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VMS Industries Ltd.

BSE: 533427 Sector: Others
NSE: N.A. ISIN Code: INE932K01015
BSE 00:00 | 12 Aug 13.12 -1.05






NSE 05:30 | 01 Jan VMS Industries Ltd
OPEN 13.50
52-Week high 22.15
52-Week low 10.32
P/E 20.18
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 13.50
CLOSE 14.17
52-Week high 22.15
52-Week low 10.32
P/E 20.18
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

VMS Industries Ltd. (VMSINDUSTRIES) - Director Report

Company director report




Your Directors present herewith their 29th (Twentieth Nine) Annual Report ofyour Company together with the Audited Financial Statements for the Financial Year ('FY')ended March 31 2021.


The financial performance of the Company for the Year ended 31st March 2021is summarized as below:'

In Lakhs

Particulars STANDALONE
Year Ended on 31.03.2021 Year Ended on 31.03.2020
Income / Receipts from Operations 15328.04 17641.33
Other Income 445.80 491.22
Total Income 15773.84 18132.55
Earning Before Financial Charges Depreciation and Taxation (EBITDA) 487.34 368.90
Financial Charges 303.32 190.02
Depreciation 39.29 46.08
Profit Before Tax (PBT) 144.73 132.80
Less: Provision for Taxation including Deferred 38.98 12.00
Profit After Tax (PAT) 105.75 120.80
Profit Brought Forward from Previous Year 1538.31 1417.51
Profit Available for Appropriation 1644.06 1538.31
Balance Carried to Balance Sheet 1644.06 1538.31


During the year under review the revenue from operations amounted to ' 15328.04Lakhs (as against the previous year figure of ' 17641.33 Lakhs. In-spite of overallslowdown in the economy the Company was able to generate Net Profit After Tax amounted to'105.75 Lakhs as against the previous year figure of '120.80 lakhs.


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 2020-21.


The Covid-19 pandemic is the defining global health crisis of our time and is spreadingvery fast across the continents. But it is much more than a health crisis and is having anunprecedented impact on people and economies worldwide.

The Company is taking all necessary measures in terms of mitigating the impact of thechallenges being faced in the business. Though the long-term directional priorities of theCompany remain firm in light of Covid-19 and its expected impact on the operatingenvironment the key priorities of the Company would be to closely monitor supply chainconserve cash and control fixed costs.

The Ministry of Home Affairs Government of India on March 24 2020 notified the firstever nationwide lockdown inIndia to contain the outbreak of Covid-19. Towards the end ofthe quarter ended March 2020 the operations were disrupted at Ship Breaking sitefacilities of the Company.

In view of the outbreak of the pandemic the Company undertook timely and essentialmeasures to ensure the safety and well-being of all its employees at all its plantlocations various branch offices and the head office. The Company observed all thegovernment advisories and guidelines thoroughly and in good faith.


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 Board of Directors has decided to retain the entire amount of profits for FY2020-21 in the Retained Earnings.


The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of theBalance Sheet.


Company has obtained the credit rating from CARE are as follow

Facilities Amount (' In Crore) Ratings Rating Action
Long Term/Short Term Bank Facilities 110.00 CARE BBB-; Stable/CARE A3 (Triple B Minus; Outlook: Stable/ A Three) Reaffirmed
Short Term Bank Facilities 5.50 CARE A3 (A Three) Reaffirmed
Total 115.50


The Company has one subsidiaries company M/s VMS TMT PVT LTD till 30thAugust 2020 and there is no joint venture with the Company.


All related party transactions entered into during FY 2020-21 were on an arm's lengthbasis and in the ordinary course of business. No material related party transactions wereentered into during the financial year by the Company. Accordingly the disclosure ofrelated party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 isseparately attached herewith in Annexure-I.

The details of the transactions with related parties are also provided in theaccompanying Financial Statements.


Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ('Listing Regulations') the Management Discussion and Analysis ispresented in a separate section forming part of this Annual Report as Annexure - II. Asrequired under the provisions of the Listing Regulations the Audit Committee of theCompany has reviewed the Management Discussion and Analysis report of the Company for theyear ended March 31 2021.


The Company has adopted a Whistle blower Policy and Vigil Mechanism to provide a formalmechanism to the Directors employees and other external stakeholders to report theirconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct. The Policy provides for adequate safeguards againstvictimisation of employees who avail of the mechanism and also provides for direct accessto the Chairperson of the Audit Committee.

No personnel of the Company has been denied access to the Audit Committee. The Whistleblower Policy and Vigil Mechanism ensures that strict confidentiality is maintained insuch cases and no unfair treatment is meted out to a Whistle blower. The Company as aPolicy condemns any kind of discrimination harassment victimisation or any other unfairemployment practice being adopted against Whistle blowers.

The Policy is also posted on the website of the Company at:


The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. There was no case of sexual harassment reported during the yearunder review.


No significant and material orders were passed by the regulators or the courts ortribunals impacting the going concern status and Company's operations in future.


Internal financial control systems of the Company are commensurate with its size andthe nature of its operations. These have been designed to provide reasonable assurancewith regard to recording and providing reliable financial and operational informationcomplying with applicable accounting standards and relevant statutes safeguarding assetsfrom unauthorised use executing transactions with proper authorisation and ensuringcompliance of corporate policies.

The Audit Committee deliberated with the members of the management considered thesystems as laid down and met the internal auditors and statutory auditors to ascertaintheir views on the internal financial control systems. The Audit Committee satisfieditself as to the adequacy and effectiveness of the internal financial control system aslaid down and kept the Board of Directors informed. However the Company recognises thatno matter how the internal control framework is it has inherent limitations andaccordingly periodic audits and reviews ensure that such systems are updated on regularintervals.


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 for the financial year ended 31st March 2021are given in Annexure - III attached hereto and forming part of this report.


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) Rules2014 the extract of the annual return in form MGT 9 for the Financial Year ended on 31stMarch 2021 is available at Company's website



In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Mr. Ajit Kumar Jain (DIN: 00114766) Whole time Director of theCompany retires by rotation at the ensuing AGM and being eligible has offered himselffor re-appointment. None of the Directors of the Company are disqualified under section164 of the Companies Act 2013 from being appointed as a Director of any public Company.The Board recommends her reappointment for your approval.

Independent Directors

In terms of Section 149 of the Act Mr. Bakul Mehta Mr. Pranav Parikh and Mr. HiteshLoonia are the Independent Directors of the Company. The Company has receiveddeclarations from all the Independent Directors confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Act and regulation 16(1) (b) of theListing Regulations and are independent from the management. The Independent Director ofthe Company holds office for the term of five years. In terms of the provision ofCompanies Act 2013 the independent Directors are not liable to retire by rotation.

The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the fields of Finance and taxationtechnology digitalisation human resources strategy auditing tax corporate governanceetc. and that they hold highest standards of integrity.

Brief resumes of the above Directors nature of his expertise in specific functionalareas and names of the Public Limited Companies in which she hold Directorships andMemberships / Chairmanships of Committees of the Board and their shareholding in theCompany as stipulated under LODR 2015 of the Listing Agreement are given in the Reporton Corporate Governance forming part of the Annual Report.

Key Managerial Personnel ('KMP')

In terms of the provisions of Section 2(51) and Section 203 of the Act the followingare the KMP of the Company:

• Mr. Manojkumar Jain Managing Director (MD)

• Mrs. Sangeeta Jain Whole Time Director (WTD)

• Mr. Hemal Patel Company Secretary (CS)

• Late Shri Arun Barot Chief Financial Officer (CFO) till 12thDecember 2020

During the financial year 2020-21 Late Shri Arun Barot Chief Financial Officer (CFO)passed away. The Board places on record its appreciation for their invaluable contributionand guidance during his tenure as Chief Financial officer.

Board Evaluation

The Board has carried out the annual evaluation of its own performance and that of itsCommittees and individual Directors for the year pursuant to the provisions of the Act andthe corporate governance requirements prescribed under the Listing Regulations.

The performance of the Board and individual Directors was evaluated by the Board afterseeking inputs from all the Directors. The criteria for performance evaluation of theBoard was based on the Guidance Note issued by SEBI on Board Evaluation which includedaspects such as Board composition and structure effectiveness of Board processescontribution in the long term strategic planning etc. The performance of the Committeeswas evaluated by the Board after seeking inputs from the Committee Members. The criteriafor performance evaluation of the Committees was based on the Guidance Note issued by SEBIon Board Evaluation which included aspects such as structure and composition ofcommittees effectiveness of committee meetings etc.


Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external consultant(s) including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bythe Management and the relevant Board Committees including the Audit Committee the Boardis of the opinion that the Company's internal financial controls were adequate andeffective during FY 2020-21.

Accordingly pursuant to Section 134(5) of the Act the Board of Directors to the bestof their knowledge and ability confirm that for the year ended March 31 2021:

(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.


Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) ofthe Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 ('Rules') are enclosed as Annexure-IV to this report.

AUDITORS Statutory Auditor

The auditors M/s. S N SHAH & Associates. Chartered Accountants offers themselvesfor reappointment 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.

Further the report of the Statutory Auditors along with notes to Schedules is a partof the Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

Cost Auditors

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules2014 the Company is required to prepare maintain as well as have the audit of its costrecords conducted by a Cost Accountant and accordingly it has made and maintained suchcost accounts and records. The Board on the recommendation of the Audit Committee hasappointed M/s. A.G. Tulsian & Co. Cost Accountants (Firm Registration No. 100629) asthe Cost Auditors of the Company for FY 2020-21 under Section 148 and all other applicableprovisions of the Act.

M/s. A.G. Tulsian & Co. have confirmed that they are free from disqualificationspecified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) ofthe Act and that the appointment meets the requirements of Section 141(3)(g) of the Act.They have further confirmed their independent status and an arm's length relationship withthe Company.

The remuneration payable to the Cost Auditors is required to be placed before theMembers in a General Meeting for their ratification. Accordingly a resolution for seekingMembers' ratification for the remuneration payable to M/s. A.G. Tulsian & Co. isincluded at Item No. 4 of the Notice convening the AGM.

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under M/s. K. Jatin & Co.Practicing Company Secretaries have been appointed as Secretarial Auditors of the Companyto carry out the secretarial audit for FY 2021-22. The report of the Secretarial Auditorsfor FY 2020-21 is enclosed as Annexure V to this Report.

There has been no qualification reservation adverse remark or disclaimer given by theSecretarial Auditor in their Report.


The Secretarial and Legal functions of the Company ensure maintenance of goodgovernance within the organisation. They assist the business in functioning smoothly bybeing compliant at all times and providing strategic business partnership in the areasincluding legislative expertise corporate restructuring regulatory changes andgovernance.

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 LODR Regulations 2015 a detailed report on Corporate Governance forms partof this Report as Annexure- VI. The Auditors' Certificate on compliance with CorporateGovernance requirements by the Company is attached.


The properties of the Company stand adequately insured against risk of fire strikeriots earthquake explosion and malicious damage.


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 Company's raw material is oldship which is purchased from the international market on credit ranging up to 180 days to360 days. Though the Company is hedging or covering the foreign exchange requirement theCompany is regularly monitoring the foreign exchange movement and suitable remedialmeasures are taken as and when felt necessary. Though the Company is employing suchmeasures the Company is still exposed to the risk of any foreign exchange fluctuation.

Likewise the Company's finished products are mainly re-rollable scrap generated fromship breaking and the price of the same is linked to the market rate for iron and steel.Any ups and downs in the price of the iron and steel will affect the profitability of theCompany. The Company keeps a watch on the movement of scrap prices and accordingly decidesits 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:


Pursuant to section 134 (3) (n) of the Companies Act 2013 & Listing Obligation& Disclosure Requirements Regulations 2015 the Company has framed Risk ManagementPolicy. The details of the policy are as updated on website of the Company risk management includes identifying types of risks and its assessment risk handlingand monitoring and reporting. At present the Company has not identified any element ofrisk which may threaten the existence of the Company.


The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.


The Company had 11 (Eleven) 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.


The Audit Committee consists of the following members:

a) Shri. Bakulbhai Mehta - Chairman
b) Shri. Ajitkumar Jain - Member
c) ShriPranav 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.


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 year2021-22.


The ISIN for the Equity shares is INE932K01015. As on 31st March 2021 total16473255 equity shares of the Company have been Dematerialized. Members of the Companyare requested to dematerialize their shares.


The Directors have devised proper systems and processes for complying with therequirements of applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems were adequate and operating effectively.


Statements in the Directors Report and the Management discussion & Analysisdescribing the Company's objectives expectations or predictions may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's 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.

On behalf of the Board of Directors
Manojkumar Jain Sangeeta Jain
Date: 31st August 2021 Managing Director Whole Time Director
Place: Ahmedabad (DIN: 02190018) (DIN: 00125273)