VISHNU CHEMICALS LIMITED
Your Directors are happy to present their Twenty Third Annual Report on the businessand operations of the Company and the financial statements for the year ended 31st March2016.
FINANCIAL RESULTS (Rs. in lakhs)
|Particulars ||2015-16 ||2014-15 |
|Gross Income ||50000.86 ||45016.60 |
|Profit before Interest Depreciation & Tax ||8514.59 ||7787.29 |
|Less: Depreciation ||1174.90 ||1221.81 |
|Less: Interest ||3279.18 ||3147.71 |
|Profit for the year before taxes ||4060.51 ||3417.77 |
|Less: Provision for Taxes ||1456.93 ||1227.06 |
|Profit after Taxes ||2603.58 ||2190.71 |
|Add: Surplus brought forward from Previous Year ||7395.97 ||5726.43 |
|Surplus Carried forward to Balance Sheet ||9999.55 ||7917.14 |
|Less: Depreciation on life expired assets ||- ||13.73 |
|Less: Capitalization of Interest on Fixed Assets during construction period adjusted ||215.97 ||- |
|Less: Appropriations ||294.46 ||507.44 |
|Balance carried forward to next year ||9489.12 ||7395.97 |
During the year the company has achieved a turnover of Rs. S00.00 crores which is Rs.S0.00 crores more than the previous year turnover. Company has made a profit of Rs. 26.03Crores against profit of Rs. 21.91 Crores in the previous year which amounts to 18.86%increase over the previous year.
Inspite of good performance the companys growth was not as much expected becauseof foreign Exchange advantages to our world competitors. The company is facing competitionfrom countries like Russia Kazakistan Turkey and South Africa and their currencies aredevalued after fall in oil prices as they are export oriented countries. Whereas we inIndia being net import county our Government is not encouraging the rupee devaluation. Inview of this we are affected in domestic market by cheap imports and also in export marketas their realization in local currency is more even in terms of dollar it is one and thesame. From the table below we can see the difference in currency devaluation.
|Currency ||As on FebIS ||As on Mar16 ||Variation ||Percentage |
|USD/INR ||62.206 ||66.142 ||3.936 ||6.327 |
|USD/CNY ||6.157 ||6.464 ||0.307 ||4.986 |
|USD/RAND ||11.647 ||15.035 ||3.388 ||29.089 |
|USD/LIRA ||2.460 ||2.837 ||0.377 ||15.325 |
|USD/TENGE ||182.844 ||341.531 ||158.687 ||86.788 |
|ISD/RUB ||61.975 ||68.060 ||6.085 ||9.818 |
|USD/EURO ||0.879 ||0.883 ||0.004 ||0.455 |
In spite of the above gap your Companys growth could sustain because of strongfundamentals and efforts put in by the Management.
However during this year the Company is completing the projects of WSS Power PlantChromic Acid and other alternative process technologies to face such challengeseffectively and to maintain growth rate.
During the year the Company has acquired Solvay Vishnu Barium Pvt.Ltd. a company whichis manufacturing barium Carbonate and its derivatives. In view of synergy in business anddue to inherent fiscal benefits the company was made a 100% subsidiary of Vishnu ChemicalsLimited.
Though business was not bad the unit was not in good operating condition as theearlier management which was based abroad didnt give due attention in terms of timeand money. Hence it took us one year to stream line the operations. At present the companyis positioned as International Barium products Supplier as well as technically updatedwith latest standards. During the year in view of above said reasons the Company incurredlosses and we are confident to turn around this year.
In spite of challenges on Foreign exchange variation the Company is going ahead incompleting all the projects on hand to reach the landmark sales by next year. TheManagement is of view to merge the Barium unit into parent company for strategic andfiscal reasons.
|SI. No. ||Name & Address of the Subsidiary ||CIN/GLN ||HoIding/Subsidiary/ Associate Company ||% of shares heId ||AppIicabIe section |
|1. ||Vishnu Hong Kong Limited 23/F B07 Hover Industrial Building No. 26-38 Kwai Cheong Road Kwai Chung N.T. Hong Kong ||No. 2164S36 ||Wholly Owned Subsidiary ||100% ||2(87)(ii) |
|2. ||Vishnu Barium Private Limited (Formerly Solvay Vishnu Barium Private Limited) 6-3-662/B/4 3rd Floor Sri Sai Nilayam Sangeetnagar Colony Somajiguda Hyderabad - S00082 ||U24120TG2001PTC 036807 ||Wholly Owned Subsidiary ||100% ||2(87)(ii) |
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Smt. Ch. Manjula Director of the Company retires by rotation and being eligible offersherself for re-appointment. The Board of Directors of the Company has appointed Dr. S.Chandrasekhar (DIN: 00481481) as an Additional Director at their meeting held on13.08.2015 and his office as Additional Director will be ceased at the ensuing AnnualGeneral Meeting. The proposal for appointment of Dr. S.Chandrasekhar as IndependentDirector is being placed before the shareholders for approval the relevant details areforming part of the AGM notice.
The Company has appointed Ms. Shruti Gupta Associate Member (A31313) of The Instituteof Company Secretaries of India New Delhi as the full time Company Secretary andCompliance Officer and also designated as Key Managerial Personnel of the Company witheffect from 16.03.2016 and the same was approved by the Board at their meeting held on16.03.2016 in place of Sri L. Narasimha Rao.
DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT IF ANY
In compliance of sub-section (7) of Section 149 of the Companies Act 2013 all theIndependent Directors of the Company have submitted their declarations stating that theymeet the criteria of independence as provided in subsection (6) of Section 149 of theabove said Act and Clause 49 of the Listing Agreement with the Stock Exchanges.
CORPORATE GOVERNANCE -LISTING REGULATIONS
A separate Section on Corporate governance with a detailed compliance report thereon isannexed to the Annual Report. The Practicing Company Secretarys Certificate withrespect to compliance with the provisions of Corporate Governance as required byRegulations 34 and other Regulations of SEBI (Listing Obligations And DisclosureRequirements) Regulations 2015 is also annexed.
During the year under review the Board of Directors had declared and paid an interimdividend of Re.1.00 per equity share of Rs.10/- each (10%) for the financial year 2015-16.The Interim dividend declared above is treated as final Dividend for the year 2015-16.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 12S of the Companies Act 2013 an amount of Rs. 24477S/- beingunclaimed dividend pertaining to the financial year 2007-08 was transferred to theInvestor Education and Protection fund (IEPF) on 23 December 2015.
Your Company has not accepted any deposits covered by the provisions of Section 73 ofthe Companies Act 2013 and the Rules framed there under.
Your Directors are happy to report that the Industrial Relations have been extremelycordial at all levels throughout the year. Your Directors record their appreciation forsincere efforts support and co-operation of all employees being extended from time totime to accelerate the growth of the Company.
The statutory Auditors M/s C K S Associates Chartered Accountants (Firm registrationNo. 007390S) have expressed their unwillingness who pre-occupied with other audits forre-appointment as the auditors of the Company and so it is proposed to appoint M/s.Jampani & Associates Chartered Accountants (Firm Registration No. 016S81S) in theirplace for a term of five years from the conclusion of this Annual General Meeting till theconclusion of the Annual General Meeting for the year 2021 subject to ratification by theMembers at each Annual General Meeting. Written confirmation has been received from theproposed Auditors regarding their eligibility and consent to accept the assignment asStatutory Auditors of the company if appointed.
The Auditors have mentioned in their report annexed as point 7.1 that there isRs.267.92 Lakhs of entry Tax outstanding as at the last day of the financial year underaudit for a period of more than six months from the date it became payable.
The company has filed Special Leave Petition (Civil) before the Honble SupremeCourt of India along with other assesses in this regard and will act based on the decisionof the Honble Supreme Court.
Pursuant to Section 148 of the Companies Act 2013 the Central Government hasprescribed Cost Audit of the company. Based on the recommendations of the Audit CommitteeM/s. N.V.S Kapardhi (Firm Regn. No. 100231) Cost Accountants Hyderabad were re-appointedas Cost Auditors of the Company for the year 2016-17.
The Paid Up Equity and Preference Share Capital as on March 312016 was Rs.S9.44 Crore.During the year under review the Company has not issued any shares with differentialvoting rights nor granted stock options nor sweat equity nor made any provision of moneyfor purchase of or subscription for shares in the Company if the purchase of or thesubscription for the shares by trustees is for the shares to be held by or for thebenefit of the employees of the company as provided in the rules of Companies (ShareCapital and Debentures) Rules 2014. As on March 312016 the Directors of the Companyhold equity shares and 7% Redeemable Preference shares of the Company as below:
|SI. || || |
Details of shares held and Percentage
|No. ||Name of the Director ||Equity Shares in Nos. ||% ||% Redeemable Preference shares in Nos. ||% |
|1 ||Sri Ch. Krishna Murthy ||6219790 ||52.07 ||44100000 ||92.84 |
|2 ||Smt. Ch. Manjula ||1614048 ||13.51 ||3250000 ||6.84 |
|3 ||Sri Ch. Siddartha ||1125668 ||9.42 ||150000 ||0.32 |
| ||Total ||8959506 ||75.00 ||47500000 ||100.00 |
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Five meetings of the Board of Directors were held during the period under review andfurther details are set out in the Corporate Governance Report forming part of theDirectors Report.
Four meetings of the Audit Committee of Directors were held during the period underreview and further details are set out in the Corporate Governance Report forming part ofthe Directors Report.
INDEPENDENT DIRECTORS MEETING
The performance of the members of the Board the Board Level Committees and the Boardas a whole were evaluated at the meetings of the independent Directors held on 20.0S.2015.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Your Company recognizes the value of transparency and accountability in itsadministrative and management practices. The Company promotes the ethical behavior in allits business activities. The Company has adopted the Whistle Blower Policy and VigilMechanism so as to provide a mechanism for the Directors and employees of the Company toapproach Audit Committee of the Company to report existing/probable violations of lawsrules regulations or unethical conduct.
POLICY ON SEXUAL HARASSMENT
Company had adopted policy on Prevention of Sexual Harassment of Women at workplace inaccordance with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
NOMINATION AND REMUNERATION COMMITTEE
Your company has a Nomination and Remuneration Committee and further details are setout in the Corporate Governance Report forming part of the Directors Report
The Board has on the recommendation of the Nomination & Remuneration Committeeformed a policy for selection and appointment of Directors Key Managerial Persons SeniorManagement and their remuneration.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements the audited consolidated financialstatements are provided in the Annual Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee and also to theBoard for approval. Prior omnibus approval of the Audit Committee is obtained on aquarterly basis for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are audited and astatement giving details of all related party transactions are placed before the AuditCommittee and the Board of Directors for their approval on a quarterly basis.
The particulars of contracts or arrangements entered into by the Company with relatedparties referred to in sub-section (1) of section 188 of the Companies Act 2013 disclosedin Form No. AOC -2 and is annexed to this report as Annexure.
RISK MANAGEMENT POLICY
Your Company has a Risk Management Policy and framework to identify evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on the business objectives and enhance the Companys competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting.
SECRETARIAL AUDIT REPORT
Pursuant to Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company had appointed M/s L.D.Reddy & Co. Practicing Company Secretaries Hyderabad as its Secretarial Auditors toconduct the secretarial audit of the Company for the financial year 2015-16. The Companyprovided all assistance and facilities to the Secretarial Auditor for conducting theiraudit. The Report of Secretarial Auditor for the financial year 2015-16 is annexed to thisreport as Annexure.
Secretarial Audit observations
i. There were delays in the payment of wages to the employees before the due date asper payment of Wages Act 1936.
ii. All statutory payments like Service tax Income tax Professional Tax Entry TaxPF ESI VAT TDS Self Assessment Tax Excise Duty etc. are paid with delay as per theprovisions of the relevant Acts.
iii. The policy on Sexual Harassment of women is not updated on the Company Website.
i. The payment of wages to employees are up-to-date. However the Company is taking allpossible steps to pay the wages within the stipulated time.
ii. The Company is taking all possible steps to pay the statutory dues within thestipulated time
iii. The Company had adopted a policy on sexual Harassment of woman at work place andthe same is now updated on the company website.
DIRECTORS RESPONSIBILITY STATEMENT
Pursant to section 134(5) of the Companies Act 2013 Directors of your Company here byState and 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 judgements 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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(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.
INTERNAL FINANCIAL CONTROLS
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Companys policies safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialstatement. The board is of the considered opnion that the internal finacial controls thatare so laid out are adequate and are operating effectively.
EXTRACT OF THE ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 312016 forms part of thisreport as Annexure.
Your Company accords high priority to quality safety training development healthand environment. The Company endeavours to ensure continuous compliance and improvementsin this regard.
All the properties and insurable assets of the Company including Building Plant andMachinery stocks etc. wherever necessary and to the extent required have beenadequately covered under insurance.
LISTING OF COMPANYS SECURITIES
Your Companys shares are currently listed on BSE Limited Ahmedabad StockExchange Limited and National Stock Exchange of India Limited.
DEMATERIALIZATION OF SHARES
Your Companys shares have been made available for dematerialization through theNational Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL).
CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 13S of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee and statutory disclosures with respect to the CSRCommittee and an Annual Report on CSR Activities forms part of this Report as Annexure.
STAKEHOLDERS RELATIONSHIP COMMITTEE
Your Company has a Stakeholders Relationship Committee and further details areset out in the Corporate Governance Report forming part of the Directors Report
The committee will monitor expeditious redressal of investors / stakeholders grievancerelating to non-receipt of annual report notices non-receipt of declared dividendchange of address for correspondence etc and to monitor action taken.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for the year under review pursuant to theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of this Annual Report.
EQUITY SHARES IN THE SUSPENSE ACCOUNT
Your Company is not having any shares lying in the suspense accounts in terms of ClauseSA(I) and Clause SA(II) of the Listing Agreement.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure .
PARTICULARS OF EMPLOYEES
The percentage of increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2015-16 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sl. No. ||Name of Director/KMP and Designation ||Remuneration of Director/ KMPfor financial year2015-16 (Rs. in lakhs) ||% increase in Remuneration in the Financial Year 2015-16 ||Ratio of remuneration of each Director/ to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1 ||Sri. Ch. Krishna Murthy Chairman & Managing Director ||6600000 ||10% ||26.57 ||Profit before Tax increased by 18.82% and Profit After Tax increased by18.84 % in financial Year 2015-16 |
|2 ||Sri. Ch. Siddartha Joint Managing Director ||4800000 ||14.29% ||19.99 || |
|3 ||Sri. T. Ramakrishna C F O ||2040000 || ||8.50 || |
|4. ||Sri. B.S. Harikrishna Company Secretary resigned on 30.06.2015 ||90000 || || || |
|5 ||Sri. L. Narasimha Rao Company Secretary resigned on 12.11.2015 ||713333 || || || |
|6. ||Ms. Shruti Gupta Company Secretary appointed on 16.03.2016 ||10065 || || || |
The details of the persons employed throughout the financial year and in receipt ofRs.60 lakhs or more or employed for part of the year and in receipt of Rs.S lakhs or morea month under Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is as under:
|Sl. No. ||Name of Director/KMP and Designation ||Remuneration of Director/ KMP for financial year2015-16 (Rs. in lakhs) ||% increase in Remuneration in the Financial Year 2015-16 ||Ratio of remuneration of each Director/ to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the Company |
|1 ||Sri. Ch. Krishna Murthy Chairman & Managing Director ||6600000 ||10% ||26.57 ||Profit before Tax increased by 18.82% and Profit After Tax increased by18.84 % in financial Year 2015-16 |
Your Directors take this opportunity to express their deep and sincere gratitude to theBankers Financial Institutions Customers and Suppliers for their unstinted and continuedsupport to the Company. Your Directors thank the various Central and State GovernmentDepartments Organizations and Agencies for the continued help and co-operation extendedby them. The Directors also gratefully acknowledge all stakeholders of the Company viz.Customers Banks Members Dealers Vendors and other business partners for the excellentsupport received from them during the year.
The Directors place on record their sincere appreciation to all employees of theCompany for their unstinted commitment and continued contribution to the Company.
By Order of the Board
| ||Sd/- ||Sd/- |
|Place: Hyderabad ||Ch. Manjula ||Ch. Krishna Murthy |
|Date : 06.08.2016 ||Director ||Chairman & Managing Director |