DIRECTORS' REPORT: DEAR FELLOW SHAREHOLDERS, Your Directors are delighted to present the 30th Annual Report along with the audited accounts for the financial year ended March 31, 2015. PERFORMANCE SUMMARY AND STATE OF AFFAIRS During the FY ended 31st March, 2015, we registered a phenomenal growth in terms of topline as well as the bottomline. Revenues from Operations registered a growth of more than 100% whereas in terms of profitability the growth was more than 200% over the previous year's figures. Income on account of engineering & other services stood at Rs.54,201,638/- out of which Rs.58,08,100/- was Export Income. Your management is concentrating more on service sector which will enable it earn higher profit margins and better return on capital employed. We, during the year goneby executed a niche project, i.e, Implementation of Integrated Data Center at ANURAG. The successful completion of project has emboldened the management to make strides in new areas where opportunities in terms of growth are relatively more and are even better in terms of profitability. No amount is being proposed to be transferred to the Reserves for the current Financial Year. Apart from the below-mentioned, no material changes and commitments have occurred after the close of the year till the date of this Report, which may have affected the financial position of the Company. Issue and allotment of securities As you are aware, your approval was sought for issue of 12,20,000 equity shares and 4,50,000 warrants convertible into equity shares, at a issue price of Rs.30 per share / warrant, on preferential basis. The said proposal was approved by way of Postal Ballot process. Pursuant to the said approval of members, the Board has issued and allotted the said securities. During the FY ended 31st March, 2015, the Company allotted 12,00,000 equity shares of Rs. 10/- each on preferential basis. Further, the Company has allotted 12,20,000 equity shares of Rs. 10/- each on preferential basis, during the period commencing on 1st April, 2015 and ending till date. As on date, the Authorised Capital stands enhanced at Rs 11 Crores and paid up Capital stands enhanced at Rs 9.458 Crores. PREFERENTIAL ISSUE OF SECURITIES As you are aware and as discussed above, your approval was sought for issue of 12,20,000 equity shares and 4,50,000 warrants convertible into equity shares on preferential basis by way of Postal Ballot process. We are apologetic to state that in the Notice of said Postal Ballot, Dated 29th May, 2015, at para iv under Item No.8 & 9 in the Explanatory Statement, the phrase Closing Price appeared instead of volume weighted average price. We do confirm that the issue price of Rs.30 per share was based on volume weighted average price,calculated in absolute compliance with the Regulation 76 of SEBI (ICDR) Regulations, 2009 as amended from time to time. FUTURE OPERATIONS India has become one of the most favored destinations for IT and ITES activities. The IT industry has not only transformed India's image on the global platform, but has also fuelled economic growth by energising the higher education sector especially in engineering and computer science. Increasing internet penetration, affordability of personal computers and consumer hunger for new technologies have been driving tech sector growth for years. To improve internal efficiency software services are being increasingly demanded by all companies which is boosting sales of Computer Hardware and Software. India has emerged as the fastest growing market for all major OEM's globally. Indian Government is also increasing the use of software services and with the new digital India initiative being launched by the Indian government, the domestic market for software services looks forward to a very bright future. VAMA is offering total IT infrastructure solution services. A large number of companies are opting for total IT infrastructure outsourcing as a solution to accomplish productivity and least downtime of their IT infrastructure and also reduce total costs at the same time. Being a single point of contact for all IT requirements; VAMA has edge over the competition. VAMA delivers value through several outcome-based business models as well as best practices and tools that can transform customer's infrastructure and architecture to keep pace with changing business demands. VAMA has been working with Indian Defence labs from the last 12 years and also has maintaining offshore engineering services delivery center for North American customers for over 10 years. With this rich experience VAMA can offer innovative solutions and best practices across different domains to the customers. NATURE OF BUSINESS There was no change in the nature of Business of your Company during the FY ended 31st March, 2015. DIVIDEND In view of issue and allotment of 12,20,000 shares (on preferential basis), which took place subsequent to the close of Financial Year, 2014-15, your Board of Directors recommends a final dividend of 2% (Re. 0.20 per share) on the enhanced capital base of Rs.9,45,80,000 comprising 94,58,000 fully paid Equity Shares of Rs. 10/- each for the year ended March 31, 2015 [Previous year Rs. 0.10 per Equity Share of Rs. 10/- each] The Dividend if approved by the shareholders at the ensuing Annual General Meeting will be paid in compliance with applicable Regulations. SUBSIDIARY COMPANIES We do not have any subsidiary or associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively. COMPOSITION OF BOARD COMMITTEES We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013 and the Listing agreement. A detailed note on the Board and its committees is provided under the Corporate Governance Report section in this Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONS Mr. V. Rajam Raju was reappointed to the office of Director in the previous AGM held on 25th September, 2014. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Ms. R. Rama Sravanthi, was appointed as Additional Director of the Company with effect from 01st March, 2015. Subsequently Ms. R. Rama Sravanthi was appointed as Director of the company, pursuant to the provisions of Section 160 of the Companies Act, 2013, by the members through Postal Ballot process. Further, the following reappointments were made by the Board and subsequently approved through Postal Ballot: • Mr. V. A. Rama Raju was reappointed as the Managing Director of the Company for a period not exceeding 3 (Three) years, with effect from 1st August, 2015, at a remuneration of Rs.1.65 lacs per month. • Mr. V. Rajam Raju was reappointed as the Executive Director of the Company for a period not exceeding 3 (Three) years, with effect from 1st August, 2015 at a remuneration of Rs.1.5 lacs per month. Further, during the Financial Year, Sri. G. Siva was appointed as the Chief Financial Officer of the Company. Pursuant to the provisions of Section 152 of the Companies Act, 2013, Sri.V. Rajam Raju retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. We have received declaration from all our Independent Directors confirming that they meet the criteria of independence as prescribed under the Act. BOARD EVALUATION Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of our independent directors is due for re-appointment. POLICY ON DIRECTORS' APPOINTMENT, REMUNERATION ETC., The following policies are attached herewith and marked as Annexure -VI and VII respectively: a. Policy for selection of Directors and determining Directors Independence; and evaluation mechanism. b. Remuneration Policy for Directors, Key managerial Personnel and other employees. MEETINGS OF THE BOARD OF DIRECTORS The Board duly met 6 times during the Financial Year 2014-15. Besides, one resolution was passed by the Board of Directors by way of circulation under Section 175 of the Companies Act, 2013. The intervening gap between any two consecutive two Board Meetings was within the period prescribed by the provisions of the Companies Act, 2013 and Listing Agrement. For further details on Board Meetings, you may please refer the Corporate Governance Report. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY We have adequate system of internal financial controls with reference to financial statements, including but not limited to safeguard and protection of assets from loss, their unauthorized use or disposition. All the transactions were properly authorized, recorded and reported to the Management. We are following all the applicable Accounting Standards for properly maintaining the books of account and reporting in the financial statements. Your Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. INTERNAL AUDITORS: The Board of Directors based on the recommendation of the Audit Committee have re-appointed V.N.S. Srinivasa Rao, Chartered Accountants, Hyderabad, as the Internal Auditors of your company. The Internal Auditors are submitting their reports on quarterly basis. STATUTORY AUDITORS: As the members are aware, at the Annual General Meeting (AGM) held on 25.09.2014 M/s GV & Co., Chartered Accountants, Hyderabad, were appointed as our Statutory Auditors for a period of 3 years, to hold office till the conclusion of the 32nd AGM. In terms of the provisions of Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every AGM. Accordingly, the appointment of M/s GV & Co., Chartered Accountants, as the Statutory Auditors of the Company, is placed for your ratification. In this regard, we have received consent letter and certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The statutory auditors' report does not contain any qualifications, reservations or adverse remarks. SECRETARIAL AUDITORS' REPORT: Pursuant to the provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 we have obtained a Secretarial Audit report from Mrs. K. Malleshwari, (M.No 37210 & C.P No 14686), Company Secretary in whole-time practice. The copy of said Report is attached herewith and marked as Annexure -I. TRANSACTIONS WITH RELATED PARTIES We have not entered into any related parties transactions which are not on arms length basis or not in the ordinary course of business. That is to say, all the related party transactions were in the ordinary course of business and at arms length. The Audit Committee has approved all the related party transactions entered during the FY 2014-15. There were no material transactions with the Related Parties during the year. Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions, as approved and adopted by the Board of Directors may be accessed on our Website at <http://www.vamaind.com/Policies/> Related_Party_Transactions_Policy.pdf Your kind attention is drawn to Note 30 to the Financial statement which sets out the Related Party disclosures. QUALITY INITIATIVES We continue to maintain successfully the Quality Management Systems to the requirements ISO 9001:2008 Standards. FIXED DEPOSITS We have neither accepted nor repaid any deposits during the FY ended 31st Mach, 2015. Further, there were no outstanding deposits as at the beginning of the FY or at any time during the FY 2015. Hence, there are no details to be provided pursuant to Rule 8 (5) (v) & (vi) of Companies (Accounts) Rules, 2014. ANNUAL RETURN In accordance with Section 134 (3) (a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed Format i.e. MGT -9 is appended as Annexure -II to this Report. VIGIL MECHANISM / WHISTLE BLOWER POLICY We have set up a vigil mechanism, which also incorporates a Whistle Blower Policy for our Directors and employees to report genuine concerns, including but not limited to unethical behaviour, actual or suspected fraud or violation of the Code of Conduct in terms of Section 177 (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. The details of the vigil mechanism are provided in the Corporate Governance Report and are set out in Annexure VIII to this Report. The Vigil Mechanism And Whistle Blower Policy may be accessed on our Website at <http://> www.vamaind.com/Policies/Vigil_Mechanism_Whistle_Blower_Policy.pdf MANAGEMENT DISCUSSION AND ANALYSIS In accordance with the provisions of Clause 49 of the Listing Agreement, a Report on the Management Discussion and Analysis is set out in Annexure - III to this Report. CORPORATE GOVERNANCE: We firmly understand and believe the importance of Corporate Governance. We always aim for the growth by adhering to the National and International Corporate Governance Standards. Our philosophy on corporate governance ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders comprising regulators, employees, customers, vendors, investors and the society at large. The Report on Corporate Governance and a Certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under clause 49 of the Listing Agreement with stock exchange is attached herewith and forms part of this Annual Report. E- DISPATCH OF ANNUAL REPORTS While adhering to the Green Initiative measures, as suggested by the MCA, we have resolved to dispatch the Annual Reports electronically to such shareholders who have registered and updated their e-mail IDs., with the Registrar & Transfer Agents of the Company. Annual Report, in physical form shall be dispatched to other shareholders. LISTING & TRADING Our Equity Shares are listed on BSE Limited, Mumbai. The listing fees for the financial year 2015-16 has been duly paid. You may further note that the listing/ trading was never suspended at any time during the financial year 2014-15. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of our employees, is attached herewith and marked as Annexure-V. We do hereby affirm that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. Further, we donot have any employee whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. LOANS, GUARANTEES OR INVESTMENTS We have not given any loan or made investment or given guarantee or provided security as envisaged under Section 186 of the Act. DEMATRIALISATION OF SHARES 99.67% of the total paid up equity shares of your Company are in dematerialized form as on 31st March, 2015. DIRECTORS RESPONSIBILITY STATEMENT As required under Section 134(5) of the Companies Act, 2013, the Directors confirm that: i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that no material departures are made from the same ; ii. The Director selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the company at the end of the Financial year and of the profits of the company for the period; iii. Proper and sufficient care has been taken 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; iv. The annual accounts have been prepared on a going concern basis. v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE SOCIAL RESPONSIBILITY Since your Company does not fall within any of the parameters specified under the provisions of Section 135 of the Companies Act, 2013 read with Rules made thereunder, reporting pursuant to Section 134(3) (o) is Not Applicable. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The Particulars as prescribed pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are provided at Annexure - IVto this Report. GENERAL There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENTS AND APPRECIATIONS Your Directors take this opportunity to thank the shareholders, Customers, Suppliers, Bankers, Business Partners/ Associates, Financial Institutions and Central and State Government offices, last but not the least the employees for their consistent support and encouragement. For and on behalf of the Board Sd/- V. A. Rama Raju Chairman and Managing Director Date : 13th August, 2015 Place : Hyderabad |