1. CORPORATE INFORMATION:

VMS Industries Limited is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The shares of the company are listed in the Bombay Stock Exchange Limited ('BSE').

The company is engaged in the business of ship breaking as well as trading in Ferrous and Non-Ferrous metals. Moreover, as and when any surplus funds were available, the same had been given on interest to various parties.

The company has one subsidiary M/s. VMS TMT Private Limited in which the company holds 80.13% shareholding. The subsidiary company carried out trading activities in Ferrous and Non-Ferrous Metals.

The company has also investment of 10.00% share in partnership firm M/s. Eternal Automobiles, which is engaged in the business of Automobiles dealership of sales, service and sale of spares of Honda two wheelers.

DETAILS OF SECUTIRIES & TERMS OF REPAYMENT

1 ICICI Bank Limited-Volvo Car Loan secured by Hypothecation Charge on Volvo Car.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 52,865/- including interest and last installment due in April, 2019

2 ICICI Bank Limited-lnnova Car Loan secured by Hypothecation Charge on Innova Car.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 32,800/- including interest and last installment due in October, 2020

3 Bank of Baroda-Baleno Delta Car Loan secured by Hypothecation Charge on Baleno Delta.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 18,656/- including interest and last installment due in July, 2021

4 Bank of Baroda-Maruti Swift VDI Car Loan secured by Hypothecation Charge on Maruti Swift VDI.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 14,605/- including interest and last installment due in July, 2021

5 Bank of Baroda-Creta Car Loan secured by Hypothecation Charge on Creta.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 24,593/- including interest and last installment due in October, 2023

6 Bank of Baroda-Celerio Car Loan secured by Hypothecation Charge on Celerio.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 12,586/- including interest and last installment due in October, 2020

7 Bank of Baroda-Ciaz Car Loan secured by Hypothecation Charge on Ciaz.

The Loan is repayable in 60 Equal Monthly Installments of Rs. 19,859/- including interest and last installment due in June, 2022

I NATURE OF SECURITY:

A Primary Security

Working Capital secured by way of Exclusive First charge by way of Hypothecation of entire Raw Materials, Stock-in-Process, Stores and Spares, Packing Materials, Finished Goods and Book-Debts of the Company both present and future.

B Collateral Security

1 Equitable Mortgage of Commercial Property situated at Plot No. B-3A, City Survey No. 5684, CS Ward No. 7, Street No. 202, Lower Ground Floor, Jain House, Central Point Complex, Opp. Vithalwadi GIDC, Near White Rose Hotel, Bhavnagar Rajkot Road, Bhavnagar admeasuring 141 Sq. Mtr. in the name of M/s. Eternal Automobiles.

2 Equitable Mortgage of Commercial Property situated at Plot No. B-3A, City Survey No. 5684, CS Ward No. 7, Street No. 202, Upper Ground Floor, Jain House, Central Point Complex, Opp. Vithalwadi GIDC, Near White Rose Hotel, Bhavnagar Rajkot Road, Bhavnagar admeasuring 1096.55 Sq. Mtr. in the name of M/s. Eternal Automobiles.

3 Equitable Mortgage of Commercial Property situated at Plot No. B-3A, City Survey No. 5684, CS Ward No. 7, Street No. 202, First Floor, Jain House, Central Point Complex, Opp. Vithalwadi GIDC, Near White Rose Hotel, Bhavnagar Rajkot Road, Bhavnagar admeasuring 1548 Sq. Mtr. in the name of M/s. Eternal Automobiles.

4 Equitable Mortgage of Commercial Property situated at Plot No. B-3A, City Survey No. 5684, CS Ward No. 7, Street No. 202, Second Floor, Jain House, Central Point Complex, Opp. Vithalwadi GIDC, Near White Rose Hotel, Bhavnagar Rajkot Road, Bhavnagar admeasuring 1342 Sq. Mtr. in the name ofSmt. Sangeeta Jain.

5 Equitable Mortgage of Commercial Property situated at Plot No. B-3A, City Survey No. 5684, CS Ward No. 7, Street No. 202, Third Floor, Jain House, Central Point Complex, Opp. Vithalwadi GIDC, Near White Rose Hotel, Bhavnagar Rajkot Road, Bhavnagar admeasuring 1342 Sq. Mtr. in the name of ManojKumar Jain.

6 Equitable Mortgage of Commercial Property situated at Survey No. 241p, City Survey No. 3027p, Ward-7, Office No. A/104 at Lilia Efcee, Waghawadi Road, Nr, Aksharwadi, Bhavnagar admeasuring 404.50 Sq. Ft. in the name of ManojKumarJain.

7 Equitable Mortgage of Commercial Property situated at Survey No. 241p, City Survey No. 3027p, Ward-7, Office No. A/105 at Lilia Efcee, Waghawadi Road, Nr, Aksharwadi, Bhavnagar admeasuring 404.50 Sq. Ft. in the name of ManojKumarJain.

8 Equitable Mortgage of Commercial Property situated at 808-C, Pinnacle Business Park, Prahladnagar Corporate Road, Prahladnagar, Ahmedabad admeasuring 1556 Sq. Ft. in the name of M/s. VMS Industries Limited.

9 Equitable Mortgage of Bunglow No. 29, Green Park Bunglows, Green Park Vikas Mandal, Gokuldham, Near Shanti Circle, Sanathal, Tal. Sanand, Dist.: Ahmedabad in the name of Indubala Mukeshchand Jain.

II GUARANTEE:

Outstanding balances of working capital secured by personal guarantees of the following:

1 ManojKunarJain-Director

2 Smt.SangeetaJain-Director

3 Smt.IndubalaMukeshJain

III REPAYMENT TERMS:

Working capital loans repayable on demand.

NOTE 2 : OTHER NOTES

a) Earnings Per Share (EPS):

The Basic and Diluted Earnings Per Share (EPS) has been computed on the basis of profit for the year attributable to equity holders divided by the weighted average number of shares outstanding during the year.

c) Financial Instruments and Related Disclosures:

Financial Risk Management:

The company activities are exposed various financial risks: credit risk, liquidity risk and foreign exchange fluctuation risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

I. Credit Risk:

Trade Receivables:

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss to the Company. The maximum exposure to the credit risk as at the reporting date is primarily from trade receivables. Trade receivables are unsecured and are derived from revenue earned from customers from sale of goods. Trade receivables generally are impaired after three years when recoverability is considered doubtful based on general trend. The Company considers that trade receivables stated in the financial statements are not impaired and past due for each reporting dates under review are of good credit quality subject to outcome of the litigations where the company has initiated legal proceedings for recovery. Other Financial Assets:

Credit risk relating to cash and cash equivalents is considered negligible since the counterparties are banks which are majorly owned by Government of India and are have oversight of Reserve Bank of India. The Company considers the credit quality of term deposits with banks to be good and the company reviews these banking relationships on an ongoing basis.

The Company considers all other financial assets as at the balance sheet dates to be of good credit quality.

II. Liquidity Risk:

The company's principal sources of liquidity are from Short Term Bank Borrowings, Cash and Cash Equivalents and Cash generated from operations.

The Short term liquidity requirements consist mainly of Trade Payables, Expense Payables, Employee Dues, Servicing of Interest on Short Term and Long Term Borrowings and payment of installments of vehicle loans and other payments arising during the normal course of business.

III. Foreign Exchange Rate Risk:

The Company undertakes transactions denominated in foreign currency mainly for purchase of Ships which are subject to the risk of exchange rate fluctuations. Financial assets and liabilities denominated in foreign currency are also subject to reinstatement risks. Hedging is regularly carried out to mitigate the risks of exchange rate fluctuations.

d) The company has initiated the process of obtaining confirmations from suppliers as to their status as Micro, Small or Medium Enterprise registered under the applicable category as per the provisions of the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act, 2006). In absence of the relevant information as to the status of the suppliers, the balance due to Micro, Small and Medium Enterprises and interest due to them if any as per the provision of the Micro, Small and Medium Enterprises (Development) Act, 2006 (MSMED Act, 2006) could not be disclosed or provided.

e) In the opinion of the Board of Directors, Current Assets & Loans and Advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the balance sheet. In the opinion of the Board of Directors, claims receivable against property/goods are realizable as per the terms of the agreement and/or other applicable relevant factors and have been stated in the financial statements at the value which is most probably expected to be realized.

f) The company has obtained balance confirmation from some of the parties for Sundry Creditors, Sundry Debtors and parties to whom loans/advance have been granted. All other balances of debtors and creditors and loans and advances are subject to confirmation and subsequent reconciliation, if any.

g) The previous year's figures have been reworked, regrouped and reclassified wherever necessary so as to make them comparable with those of the current year.

The Paises are rounded up to the nearest of rupee. The figures wherever shown in bracket represent deductions.