on the date of this report, following change took place:

• The Board of Directors, at its meeting held on 31st August 2026, appointed Mr. Sunil Kulkarni (DIN: 02714177) as an Non-Executive Additional Director (Professional) of the Company with effect from 31st August 2026, pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company. He shall hold the office as an Additional Director up to the date of the ensuing Annual General Meeting. The Board has recommended his appointment as a Non-Executive Director (Professional), liable to retire by rotation, for approval of the Members at the ensuing Annual General Meeting.

14. KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of the Companies Act, 2013 and the rules made thereunder, the following persons were the Key Managerial Personnel ("KMP") of the Company during the financial year under review:

Sr. No. Name of Director/ Signatory Details	Designation
1. Sachin Purushottam Pande	Managing Director
2. Avinash Narayanrao Shende	Chief Financial officer
3. Anjali Vinay Padhye	Company Secretary and Compliance Officer

15. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT UNDER SECTION 186 OF THE COMPANIES Act, 2013.

Particulars of loans given, security provided, investments made and guarantees given during the year as covered under section 186 of the Companies Act, 2013 ("the Act") form part of the notes to the standalone financial statements of the Company as attached to this Annual Report.

16. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY TRANSACTION

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with related parties which may have potential conflict with the interest of the company at large. Your directors draw your attention to notes to the financial statements for detailed related parties transactions entered during the year.

Accordingly, as per third provision to Section 188(1) of the Act, required approvals of the Board or Members/ Shareholders has been obtained for such transactions. However, as part of good corporate governance, all related party transactions covered under Section 188 of the Act are approved by the Audit committee. The FORM AOC- 2 is attached as Annexure - I with this report.

17. MANAGEMENT DISCUSSIONS AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under Regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations) and as approved by the Board of Directors, is provided in a separate section and forms an integral part of this Report.

18. ANNUAL RETURN

The Annual Return of the Company will be placed on the website of the company pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules 2014, the web link of the same is at https://www.vgipl.com/.

19. PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

20. DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3) (c) of the Companies Act, 2013:

a) That in the preparation of the Annual Accounts for the year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) That the directors had 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 and of the profit of the company for that period;

c) That 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;

d) The Annual Accounts have been prepared on a going concern basis;

e) That the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) That 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.

21. DECLARATION OF INDEPENDENCE OF DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors is of the opinion that the Independent Directors appointed during the year possess the requisite integrity, expertise, experience and proficiency to effectively discharge their duties and responsibilities. The Board is also satisfied that the Independent Directors fulfil the applicable criteria of independence and are capable of exercising independent judgment in the best interests of the Company.

22. ANNUAL EVALUATION OF BOARD PERFORMANCE

As per provisions of Section 134(3) of the Companies Act, 2013 and Rules made thereunder, the Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors.

The performance of the Board of Directors and its Committees were evaluated on various parameters such as structure, composition, experience, performance of specific duties and obligations, quality of decision making and overall effectiveness.

The performance of individual Directors was evaluated on parameters, such as meeting attendance, participation and contribution and independent judgment.

The Board members noted from time to time the suggestions/ inputs of Independent Directors, Nomination Committee and Audit Committee and also discussed various initiatives to further improve the Board effectiveness.

In a separate meeting of Independent Directors performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated.

23. CORPORATE GOVERNANCE REPORT

The Company has listed its equity shares on the SME Exchange. Accordingly, pursuant to Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the corporate governance provisions specified under the said Regulation are not applicable to the Company, to the extent applicable to an entity listed on the SME Exchange.

However, the Company continues to comply with the applicable provisions of the Companies Act, 2013 and the rules made thereunder relating to corporate governance, Board composition and constitution of committees, as applicable.

24. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/ OUTGO:

Details regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are stated below:

Pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo for the year under review are as follows:

A. Conservation of Energy

a) Steps taken or impact on conservation of energy - The Operations of the Company do not consume energy intensively. However, Company continues to implement prudent practices for saving electricity and other energy resources in day-to-day activities.

b) Steps taken by the Company for utilizing alternate sources of energy - Though the activities undertaken by the Company are not energy intensive, the Company shall explore alternative sources of energy, as and when the necessity arises.

B. Technology Absorption

a) The efforts made towards technology absorption - The Company continues to take prudential measures in respect of technology absorption, adaptation and take innovative steps to use the scarce resources effectively.

b) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Not Applicable

C. The Particulars of Foreign Exchange and Outgo for the year under review are:

PARTICULARS	YEAR ENDED MARCH 31, 2026	YEAR ENDED MARCH 31, 2025
FOREIGN EXCHANGE EARNING	1200.26	884.25
FOREIGN EXCHANGE OUTGO	-	-

25. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

During the year under review, Mr. Sachin Pande and Mr. Avinash Shende, Directors of the Company, received remuneration in accordance with the applicable provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pursuant to the approval accorded by the shareholders at the Extra-Ordinary General Meeting held on September 14, 2024.

The necessary disclosure with respect to the remuneration of Directors and employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure -II Managerial Remuneration to this Report.

26. CASH FLOW STATEMENTS

As required by Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Cash Flow Statement is appended.

27. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board received a declaration from all the Directors under Section 164 and other applicable provisions, if any, of the Companies Act, 2013 that none of the directors of the company is disqualified under the provisions of the Companies Act, 2013 ("Act") or under the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.

I. DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR:

The Board received a declaration from all the Directors under Section 164 and other applicable provisions, if any, of the Companies Act, 2013 that none of the directors of the company is disqualified under the provisions of the Companies Act, 2013 ("Act") or under the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.

II. APPOINTMENT & RESIGNATION OF DIRECTORS:

During the Financial Year 2025-26, there were no appointments, resignations, retirements, removals, or any other changes in the composition of the Board of Directors of the Company. The Board composition remained unchanged throughout the year under review.

III. KEY MANAGERIAL PERSONNEL

During the Financial Year 2025-26, there was no appointment, resignation, cessation, or any other change in the Key Managerial Personnel of the Company. The Key Managerial Personnel of the Company remained unchanged throughout the year under review.

28. MEETINGS OF THE BOARD

The Board of Directors met 11 (Eleven) times during the year under review. Details of these Board meetings are provided as under. The gap between two board meetings was within the time prescribed under the Companies Act, 2013 and SEBI Listing Regulations.

Sr.No	Date of meeting	Total Number of directors on board as on the date of meeting	Number of directors attended
1	May 02, 2025	6	5
2	May 03, 2025	6	5
3	May 08, 2025	6	5
4	May 10, 2025	6	5
5	May 15, 2025*	6	5
6	May 15, 2025 *	6	5
7	June 06, 2025	6	5
8	June 12, 2025	6	5
9	September 05, 2025	6	5
10	November 14, 2025	6	6
11	February 14, 2026	6	6

* Two meetings of the Board of Directors of the Company were held on May 15 2025.

29. SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company meet at least once during each financial year, without the presence of the Executive Directors or members of the management. During such meeting, the Independent Directors review the performance of the Non-Independent Directors and the Board as a whole, evaluate the performance of the Chairperson and assess the quality, quantity and timeliness of the flow of information between the management and the Board to ensure that the Board is able to effectively and efficiently discharge its responsibilities.

During the year under review, one Meeting of the Independent Directors was held on May 02, 2025 for the Financial Year 2025-26 at the office of the Company.

30. COMMITTEES OF THE BOARD

The Companys Board has the following Committees:

Rs. Audit Committee

Rs. Nomination and Remuneration Committee Rs. Stakeholders Relationship Committee Rs. Corporate Social Responsibility Committee

The Audit Committee of the Board is entrusted with the responsibility of overseeing the Companys financial reporting process and ensuring the accuracy, adequacy and credibility of financial disclosures. The Committee reviews the annual and quarterly financial statements before submission to the Board and periodically evaluates the adequacy and effectiveness of the internal control systems. The Committee also reviews the financial and risk management policies of the Company.

During the Financial Year 2025-26, the Audit Committee met six (06) times. The gap between any two consecutive meetings did not exceed the maximum period prescribed under the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year under review, the composition of the Audit Committee underwent a change consequent to the resignation of Mr. Asit Oberoi from the Committee with effect from January 30, 2026. Mr. Asit Oberoi resigned due to his professional commitments. The appointment of Mr. Jaideep Narayan Pawar as member of Audit Committee was approved by the Board on January 31, 2026 with immediate effect.

The attendance of the Audit Committee members at the meetings held during the year are as follows:

Sr.No	Date of meeting	Total Number of Members as on the date of meeting	Number of Members attended
1	May 02, 2025	3	2
2	June 05, 2025	3	2
3	June 12, 2025	3	2
4	September 05, 2025	3	2
5	November 14, 2025	3	3
6	February 14, 2026	3	3

All recommendations made by the Audit Committee during the year were accepted by the Board of Directors.

(b) NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178(3) of the Companies Act, 2013, the Board of Directors of the Company has duly constituted a Nomination and Remuneration Committee. The Company has also formulated a Nomination and Remuneration Policy in accordance with the applicable provisions of the Companies Act, 2013, which is available on the Companys website.

The attendance of the Nomination and Remuneration Committee members at the meetings held during the year are as follows:

Sr.No	Date of meeting	Total Number of directors on board as on the date of meeting	Number of directors attended
1	June 12, 2025	3	2

Pursuant to Section 178(5) of the Companies Act, 2013, the Board duly constituted Stakeholder Relationship Committee to look into the redressal of complaints of investors such as transfer or credit of shares, nonreceipt of notices/annual reports, etc.

The attendance of the Stakeholder Relationship Committee members at the meetings held during the year are as follows

Sr.No	Date of meeting	Total Number of directors on board as on the date of meeting	Number of directors attended
1	July 09, 2025	3	3

Complaint Details of the investors grievances as on March 31, 2026 is as under:

a) Number of shareholders complaints received during the financial year ended March 31, 2026: NIL

b) Number of complaints not solved to the satisfaction of shareholders: NIL

c) Number of pending complaints pending as on March 31, 2026: Nil

Name & Designation of Compliance officer

Mrs. Anjali Vinay Padhye, Company Secretary is the compliance Officer of the company and can be contacted at Plot No. 26, The Nagpur Divisional Insurance Employees Co-operative Housing Society Limited, Vivekanand Nagar, Nagpur, Maharashtra, India, 440015. Email: investors@vginfotech.ai for any stakeholders query/complaint.

(d) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility (CSR) Committee is responsible for formulating and monitoring the Companys CSR Policy, recommending CSR activities and expenditure to the Board, and overseeing the implementation of CSR initiatives in compliance with the provisions of the Companies Act, 2013.

The attendance of the Corporate Social Responsibility (CSR) Committee members at the meetings held during the year are as follows

Sr.No	Date of meeting	Total Number of directors on board as on the date of meeting	Number of directors attended
1	July 09, 2025	3	3
2	November 14, 2025	3	3
3	February 14,2026	3	3

31. DETAILS OF FRAUD REPORT BY AUDITOR:

During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

32. AUDITORS

(a) STATUTORY AUDITORS:

M/s. RKAS & Co., Chartered Accountants [Firm Registration No. 135727W] were appointed as Statutory Auditor of the Company by the members at their 24th Annual General Meeting held on 30th November, 2021, for a period of 5 years. M/s RKAS & Co. has resigned as the Statutory Auditor of the company on June 04, 2025 as the firm does not possess the Peer Review Certificate issued by ICAI, which is Mandatory to audit the books of Listed Company as per the guidelines prescribed by SEBI (LODR Regulations). The Casual vacancy caused by resignation of previous Auditors have been filled by M/s K. K. Mankeshwar & Co., Chartered Accountants (Firm Registration No. 106009W) on June 06, 2025 by the Board on recommendation of the Audit Committee. Further being eligible M/s K. K. Mankeshwar & Co., offered themselves for re-appointment for a term of 5 years from the conclusion of the Annual General Meeting held on August 01, 2025 till the conclusion of the 33rd Annual General Meeting to be held in the year 2030.

There are no qualifications, reservation or adverse remark or disclaimer made by the Statutory Auditors in their Report.

(b) SECRETARIAL AUDITOR:

The provisions of Section 204 of the Companies Act, 2013 read with Rule 9 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have become applicable to Company. Consequently, the Company appointed M/s. PGBP & Associates LLP, holding peer review certificate : 6757/2025 as the Secretarial Auditor of the Company for a term of upto Five (05) consecutive years, to hold office from the financial year 2025-26 till the financial year 2029-30, at the Board Meeting held on June 06, 2025.

The Secretarial Auditors Report for the financial year ended March 31, 2026, contains the following observations/adverse remarks:

Sr. No. Observations	Management Clarifications
1 The Company had an unspent CSR obligation amounting to Rs. 20,15,126.40/- for the financial year 2024-25.	The Company had an unspent CSR obligation of Rs. 20,15,126.40/- for the financial year 2024-25. The Company has taken appropriate steps to comply with the applicable provisions relating to the treatment and utilisation of the unspent CSR amount.
2 The Company had delayed the submission of its Audited Financial Results, as required under the aforesaid Regulations, for the financial year ended March 31, 2025, to the Stock Exchange.	The delay was attributable to a change in the Statutory Auditor of the Company following the resignation of the previous Statutory Auditor, who did not possess a valid Peer Review Certificate as required under the applicable SEBI Regulations. Accordingly, a new Statutory Auditor was appointed on June 6, 2025, following which the necessary financial reporting and related compliances were completed.
3 The Company had not provided prior intimation to the Stock Exchange regarding the meeting of the Board of Directors at which a proposal for fund raising was to be considered.	No fund-raising proposal was placed before or approved by the Board of Directors at its meeting held on November 14, 2025. The matter was only mentioned informally for preliminary awareness and no supporting documents or resolutions relating to any fund-raising proposal were circulated, considered or approved at the said meeting.
4 The Company had delayed the submission of the disclosure of Related Party Transactions, as required under the aforesaid Regulations, along with the Integrated Financials for the half year ended September 30, 2025, to the Stock Exchange.	The delay occurred as the Monitoring Report was received by the Company later than expected, which impacted the timely completion and submission of the Integrated Financials. However, the standalone financial results were duly uploaded in PDF format within the prescribed timelines. The Company has taken necessary measures to ensure timely compliance with the applicable disclosure requirements going forward.

The Secretarial Auditors Report for the financial year ended March 31, 2026, is enclosed to the Boards report, which forms part of this Integrated Annual Report.

(c) INTERNAL AUDITOR:

Pursuant to the provisions of applicable provisions of the SEBI Listing Regulations read with Section 138 of the Companies Act 2013, the Audit Committee and the Board of Directors at their respective meetings held on June 12, 2025 have recommended and approved, appointment of M/s RKAS & Co., Chartered Accountants (Firm Registration Number 135727W) as Internal Auditor for a term of Five (05) consecutive years, to hold office from the financial year 2025-26 till the financial year 2029-30.

33. STATUTORY AUDITORS REPORT

The Auditors Report for the FY 2025-26 as well as financial statements of the Company is attached to this Annual Report. The notes on Financial Statements referred to in the Annual Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

34. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with nature and size of the business activity and with reference to the financial statements. The controls comprise of policies and procedures for ensuring orderly and efficient conduct of the Companys business, including adherence to its policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has satisfactory Internal Control Systems, which are continuously evaluated by professional statutory auditors of repute. The Company continues to improve the present Internal Control Systems by implementation of appropriate policy and processed.

35. RISK MANAGEMENT POLICY

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a Companys capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a companys operating environment and they emerge on a regular basis. The Companys Risk Management processes focus on ensuring that these risks are identified on a timely basis and addressed.

The Process of Risk Management include following steps:

1) Risk Identification and Impact Assessment

2) Risk Evaluation

3) Risk Reporting and Disclosures

4) Risk Mitigating and Monitoring

36. COMPLIANCE WITH SECRETARIAL STANDARD

During the period under review, the Company has complied with the Secretarial Standard - 1 and Secretarial Standard - 2 issued by the Institute of Company Secretaries of India.

37. POLICY ON CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the provisions of Section 135 of the Companies Act, 2013 became applicable to the Company as the Company met the prescribed threshold criteria under the said section.

The Company has adopted a Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time. The CSR Policy provides the framework for undertaking initiatives aimed at creating a positive and sustainable impact on society.

During the financial year, the Company had an unspent CSR obligation of Rs. 20.15 Lakhs, pertaining to the previous financial year 2024-25. The Company shall deal with the said unspent amount in accordance with the provisions of Section 135 of the Companies Act, 2013 and the rules made thereunder.

The Company has fully spent the amount of CSR obligation for the financial year 2025-26 amounting to Rs. 48.30 Lakhs, on eligible CSR activities in accordance with the applicable provisions of the Companies Act, 2013. In total the Company has spent Rs. 50.75 Lakhs on CSR activities in the Financial year 2025-26 including excess of Rs. 2.45 Lakhs.

The details of the CSR activities undertaken by the Company during the year are provided in Annexure III to this Report.

38. CREDIT RATING

The company has obtained rating from the Acuite Ratings & Research Limited during the year 2025-26, in respect of the companys banking facilities, the details are given below:

Facilities	Quantum (Rs. Cr)	Rating	Rating Action
Short Term Bank Facilities	2.47	ACUITE A3+	Upgraded
Long Term Bank Facilities	14.53	ACUITE BBBStable	Upgraded
Long Term Bank Facilities	19.18	ACUITE BBB Stable	Assigned

39. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

During the year under review, no significant or material orders were passed by regulators, courts or tribunals which could adversely impact the going concern status or future operations of the Company, except as disclosed below.

Order by Income Tax Authorities:

A. During the year under review, the Company received an assessment order dated March 12, 2026, passed under Section 147 read with Sections 250 and 144B of the Income-tax Act, 1961 in respect of Assessment Year 2015-16.

Pursuant to the said order, the income of the Company has been assessed at Rs. 179.40 Lakhs. The order also provides for initiation of certain penalty proceedings under the applicable provisions of the Income- tax Act, 1961.

The management is examining the observations contained in the assessment order and, based on professional advice, shall take such appropriate steps, including filing of appeal(s) and other legal remedies, as may be considered necessary. The Company believes that it has adequate grounds to contest the additions/disallowances made in the assessment order.

The impact of the aforesaid matter on the financial statements, if any, has been dealt with in accordance with the applicable accounting standards and legal requirements.

B. During the year under review, the Company pursued an appeal before the Honble Income Tax Appellate Tribunal, Nagpur Bench, in relation to penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2014-15. The Honble ITAT, vide its order dated August 10, 2026, allowed the Companys appeal and directed the Assessing Officer to delete the penalty of Rs. 1,08,26,994. The Tribunal held that the returned income had been accepted without any variation and, accordingly, the basis for levy of penalty under Section 271(1)(c) was not sustainable.

40. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT 2013.

POSH Committee

The composition of the Internal Complaints Committee is as follows:

Sr. No. Name of Member of IC Committee	Designation in IC Committee
1 Mrs. Shilpa Avinash Shende	Presiding Officer
2 Mrs. Sampada Sachin Pande	Member of the Committee
3 CS Anjali Vinay Padhye	Member of the Committee
4 Mr. Aditya Kawadkar	Member of the Committee
5 Adv Chetan Dhore	External Member

The Company is committed to providing a healthy environment to all employees and thus does not tolerate any sexual harassment at the workplace. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review:

Number of Sexual Harassment Complaints Received	NIL
Number of Complaints Disposed of	NIL
Number of Cases pending for more than 90 days	NIL

41. COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

In accordance with the provisions of the Maternity Benefit Act, 1961, as amended, and pursuant to the disclosures required under Section 134 of the Companies Act, 2013, the Company affirms its commitment to ensuring a safe, equitable, and supportive work environment for all women employees.

The Company has implemented all necessary measures to comply with the provisions of the Maternity Benefit (Amendment) Act, 2017.

42. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) and (10) of the Companies Act, 2013, every listed company is required to establish a Vigil Mechanism (similar to a Whistle Blower mechanism) for Directors and employees to report genuine concerns.

The Company has in place a duly formulated Vigil Mechanism/ Whistle Blower Policy, which demonstrates its commitment to providing adequate safeguards against victimization of individuals who raise such concerns. The Policy also ensures direct access to the Chairman of the Audit Committee in appropriate or exceptional cases.

The Board of Directors affirms that no employee has been denied access to the Audit Committee during the year under review. Further, no complaints were received or are pending under the Vigil Mechanism during the said period.

The details of the Vigil Mechanism / Whistle Blower Policy are available on the Companys website.

43. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016

During the year under the review, there were no applications made or proceedings pending in the name of the company under the insolvency and bankruptcy code, 2016.

44. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE-TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS.

During the year under the review, there has been no one-time settlement of loans taken from banks and financial institutions.

45. CEO/ CFO CERTIFICATION:

Pursuant to Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provision of Para D of Schedule V of SEBI (LODR) relating to declaration by CEO/CFO is not applicable to the company.

46. COST RECORDS AND COST AUDIT

The provisions relating to maintenance of cost records and audit of cost records under Section 148 of the Companies Act, 2013 read with the applicable rules made thereunder are not applicable to the Company for the financial year under review. Accordingly, the Company is not required to maintain cost records or undertake cost audit for the financial year 2025-26.

47. ACKNOWLEDGEMENT

The Board of Directors wishes to express its gratitude and record its sincere appreciation for the commitment and dedicated efforts put in by all the employees. Your Directors take this opportunity to express their grateful appreciation for the encouragement, cooperation and support received by the Company from the local authorities, bankers, clients, suppliers and business associates. The directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its management.

BY ORDER OF THE BOARD OF DIRECTORS FOR,
VIRTUAL GALAXY INFOTECH LIMITED
Sd/-	Sd/-
AVINASH NARAYANRAO SHENDE	SACHIN PURUSHOTTAM PANDE
CHAIRMAN	MANAGING DIRECTOR
DIN:02179381	DIN:02181154
Registered Office:
Place: Nagpur
Date: August 31, 2026