Your Directors have pleasure in presenting the Twenty Eighth Annual Report togetherwith the Financial Statements of the Company for the Financial Year ended March 31 2021.
A brief overview on Consolidated and Stand-Alone Financial Performance for theFinancial Year ended March 31 2021 is as follows:
A. STANDALONE FINANCIAL PERFORMANCE
(Rupees in Lacs)
|Particulars ||31.03.2021 ||31.03.2020 |
| ||(Audited) ||(Audited) |
|Revenue from operations ||18094.43 ||32234.45 |
|Other Income ||145.52 ||189.25 |
|Total Income ||18239.95 ||32423.70 |
|Expenses || || |
|Operating Expenditure ||10504.02 ||17200.92 |
|Employee Benefit Expense ||913.81 ||974.49 |
|Depreciation and amortization expenses ||572.44 ||475.98 |
|Other Expenses ||7157.37 ||10529.53 |
|Total Expenses ||19147.64 ||29180.92 |
|Profit before finance cost and tax ||(907.69) ||3242.78 |
|Finance Cost ||1171.33 ||861.71 |
|Profit before tax ||(2079.02) ||2381.07 |
|Tax Expenses ||(275.41) ||684.59 |
|Share of profit/(loss) in associates ||- ||- |
|Profit before comprehensive income ||(1803.61) ||1696.48 |
|Other comprehensive incomes ||(2.96) ||8.10 |
|Total Comprehensive Income for the year ||(1806.57) ||1704.58 |
B. CONSOLIDATED FINANCIAL PERFORMANCE
(Rupees in Lacs)
|Particulars ||31.03.2021 ||31.03.2020 |
| ||(Audited) ||(Audited) |
|Revenue from operations ||28757.21 ||45988.66 |
|Other Income ||257.53 ||360.20 |
|Total Income ||29014.74 ||46348.86 |
|Expenses || || |
|Operating Expenditure ||16547.08 ||24297.44 |
|Employee Benefit Expense ||1678.80 ||1688.99 |
|Depreciation and amortization expenses ||1336.86 ||1167.45 |
|Other Expenses ||11488.87 ||15569.32 |
|Total Expenses ||31051.61 ||42723.2 |
|Profit before finance cost and tax ||(2036.87) ||3625.66 |
|Finance Cost ||1865.90 ||1536.90 |
|Profit before tax ||(3902.77) ||2088.77 |
|Tax Expenses ||95.49 ||586.71 |
|Share of profit/(loss) in associates ||- ||- |
|Profit before comprehensive income ||(3807.29) ||1502.11 |
|Other comprehensive incomes ||(3.77) ||8.10 |
|Total Comprehensive Income for the year ||(3811.06) ||1510.21 |
TRANSFER TO RESERVES
The Board of the Company has decided to carry entire amount of its losses to reservesand surplus.
DIVIDEND EQUITY SHARES
For this FY 2020-21 your Board has not recommend any dividend on equity share onaccount of the losses in the Company.
During the year under review on consolidated basis your Company registered GrossRevenue of Rs 50965.86 lacs whereas the Profit/(Loss) before Tax and total comprehensiveincome for the year stood at Rs. (3902.77) lacs and Rs. (3811.06) lacs respectively. On astandalone basis the Company registered Gross Revenue of Rs. 22815.32 lacs whereas theProfit/(Loss) before Tax and total comprehensive income for the year stood at Rs.(2079.02) lacs and Rs. (1806.57) lacs respectively.
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this Annual Report.
M/s RN Gupta & Associates Chartered Accountants (Firm Registration No. 001419C)was appointed by the Company as the Auditor in the Annual General Meeting held on 29thSeptember 2017 for a period of five years in terms of the provisions of Section 139(2) ofthe Companies Act 2013 read with Rules made thereunder. Accordingly the Auditors holdoffice until the conclusion of the Annual General Meeting to be held in the year 2022.
The Statutory Auditors have submitted a certificate confirming their eligibility underSection 139 of the Act and meet the criteria for appointment specified in Section 141 ofthe Act. Further the Company has also received a copy of Peer Review Certificate asprescribed by the Institute of Chartered Accountant of India to the Auditors anddeclaration from the Auditors that they are not disqualified for such appointment/reappointment under the said Act.
In terms of the provisions of Section 139(1) of the Companies Act 2013 it was requiredto ratify the appointment of Statutory Auditor every year by the shareholders of theCompany during the tenure of appointment. Further due to notification of some of theprovisions of the Companies (Amendment) Act 2017 on May 7 2018 the requirement ofrati_cation of appointment of Statutory Auditors by members has been done away with.
Hence it is no longer required to ratify the appointment of Statutory Auditors atevery Annual General Meeting by the members of the Company.
The Notes on accounts and observations of the Auditors in their Report on the Accountsof the Company are self- explanatory.
There are no observations (including any qualification reservation adverse remark ordisclaimer) of the Auditors in their Audit Reports that may call for any explanation fromthe Directors.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Neelesh Jain & Associates Company Secretaries to undertake theSecretarial Audit of the Company for the FY 2020-21. The remarks of Secretarial Auditorswere self-explanatory and the same was mentioned in the Boards Report.
The comments of Board on observations of Secretarial Auditor of the Company in theirReport for the FY 2020-21 are indicated below and the Report of the Secretarial Audit inForm MR-3 is annexed as Annexure I. In accordance with Regulation 24A of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Company carried outSecretarial Audit of its material unlisted subsidiaries i.e.
(a) Woodpecker Distilleries & Breweries Private Limited and
(b) Som Distilleries & Breweries Odisha Private Limited through M/s MM Chawla& Associates Company Secretaries in Practice. The reports of the secretarial auditoris annexed herewith as Annexure I (A) & Annexure I (B) respectively.
Comments by Board on observations of Secretarial Auditor:
As per Section 124(6) of the Act read with the IEPF Rules as amended all the Shares inrespect of which dividend has remained unpaid/ unclaimed for seven consecutive years ormore are required to be transferred to IEPF Account. The Company is in process to sendnotice / reminders to the concerned members and to publish notice regarding the same innewspaper(s).
The Board of Directors had appointed Mr. Sourabh Tandon as the Internal Auditors of theCompany for the F.Y. 2021-22. Internal Financial Control & Systems of the Company hasbeen devised through its extensive experience that ensures control over various functionsof its business. The Company practices Quality Management System for Design PlanningConstruction and Marketing. Periodic audits conducted by Internal Auditors and StatutoryAuditors provide means whereby any weakness whether financial or otherwise is identifiedand recti_ed in time.
SUBSIDIARY JOINT VENTURE & ASSOCIATE COMPANIES
The Company has 2 Wholly Owned Subsidiary as on March 31 2021. List of companies whichhave been consolidated at the year-end is given in the Notes to Accounts.
There has been no material change in the nature of the business of the Subsidiaries. Aseparate statement containing the report on the performance and financial position of eachof subsidiaries is included in the consolidated financial statements of the Companyforming part of this Annual Report.
ACCOUNTS OF SUBSIDIARY COMPANIES
Pursuant to applicable Accounting Standards on Consolidated Financial Statements andFinancial Reporting issued by the ICAI and as prescribed by Securities and Exchange Boardof India (SEBI) Consolidated Financial Statements which includes the financialinformation of the subsidiaries are enclosed and forms part of this Annual Report.
As per the provision of first proviso of Section 129(3) of the Companies Act 2013 readwith Rule 5 of the Companies (Accounts) Rules 2014 the balance sheets of the SubsidiaryCompanies have not been attached to the Annual Report. However Company is required toattach along with its financial statements a separate statement containing the salientfeatures of financial statements of its subsidiaries in Form AOC-1.
Further the Annual Accounts of the Subsidiary Companies and the related detailedinformation will be made available to the shareholders of the Holding and SubsidiaryCompanies seeking such information at any point of time and the Annual Accounts of thesubsidiary companies will also be kept for inspection by any member in the head office ofthe holding Company and of the subsidiary companies concerned. Further the annualaccounts for the FY 2020-21 of all the subsidiary companies are available on the websiteof the Company i.e. www.somindia.com.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34 of the SEBI Listing Regulations a Business Responsibility Reportis annexed as Annexure II and forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board upon the recommendation of the CSR Committee adopted CSR Policy andinitiated its implementation. The CSR Policy is available on the Companys websitewww.somindia.com. During the period under consideration the Company had to spend anoverall amount of Rs. 69.50 lacs towards CSR activity.
The details pertaining to composition of CSR Committee are included in the CorporateGovernance Report which forms part of this Annual Report. The Annual Report on CSRactivities is annexed as Annexure III.
POLICY ON SEXUAL HARASSMENT
The Company has Internal Complaints Committee (ICC) with Ms. Anamma Vasco as (PresidingOfficer) Mr. Nakul Sethi (Member) Mr. Rajesh Dubey (Member) Ms. Madhuri Goel a memberfrom an NGO in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. All female employees are covered underthe Policy. There was no complaint received from any employee during the FY 2020-21 andhence no complaint is outstanding as on March 31 2021 for redressal.
DIRECTORATE & KMP
During the period under Review Mr. Uma Kant Samal was appointed as Additional Director(Non-Executive & Independent) w.e.f. April 20 2020 on the Board of Directors
Further Mr. Rakesh Rathi Independent Director of the Company have resigned w.e.f.January 4 2021 from the directorship. The Board appreciates his valuable contribution tothe Boards functioning during his tenure.
Brief resume of the Director(s) recommended for approval of appointment/re-appointmentat the 28th AGM of the Company and nature of expertise in specific functionalareas and names of the Companies in which he/she holds Directorship and Membership/Chairmanship of Committees of the Board as stipulated under SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 are provided in the Corporate GovernanceReport which forms part of the Annual Report.
BOARD AND ITS COMMITTEES
The Board as on March 31 2021 comprises 6 Members - 2 Executive Directors and 4Non-executive Directors of which 4 are Independent Directors. During the period underreview your Directors met five times. The maximum time-gap between any two consecutivemeetings was within the period prescribed under the Companies Act 2013 and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 read with General Circular No. 11/2020 and SEBI circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/38 dated March 19 2020 respectively. Details of number of meetings of Boardand various Committees attended during the year by each Director/ Member is disclosed inthe Corporate Governance Report forming part of this Annual Report.
The Board as on March 31 2021 has six Committees namely Audit Committee Nominationand Remuneration Committee Corporate Social Responsibility Committee StakeholderRelationship Committee Risk Management Committee and Executive Legal and BorrowingCommittee.
A detailed note on the composition of the Board Committees including meetingsattendance thereat is provided in the Corporate Governance Report which forms part of thisAnnual Report.
Mr. J.K. Arora is the Chairman and Managing Director Mr. Nakul Kam Sethi is theWholetime Director Mr. Rajesh Kumar Dubey is the Chief Financial Officer and Mr. OmPrakash is the Company Secretary & Compliance Officer of the Company.
INDEPENDENT DIRECTORS MEETING
The Independent Directors met on 10th February 2021 without the attendanceof Non-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of non-independent directors and the Board as a whole; theperformance of the Chairperson of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.
COMPLIANCE OF THE SECREATARIAL STANDARDS ISSUED BY ICSI
The Board confirms that during the period under review the Company has complied withthe applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia (ICSI) as amended from time to time.
DECLARATION BY INDEPENDENT DIRECTORS
As per the requirement of section 134(3)(d) of the Companies Act 2013 the Company isrequired to attach the statement on declaration given by the Independent Directors underSection 149(6) with the Report. Your Company has received the said declaration from allthe Independent Directors.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 134(5) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that: a. Inthe preparation of the annual accounts for the Financial Year ended March 31 2021 theapplicable Accounting Standards have been followed and there are no material departures;b. The Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on March 31 2021 and of the profit of theCompany for the year ended on that date; c. The Directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act 2013 for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; and d. The Directors had prepared thefinancial statements of the Company for the Financial Year ended March 31 2021 on agoing concern basis. e. The Directors had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively. f. The Directors had devised proper systems toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
PARTICULARS OF EMPLOYEES
As required by the provisions of Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 details of theEmployees are set out in Annexure IV.
DISCLOSURE RELATING TO SOM EMPLOYEES STOCK OPTION PLAN SCHEME 2020
During the year under review the Board of Directors and shareholders approved theintroduction and implementation of "SOM Employees Stock Option Plan Scheme 2020"("ESOP-2020"). ESOP 2020 was approved by the members of the Company at theAnnual General Meeting held on September 29 2020. Further on the recommendation of NRC /Board of Directors on March 15 2021 the members at their Meeting (EGM) held on April 82021 approved and modified the scheme and extend the benefits of the SOM Employees StockOption Plan Scheme 2020 for the benefit of permanent Employees and/or Directors of theCompany and/or subsidiary company(ies) as may be permissible under the SEBI Regulations.
The Company did not issue/grant any options under "SOM Employees Stock Option PlanScheme 2020" during the year under review.
Hence there are no outstanding options under ESOP-2020 as on March 31 2021.Accordingly no disclosures in terms of Companies (Share Capital and Debenture) Rules2014 and SEBI (Employee Share Based Employee Benefits) Regulations 2014 are required.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT/ TECHNOLOGY/ ABSORPTION/ FOREIGNEXCHANGE EARNING AND OUTGO
The information required pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 pertaining to Conservation of Energy Research &Development Technology Absorption are not applicable to the Company.
The earning in foreign currency is Rs. 897.77 lacs during the current FY as against Rs.488.99 lacs in previous year and expenditure in foreign currency is Rs. 1.59 lacs duringthe current year as compared to Rs. 0.88 lacs in the previous year.
As per the Circular No. CIR/OIAE/2/2011 dated June 3 2011 issued by the Securities andExchange Board of India Company is timely redressing the Investor Complaints through theSEBI complaints Redress System (SCORES). As a part of compliance the Company has aStakeholder Relationship Committee Investor Grievance Committee to redress the issuesrelating to investors. It consists of three Members namely Mr. D. N. Singh ChairpersonMrs. Nishi Arora and Mr. Nakul Kam Sethi Members.
The details of this Committee are provided in the Corporate Governance Report formingpart of the Annual Report.
The equity shares continue to be listed on the BSE Ltd (Bombay Stock Exchange) and theNational Stock Exchange of India Ltd. (NSE). Both these Stock Exchanges have nationwideterminals and therefore shareholders/investors are not facing any difficulty in tradingthe shares of the Company from any part of the Country. The Company has paid annuallisting fees for the FY 2021-22 to BSE and NSE and annual custody fees to NationalSecurities Depository Limited and Central Depository Services (India) Limited.
CORPORATE GOVERNANCE REPORT
The Directors adhere to the requirements set out by the Securities and Exchange Boardof Indias Corporate Governance practices and have implemented all the stipulationsprescribed. Secretarial compliances reporting intimations etc. Under the Companies Act2013 listing agreement(s) and other applicable laws rules and regulations are noted inthe Board/ Committee Meetings from time to time. The Company has implemented several bestcorporate governance practices as prevalent globally.
The Corporate Governance Report as stipulated under Regulation 34(3) and otherapplicable Regulations read with Part C of Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this Report.
CERTIFICATE ON CORPORATE GOVERNANCE FROM PRACTICING COMPANY SECRETARIES
The requisite Certificate from the Company secretary in practice M/s N. K. Jain &Associates Company Secretaries confirming compliance with the conditions of CorporateGovernance as stipulated under Regulation 34(3) and 53(f) read with Part E of Schedule Vof the aforesaid Regulations forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as required under Regulation 34(2)(e) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthis Report.
The Annual Return of the Company as on 31st March 2021 is available on theCompanys website and can be accessed at the Companys website under theweblink https://www.somindia. com.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All contracts/arrangements/transaction entered into by the Company during the financialyear with related parties were in the ordinary course of business and on arms lengthbasis. During the year the Company had not entered into any contract/arrangement/transaction with the related parties which could be considered material inaccordance with the Policy of the Company on materiality of related party transactions.The RPT Policy is available on the Companys website under the weblinkhttps://www.somindia.com. Your Directors draw attention of the Members to Note no. 37 ofthe financial statements which set out related party disclosure.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT
The company has complied with the provisions of Section 186 of the Companies Act 2013in relation to loans investments and guarantees given by the Company during the year.
CHANGES IN SHARE CAPITAL
The authorized share capital of the company has increased from Rs.350000000/-(Rupees Thirty Five Crore Only) to Rs.400000000/- (Rupees Forty Crore Only). FurtherThe company has sub-divided its equity share capital from one equity share of Rs.10/- eachto two equity shares of Rs.5/- each w.e.f. the record date i.e. 16.10.2020.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relatetill the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The details of the same are provided in Corporate Governance Report forming part of theAnnual Report.
SEBI (Listing Obligation & Disclosure Requirements) Regulation 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The framework includesthe evaluation of Directors on various parameters.
Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard on its own performance and that of its Committees Chairman of the Board andIndividual Directors.
Schedule IV of the Companies Act 2013 states that the performance evaluation ofindependent Directors shall be done by the entire Board of Directors excluding theDirectors being evaluated.
The Company has adopted adequate Policy for the evaluation of its Director includingindependent Director and for the evaluation of the performance of Board and its Committee;the above referred evaluation has been made in accordance with the stated Policy which isavailable on the website of the Company under the weblink https://www.somindia.com.
DIRECTORS APPOINTMENT AND REMUNERATION POLICY
Pursuant to the provision of Section 178 of the Companies Act 2013 and Regulation 19 ofSEBI (Listing Obligation & Disclosure Requirements) Regulations 2015 the Board ofDirectors on the recommendation of Nomination and Remuneration Committee has framed aPolicy for the appointment of Directors and Senior Management and their remuneration whichis available on the website of the Company under the weblink https://www.somindia.com.
The details pertaining to composition of Nomination and Remuneration Committee areincluded in the Corporate Governance Report which forms part of this Annual Report.
RISK MANAGEMENT POLICY
The Company has adopted the Risk Management Policy which is aimed at creating andprotecting shareholders value by minimizing threats and losses and identifying andmaximizing opportunities. Your Directors periodically review the risks associated with thebusiness or threaten the prospect of the Company. The Risk Management Policy is availableon the website of the Company under the weblink https://www.somindia.com.
WHISTLE BLOWER POLICY
The Company has a vigil mechanism named as Whistle Blower Policy of the Company anavenue to raise concern and access in good faith the Chairman of the Audit Committee whichprovide for adequate safeguard against victimization of person. The Policy on WhistleBlower Policy is available on the website of the Company under the weblinkhttps://www.somindia.com.
COVID-19 PANDEMIC IMPACT ON BUSINESS OPERATIONS OF THE COMPANY
In March 2020 the World Health Organisation had declared Corona virus (COVID-19) to bea pandemic and on March 24 2020 the Government of India ordered a nationwide lockdownwhich got extended in phases across the country.
Due to COVID 19 there was a significant reduction in the economic activity in thecountry. From May 2020 we resumed our business activities in a phased manner in line withdirectives issued by the central and state governments. The business operations of thecompany were severely impacted in particular by the loss of peak season in FY 2020-21interruption of production disruptions in the supply chain loss on materials etc.
The industry outlook remains positive yet remains volatile depending amongst others onthe future trajectory of the pandemic as well as the state of the economy. The companycontinues to actively review costs and focus on working capital management. We remainoptimistic about the long-term growth drivers of the industry.
Recently India has seen a surge in the spread of COVID-19 in India and various stategovernments have imposed restrictions ranging from lock downs to night/weekend curfews tocontain the spread of COVID-19. The impact of COVID-19 pandemic on the overall economicenvironment continues to be uncertain. The Company will continue to closely monitor thesituation and any material changes to future economic conditions.
Your Directors would like to express their sincere appreciation for assistance andco-operation received from the vendors and stakeholders including financial institutionsbanks Central & State Government Authorities other business associates who haveextended their valuable sustained support and encouragement during the year under review.
The relationship with the employees remained cordial during the year. Your Directorsare thankful to the shareholders and customers for their continued patronage. YourDirectors wish to place on record their appreciation for solidarity cooperation andsupport of employees and all stakeholders.
Statement made in the Annual Report including those stated under the caption"Management Discussion and Analysis" describing the Companys plansexecutions achievements projections and expectations may include approximations and mayconstitute "forward looking statement" within the meaning of applicable laws andregulations. Actual results may differ materially from those either expressed or implied.
|Place: Bhopal ||For and on behalf of the Board |
|Date: June 3 2021 ||FOR SOM DISTILLERIES AND BREWERIES LIMITED |
| ||Sd/- |
| ||J.K. ARORA |
| ||CHAIRMAN AND MANAGING DIRECTOR |
| ||(DIN: 00224633) |