The Board of Directors are pleased to present the Company's Twenty Ninth Annual Report and the Company's audited financial statements (standalone and consolidated) for the financial year ended 31st March, 2022.

Financial Results

The Company's financial performance for the year ended 31st March, 2022, is summarised below:

including other income

Performance Review & Company's State of Affairs

On consolidated basis, revenue for the financial year 2021-22 grew by 58% to ' 1,07,475.93 Lakhs compared to ' 68,150.39 Lakhs of previous year. Also growth in EBITDA recorded 101% to ' 16,141.30 Lakhs as against ' 8,027.21 Lakhs for previous year. PAT is ' 8,139.27 Lakhs, higher by 136% over the previous year's PAT ' 3,449.46 Lakhs.

On standalone basis, revenue for the financial year 2021-22 grew by 58% to ' 91,328.66 Lakhs compared to ' 57,708.97 Lakhs of previous year. Also growth in EBITDA recorded over 107% to ' 13,284.36 Lakhs as against ' 6,415.23 Lakhs for previous year. PAT is ' 6,523.90 Lakhs, higher by 187% over the previous year's PAT ' 2,275.33 Lakhs.

For the first time the Company has achieved a historic milestone of ' 1,000 Crores in sales during the financial year 2021-22 marking the best ever annual performance of the Company since inception. The performance for 2021-22 was satisfactory with the growth in domestic as well as export sales by 57% and 60% respectively. Indeed, the demand environment was good throughout the year. During the year, apart from the growth 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 in EBITDA is aided by multiple factors, some of which were scale, quality of products, operational flexibility, focus on supply chain and better procurement planning.

Also, the Company achieved the best ever PAT in 2021-22 at ' 8,139.27 Lakhs compared to ' 3,449.46 Lakhs in 2020-21. During the year, PAT margins also increased by 251 basis points.

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 colours and improving the performance of many consumer and industrial components such as construction equipment, wind turbines, engine pistons etc; we are positive and confident of continuing the growth momentum in 2022-23 and deliver industry leading value accretive growth.

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 31st March, 2022.

Dividend

The Board at its meeting held on 16th May, 2022 has recommended Dividend of ' 2.00 (i.e. 20%) per equity share of ' 10/- each for the financial year 2021-22, (previous year ' 1/- per equity share of ' 10/- each i.e. 10%) amounting to ' 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, 8th July, 2022.

As far 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 ' 10/- (Rupees Ten only) each, consented to accept reduced rate of dividend i.e. 1% per annum instead of 7% per annum for the financial year 2021-22.

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 2021-22 in the Retained Earnings.

Share capital

During the year under review there were no changes in authorised and paid-up share capital of the Company. The authorised share capital of the Company is ' 95,00,00,000/- divided into 1,50,00,000 Equity Shares of '10/- each and 8,00,00,000 Preference Shares of ' 10/- each; and total paid-up share capital of the Company as on financial year ended 31st March, 2022 is ' 88,58,35,200/- divided into 1,19,46,020 Equity Shares of ' 10/- each and 7,66,37,500 7% Cumulative Redeemable Preference Shares of '10/- each.

Promoters of the Company

The promoters of the Company continued to reinforce their confidence in the long term prospects of the Company. The following is the promoter's shareholding as on 31st March, 2022:

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 31st March, 2022 to 16th May, 2022.

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 2021-22 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. 1st April, 2019, as per the amended definition given under the Listed 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.

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's 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 2021-22 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

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 Company by the Board at its meeting held on 31st December, 2021 and 16th May, 2022 respectively, with immediate effect under the provisions of section 161 (1) and other applicable provisions, if any, of the Companies Act, 2013 and are entitled to hold office up to the date of 29th Annual General Meeting of the Company.

The Company has received consent from Mr. Vimalanand and Mrs. Sita Vanka in writing to act as a director in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended from time to time along with a declaration that they are eligible for appointment as Independent Director and confirming the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and under the Regulation 16(1)(b) of Listing Regulations. As per the declarations received, Mr. Vimalanand and Mrs. Sita Vanka are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013. In opinion of the 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.

ii. Re-appointment

I n accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mrs. Ch. Manjula, Non-Executive Director of the Company, retires by rotation at the ensuing AGM and being eligible, has offered herself for re-appointment.

Based on the recommendations of NRC, the Board at its meeting held on 16th 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 of three (3) years i.e. from August 14, 2022 to 13th August, 2025 and two (2) years i.e. 12th February, 2023 to 11th February, 2025 respectively, subject to approval of the 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, resolutions are being proposed

in the notice of 29th AGM along with explanatory statement thereof, for approval of the members of the Company by passing a special resolutions.

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 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 a Joint Managing Director of the Company for a further term of five (5) years w.e.f. 2nd May, 2021 up to 1st May, 2026 on such terms and conditions including remuneration of ' 48.00 Lakhs (Rupees Forty Eight Lakhs only) per annum and the said re-appointment was approved by the shareholders of the Company by passing special resolution under section 196, 197 and 203 and all other applicable provisions of the Companies Act, 2013 read with Listing Regulations at 28th Annual General Meeting of the Company held on 12th July, 2021.

Further, as per approved terms and conditions of his reappointment and based on the recommendations of NRC, the Board at its meeting held on 16th May, 2022 revised the terms & conditions of his re-appointment to increase remuneration from ' 48.00 Lakhs (Rupees Forty Eight Lakhs only) per annum to ' 72.00 Lakhs (Rupees Seventy Two Lakhs only) per annum w.e.f. 1st June, 2022 which is within the limits as approved by the shareholders at their 28th AGM of the Company held on 12th July, 2021 by way of special resolution.

Further, based on the recommendations of NRC, the Board at its meeting held on 16th May, 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 ' 96.00 Lakhs (Rupees Ninety Six Lakhs only) per annum to ' 192 Lakhs (Rupees One Crore Ninety Two Lakhs only) per annum in line with the performance of the Company subject to approval of the shareholders at ensuing AGM 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. In this regard, a special resolution is being proposed in the notice of 29th AGM along with

explanatory statement thereof, for approval of the members of the Company.

iv. Cessation

During the year Mr. Pradip Saha (DIN: 07677683), Independent Director of the Company retired on 9th November, 2021 on completion of his term of appointment and ceased to be Director of the Company. The Board placed on record its appreciation for his invaluable contribution and guidance during his tenure as Independent Director of the Company.

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 Regulation 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 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 a 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.

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 Management 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.

Risk Management Committee

The Risk Management Committee consists of the following Directors and Senior 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 the Committee; Mr. P. Anjaneyulu, Chief Financial Officer of the Company is designated as Chief Risk Officer and Mr. Kishore Kathri, Company Secretary acts as Secretary to the Committee.

The Committee had formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day-today operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat risks. The Risk management procedures are reviewed by the Audit Committee and the Board of Directors on a quarterly basis at the time of review of the Quarterly Financial Results of the Company.

Brief description of terms of reference of the Committee, inter alia, includes the following:

1. To formulate a detailed risk management policy which shall include:

a. A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks or any other risk as may be determined by the Committee.

b. Measures for risk mitigation including systems and processes for internal control of identified risks.

c. Business continuity plan.

2. To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company;

3. To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems;

4. To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity;

5. To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken;

6. The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review by the Risk Management Committee.

7. The Risk Management Committee shall coordinate its activities with other committees, in instances where there is any overlap with activities of such committees, 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, Company Secretary & AGM-Legal, 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. There has been no change in the Key Managerial Personnel (KMP) during the financial year.

Board Meetings

During the year under review, six 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 the financial year 2021-22, 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 recognizing 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 5th January, 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 16th May, 2022, 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 2021-22.

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 31st March, 2022:

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 in terms of Sections 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 (the Act) and the Companies (Audit and Auditors) Rules, 2014 (the Rules) and the same was approved by the members at 28th AGM held on 12th July, 2021.

The Company received a certificate from the auditors confirming that they have not attracted any disqualifications as prescribed under the Companies Act, 2013 and the Chartered Accountant Act, 1949 read with rules made thereunder.

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 interest free unsecured loans of ' 989 Lakhs (with a value at amortised cost of ' 951.59 Lakhs) to wholly-owned subsidiary (WOS) i.e. Vishnu Barium Private Limited (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 31st March, 2022.

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, 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.

During the year, there occurred a casual vacancy in the office of Cost Auditor due to the sudden demise of Mr. N.V.S. Kapardhi, Cost Auditor and such causal vacancy was filled by the Board, on the recommendation of the Audit Committee, at its meeting held on 14th February, 2022 by appointing M/s. Sagar & Associates, Cost Accountants (Firm Registration No. 000118) as the Cost Auditors of the Company to conduct audit of the cost records of the Company for 2021-22 under section 148 and all other applicable provisions of the Act.

Further, on the recommendations of the Audit Committee, the Board at its meeting held on 16th May, 2022 has reappointed M/s. Sagar & Associates, Cost Accountants (FRN: 000118) as the Cost Auditors of the Company to conduct audit of the cost records of the Company for 2022-23 at such terms & conditions as approved by the Board.

M/s. Sagar & Associates, Cost Accountants (FRN: 000118) has 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) 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, 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 2021-22. The Secretarial Audit Report of 2021-22 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 2021-22 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. Also prior omnibus approval of the Audit Committee is obtained for related party transactions which are of repetitive 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 the internal audit team and the Audit Committee on quarterly basis.

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 31st March, 2022 is available on the Company's website on https://vishnuchemicals.com/wp-content/ uploads/2022/05/VCL_Form_MGT_7-dt31032022-draft-pdf.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 Report

The 'Business Responsibility Report' (BRR) of your Company for the year ended 31st March, 2022 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 Investor 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 interim dividend declared for the FY 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/2022/04/ 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/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 orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

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.