To the Members
The Board of Directors are pleased to present the Company's TwentyEighth Annual Report and the Company's audited financial statements (standalone andconsolidated) for the financial year ended March 31 2021.
Financial Results The Company's financial performance for the yearended March 31 2021 is summarised below:
| || || || ||Rs. in lakhs |
|Particulars ||Standalone ||Consolidated |
| ||FY 2020-21 ||FY 2019-20 ||FY 2020-21 ||FY 2019-20 |
|Revenue from operations ||57310.24 ||57113.97 ||67868.09 ||67350.23 |
|Other income ||398.73 ||861.99 ||282.30 ||733.75 |
|Total Revenue ||57708.97 ||57975.96 ||68150.39 ||68083.98 |
|Earnings before finance cost depreciation & amortization and taxes (EBITDA) ||6016.50 ||6380.19 ||7744.91 ||7892.94 |
|Earnings before finance cost and taxes (EBIT) ||4300.36 ||4677.63 ||5715.14 ||5873.93 |
|Finance Cost ||2472.94 ||3409.75 ||2597.15 ||3577.00 |
|Profit Before Taxation ||2226.15 ||2129.87 ||3400.29 ||3030.68 |
|Less: Tax Expense ||(49.17) ||807.77 ||(49.17) ||807.77 |
|Profit After Taxation ||2275.32 ||1322.10 ||3449.46 ||2222.91 |
|Other comprehensive income/ (expenses) (net of taxes) ||20.30 ||56.24 ||15.83 ||54.75 |
|Total comprehensive income for the year EPS (of H 10/- each) ||2295.62 ||1378.35 ||3465.29 ||2277.66 |
|Basic ||19.05 ||11.07 ||28.88 ||18.61 |
|Diluted ||19.05 ||11.07 ||28.88 ||18.61 |
Performance Review & Company's State of Affairs
The Standalone revenue from operations for the FY 2020-21 is H57310.24 lakhs as against H 57113.97 lakhs of previous year. Earnings before interesttax depreciation and amortization (EBITDA') for the FY 2020-21 is H 6016.50lakhs compared to H 6380.19 lakhs of previous FY 2019-20. During FY 2020-21 Profit beforetax stood at H 2226.15 lakhs compared to H 2129.87 lakhs of previous year. Howeverduring the year over all finance cost has reduced by over 27% to H 2472.94 lakhs asagainst 3409.75 lakhs of previous year.
Net profit for the FY 2020-21 has increased by 72% to H 2275.32lakhs as against H 1322.10 lakhs of previous year. Total comprehensive income stood at H2295.62 lakhs for FY 2020-21 compared to H 1378.35 lakhs during the previous FY2019-20.
The consolidated revenue from operations for the financial year 2020-21is H 67868.09 lakhs compared to H 67350.23 lakhs of previous year. Earnings beforeinterest tax depreciation and amortization (EBITDA') are at H 7744.91 lakhsduring the year compared to H 7892.94 lakhs of previous FY 2019-20.
During FY 2020-21 Profit before tax stood at H 3400.29 lakhs comparedto H 3030.68 lakhs of previous year. However finance cost has reduced by over 27% to H2597.15 lakhs as compared to H 3577.00 lakhs of previous year.
Net profit for the FY 2020-21 has increased by 55% to H 3449.46lakhs compared to H 2222.91 lakhs during FY 2019-20. Total comprehensive income isH 3465.29 lakhs for FY 2020-21 as against H 2277.66 lakhs of previous year.
| ||Standalone ||Consolidated |
|Particulars ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Domestic ||28760.22 ||50.67% ||30813.85 ||54.68% ||33118.75 ||49.30% ||34326.70 ||51.94% |
|Overseas ||27997.61 ||49.32% ||25535.25 ||45.31% ||34057.40 ||50.69% ||32059.17 ||48.06% |
| ||56757.82 ||100% ||56349.10 ||100% ||67176.15 ||100% ||66385.87 ||100% |
We were able to deliver growth on our historical performance despiteincreasingly challenging conditions caused by the pandemic with the help of greaterproduct portfolio coherence and diversified application of our product across multipleindustries at globe. We also succeeded in prioritising and protecting the health of ouremployees while ensuring business continuity to meet our customer requirements. Thecompany has undertaken timely and essential measures to ensure the safety and well-beingof all its employees at all its plant locations various branch offices and the headoffice. The Company observed all the government advisories and guidelines thoroughly andin good faith. Team Vishnu has exhibited very good teamwork to maintain and accelerateoperations during these toughest days.
The same is covered in Management Discussion and Analysis forming partof this Annual Report.
Management Discussion and Analysis
Pursuant to Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations') theManagement Discussion and Analysis is presented in a separate section forming part of thisAnnual Report. As required under the provisions of the Listing Regulations the AuditCommittee of the Company has reviewed the Management Discussion and Analysis report of theCompany for the year ended March 31 2021.
The Board at its meeting held on May 19 2021 has recommended Dividendof H 1.00 (i.e. 10%) per equity share (previous year H 1/- per equity share i.e. 10%) onthe equity share of H 10/- each for the financial year 2020-21 amounting to H 119.46Lakhs. The dividend pay-out is subject to the approval of the shareholders at ensuingAnnual General Meeting. The dividend will be paid to the members whose names appear inregister of members as on record date July 2 2021.
As per as Preference Dividend is concerned on request of the Companythe preference shareholders holding 100% preference share capital i.e. 76637500 (SevenCrore Sixty Six Lakh Thirty Seven Thousand Five Hundred only) 7 % Cumulative RedeemablePreference Shares (CRPS) of H 10/- (Rupees Ten only) each consented vide their letterdated May 23 2020 to forgo preference dividend for the FY 2020-21.
Transfer to reserves
The Board of Directors has decided to retain the entire amount ofprofits for FY 2020-21 in the Retained Earnings.
During the year under review there were no changes in authorized andpaid-up share capital of the Company. The authorised share capital of the Company is H950000000/- divided into 15000000 Equity Shares of H10/- each and 80000000Preference Shares of H 10/- each; and total paid-up share capital of the Company as onfinancial year ended March 31 2021 is H 885835200/- divided into 11946020 EquityShares of H 10/- each and 76637500 7% Cumulative Redeemable Preference Shares of H10/-each.
Promoters of the company
The promoters of the company continued to reinforce their confidence inthe long term prospects of the Company by infusing funds as and when required. Thefollowing is the promoter's shareholding as on March 31 2021:
| ||Equity shares ||Preference Share |
|S.No. Particulars || || || || |
| ||No. of shares ||% ||No. of shares ||% |
|1 Mr. Ch. Krishna Murthy ||6219790 ||52.07 ||71121750 ||92.80 |
|2 Mrs. Ch. Manjula ||1614048 ||13.51 ||5271250 ||6.88 |
|3 Mr. Ch. Siddartha ||1125668 ||9.42 ||244500 ||0.32 |
|Total ||8959506 ||75.00 ||76637500 ||100.00 |
Change in the nature of the business if any
There is no change in the nature of the business of the Company or anyof its subsidiaries during the year under review.
Material Changes and commitments affecting the financial position ofthe Company
There are no material changes and commitments affecting the financialposition of the Company that have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the Report i.e. betweenMarch 31 2021 to May 19 2021.
The Company did not accept any fixed deposits within the meaning ofsection 73 of the Companies Act 2013 during the year. No amount on account of principalor interest on deposits from public was outstanding as on the date of the Balance Sheet.
Listing at Stock Exchanges
The equity shares of the Company continue to be listed and traded onthe BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee forthe year 2020-21 has been paid to both the stock exchanges. There was no suspension onshares of the Company during the year.
Subsidiaries Joint Ventures and Associates
The Company has two wholly-owned subsidiaries (WOS) namely: (i) VishnuBarium Private Limited (VBPL) is a material subsidiary w.e.f. April 1 2019 as per theamended definition given under the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") as amended from time to time read with the policy for determiningmaterial subsidiaries as approved by the Board. A copy of the policy can be accessed onthe Company's website at the link:https://www.vishnuchemicals.com/investors/#Policies (ii) Vishnu South Africa (Pty) Limited(VSAL) which is yet to commence its operations. The Company doesn't have any jointventures or associate companies.
The Company is in compliance with Regulation 24A of the ListingRegulations. The Company's unlisted material subsidiary viz. VBPL undergoesSecretarial Audit. Copy of Secretarial Audit Report of VBPL is available on the website ofthe Company. The Secretarial Audit Report of VBPL does not contain any qualificationreservation adverse remark or disclaimer.
During the year the Board of step-down subsidiary i.e. VishnuRenewable Energy Private Limited (VREPL) which is WOS Company of VBPL resolved to closedown VREPL. Accordingly an application under section 248 of the Companies Act 2013 wassubmitted to Registrar of Companies Andhra Pradesh on January 9 2021 for voluntarystrike-off of the name of the Company and the same in under process.
A report on the financial position of each of the subsidiaries as perthe Act is provided in Form AOC-1 attached as Annexure A'.
Consolidated financial Statements
During the year the Board of Directors reviewed the affairs of thesubsidiaries and prepared consolidated financial statements (CFS) of the Company and itssubsidiaries for the FY 2020-21 in compliance with the provisions of Section 129(3) of theCompanies Act 2013 and as stipulated under Regulation 33 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations') as wellas in accordance with Indian Accounting Standards (Ind AS) notified under the Companies(Indian Accounting Standards) Rules 2015. The consolidated financial statements have beenprepared on the basis of audited financial statements of the Company its subsidiaries asapproved by the respective Board of Directors. The audited CFS together with theAuditor's Report thereon forms part of this Annual Report.
Pursuant to provisions of Section 136 of the Act the audited financialstatements including consolidated financial statements and related information of theCompany and audited accounts of the each of its subsidiaries are available onCompany's website www.vishnuchemicals.com. The annual accounts of the subsidiariesand related detailed information will be made available to investors seeking informationtill the date of the AGM.
Particulars of loans guarantees or investments
Particulars of loans guarantees security and investments coveredunder section 186 of the Companies Act 2013 forms part of the notes to the financialstatements (please refer Note No. 3 4 & 41).
Directors and Key Managerial Personnel
The Board received a declaration from all the directors under section164 and other applicable provisions if any of the Companies Act 2013 that none of thedirectors of the company is disqualified under the provisions of the Companies Act 2013(Act') or under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
During the financial year based on the recommendations of Nominationand Remuneration Committee Mr. Tirthankar Mitra (DIN: 02675454) & Mr. ChetanNavinchandra Shah (DIN: 08038633) were appointed as Additional Directors (for IndependentDirector category) of the Company by the Board at its meeting held on August 14 2020& February 12 2021 respectively with immediate effect under the provisions ofsection 161 (1) and other applicable provisions if any of the Companies Act 2013 andare entitled to hold office up to the date of 28th Annual General Meeting ofthe Company.
The Company has received a declaration from Mr. Mitra and Mr. Shah asthey being eligible for appointment as Independent Director. Further they have providedconsent in writing to act as a director in Form DIR-2 pursuant to Rule 8 of the Companies(Appointment & Qualification of Directors) Rules 2014 as amended from time to time.The Company has also received a declaration from both of them confirming the criteria ofIndependence as prescribed under Section 149(6) of the Companies Act 2013 and under theRegulation 16(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 as amended from time to time ("Listing Regulations"). Mr. Mitra & Mr.Shah are not disqualified from being appointed as Directors in terms of Section 164 of theCompanies Act 2013. In opinion of the Board both fulfill the conditions specified in theCompanies Act 2013 & Listing Regulations and are independent of the management.
The Board recommends the Ordinary Resolutions set out at Item No. 5& 6 of the Notice for approval of the Members.
During the year under review Mr. Ch. Krishna Murthy was re-appointedas a Managing Director of the Company for a further term of five (5) years w.e.f. January2 2021 up to January 1 2026 on such terms and conditions and the said re-appointment wasalso approved by the shareholders of the Company by passing special resolution undersection 196 197 and 203 and all other applicable provisions of the Companies Act 2013read with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 at 27thAnnual General Meeting of the Company held on August 14 2020. Further as per approvedterms and conditions of his re-appointment and based on the recommendations of Nomination& Remuneration Committee the Board at its meeting held on May 19 2021 approvedincrease in remuneration of Mr. Murthy from H 66.00 lakh per annum to H 96.00 lakhper annum w.e.f. June 1 2021 which is within the approved limits of the specialresolution passed by the shareholders at 27th AGM of the Company.
In accordance with the provisions of Section 152 of the Act and theArticles of Association of the Company Mr. Ch. Krishna Murthy Managing Directorof the Company retires by rotation at the ensuing AGM and being eligible has offeredhimself for re-appointment.
Pursuant to the recommendations of Nomination and RemunerationCommittee (NRC) the Board at its meeting held on April 23 2021 approved re-appointmentof Mr. Ch. Siddartha as a Joint Managing Director of the Company for a further term offive (5) years w.e.f. May 2 2021 till May 1 2026 on such terms and conditions subject toapproval of the shareholders under section 196 197 and 203 and all other applicableprovisions of the Companies Act 2013 read with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 at ensuing annual general meeting of the Company. Furtherthe said re-appointment and terms & conditions thereof shall be approved by themembers at ensuing AGM as per the provisions of the Act and Listing Regulations.Accordingly a resolution is being proposed in the notice of 28th AGM anddetailed terms & conditions of Mr. Siddartha's appointment are enumerated in thesaid notice along with explanatory statement thereof for approval of the members of thecompany by passing a special resolution.
Pursuant to the provisions of Regulation 36 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and Secretarial Standard 2 onGeneral Meetings issued by Institute of Company Secretaries of India (ICSI) briefparticulars of the directors proposed to be appointed/ re-appointed are provided as anannexure to the notice convening the AGM.
During the year Mr. T S Appa Rao and Mr. S Saranathan IndependentDirectors of the company retired on June 28 2020 and February 2 2021 respectively due tocompletion of their term of appointment and ceased to be Directors of the Company. TheBoard places on record its appreciation for their invaluable contribution and guidanceduring their tenure as Independent Directors.
In terms of Section 149 of the Act Mr. Pradip Saha (DIN: 07677683)Mr. Tirthankar Mitra (DIN: 02675454) and Mr. Chetan Navinchandra Shah (DIN: 08038633) arethe Independent Directors of the Company. The Company has received a declaration from allthe Independent Directors confirming that they meet the criteria of independence asprescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the ListingRegulations and are independent from the management. The Independent Directors of theCompany hold office till the end of their term of appointment or until completion of 75years whichever is earlier. They are not liable to retire by rotation in terms of Section149(13) of the Act. The Independent Directors have also confirmed that they have compliedwith the Company's Code of Conduct.
The Board is of the opinion that the Independent Directors of theCompany possess requisite qualifications experience and expertise in chemicals/manufacturing industry strategy auditing tax and risk advisory services financialservices corporate governance etc. and that they hold standards of integrity.
The Independent Directors of the Company got included their names inthe data bank of Independent Directors maintained with the Indian Institute of CorporateAffairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment& Qualification of Directors) Rules 2014.
Familiarization Programme for Independent Directors
The Independent Directors are familiarized through various programmeson a continuing basis including the following:
(a) nature of the industry in which Company operates;
(b) business model of the Company;
(c) roles rights responsibilities of Independent Directors etc.
The familiarization programme along with terms and conditions ofappointment of Independent Directors is disclosed on the Company's websitehttps://www. vishnuchemicals.com/investors/#Policies.
Committees of the Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
5. Finance Committee of Directors
The details of the Committees along with their composition number ofmeetings and attendance at the meetings are provided in detail in the Corporate GovernanceReport.
Key Managerial Personnel
Mr. Ch. Krishna Murthy Chairman & Managing Director; Mr. Ch.Siddartha Joint Managing Director; Mr. P. Anjaneyulu CFO and Mr. Kishore Kathri CompanySecretary & AGM-Legal are Key Managerial Personnel of the Company in accordance withthe provisions of Section(s) 2(51) and 203 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. There hasbeen no change in the Key Managerial Personnel (KMP) during the financial year.
During the year under review four Board Meetings and four AuditCommittee Meetings were convened and held the details of which are given in the CorporateGovernance Report which forms part of this report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and ListingRegulations.
Procedure for Nomination & Appointment of Directors andRemuneration Policy
The Nomination and Remuneration Committee (NRC) is responsible to setthe skills/ expertise/ competencies of the Board Members based on the industry andstrategy of the Company and to formulate the criteria for determining qualificationspositive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and the Listing Regulations. The Board has on the recommendations of theNomination & Remuneration Committee framed a policy for Remuneration of the Directorsand Key Managerial Personnel.
During FY 2020-21 the Board had also identified the list of coreskills expertise and competencies of the Board of Directors as are required in thecontext of the business and sector applicable to the Company and those actually availablewith the Board. The Company has also mapped each of the skills expertise and competenciesagainst the names of the Board Members possessing the same.
The objective of the Company's remuneration policy is to attractmotivate and retain qualified and expert individuals that the Company needs in order toachieve its strategic and operational objectives whilst acknowledging the societalcontext around remuneration and recognizing the interests of Company's stakeholders.
The Non-Executive Directors (NED) are remunerated by way of sitting feefor each meeting attended and are also reimbursed out of pocket expenses incurred by themin connection with the attendance of the Company's Meetings.
A copy of the Nomination & Remuneration Policy is available on thewebsite of the company https://www.vishnuchemicals. com/investors/#Policies
The Board has carried out the annual evaluation of its own performanceand that of its Committees and individual directors for the year pursuant to theprovisions of the Act and the corporate governance requirements prescribed under theListing Regulations.
The performance of the Board and individual directors was evaluated bythe Board after seeking inputs from all the directors. The criteria for performanceevaluation of the Board was based on the Guidance Note issued by SEBI on Board Evaluationwhich included aspects such as Board composition and structure effectiveness of Boardprocesses contribution in the long term strategic planning etc. The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee Members. Thecriteria for performance evaluation of the Committees was based on the Guidance Noteissued by SEBI on Board Evaluation which included aspects such as structure andcomposition of committees effectiveness of committee meetings etc.
In a separate meeting held on June 2 2020 the Independent Directorsevaluated the performance of Non-Independent Directors and performance of the Board as awhole. They also evaluated the performance of the Chairman taking into account the viewsof Executive Directors and Non-Executive Directors. The NRC reviewed the performance ofthe Board its Committees and of the directors. The same was discussed in the BoardMeeting that followed the meeting of the Independent Directors and NRC at which thefeedback received from the Directors on the performance of the Board and its Committeeswas also discussed.
Code of Conduct for Board of Directors and Senior Management Personnel
The Directors and members of Senior Management have affirmed compliancewith the Code of Conduct for Board of Directors and Senior Management Personnel of theCompany. A declaration to this effect has been signed by the Chairman & ManagingDirector forms part of the Annual Report.
Particulars of Employees and Remuneration
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (Rules') are enclosed asAnnexure B' to this Report.
The statement containing particulars of employees as required underSection 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules forms part of thisReport. Further the Report and the Accounts are being sent to the Members excluding theaforesaid statement. In terms of Section 136 of the Act the said statement will be openfor inspection upon request by the Members. Any Member interested in obtaining suchparticulars may write to the Company Secretary at email@example.com
Internal Financial Controls
Internal financial control systems of the Company are commensurate withits size and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable accounting standards and relevant statutessafeguarding assets from unauthorised use executing transactions with properauthorisation and ensuring compliance of corporate policies. The Company has awell-defined delegation of authority with specified limits for approval of expenditureboth capital and revenue. The Company uses an established ERP system to record day-to-daytransactions for accounting and financial reporting.
The Audit Committee deliberated with the members of the managementconsidered the systems as laid down and met the internal auditors and statutory auditorsto ascertain their views on the internal financial control systems. The Audit Committeesatisfied itself as to the adequacy and effectiveness of the internal financial controlsystem as laid down and kept the Board of Directors informed. However the Companyrecognizes that no matter how the internal control framework is it has inherentlimitations and accordingly periodic audits and reviews ensure that such systems areupdated on regular intervals.
Directors' Responsibility Statement
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory cost and secretarial auditors and external consultant(s) including audit ofinternal financial controls over financial reporting and the reviews performed by theManagement and the relevant Board Committees including the Audit Committee the Board isof 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 ofDirectors to the best of their knowledge and ability confirm that for the year endedMarch 31 2021:
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
b. they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
i. Statutory Audit
M/s. Jampani & Associates Chartered Accountants (FRN - 016581S)Hyderabad were appointed as statutory auditors of the company by the Board at its meetingheld on August 6 2016 for an initial term of five (5) years i.e. from 23rdAnnual General Meeting (AGM) to till conclusion of 28th Annual General Meetingof the Company in terms of Sections 139 142 and other applicable provisions if any ofthe Companies Act 2013 (the Act) and the Companies (Audit and Auditors) Rules 2014 (theRules) and the same was approved by the members at 23rd AGM held on September28 2016 and the said initial term ends on conclusion of ensuing 28th AGM.
In view of the above based on the recommendations of Audit Committeethe Board at its meeting held on May 19 2021 approved re-appointment of M/s. Jampani& Associates Chartered Accountants (FRN - 016581S) Hyderabad as statutory auditorsof the company for second term of five (5) years i.e. from the date of 28th AGMtill the conclusion of 33rd AGM to be held in year 2026 at such remuneration asagreed between the Board and Auditors in addition to actual out-of-pocket expensesincurred by them for the purpose of audit and the applicable taxes. and recommended forapproval of the shareholders under section 139 and all other applicable provisions ifany of the Companies Act 2013 read with rules made thereunder at ensuing 28thAnnual General Meeting.
The company received their consent along with a certificate from theauditors confirming that they have not attracted any disqualifications as prescribed underthe Companies Act 2013 and the Chartered Accountant Act 1949 read with rules madethereunder.
The Board recommends the Ordinary Resolution set out at Item No. 4 ofthe Notice of 28th AGM for approval of the Members.
Further the report of the Statutory Auditors along with notes toaccounts is a part of the Annual Report. There has been no other qualificationreservation adverse remark or disclaimer given by the Auditors in their Report exceptbelow:
The Statutory Auditors have mentioned in their report at point no.(iii) of Annexure 'B' to the Independent Auditors Report regardinginterest free unsecured loans of H 989 Lakhs (with a value at amortised cost of H868.00 lakhs) to wholly-owned subsidiary (WOS) i.e. Vishnu Barium Pvt Ltd (VBPL). Furtherthey also mentioned in their report at point no. (a) & (b) of (vii) of Annexure 'B' that the company has generally been irregular in depositing undisputedstatutory dues and H 918.30 lakhs payable towards income tax and interest thereonunder the Income Tax Act 1961 for the periods AY 2018-19 and 2019-20 which are yet to bepaid respectively.
The above said interest-free unsecured loan was infused by the Companyin WOS Company i.e. VBPL to comply with the conditions stipulated by the Banker forsanction of term loan and working capital facilities to VBPL and such infusion ofunsecured loan is for the ultimate benefit of the Company; Delay in deposit of undisputedstatutory dues & income tax is due to paucity of funds.
However all possible steps are being taken to deposit the said dues intime.
ii. Cost Auditors
As per Section 148 of the Act read with the Companies (Cost Records andAudit) Rules 2014 the Company is required to prepare maintain as well as have the auditof its cost records conducted by a Cost Accountant and accordingly it has made andmaintained such cost accounts and records.
The Board on the recommendation of the Audit Committee has appointedM/s. Kapardhi & Associates Cost Accountant Hyderabad (Firm Reg. No. 100231) as theCost Auditors of the Company for FY 2021-22 under Section 148 and all other applicableprovisions of the Act.
M/s. Kapardhi & Associates Cost Accountant Hyderabad (Firm Reg.No. 100231) has confirmed that they are free from disqualification specified under Section141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that theappointment meets the requirements of Section 141(3) (g) of the Act. They have furtherconfirmed their independent status and an arm's length relationship with the Company.
The remuneration payable to the Cost Auditors is required to be placedbefore the Members in a General Meeting for their ratification. Accordingly a resolutionfor seeking Member's ratification for the remuneration payable to M/s. Kapardhi &Associates Cost Accountant Hyderabad (Firm Reg. No. 100231) is included at Item No. 8 ofthe Notice convening the AGM.
iii. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard has appointed M/s. L.D.Reddy & Co. Company Secretaries Hyderabad to undertakethe Secretarial Audit of the Company for the financial year 2020-21. The Secretarial AuditReport of FY 2020-21 is annexed herewith as Annexure C'.
There has been no other qualification reservation adverse remark ordisclaimer given by the Auditors in their Report except the concern about delay in depositof some of the tax dues. In this regard the management explained that the company haspaid majority of pending taxes during the FY 2020-21 and has assured that balance taxeswill be deposited in coming financial years on priority basis.
The Board has devised proper systems and processes for complying withthe requirements of applicable Secretarial Standards issued by the Institute of CompanySecretaries of India (ICSI) and that such systems were adequate and operating effectively.
Energy conservation technology absorption and foreign exchangeearnings and outgo
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith asAnnexure D'.
Related Party Transactions
There are no materially significant related party transactions made bythe Company with Promoters Key Managerial Personnel or with entities where promoter/KMPs/Directors are interested and other related parties who may have potential conflict ofinterest with the Company. As a matter of policy your Company carries out transactionswith related parties on an arms' length basis. Statement of these transactions isgiven at Note No. 37 of the Notes to financial statements. Accordingly particulars ofcontracts or arrangements with related parties referred to in Section 188(1) along withthe justification for entering into such contract or arrangement in Form AOC-2 does notform part of this report.
A policy on related party transactions is available on website athttps://www.vishnuchemicals.com/wp-ontent/uploads/2019/08/Policy_on_Materiality_of_RPT.pdf
All transactions with related parties were approved by the AuditCommittee and Board and the same are reviewed by the Audit Committee on quarterly basis.Also prior omnibus approval of the Audit Committee is obtained for related partytransactions which are of repetitive nature entered in ordinary course of business and onan arm's length basis. The transactions entered into pursuant to the omnibus approvalare reviewed by the internal audit team and Audit Committee on quarterly basis.
Corporate Social Responsibility (CSR) initiatives
The brief outline of the corporate social responsibility (CSR) policyof the Company details regarding CSR Committee and the initiatives undertaken by theCompany on CSR activities during the year are set out in Annexure E' of thisreport in the format prescribed in the Companies (Corporate Social Responsibility Policy)Rules 2014. CSR Policy is available on the Company's website onhttps://www.vishnuchemicals.com/wp-content/uploads/2021/03/CSR-Policy-updated-on-12022021.pdf
Whistle Blower Policy & Vigil Mechanism
In terms of the requirements of the Companies Act 2013 and Regulation22 of Listing Regulations the Company has a vigil mechanism to deal with instance offraud and mismanagement if any including reporting instances of leak of UPSI orsuspected leak of UPSI by employees anti-bribery & anti-corruption and takingappropriate actions on such reporting. The Audit Committee reviews the functioning of thevigil / whistle blower mechanism from time to time. There were no allegations /disclosures / concerns received during the year under review in terms of the vigilmechanism established by the Company. The details of the vigil mechanism are displayed onthe website of the Company https://www.vishnuchemicals.com/investors/#Policies
Prevention of Insider Trading
Pursuant to SEBI (Prohibition of Insider Trading) Regulations 2015 asamended the Company has adopted the Code of Internal Procedures and Conduct forRegulating Monitoring and Reporting of Trading by Designated Persons and their ImmediateRelatives along with Code of Fair Disclosures and a copy of the same are available oncompany's website https://www.vishnuchemicals.com/investors/#Policies.
Environment Health and Safety
The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy requires conduct of operations in such a mannerso as to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.
During the financial year the company has undertaken followingactivities:
Organised frequent medical checkups for all employees and contract workers at alllocations of the company.
Ensured availability of dispensary 24/7 with requisite staff equipment and necessarymedicines.
Availability of first aid boxes in every department/section and maintenance site.
Availability of equipped ambulance at all the times to assist the patient to thenearest hospital.
Imparted health education through programs and initiatives and created awareness amongemployees on the precautions to be taken against Covid.
Arrangement of hospitalization for severe Covid infected employees.
Safety awareness has been enhanced by way of training on hazard identification riskassessment and continuous training to the newly inducted employees and regular training tothe employees on SOPs mock drills on emergency preparedness and mitigation exercises.
Installed fire extinguishers at appropriate places and provided training to members onits functioning.
Ensured use of personnel protection equipment (PPE) at sites with safety protocols.
Undertook examination and audit of equipment at regular intervals by internal as wellas external agencies.
Ensured strict adherence of Covid protocols across the sites and offices.
Maintaining hygiene at work place and promoting self- hygiene among personnel.
Coverage of all employees under Covid Insurance Policy.
Prevention of Sexual Harassment (POSH')
In order to comply with provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderthe Company has formulated and implemented a policy on prevention prohibition andredressal of complaints related to sexual harassment of women at the workplace. All womenemployees permanent temporary or contractual are covered under the above policy. The saidpolicy has been circulated to all employees by hosting on notice board and a copy of thesame has been uploaded on the website of the Company. An Internal Complaint Committee(ICC) has been set up in compliance with the said Act. To build awareness in this areathe Company has been conducting awareness sessions during induction. During the year underreview no complaints pertaining to sexual harassment of women employees were reported.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on March 31 2021 is available on the Company's website onhttps://www.vishnuchemicals.com/wp-content/uploads/2021/06/VCL_Form_MGT-7-dt-31032021N.pdf
A detailed report on the subject forms part of this Report as'Annexure F'. The Secretarial Auditors of the Company have examined theCompany's compliance and have certified the same as required under the SEBIGuidelines/ Regulations. Such a certificate on corporate governance is reproduced in thisAnnual Report.
Significant and material orders passed by the regulators or courts
During the year under review there were no significant material orderspassed by the Regulators / Courts which would impact the going concern status of theCompany and its future operations.
The Directors wish to place on record their appreciation for thecontinued support and co-operation by Financial Institutions Banks Customers SuppliersGovernment Authorities and other stakeholders. Your directors also acknowledge the supportextended by all the employees for their dedicated service.