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 31^st 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 27^th annual general meeting, to hold office till the conclusion of 32^nd 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

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.