VMS Trading Company ("VMS" or "the Company") was founded in 2010 as a sole proprietorship. The registered office is located at F-165, S.I.T.E Area, near Labour Square, Karachi West.

In the 1970s, Mr. Kundan Mal, father of Mr. Kheem Chand, embarked on his entrepreneurial journey by establishing a rice mill. However, the mill was later nationalized during Bhutto's administration. Today, Mr. Kheem Chand proudly continues his father's legacy, leading VMS Trading Company. The name "VMS" is a heartfelt tribute to his three sons—Vanoth, Mahish, and Sahil—using the initials of their names to symbolize their importance in the family and the business

VMS Trading Company primarily focuses on the processing and trading of rice. The company operates two stateof-the-art processing units, located in Port Qasim and S.I.T.E Karachi. Together, these units provide a combined processing capacity of 35 metric tons per hour, translating to an impressive annual capacity of 262,080 metric tons as of FY24.

VMS Trading Company is solely owned by Mr. Kheem Chand, showcasing his vision and entrepreneurial spirit. Under his leadership, the company has grown from a modest beginning to become a significant player in the rice processing and trading sector. His dedication to quality, innovation, and customer satisfaction has helped establish VMS as a trusted name in both local and international markets. Mr. Kheem Chand's hands-on approach ensures that the company's operations reflect the values of integrity and excellence that have been the foundation of VMS since its inception.

The ownership structure of VMS Trading Company remains stable, with no significant changes anticipated in the near future. While a formal succession plan has not yet been established, the second generation is progressively being integrated into the family business. This gradual involvement ensures a seamless transition of knowledge and leadership, securing the long-term sustainability and growth of the company.

The owner of VMS Trading Company brings extensive experience and deep insights into the rice sector, largely attributable to a rich family heritage in the industry. This legacy provides a profound understanding of the market's intricacies and dynamics, allowing for informed decision-making and strategic leadership. This depth of knowledge not only enhances the company's competitive edge but also positions it for continued growth and success in the highly specialized rice industry.

The sponsors possess substantial net worth, ensuring they have the financial capacity to support the business during challenging times. This financial resilience provides a critical safety net, allowing the company to navigate periods of uncertainty while maintaining stability and operational continuity.

As a sole proprietorship, the business lacks a formal governance framework typically found in larger corporate structures. Instead, the oversight function, which would conventionally be handled by a board of directors, is effectively managed by the sponsors themselves. Each sponsor takes direct responsibility for overseeing their respective departments, ensuring that operational standards are met, decisions are streamlined, and the company's strategic goals are consistently pursued. This hands-on approach allows for agile decision-making while ensuring each area of the business receives dedicated attention.

Mr. Kheem Chand leads the business with over two decades of extensive industry experience. His deep expertise and strategic leadership have been instrumental in driving the company's growth and establishing it as a trusted name in the rice sector.

At present, the company operates without a formal board structure or any established committees. This absence of formal governance bodies reflects the company's streamlined decision-making approach, characteristic of its sole proprietorship model.

Sarwars Co. Chartered Accountants have recently been appointed as the company's external auditors. The firm holds a Quality Control Review (QCR) rating, though it is not listed on the State Bank of Pakistan's panel of auditors. For the fiscal year ending June 2024, the auditors provided an unqualified opinion on the company's financial statements, indicating their confidence in the accuracy and reliability of the financial reporting.

VMS Trading Company maintains a lean organizational structure, effectively divided into key functional departments to optimize efficiency. Currently, the company is organized into five main functions: 1) Export Sales, 2) Commercial Management, 3) Production, 4) Finance, and 5) Administration. This streamlined structure enables focused expertise in each area, fostering operational efficiency and ensuring that all critical aspects of the business are well-managed.

Mr. Kheem Chand, serving as both the CEO and Chairman of the Board, brings over 22 years of industry experience to VMS Trading Company. Prior to formally establishing VMS, he was deeply involved in the family’s rice processing and trading business, gaining valuable insights and expertise. His extensive background in the rice sector has played a pivotal role in shaping VMS into a respected and thriving entity within the industry.

Considering the size and scope of the company's operations, the management structure shows room for improvement in terms of effectiveness, largely due to the absence of formal management committees. This lack of structured governance limits the potential for streamlined oversight and strategic alignment. Currently, management convenes on an as-needed basis to ensure operational efficiency, with senior management holding the primary control over day-to-day activities. Establishing formal committees could enhance decision-making processes, provide greater clarity of roles, and ultimately contribute to more effective overall governance.

The company has implemented ERP software to manage various aspects of its operations, including safety management, financial management, and inventory control. This integrated system not only enhances operational efficiency but also ensures consistency across processes. Additionally, the ERP enables the generation of standardized reports tailored to specific requirements, providing valuable insights and supporting informed decision-making throughout the organization.

The company has established an internal audit function to ensure the effective implementation of policies and procedures. Additionally, an internal Management Information System (MIS) is in place to facilitate reporting to senior management. Reports are generated on a weekly, monthly, quarterly, and annual basis, providing comprehensive oversight and enabling informed decision-making based on timely and accurate data as required by management.

Rice is one of the most important staple foods in Pakistan, second only to wheat, and also serves as a significant cash crop. Approximately 52% of Pakistan’s total rice production takes place in Punjab, around 38% in Sindh, and the remaining 8% in Baluchistan. Globally, Pakistan ranks as the 11th largest rice producer, with roughly 50% of its production comprising Basmati rice, while the other 50% consists of various coarse varieties. For FY24, rice production is estimated at approximately 9.0mln metric tons, driven by favorable climatic conditions and increased water availability for irrigation. Pakistani rice exporters generated a record-breaking $3.93 billion in foreign exchange during FY24 by exporting about 6mln tons of rice. This achievement was largely boosted by India's temporary ban on rice exports due to a reduced crop yield, which provided Pakistan with a unique opportunity to enhance its competitive position in the global market, where India remains a major rival.

Since its establishment, VMS Trading Company has prioritized rice exports, with a substantial share of its revenue generated from African markets, where non-Basmati rice (IRRI 6) is in high demand. The company is resolutely committed to enhancing its global presence by expanding its footprint in international markets and cultivating long-term partnerships with clients worldwide. This strategic emphasis on exports not only positions VMS as a leading supplier of quality rice but also enables the company to capitalize on the growing global demand for premium rice varieties.

During 9MFY25, the Company recorded revenue of ~PKR 8,560mln, of which ~PKR 6,346mln came from export sales and ~PKR 2,214mln from local sales, reflecting a YoY growth of ~22% compared to FY24(~PKR 9,339mln). Export contribution remained significant at ~74% in 9MFY25 (FY24: ~74%; FY23: ~80%).

The Company’s gross margin stood at ~10.2% in 9MFY25, down from ~13.1% in FY24 and ~15.3% in FY23. Operating margin clocked in at ~8.5% (FY24: ~11.3%; FY23: ~13.5%), while net profit margin was ~5.3% (FY24: ~5.4%; FY23: ~7.7%).

VMS Trading Company’s management is focused on establishing a sustainable presence in international markets by investing in advanced technology and machinery to enhance the value of the rice supply chain. This forwardthinking approach is expected to drive increased efficiency and product quality. As a result, the company anticipates continued growth in both demand and sales, positioning itself for long-term success in the global market.

In 9MFY25, inventory days stood at ~67 days, lower than FY24 (~78 days) and FY23 (~107 days). Trade receivable days increased to ~53 days (FY24: ~43 days; FY23: ~76 days). Gross working capital cycle was ~120 days (FY24: ~121 days; FY23: ~183 days). Trade payable days improved to ~7 days (FY24: ~2 days; FY23: ~1 day), bringing net working capital days to ~113 (FY24: ~119; FY23: ~182).

The Company’s FCFO stood at ~PKR 643mln in 9MFY25, lower than FY24 (~PKR 957mln) and FY23 (~PKR 812mln). Interest coverage ratio improved to ~4.7x (FY24: ~2.6x; FY23: ~2.7x). Debt coverage ratio remained steady at ~4.0x (FY24: ~2.6x; FY23: ~2.6x).

In 9MFY25, total borrowings to capital stood at ~35.8%, slightly higher than FY24 (~32.2%) and significantly lower than FY23 (~51%). The Company’s borrowings consist entirely of short-term debt used to finance working capital needs.