MANAGEMENT DISCUSSION AND ANALYSIS REPORT

This Management Discussion and Analysis Report addresses the expectations and Projections of the company for its future, about its Product Development, Market Position, Market Development and Penetration, Expenditure, Financial Results, Risks and Concerns etc. However, the expectations shared herein are not limited to the Compa­ny's Growth. The Company's actual results, performance or achievements could differ from those shared herein.

On the other hand, our Management declares that, the financial statements have been brpared in compliance with the requirements of the Companies Act, 2013 and Rules made thereunder, guidelines issued by the Securities Exchange Board of India (SEBI) and the Generally Accepted Accounting Principles (GAAP) in India.

A. Industry Structure & Developments

Companies are focusing on their core competencies and using outsourced technology service providers to ad­equately address these needs. The role of technology has evolved from supporting corporation to transforming their business. At the same time, corporations are reluctant to expand their internal IT Departments and increase costs. These factors have increased the reliance of corporations on their outsourced technology service providers and are expected to continue to drive future growth for outsource technology services.

Quality Service & Customer Care

VAMA is very focused on Engineering; IT & IT enabled services. We are very keen on our industry expertise and ensure specialized support for our clients. Therefore, we continually evaluate and train our professionals in new technologies and methodologies.

The Company continues to look for new ways to strengthen customer relationships, expand services portfolio by continuously introducing new services, infrastructure and continuously improving quality processes to raise the delivery promise to customers. The Company believes in strong focus on execution of strategy to deliver long-term growth.

We firmly believe that, our process, methodologies, knowledge management systems and tools minimize the overall cost to the client and improve from time to time. The revenues attributed to the IT infrastructure solution services, customer application development, maintenance and production support, product engineering and con­sulting services rebrsented a part of our revenues in the financial period under review

B. Financial Information

1. Sources of Funds

Currently, we have only one class of shares i.e., Equity Shares of nominal value Rs. 10/- each. Our Authorised Share Capital is Rs. 9,00,00,000 divided into 90,00,000 equity shares of Rs. 10/- each. The Issued, Subscribed and Paid Up capital stood at Rs. 8,23,80,000 divided into 82,38,000 equity shares of Rs. 10/- each as at March  31, 2015.

2. Profit & Loss Account

The balance retained in the Profit & Loss account as at March 31, 2015 is Rs.30,41,904/- after providing for final dividend for the year of Rs.16,47,600/- and Dividend Tax of Rs.3,29,423/- thereon. The total amount of profits proposed to be appropriated towards dividend and Dividend tax is Rs.19,77,023/-

3. Deferred Tax Assets/ Liabilities

We recorded net Deferred Tax Assets of Rs 3,93,993/- as at March 31, 2015 (Previous Year Deferred Tax Liabilities of Rs1,86,741)

4. Fixed Assets

During the year, the net block of the fixed assets as at 31st March 2015 is Rs.13,017,337/- as compared to Rs.1,44,75,010/- in the brvious year.

5. Investments

The Company did not make any investments during the year.

C. Results of Operations 1. Income

Of the total revenues for the year ended March 31, 2015 approximately 1.19% were derived from our overseas operations whereas 98.8% were received from domestic operations.

Our revenues are segmented as 100% EOU, Domestic and other Income.

100% EOU Revenues are for those services which are performed at our Software Development Center located in India (offshore revenues) towards IT & ITeS on the other hand domestic revenues are those revenues that are a result of IT Infrastructure Solution Services, trading in hardware products, and related services, consultancy and

Cost of products & services mentioned above is net of the changes in inventories of finished goods, work in prog­ress and stock-in-trade.

D. Opportunities & Threats

Scope: We at VAMA, being Offshore Technology Service Provider, practice high quality, Cost Competitive Technology Solutions and Related Support Functions to offshore Technology Service Providers to reduce cycle time for introducing new products and services. We firmly believe that our quality process and access to skilled talent base at lower costs enable us to take advantage of the trend towards outsourcing IT services.

Innovation, leadership, commitment to superior quality and process execution are the strengths of VAMA.

In view of establishing strong brand and long standing client relationships, to strengthen our position as a leading global technology service company by successfully differentiating our service offerings and increasing the scale of our operations, we understand that we have to expand geographically, continue to enhance our engagement mod­els and offerings, continue to develop deep industry knowledge, increase business from existing and new clients, continue to invest in infrastructure and employees, enhance brand visibility.

Competition: Obviously we are operating in a highly competitive and rapidly changing market and in the future, we expect competition from companies establishing and building their offshore brsence and firms in countries with lower personnel costs than those brvailing in India apart from those who are strongly established. However, we understand that price alone cannot constitute a sustainable competitive advantage. We are confident to compete favorably with respect to these factors.

E. Outlook, Risks and Concerns

In this section, we are disclosing the risks and concerns of the company.

Revenues & Expenses: Like any other company, even our expenses and revenues are difficult to be brdicted, our revenues are highly dependent on clients primarily located in the U.S, The impact of economic slowdown or other factors that affect the economic health of U.S may also affect our business. Our revenues are largely dependent upon small number of clients and the loss of any one of the client will certainly impact the business. As a result, there is intense competition in the market for technology services and this can affect our cost advantages, which could reduce our share of business from clients and may decrease our revenues. Currency fluctuations may also affect the results of our operations.

Government & Compliance:

Legislation in certain countries may restrict the company from outsourcing work to us. Increasing compliance in India and abroad is increasing the costs of compliance. Our increasing work with governmental agencies may expose us to additional risks. The income can also be affected if the Government of India or the government of another country changes its tax policies in a manner that is adverse to us. Our ability to acquire companies orga­nized outside India depends on the approval of the Government of India and/or Reserve Bank of India, and failure to obtain permissions and approval could adversely impact our business.

Human Resources:

Increasing cost of employees may affect the margins of the company. In addition, our services demand highly skilled technology professionals and our ability to hire, attract, motivate, retain and train our personnel is demand­ing higher cost. However, the human resource strategy enabled the Company to attract, integrate, develop and retain the best talent required for driving business growth.

Number of People Employed:

As on 31st March 2015, the employee strength was 141.

Customers & Clients:

Our client's contracts are often conditioned upon our performance, which if unsatisfactory, may result in fewer rev­enues. Our engagements with customers are singular in nature and may not necessarily provide for subsequent engagements. Some of our long term client contracts contain certain provisions which, if triggered, could result in lower future revenues and profitability under the contract. This means that, our clients contracts can be terminated any time without cause. This could certainly affect the business negatively. On the other hand our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and in the industry on which we focus.

F. Segment-Wise Performance

As of March 31, 2015 our main reportable segments are Software Development &Services (IT &ITeS) and Product/ Hardware Sales & Services.

G. Internal Control Systems and Their Adequacy

The CEO Certification, issued pursuant to the provisions of Clause 49 of the Listing Agreement is provided in the Annual report which shall discuss the adequacy of VAMA's Internal Control Systems and Procedures.

The internal control systems adopted by the Company are adequate and appropriate to its operations. The system has been designed to ensure that assets and interest of the Company are protected and dependability of account­ing data and its accuracy are ensured with proper checks and balances.

The Company has appointed V.N.S. Srinivasa Rao to oversee and carry out an internal audit of the Company's activities. The audit is based on an Internal Audit Plan, which is reviewed each year in consultation with the statu- tory auditors and the Audit Committee.

The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of the company operations . The company has an audit committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee reviews audit reports submitted by the internal Auditors .

The Company's Audit committee meets the Company's statutory auditors to ascertain their views on the adequacy of internal control systems in the Company and keeps the Board of Directors informed of its major observations at periodic intervals.