To the Members
The Board of Directors are pleased to present the Company's TwentyNinth Annual Report and the Company's audited financial statements (standalone andconsolidated) for the financial year ended 31st March 2022.
The Company's financial performance for the year ended 31st March2022 is summarised below:
Rs in Lakhs
|Particulars ||Standalone ||Consolidated |
| ||2021-22 ||2020-21 ||2021-22 ||2020-21 |
|Revenue from operations ||90668.70 ||57310.23 ||106900.18 ||67868.09 |
|Other income ||659.96 ||398.74 ||575.75 ||282.30 |
|Total income ||91328.66 ||57708.97 ||107475.93 ||68150.39 |
|Earnings before finance cost depreciation & amortisation and taxes (EBITDA) ||13284.36 ||6415.23 ||16141.30 ||8027.21 |
|Earnings before finance cost and taxes (EBIT)* ||11357.69 ||4699.09 ||13842.86 ||5997.44 |
|Finance cost ||2452.00 ||2472.93 ||2609.52 ||2597.15 |
|Profit Before Taxation ||8905.69 ||2226.16 ||11233.34 ||34 00.29 |
|Less: Tax expense ||2381.79 ||(49.17) ||3094.07 ||(49.17) |
|Profit After Taxation ||6523.90 ||2275.33 ||8139.27 ||34 4 9.46 |
|Other comprehensive income/ (expenses) (net of taxes) ||(40.92) ||20.30 ||(56.43) ||15.83 |
|Total comprehensive income for the year ||6482.98 ||2295.6 3 ||8082.84 ||3465.29 |
|EPS (of Rs 10/ each) || || || || |
|Basic ||54.61 ||19.05 ||68.13 ||28.88 |
|Diluted ||54.61 ||19.05 ||68.13 ||28.88 |
including other income
Performance Review & Company's State of Affairs
On consolidated basis revenue for the financial year 2021-22 grew by58% to Rs 107475.93 Lakhs compared to Rs 68150.39 Lakhs of previous year. Also growthin EBITDA recorded 101% to Rs 16141.30 Lakhs as against Rs 8027.21 Lakhs for previousyear. PAT is Rs 8139.27 Lakhs higher by 136% over the previous year's PAT Rs 3449.46Lakhs.
On standalone basis revenue for the financial year 2021-22 grew by 58%to Rs 91328.66 Lakhs compared to Rs 57708.97 Lakhs of previous year. Also growth inEBITDA recorded over 107% to Rs 13284.36 Lakhs as against Rs 6415.23 Lakhs for previousyear. PAT is Rs 6523.90 Lakhs higher by 187% over the previous year's PAT Rs 2275.33Lakhs.
|Particulars ||Standalone ||Consolidated |
| ||2021-22 ||2020-21 ||2021-22 ||2020-21 |
|Domestic ||47194.47 ||52.18% ||28760.22 ||50.67% ||52084.01 ||48.86% ||33118.75 ||49.30% |
|Overseas ||43251.93 ||47.82% ||27997.61 ||49.32% ||54503.60 ||51.14% ||34057.40 ||50.69% |
| ||90446.40 ||100% ||56757.82 ||100% ||106587.61 ||100% ||67176.15 ||100% |
For the first time the Company has achieved a historic milestone of Rs1000 Crores in sales during the financial year 2021-22 marking the best ever annualperformance of the Company since inception. The performance for 2021-22 was satisfactorywith the growth in domestic as well as export sales by 57% and 60% respectively. Indeedthe demand environment was good throughout the year. During the year apart from thegrowth in revenues the consolidated EBITDA margin has improved to 15.0% compared to 11.8%in 2020-21 which is an increase of 317 basis points year-on-year. The said growth inEBITDA is aided by multiple factors some of which were scale quality of productsoperational flexibility focus on supply chain and better procurement planning.
Also the Company achieved the best ever PAT in 2021-22 at Rs 8139.27Lakhs compared to Rs 3449.46 Lakhs in 2020-21. During the year PAT margins alsoincreased by 251 basis points.
Further we are confident that robust demand environment continue todrive enquiries for Company's products as they are essential to extending the life impartcolours and improving the performance of many consumer and industrial components such asconstruction equipment wind turbines engine pistons etc; we are positive and confidentof continuing the growth momentum in 2022-23 and deliver industry leading value accretivegrowth.
Outlook 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') the ManagementDiscussion and Analysis is presented in a separate section forming part of this AnnualReport. As required under the provisions of the Listing Regulations the Audit Committeeof the Company has reviewed the Management Discussion and Analysis report of the Companyfor the year ended 31st March 2022.
The Board at its meeting held on 16th May 2022 has recommendedDividend of Rs 2.00 (i.e. 20%) per equity share of Rs 10/- each for the financial year2021-22 (previous year Rs 1/- per equity share of Rs 10/- each i.e. 10%) amounting to Rs238.92 Lakhs. The dividend pay-out is subject to the approval of the shareholders atensuing Annual General Meeting. The dividend will be paid to the members whose namesappear in register of members before the day of Closure of Register of Members and ShareTransfer Books i.e. as on Friday 8th July 2022.
As far 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 Redeemable
Preference Shares (CRPS) of Rs 10/- (Rupees Ten only) each consentedto accept reduced rate of dividend i.e. 1% per annum instead of 7% per annum for thefinancial year 2021-22.
Dividend Distribution Policy
The Company has adopted the Dividend Distribution Policy in accordancewith the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") to determine the distribution ofdividends on equity shares of the Company. The Dividend Distribution Policy is availableon the Company's website athttps://vishnuchemicals.com/wp-content/uploads/2022/05/VCL-Dividend-Distribution-Policy-dt-16052022.pdf.
Transfer to reserves
The Board of Directors has decided to retain the entire amount ofprofits for 2021-22 in the Retained Earnings.
During the year under review there were no changes in authorised andpaid-up share capital of the Company. The authorised share capital of the Company is Rs950000000/- divided into 15000000 Equity Shares of '10/- each and 80000000Preference Shares of Rs 10/- each; and total paid-up share capital of the Company as onfinancial year ended 31st March 2022 is Rs 885835200/- divided into 11946020 EquityShares of Rs 10/- each and 76637500 7% Cumulative Redeemable Preference Shares of '10/-each.
Promoters of the Company
The promoters of the Company continued to reinforce their confidence inthe long term prospects of the Company. The following is the promoter's shareholding as on31st March 2022:
|S.No. Promoters ||Equity shares ||Preference Share |
| ||No. of shares ||Percentage ||No. of shares ||Percentage |
|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. between31st March 2022 to 16th May 2022.
The Company did not accept any deposits within the meaning of section73 of the Companies Act 2013 during the year. As such 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 your Company continue to be listed and traded onthe BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee forthe year 2021-22 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. 1st April 2019 as per theamended definition given under the Listed Regulations as amended from time to time readwith the policy for determining material subsidiaries as approved by the Board. A copy ofthe policy can be accessed on the 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.
A report on the financial position of each of the subsidiaries as perthe Act is provided in Form AOC-1 attached as 'Annexure A'.
During the year the Company has complied with the applicable corporategovernance requirements as prescribed under Regulation 24 of Listing Regulations withrespect to its subsidiaries and Secretarial Audit for its material subsidiary viz. VBPLwas carried out by M/s. L.D Reddy & Co. Company Secretaries Hyderabad in terms ofRegulation 24A of the Listing Regulations and a copy of the report is annexed to thisBoard's Report as 'Annexure B'. The Secretarial Audit Report of VBPL does notcontain any qualification reservation adverse remark or disclaimer.
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 financial year 2021-22 in compliance with the provisions of Section129(3) of the Companies Act 2013 and as stipulated under Regulation 33 of the ListingRegulations as well as in accordance with Indian Accounting Standards (Ind AS) notifiedunder the Companies (Indian Accounting Standards) Rules 2015. The consolidated financialstatements have been prepared on the basis of audited financial statements of the Companyits subsidiaries as approved by the respective Board of Directors. The audited CFStogether with the Auditor's Report thereon forms part of this Annual Report.
Pursuant to the provisions of Section 136 of the Act the auditedfinancial statements including consolidated financial statements and related informationof the Company and audited accounts of the each of its subsidiaries are available onCompany's website www.vishnuchemicals.com. The annual accounts of the subsidiaries andrelated detailed information will be made available to investors seeking information tillthe 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 & 7). During the financial year the Companyhas not given any loans and advances to the firms/ Companies where directors of theCompany are interested except to its subsidiaries.
Directors and Key Managerial Personnel Directors
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 Listing Regulations.
Based on the recommendations of Nomination and Remuneration Committee(NRC) Mr. Veeramachaneni Vimalanand (DIN: 02693721) and Mrs. Sita Vanka (DIN:07016012)were appointed as Additional Directors (for Independent Director category) of the Companyby the Board at its meeting held on 31st December 2021 and 16th May 2022 respectivelywith immediate effect under the provisions of section 161 (1) and other applicableprovisions if any of the Companies Act 2013 and are entitled to hold office up to thedate of 29th Annual General Meeting of the Company.
The Company has received consent from Mr. Vimalanand and Mrs. SitaVanka 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 timealong with a declaration that they are eligible for appointment as Independent Directorand confirming the criteria of Independence as prescribed under Section 149(6) of theCompanies Act 2013 and under the Regulation 16(1)(b) of Listing Regulations. As per thedeclarations received Mr. Vimalanand and Mrs. Sita Vanka are not disqualified from beingappointed as Directors in terms of Section 164 of the Companies Act 2013. In opinion ofthe Board they both fulfill the conditions specified in the Companies Act 2013 &Listing Regulations and are independent of the management.
The Board recommends the Special Resolutions set out at Item No. 4& 5 of the Notice for approval of the Members.
I n accordance with the provisions of Section 152 of the Act and theArticles of Association of the Company Mrs. Ch. Manjula Non-Executive Director of theCompany retires by rotation at the ensuing AGM and being eligible has offered herselffor re-appointment.
Based on the recommendations of NRC the Board at its meeting held on16th May 2022 approved re-appointment of Mr. Tirthankar Mitra (DIN: 02675454) and Mr.Chetan Shah (DIN: 08038633) as Independent Directors of the Company for a second term ofthree (3) years i.e. from August 14 2022 to 13th August 2025 and two (2) years i.e. 12thFebruary 2023 to 11th February 2025 respectively subject to approval of theshareholders under section 149 and all other applicable provisions of the Companies Act2013 read with Listing Regulations at ensuing annual general meeting of the Company.Accordingly resolutions are being proposed in the notice of 29th AGM along withexplanatory statement thereof for approval of the members of the Company by passing aspecial resolutions.
Pursuant to the provisions of Regulation 36 of the Listing Regulationsand Secretarial Standard - 2 (SS-2) on General Meetings issued by Institute of CompanySecretaries of India (ICSI) brief particulars of the directors proposed to be appointed/re-appointed are provided as an annexure to the notice convening the AGM.
The Board recommends the Special Resolutions set out at Item No. 6& 7 of the Notice for approval of the Members.
iii. Change in terms & conditions of appointment/ re-appointment:
During the year under review Mr. Ch. Siddartha was reappointed as aJoint Managing Director of the Company for a further term of five (5) years w.e.f. 2ndMay 2021 up to 1st May 2026 on such terms and conditions including remuneration of Rs48.00 Lakhs (Rupees Forty Eight Lakhs only) per annum and the said re-appointment wasapproved by the shareholders of the Company by passing special resolution under section196 197 and 203 and all other applicable provisions of the Companies Act 2013 read withListing Regulations at 28th Annual General Meeting of the Company held on 12th July 2021.
Further as per approved terms and conditions of his reappointment andbased on the recommendations of NRC the Board at its meeting held on 16th May 2022revised the terms & conditions of his re-appointment to increase remuneration from Rs48.00 Lakhs (Rupees Forty Eight Lakhs only) per annum to Rs 72.00 Lakhs (Rupees SeventyTwo Lakhs only) per annum w.e.f. 1st June 2022 which is within the limits as approved bythe shareholders at their 28th AGM of the Company held on 12th July 2021 by way ofspecial resolution.
Further based on the recommendations of NRC the Board at its meetingheld on 16th May 2022 revised the terms of appointment of Mr. Ch. Krishna MurthyChairman & Managing Director of the Company to increase the remuneration payable tohim from Rs 96.00 Lakhs (Rupees Ninety Six Lakhs only) per annum to Rs 192 Lakhs (RupeesOne Crore Ninety Two Lakhs only) per annum in line with the performance of the Companysubject to approval of the shareholders at ensuing AGM in terms of the provisions ofsection 197 and all other applicable provisions if any of the Companies Act 2013 readwith rules made thereunder and Regulation 17 and all other applicable provision if anyof the Listing Regulations. In this regard a special resolution is being proposed in thenotice of 29th AGM along with explanatory statement thereof for approval of the membersof the Company.
During the year Mr. Pradip Saha (DIN: 07677683) Independent Directorof the Company retired on 9th November 2021 on completion of his term of appointment andceased to be Director of the Company. The Board placed on record its appreciation for hisinvaluable contribution and guidance during his tenure as Independent Director of theCompany.
In terms of Section 149 of the Act Mr. Tirthankar Mitra (DIN:02675454) Mr. Chetan Navinchandra Shah (DIN: 08038633) Mr. V. Vimalanand (DIN: 02693721)and Mrs. Sita Vanka (DIN: 07016012) are the Independent Directors of the Company. TheCompany has received declarations from all the Independent Directors confirming that theymeet the criteria of independence as prescribed under Section 149(6) of the Act andRegulation 16(1)(b) of the Listing Regulations and are independent from the management.The Independent Directors of the Company hold office till the end of their term ofappointment or until completion of 75 years whichever is earlier. They are not liable toretire by rotation in terms of Section 149(13) of the Act. The Independent Directors havealso confirmed that they have complied with the Company's Code of Conduct for Boardmembers and Senior Management and Codes under SEBI (Prohibition of Insider Trading)Regulations 2015.
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.
Familiarisation Programme for Independent Directors
The Members of the Board of the Company have been providedopportunities to familiarise themselves with the Company its management and itsoperations. The Directors are provided with all the documents to enable them to have abetter understanding of the Company its various operations and the industry in which itoperates.
All the Independent Directors of the Company are made aware of theirroles and responsibilities at the time of their appointment through a formal letter ofappointment which also stipulates various terms and conditions of their engagement.Executive Directors and Senior Management provide an overview of the operations andfamiliarise the new Non-Executive Directors on matters related to the Company's values andcommitments. They are also introduced to the organisation structure constitution ofvarious committees board procedures risk management strategies etc.
Strategic Presentations are made to the Board where Directors get anopportunity to interact with Senior Management. Directors are also informed of the variousdevelopments in the Company through Press Releases emails etc. Senior managementpersonnel of the Company make presentations to the Board Members on a periodical basisbriefing them on the operations of the Company plans strategy risks involved newinitiatives etc. and seek their opinions and suggestions on the same. In addition theDirectors are briefed on their specific responsibilities and duties that may arise fromtime to time. The Board is provided with the summary of critical regulatory changes fromtime to time.
The familiarisation 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
6. Risk Management Committee
The details of all the above Committees (except for Risk ManagementCommittee) along with their composition number of meetings and attendance at the meetingsare provided in detail in the Corporate Governance Report annexed to this Board's Report.
Risk Management Committee
The Risk Management Committee consists of the following Directors andSenior Management of the Company:
a. Mr. Ch. Krishna Murthy Chairman & Managing Director
b. Mr. Ch. Siddartha Joint Managing Director
c. Mr. Tirthankar Mitra Independent Director
d. Mrs. Ch. Manjula Non-Executive Director
e. Mr. CPC Kamalakara Rao Director (Operations)
f. Mr. P Anjaneyulu Chief Financial Officer
g. Mr. T. Ramakrishna Director (Commercial & Corporate Affairs)
Mr. Ch. Krishna Murthy Managing Director is the Chairman of theCommittee; Mr. P. Anjaneyulu Chief Financial Officer of the Company is designated asChief Risk Officer and Mr. Kishore Kathri Company Secretary acts as Secretary to theCommittee.
The Committee had formulated a Risk Management Policy for dealing withdifferent kinds of risks which it faces in day-today operations of the Company. RiskManagement Policy of the Company outlines different kinds of risks and risk mitigatingmeasures to be adopted by the Board. The Company has adequate internal control systems andprocedures to combat risks. The Risk management procedures are reviewed by the AuditCommittee and the Board of Directors on a quarterly basis at the time of review of theQuarterly Financial Results of the Company.
Brief description of terms of reference of the Committee inter aliaincludes the following:
1. To formulate a detailed risk management policy which shall include:
a. A framework for identification of internal and external risksspecifically faced by the listed entity in particular including financial operationalsectoral sustainability (particularly ESG related risks) information cyber securityrisks or any other risk as may be determined by the Committee.
b. Measures for risk mitigation including systems and processes forinternal control of identified risks.
c. Business continuity plan.
2. To ensure that appropriate methodology processes and systems are inplace to monitor and evaluate risks associated with the business of the Company;
3. To monitor and oversee implementation of the risk management policyincluding evaluating the adequacy of risk management systems;
4. To periodically review the risk management policy at least once intwo years including by considering the changing industry dynamics and evolvingcomplexity;
5. To keep the board of directors informed about the nature and contentof its discussions recommendations and actions to be taken;
6. The appointment removal and terms of remuneration of the Chief RiskOfficer (if any) shall be subject to review by the Risk Management Committee.
7. The Risk Management Committee shall coordinate its activities withother committees in instances where there is any overlap with activities of suchcommittees as per the framework laid down by the board of directors.
During the year no meetings were held by the Committee.
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 with the provisionsof Section(s) 2(51) and 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. There has been nochange in the Key Managerial Personnel (KMP) during the financial year.
During the year under review six 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 DirectorsKey Managerial Personnel and Senior Management of the Company.
During the financial year 2021-22 the Board had also identified thelist of core skills expertise and competencies of the Board of Directors as are requiredin the context of the business and sector applicable to the Company and those actuallyavailable with the Board. The Company has also mapped each of the skills expertise andcompetencies against 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 Companyhttps://vishnuchemicals.com/wp-content/uploads/2022/06/NRC-Policy-dt-09022018.pdf
Mechanism for Evaluation of the Board
Pursuant to the provisions of the Companies Act 2013 and the ListingRegulations the Board has carried out an annual evaluation of its own performance andthat of its Committees as well as performance of the Directors individually. Feedback wassought by way of a structured questionnaire covering various aspects
of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance and the evaluation was carried out based on responses receivedfrom the Directors.
The evaluation is performed by the Board Nomination and RemunerationCommittee and Independent Directors with specific focus on the performance and effectivefunctioning of the Board and Individual Directors.
In line with SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated5th January 2017 the Company has adopted the criteria recommended by the SEBI. TheDirectors were given Six Forms for evaluation of the following:
a. Evaluation of the Board;
b. Evaluation of Committees of the Board;
c. Evaluation of Independent Directors;
d. Evaluation of Chairperson;
e. Evaluation of Non-Executive and Non-Independent Directors; and
f. Evaluation of Managing Director.
The Directors were requested to give following ratings for eachcriteria:
1. Could do more to meet expectations;
2. Meets expectations; and
3. Exceeds expectations.
A report on the above evaluation has been prepared and submitted to theChairman with feedback for continuous improvement.
In a separate meeting held on 16th May 2022 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 Director and Non-Executive Directors. The NRC reviewed the performance of theBoard its Committees and of the Directors. The same was discussed in the Board Meetingthat followed the meeting of the Independent Directors and NRC at which the feedbackreceived from the Directors on the performance of the Board and its Committees were alsodiscussed.
Code of Conduct for the Board of Directors and Senior ManagementPersonnel
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 and Remuneration of Managerial Personnel)Rules 2014 ('Rules') are enclosed as 'Annexure C 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 does not form part ofthis Report however the same shall be kept open for inspection in terms of Section 136 ofthe Act and any member can obtain a copy of the said statement by writing an email to theCompany 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 a well-defined delegation of authority with specified limits for approval of expenditure bothcapital 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 Companyrecognises 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 and effectiveduring 2021-22.
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 ended31st March 2022:
a. in the preparation of the annual accounts the applicable accountingstandards have been followed and that there are no material departures;
b. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
c. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets 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 bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
f. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
i. Statutory Audit
M/s. Jampani & Associates Chartered Accountants (FRN - 016581S)Hyderabad were re-appointed as statutory auditors of the Company for second term of five(5) years i.e. from the date of 28th Annual General Meeting till the conclusion of 33rdAGM to be held in year 2026 in terms of Sections 139 142 and other applicable provisionsif any of the Companies Act 2013 (the Act) and the Companies (Audit and Auditors) Rules2014 (the Rules) and the same was approved by the members at 28th AGM held on 12th July2021.
The Company received a certificate from the auditors confirming thatthey have not attracted any disqualifications as prescribed under the Companies Act 2013and the Chartered Accountant Act 1949 read with rules made thereunder.
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 regarding interest freeunsecured loans of Rs 989 Lakhs (with a value at amortised cost of Rs 951.59 Lakhs) towholly- owned subsidiary (WOS) i.e. Vishnu Barium Private Limited (VBPL). Further theyalso mentioned in their report at point no. (a) of (vii) of Annexure - 'B' that theCompany has generally been regular in depositing undisputed statutory dues exceptinstances of payment of income tax and they also mentioned that there are no duesoutstanding for a period of more than six months from the date they became payable as at31st March 2022.
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; During the year the Companyhas paid all its statutory dues pertaining to the previous years and efforts are beingmade to comply with the provisions of advance tax during the financial year 2022-23.
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 get its costrecords audited by a Cost Accountant and accordingly such cost accounts and records arebeing maintained by the Company.
During the year there occurred a casual vacancy in the office of CostAuditor due to the sudden demise of Mr. N.V.S. Kapardhi Cost Auditor and such causalvacancy was filled by the Board on the recommendation of the Audit Committee at itsmeeting held on 14th February 2022 by appointing M/s. Sagar & Associates CostAccountants (Firm Registration No. 000118) as the Cost Auditors of the Company to conductaudit of the cost records of the Company for 2021-22 under section 148 and all otherapplicable provisions of the Act.
Further on the recommendations of the Audit Committee the Board atits meeting held on 16th May 2022 has reappointed M/s. Sagar & Associates CostAccountants (FRN: 000118) as the Cost Auditors of the Company to conduct audit of the costrecords of the Company for 2022-23 at such terms & conditions as approved by theBoard.
M/s. Sagar & Associates Cost Accountants (FRN: 000118) hasconfirmed that they are free from disqualification specified under Section 141(3) andproviso to Section 148(3) read with Section 141(4) of the Act and that the appointmentmeets the requirements of Section 141(3) (g) of the Act. They have further confirmed theirindependent status and an arm's length relationship with the Company.
In terms of the provisions of Section 148(3) of the Companies Act 2013read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 (as amended from timeto time) the remuneration payable to the Cost Auditors is required to be placed beforethe Members in a General Meeting for their ratification. Accordingly a resolution forseeking Members' ratification for the remuneration payable to M/s. Sagar & AssociatesCost Accountants (FRN: 000118) for the 2021-22 and 2022-23 is included at Item Nos. 10& 11 of the 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 2021-22. The Secretarial Audit Report of 2021-22is annexed herewith as 'Annexure D'.
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 hasdeposited all its pending taxes during the 2021-22 and has assured that the same will begiven priority hereinafter.
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 as'Annexure E'.
Particulars of Contracts or Arrangements with Related Parties
All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course of business.There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. All the transactions withrelated parties were approved by the Audit Committee and the Board as may be applicable;and the same are reviewed by the Audit Committee on quarterly basis. Also prior omnibusapproval of the Audit Committee is obtained for related party transactions which are ofrepetitive in nature entered in ordinary course of business and on an arm's length basis.The transactions entered into pursuant to the omnibus approval are reviewed by theinternal audit team and the Audit Committee on quarterly basis.
The Company has developed a Policy on Related Party Transactions forthe purpose of identification and monitoring of such transactions. The policy on RelatedParty Transactions as approved by the Board is uploaded on the website of the Company andthe web link is https://www.vishnuchemicals.com/investors/fPolicies.
The particulars of contracts or arrangements with related partiesreferred to in sub section (1) of Section 188 entered by the Company during the FinancialYear ended 31st March 2022 is annexed to this Board's Report in prescribed Form AOC-2 as 'AnnexureF'.
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 G' 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 the Listing Regulations the Company has a vigil mechanism to deal with instances 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/fPolicies
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/fPolicies.
Environment Health and Safety
The Company considers it is essential to protect the Earth and limitednatural resources as well as the health and wellbeing of every person especiallyemployees/ workers of the Company.
The Company strives to achieve safety health and environmentalexcellence in all aspects of its business activities. Acting responsibly with a focus onsafety health and the environment to be part of the Company's DNA.
In line with the 'Go Green' philosophy the Company is continuouslyadopting new techniques to eliminate and minimise the environmental impact. Variousprojects have been implemented by the Company to use alternate sources of energy whereverpossible.
The Company does not just talk about 'Sustainability it follows intrue letter and spirit; Sustainability is about how VCL operates. VCL strives to promoteCircular Economy and deliver Societal Value. VCL's approach is to innovate collaborateand educate communities.
With an intensive focus on safety we have achieved decline in ourtotal recordable injury rate (TRIR). We firmly believe that we can progress only as fastas the successful implementation and acceptance of our safety programmes and initiatives.
Our aim is to build a more mature and sustainable safety culture thatwill allow us to increase our productivity and operational discipline and facilitatehighly competitive organic growth.
Occupational health is a key aspect of VCL's safety activities.Currently there are several health programmes initiated at each site and locationincluding global health days with dedicated initiatives.
Process safety is an integral part of our mission to operate in thesafest manner possible by increasing the efficiency and reliability of our operations.
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 31st March 2022 is available on the Company's website onhttps://vishnuchemicals.com/wp-content/uploads/2022/05/VCL_Form_MGT_7-dt31032022-draft-pdf.pdf
A detailed report on Corporate Governance forms part of this Report as 'AnnexureH'. The Secretarial Auditors of the Company
have examined the Company's compliance and have certified the same asrequired under the Listing Regulations. A copy of the certificate on corporate governanceis reproduced in this Annual Report.
Business Responsibility Report
The 'Business Responsibility Report' (BRR) of your Company for the yearended 31st March 2022 forms part of this Annual Report as required under Regulation34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015as 'Annexure I'.
Transfer of Unpaid and Unclaimed amounts to Investor Education andprotection Fund (IEpF)
As per section 124 of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 and subsequent amendments thereto ("the Rules") all shares in respect ofwhich dividends has not been paid or claimed for seven consecutive years or more shall betransferred to Investor Education and Protection Fund (IEPF).
In line with the aforesaid provisions during the year unclaimedinterim dividend declared for the FY 2014-15 along with the underlying shares on whichdividend has not been claimed for seven consecutive years have been transferred to IEPF.
The procedure for claiming such unclaimed dividend/ shares from IEPFhas been made available on website of the Companyhttps://vishnuchemicals.com/wp-content/uploads/2022/04/Procedure-for-claiming-shares-unclaimed-dividend.pdf. Also the List of shareholders whoseshares have been transferred to IEPF is available on the website of the Companyhttps://vishnuchemicals. com/wp-content/uploads/2021/09/List-of-shareholders-whose-shares-are-being-transferred-to-IEPF-along-with-Unclaimed_Unpaid-dividend-for-seven-consecutive-years.pdf.
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.
| ||For and on behalf of the Board of Directors || |
| ||Sd/- ||Sd/- |
| ||Ch. Krishna Murthy ||Ch. Manjula |
|Hyderabad ||Chairman & Managing Director ||Director |
|16th May 2022 ||DIN:00030274 ||DIN: 01546339 |