Dear Members,
Your Directors are pleased to present the Twenty-Eighth Annual Report of your Company
together with the Audited Financial Statements for the financial year ended March 31,
2023.
Results of Operation and the State of Company's Affairs
The Company has a cane crushing capacity of 11000 TCD, ethanol production capacity of
100 Kilo Liters and power generation capacity of 36.40 kWh.
During the year under review, the Company crushed 10,59,379.15 MT of sugar cane and
produced 8,93,500.00 quintals of sugar, produced 28,965.77 kilo liters of ethanol and
generated 10,60,64,100 KWh of power. Out of the power generated 6,33,98,450 KWh was
exported and the balance was consumed by the Company.
The Company received total income of Rs. 61935.96 Lakhs for the year ended March 31,
2023 as against Rs. 47,027.41 Lakhs for the previous year. The EBITDA for the year under
review stood at Rs. 6906.05 Lakhs as compared to Rs. 9797.19 Lakhs for the previous year.
The Company has incurred Net Loss after provision for tax of Rs. 2323.36 Lakhs as compared
to net profit of Rs. 6,016.04 Lakhs for the previous year. Analysis of operating
performance is covered under Management Discussion and Analysis which forms part of this
Report.
Financial Summary and Highlights
The Company's Financial Performance for the financial year ended on March 31, 2023
under review alongwith previous year figures are given hereunder:
(Rs. In lakhs)
Particulars |
2022-23 |
2021-22 |
Revenue from operations |
61,649.49 |
46,875.10 |
Other Income |
286.47 |
152.31 |
Total |
61,935.96 |
47,027.41 |
Profit/(Loss) before Finance Cost, Depreciation & Amortization |
6,906.05 |
9,797.19 |
Depreciation & Amortization expense |
1,597.69 |
1,551.25 |
Finance cost |
2,753.65 |
3,227.91 |
Profit Before Exceptional and Extraordinary items |
2,554.71 |
4,718.03 |
Exceptional and Extraordinary items |
- |
- |
Profit/(Loss) before tax |
2,554.71 |
4,718.03 |
Provision for Current Tax |
376.93 |
347.44 |
Deferred Tax |
4,869.81 |
-1,434.08 |
Short and excess provisions for earlier year |
(347.44) |
-211.37 |
Net Profit/(Loss) After Tax |
(2344.59) |
6,016.04 |
Profit/(Loss) brought forward |
21,444.31 |
15,803.83 |
Profit Available for appropriation |
19,099.72 |
21,819.87 |
Transferred to General Reserve |
- |
- |
Interim Dividend paid |
187.78 |
- |
Final Dividend Recommended |
- |
375.56 |
Profit/(Loss) retained in Profit & Loss Account |
18,724.16 |
21,444.31 |
Basic & diluted Earnings per Share (Rs.) |
-1.24 |
3.21 |
Transfer to Reserves
The Company has not transferred any amount to the reserves separately and adjusted the
loss in the profit and loss account.
Dividend
The Board of Directors declared and paid interim dividend of Rs. 0.10/- per eqiuty
share of the face value of Rs. 2/- each aggregating to Rs. 187.78 Lakhs, during the
financial year 2022-23.
In view of the loss incurred for the current financial year and with an intention to
preserve the reserves, the Board of Directors did not recommend any final dividend for the
year ended March 31, 2023.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under review, as stipulated
under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is presented separately and forms part of this Annual Report.
Corporate Governance
Your Company is committed to maintain highest standards of Corporate Governance and
adhere to Corporate Governance requirements set out by the Securities and Exchange Board
of India.
The Report on Corporate Governance as stipulated under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The
requisite certificate from the Auditors of the Company confirming compliance with the
conditions of Corporate Governance is attached to the report on Corporate Governance.
Business Responsibility Report
SEBI, vide its Circular dated May 10, 2021, made Business Responsibility and
Sustainability Report mandatory for the top 1,000 listed companies (by market
capitalization) from fiscal 2023.
Since, the provisions of the Regulation 34(f) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 are not applicable to the Company for the year
ended March 31, 2023 based on the market capitalisation, the Business Responsibility and
Sustainability Report is therefore not given.
Credit Rating
During the year under review Brickwork Ratings India Private Limited has given credit
ratings for the financial facilities as
(1) Fund Based BWR BBB -/Stable Reaffirmation and
(2) Non-Fund Based BWR A3 Reaffirmation.
Contracts and Arrangements with Related Parties
All contracts and arrangements with related parties that were entered in to during the
financial year 2022-23 were on an arm's length basis and in the ordinary course of
business.
All related party transactions were placed before the Audit Committee for
approval/omnibus approval as per the Company's policy on related party transactions. Prior
omnibus approval of the Audit Committee is obtained for the transactions which are of
foreseen and repetitive in nature on yearly basis. A statement giving details of all
related party transactions is placed before the Audit Committee for their approval.
During the year under review, there are no materially significant related party
transactions that may have potential conflict with interest of the Company at large.
Since the Company has not entered in to any contracts or arrangements or transactions
which are not at arm's length basis with related parties so also material contracts,
arrangement or transactions with related parties, the disclosure of particulars pursuant
to section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules,
2014 in Form AOC-2 are therefore not made.
However, the details of the related party transactions entered into during the year are
given under Note No. 32 of the Financial Statements forming part of this Annual Report.
Internal Financial Control
The internal control systems are commensurate with the nature of business and the size
and complexity of operations of the Company.
The Audit Committee periodically evaluates the adequacy and effectiveness of the
Company's internal financial control systems and monitors the implementation of
recommendations made by the Committee.
The Auditors of the Company have also opined that "the Company has in all material
respects an adequate internal financial control systems over financial reporting and such
internal financial controls over financial reporting were operating effectively as at 31st
March 2023". Further certificate of compliance from the Executive Director and Chief
Financial Officer annexed to this report confirms the adequacy of the internal control
systems and procedures of the Company.
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act, 2013 (the Act') Mr.
Nikhil Katti and Mr. Mukesh Kumar, Directors of the Company are liable to retire by
rotation at the ensuing Annual General Meeting and being eligible have offered themselves
for reappointment. Both the Directors have confirmed that, they are not disqualified under
sub-section (2) of Section 164 of the Act and are eligible for re-appointment as Directors
of the Company.
The Chairman of the Company Late. Shri. Umesh Katti left for heavenly abode on
September 6, 2022. His sad and sudden demise was a big set back to the Company. The Board
of Directors appointed Mr. Ramesh Katti as the Chairman of the Board, with effect from
October 15, 2022 until otherwise resolved.
The first five year term of office of Mr. Shivanand Tubachi, Mr. Basavaraj Hagargi and
Mrs. Pratibha Munnolli as Independent Directors of the Company ended on September 29,
2022. The Board of Directors of the company taking in to consideration their knowledge,
varied experience in the areas of agriculture and commerce and past performance appointed
them as Additional Directors of the Company, to occupy the office of Independent Directors
of the Company with effect from September 30, 2022 subject to the approval of the members
in general meeting by special resolution.
With an intention to broad base the Board and taking in to consideration knowledge,
experience and qualification, the Board of Directors of the Company appointed Mr. Ramesh
Katti and Mrs. Sneha Nitin Dev as Additional Directors with effect from October 15, 2022.
Mr. Ramesh Katti is the younger brother of Late Shri. Umesh Katti and Mrs. Sneha Nitin Dev
is the daughter of Late Shri. Umesh Katti. They hold office up to the date of this annual
general meeting. The Company has received due notices in writing from the members, under
section 160(1) of the Act, proposing their candidatures for the office of Director of the
Company.
Taking in to consideration that Mrs. Sneha Nithin Dev, aged 37 years, is one of the
Promoters of the Company and possessing qualification of Bachelor of Business
Administration, the Board of Directors of the Company appointed her as Whole-Time Director
of the Company for a period of three years with effect from October 15, 2022 subject to
the approval by the members by special resolution.
Directors' Responsibility Statement
In terms of Section 134 (5) of the Companies Act, 2013, the Directors would like to
state that:
(i) In the preparation of the annual accounts, the applicable accounting standards (Ind
AS) have been followed along with proper explanation relating to material departures.
(ii) The Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that were 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 or loss of the Company for that period.
(iii) The Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) The Directors have prepared the annual accounts on a going concern basis.
(v) The Directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were operating
effectively.
(vi) The Directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such system was adequate and operating effectively.
Board Evaluation
Pursuant to Section 178(2) of the Companies Act, 2013 the Nomination and Remuneration
Committee of the Board carried out an annual evaluation of every Director's performance.
Pursuant to the provisions of Schedule IV to the Companies Act, 2013 and Regulation 17(10)
of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 the Board
evaluated the performance of Independent Directors. The Independent Directors in a
separate meeting reviewed the performance of Non-Independent Directors, performance of
Board as a whole and performance of the Chairman.
Statutory Auditors & Auditors Report
M/s P. G. Ghali & Co., Chartered Accountants, is appointed as Statutory Auditors of
the Company, in the 27th annual general meeting, to hold office till the
conclusion of 32nd annual general meeting of the Company to be held in the year
2027.
The Auditors Report to the shareholder for the year ended March 31, 2023 does not
contain any qualification, reservation or adverse remark and therefore does not call for
any explanation or comments.
The Auditors have reported in the Annexure to their Report that, "Some of the
properties are being held by way of general power of attorney in the name of Mr.
Mallikarjun Kadayya Pujar".
It is hereby clarified that the Company has authorised Mr. Mallikarjun Kadayya Pujar to
execute the deeds of sale in respect of the said properties, on behalf of the Company. The
deeds of sale are in the process of completion.
Secretarial Auditors and their Report
The Board of Directors appointed Mrs. Vinita D. Modak, Practicing Company Secretary, to
conduct Secretarial Audit for the financial year 2022-23.
Pursuant to SEBI Circular dated February 8, 2019, in addition to the Secretarial Audit
Report as mentioned above, the Company has obtained Secretarial Compliance Report from
Mrs. Vinita D. Modak, Practicing Company Secretary, for the year ended March 31, 2023. A
copy of the Secretarial Compliance Report so obtained, is filed with the BSE Limited and
National Stock Exchange of India Limited.
The Secretarial Audit Report and the Secretarial Compliance Report do not contain any
qualification, reservation and adverse remark and therefore do not call for any
explanation or comments.
The Secretarial Audit Report and Secretarial Compliance Report for the financial year
ended March 31, 2023 are annexed and forms part of this Report as ANNEXURE - I & I-A.
Cost Records and Cost Audit
Pursuant to the provisions of Section 148 (1) of the Companies Act, 2013, the Company
has included cost records in its books of accounts as required by Rule 3 of the Companies
(Cost Records and Audit) Rules 2014. Since Cost Audit is applicable, the Board of
Directors of the Company appointed M/s. S. K. Tikare & Co. Cost Accountants, Belagavi
to audit the cost records maintained for the year ended March 31, 2023.
The Board of Directors of the Company further appointed M/s. S.K. Tikare & Co. Cost
Accountants, Belagavi as Cost Auditor, to audit the cost records of the Company for the
year ended March 31, 2024, on the recommendation of the Audit Committee and approved
remuneration as recommended by the Audit Committee, which is subject to ratification by
the shareholders.
The Cost Auditors Report for the year ended March 31, 2023 does not contain any
qualification, reservation or adverse remark and therefore does not call for any
explanation or comments.
DISCLOSURES
Audit Committee
The Audit Committee was reconstituted by the Board of Directors of the Company on
October 15, 2022. The reconstituted Audit Committee comprises of two Independent Directors
namely Mr. Shivanand Tubachi and Mr. Vishnukumar Kulkarni and one Non-Executive Director
Mr. Ramesh. Katti. Mr. Shivanand Tubachi is the Chairman of the Committee. Terms of
reference and powers of the Committee is provided in the Corporate Governance Report
annexed to this Report. All the recommendations made by the Audit Committee were accepted
by the Board.
The number and dates of the meetings held during the financial year 2022-23 are
provided in the Corporate Governance Report.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises of three Independent Directors
namely Mr. Basavaraj Hagargi, Mrs. Pratibha Munnolli and Mr. Surendra Khot. Mr. Basavaraj
Hagargi is the Chairman of the Committee. Terms of reference and powers of the Committee
is provided in the Corporate Governance Report annexed to this Report. The policy for
selection of Directors and determining Director's independence and policy relating to the
remuneration of Directors, Key Managerial Personnel and other employees may be accessed on
the Company's website www.vsil.co.in. The salient features of the policies are annexed to
this Report as ANNEXURE - II.
The number and dates of the meetings held during the financial year 2022-23 are
provided in the Corporate Governance Report.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee was reconstituted by the Board of
Directors of the Company on October 15, 2022. The reconstituted Committee consists of of
Mr. Ramesh Katti, Mr. Kush Katti and Mrs. Pratibha Munnolli. Mr. Ramesh Katti is the
Chairman of the said Committee. The Annual Report on CSR pursuant to Rule 8 containing
particulars specified in Annexure II to the Companies (Corporate Social Responsibility
Policy) Rules, 2014 is attached to this Report as ANNEXURE - III.
The number and dates of the meetings held during the financial year 2022-23 are
provided in the Corporate Governance Report.
Stakeholder Relationship Committee
The stakeholders Relationship Committee was reconstituted by the Board of Directors on
October 15, 2022. The reconstituted Committee comprises of Directors namely Mr. Shivanand
Tubachi, Mr. Nikhil Katti and Mrs.Sneha Nitin Dev. Terms of Reference and Powers of the
Committee is provided in the Corporate Governance Report annexed to this Report.
The number and dates of the meetings held during the financial year 2022-23 are
provided in the Corporate Governance Report.
Risk Management
Your Company has framed, developed and implemented Risk Management Plan, pursuant to
the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015. Risk Management Committee was reconstituted by
the Board of directors on October 15, 2022. The Reconstituted Committee consists of the
following directors' viz. Mr. Vishnukumar Kulkarni (Chairman), Mr. Mukesh Kumar, Mrs.
Pratibha Munnolli and Mrs. Sneha Nitin Dev.
Identification of elements of risk and their mitigation are discussed in the meeting of
the Committee. In the opinion of the Committee there is no element of risk which may
threaten the existence of the Company.
The number and dates of the meetings held during the financial year 2022-23 are
provided in the Corporate Governance Report forming part of this annual report.
Vigil Mechanism
The Company has formulated a Vigil Mechanism for directors and employees to report
their genuine concerns or grievances pursuant to Section 177 (9) of the Companies Act,
2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Audit Committee oversees the Vigil Mechanism. The Vigil Mechanism
provides for adequate safeguards against victimization of director(s), employee(s) or any
other person who avail the mechanism and also provide for direct access to the Chairperson
of the Audit Committee in appropriate and exceptional cases. The policy on Vigil Mechanism
may be accessed on the Company's website www.vsil.co.in.
Internal Complaints Committee
The Company has constituted a Committee by name Internal Complaints Committee, in
compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 read with Rule 8(5)(x) of the Companies (Accounts) Rules, 2014. The
said Committee is constituted to consider and resolve all sexual harassment complaints
reported by women employees. During the year under review the Company did not receive any
such complaint.
Meetings of the Board
The Board of Directors met 12 times during the year under review. Details of the
meetings of the Board of Directors held are given in the report on Corporate Governance,
which forms part of this report. The maximum interval between any two meetings did not
exceed 120 days, as prescribed under the Companies Act, 2013 and the SEBI Listing
(Obligations and Disclosure Requirements) Regulations, 2015.
Web link of Annual Return
Copy of the Annual Return for the year ended March 31, 2023 will be placed on the
website of the Company at www.vsil.co.in, pursuant to Section 92(3) of the Companies Act,
2013.
Particulars of Loans, Guarantees or Investments
During the year under review, the Company has not made investment or given security or
granted any loans to companies, firms, Limited Liability Partnerships or other parties
except for the corporate guarantee towards the Harvesting and Transportation Loan
sanctioned to the Sugarcane Harvesting & Transportation contractors from banks to the
extent of Rs. 80 Crores who are in agreement with the company for Harvesting &
Transportation contract which is done in the normal course of business.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo
Particulars with respect to Conservation of Energy and Technology Absorption pursuant
to Rule 8(3) A and 8(3) B of the Companies (Accounts) Rules, 2014 are provided as under:
(A) Conservation of Energy
(i) The steps taken or impact on conservation of energy:
The Company has been continuously updating modern technology for energy conservation,
like usage of Variable Frequency Drives, IE Three Motors, etc. and added automation in
sugar boiling house there reducing the consumption of energy as well as other consumables
like lime and sulphur. The steam consumption in the boiling house is amongst the lowest in
the sugar industry in the Country.
(ii) The steps taken by the company for utilizing alternate sources of energy: The
Company has been generating power from renewable sources (bagasse) and consuming captively
and exporting the surplus to the grid.
(iii) The capital investment on energy conservation equipment: During the year under
review, the Company did not make any capital investment on energy conservation equipment.
However, some revenue expenditure was incurred.
(B) Technology Absorption
(i) The efforts made towards technology absorption: The Company has been upgrading its
sugar processing technology and during the year the Company has developed the technology
to manufacture bacteria- free sugar.
(ii) The benefits derived like product improvement, cost reduction, product development
or import substitution:
The quality of the sugar has improved to a greater extent and there has been
improvement in the sugar recovery also.
(iii) In case of imported technology (imported during the last three years reckoned
from the beginning of the financial year): No new imported technology was introduced.
(a) The details of technology imported: Not Applicable
(b) The year of import: Not Applicable
(c) Whether the technology been fully absorbed: Not Applicable
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons
thereof: Not Applicable
(iv) The expenditure incurred on Research and Development:
Not Applicable
(C) Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and the Foreign
Exchange outgo during the year in terms of actual outflows.
Foreign Exchange Earnings: Nil
Foreign Exchange Outgo: Rs. 89.16 Lakhs
Particulars of Employees and Related Disclosures
Disclosures pertaining remuneration and other details as required under Section 197
(12) of the Companies Act, 2013 read with Rules 5(1) of the Companies (Appointment and
Remuneration of Management Personnel) Rules, 2014 are provided in ANNEXURE - IV.
The relations between the management and the staff remained cordial during the period
under review.
There is no employee who was employed throughout the financial year 2022-23, drawing
remuneration which in aggregate was not less than Rupees One Crore and Two Lakhs per
annum.
There was no employee employed for part of the financial year 2022-23, drawing
remuneration at the rate which in aggregate was not less than Rupees Eight Lakhs and Fifty
Thousand per month.
Secretarial Standards
During the year under review, your company has complied with the applicable Secretarial
Standards issued by the Institute of Company Secretaries of India.
Other Information to Shareholders
1. The certification body TUV NORD CERT GmbH vide its certificate dated
03-10-2022 has confirmed that Vishwaraj Sugar Industries Limited operates a management
system in accordance with the requirements of FSSC 22000 (Version 5.1) for sugar
manufacturing from sugarcane.
2. The Ministry of Forests and Environment and Climate Change Government of
India recommended for grant of environment clearance for expanding the distillery capacity
from 100 KLPD to 250 KLPD based on Syrup/C/B Heavy Molasses as raw material and 120 KLPD
grain-based distillery to produce ethanol at its existing plant located at village Bellad
Bagewadi.
3. The Company has commissioned the bagasse pelletizing machine to convert loose
bagasse in to bagasse pellets. This will help the Company in storing the bagasse in lesser
space reducing wastage and effectively using the bagasse in the boilers.
4. The Company has entered in to an agreement with Oil Marketing Companies
(OMCs) for supply of an additional Mn. Liters of ethanol during the period June to
November 2024. This quantity is over and above the 20 Mn. Liters already supplied during
the period December 2022 to May 2023.
5. The Company has received in-principal approval from both the stock exchanges
i.e. BSE and NSE for the proposed rights issue.
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.
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Issue of shares (including sweat equity shares) to Directors and employees of the
Company under any scheme.
c. Details relating to employee's stock option scheme. d. Revision of financial
statement or Board's report. e. Buyback of shares.
f. The Company does not have scheme for provision of money for purchase of its own
shares by employees or by trustee for the benefit of employees.
g. Purchase by Company of its own shares or giving of loans for such purchase.
h. There is no change in the nature of business of the Company.
i. There is no material change or commitment affecting the financial position of the
Company, occurred between the end of the financial year and the date of this report.
j. The Company has not accepted deposits within the meaning of Section 73 or Section 76
of the Companies Act, 2013.
k. No remuneration was paid to Non-executive Directors except sitting fees.
l. No significant and material order is passed by the Regulators or Courts or Tribunals
impacting the going concern status and Company's operations in future.
m. No fraud has been reported by the Auditors to the Audit Committee of the Board.
n. No case of child labour, forced labour, involuntary labour, sexual harassment and
discriminatory employment was reported in the financial year 2022-23.
o. There was no subsidiary, associate or joint venture company of the company during
the financial year under review.
p. Shares held in trust for the benefit of employees. q. Issue of debentures/warrants.
r. Transfer to Investor Education and Protection Fund (IEPF).
s. Disclosure about the application made or any proceeding pending under the Insolvency
and Bankruptcy Code (IBC), 2016 during the year along with their status as at the end of
the financial year.
t. Disclosure about the difference between the amounts of the valuation executed 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.
Acknowledgements
The Directors wish to place on record their appreciation to the wholehearted help and
co-operation the Company has received from the business associates, partners, vendors,
clients, government authorities, and bankers of the Company.
The relations between the management and the staff were cordial during the period under
review.
The Company also wishes to put on record its appreciation for the work done by the
staff. Your Directors appreciate and value the trust imposed upon them by the members of
the Company.
|
By Order of the Board of Directors |
|
For Vishwaraj Sugar Industries Limited |
|
Sd/- |
|
Ramesh Katti |
|
Chairman |
|
DIN: 02669306 |
Place: Bellad Bagewadi |
341, Town: Bellad Bagewadi, Taluk: Hukkeri, |
Date: August 10, 2023 |
Dist. Belagavi-591305, Karnataka, India |