Visaka Industries Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 39th Annual Report on the operational and business performance of the Company together with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31st March, 2021.

Financial Performance

The summarised financial performances for the Financial Year ended March 31, 2021 are as under:

(Rs in lakh)




2020-21 2019-20 2020-21 2019-20
Total Revenues 1,15,479 1,05,701 1,15,513 1,05,701
Profit before depreciation and Taxes 18,925 9,808 18,925 9,808
Profit before taxes 14,926 5,712 14,926 5,712
Provision for taxes (Including deferred tax) 3,861 782 3,861 782
Total Comprehensive Income 11,087 4,763 11,086 4,763
Dividend (including corporate dividend tax) * 824 4,212 824 4,212
Balance brought forward from previous year 17,006 16,454 17,006 16,454
Profit available for appropriation 27,268 17,006 27,268 17,006

*Dividend paid during the respective years

Performance review and the state of Companys affairs:

The Companys consolidated total income for the year 2020-21 was H1,155.13 crore, up by 9% over the previous year FY2019-20. Profit before tax (PBT) was H149.26 crore representing a growth of 161% over the previous year.

The Companys standalone total income for the year was H1,154.79 crore, up by 9% over the previous year. Profit before tax (PBT) was H149.26 crore representing a growth of 161% over the previous year.

The Company has posted highest ever profits during the year under review. This is during a year in which humankind has passed through challenges which are not within living memory. The impact of Covid-19 was felt across the economy and businesses. However, the Building product segment led the Companys strong growth with focused initiatives countering the challenges posed by Covid-19 pandemic. The good performance is possible due to strong rural markets, gradual opening of Urban markets and ease of supply chains among others. Digital marketing initiatives of the Company have also shown a positive impact.

The Companys other key performance indicators are as under:

• Cash Profit increased by 68% to H151 crore from H90 crore in previous year

• The capital expenditure for FY2020-21 was H54 crore, major part of which is in respect of the ongoing Udumulpet project (VNext Boards) near Coimbatore.

There is no change in business during the year under review.

COVID-19 impact

The outbreak of the deadly COVID-19 virus and the ensuing lockdown imposed across the country affected business operations. The health of the employees and workers became a priority; stoppage of operations for an uncertain period resulted in a large financial burden on the one hand and workforce idling on the other. COVID-19 is an unprecedented challenge. The lockdown gave India time to make a concerted effort to flatten the outbreak curve. However, towards later part of the year consequent to significant opening of the economic activity across the nation the demand picked up compared to that during the initial period of Covid-19.

India is currently experiencing a massive second wave of Covid-19 infections. However, we expect no major changes in the economic activity as the nation is preparing to face the Pandemic with vaccines and preparedness.

Moodys Investors Services said the escalating second wave of coronavirus infections in India present a risk to its growth forecast of 13.7% for FY22 as the re-imposition

of virus management measures will curb economic activity and could dampen market and consumer sentiment.

"The announced countermeasures to combat the second wave - some of which are due to remain in place at least until the end of June - risk weakening the economic recovery. However, the targeted nature of containment measures and rapid progress on vaccinating the population will mitigate the credit-negative impact," it added.


Your Directors declared interim dividend of H5/- (i.e., 50%) per share of H10/- each fully paid up during the financial year under review. Your Directors are pleased to recommend a Final Dividend of H10/- (i.e.100 %) per share of H10/- each for the Financial Year 2020-21. With the above, the total dividend recommended would be H15/- (i.e.150%) per share of H10/-, which is on par with the previous year of H15/- per share (i.e.150%). The dividend, if approved at the 39th annual general meeting (AGM), will be paid to those members whose names appear on the register of members of the company as of end of the day on 19th May, 2021.


The company has not proposed to transfer any amount to the general reserve.


The paid-up share capital of your company increased by H60.00 lakh to H1,648.10 lakh during the year under review. The Company has made preferential allotment of2 lakh Equity Shares of H10/- face value each fully paid up at a price of H241/- (Share Premium at the rate of H231/- per share) and further allotted 4,00,000 fully paid equity shares of face value H10/- fully paid up at a price of H241/- (Share Premium at the rate of H231/- per share) each against 4,00,000 convertible warrants

Share Warrants

During the year under review the Company allotted 12,00,000 convertible Warrants to its Promoter Group each carrying a right exercisable by the warrant holder to subscribe to One equity share per warrant at a price of H241/- (Premium at the rate of H231/- per warrant). 25% of the warrant issue price received upfront and balance 75% is payable by the Warrant Holder at the time of allotment of the Equity Share which may be exercised at any time before expiry of 18 months from the date of allotment of

Warrants, failing which the warrants shall lapse and the amount paid shall stand forfeited by the Company. Out of these the Company had allotted 4,00,000 fully paid equity shares of face value H10/- each against 4,00,000 convertible warrants after receiving the balance 75% amount. Convertible warrants outstanding as at 31st March, 2021 are 8,00,000.

Disclosure Under Reg 32 (7A) of SEBI (LODR) Regulations 2018

The preferential issue of Equity Shares and Warrants proceeds have been completely utilised towards capital expenditure for Udumulpet (VBoards Unit) repayment of borrowings.

Subsidiary companies:

The Company has two subsidiaries as on 31st March, 2021 i.e., VNEXT Solutions Private Limited and Atum Life Private Limited, Vnext Solutions Pvt Ltd is setup to capitalise on the expertise gained in the various applications of its products.

The Statement containing salient features of the financial statement of Subsidiaries/associate companies/joint ventures (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) is annexed as Annexure 1

Atum Life Private Limited is formed in dealing with the sustainable products for the following reasons

a) Recent market studies suggest that awareness among Indian consumers towards sustainable and ethical practices of brands has increased, which has led to a significant shift in their behaviour.

b) It is hoped that there is increasing affinity with brand prestige and sustainability, and a willingness to shift purchases towards brands with higher ethical practices and sustainable processes.

c) Studies further suggest that there is a need for retailers/ dealers to develop capabilities to meet the change in purchase pattern and as such, the management feels that there exists an opportunity in this area and

d) With a view to capitalise on early mover advantage and to provide touch and feel experience to the customers it is proposed to enter into the business of dealing, trading, selling, marketing, promotion and distribution of Eco-friendly and Sustainable products by setting up Studios in top 10 metro cities.

In terms of Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the company and all its subsidiaries prepared in accordance with Ind AS 110 and 111 as specified in the Companies (Indian Accounting Standards) Rules, 2015, forming part of the annual report. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements and related information of the company and its subsidiaries, wherever applicable, are available on the companys website: www.visaka. co. These are also available for inspection during regular business hours at our corporate office in Hyderabad, India.

Management discussion and analysis

Global economic overview

The global economy reported de-growth of 3.5% in 2020 compared to a growth of 2.9% in 2019. This steep decline in global economic growth was largely due to the outbreak of the novel coronavirus and consequent suspension of economic activities across the world. The global economy is projected to grow by 5.5% in 2021 largely due to the successful roll-out of vaccines across the globe, coupled with policy support in large economies. (Source: IMF)

Region growth % 2020 2019
World output (3.5) 2.9
Advanced economies (4.9) 1.7
Emerging and developing economies (2.4) 3.7


(Source: IMF)

Indian economic review

The Indian government announced a complete lockdown in public movement and economic activity from the fourth week of March 2020. The lockdown staggered an already- slowing economy as 1.38 billion Indians stayed indoors - one of the most stringent lockdowns anywhere.

The outbreak of the novel coronavirus impacted the Indian economy during the first quarter of the year under review. The Indian economy de-grew 23.9 per cent in the first quarter of 2020-21, the sharpest de-growth experienced by the country since the index was prepared.

The Indian and state governments selectively lifted controls on movement, public gatherings and events from June 2020 onwards. The result is that Indias relief consumption, following the lifting of social distancing controls, translated into a full-blown economic recovery. A number of sectors in India - real estate, steel, cement, home building products and consumer durables, among others - reported unprecedented growth. India de-grew at a relatively improved 7.5 per cent in the July-September quarter and reported 0.4 per cent growth in the October- December quarter.

Indias GDP contracted initially and then recovered in 2020-21. This recovery - one of the most decisive among major economies - validated Indias long-term consumption potential.

Y-o-Y growth of the Indian economy

Region growth % FY18 FY19 FY20 FY21
Real GDP growth (%) 7 6.1 4.2 NA

Growth of the Indian economy, 2020-21

Region growth % Q1, FY21 Q2, FY21 Q3 FY21 Q4, FY21
Real GDP growth (%) (23.9) (7.5) 0.4 NA


(Source: Economic Times, IMF, EIU, Business Standard, McKinsey)


The Indian economy is projected to grow by more than 10% in FY22 as per various institutional estimates, making it one of the fastest-growing economies. Indias growth journey could be the result of a culmination of favourable tailwinds like consistent agricultural performance, flattening of the COVID-19 infection curve, increase in government spending, reforms and an efficient roll-out of the vaccine, among others.

However, the only dampener is the surge in Covid-19 in the first quarter of the current financial year that could affect public consumption of products and services.

Indian construction and building materials industry

Indias construction industry is engaged in growth, which mainly includes real estate and urban development projects. Given the nations objective to modernize infrastructure and bring about a smart development in its cities, India is expected to emerge as the third largest construction market by 2025. This industry covers a wide scope and contributes around 55% to the steel, 15% to the paint and 30% to the glass industry. To facilitate growth, India relaxed foreign investment norms, with the real estate sector solely receiving investments worth US$ 5 billion. In terms of job creation, the Indian construction sector created more than 50 million jobs in 2020.

The Covid-19 pandemic caused a social and economic disruption. The economic impact on the construction and building industry was vast. The Indian construction industry is expected to experience a YoY growth of 11.6% by 2021. Different industries and markets are bound to go through changes in the upcoming years, with a common factor in each business- digitization. Therefore, even within the real estate and infrastructure industry, while the nature and pace of change could vary from business to business, each of them will be in need of digitization. (Source: India briefing, Surfaces reporter,

Rising urbanisation: Indias population is expected to rise from 1.38 billion in 2020 to 1.52 billion in 2036.

Demographic dividend: Indias median age of population is 28 years, which is lower compared to the global average of 30, expected to drive demand for building materials.

Rise of real estate sector: The real estate sector is projected to increase from a market size of US$ 180 billion in 2020 to US$ 650 billion in 2025.

Smart Cities Mission: An allocation of H137 billion was made in the Union Budget 2021-22 for the Smart Cities Mission, which aims to promote smart cities that provide their citizens with the benefit of core infrastructure, as well as decent life quality, clean and sustainable environment.

Pradhan Mantri Awas Yojana - Gramin (PMAY-G): India seeks to build 30 million houses in rural areas by 2022.

Budgetary allocation: The Ministry of Rural Development received the 4th highest allocation of the Union Budget 2021-22 across all ministries (H1,33,690 crore). Out of this amount, 98% was allotted to the Department of Rural Development and the rest to the Department of Land Resources. (Source: The wire, Trading Economics, Statista, PRS, India briefing)

Indian fibre cement products sector overview

Fibre cement roofing products have been in use in India for more than 80 years now. They are made of superior quality cement and imported fibre. Fibre cement roofing sheets are composite building and construction materials, which are mainly used in roofing and facade applications due to their strength and durability. Moreover, strict regulations against the use of asbestos in construction due to the health risks involved in its use has been a major demand driver for fiber cement roofing sheets.

The Indian fibre cement roofing sheets market is anticipated to reach a value of US$ 760 million by FY 2026, growing at a CAGR of more than 3%, on account of the growing economy of India, coupled with the preference of fibre cement roofing products over its alternatives due to its adaptable properties. The fibre cement roofing market is expected to grow on account of high developments in the sector and increasing government investments in infrastructure development.

In terms of raw materials, the Indian fiber cement roofing sheets market is segmented into portland cement, chrysotile asbestos fibre and others.

The roofing category is anticipated to retain its superiority in the upcoming years. The growth of the roofing category is majorly attributable to the widespread use of fiber cement sheets for roofing in residential as well as nonresidential applications. Moreover, in rural buildings, the corrugated roofing sheets possess repetition of folds on their surface as this unique shape offers enduring strength and utility. Their grooves and ridges make asbestos sheets stronger and wavy structure increases strength in covering small surface areas. (Source: Techsciresearch, Yahoo)

The other fibre cement product is the fibre cement board which comprises cement, silica and cellulose fibre among others. This product which is recognised as a green product is popular world wide and is gaining immense traction in India (manufactured and marketed by Visaka under the brand of VNext products) in the last few years. These are used for literally all internal and external applications except the roof. The properties of these products make them ideal to replace brick work applications, plywood applications, MDF applications and gypsum board applications. The company currently enjoys a 32% market share which is expected to go up to 40% by end of FY 22. The size of this market can be anything considering the potential indicated above.

Indian solar rooftops market overview

In 2015, India announced its renewable energy target of 175 GW for 2022, with 100 GW as the share for solar power. The rooftop solar is the most underdeveloped renewable energy segment in the country with an installed capacity of 3.4 GW as of 30th November, 2020 against the 40 GW target set for 2022. More than 70% of the distributed generation/ rooftop solar capacity in the country have been contributed by the commercial and industrial customers.

Financially, the rooftop solar market suffered from being perceived as expensive and requiring subsidies. A massive push has been given by the Government at both central and state levels, through the PMKUSUM scheme. This In turn gives a boost to solar rooftops.

Indian textiles and apparel industry

The Indian textile and apparel industrys market size was pegged at US$ 133 billion in 2020. This industry contributes to 2% of Indias GDP and is anticipated to grow at a CAGR of 13.80% during 2021-2026. The Government made investments under Integrated Textile Parks Scheme and the Technology Upgradation Fund to encourage private investments.

The country is among one of the largest producers of textile and apparel. The Indian textile and apparel industry contributes to 7% of global industry output in terms of value and 12% through exports.

In terms of employment, the Indian textile industry is the second largest employer in the country after the agricultural sector, providing direct and indirect employment to around 100 million people.

Lower cost of production: India has a lower cost of production in terms of skilled manpower and availability of abundant raw materials, which gives the country a competitive advantage over other countries.

Increase in demand of end-user segments: There has been an increase in the demand for technical textiles on account of growth of its end-user segments such as automotive, health care, infrastructure and oil and petroleum.

Growth of Indian online retail sector: The market size of Indian online retail sector has increased from US$ 32.7 billion in 2018 to US$ 60 billion in 2020. This rapid expansion can be credited to increase in e-commerce, government policy of allowing 100% FDI into the sector and increase in digital buyers. This rise in digitization is expected to strengthen demand for textiles and apparel in the country.

Policy support: The Government provided a total outlay of H10,683 crore under the Production Linked Scheme for man-made fibres and technical textiles. Moreover, H700 crore was allocated in the Union Budget 2021-22 for Amended Technology Upgradation Scheme (ATUFs) against H545 crore in the last one, which will help in clearing the pending capital subsidy.


(Source: InvestIndia, Financial Express)

Financial overview

Analysis of the profit and loss statement

Revenues: Revenue from operations reported 9% growth from H1,050 crore in FY2019-20 to H1146 crore in 202021. Other income of the Company reported a 30% growth and accounted for 0.7% share of the Companys revenues reflecting the Companys dependence on its core business operations.

Expenses: Total expenses of the Company increased by 0.5% from H1000 crore in FY2019-20 to H1005 crore in 2020-21 due to higher production. Employee expenses accounting for 10.4% share of the Companys total revenues increased by 3.4% from H116 crore in FY2019- 20 to H120 crore in 2020-21.

Analysis of the Balance Sheet Sources of funds

• The capital employed by the Company decreased by 3% from H825 crore as on 31st March, 2020 to H798 crore as on 31st March, 2021 .

• The net worth of the Company increased from H505 crore as on 31st March, 2020 to H627 crore as on 31st March, 2021 owing to increase in reserves and surpluses. The Companys equity share capital increased from 1.58 crore equity shares to 1.648 crore equity shares of H 10 each, during the year under review.

• Long-term debt of the Company decreased to H76 crore as on 31st March, 2021. The long-term debt- equity ratio of the Company stood at 0.12in 2020-21 compared to 0.17 in FY2019-20.

• Finance costs of the Company decreased from H17.40 crore in FY2019-20 to H12.81 crore in 2020-21 following the repayment of liabilities and negotiation of better terms with bankers. The Companys interest cover stood at a comfortable 15.8 in 2020-21 (6.6 in FY2019-20).

Applications of funds

• Fixed assets (gross) of the Company increased by 5% from H549 crore as on 31st March, 2020 to H577 crore as on 31st March, 2021 owing to expansion.

Other non-current assets

• Other Non-current assets of the Company increased from H14.71crore as on 31st March, 2020 to H43.09 crore as on 31st March, 2021.

Working capital management

• Current assets of the Company decreased from H514 crore as on 31st March, 2020 to H503 crore as on 31st March, 2021. The current and quick ratios of the Company stood at 2.17 and 0.96, respectively in 2020-21 compared to 1.52 and 0.48, respectively in FY2019-20.

• Inventories including raw materials, work-in-progress and finished goods among others decreased by 18% from H304 crore as on 31st March, 2020 to H249 crore as on 31st March, 2021. The inventory cycle days decreased from 106 days of turnover equivalent in FY2019-20 to 79 days of turnover equivalent in 2020-21.

• Trade receivables decreased by 23% from H145 crore as on 31st March, 2020 to H111 crore as on 31st March, 2021. More than 95 % of the receivables are considered good. The Company contained its debtor turnover cycle within 33 days of turnover equivalent in 2020-21 compared to 49 days in FY2019-20.

• Cash and bank balances of the Company increased from H19 crore as on 31st March, 2020 to H117 crore as on 31st March, 2021.

• Loans and advances made by the Company increased by 39% from H34 crore as on 31st March, 2020 to H48 crore as on 31st March, 2021 on account of increased advances payable to suppliers and others.


The EBIDTA margin of the Company grew 663 basis points from 11.04% in FY2019-20 to 17.67% in 2020-21, while the net profit margin of the Company grew by 497 basis points.

Key ratios
Particulars FY2020-21 FY2019-20
Debt-equity ratio 0.25 0.60
Return on equity (%) 17.65 9.76
Earnings per share (R) - Basic 68.47 31.04
Debtors Turnover (days) 33 49
Inventory Turnover (days) 79 106
Interest Coverage Ratio 15.8 6.6
Current Ratio 2.17 1.52
EBITDA Margin (%) 17.67 11.04
Net Profit Margin (%) 9.68 4.71

Risk management

The risks affecting the companys business have been extensively covered in another part of the annual report.

Internal Financial Control systems and their adequacy

The Companys internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with and pending issues are addressed promptly. The audit committee reviews reports presented by the internal auditors on a routine basis. The committee makes note of the audit observations and takes corrective actions wherever necessary. It maintains constant dialogue with statutory and internal auditors to ensure that internal control systems are operating effectively. Based on

its evaluation (as provided under Section177 of the Companies Act, 2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as of 31st March, 2021, the Internal Financial Controls were adequate and operating effectively.

M/s. Price Waterhouse & Co. Chartered Accountants LLP, the Statutory Auditors of the Company audited the financial statements included in this Annual Report and issued a report on the internal controls over financial reporting (as defined in Section 143 of the Companies Act, 2013).

Human resources and industrial relations

The Company believes that the quality of employees is the key to its success. In view of this, it is committed to equip them with skills, enabling them to evolve with technological advancements.

During the year, the Company organised training programmes in technical skills, behavioral skills, business excellence, general management, advanced management, leadership skills, customer orientation, safety, values and code of conduct. Considering the health and safety of employees and advisories, orders and directions issued by State and Central Governments to restrict the novel corona virus, the Company implemented a work from home policy to ensure employee safety.

The HR department of the Company was continuously in touch with employees to guide and solve problems. It created awareness regarding COVID-19 and educated employees about precautions. The Company conducted all interviews through telephone and video calls in reference to the need for social distancing. The Company prepared a systematic operating plan to address COVID-19 after the lockdown is lifted. The Companys permanent employee strength stood at 1900 as on 31st March, 2021.

Cautionary statement

This statement made in this section describes the Companys objectives, projections, expectations and estimations, which may be forward-looking statements, within the meaning of applicable laws and regulations.

Fixed Deposits

During the year under review, your Company has accepted H2.33 crore as public deposits and repaid H2.46 crore upon maturity making the outstanding as on 31st March, 2021 to H13.27 crore. In this regard,it is further stated that:

a) There were no deposits lying unpaid or unclaimed at the end of the year i.e. 31st March, 2021;

b) There has been no default in repayment of deposits or payment of interest thereon during the year;

c) There are no deposits lying with the Company which are not in compliance with the requirements of Chapter V of the Companies Act 2013 (Act) and

d) As provided under the Act, the outstanding deposits accepted under the provisions of previous Act have been repaid and squared off, fully.

Unclaimed Dividend and Shares

Your company, in compliance with provisions of Section 125 of the Companies Act 2013, read with relevant applicable rules and circulars issued thereunder from time to time by the Ministry of Corporate Affairs, New Delhi, transferred 15007 Equity Shares during the year to the IEPF Authority in respect of which no claim of dividend has been made for seven consecutive years

Further, in terms of the aforesaid provisions, upon expiry of 7 consecutive years period, unclaimed dividend amount pertaining to the Year 2013-14 together with shares, if any, will be transferred to the said fund on or before August 20th, 2021.

Banks and financial institutions

Your Company is prompt in making the payment of interest and repayment of loans to the financial institutions / banks apart from payment of interest on working capital to the banks. During the COVID-19 Pandemic period, it has not availed any moratorium on any of its payments to the institutions. Banks and Financial Institutions continue their unstinted support in all aspects and the Board records its appreciation for the same.

Corporate social responsibility

Your Company, as a responsible Corporate Citizen, established Visaka Charitable Trust (VCT) in the year 2000, a non-profit entity, to support initiatives that benefit the society at large. The Trust had been already undertaking various activities like provision of drinking water by digging borewells, construction of irrigation tanks in remote villages, building of Classrooms in Schools and Colleges, reimbursement of salaries of teachers and supply of classroom furniture and conducting health camps.

Keeping in view the above, your Board, thought it would be appropriate to spend CSR expenditure as mandated under Section 135 of the Companies Act, 2013 either in part or full through the same trust i.e., Visaka Charitable Trust, objectives of which entail it to undertake the CSR activities as contemplated under Schedule VII of the Companies Act, 2013. Accordingly, your company has been undertaking various CSR initiatives through the trust in addition to directly meeting the obligations. The Companys CSR policy provide a constructive framework to review and organize our social outreach programmes in education, eradication of poverty, provision of drinking water, rural electrification in sustainable manner, etc.

A report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as Annexure - 2.

Your Board further undertakes to spend the amount towards various identified CSR activities either directly or through the trust as per the CSR policy of the Company.

CSR policy of the Company may be accessed on the Companys website at the link:

Directors and key managerial personnel

At the 38th annual general meeting of the company held on 23.07.2020:

a) Shri P. Srikar Reddy has been reappointed as Independent Director of the company to hold the office for a term of 5 (five) years up to 24th July, 2025.

b) Shri G. Appnender Babu and Smt. Vanitha Datla have been appointed as an Independent Directors of the Company to hold the office for a term of 5 (five) years up to 25th May, 2025.

All the Independent Directors have given declarations stating that for the financial year 2020-21, they meet the criteria of independence as contemplated under Section 149(6) read with Schedule IV to the Act as well as SEBI Listing Regulations 2015 and the same were taken on record by the Board.

During the year under review:

a) Shri V. Vallinath retired as Whole-time Director & Chief Financial Officer (CFO) of the company from the closing hours of 8th September, 2020

b) Shri Bhagirat B. Merchant and Shri V. Pattabhi, retired as Independent Directors of the Company from the closing hours of 31st March, 2021

After completion of long stint of more than 3 decades of association with the Company. The Board places on record its appreciation and gratitude for their wise-counselling and valuable guidance over all these years.

Based on the recommendations of Nomination and Remuneration Committee, Shri J.P. Rao has been reappointed as Whole-time Director of the Company for a period of two years effective from 21st May, 2021. The said appointment is subject to your approval at the ensuing annual general meeting.

Upon completion of Mr. V. Vallinaths tenure, Mr. S. Shafiulla, Senior Vice President (Finance and Accounts) of the Company has been appointed as the Chief Financial Officer of the company with effect from 9th September, 2020.

In pursuance of Article 130(e) of Articles of Association of the Company, Shri Gaddam Vamsi Krishna is liable to retire by rotation at the ensuing annual general meeting and being eligible, offers himself for reappointment. Brief Profile of Shri Gaddam Vamsi Krishna is provided in the Notice convening the 39th AGM of the Company for reference of the shareholders is as under.

Shri. G.Vamsi Krishna has done his Bachelor of Science from Purdue University, IN, USA and joined the Company as Management Trainee in June 2011. Considering his active role in development of Boards Division he was appointed as Whole-time Director of the Company, effective from 1st June, 2014. He made valuable contributions in increasing the scope of the business of Boards Division in a short span and under his able leadership, the division is contributing significantly to the revenues of the company, pursuant to which, he is redesignated as Joint Managing Director of the Company effective from 6th May, 2017.

He is holding 21730 shares of the Company. He does not hold any directorships in any other public limited companies.

None of the Directors, Key Managerial Personnel and their relatives except Shri. G. Vamsi Krishna, Smt. G. Saroja Vivekanand, Managing Director and Dr. G. Vivekanand, Chairman of the Company are interested or concerned financially or otherwise, in the resolution

Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company state that:

a) In the preparation of the annual accounts for the year ended 31st March, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures and the annual accounts have been prepared in compliance with the provisions of the Companies Act, 2013.

b) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent 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 the said period.

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 in the Company that are adequate and are operating effectively and

f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

Corporate Governance

A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report.

Auditors and auditors report

Statutory audit:

In terms of provisions of the Companies Act, 2013, at the 35 th Annual General Meeting (20.06.2017) of the Company, M/s. Price Waterhouse & Co., Chartered Accountants LLP (FRN 304026E/E300009), Hyderabad, were appointed as statutory auditors of the Company to hold the office from the conclusion of the 35th annual general meeting till the conclusion of 40th annual general meeting to be held in the year 2022. They have confirmed that they are not disqualified from continuing as auditors of the company.

Cost audit:

In terms of the Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records pertaining to building products division and textile products division and stipulated cost records pertaining to the said divisions are maintained.

M/s. Sagar & Associates, Cost Accountants, Hyderabad, were appointed as Cost Accountants of the Company for conducting the cost audit for the financial year 2020-21 at a remuneration of H1,50,000/- (exclusive of out-of-pocket expenses and applicable taxes) and the same was ratified by you at the 38th annual general meeting of the Company.

The Board after considering the recommendations of its Audit Committee, appointed the aforesaid firm as cost auditors for the financial year 2021-22 and appropriate resolutions in this connection has been included in the notice calling the ensuing annual general meeting of the Company for ratification purpose. Cost audit report for the financial year ended 31st March, 2020 was filed with the Central Government on 04th September, 2020.

Secretarial audit:

Your Board has appointed Mr. K. V. Soorianarayanan, Practicing Company Secretary, Secunderabad, as Secretarial Auditor of the Company for the financial year 2020-21 and secretarial audit report for the financial year ended 31st March, 2021 is enclosed as Annexure-3.

Criteria for identification, appointment, remuneration and evaluation of performance of Directors

Your Company constituted Nomination and Remuneration Committee (hereinafter referred to as "the Committee"), to oversee, inter-alia, matters relating to:

a) Identify persons who are qualified to become directors and persons who can be appointed in senior management

in accordance with the criteria laid down, recommend to the Board their appointment and removal;

b) Formulate the criteria for determining qualifications, positive attributes and independence of a director;

c) Recommend to the Board a policy relating to the remuneration for the directors, key managerial personnel and other employees;

d) Carry out evaluation of every directors performance including that of Independent Directors and

e) Devise a policy to be followed for identification, appointment, remuneration and evaluation of performance of directors including Companys Board diversity etc., as approved by the Board.

The criteria for appointment, qualifications, and positive attributes along with remuneration policy as applicable to Directors, KMPs and other Senior management personnel and the criteria to be followed for performance evaluation of each director including Independent Directors of the Company is enclosed as Annexure - 4.

Formal annual evaluation made of the performance of the Board, its committees and of individual directors

Your Company believes that it is the collective effectiveness of the Board that impacts the Companys performance and thus, the primary evaluation platform is that of collective performance of the Board.

The parameters for evaluation of Board performance, as laid under evaluation criteria adopted by the Company, have been derived from the Boards core role of trusteeship to protect and enhance shareholder value as well as fulfil expectations of other stakeholders through strategic supervision of the Company.

The said criteria also contemplate evaluation of Directors based on their performance as directors apart from their specific role as independent, nonexecutive and executive directors as mentioned below:

a. Every director will be evaluated on discharging their duties and responsibilities as enshrined under various statutes and regulatory facet, participation in discussions and deliberations in achieving an optimum balance between the interest of companys business and its stakeholders.

b. Executive Directors will also be evaluated based on targets/criteria given to Executive Directors by the Board from time to time in addition to their terms of appointment.

c. Independent Directors will also be evaluated on discharging their obligations in connection with their independence criteria as well as adherence with the requirements of professional conduct, roles, functions and duties, specifically applicable to Independent Directors as contained in Schedule IV to the Companies Act, 2013.

The criteria also specifies that the Board would evaluate each committees performance based on the mandate on which the committee has been constituted and the contributions made by each member of the said committee in effective discharge of the responsibilities.

The Board of Directors of your Company has made annual evaluation of its performance, its committees and directors for the financial year 2020-21 based on aforesaid criteria.

Particulars of loans, guarantees or investments

Details of investments made by the Company, are given in the notes to the financial statements (Please refer Note Nos. 5 & 6.1). During the year under review, your Company did not give any other loans or guarantees, provide any security or make any investments as covered under Section 186 of the Companies Act, 2013, other than as disclosed above.

Related party transactions

Related party transactions entered during the financial year under review are disclosed in Notes to the financial statements of the Company for the financial year ended 31st March, 2021. These transactions entered were at an arms length basis and in the ordinary course of business.

There were no materially significant related party transactions with the Companys promoters, directors, management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed as Annexure-5.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website under investor relations/listing compliances tab at

Risk management framework

As a diversified enterprise, your Company believes that, periodic review of various risks which have a bearing on the business and operations is vital to proactively manage uncertainty and changes in the internal and external environment so that it can limit the negative impact and capitalize on opportunities.

Risk management framework enables a systematic approach to risk identification, leverage on any opportunities and provides strategies to manage, transfer, avoid or minimize the impact of the risks and helps to ensure sustainable business growth with stability of affairs and operations of the Company.

Keeping the above in view, your Companys risk management is embedded in the business processes. As a part of review of business and operations, your Board with the help of the management periodically reviews various risks associated with the business and products of the Company and considers appropriate risk mitigation processes. However, there are certain risks which cannot be avoided but the impact can only be minimised. The recent disruption and uncertainty in business due to the COVID-19 pandemic is one such risk due to which the Companys operations have been badly impacted. It might have a long-standing impact on the companys revenues and margins due to incapacitation of sections of the workforce, reduced productivity, impact on emotional wellbeing during lockdown/quarantine, inability to provide work to some of the employees, disruption of supply chains, suppliers inability to service and non-opening of markets due to extended period of lockdown. Demand for the Companys products may just not be adversely affected in industry segments directly impacted by the pandemic like travel and hospitality, but across other segments as well due to a sharp slowdown of the worlds major economies. This is likely to affect the companys earnings in the short and medium-term. However, your Companys significant scale and broad geographical exposure, focus on value added applications, coupled with cost control measures are expected to facilitate the transition.

The risks and concerns associated with each segment of your Companys business are discussed while reviewing segment-wise Management Discussion and Analysis. The other risks that the management review includes:

a) Industry and services risk: This includes economic risks like demand and supply chain, profitability, gestation period etc.; services risks like infrastructural facilities; market risks like consumer preferences and distribution channel etc.; business dynamics like inflation/deflation etc.; competition risks like cost effectiveness.

b) Management and operational risks: This includes risks to property; clear and well-defined work process; changes in technology/upgradation; R&D risks; agency network risks; personnel and labour turnover risks; environmental and pollution control regulations; locational benefits near metros.

c) Market risks: This includes raw material rates; quantities, quality, suppliers, lead time, interest rate and forex risk.

d) Political risks: This includes elections; war risks; country / area risks; insurance risks like fire, strikes, riots and civil commotion, marine risks, cargo risks etc.; fiscal/monetary policy risks including taxation risk.

e) Credit risks: This includes creditworthiness; risks

in settlement of dues by clients and provisions for doubtful and bad debts.

f) Liquidity risks: This includes risks like financial solvency and liquidity; borrowing limits, delays; cash/ reserve management risks and tax risks.

g) Disaster risks: This includes natural calamities like fires, floods, earthquakes, etc.; man made risk factors arising under the Factories Act, Mines Act, etc.; risk of failure of effective disaster management plans formulated by the Company.

h) System risks: This includes system capacities and system reliability risks; obsolescence risk; data integrity risk and coordination and interface risk.

i) Legal risks: This includes contract risks; contractual liabilities; frauds; judicial risks and insurance risk.

j) Government policies: This includes exemptions, import licenses, income tax and sales tax holidays, subsidies, tax benefits etc.

Further, your Board has constituted a Risk Management Committee, inter-alia, to monitor and review the risk management framework.

Other disclosures

Board Meetings:

Eight meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance on page no - 83 of this Annual Report.

Audit Committee:

The Audit Committee comprises Independent Directors namely Shri Bhagirat B Merchant (Chairman), Shri V.Pattabhi and Shri Gusti J. Noria apart from Smt. G. Saroja Vivekanand, Managing Director. All the recommendations made by the Audit Committee were accepted by the Board.

The Audit Committee is reconstituted with effect from 1st April, 2021 comprising of Independent Directors Smt Vanitha Datla, (Chairman), Shri Gusti J. Noria, Shri P. Srikar Reddy apart from Smt G Saroja Vivekanand, Managing Director.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure-6.

Vigil Mechanism:

In accordance with the provisions of the Act and listing regulations, Vigil Mechanism for directors and employees to report genuine concerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of the Company under investor relations/ listing compliances tab at

Remuneration of Directors, Key Managerial Personnel, Employees and General:

Statement showing 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 is enclosed as Annexure-7. In terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the top ten employees in terms of the remuneration drawn as set out in said rules forms part of the annual report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, this annual report, excluding the aforesaid information, is being sent to the shareholders of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing annual general meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 is placed at


Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

i. Issue of equity shares with differential rights as to dividend, voting or otherwise.

ii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

iii. No significant or material orders were passed by any regulator or Court or Tribunal which impacts the going concern status and Companys operations in future.

iv. details in respect of frauds reported by auditors under sub-section (12) ofsection 143other than those which are reportable to the Central Government

v. material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;

vi. the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year.

vii. the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

viii. There are no qualification, reservation or adverse remark or disclaimer made by the auditor in his report and by the company secretary in practice in his secretarial audit report;

Your Directors further state that:

a) The company has complied with the provisions of constitution of internal complaints committee under the sexual harassment of women at workplace (prevention, prohibition and redressal) Act, 2013 and

b) During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.


Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.

The Directors deeply regret the loss of life caused due to the outbreak of COVID-19 and are grateful to every person who risked their life and safety to fight this pandemic.

On behalf of the Board of Directors
Dr. G Vivekanand
Date: 22nd April, 2021


Place: Secunderabad