Virtual Galaxy Infotech Ltd

TO

THE MEMBERS OF THE COMPANY

Your Directors feel great pleasure in presenting 28th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2025.

Your company during the year under review has reported total revenue of Rs.12,014.35 Lakhs which is comparatively significant than last year's total revenue of Rs. 6,146.39 Lakhs. The net profit of the year under review is amounting to Rs. 3,211.83 Lakhs as against Profit of Rs.l,605.14 Lakhs reported in the Previous Year.

The company has reserves and surplus of Rs. 7,489.27 lakhs in the present financial year (FY 2024-25) as against the Reserve and Surplus of Rs. 3,256.83 lakhs during the previous financial year (FY 2023-24).

Subsequent to the end of the financial year, there has been a material development affecting the financial position of the Company. The Company received approval from the National Stock Exchange of India Limited (NSE) vide letter dated 16th May 2025 for the listing of its equity shares under the SME IPO on the NSE Emerge Platform. The equity shares of Virtual Galaxy Infotech Limited were listed on 19th May 2025.

This transition to a publicly listed SME entity is a significant milestone that is expected to enhance the Company's visibility in financial markets, improve access to capital, and strengthen its corporate governance and compliance framework. Other than the aforementioned development, there have been no further material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

In view of the appointments of Directors in the Board of the Company, following is the revised Composition of the Board;

With a view to conserve the resources for future business operations of the Company and to develop and diversify the existing business, your directors have not recommended any Dividend for the Financial Year 2024-25.

Your Company has transferred the entire profit available for appropriation for the current Financial Year to the General Reserve.

During the year under review, there is no unclaimed/unpaid dividend within the meaning of the provisions of Section 125 of the Companies Act, 2013.

The authorized Share Capital of the Company is 525,00,00,000 (Rupees Twenty-Five Crore Only) divided into 2,50,00,000 (Two Crore Fifty Lakh) Equity Shares of Rs.10/- (Rupees Ten Only) each. During the year Company has not made any changes in its Authorized Share Capital.

The paid-up Share Capital of the Company is Rs. 18,29,86,350.00 (Rupees Eighteen Crores Twenty Nine Lacs Eighty-Six Thousand Three Hundred Fifty Only).

During the year the Company has issued 11,98,945 (Eleven Lakhs Ninety-Eight Thousand Nine Hundred Forty-Five) equity shares of Rs.10/- (Rupees Ten Only) each and at a premium of Rs.136/- (Rupees One Hundred Thirty-Six only). Further the company has issued 60,99,530 (sixty Lakh Ninety-Nine Thousand Five Hundred Thirty Only) bonus equity shares of Rs.10/- (Rupees Ten Only) each.

We are pleased to inform all stakeholders that after the closure of the financial year 2024-25, your Company has successfully completed its Initial Public Offering (ipo), marking a significant milestone in its growth journey. The IPO received an overwhelming response, with a subscription of 231 times, amounting to approximately 514,440 Crores. This has been one of the largest responses to an IPO in the IT segment within the SME space, reflecting the strong investor confidence in the Company's business model, growth prospects, and leadership.

The overwhelming response to the IPO enabled the Company to successfully issue 65,70,000 equity shares, raising 593.29 crores through the offering, and resulting in an increase in the Company's paid-up share capital to 524,86,86,350.

Pursuant to the successful completion of the IPO process, the equity shares of the Company were listed on the NSE Emerge Platform (the SME Platform of the National Stock Exchange of India Limited) on 19th May 2025. With this, your Company has transitioned into an SME Listed Company, enhancing its visibility in the financial markets, strengthening its corporate governance practices, and paving the way for greater transparency and access to capital.

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 financial statements of the Company as attached to this annual report.

The particulars of transactions entered into with the related parties referred in section 188(l) and applicable rules of the act have been given in Annexure - I to this report in Form AOC-2. The Company in place Policy on Materiality of Related Party Transactions which is available on the Company's website - https://www.vgipl.com/

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.

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/.

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.

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 31st March, 2025, 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.

As per the provisions of Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions related to Corporate Governance are not applicable to the company being listed on SME Exchange.

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:

During the year under review, two Directors of the Company viz., Mr. Sachin Pande and Mr. Avinash Shende were in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with the approval of shareholders in the Extra Ordinary General meeting held on 14th September, 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.

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.

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

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.

During the financial year 2024-25, the following Directors have been appointed at the Board of the company:

During the year under review, the following Key Managerial Personnel have been appointed at the Board of the company:

The Board of Directors met 22 (Twenty-Two) times during the year under review on the following dates: 01 April 2024, 09 April 2024. 25 April 2024, 01 May 2024, 04 May 2024, 27 May 2024, 01 June 2024, 03 June 2024, 12 June 2024,15 June 2024, 19 June 2024, 19 July 2024, 22 July 2024, 22 August 2024, 12 September 2024, 13 September 2024, 16 September 2024, 21 October 2024, 25 October 2024, 29 October 2024, 24 January 2025 and 29 March 2025. The gap between two board meetings was within the time prescribed under the Act and SEBI Listing Regulations.

As stipulated by the Code of Independent Directors under Schedule IV of the Companies Act, 2013, a separate meeting of the Independent Directors of the Company was held on 25th March, 2025 to review, among other things, the performance of non-independent directors and the Board as whole, evaluation of the performance of the Chairman and the flow of communication between the Board and the management of the Company.

The Company's Board has the following Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders' Relationship Committee

• Corporate Social Responsibility Committee

The Board at its Meeting held on 13th September, 2024 constituted the Audit Committee. During the financial year 2024 - 2025, (4) meetings of Audit Committee were held on 20th October, 2024 and 23rd October, 2024, 24th January, 2025 & 25th March 2025.

The table below highlights the composition and attendance of the Members of the Committee. The requisite quorum was present at all the Meetings:

The Company Secretary has acted as the Secretary to the Committee.

All the recommendations made by the Audit Committee were accepted by the Board of Directors. The terms of reference of the Audit Committee shall include but not limited to the following:

(i) the recommendation for appointment, remuneration and terms of appointment of auditors of the company;

(ii) review and monitor the auditor's independence and performance, and effectiveness of the audit process;

(iii) examination of the financial statement and the auditors' report thereon;

Iiv) approval or any subsequent modification of transactions of the company with related parties;

v) scrutiny of inter-corporate loans and investments;

vi) valuation of undertakings or assets of the company, wherever it is necessary;

vii) evaluation of internal financial controls and risk management systems;

viii) monitoring the end use of funds raised through public offers and related matters.

The Board at its Meeting held 13th September, 2024 constituted the Nomination and remuneration Committee (hereinafter referred as "NRC"). During the financial year 2024-25,1 (One) meeting of NRC was held on 16th September, 2024

The Company Secretary has acted as the Secretary to the Committee.

The broad terms of reference of the NRC, as approved by the Board, are in compliance with Section 178 of the Companies Act, 2013 which are as follows:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals."

(d) To discharge such other duties and responsibilities as assigned to the Committee from time to time by the Board of Directors or as may be required under applicable laws or regulations.

The Board at its Meeting held 13th September, 2024 constituted the Stakeholders' Relationship Committee (hereinafter referred as "SRC"). During the financial year 2024-25,1 (One) meeting of SRC was held on 24th January, 2025

The SRC comprises of:

The Company Secretary of the Company acts as the Secretary of the Committee.

This committee addresses all grievances of Shareholders/lnvestors and its terms of reference include the following:

a) Resolving the grievances of the security holders of the Company, including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings, etc;

b) Review of measures taken for effective exercise of voting rights by shareholders;

c) Review of adherence to the service standards adopted by the Company in respect of various services rendered by the registrar and share transfer agent;

d) Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company;

e) Formulate procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from shareholders from time to time;

f) Approve, register, refuse to register transfer or transmission of shares and other securities;

g) Sub-divide, consolidate and or replace any share or other securities certificate(s) of the Company;

h) Allotment and listing of shares;

i) Authorise affixation of common seal of the Company;

j) Issue duplicate share or other security(ies) certificate(s) in lieu of the original share/security(ies) certificate(s) of the Company;

k) Approve the transmission of shares or other securities arising as a result of death of the sole/any joint shareholder;

l) Dematerialize or rematerialize the issued shares;

m) Ensure proper and timely attendance and redressal of investor queries and grievances;

n) n) Carry out any other functions contained in the Companies Act, 2013 (including Section 178) and/or equity listing agreements (if applicable), as and when amended from time to time; and

o) Further delegate all or any of the power to any other employee(s), officer(s), representative(s), consultant(s), professional(s), or agent(s).

Our Board has constituted the Corporate Social Responsibility Committee vide Board Resolution dated September 13, 2024 pursuant to section 135 of the Companies Act, 2013. The Committee met Once during the FY 2024-2025 on 24th January, 2025

The scope of Corporate Social Responsibility Committee shall include but shall not be restricted to the following:

a) To formulate and recommend to the Board, a CSR policy which shall indicate the activities to be undertaken by the Company as per the Companies Act, 2013;

b) To review and recommend the amount of expenditure to be incurred on the activities to be undertaken by the company;

c) To monitor the CSR policy of the Company from time to time; and

d) Any other matter as the CSR Committee may deem appropriate after approval of the Board of Directors or as may be directed by the Board of Directors from time to time.

During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under Section 143(l2) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

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 04th June 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 06th June 2025 by the Board on recommendation of the Audit Committee.

Further being eligible M/s K.K. Mankeshwar & Co., offers themselves for reappointment for a term of 5 years from the conclusion of this Annual General Meeting to the conclusion of the 33rd Annual General Meeting to be held in the year 2030

Pursuant to the provisions of Regulation 24A & other applicable provisions of the SEBI Listing Regulations read with Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee and the Board of Directors at their respective meetings held on 06th June 2025 have approved & recommended for approval of Members, appointment of M/s PGBP & Associates LLP, Practicing Company Secretaries (uiN: L2022MH012600) as Secretarial Auditor for a term of upto 5 (Five) consecutive years, to hold office from April 1, 2025 upto March 31, 2030.

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 12th June 2025 have recommended and approved, appointment of M/s RKAS & Co., Chartered Accountants (Firm Registration Number 135727W) as Internal Auditor for a term of upto 5 (Five) consecutive years, to hold office from April 1, 2025 upto March 31, 2030.

The Auditor's Report for the FY 2024-25 as well 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 Auditor's Report does not contain any qualification, reservation or adverse remark.

During the year under review, the provisions relating to Secretarial Audit under Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 were not applicable to the Company, as the Company did not meet the prescribed thresholds for applicability.

However, subsequent to the closure of the financial year, the equity shares of the Company have been listed on the NSE Emerge Platform, making the Company a SME Listed Entity. In view of the mandatory requirement under the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is now obligatory for listed entities to conduct a Secretarial Audit.

Accordingly, based on the recommendation of the Audit Committee and the approval of the Board of Directors at its meeting held on 06th June 2025, the Company proposes to appoint m/s PGBP S, Associates LLP, Practicing Company Secretaries, as the Secretarial Auditor of the Company for a term of five consecutive financial years commencing from FY 2025-26 to FY 2029-30, subject to the approval of the shareholders at the ensuing Annual General Meeting.

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.

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 Company's 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.

The Company is exposed to inhe9ent uncertainties owing to the sectors in which it operates. A key factor in determining a Company's 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 company's operating environment and they emerge on a regular basis. The Company's 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

The company does not have any Subsidiary, Associate and Joint Venture as on 31st March, 2025..

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.

The Company allocated the required CSR budget of 48,29, 686.40 for FY 2024-25 as per Section 135 of the Companies Act, 2013. However, the funds could not be deployed due to the non-availability of suitable implementation partners who met the Company's due diligence, compliance, and impact standards.

Challenges included gaps in regulatory compliance (e.g., CSR-l registration, 12A/80G certification), limited availability of credible agencies in priority sectors and geographies, and lack of robust governance structures among prospective partners. In view of these constraints, and to uphold fiduciary responsibility, the CSR Committee decided to defer disbursement.

To ensure effective deployment going forward, the Company is developing a vetted partner network, exploring joint CSR initiatives, and evaluating in-house execution models. Any unspent amount will be dealt with as per statutory provisions

During the year there were no significant material orders passed by the Regulators / Courts / Tribunals except the Income Tax Order as mentioned below which would impact the going concern status of the Company and its future operations. Your Board takes this opportunity to thank all its employees for their dedicated service and firm commitment to the goals of the Company. Your Board also wishes to place on record its sincere appreciation for the wholehearted support received from members, clients, bankers and all other business associates. We look forward to continued support of all these partners in progress.

Order by Income Tax Authorities:

In the matter of the assessment for A.Y. 2015-16, the Assessing Officer (ao) passed an ex-parte order u/s 147 r.ws. 144 of the Income Tax Act, 1961 dated 28.03.2022, determining the assessed income at Rs.40,67,80,792/-. Upon review of the facts and submissions, and considering the grievance raised by the appellant, the ex-parte nature of the assessment has been recognized. Accordingly, in the interest of justice and to ensure a fair and proper determination of income, the Commissioner (Appeals) set aside the assessment order passed by the AO and remanded the matter back for a de novo assessment. Consequently, the income determined in the original order has been annulled and will be reassessed afresh.

After the closure of Financial Year under review, the Company vide the letter dated 16th May 2025 has received the approval of National Stock Exchange for Listing of Equity Shares of Virtual Galaxy Infotech Limited (SME IPO). The equity shares of the Company were listed on the NSE Emerge Platform (the SME Platform of the National Stock Exchange of India Limited) on 19th May 2025. With this, your Company has transitioned into a SME Listed Company, enhancing its visibility in the financial markets, strengthening its corporate governance practices, and paving the way for greater transparency and access to capital.

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 Harrassment Complaints Received: NIL

Number of Complaints Disposed of: NIL

Number of Cases pending for more than 90 days: NIL

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, including:

(a) Extension of paid maternity leave from 12 to 26 weeks for eligible women employees;

(b) Option for work-from-home post-maternity leave, where the nature of work permits;

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.

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

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.