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Vishnu Chemicals Ltd.

BSE: 516072 Sector: Industrials
NSE: VISHNU ISIN Code: INE270I01014
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OPEN 274.00
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VOLUME 2454
52-Week high 436.50
52-Week low 214.10
P/E 35.32
Mkt Cap.(Rs cr) 333
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 274.00
CLOSE 272.65
VOLUME 2454
52-Week high 436.50
52-Week low 214.10
P/E 35.32
Mkt Cap.(Rs cr) 333
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vishnu Chemicals Ltd. (VISHNU) - Director Report

Company director report

DIRECTORS' REPORT

To

THE MEMBERS

VISHNU CHEMICALS LIMITED

Your Directors are happy to present their Twenty Fourth Annual Report on the businessand operations of the Company and the financial statements for the year ended 31stMarch 2017.

FINANCIAL RESULTS (Rs. in lakhs)

Particulars 2016-17 2015-16
Gross Income 47226.26 50000.86
Profit before Interest Depreciation & Tax 6410.75 8514.59
Less: Depreciation 1331.61 1174.90
Less: Interest 3177.73 3279.18
Profit for the year before taxes 1901.41 4060.51
Less: Provision for Taxes 701.57 1456.93
Profit after Taxes 1199.84 2603.58
Add: Surplus brought forward from Previous Year 9489.12 7395.97
Surplus Carried forward to Balance Sheet 10688.96 9999.55
Less: Capitalization of Interest on Fixed Assets during construction period adjusted 215.97
Less: Appropriations 294.46
Balance carried forward to next year 10688.96 9489.12

OPERATIONS

During the year the company had a negative growth in view of increased imports into theCountry by Competitors from all over the world. In International Market also we facedstiff competition on account of currency fluctuations.

In order to counter dumping of products the Company has filed an anti-dumpingapplication with Government of India. The Government of India after careful studyaccepted the damage to the Industry and our petition is admitted and is underinvestigation.

However we have completed the pending projects with a capital outlay of Rs.92 croresand commenced commercial production to face severe competition from foreign players. Theresults of new projects can be witnessed during the current financial year.

As far as the subsidiary company is concerned which is manufacturing barium productsprogressing well in terms of revenue from domestic and export markets.

FUTURE PLANS

The Management will henceforth concentrate on maximizing production/ sale of ValueAdded products and increase the share of export revenue vis-a-vis domestic revenue.Further the company will also develop local raw material sources to reduce the foreignexchange outgo. It enables the company to become strong net foreign exchange earner.

The Company will also approach banks to convert the Rupee term loans into Foreigncurrency loans in-order to reduce the finance cost. This is technically possible once thecompany increases its export revenue and reduces imports.

SUBSIDIARY

Name & Address of the Company CIN/GLN Holding/Subsidiary/ Associate % 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. 2164536 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 - 500082* U24120TG2001PTC 036807 Wholly Owned Subsidiary 100% 2(87)(ii)

* The new registered office address is Plot No. C-23 Road No. 8 Film Nagar JubileeHills Hyderabad - 33 DIRECTORS

Your Company has 6 (Six) Directors consisting of 2 (Two) Promoter and ExecutiveDirectors (Chairman & Managing Director and Joint Managing Director) I (One) Promoterand Non-Executive Director and 3 {Three} Independent Directors as on March 312017.

DIRECTORS RESIGNATIONS

During the period under review Shri. CPC Kamalakar Rao (DIN 00037803) and Shri. T.Ramakrishna (DIN 07509474) were appointed as Directors of the company. However due to preoccupation with other professional services both the Directors resigned from the office ofthe Directorship with effect from 5th Aug 2016 CHANGES IN DIRECTORS AND KEYMANAGERIAL PERSONNEL

Shri. Ch. Siddartha Jt Managing Director of the Company retires by rotation and beingeligible offers himself for re-appointment. The resolution is being placed before theshareholders for approval the relevant details are forming part of the AGM notice.

KEY MANAGERIAL PERSONNEL OF THE COMPANY

SI.No. Name Designation
1. Shri. Ch. Krishna Murthy Managing Director
2. Shri. Ch. Siddartha Jt. Managing Director
3. Shri. T. Rama Krishna Chief Financial Officer
4. Ms. Shruti Gupta Company Secretary & Compliance Officer

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 sub-section (6) of Section 149 of theabove said Act and the Listing Regulations 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 Secretary's Certificate with respectto compliance with the provisions of Corporate Governance as required by Regulations 34and other Regulations of SEBI (Listing Obligations And Disclosure Requirements)Regulations) 2015 is also annexed.

DIVIDEND

The Board of Directors has not recommended any dividend for the current financial yearin order to augment internal resources to meet Companies operations

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 12S of the Companies Act 2013 there is no unclaimed dividendamount pertaining for any of the financial year to be transferred to the InvestorEducation and Protection fund (IEPF).

FIXED DEPOSITS

Your Company has not accepted any deposits covered by the provisions of Section 73 ofthe Companies Act 2013 and the Rules framed there under.

INDUSTRIAL RELATIONS

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.

AUDITORS

The Statutory Auditors M/s. Jampani & Associates Chartered Accountants(Firm Registration No. with ICAI - 016S81S) Hyderabad were appointed for Five years atthe last Annual General Meeting held on 28th September 2016 subject to ratification ofappointment by the members at every Annual General Meeting. They have confirmed theireligibility and willingness to accept the assignment as Statutory Auditors of the Companyif ratified by the members.

AUDITOR'S REPORT

Auditors Observations:

The Statutory Auditors have mentioned in their report as Point No. 3 and 4 of Annexure- I to the Independent Auditor's Report regarding interest free unsecured loan/advance ofRs. 996.26 lakh to its wholly owned subsidiary companies. Similarly they have alsomentioned in their report as point No. 7.1 of Annexure - I that statutory dues are pendingbeyound six months to the extent of Rs. 267.92 lakhs towards entry tax pertaining to thefinancial years 2009-10 & 2010-11 and Rs. 882.68 lakh towards Income Tax pertaining tothe financial year 2015-2016.

Management Replies :

The net amount of Rs. 343.33 lakh (after considering Rs. 6S2.93 lakh towards interestfree advance from subsidiary as stated in Note 9 of Annual Report) as Interest freeunsecured loan/advances given to its wholly owned subsidiaries viz. Vishnu Barium PrivateLimited and Vishnu Hong Kong Limited as the board took a decision to infuse the funds asper requirements of the business and for ultimate benefit of the holding company.

We are in the process of clearing Entry Tax and Income Tax dues at the earliest.

COST AUDITOR

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.5 Kapardhi (Firm Regn. No. 100231) Cost Accountants Hyderabad were re-appointedas Cost Auditors of the Company for the year 2017-18.

SHARE CAPITAL

The Paid up Equity and Preference Share Capital as on March 312017 was Rs.59.44 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 312017 the Directors of the Companyhold shares and 7% Redeemable Preference of the Company as below:

Details of shares held and Percentage

Name of the Director Equity Shares in Nos. % 7% Redeemable Preference shares in Nos. %
1 Shri Ch. Krishna Murthy 6219790 S2.07 44100000 92.84
2 Smt. Ch. Manjula 1614048 13.51 32S0000 6.84
3 Shri Ch. Siddartha 112S668 9.42 1S0000 0.32
Total 8959506 75.00 47500000 100.00

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Four 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 theDirector's Report.

AUDIT COMMITTEE

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 Director's Report.

INDEPENDENT DIRECTOR' 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 14thNov 2016.

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 Director's 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 read with AS - 23 on Accountingfor Investments in Associates and AS - 27 on Financial Reporting of Interests in JointVentures the audited consolidated financial statement is 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 arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained on a quarterlybasis for the transactions if any 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 is 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 Company's competitive advantage. Thebusiness 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. (CP No. 3752) Practicing Company Secretaries Hyderabad as itsSecretarial Auditors to conduct the secretarial audit of the Company for the financialyear 2016-17. The Company provided all assistance and facilities to the SecretarialAuditor for conducting their audit. The Report of Secretarial Auditor for the financialyear 2016-17 is annexed to this report as Annexure.

Secretarial Audit observations:

Some statutory payments are made after the due dates as per the provisions of therelevant Acts.

Management replies:

The Company is taking all possible steps to pay the statutory dues within thestipulated time

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state 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 have selected such accounting policies and applied them consistentlyand made judgments 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 have 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 have prepared the annual accounts on a going concern basis; and

(e) The directors in the case of a listed company have laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.

(f) The directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.

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 312017 forms part of thisreport as Annexure.

QUALITY

Your Company attaches high priority to quality safety training development healthand environment. The Company endeavours to ensure continuous compliance and improvementsin this regard.

INSURANCE

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.

LISTING OF COMPANY'S SECURITIES

Your Company's shares are currently listed on BSE Limited Ahmedabad Stock ExchangeLimited and National Stock Exchange Limited.

DEMATERIALIZATION OF SHARES

Your Company's 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.

STAKEHOLDER'S RELATIONSHIP COMMITTEE

Your Company has a Stakeholders' Relationship Committee and further details are set outin 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 dividend /interest change 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 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 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 year2016-17 (Rs. in lakhs) % increase in Remuneration in theFinancial Year 2016-17 Ratio of remuneration of each Director/ to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of theCompany
1 Shri. Ch. Krishna Murthy (Chairman & Managing Director 6600000 Nil 23.31 There is no increase of KMP remuneration during the period under review.
2 Shri. Ch. Siddartha (Jt Managing Director) 4800000 Nil 16.95
3 Shri. T. Ramakrishna (CFO) 2040000 Nil 7.20
6. Ms. Shruti Gupta (Company Secretary) 234000 Nil 0.83

There are no persons employed throughout the financial year and drawing of Rs.102.00lakhs or more p.a. or employed for part of the year and in receipt of Rs.8.5 lakhs ormore per month under Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

ACKNOWLEDGEMENTS

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: 28.08.2017 Director Chairman & Managing Director