Your Directors present herewith their 24th (Twentieth Fourth) Annual Reportof your Company together with the Audited Annual Accounts of the Company for the yearended 31st March 2016.
The financial performance of the Company for the Year ended 31st March 2016is summarized as below:-
| || || |
(Rs In Lacs)
| ||STANDALONE ||CONSOLIDATED |
|Particulars ||Year Ended on 31.03.2016 ||Year Ended on 31.03.2015 ||Year Ended on 31.03.2016 ||Year Ended on 31.03.2015 |
|Income / Receipts from Operations ||10179.95 ||8228.19 ||10179.95 ||8228.19 |
|Other Income ||424.09 ||369.71 ||424.09 ||369.71 |
|Total Income ||10604.04 ||8597.90 ||10604.04 ||8597.90 |
|Earning Before Financial Charges Depreciation and Taxation (EBITDA) ||307.53 ||340.92 ||307.53 ||340.92 |
|Financial Charges ||132.82 ||168.35 ||132.82 ||168.35 |
|Depreciation ||34.98 ||71.99 ||34.98 ||71.99 |
|Profit Before Tax (PBT) ||139.74 ||100.58 ||139.74 ||100.58 |
|Less: Provision for Taxation including Deferred ||44.53 ||32.44 ||44.53 ||32.44 |
|Less Extra Ordinary Item ||- ||(13.46) ||- ||(13.46) |
|Profit After Tax (PAT) ||95.20 ||54.68 ||95.20 ||54.68 |
|Profit Brought Forward from Previous Year ||884.87 ||830.18 ||884.87 ||830.18 |
|Profit Available for Appropriation ||980.07 ||884.87 ||980.07 ||884.86 |
|Balance Carried to Balance Sheet ||980.07 ||884.87 ||980.07 ||884.86 |
During the year under review the revenue from operations amounted to Rs 10179.95 lacsas against the previous year figure of Rs 8228.19 lacs a growth of 23.72 % approx.In-spite of overall slowdown in the economy the Company was able to generate Net ProfitAfter Tax amounted to Rs 95.20 lacs as against the previous year figure of Rs 54.68 lacs a growth of 74.12%.
We maintain sufficient cash to meet our strategic objectives. We understand thatliquidity is necessary to cover Business and Financial risks. Excess funds are invested indeposits with Bank having special rates of interest or by providing short Terms Loan andAdvances to parties which is receivable on demand so that funds are readily available atany time period to meet requirement of our business.
Looking to future requirements of funds for business operations of the Company thedirectors have not recommended any dividend for the Financial Year 2015-16.
Our Company is also optimistic that with the stabilization in price for the old ship inthe international markets and in the sale price of recycled products in the domesticmarket the Company will be able to improve the turnover and the profitability ratios inthe coming years.
The consolidated financial statements presented by the Company include financialinformation of its subsidiary Company M/s VMS TMT Private Limited which is prepared incompliance with applicable Accounting Standards. As per Sub Section (3) of Section 129 ofthe Companies Act 2013 mandates every company to prepare a consolidated financialstatement for all the Companies having one or more subsidiaries from attaching the balancesheet profit and loss account and other documents of the subsidiary company to thebalance sheet of the Company provided certain conditions are fulfilled. Accordingly theAnnual Accounts of the subsidiary company and the related detailed information will bemade available to the holding and subsidiary company investors seeking such information atany point of time. The annual accounts of the subsidiary company will also be kept forinspection by any investor at its Reg. Office /Head Office in Ahmedabad and that of theSubsidiary company concerned and also available at website of the Company (www.vmsil.com)
Mr. Ajit Kumar Jain (DIN: 00114766) is liable to retire by rotation at the ensuingAnnual General Meeting and being eligible offers themselves for re-appointment. None ofthe Directors of the company are disqualified under section 164 of the Companies Act 2013from being appointed as a Director of any public company. The Board recommends theirreappointment for your approval.
In terms of the provision of Companies Act 2013 the independent Directors are notliable to retire by rotation. Accordingly the Board has ascertained the Directors who areliable to retire by rotation keeping in view the provisions of the Companies Act 2013.The Board recommends for their reappointment.
Brief resumes of the above Directors nature of their expertise in specific functionalareas and names of the Public Limited Companies in which they hold Directorships andMemberships / Chairmanships of Committees of the Board and their shareholding in theCompany as stipulated under LODR 2015 are given in the Report on Corporate Governanceforming part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated financialStatements read with the Accounting Standard AS-23 on Accounting for investments inAssociates the Audited consolidated financial statements are provided in the annualreport.
The properties of the company stand adequately insured against risk of fire strikeriots earthquake explosion and malicious damage.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 134(5) of the Companies Act 2013 the Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
COST COMPLIANCE REPORT
The Company has appointed a Practicing Cost Accountant for obtaining Cost ComplianceReport under the Companies (Cost Accounting Records) Rules 2011 as per the notificationof Ministry of Corporate Affairs dated 3rd June 2011. The Compliance Report will be dulyfiled with Ministry of Corporate Affairs within 180 days from the close of the FinancialYear ending 31st March 2016.
The Company is exposed to the risk from the market fluctuations of foreign exchange aswell as the fluctuation in the price of iron and steel. The Companys raw material isold ship which is purchased from the international market on credit ranging up to 180days to 360 days. Though the Company is not hedging or covering the foreign exchangerequirement the Company is regularly monitoring the foreign exchange movement andsuitable remedial measures are taken as and when felt necessary. Though the Company isemploying such measures the Company is still exposed to the risk of any foreign exchangefluctuation.
Likewise the Companys finished products are mainly re-rollable scrap generatedfrom ship breaking and the price of the same is linked to the market rate for iron andsteel. Any ups and downs in the price of the iron and steel will affect the profitabilityof the Company. The Company keeps a watch on the movement of scrap prices and accordinglydecides its policy regarding purchase of ships and sale of scrap.
Except as disclosed elsewhere in this report there are no material changes andcommitments which can affect the financial position of the Company occurred between theend of the financial year and the date of this report:
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORBTION FOREIGNEXCHNGE EARNINGS AND OUTGO
Information pursuant to Section 217(1) (e) of the Companies Act 1956 read with theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988related to Conversation of Energy Technology Absorption Foreign Exchange Earnings andoutgo for the financial year ended 31st March 2016 are given in Annexure- II attached hereto and forming part of this report.
MANAGEMENT DISCUSSION AND ANALYSIS
As required under the provisions of Listing Obligation & Disclosure RequirementsRegulations 2015 a detailed review of the operations performance and future outlook ofthe Company and its business is given in the Managements Discussion and AnalysisReport which form of this Report as Annexure III.
EXTRACT OF THE ANNUAL RETURN
Pursuant to provision of Section 92 and 134 and other applicable provision of theCompanies Act 2013 and of Rule 12 ( 1 ) of Companies ( Management and Administration )Rules 2014 the extract of the annual return in form MGT 9 for the Financial Year ended on31st March 2015 is annexed as Annexure-V to this Report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
Pursuant to section 134 (3) (n) of the Companies Act 2013 & Clause 49 of thelisting agreement the company has framed Risk Management Policy. The details of thepolicy are as updated on website of the company www.vmsil.com . The risk managementincludes identifying types of risks and its assessment risk handling and monitoring andreporting. At present the company has not identified any element of risk which maythreaten the existence of the company.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The details of Loans Guarantee and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arms lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.
Your Directors draw attention of the members to Note 2.3 to the financial statementwhich sets out related party disclosures.
PARTICULARS OF EMPLOYEES
There are no employees in the Company whose particulars are required to be providedunder Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars ofEmployees) Rules 1975 as amended.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had 9 (Nine) Board meetings during the financial year under review. Thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
FORMAL ANNUAL BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Listing Obligation &Disclosure Requirements Regulations 2015 the Board has carried out an evaluation of itsown performance and the Directors individually. A process of evaluation was followed bythe Board for its own performance and that of its Committees and individual Directors.
A familiarization programme was conducted for Independent Directors to familiarize themwith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company and related mattersand the said was updated on website of the Company http://www.vmsil.com
DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
The Audit Committee consists of the following members:
|a) Shri. Bakulbhai Mehta ||- Chairman |
|b) Shri. Ajitkumar Jain ||- Member |
|c) Shri Pranav Parikh ||- Member |
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.
CORPORATE SOCIAL RESPONSIBILITY :
The provision of Corporate Social responsibility is not applicable to the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee are set up at shop floor level to redress complaints receivedregularly and are monitored by women line supervisors who directly report to the Chairman.All employees (permenant contractual temporary trainees) are covered under the policy.There was no compliant received from any employee during the financial year 2015-16 andhence no complaint is outstanding as on 31.03.2016 for redressal.
SECRETARIAL AUDIT REPORT :
Pursuant to Section 204 of the Act the Secretarial Audit Report for the Financial Yearended 31st March 2016 given by M/s. Jalan Alkesh & Associates Practising CompanySecretary is annexed as Annexure VI to this Report.
The Equity shares of the Company are listed on Bombay Stock Exchange. The Company isregular in payment of listing fees. The Company has paid the listing fees for the year2016-17.
DEMATERIALISATION OF SHARES:
The ISIN for the Equity shares is INE932K01015. As on 31st March 2016 total16473380 equity shares of the company have been Dematerialized. Members of the Companyare requested to dematerialize their shares.
CORPORATE GOVERNANCE REPORT
We adhere to the principal of Corporate Governance mandated by the Securities andExchange Board of India (SEBI) and have implemented all the prescribed stipulations. Asrequired by Listing Obligation & Disclosure Requirements Regulations 2015 a detailedreport on Corporate Governance forms part of this Report as Annexure - VII.The Auditors Certificate on compliance with Corporate Governance requirements by theCompany is attached.
The auditors M/s. P D Goplani & Co. Chartered Accountants offers themselves forreappointment at the ensuing annual general meeting. The company has received a letterfrom the auditors stating that their appointment if made will be within the limits ofSection 139 141 of the Companies Act 2013 and the rules made there under. The Directorsrecommend for their reappointment.
During the year ended on 31st March 2016 the Company has not accepted any FixedDeposits from public under Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014.
Statements in the Directors Report and the Management discussion & Analysisdescribing the Companys objectives expectations or predictions may be forwardlooking within the meaning of applicable securities laws and regulations. Actual resultsmay differ materially from those expressed in the statement. Important factors that couldinfluence the Companys operations include global & domestic demand and supplyconditions affecting selling prices new capacity additions availability of criticalmaterials and its cost changes in government policies and tax laws economic developmentof the country and such other factors which are material to the business operations of theCompany.
Your Directors acknowledge with gratitude the commitment and dedication of theemployees their untiring personal efforts and collective contributions at all levels thathas led to the growth and success of the Company. The Directors would also like to thankother stakeholders including banks and business associates who have continued to providesupport and encouragement to the Company.
| ||For and on Behalf of Board of Directors |
|Place : Ahmedabad ||MANOJ KUMAR JAIN |
|Date : 12th August 2016 ||MANAGING DIRECTOR |
Annexure-I Form AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement Containing Salient features of FinancialStatement of Subsidiaries Part "A": Subsidiaries
|Name of Subsidiary ||VMS TMT PRIVATE LTD |
|Reporting period of the subsidiary concerned if different from the holding Companys reporting period ||01st April 2015 to31st March 2016 |
|Reporting Currency ||INR |
|Share Capital ||633.36 |
|Reserves and Surplus ||- |
|Total Assets ||566.97 |
|Total Liabilities (Excluding Share Capital & Reserve and Surplus) ||- |
|Investment (Other than Subsidiary) ||- |
|Turnover (Including other Income) ||- |
|Profit Before Taxation ||- |
|Provision for Taxation ||- |
|Profit After Taxation ||- |
|Proposed Dividend ||- |
|% of Shareholding ||80.13% |
1. There is no subsidiary which has been liquidated or sold during the year.
The amount given in the tables above are from the annual accounts made for therespective financial year end for each of the Company.
Part-"B": Associates and Joint Venture- Not Applicable
ANNEXURE II TO DIRECTORS REPORT
Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo as required under Section 134 (3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014
A. CONSERVATION OF ENERGY
|a) Energy conservation measure taken ||In the ship breaking and offshore activities carried out by the Company the energy consumption is Negligible and does not require any specific energy conservation measures |
|b) Additional investment and proposal if any being implemented for reduction in consumption of energy. ||No material consideration looking to the business of the Company |
|c) Impact of the measures at (a) & (b) on energy consumption & consequent impact on the cost of production. ||N.A. |
|d) Total energy consumption and energy consumption per unit of production ||Nil |
B. TECHNOLOGY ABSORPTION:-
The Company is engaged in the business of breaking of old and used ships and in thebusiness of off-shore segment. No material Research & Development is carried out inany specific area and therefore no details are furnished on matters related to TechnologyAbsorption.
C. FOREIGN EXCHANGE EARNING & OUTGO
1. Activities relating to export initiatives taken to increase exports development ofnew markets for products and services and export plans : NIL
2. During the year the Company earned / spent foreign exchange as under :
Earnings : Rs NIL
Outgo : Rs 80.51 Crores
Disclosure under Section 197(12) and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
1. Ratio of remuneration of each director to the median remuneration of the employeesof the company for the financial year ended 31 March 2016
|Sr. No. ||Name of the Director ||Remuneration per annum (In Rs) ||Median Remuneration per annum ( In Rs ) ||Ratio |
|1 ||MANOJ KUMAR JAIN ||1200000 ||187500 ||6.40 |
|2 ||SANGEETA JAIN ||2400000 ||187500 ||12.80 |
2. There was no increase in the remuneration of the Directors.
3. Percentage increase in median remuneration of employees in the financial year 5%.
4. The number of permanent employees on the rolls of the company as on 31 March 2016is 40.
5. The explanation on the relationship between average increase in remuneration andcompany performance.
|Particulars ||2015 2016 ||2014 2015 |
|Total revenue ||10604.04 ||8597.90 |
|EBIDTA ||307.53 ||340.92 |
|EBIDTA as a % of total Income ||2.90 ||3.96 |
|Profit before tax ||139.74 ||100.58 |
|PBT as a % of total Income ||1.31 ||1.16 |
6. Affirmation that the remuneration is as per the remuneration policy of theCompany:
It is affirmed that the remuneration is as per the remuneration policy of the Company.
7. None of employees received highest remuneration than that of Directors.
Form No. MR-3
For the financial year ended on 31st March 2015
[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
VMS Industries Limited
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by VMS Industries Limited(hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on my verification of the VMS Industries Limited books papers minute booksforms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit I hereby report that in my opinion the companyhas during the audit period covering the financial year ended on 31 March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31 March 2016 accordingto the provisions of :
(i) The Companies Act 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade there under;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings.
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-(a) The Securities and ExchangeBoard of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011; (b)The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations1992; (c) The Securities and Exchange Board of India ( Issue of Capital and DisclosureRequirements ) Regulations 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009
(h) The Securities and Exchange Board of India (Buy Back of Securities) Regulations1998
And in general the Company has systems process and procedure for the compliance ofOther Laws Applicable to the Company.
The Excise Act 1944 Central Sales Tax Act 1958 Factories Act Water ( Prevention andControl of Pollution ) Act 1974 The Air (Prevention and Control of Pollution) Act 1981Employees State Insurance Act Employees Provident Fund Act Gratuity Act Service TaxAct 1944 Income Tax Act 1961 Explosives Act 1884
I have also examined compliance with the applicable clauses of the following: (i)Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) TheListing Agreements entered into by the Company with BSE Limited.
During the period under review the Company has complied with the provisions of the ActRules Regulations guidelines standards etc.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all the directors to schedule the Board Meetings agendaand detailed notes on agenda were sent at least seven days in advance and a system existsfor seeking and obtaining further information and clarifications on the agenda itemsbefore the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members views arecaptured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the audit period there were no instances of :
(i) Public/Rights/Preferential issue of Shares/debentures/ sweat equity of the Company.
(ii) Redemption/buy-back of securities.
(iii) Major decisions taken by the members in pursuance to Section 180 of the CompaniesAct 2013.
(iv) Merger/ amalgamation/ reconstruction etc.
(v) Foreign technical collaborations.
| ||For JALAN ALKESH & ASSOCIATES |
| ||COMPANY SECRETARIES |
|Date : 12th August 2016 ||ALKESH JALAN |
|Place : Ahmedabad ||PROPRIETOR |