Dear Members,

The Directors are pleased to present the 37th Annual Report of the Company with Audited Financial Statement for the year ended March 31, 2019. The financial highlights are as follows:

Rs. in Lakhs

*Dividend paid during the respective years.

Performance review and the state of company’s affairs:

The year under review, started on a positive note, but could not sustain towards the end, as the initial momentum in GDP for the first quarter, recorded at 8% gradually slowed down to 6.6% for the third quarter of FY 2018-19 due to weaker domestic and external demand. This growth may look respectable, but under-performance of manufacturing sector and creation of inadequate employment opportunities remained as concerns. Despite the increase in state’s spending and direct cash transfer to farmers, the rural economy is hit by falling prices for farm produce. Towards the end, the state spending also slowed down due to general elections.

Your company’s significant scale, broad geographical exposure focussing on value added applications coupled with cost control measures have helped it to register highest ever sales since inception during the financial year under review. Increase in prices of key raw materials, rupee depreciation coupled with initial losses incurred on two projects impacted the profitability and thus the profit for the year remained the same as that of last year, despite increased revenues.

The Company’s key performance indicators are as under:

Total revenues increased by 10% to Rs.1148 Crores from Rs.1048 Crores of previous year.

Cash Profit remained at the same level of Rs.136 Crores as that of previous year.

Net Profit increased by 3% to Rs.67 crores from Rs.65 crores of previous year.

The capital expenditure for 2018-19 was Rs.50 crores, maximum of which is in respect of new V-Boards plant at Jhajjar in Haryana and ATUM plant at Miryalguda in Telangana

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

Fixed Deposits

During the year under review, your company has accepted Rs.2.42 Crores as public deposits and repaid Rs.3.91 Crores upon the maturity making the outstanding as on March 31, 2019 to Rs.14.71 Crores.

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. 31.03.2019;

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 together with relevant applicable rules and circulars issued thereunder from time to time by the Ministry of Corporate Affairs, New Delhi, transferred the following shares to the IEPF Authority in respect of which no claim of dividend has been made for seven consecutive years:

a) 1,04,861 shares - In terms of notification general circular no. 12/2017 dated 16.10.2017 for seven consecutive years preceding 07.09.2016 (later extended up to 31.10.2017);

b) 4,107 shares - dividend declared up to the financial year 2010-11

Further, in terms of the aforesaid provisions, consequent to expiry of 7 consecutive years’ period unclaimed amount pertaining to Final Dividend for the Year 2011-12 along with First and Second Interim Dividends for the year 2012-13 together with shares, if any, will be transferred to the said fund on or before August 8, 2019 and September 8, 2019 respectively.

Banks and Financial Institutions

Your Company is prompt in making the payment of interest and repayment of loans to the Financial Institutions / bank and interest on working capital to the banks.

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 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 bore wells, construction of irrigation tanks in remote villages, building of Class Rooms in Schools and Colleges, reimbursement of salaries of teachers and supply of class room 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 in meeting the said statutory obligations through the trust.

A report on CSR activities as required under Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as Annexure - 1.

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

CSR policy of the Company may be accessed on the Company’s website at the link: www.visaka.co.

Directors and Key Managerial Personnel

Pursuant to your approval obtained under postal ballot mode, following directors were reappointed as Independent Directors of the company effective from April 1, 2019:

a) Shri Bhagirat B.Merchant for two years up to 31.03.2021,

b) Shri V.Pattabhi for two years up to 31.03.2021 and

c) Shri Gusti J. Noria for five years with effect from 01.04.2019 up to 31.03.2024.

All the Independent Directors have given declarations stating that for the financial year 2019-20, 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 in its meeting held on May 3, 2019.

In pursuance of Article 130(e) of Articles of Association of the Company, Shri G. Vamsi Krishna is liable to retire by rotation at the ensuing annual general meeting and being eligible, offers himself for reappointment.

You are aware that Smt. G. Saroja Vivekanand is appointed as the Managing Director of the company for a period of five years effective from 24.10.2014 and holds the said position upto 23.10.2019. Based on the recommendations of Nomination and Remuneration Committee, your Board recommends her appointment as the Managing Director of the company for a further period of five years effective from 24.10.2019.

The compensation payable to the Managing Director and Joint Managing Director in aggregate is more than 5% of the net profits of the company. Therefore, in terms of SEBI (LODR) Regulations the terms of remuneration payble to Managing Director from 1.4.2019 requires your approval by way of special resolution. Appropriate resolutions to aforesaid effect are included in the Notice calling the ensuing annual general meeting of the company for seeking your approval.

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 March 31, 2019, 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 judgments 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 same 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.

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 35th 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 2023 subject to the ratification at every Annual General Meeting, based on their eligibility confirmation to the effect that their appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for reappointment.

You are aware that in terms of interim orders of the Securities Exchange Board of India’s (SEBI) dated January 10, 2018, Price Waterhouse network Audit firms were restricted to undertake statutory audit and other certification related work for listed companies and intermediaries registered with SEBI for a period of 2 years including imposition of a financial penalty. However, SEBI has clarified that said order will not impact audit assignments for the financial year 2017-18. PW network firms have preferred an appeal against the said orders before the Hon’ble Securities Appellate Tribunal (SAT) and Hon’ble Tribunal granted partial relief to PW network firms, allowing them to audit their existing clients till March 31, 2019 or until a new bench is formed, whichever is earlier. As the quorum in SAT was not complete for hearing the matter in this case, PW preferred an appeal before Hon’ble Supreme Court for extension of the period of interim relief as granted by SAT. The Hon’ble Supreme Court vide its order dated 7th December 2018, inter-alia, mentioned that the interim order that has been passed in these proceedings (by SAT) should continue to operate at least until March 31, 2019 or until the SAT is properly constituted and decides the appeal. SAT vide its order dated 4th April 2019 reserved its order and mentioned that interim order that has been passed earlier, will continue to operate till disposal of the appeals.

In terms of Companies (Amendment) Act, 2017, with effect from May 07, 2018, the requirement relating to ratification of statutory auditors at every annual general meeting is done away with.

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 as 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 2018-19 at a remuneration of Rs.1,50,000/- (exclusive of out of pocket expenses and applicable taxes) and the same was ratified by you at the 36th Annual General Meeting of the Company.

Further, the Board after considering the recommendations of its Audit Committee, appointed the aforesaid firm as cost auditors for the financial year 2019-20 and appropriate resolutions in this connection seeking your approval, has been included in the notice calling ensuing Annual General Meeting of the Company. Cost audit report for the financial year ended March 31, 2018 was filed with the Central Government on August 30, 2018.

Secretarial Audit:

Your Board has appointed M/s. Tumuluru & Co., Practicing Company Secretaries, Hyderabad as Secretarial Auditors for the financial year 2018-19 and Secretarial Audit Report for the Financial Year ended March 31, 2019 is enclosed as Annexure-2.

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 who may 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 director’s performance including that of Independent Directors and

e) Deviseapolicyon Board Diversity Criteria to be followed for identification, appointment, remuneration and evaluation of performance of directors including Company’s Board diversity etc., as approved by the Board, aids the committee in discharging aforesaid functions.

The criteria for appointment, qualifications and positive attributes along-with remuneration policy as applicable to Directors, KMPs and other Senior management personnel and criteria to be followed for performance evaluation of each director including Independent Directors of the Company is enclosed as Annexure - 3.

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 Company’s performance and thus, the primary evaluation platform is that of collective performance of the Board.

The parameters for Board performance evaluation, as laid under evaluation criteria adopted by the company, have been derived from the Board’s 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, non-executive and executive directors as mentioned below:

a. Every director will be evaluated on meeting 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 company’s business and its stakeholders.

b. Executive Directors, being evaluated as Directors as mentioned above, 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, being evaluated as a Director, will also be evaluated on meeting their obligations connected 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 committee’s 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 of the said committee.

The Board of Directors of your Company has made annual evaluation of its performance, its committees and directors for the financial year 2018-19 based on afore stated criteria.

Copy of Annual Return

A copy of the annual return has been placed on the website of the company at www.visaka.co.

The details forming part of the extract of the Annual return in form MGT-9 is annexed herewith as Annexure - 7.

Particulars of Loans, Guarantees or Investments

Details of investments and inter corporate deposits made by the Company, are given in the notes to the Financial Statements (Please refer Note Nos. 5 and 11). 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 March 31, 2019. These transactions entered were at an arm’s length basis and in the ordinary course of business.

There were no materially significant related party transactions with the Company’s 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-4.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website under investor relations/listing compliances tab at www.visaka.co.

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 negative impacts and capitalize on opportunities.

Risk management framework enables a systematic approach to risk identification, leverage on any opportunities and provides strategies to manage, transfer and 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 Company’s 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 process. However, there are certain risks which cannot be avoided but the impact can only be minimized. The risks and concerns associated with each segment of your company’s business are discussed while reviewing segment-wise Management and Discussion Analysis. The other risks that the management reviews also include:

a) Industry & Services Risk: this includes Economic risks like demand and supply chain, Profitability, Gestation period etc.; Services risk like infrastructure facilities; Market risk like consumer preferences and distribution channel etc.; Business dynamics like inflation/deflation etc.; Competition risks like cost effectiveness.

b) Management and Operational Risk: this includes Risks to Property; Clear and well-defined work process;

Changes in technology / up gradation; R&D Risks; Agency network Risks; Personnel & labour turnover Risk; Environmental and Pollution Control Regulations etc.; Locational benefits near metros.

c) Market Risk: this includes Raw Material rates; Quantities, quality, suppliers, lead time, interest rate risk and forex risk.

d) Political Risk: this includes Elections; War risk; Country/ Area Risk; Insurance risk like Fire, strikes, riots and civil commotion, marine risk, cargo risk etc.; Fiscal/Monetary Policy Risk including Taxation risk.

e) Credit Risk: this includes Creditworthiness; Risk in settlement of dues by clients and Provisions for doubtful and bad debts.

f) Liquidity Risk: this includes risks like financial solvency and liquidity; Borrowing limits, delays; Cash/Reserve management risks and Tax risks.

g) Disaster Risk: 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 Risk: this includes System capacities; System reliability; Obsolescence risk; Data Integrity risk & Coordination and Interface risk.

i) Legal Risk: this includes Contract risk; Contractual liability; Frauds; Judicial Risk and Insurance risk.

j) Government Policy: 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:

Five meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance on page no. 77 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.

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-5.

Vigil Mechanism:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulation 2015 a 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 www.visaka.co

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-6. 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.

General:

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. The Company did not have any subsidiaries and hence receipt of remuneration from such companies by directors did not arise.

iv. No significant or material orders were passed by any Regulator or Court or Tribunal which impacts the going concern status and Company’s operations in future.

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 work place (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.

Acknowledgements

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 Company’s executives, staff and workers.

On behalf of the Board of Directors

Date: May 3, 2019 Bhagirat B. Merchant

Place: Secunderabad Chairman