Vishwaraj Sugar Industries : DLOF (Draft Offer Document filed with SEBI)

Draft Letter of Offer

Dated: February 27, 2023

For Eligible Shareholders only

VISHWARAJ SUGAR INDUSTRIES LIMITED

Vishwaraj Sugar Industries Limited ("Company" or "Issuer") was incorporated as a public limited company under the Companies Act, 1956 in the name of Vishwanath Sugars Limited vide Certificate of Incorporation dated May 02, 1995 with the Registrar of Companies ("RoC"), Bangalore bearing Registration Number - 08/17730. Our Company was granted the Certificate of Commencement of Business by the RoC, Bangalore on December 21, 1999. The name of our Company was subsequently changed to Vishwanath Sugar and Steel Industries Limited and a Fresh Certificate of Incorporation dated December 28, 2010 was issued by the Registrar of Companies, Bangalore. The name of our Company was further changed to Vishwaraj Sugar Industries Limited vide Certificate of Incorporation dated November 29, 2012 granted by the Registrar of Companies, Bangalore. The corporate identification number of our Company is L85110KA1995PLC017730.

Registered Office: Bellad Bagewadi, Taluka Hukkeri, District Belgaum - 591 305, Karnataka, India; Telephone: +91 - 8333 - 251251; Facsimile: +91 - 8333 -

251323; E-mail: [e-mail]; Website:www.vsil.co.in;Contact Person: Ms. Priya Manoj Dedhia, Company Secretary and Compliance Officer;

Corporate Identification Number: L85110KA1995PLC017730

OUR PROMOTERS - MR. NIKHIL UMESH KATTI, MS. SNEHA NITHIN DEV, MR. KUSH RAMESH KATTI, MR. LAVA RAMESH KATTI, MS.

JAYASHREE RAMESH KATTI, MS. SHEELA UMESH KATTI AND MR. RAMESH VISHWANATH KATTI

FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF COMPANY ONLY

WE HEREBY CONFIRM THAT NONE OF OUR PROMOTERS OR DIRECTORS ARE WILFUL DEFAULTERS OR FRAUDULENT BORROWER AS

ON DATE OF THIS DRAFT LETTER OF OFFER

ISSUE OF UPTO [●] EQUITY SHARES OF FACE VALUE ₹2.00 EACH ("RIGHTS EQUITY SHARES") OF OUR COMPANY FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) (THE "ISSUE PRICE"), AGGREGATING UPTO

• 12,500 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF [●] RIGHTS EQUITY SHARE FOR EVERY [●] FULLY PAID-UP EQUITY SHARES HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [•] (THE ISSUE"). THE ISSUE PRICE FOR THE RIGHTS EQUITY SHARES IS [●] TIMES THE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER TITLED "TERMS OF THE ISSUE" ON PAGE 176 OF THIS DRAFT LETTER OF OFFER.

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue, including the risks involved. The Rights Equity Shares in the Issue have not been recommended or approved by the Securities and Exchange Board of India ("SEBI"), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Letter of Offer. Specific attention of the investors is invited to the chapter titled "Risk Factors" on page 19 of this Draft Letter of Offer.

OUR COMPANY'S ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to our Company and this Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect.

LISTING

The existing Equity Shares are listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). Our Company has received 'in-principle' approval from BSE and NSE for listing the Rights Equity Shares to be allotted pursuant to this Issue vide its letter dated [●] and [●]. For the purpose of this Issue, the Designated Stock Exchange is BSE.

LEAD MANAGER TO THE ISSUE	REGISTRAR TO THE ISSUE

CORPORATE CAPITAL VENTURES PRIVATE LIMITED

B-1/E-13 Mohan Cooperative Industrial Estate, Mathura Road,

New Delhi-110044, India

Telephone: + 91 - 11 - 41824066

E-mail: [e-mail]

Investor grievance: [e-mail]

Website:www.ccvindia.com

Contact Person: Mrs. Harpreet Parashar

SEBI Registration Number: INM000012276

Validity of Registration: Permanent

BIGSHARE SERVICES LIMITED

Office No. S6- 2, 6th Floor, Pinnacle Business Park, Next to Ahura Centre, Mahakali Caves Road, Andheri (East), Mumbai - 400093, India. Tel: +91 - 22 - 6263 8200/22

Email: [e-mail]

Investor Grievance Email: [e-mail]

Website: www.bigshareonline.com

SEBI Registration No.: INR000001385

Contact Person: Mr. Vijay Surana

Validity of Registration: Permanent

ISSUE PROGRAMME

ISSUE OPENS ON	LAST DATE FOR ON MARKET RENUNCIATION*	ISSUE CLOSES ON**
[●]	[●]	[●]

*Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.

**Our Board or a duly authorized committee thereof will have the right to extend the Issue period as it may determine from time to time, provided that this Issue will not remain open in excess of 30 (Thirty) days from the Issue Opening Date (inclusive of the Issue Opening Date). Further, no withdrawal of Application shall be permitted by any Applicant after the Issue Closing Date.

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Table of Contents
SECTION I - GENERAL	1
DEFINITIONS AND ABBREVIATIONS	1
NOTICE TO INVESTORS	11
PRESENTATION OF FINANCIAL INFORMATION	14
FORWARD - LOOKING STATEMENTS	16
SUMMARY OF DRAFT LETTER OF OFFER	17
SECTION II - RISK FACTORS	19
SECTION III - INTRODUCTION	32
THE ISSUE	32
GENERAL INFORMATION	33
CAPITAL STRUCTURE	38
OBJECTS OF THE ISSUE	40
STATEMENT OF TAX BENEFITS	45
SECTION IV - ABOUT THE COMPANY	49
INDUSTRY OVERVIEW	49
OUR BUSINESS	57
OUR MANAGEMENT AND ORGANISATIONAL STRUCTURE	80
SECTION V - FINANCIAL INFORMATION	84
ACCOUNTING RATIOS	154
MATERIAL DEVELOPMENTS	155
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
OPERATIONS	156
SECTION VI - LEGAL AND OTHER INFORMATION	165
OUTSTANDING LITIGATIONS AND DEFAULTS	165
GOVERNMENT AND OTHER STATUTORY APPROVALS	168
OTHER REGULATORY AND STATUTORY DISCLOSURES	169
SECTION VII- ISSUE INFORMATION	176
TERMS OF THE ISSUE	176
RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES	207
SECTION VIII- STATUTORY AND OTHER INFORMATION	216
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION	217
DECLARATION	218

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SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Letter of Offer uses certain definitions and abbreviations set forth below, which you should consider when reading the information contained herein. The following list of certain capitalized terms used in this Draft Letter of Offer is intended for the convenience of the reader/prospective investor only and is not exhaustive.

Unless otherwise specified, the capitalized terms used in this Draft Letter of Offer shall have the meaning as defined hereunder. References to any legislations, acts, regulation, rules, guidelines, circulars, notifications, policies or clarifications shall be deemed to include all amendments, supplements or re-enactments and modifications thereto notified from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under such provision.

Provided that terms used in the chapters titled "Industry Overview", "Summary of this Draft Letter of Offer", "Financial Information", "Statement of Special Tax Benefits", "Outstanding Litigation and Defaults" and "Issue Information" on pages 49, 17, 84, 45, 165 and 176 respectively of this Draft Letter of Offer, shall, unless indicated otherwise, have the meanings ascribed to such terms in the respective sections/ chapters.

Company Related Terms

Term	Description
"Company", "our Company",	Vishwaraj Sugar Industries Limited, a public limited company incorporated under the
"the Company", "the Issuer" or	provisions of the Companies Act, 1956 having its registered office at Bellad Bagewadi,
"VSIL"	Taluka Hukkeri, Belgaum - 591 305, Karnataka, India.
"we", "us", or "our"	Unless the context otherwise indicates or implies, refers to our Company.
"Annual Audited Financial	The audited financial statements of our Company for the year ended March 31, 2022
Statements"	prepared in accordance with IND AS which comprises the balance sheet as at March
	31, 2022, the statement of profit and loss, including other comprehensive income, the
	statement of cash flows and the statement of changes in equity for the year ended
	March 31, 2022, and notes to the financial statements, including a summary of
	significant accounting policies and other explanatory information read along with the
	report thereon.
"Articles" / "Articles of	Articles / Articles of Association of our Company, as amended from time to time.
Association" / "AoA"
"Audit Committee"	The committee of the Board of Directors constituted as our Company's audit
	committee in accordance with Regulation 18 of the Securities and Exchange Boardof
	India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as
	amended ("SEBI Listing Regulations") and Section 177 of the Companies Act, 2013.
"Auditor"/ "Statutory Auditor"/	Statutory and peer review auditor of our Company, namely M/s P.G. Ghali & Co.
"Peer Review Auditor"	Chartered Accountants.
"Board"/ "Board of Directors"	Board of directors of our Company or a duly constituted committee thereof.
"Chief Financial Officer /CFO"	Sheshagiri Hanumantarao Kulkarni, the Chief Financial Officer of our Company.
"Company Secretary and	Priya Manoj Dedhia, the Company Secretary and the Compliance Officer of our
Compliance Officer"	Company.
"Corporate Social Responsibility	The committee of the Board of directors constituted as our Company's corporate social
Committee/ CSRCommittee"	responsibility committee in accordance with Section 135 of the Companies Act, 2013.
	For details, see "Our Management and Organizational Structure" on page 80 of this
	Draft Letter of Offer.
"Director(s)"	The director(s) on the Board of our Company, unless otherwise specified.
"Equity Shareholder"	A holder of Equity Shares
"Equity Shares"	Equity shares of our Company of face value of ₹ 2.00 each.
"Executive Directors"	Executive Directors of our Company.
"Independent Director(s)"	The Independent Director(s) of our Company, in terms of Section 2(47) and Section
	149(6) of the Companies Act, 2013.
"Key Management Personnel" /	Key Management Personnel of our Company in terms of the Companies Act, 2013 and
"KMP"	the SEBI ICDR Regulations as described in the subsection titled "Our Management
	and Organizational Structure - Key Managerial Personnel" on page 82 of this Draft
	Letter of Offer.
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"Limited	Reviewed	The limited reviewed unaudited financial results dated February 9, 2023 for the nine
Financial Information" or	months periods ended December 31, 2022, prepared in accordance with the Companies
"Limited	Reviewed	Act and SEBI Listing Regulations. For details, see "Financial Information" on page
Financial Statements"	84 of this Draft Letter of Offer.
Materiality Policy	Policy on determination of materiality of events adopted by our Company in
		accordance with Regulation 30 of the SEBI Listing Regulations.
"Memorandum of Association" /	Memorandum of Association of our Company, as amended from time to time.
"MoA"
"Nomination	and	The committee of the Board of Directors reconstituted as our Company's nomination
Remuneration Committee"	and remuneration committee in accordance with Regulation 19 of the SEBI Listing
		Regulations and Section 178 of the Companies Act, 2013.
"Non-Executiveand Independent	Non-Executive and Independent Directors of our Company, unless otherwise
Director"		specified.
"Non-executive Directors"	Non-executive Directors of our Company.
"Promoter(s)"		The promoters of our Company, namely, Mr. Nikhil Umesh Katti, Ms. Sneha Nithin
		Dev, Mr. Kush Ramesh Katti, Mr. Lava Ramesh Katti, Ms. Jayashree Ramesh Katti,
		Ms. Sheela Umesh Katti and Mr. Ramesh Vishwanath Katti.
"Promoter Group"	Individuals forming part of promoter and promoter group in accordance with SEBI
		ICDR Regulations.
"Registered Office"	The Registered Office of our Company located at Bellad Bagewadi, Taluk Hukkeri
		District, Belgaum-591305, Karnataka, India
"Registrar	of	Registrar of Companies, Karnataka, having its office at 'E' Wing, 2nd Floor,
Companies"/ "RoC"	Kendriya Sadana, Kormangala, Banglore-560034, Karnataka.
"Shareholders/ Equity	The Equity Shareholders of our Company, from time to time.
Shareholders"
"Stakeholders' Relationship	The committee of the Board of Directors constituted as our Company's Stakeholders'
Committee"		Relationship Committee in accordance with Regulation 20 of the SEBI Listing
		Regulations.
Issue Related Terms
Term	Description
2009 ASBA Circular, 2011	The SEBI circular SEBI/CFD /DIL/ASBA/1/2009/30/12 dated December 30, 2009
ASBA Circular, 2013 ASBA	The SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011, The SEBI circular
Circular, 2020 ASBA Circular	CIR/CFD/DIL/1/2013 dated January 02, 2013, The SEBI circular
(Collectively called "ASBA	SEBI/HO/CFD/DIL/1/CIR/238/2020 dated December 08, 2020
Circulars)
Abridged Letter of Offer	Abridged letter of offer to be sent to the Eligible Equity Shareholders with respectto the
		Issue in accordance with the provisions of the SEBI ICDR Regulations and the
		Companies Act, 2013.
Allot/Allotment/Allotted	Allotment of Rights Equity Shares pursuant to the Issue.
Allotment Account	The account opened with the Banker(s) to the Issue, into which the Application Money
		lying to the credit of the escrow account(s) and amounts blocked by Application
		Supported by Blocked Amount in the ASBA Account, with respect to successful
		Applicants will be transferred on the Transfer Date in accordance with
		Section 40(3) of the Companies Act, 2013.
Allotment Advice	Note, advice or intimation of Allotment sent to each successful Applicant who hasbeen
		or is to be Allotted the Rights Equity Shares pursuant to the Issue.
Allotment Date		Date on which the Allotment is made pursuant to the Issue.
Allottee(s)		Person(s) who are Allotted Rights Equity Shares pursuant to the Allotment.
Applicant(s) / Investor(s)	Eligible Equity Shareholder(s) and/or Renouncee(s) who make an application forthe
		Rights Equity Shares pursuant to the Issue in terms of this Draft Letter of Offer,
		including an ASBA Investor.

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