AFFLUENCE

DIRECTORS REPORT

 To,

The Members,

Vishwaraj Sugar Industries Limited.,

Belgaum.

The Directors hereby present the Twenty First Annual Report together with audited Statements of Account for the year ended 31st March 2016.

Financial Results

                                             (Sugar unit, Co-gen unit and Distillery)                 (Rs. In Lakhs)

          Deposits: There were no Deposits in the company outstanding as on 31st march 2016 nor the company has accepted any deposits during the financial year 2015-16.      Directors and Company Secretary:

1.         Mr. Umesh V. Katti                                                  Chairman

2.         Mr. Nikhil U. Katti                                                    Managing Director     

3.         Mr. Mallikarjun K. Pujar                                           Whole-Time-Director

4.         Mr. Lava R. Katti                                                      Director

5.         Mr. Kush R. Katti                                                     Director

6.         Mrs. Sheela U. Katti                                                  Director

7.         Mr. Rajaram Shiralkar                                               Director

8.         Mr. Shrinivas R. Koujalgi                                          Director

9.         Mr. Surendra S. Khot                                                Director

10.     Miss. Sneha P. Patil                                                   Company Secretary

-          Mr. Lava Katti and Mr. Kush Katti Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment.

-          Mr. Mukesh Kumar Executive Director (Independent) resigned from the post due to his personal reasons with effect from 15th June, 2016. The Board would like to place on record their sincere appreciation for his ability, unstinting commitment and outstanding contribution to the Company during his tenure on the Board since 2011.

-          Mr. Jibu Cherian, Director (Independent) resigned from the post due to his personal reasons with effect from 15th June, 2016. The  Board would like to place on record their sincere appreciation for his ability, unstinting commitment and outstanding contribution to the Company during his tenure on the Board since 2011

      Dividend:

The Company has declared Interim Dividend of 10% on the Paid-up Capital for the year ending 31/03/2016 during the financial year 2015-16.

      Annual  Return:

The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-A and is attached to this Report.

      Number Board Meetings:

The company has held Twelve (12) Board meetings during the year 2015-16.

      Directors Responsibility Statement:

In compliance with the requirements of Section 134(3)(c) of the Companies Act, 2013 the Directors confirm that In preparation of the annual accounts for the year ended 31st March 2016 the applicable accounting standards have been followed along with proper explanation relating to material departures;

 The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give fair view of the state of affairs of the company at the end of the financial year and of profit and loss of the company for that period;

 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;

 The directors have prepared the annual accounts ongoing concern basis.

 The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

      Details in respect of fraud reported by auditors under sub section (12) of section 143 other than those which are reportable to the Central government:

No such frauds have been detected by auditors during the year under review.

      Compliance of Sec 149(6) of Companies Act, 2013 (A Statement on declaration given by Independent Directors)

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. 

      Comment on Declaration of Independent Directors :

The Company has obtained declarations given by the Directors in due compliance of law.

       Audit Committee: The Board of Directors has constituted the Audit Committee consisting of the following Directors to exercise powers and discharge functions as stipulated in Section 177 of the Companies Act, 2013.Mr. Shrinivas R. Koujalgi, Chairperson.Mr. Nikhil U. Katti, MemberMr. Jibu Cherian, Member. 

However the committee held meeting during the year on the following dates:

a.       08th May, 2015

b.      3rd September, 2015

c.       19th November, 2015

d.      19th February, 2016.

       Nomination and Remuneration Committee: The Board of Directors has constituted the Audit Committee consisting of the following Directors to exercise powers and discharge functions as stipulated in Section 178 of the Companies Act, 2013.                                                      1.      Mr. Kush R. Katti2.      Mr. Mallikarjun Pujar3.      Mr. Surendra R. Khot

  However the committee held meeting during the year on the following dates:

a.       08th May, 2015

b.      3rd September, 2015

c.       19th November, 2015

d.      19th February, 2016.

       Stakeholders Relationship Committee: The Board of Directors has constituted the Audit Committee consisting of the following Directors to exercise powers and discharge functions as stipulated in Section 178 of the Companies Act, 2013.1.      Mr. Lava R. Katti2.      Mr. Mukesh Kumar3.      Mr. Jibu Cherian

  However the committee held meeting during the year on the following dates:

a.       08th May, 2015

b.      3rd September, 2015

c.       19th November, 2015

d.      19th February, 2016.

      Auditors:

M/s. P. G. Ghali & Co., Chartered Accountants, Belgaum Auditors of the Company retires at the conclusion of the ensuring Annual General Meeting. They have signified their willingness to accept re-appointment and have further confirmed their eligibility under Section 139 (2) of the Companies Act, 2013 for the Re-appointment as statutory Auditor of the Company.

      Explanation Or Comments On Qualifications, Reservations Or Adverse Remarks Or Disclaimers Made by the Auditors and the Company Secretary in Practice  in their respective Reports:

There were no qualifications, reservations or adverse remarks made by either by the Auditors or by the Practicing Company Secretary in their respective reports.

      Particulars Of Loans, Guarantees Or Investments Made Under Section 186 Of The Companies Act, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

      Contracts with Related Parties 188 (1) of Companies Act, 2013

The related party transaction for the year under review as per AS-18 is annexed a to this report as ANNEXURE-B 

      Operations / State of Affairs of the Company during year:

During the year under review the company has continued commercial production in all the three units namely Sugar unit, Co-generation unit and Distillery unit. The company has crushed 8,00,234.239 MT of Sugar Cane and produced 8,79,400 Qts Sugar and 10,89,317 Qts sold and earned an income of Rs. 24,967.16 Lakhs.

The company also runs Co-Generation Unit in its optimum Capacity and there is export of power to TATA Power Trading Company Ltd & HESCOM earning income of Rs.2873.58 Lakhs.

During the year company manufactured Compost and sold to the extent of Rs.247.69 Lakhs. Company manufactured liquor and sold to the extent of Rs. 9157.97 Lakhs, out of which Export of Rs.118.18 Lakhs & Yalahanka Unit IML sold Nil.

The performance of the Five Units during the year 2015-16 is as under:

Manufacturing/Production details of Sugar Unit, Distillery Unit, IML Units and Co. generation unit are as under

      Amount Proposed to be carried to any Reserves:

No amount has been transferred to any Reserves during the year 2015-16.

      Material changes from the end of financial year till the date of Preparation of Director Report:

The Sugar prices are fluctuating the effect of the same on the financial accounts cannot be estimated.

Further there is no change in the Business activities carried on by the company.

      The Conservation of energy , technology absorption, foreign exchange earnings and outgo:

As per ANNEXURE C

      Statement indicating development and implementation of risk management policy:

The company has adequate risk management policy.

      The Company On Its Corporate Social Responsibility Initiatives:

As the company has incurred a net profit of Rs. 4,41,45,793.37/- by which it does not meet the criteria specified under the provisions of Sec 135 Corporate Social Responsibility under the Companies Act,2013.

      Formal annual evaluation by Board of Directors of its own performance and that of its committees and individuals:

The Board of Directors of the Company have devised a proper and effective internal performance evaluation which analysis and reports any deviations in the performance of the Directors individually and performance of the respective Committees.

      Industrial Relations:

Your company continues to enjoy cordial relations with employees at all levels.

      Acknowledgement:

Your Director commends the continuing commitment and dedication of employees at all levels. The Directors would also like to thank all other stakeholders, including bankers financial institutions and other business associates, who have extended their valuable sustained support and encouragement. The Directors look forwards to their continued support and understanding in the years to come.

                                                                                   ANNEXURE TO DIRECTORS REPORT

 Annexure A

      ANNUAL RETURN EXTRACT-MGT-9

     (Attached at the end of the Annual Report)

 Annexure - BFORM NO. AOC -2

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1.      Details of contracts or arrangements or transactions not at Arms length basis.

2.      Details of contracts or arrangements or transactions at Arms length basis. 

3.      Annexure C

Information as per Section 134(3)(m) of the companies Act, 2013  Read with Rule  8(3) of the Companies (Accounts) Rules, 2014  and forming part of Directors Report:

A.    CONSERVATION OF ENERGY:

1.      Energy conservation is an ongoing process in our organization continuous monitoring planning. Development and modifications for energy conservation are done at the plant.

2.      Total energy consumption and energy consumption per unit of production as per Form A as per annexure to the Rules.

FORM-A

{See Rule 2}

Form for disclosure of particulars with respect to conservation of Energy

Power and Fuel Consumption

(As per details given by board)

The unit per Kg of Bagasse and the cost per unit are not defined as the Total Steam generation is from of Coal & Bagasse mixed.

B.     TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

      Research and Development:

 Specific areas in which R & D carried out by the Company:

The Company has no specific Research & Development Department however, the Company has quality control department to check the quality of different products manufactured.

 Benefits derived as a result of the above efforts:

The Company has been continuously improving the quality of its existing products and also been able to reduce the cost of production.

 Achievements  and Future Plan of Action:

      The company has completed the installation of Vinegar Plant and has started its Commercial production. Further the Management is committed to strengthen their quality control department, to improve its competitiveness in times to come.

                                                                  Expenditure on R & D:

The Company from time to time incurs capital expenditure, exposes itself to better technology and keeps itself abreast of technological improvements.

      Technology Absorption, Adaptation and Innovation:Efforts in brief, made towards Absorption, Adaptation and Innovation:

Modifications of process and products are carried out from time to time to suit market requirements and to improve operational efficiency.

 Benefits derived as a result of the above efforts:

Better quality of Sugar & Rectified Spirit will be produced at low costs and continued quantity production of power assured.

Particulars of Technology Imported:

The Technology used by the Company is indigenously developed and no technology has been imported.

C.    FOREIGN EXCHANGE EARNING AND OUTGO:

During the year the foreign exchange earnings of the Company were USD 1,77,7427.50 from export sales of IML and USD 8000.00 from Vinegar export sales. However during the year the Company has incurred certain foreign Exchange outgo for making payments of vinegar machinery maintenance charges to the extent of 13,636.83 EURO, Vinegar Chemical charges of 69,097.15 EURO and Kasurth Certificate Plant Fees  of USD 5000.00.