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Vishnu Chemicals Ltd			Industry : Chemicals


BSE Code:	516072	NSE Symbol:	VISHNU	P/E(TTM):	18.81

ISIN Demat:	INE270I01022	Div & Yield %:	0.12	EPS(TTM):	16.36

Book Value(Rs):	89.5263621	Market Cap ( Cr.):	2015.94	Face Value(Rs):	2

Change Company

To the Members,

The Board of Directors are pleased to present the Company's Thirtieth Annual Report and the Company's Audited Financial Statements (standalone and consolidated) for the financial year ended March 31, 2023.

Financial Results

The Company's financial performance for the year ended March 31, 2023, is summarised below:

				Rs. in Lakhs
Particulars	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from operations	1,22,185.61	90,668.70	1,39,099.36	1,06,900.18
Other income	1,550.60	659.96	1,520.95	575.75
Total Revenue	1,23,736.21	91,328.66	1,40,620.31	1,07,475.93
Earnings before finance cost, depreciation & amortisation and taxes (EBITDA)*	22,343.82	13,284.36	24,528.26	16,141.30
Earnings before finance cost and taxes (EBIT)*	20,294.36	11,357.69	21,881.94	13,842.86
Finance Cost	2,775.83	2,452.00	3,337.06	2,609.52
Profit Before taxation	17,518.53	8,905.69	18,544.88	11,233.34
1 ess: Tax Ixpense	4,584.06	2,381.79	4,888.50	3,094.07
Profit After Taxation	12,934.47	6,52 3.90	13,656.38	8,139.2/
Other comprehensive income/ (expenses) (net of taxes)	20.69	(40.92)	56.08	(56.4 3)
Total comprehensive income for the year	12,955.16	6,482.98	13,712.46	8,082.84
E PS (of Rs.2/ each)*
Basic	21.65	10.92	22.86	13.6 3
Diluted	21.65	10.92	22.86	13.6 3

including other income

** EPS is calculated on the new base post-split of shares performance review & Company's State of Affairs

On consolidated basis, Total income for the financial year 2022-23 grew by 31 % to Rs.1,40,620.31 Lakhs compared to Rs.1,07,475.93 Lakhs in previous year. Also growth in EBITDA recorded 52% to Rs.24,528.26 Lakhs as against Rs.16,141.30 Lakhs for previous year. PAT is Rs.13,656.38 Lakhs, higher by 68% over the previous year's PAT Rs.8,139.27 Lakhs.

On standalone basis, Total income for the financial year 2022-23 grew by 35% to Rs.1,23,736.21 Lakhs compared to Rs.91,328.66 Lakhs in previous year. Also growth in EBITDA recorded over 68% to Rs.22,343.82 Lakhs as against Rs.13,284.36 Lakhs for previous year. PAT is Rs.12,934.47 Lakhs, higher by 98% over the previous year's PAT Rs.6,523.90 Lakhs.

Geography-wise performance

Particulars	Standalone				Consolidated
	2022-23		2021-22		2022-23		2021-22
Domestic	63,921.88	52.45%	47,194.47	52.18%	70,841.69	51.05%	52,084.01	48.86%
Overseas	57,955.79	47.55%	43,251.93	47.82%	67,923.89	48.95%	54,503.60	51.14%
	1,21,877.67	100%	90,446.40	100%	1,38,765.58	100%	106587.61	100%

The Company has achieved remarkable achievement of PAT crossing Rs.100 Cr in financial year 2022-23 and highest ever PAT margin in a decade. The performance for 2022-23 was satisfactory with the growth in domestic as well as export sales by 36% and 26% respectively. Indeed, the demand environment was good throughout the year. During the year, apart from the growth in revenue the consolidated EBITDA margin stood at 18.1% as compared to 14.5% in 2021-22, and has expanded by over 500 basis points since 2020-21.On consolidated basis debt to equity ratio was reported less than 1. Your Company was recognised as the "Company of the Year" in the Chemicals Sector at the prestigious Dare to Dream Awards 2022.

Further we are confident that robust demand environment continue to drive enquiries for Company's products as they are essential to extending the life, impart colors and improving the performance of many consumer and industrial components such as construction equipment, wind turbines, engine pistons etc.

Outlook

Outlook is covered in Management Discussion and Analysis forming part of this Annual Report.

Management Discussion and Analysis

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the Management Discussion and Analysis is presented in a separate section forming part of this Annual Report. As required under the provisions of the Listing Regulations, the Audit Committee of the Company has reviewed the Management Discussion and Analysis report of the Company for the year ended March 31,2023.

Dividend

The Board at its meeting held on May 03, 2023 has recommended Dividend of Rs.0.40 (i.e. 20%) per equity share of Rs.2/- each for the financial year 2022-23 (previous year Rs.2/- per equity share of Rs.10/- each i.e. 20%) amounting to Rs.238.92 Lakhs. The dividend pay-out is subject to the approval of the shareholders at ensuing Annual General Meeting. The dividend will be paid to the members whose names appear in register of members before the day of Closure of Register of Members and Share Transfer Books i.e. as on Friday, August 4, 2023.

As per as Preference Dividend is concerned, on request of the Company, the preference shareholders holding 100% preference share capital i.e. 7,66,37,500 (Seven Crore Sixty Six Lakh Thirty Seven Thousand Five Hundred only) 7% Cumulative Redeemable Preference Shares (CRPS) of Rs.10/- (Rupees Ten only) each, consented to accept reduced rate of dividend i.e. 4.5% per annum instead of 7% per annum for the financial year 2022-23.

Dividend Distribution Policy

The Company has adopted the Dividend Distribution Policy in accordance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") to determine the distribution of dividends on equity shares of the Company. The Dividend Distribution Policy is available on the Company's website, at https://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 of profits for 2022-23 in the Retained Earnings.

Sub Division of Equity shares

During the 2022-23, the shareholders by means of Postal Ballot through electronic means, on December 14, 2022, approved sub-division of Company's one (1) equity share of face value of Rs.10/- each into five (5) equity shares of face value of Rs.2/- each and consequent amendment in the existing Capital Clause V of the Memorandum of Association (MOA) of the Company.

After the requisite approvals of the Stock Exchanges (i.e., BSE and NSE) and Depositories (i.e., NSDL and CDSL), new ISIN i.e., INE270I01022 has been allotted to the Company. The effect of the change in face value of the share was reflected on the share price at the Stock Exchanges where Company is listed (BSE and NSE) with effect from January 13, 2023 (i.e., Record Date).

Share capital

Due to the sub-division of shares during the year under review, the Authorised share capital of the Company was altered and amended to Rs.95,00,00,000/- divided into 7,50,00,000 Equity Shares of Rs.2/- each and 8,00,00,000 Preference Shares of Rs.10/- each; and the Total paid-up share capital of the Company as on financial year ended March 31,2023 was Rs.88,58,35,200/- divided into 5,97,30,100 Equity Shares of Rs.2/- each and 7,66,37,500 7% Cumulative Redeemable Preference Shares of Rs.10/- each.

Variation of terms of Cumulative Redeemable preference Shares

During the year under review, the shareholders by means of Postal Ballot through electronic means, on March 22, 2023, have approved variation of terms of Cumulative Redeemable Preference Shares (CRPS) of the Company in relation to the redemption period of the CRPS, wherein such CRPS will be allowed for early redemption or early repayment by the Company to CRPS shareholders, on or any time before March 31, 2038.

Fund Raising

The Company is under the process of raising funds by way Qualified Institutions Placement. During the year under review, the shareholders by means of Postal Ballot through electronic means, on March 22, 2023, approved the proposal for capital raising in one or more tranches by way of issuance of equity shares and/or equity linked securities by way of Qualified Institutions Placement ("QIP").

Promoters of the Company

The promoters of the Company continued to reinforce their confidence in the long term prospects of the Company by infusing funds as and when required. The following is the promoter's shareholding as on March 31,2023:

S.No.	Promoters	Equity shares		Preference share
		No. Of shares	Percentage	No. of shares	Percentage
1	Mr. Ch. Krishna Murthy	3,10,98,950	52.07	7,11,21,750	92.80
2	Mrs. Ch. Manjula	80,70,240	13.51	52,71,250	6.88
3	Mr. Ch. Siddartha	56,28,340	9.42	2,44,500	0.32
Total		4,47,97,530	75.00	7,66,37,500	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 any of its subsidiaries during the year under review.

Material changes and commitments, affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report i.e. between March 31, 2023 to May 03, 2023.

Deposits

The Company did not accept any deposits within the meaning of section 73 of the Companies Act, 2013 during the year. As such, no amount on account of principal or 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 on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee for the year 2022-23 has been paid to both the Stock Exchanges. There was no suspension on shares of the Company during the year.

Subsidiaries, Joint Ventures and Associates

The Company has two wholly-owned subsidiaries (WOS) namely: (i) Vishnu Barium Private Limited (VBPL) is a material subsidiary w.e.f. April 01, 2019, as per the amended definition given under the Listing Regulations, as amended from time to time, read with the policy for determining material subsidiaries as approved by the Board. A copy of the 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 joint ventures or associate companies and no company has become subsidiary or ceased to be subsidiary of the Company during the year.

A report on the financial position of each of the subsidiaries as per the Act is provided in Form AOC-1 attached as 'Annexure A.

During the year, the Company has complied with the applicable corporate governance requirements as prescribed under Regulation 24 of Listing Regulations with respect to its subsidiaries and Secretarial Audit for its material subsidiary viz. VBPL was carried out by M/s. L.D Reddy & Co., Company Secretaries, Hyderabad in terms of Regulation 24A of the Listing Regulations and a copy of the report is annexed to this Board Report as 'Annexure B. The Secretarial Audit Report of VBPL does not contain any qualification, reservation, adverse remark or disclaimer.

Consolidated Financial Statements

During the year, the Board of Directors reviewed the affairs of the subsidiaries and prepared consolidated financial statements

(CFS) of the Company and its subsidiaries for the financial year 2022-23 in compliance with the provisions of Section 129(3) of the Companies Act, 2013 and as stipulated under Regulation 33 of the Listing Regulations as well as in accordance with Indian Accounting Standards (IND AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries as approved by the respective Board of Directors. The audited CFS together with the Auditor's Report thereon forms part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act the audited financial statements including consolidated financial statements and related information of the Company and audited accounts of the each of its subsidiaries are available on Company's website www.vishnuchemicals.com. The annual accounts of the subsidiaries and related detailed information will be made available to investors seeking information till the date of the AGM.

Particulars of loans, guarantees or investments

Particulars of loans, guarantees, security and investments covered under section 186 of the Companies Act, 2013 forms part of the notes to the financial statements (please refer Note No 3, 4 & 7). During the financial year, the Company has not given any loans and advances to the firms/ Companies where directors of the Company are interested except to its subsidiaries.

Directors and Key Managerial Personnel Directors

The Board received a declaration from all the directors under section 164 and other applicable provisions, if any, of the Companies Act, 2013 that none of the directors of the Company is disqualified under the provisions of the Companies Act, 2013 ('Act') or under the Listing Regulations.

i. Appointment

During the year under review, based on the recommendations of Nomination and Remuneration Committee (NRC), Mrs. Sita Vanka (DIN:07016012) was appointed as Additional Director (for Independent Director category) of the Company by the Board at its meeting held on May 16, 2022, with immediate effect under the provisions of section 161 (1) and other applicable provisions, if any, of the Companies Act, 2013 and her appointment was approved by the shareholders of the Company by passing Special Resolution under Section 149 and all other applicable provisions of the Companies Act, 2013 read with Listing Regulations at the 29th Annual General Meeting of the Company held on July 15, 2022.

ii. Re-appointment

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Ch. Siddartha, Joint Managing Director of the Company, retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.

During the year under review, based on the recommendations ofNRC, the Board at its meeting held on May16, 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 of three (3) years i.e. from August 14, 2022 to August 13, 2025 and two (2) years i.e. February 12, 2023 to February 11, 2025 respectively, and the said re-appointment was approved by the shareholders of the Company by passing Special Resolution under section 149 and all other applicable provisions of the Companies Act, 2013 read with Listing Regulations at the 29th Annual General Meeting of the Company held on July 15, 2022.

Based on the recommendations of NRC, the Board at its meeting held on May 03, 2023 approved re-appointment of Mr. Veeramachaneni Vimalanand (DIN: 02693721) as Independent Director of the Company for a second term of two (2) years i.e. from December 31, 2023 to December 30, 2025, subject to approval of shareholders under section 149 and all other applicable provisions of the Companies Act, 2013 read with Listing Regulations at ensuing Annual General Meeting of the Company. Accordingly, resolution is being proposed in the notice of 30th AGM along with explanatory statement thereof, for approval of members of the Company by passing a special resolution.

Pursuant to the provisions of Regulation 36 of the Listing Regulations and Secretarial Standard - 2 (SS-2) on General Meetings issued by Institute of Company Secretaries 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 Ordinary Resolution set out at Item No. 3 and Special Resolution set out at Item No. 4 of the Notice for approval of the Members.

iii. Change in terms & conditions of appointment/ reappointment:

During the year under review, as per approved terms and conditions of reappointment of Mr. Ch. Siddartha, Joint Managing Director and based on the recommendations of NRC, the Board at its meeting held on May 16, 2022 revised the terms & conditions of his re-appointment to increase remuneration from Rs.48 Lakhs (Rupees Forty Eight Lakhs only) per annum to Rs.72 Lakhs (Rupees Seventy Two Lakhs only) per annum w.e.f. June 01,2022 which is within the limits as approved by the shareholders at their 28th AGM of the Company held on July 12, 2021 by way of special resolution.

Further, based on the recommendations of NRC, the Board at its meeting held on May 16, 2022 revised the terms of appointment of Mr. Ch. Krishna Murthy, Chairman

& Managing Director of the Company to increase the remuneration payable to him from Rs.96 Lakhs (Rupees Ninety Six Lakhs only) per annum to Rs.192 Lakhs (Rupees One Crore Ninety Two Lakhs only) per annum w.e.f. June 01, 2022 and the same was approved by the shareholders by passing Special Resolution in terms of the provisions of section 197 and all other applicable provisions, if any, of the Companies Act, 2013 read with rules made thereunder and Regulation 17 and all other applicable provision, if any, of the Listing Regulations at the 29th Annual General Meeting of the Company held on July 15, 2022.

Independent Directors

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. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation16(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 of appointment or until completion of 75 years, whichever is earlier. They are not liable to retire by rotation in terms of Section 149(13) of the Act. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct for Board members and Senior Management and Codes under SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in chemicals/ manufacturing industry, strategy, auditing, tax and risk advisory services, financial services, corporate governance, etc. and that they hold standards of integrity.

The Independent Directors of the Company got included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs 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 provided opportunities to familiarise themselves with the Company, its management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement. Executive Directors and Senior Management provide an overview of the operations and familiarise the new Non-Executive Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies, etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Senior management personnel of the Company make presentations to the Board Members on periodical basis, briefing them on the operations of the Company, plans, strategy, risks involved, new initiatives, etc., and seek their opinions and suggestions on the same. In addition, the Directors are briefed on their specific responsibilities and duties that may arise from time to time. The Board is provided with the summary of critical regulatory changes from time to time.

The familiarisation programme along with terms and conditions of appointment of Independent Directors is disclosed on the Company's website https://www.vishnuchemicals.com/ investors/#Policies.

Key Managerial Personnel

Mr. Ch. Krishna Murthy, Chairman & Managing Director; Mr. Ch. Siddartha, Joint Managing Director; Mr. Mahesh Bhatter, Chief Financial Officer and Ms. Vibha Shinde, Company Secretary & Compliance Officer, are Key Managerial Personnel of the Company in accordance with the provisions of Section(s) 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

During the year under review, Mr. Kishore Kathri, Company Secretary & AGM-Legal has resigned from the Company w.e.f. June 15, 2022 and Ms. Vibha Shinde was appointed as Company Secretary & Compliance Officer w.e.f. August 06, 2022. Pursuant to demise of Mr. P Anjaneyulu (former Chief Financial Officer of the Company) Mr. Mahesh Bhatter was appointed as Chief Financial Officer of the Company w.e.f. February 10, 2023.

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. Risk Management Committee

6. Finance Committee of Directors

7. Fund Raising Committee

8. Investment Committee

The details of all the above Committees (except for Investment Committee) along with their composition, number of meetings and attendance at the meetings are provided in detail in the Corporate Governance Report annexed to this Board's Report.

Investment Committee

Mr. Ch. Krishna Murthy, Chairman & Managing Director, Mr. Ch. Siddartha, Joint Managing Director and Mr. Chetan Shah, Independent Director are the members of the Committee. The Committee was constituted on May 03, 2023, inter alia, to exercise the powers specified in clauses (d) to (f) of sub-section (3) of section 179 of the Companies Act, 2013 w.r.t enter into transaction with the Company's related party including but not limited to its subsidiaries and associates entities, wherein, the Company may transfer its resources to such related party in permitted form and manner including (a) granting of loan, (b) giving guarantee, (c) subscribing to the share capital, convertible instrument and/or debt instrument of such related party as maybe deem fit in adherence to the provisions Section 186 and 188 of the Companies Act, 2013 and SEBI Listing Regulations. During the year, no meetings were held by the Committee.

Board Meetings

During the year under review, five Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report, which forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations.

procedure for Nomination & Appointment of Directors and Remuneration policy

The Nomination and Remuneration Committee (NRC) is responsible to set the skills/ expertise/ competencies of the Board Members based on the industry and strategy of the Company and to formulate the criteria for determining qualifications, positive 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 the Nomination & Remuneration Committee framed a policy for Remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company.

During 2022-23, the Board had also identified the list of core skills, expertise and competencies of the Board of Directors as are required in the context of the business and sector applicable to the Company and those actually available with the Board. The Company has also mapped each of the skills, expertise and competencies against the names of the Board Members possessing the same.

The objective of the Company's remuneration policy is to attract, motivate and retain qualified and expert individuals that the Company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognising the interests of Company's stakeholders.

The Non-Executive Directors (NED) are remunerated by way of sitting fee for each meeting attended and are also reimbursed out of pocket expenses incurred by them in connection with the attendance of the Company's Meetings.

A copy of the Nomination & Remuneration Policy is available on the website of the Company https://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 Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.

The evaluation is performed by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

In line with SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004, dated January 05, 2017, the Company has adopted the criteria recommended by the SEBI. The Directors 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 each criteria:

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 the Chairman with feedback for continuous improvement.

In a separate meeting held on May 03, 2023, the Independent Directors evaluated the performance of Non-Independent Directors and performance of the Board as a whole. They also evaluated the performance of the Chairman taking into account the views of Executive Director and Non-Executive Directors. The NRC reviewed the performance of the Board, its Committees and of the Directors. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors and NRC, at which the feedback received from the Directors on the performance of the Board and its Committees were also discussed.

Code of Conduct for the Board of Directors and Senior Management personnel

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Board of Directors and Senior Management Personnel of the Company. A declaration to this effect has been signed by the Chairman & Managing Director forms part of the Annual Report.

particulars of employees and Remuneration

Disclosures pertaining to remuneration and other details as required under 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 under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules does not form part of this Report however the same shall be kept open for inspection in terms of Section 136 of the Act and any member can obtain a copy of the said statement by writing an email to the Company Secretary at investors@vishnuchemicals. com

Internal Financial Controls

Internal financial control systems of the Company are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards and relevant statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. The Company has a well- defined delegation of authority with specified limits for approval of expenditure, both capital and revenue. The Company uses an established ERP system to record day-to-day transactions for accounting and financial reporting.

The Audit Committee deliberated with the members of the management, considered the systems as laid down and met the internal auditors and statutory auditors to ascertain, their views on the internal financial control systems. The Audit Committee satisfied itself as to the adequacy and effectiveness of the internal financial control system as laid down and kept the Board of Directors informed. However, the Company recognises that no matter how the internal control framework is, it has inherent limitations and accordingly, periodic audits and reviews ensure that such systems are updated on regular intervals.

Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s), including audit of internal financial controls over financial reporting and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during 2022-23.

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that for the year ended March 31,2023:

a. i n the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 by the Company and that such internal financial controls are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors

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 33rd AGM to be held in year 2026, at such remuneration as may be agreed upon between the Auditors and the Board of Directors, in addition to actual out-of-pocket expenses incurred by them for the purpose of audit and the applicable taxes.

Further, the report of the Statutory Auditors along with notes to accounts is a part of the Annual Report. There has been no other qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report except below:

Auditor's Observations:

The Statutory Auditors have mentioned in their report at point no. (iii) of Annexure - 'B' to the Independent Auditors Report regarding granting of interest free unsecured loans of Rs.989 Lakhs (with a value at amortised cost of Rs.670.18 Lakhs) in earlier years and granting of interest bearing loan of Rs. 1440 Lakhs during 2022-23 to wholly-owned subsidiary (WOS) i.e. Vishnu Barium Pvt Ltd (VBPL). Further, they also mentioned in their report at point no. (a) of (vii) of Annexure - 'B' that the company has generally been regular in depositing undisputed statutory dues except instances of payment of income tax and they also mentioned that there are no dues outstanding for a period of more than six months from the date they became payable as at March 31,2023.

Management Replies:

The above said interest-free unsecured loan was infused by the Company in WOS Company i.e. VBPL, to comply with the conditions stipulated by the Banker for sanction of term loan and working capital facilities to VBPL and such infusion of unsecured loan is for the ultimate benefit of the Company. During the year further infusion of unsecured interest bearing Loan for Rs. 1440 Lakhs is for the long term benefit of the company. Also,during the year, the Company has paid all its statutory dues pertaining to the previous years and efforts are being made 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 and Audit) Rules, 2014, the Company is required to prepare, maintain as well as get its cost records audited by a Cost Accountant and accordingly such cost accounts and records are being maintained by the Company.

The Board on the recommendation of the Audit Committee has appointed M/s. Sagar & Associates, Cost Accountants (FRN: 000118) as the Cost Auditors of the Company under Section 148 and all other applicable provisions of the Act to conduct the audit of the cost records of the Company for the 2023-24.

M/s. Sagar & Associates, Cost Accountants (FRN: 000118) have confirmed that they are free from disqualification specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act and that the appointment meets the requirements of Section 141(3)(g) of the Act. They have further confirmed their independent status and an arm's length relationship with the Company.

In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, (as amended from time to time), the remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution for seeking Members' ratification for the remuneration payable to M/s. Sagar & Associates, Cost Accountants (FRN: 000118) is included at Item No. 5 of the Notice convening the AGM.

iii. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. L.D. Reddy & Co., Company Secretaries, Hyderabad to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report of 202223 is annexed herewith as 'Annexure D'.

There has been no other qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report except the concern about delay in deposit of some of the tax dues. In this regard, the management explained that the Company has deposited all its pending taxes during the 2022-23 and has assured that the same will be given priority hereinafter.

Secretarial Standards

The Board has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and that such systems were adequate and operating effectively.

Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 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 the financial 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 with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All the transactions with related 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.

The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company and the web link is https://www.vishnuchemicals.com/investors/#Policies.

The particulars of contracts or arrangements with related parties referred to in sub section (1) of Section 188 entered by the Company during the Financial Year ended March 31,2023 is annexed to this Board's Report in prescribed Form AOC-2 as 'Annexure F.

Corporate Social Responsibility (CSR) initiatives

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company, details regarding CSR Committee and the initiatives undertaken by the Company on CSR activities during the year are set out in 'Annexure G' of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. CSR Policy is available on the Company's website on https://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 Regulation 22 of the Listing Regulations, the Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any, including reporting instances of leak of UPSI or suspected leak of UPSI by employees, anti-bribery & anti-corruption and taking appropriate actions on such reporting. The Audit Committee reviews the functioning of the vigil / whistle blower mechanism from time to time. There were no allegations / disclosures / concerns received during the year under review in terms of the vigil mechanism established by the Company. The details of the vigil mechanism are displayed on the website of the Company https://www.vishnuchemicals.com/investors/#Policies

Prevention of Insider Trading

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended, the Company has adopted the Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons and their Immediate Relatives along with Code of Fair Disclosures and a copy of the same are available on company's website https://www.vishnuchemicals. com/investors/#Policies.

Environment, Health and Safety

The Company considers it is essential to protect the Earth and limited natural resources as well as the health and wellbeing of every person especially employees/ workers of the Company.

The Company strives to achieve safety, health and environmental excellence in all aspects of its business activities. Acting responsibly with a focus on safety, health and the environment to be part of the Company's DNA.

In line with the 'Go Green' philosophy, the Company is continuously adopting new techniques to eliminate and minimise the environmental impact. Various projects have been implemented by the Company to use alternate sources of energy wherever possible.

The Company does not just talk about 'Sustainability, it follows in true letter and spirit; Sustainability is about how VCL operates. VCL strives to promote Circular Economy and deliver Societal Value. VCL's approach is to innovate, collaborate and educate communities.

With an intensive focus on safety, we have achieved decline in our Total recordable injury rate (TRIR). We firmly believe that we can progress only as fast as the successful implementation and acceptance of our safety programmes and initiatives.

Our aim is to build a more mature and sustainable safety culture that will allow us to increase our productivity and operational discipline and facilitate highly 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 location, including global health days with dedicated initiatives.

Process safety is an integral part of our mission to operate in the safest 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 at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All women employees permanent, temporary or contractual are covered under the above policy. The said policy has been circulated to all employees by hosting on notice board and a copy of the same 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 area, the Company has been conducting awareness sessions during induction. During the year under review, no complaints pertaining to sexual harassment of women employees were reported.

Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Company's website on https://vishnuchemicals.com/wp-content/ uploads/2023/06/VCL_Form_MGT_7_dt31032023pdf.pdf

Corporate Governance

A detailed report on Corporate Governance forms part of this Report as 'Annexure H'. The Secretarial Auditors of the Company have examined the Company's compliance and have certified the same as required under the Listing Regulations. A copy of the certificate on corporate governance is reproduced in this Annual Report.

Business Responsibility and Sustainability Report

The 'Business Responsibility and Sustainability Report' (BRSR) of your Company for the year ended March 31,2023 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as 'Annexure I.

Transfer of Unpaid and Unclaimed amounts to Investor Education and Protection Fund (IEPF)

As per section 124 of the Companies Act, 2013 read with the I n vestor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereto ("the Rules"), all shares in respect of which dividends has not been paid or claimed for seven consecutive years or more shall be transferred to Investor Education and Protection Fund (IEPF).

In line with the aforesaid provisions, during the year, unclaimed final dividend declared for the 2014-15 along with the underlying shares on which dividend has not been claimed for seven consecutive years have been transferred to IEPF.

The procedure for claiming such unclaimed dividend/ shares from IEPF has been made available on website of the Company https://vishnuchemicals.com/wp-content/uploads/2022/12/VCL_ Procedure-for-claiming-shares-unclaimed-dividend.pdf. Also, the List of shareholders whose shares have been transferred to IEPF is available on the website of the Company https://vishnuchemicals. com/investors/#1571301753648-def2a8d8-e177

Significant and material orders passed by the regulators or courts

During the year under review, there were no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Insolvency and Bankruptcy

The Company has neither made any applications nor there are any proceedings pending under the Insolvency and Bankruptcy Code, 2016 during the year under review.

Acknowledgements

The Directors wish to place on record their appreciation for the continued support and co-operation by Financial Institutions, Banks, Customers, Suppliers, Government Authorities and other stakeholders. Your Directors also acknowledge the support extended 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
May 03, 2023	DIN:00030274	DIN:01546339