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Southern Online Bio Technologies Ltd.

BSE: 532669 Sector: Others
NSE: N.A. ISIN Code: INE371B01023
BSE 00:00 | 06 Aug Southern Online Bio Technologies Ltd
NSE 05:30 | 01 Jan Southern Online Bio Technologies Ltd
OPEN 0.93
PREVIOUS CLOSE 0.93
VOLUME 3
52-Week high 0.93
52-Week low 0.00
P/E 7.75
Mkt Cap.(Rs cr) 4
Buy Price 0.96
Buy Qty 2.00
Sell Price 0.94
Sell Qty 3000.00
OPEN 0.93
CLOSE 0.93
VOLUME 3
52-Week high 0.93
52-Week low 0.00
P/E 7.75
Mkt Cap.(Rs cr) 4
Buy Price 0.96
Buy Qty 2.00
Sell Price 0.94
Sell Qty 3000.00

Southern Online Bio Technologies Ltd. (SOUTHBIOTECH) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting before you the 23rdBoard Report on the Company's business and operations together with the auditedfinancial statements for the financial year ended March 31 2021.

Closure of Liquidation process against the Company

The members are informed that pursuant to the order of the Hon'bleNational Company Law Tribunal (NCLT) Hyderabad Bench dated October 05 2018 ("NCLTOrder") Corporate Insolvency Resolution Process ("CIRP") has beeninitiated for the Southern Online Bio Technologies Limited ("the Company") inaccordance with the provisions of the Insolvency and Bankruptcy Code 2016 and the relatedrules and regulations issued there under ("Code").

Mrs. CA G Kalpana was appointed as Interim Resolution Professional(IRP) in terms of the NCLT Order who took over the management of the Company w.e.f.October 05 2018. The Board of Directors existing as on October 05 2018 were suspended ason that date. Subsequently the IRP was appointed as the Resolution Professional (RP) bythe Committee of Creditors as per the provisions of the Code ("ResolutionProfessional"). When no resolution plan came forth the Committee of creditors in its14th meeting resolved to liquidate the Corporate Debtor. Following which theHon'ble NCLT Hyderabad bench on July 16 2019 passed an order in IA No. 565/2019preferred by the RP for liquidating the Southern Online Bio Technologies Limited (theCorporate Debtor Company) for liquidation of the Southern Online Bio Technologies Limited(Company) by appointing Mrs. CA G Kalpana as Liquidator of the Corporate Debtor Company.

The Liquidator had issued sale notice for the sale of the Company as agoing concern on October 13 2019 and the date of E-Auction was on October 22 2019.

Pursuant to the sale notice issued by the Liquidator Dr DevaiahPagidipati applied to participate in the E-Auction duly submitting the required documentsand EMD amount of Rs. 5.17 Crores in the form of Demand Draft and the Liquidator afterverifying the documents declared him as the Qualified bidder and issued Login Id andPassword to participate in the E-Auction.

The Qualified bidder i.e. Dr Devaiah Pagidipati participated in theE-Auction and submitted his bid for Rs. 51.70 Crores and has been declared as theSuccessful Bidder by the Liquidator and the Liquidator issued Letter of Intent to theSuccessful Bidder on October 29 2019 to pay the balance sale consideration of Rs. 46.53Crores plus GST and other applicable taxes if any after deducting EMD amount within 30days from the date of issuance of the Letter of Intent or within 90 days provided that thepayment made after 30 days will attract interest at the rate of 12% from the date of theissuance of the Letter of Intent.

The Successful Bidder i.e. Dr Devaiah Pagidipati paid an amount ofRs.41.53 Crores on November 28 2019 and Rs.2 Crores on November 29 2019 and balance Rs.3 Crores on December 04 2019 and paid an interest amount of Rs. 55890/- (Rs. 6575/- forone day and Rs. 49315/- for 5 days) towards delayed payment.

In consideration of the payment of Rs. 51.70 Crores the Company M/sSouthern Online Bio Technologies Limited (in Liquidation) is sold on ‘as is where isand as is whatever there is without recourse basis' in favour of Dr DevaiahPagidipati 409 Jayabheri Silicon County Kondapur Post Madhapur Hyderabad-500084 andthe possession of the Company has also been handed over to him on January 02 2020 byissuing a sale certificate to him by the Liquidator.

Consequent to the above sale the Hon'ble NCLT Hyderabad benchissued a written Order on June 22 2020 in IA No. 196/2020 in CP IB No. 343/7/HDB/2018 forclosure of liquidation process against the Company on application by the Liquidator fordisposal of liquidation process against the Company.

Consequent to the NCLT Order dated June 22 2020 for disposal ofliquidation process against the Company and based on the NCLT Order dated November 262019 The new promoter had taken steps for removal of old directors and management of theCompany and formed the new board of directors. Thereafter the board of directors in itsmeeting held on December 12 2020 took note of extinguishment of entire old share capitaland allotted new shares of 45000000 of Rs. 10/- each in compliance with the NCLT Orderdated November 26 2019.

The Company has obtained the listing approval for extinguishment oferstwhile share capital and allotment of new shares from BSE on February 13 2021 and isin the process of obtaining the trading approval.

Financial performance

In compliance with the provisions of the Companies Act 2013(‘Act') and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (‘Listing Regulations') the Company has prepared its financial statementsas per Indian Accounting Standards (‘Ind AS') for the FY 2020-21. The financialhighlights of the Company's operations are as follows: (Rs. in Lakhs)

Particulars 2020-21 2019-20
Total Income 220.99 33666.10
Total Expenditure 171.49 9098.90
Profit before Tax 49.50 24567.20
Provision for Tax 3.54 7984.89
Profit after Tax 45.96 16582.31
Transfer to General Reserve 45.96 16582.31
Profit available for appropriation 0 0
Provision for Proposed Dividend 0 0
Provision for Corporate Tax 0 0
Balance Carried to Balance Sheet 45.96 444.80

Performance a) Operations

The total revenue of the Company for the financial year ended March 312021 was Rs. 22098999/- as compared to the previous year's total revenue of Rs.3366610325/-. During this financial year the Company has incurred a net profit of Rs4596658/- as against the previous year's net profit of Rs. 1658231380/-. Therevenue of the Company was from only ISP Division.

b) Prospects

As per Government of India's Initiatives to promote the use of Biodiesel fuel Government has made it compulsory to use 5% as bio diesel fuel of its totalfuel requirement. On account of this mandatory action the Company has good number oforders in hand various Government owned transport organizations.

Indian Government has introduced a new policy. The Goal policy is toensure that a minimum level of biofuels become readily available in the market to meet thedemand at any given time.

An indicative target of 5% blending of bio diesel by 2030 is proposed.

Hence the Biodiesel industry has got very good future.

c) Company Prospects

Company plans to revive the present situation.

d) ISP Division

The Company presently provides internet services as a Licensed ISP. TheCompany Services include the following: - Server Co-Location - Leased Line services(Terrestrial and RF links)

- Broad band services - Networking solutions - Web hosting services

e) Bio Diesel Division

The Company has two Bio diesel units one is at Samsthan Narayanpur(V&M) Yadadri Bhuvanagiri District Telangana State with 36TPD capacity and the otheris at APIIC SEZ Atchutapuram Rambilli Mandal Visakhapatnam Andhra Pradesh state with250 TPD capacity.

Currently both units are under shut down and the current management ofthe Company is working on re commencing the production in both the units. The unit locatedat Samsthan Narayanpur is expected to commence the production from September 2021 onwards.

f) Bio diesel Plant at Tondiarpet Chennai

The 30 TPD Biodiesel plant for Indian Railways Organization forAlternate Fuels (IROAF) Ministry of Railways is under implementation by the Company andis expected to commence the production soon through a contractor by entering in to backto back project execution contract.

Change in the nature of business

There was no change in nature of the business of the Company during thefinancial year ended on March 31 2021.

COVID-19

These are unprecedented times as our country and the entire worldstruggles to contain and combat the COVID-19 pandemic. Amidst such rampant uncertaintieswe have abided by every safety and social distancing norm and have been consistentlycommunicating the same to both our employees and customers. We stand in solidarity withthe Government of India and all our citizens and our efforts towards the betterment ofone and all will continue unabated.

Secretarial Standards

During the year your Company has complied with applicable SecretarialStandards i.e. SS-1 and SS-2 relating to "Meetings of the Board of Directors"and "General Meetings" respectively.

The Directors have devised proper systems and processes for complyingwith the requirements of applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India and that such systems were adequate and operatingeffectively.

Share Capital

During the F.Y. 2020-21 the authorised share capital of the Company isRs 750000000 (Rupees Seventy Five Crores) divided into 75000000 equity shares of Rs10/- each. The old paid up equity share capital of the Company is Rs 589932880/-divided into 58993288 equity shares of Rs 10/- each which was extinguished during theyear by the Order of Hon'ble NCLT Hyderabad bench dated November 26 2019. The newpaid up equity share capital of the Company as on date of this report is Rs.450000000/- divided into 45000000 equity shares of Rs. 10/- each as per theHon'ble NCLT Order dated November 26 2019 which was allotted by the Board ofDirectors in its meeting held on December 12 2020 and obtained the listing approval fromBSE on February 13 2021 and is in the process of obtaining trading approval for the saidnew shares from BSE.

Transfer to reserves

For the financial year ended March 31 2021 the Company hastransferred an amount of Rs. 4596658 to General Reserves and Surplus Account.

Dividend

Company has not declared any dividend during the year. Members areinformed that In view of the changes made under the Income-tax Act 1961 by the FinanceAct 2020 dividends paid or distributed by the Company shall be taxable in the hands ofthe Shareholders. Your Company shall accordingly make the payment of the dividenddeclared if any after deduction of tax at source.

Buy Back of shares and disinvestment

The Company has not bought back any of its securities and there were nodisinvestment during the Financial Year ended March 31 2021.

Indian Accounting Standards (Ind AS)

The Company has adopted Indian Accounting Standards (Ind AS) witheffect from April 1 2017 pursuant to Ministry of Corporate Affairs' notification ofthe Companies (Indian Accounting Standards) Rules 2015. The standalone and consolidatedfinancial statements of the Company forming part of the Annual Report have been preparedand presented in accordance with all the material aspects of the Indian AccountingStandards (‘Ind AS') as notified under section 133 of the Companies Act 2013read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of CorporateAffairs (‘MCA')) and relevant amendment rules issued thereafter and guidelinesissued by the Securities Exchange Board of India ("SEBI").

Transfer of unclaimed Dividend(s)/ Shares to Investor Education andProtection Fund

During the FY 2020-21 there was no unpaid/ unclaimed dividendpertaining to FY 2012-13 to be transferred to the Investors Education and Protection Fund(‘IEPF') Account established by the Central Government.

Pursuant to the provisions of Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 as amended the shares onwhich dividend remains unpaid / unclaimed for seven consecutive years or more shall betransferred to the Investor's Education and Protection Fund (‘IEPF') aftergiving due notices to the concerned shareholders which is not applicable to the Companyduring the year.

Unclaimed securities demat suspense account

As per the Oder of Hon'ble NCLT dated November 26 2019 all theold shareholders capital was extinguished and the old shareholders will become claimantsfrom liquidation proceeds u/s 53 of the Code. Accordingly there are no unclaimedsecurities to be kept in the demat suspense account.

Deposits

The Company has not accepted any deposits from public in terms ofSection 73 of the Companies Act 2013 and as such no amount on account of principal orinterest on public deposits was outstanding as on the date of the balance sheet.

Significant and material orders passed by the regulators

After the Company account becoming NPA with lenders in the year 2018the Lead Banker that is Bank of India has filed the petition with Hon'ble NationalCompany Law Tribunal (NCLT) Hyderabad for the recovery of dues under section of CompaniesAct 7 of IBC. The Hon'ble NCLT Hyderabad bench admitted the said petition andappointed the IRP Mrs CA G Kalpana w.e.f. October 05 2018 from the date on which the oldboard of directors were suspended and the management of the Company including day to dayaffairs were looked after by Mrs CA G Kalpana from October 05 2018 onwards. Subsequentlyshe was appointed as Resolution Professional (RP) by the creditors of the Company.

When no resolution plan came forth the Committee of creditors in its14th meeting resolved to liquidate the Corporate Debtor. Following which theHon'ble NCLT Hyderabad bench on July 16 2019 passed an order in IA No. 565/2019preferred by the RP for liquidating the Southern Online Bio Technologies Limited (theCorporate Debtor Company) for liquidation of the Southern Online Bio Technologies Limited(Company) by appointing Mrs. CA G Kalpana as Liquidator of the Corporate Debtor Company.

The Liquidator has issued sale notice for the sale of the Company as agoing concern on October 13 2019 and the date of E-Auction is on October 22 2019.

Pursuant to the sale notice issued by the Liquidator Dr DevaiahPagidipati applied to participate in the E-Auction duly submitting the required documentsand EMD amount of Rs. 5.17 Crores in the form of Demand Draft and the Liquidator afterverifying the documents declared him as the Qualified bidder and issued Login Id andPassword to participate in the E-Auction.

The Qualified bidder i.e. Dr Devaiah Pagidipati participated in theE-Auction and submitted his bid for Rs. 51.70 Crores and has been declared as theSuccessful Bidder by the Liquidator and the Liquidator issued Letter of Intent to theSuccessful Bidder on October 29 2019 to pay the balance sale consideration of Rs. 46.53Crores plus GST and other applicable taxes if any after deducting EMD amount within 30days from the date of issuance of the Letter of Intent or within 90 days provided that thepayment made after 30 days will attract interest at the rate of 12% from the date of theissuance of the Letter of Intent.

The Successful Bidder i.e. Dr Devaiah Pagidipati paid an amount ofRs.41.53 Crores on November 28 2019 and Rs.2 Crores on November 29 2019 and balance Rs.3 Crores on December 04 2019 and paid an interest amount of Rs. 55890/- (Rs. 6575/- forone day and Rs. 49315/- for 5 days) towards delayed payment.

In consideration of the payment of Rs. 51.70 Crores the Company M/sSouthern Online Bio Technologies Limited (in Liquidation) is sold on ‘as is where isand as is whatever there is without recourse basis' in favour of Dr Devaiah

Pagidipati 409 Jayabheri Silicon County Kondapur Post MadhapurHyderabad-500084 and the possession of the Company has also handed over to him on January02 2020 by issuing a sale certificate to him by the Liquidator.

Consequent to the above sale the Hon'ble NCLT Hyderabad benchissued a written Order on June 22 2020 in IA No. 196/2020 in CP IB No. 343/7/HDB/2018 forclosure of liquidation process against the Company.

Consequent to the NCLT Order dated June 22 2020 for disposal ofliquidation process against the Company and based on the NCLT Order dated November 262019 The new promoter had taken steps for removal of old directors and management of theCompany and formed the new board of directors. Thereafter the board of directors in itsmeeting held on December 12 2020 took note of extinguishment of entire old share capitaland allotted new shares of 45000000 of Rs. 10/- each in compliance with the NCLT Orderdated November 26 2019.

The Company has obtained the listing approval for extinguishment oferstwhile share capital and allotment of new shares from BSE on February 13 2021 and isin the process of obtaining the trading approval.

There were no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.

Material changes and commitments

There were no material changes and commitments affecting the financialposition of the Company between the end of the financial year March 31 2021 to which thefinancial statements relates and the date of signing of this report.

Board of Directors

By the Order of the Honorable National Company Law Tribunal HyderabadBench ('NCLT') dated October 05 2018 the Southern Online Bio Technologies Limited(Company) was admitted for Corporate Insolvency Resolution Process ('CIRP') as per theprovisions of the Insolvency and Bankruptcy Code 2016 (IBC) and as per Section 17 of theCode the powers of the then Board of Directors of the Company stands suspended and suchpowers shall be vested with Mrs. CA G Kalpana Resolution Professional. Later on theCompany was admitted for liquidation by the Order of Hon'ble NCLT Hyderabad benchand was sold as a going concern to Dr Devaiah Pagidipati w.e.f. January 02 2020. As perthe Order of Hon'ble NCLT dated November 26 2019 all the suspended former board ofdirectors stands vacated and the new Board of Directors took over control and managementof the Company w.e.f. January 27 2020. The new Board of Directors consists of thefollowing from January 27 2020:

Sl No Name of the Director DIN Designation

1 Dr Devaiah Pagidipati 05147621 Executive Director

2 Mr Brijmohan Venkata Mandala 00295323 Non-executive Director

3 Mr Yalamanchili Madana Mohana Rao 00745820 Additional Director -Independent

The new Board of Directors in its meeting held on November 06 2020 hadappointed Dr Divya Sunitha Raj Burra holding DIN: 03412586 as Additional Director in thecategory of Woman Independent Director.

Upon recommendations of the Nomination and Remuneration Committee inits meeting held on November 13 2020 the Board of Directors in its meeting held onNovember 13 2020 the approval of shareholders was obtained in the 22nd AGM ofthe Company held on December 31 2020 for the appointment of Dr Devaiah Pagidipati asChairman & Managing Director of the Company Mr. Madana Mohana Rao Yalamanchili asDirector and Independent Director of the Company and Dr Divya Sunitha Raj Burra asDirector and Independent Director (Woman category) of the Company.

Currently the board of directors consists of the following directors:

Name of the Director DIN Designation
1 Dr Devaiah Pagidipati 05147621 Chairman & Managing Director
2 Mr Brijmohan Venkata Mandala 00295323 Non-executive Director
3 Mr Yalamanchili Madana Mohana Rao 00745820 Independent Director
4 Dr Divya Sunitha Raj Burra 03412586 Independent Director

Key Managerial Personnel

The Board of Directors in its meeting held on November 13 2020appointed Mr Upadhyayula Uma Vighneswara Ravikanth as Chief Financial Officer (CFO) of theCompany and Mr Srikanth Reddy Kolli as Company Secretary (CS) & Compliance Officer ofthe Company.

The Board of Directors in its meeting held on December 29 2020appointed Dr Devaiah Pagidipati as Chairman & Managing Director of the Company whichwas approved by the shareholders in the 22nd AGM held on December 31 2020.

Declaration by the Independent Directors

The Company has received declarations from all Independent directors ofthe Company confirming that they continue to meet the criteria of independence asprescribed under Section 149 of the Companies Act 2013 rules made there under andRegulations 16 & 25 of the Listing Regulations. The Independent Directors have alsoconfirmed that they have complied with the Company's code of conduct.

Policy on Directors' appointment and remuneration and otherdetails

The Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy for selection and appointment of Directors and Senior Managementpersonnel and fix their remuneration. The detailed policy is available on theCompany's website at www.sol.net.in.

Annual Board Evaluation

The board of directors has carried out an annual evaluation of its ownperformance board committees and individual directors pursuant to the provisions of theAct and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations").

The performance of the board was evaluated by the board after seekinginputs from all the directors on the basis of the criteria such as the board compositionand structure effectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of the criteria such as thecomposition of committees effectiveness of committee meetings etc.

The board and the nomination and remuneration committee reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the chairman was also evaluated on the key aspectsof his role.

In a separate meeting of independent directors held on 13 February2021 performance of non-independent directors performance of the board as a whole andperformance of the chairman was evaluated taking into account the views of executivedirectors and non-executive directors. The same was discussed in the board meeting thatfollowed the meeting of the independent directors at which the performance of the boardits committees and individual directors was also discussed. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.

 

Criteria for Performance Evaluation:

a. Ability of the candidates to devote sufficient time and attention tohis professional obligations as Independent Director for informed and balanced decisionmaking.

b. Adherence to the Code of Conduct in letter and in spirit by theIndependent Directors.

c. Bringing objectivity and independence of view to the Board'sdiscussions in relation to the Company's strategy performance and risk management

d. Statutory Compliance and ensuring high standards of financialprobity and Corporate Governance

e. Responsibility towards requirements under the Companies Act 2013Responsibilities of the Board and accountability under the Director's ResponsibilityStatement.

Familiarisation Programme

A handbook covering the role functions duties and responsibilitiesand the details of the compliance requirements expected from the Directors under the Actand relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 were given and explained to the new Directors.

The newly appointed Directors are given induction and orientation withrespect to Company's Vision Core purpose Core Values and Business operations. Inaddition detailed presentations are made by Senior Management Personnel on businessenvironment performance of the Company at every Board Meeting.

The above initiatives help the Directors to understand the Company itsbusiness and the regulatory framework in which the Company operates and enables theDirectors to fulfill their role/responsibility.

Details of Familiarization Programme for the Independent Directors areuploaded on the website of the Company at www.sol.net.in.

Meetings of the Board of Directors and its Committees during theFinancial Year 2020-21

During the year Board convened seven meetings The dates of the sevenmeetings are August 14 2020 November 06 2020 November 13 2020 December 12 2020December 29 2020 February 13 2021 and March 09 2021.

The details were disclosed in the report on Corporate Governance whichforms part of this Annual Report. The intervening gap between any two meetings was withinthe prescribed period.

All the recommendations made by committees of the Board including theAudit Committee were accepted by the Board. A detailed update on the Board itscomposition detailed charter including terms and reference of various Board Committeesnumber of Board and Committee meetings held during FY 2020-21 and attendance of theDirectors at each meeting is provided in the Report on Corporate Governance which formspart of this Report.

Committees of the Board

The Composition of Audit Committee Nomination & RemunerationCommittee and Stakeholders Relationship Committee are mentioned in Corporate GovernanceReport.

Nomination and remuneration policy

The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy which lays down a framework in relation toselection appointment and remuneration to Directors Key Managerial Personnel and SeniorManagement of the Company. The details of Nomination and Remuneration Committee and Policyare stated in the Corporate Governance Report.

Subsidiary Associate and Joint Venture Companies

As on March 31 2021 your Company has the following Subsidiary.Further there has been no material change in the nature of business of the Subsidiary.Southern Biofe Biofuels Pvt Ltd (SBBF) is a subsidiary of the Company. SBBF wasincorporated on 08.05.2002 with an authorized share capital of Rs.3440000/-. SBBFinitially focused on the establishment and production of biodiesel the activity of whichhas been taken over by Southern Online Bio Technologies Ltd. The SBBF has no operations inthe financial year ended March 31 2021.

Name of the Company Percentage (%)
Subsidiary Companies:
1 Southern Biofe Biofuels Pvt Ltd (SBBF) 99.97

As per the provisions of Section 129(3) of the Companies Act 2013 (theAct) read with Companies (Accounts) Rules 2014 a statement containing the salientfeatures of the financial statements of the Subsidiary in Form AOC-1 is enclosed as AnnexureII to this Report.

Performance and financial position of each of the subsidiariesassociates and joint ventures:

As per Rule 8 of Companies (Accounts) Rules 2014 a Report on theperformance and financial position of each of the subsidiaries associates and jointventure companies of the Company is enclosed as Annexure II to this Report.

Statutory Auditors

M/s P C N & Associates (Formerly Known as Chandra Babu Naidu &Co.) Chartered Accountants Hyderabad were appointed as the Statutory Auditors of theCompany in 19th Annual General Meeting held on December 30 2017 to hold theoffice until the conclusion of the 24th Annual General Meeting to be held forthe financial year 2021-22.

Pursuant to notification from the MCA dated 07.05.2018 ratification ofappointment of statutory auditors at every Annual General Meeting has been omitted.

Auditors' Report

(a) Statutory Auditors Report

The board of directors in its meeting held on June 30 2021 dulyreviewed the Statutory Auditor's Report on the Accounts for the year ended March 312021 and has noted the following qualifications/ emphasis of the matter: The company is inthe process of getting trading approval from the Bombay Stock Exchange Limited towardsfully paid up shares which are allotted with reference to NCLT order.

Explanation on the comments made by the statutory auditor:

The Company has obtained the listing approval from BSE on February 122021 for its new capital of Rs. 45 Crores dividend in to 4.5 Crore equity shares of Rs. 10each. The Company is in the process of obtaining the trading approval which was granted bythe BSE on June 08 2021 and kept on hold on June 09 2021. The Company is awaiting therelease of hold on trading approval from BSE.

(b) Internal Auditors

The Company has external firms of Chartered Accountants acting asinternal auditors that reviews internal controls and operating systems and procedures asper the scope of audit. The Internal Audit Reports of the company are reviewed by theAudit Committee on quarterly basis.

The Board of Directors on recommendation of the Audit Committeeappoints/re-appoints the Internal Auditors of your Company every year in compliance withSection 138 of the Act read with the Companies (Accounts) Rules 2014.

(c) Cost Auditors

Cost Audit is not applicable as the turnover is less than applicablelimit and hence no cost auditor is required to be appointed.

(d) Cost Audit Records

Appointment of Cost Auditors is not applicable as the turnover is lessthan applicable limit and hence maintenance of cost records was not applicable to theCompany.

(e) Secretarial Auditors and Report

The Secretarial Audit for the financial year ended March 31 2021 wascarried out by M/s. CSB Associates Practicing Company Secretaries. The Report given bythe Secretarial Auditors in Form MR-3 is annexed as Annexure-VII and formsintegral part of this Report.

The Secretarial Audit Report is self-explanatory and does not call forany further comments. The Secretarial Audit Report does not contain any qualificationreservation adverse remark or disclaimer. During the year under review the SecretarialAuditors had not reported any matter under Section 143 (12) of the Act therefore nodetail is required to be disclosed under Section 134 (3)(ca) of the Act.

In terms of the amended SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 the Company had obtained the Secretarial Compliancecertificate from Mr C Sudhir Babu Proprietor of M/s. CSB Associates Practicing CompanySecretaries which is annexed as Annexure-VII(A) and forms part of the Annual Reportand the same was also intimated to the Stock Exchange where the shares of the Company arelisted.

Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Company hasobtained a certificate from Mr Y Ravi Prasada Reddy (Membership

No.: FCS 5783) Proprietor of M/s. RPR & Associates PracticingCompany Secretaries (PCS Registration No. 5360) which is annexed as Annexure-VII(B)and forms part of the Annual Report.

In terms of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the AuditCommittee recommended and the Board of Directors appointed M/s. CSB Associates PracticingCompany Secretaries as the Secretarial Auditors of the Company in relation to thefinancial year ending March 31 2022.

The Company has received their written consent that the appointment isin accordance with the applicable provisions of the Act and rules framed thereunder. TheSecretarial Auditors have confirmed that they are not disqualified to be appointed as theSecretarial Auditors of the Company for the year ending March 31 2022.

Corporate Social Responsibility (CSR)

Since the Company did not have profits (average net profits for thelast three financial years) it was not obligated to contribute towards CSR activitiesduring FY 2020-21. However the Company is committed to build its CSR capabilities on asustainable basis and undertake CSR activities as and when the opportunity arises.

The Annual Report on Corporate Social Responsibility u/s 135 of theCompanies Act 2013 is not required to be given as the Company was not required tocontribute towards CSR activities during FY 2020-21.

Management Discussion and Analysis Report

In terms of the provisions of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 as amended from time to time theManagement's Discussion and Analysis for the year ended march 31 2021 is annexedhereto as Annexure-VIII.

Corporate Governance

Corporate governance is an ethically driven business process that iscommitted to values aimed at enhancing an organization's brand and reputation. Thisis ensured by taking ethical business decisions and conducting business with a firmcommitment to values while meeting stakeholders' expectations. It is imperative thatyour company's affairs are managed in a fair and transparent manner. This is vital togain and retain the trust of the stakeholders.

The Report on corporate governance for the year ended March 31 2021pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed hereto as Annexure-IX.

Auditors' certificate on Corporate Governance

As required by SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the auditor's certificate on corporate governance regarding thecompliance of conditions forms part of the Annual Report.

Statement containing additional information as required under ScheduleV of the Companies Act 2013

A statement containing additional information as required under ClauseIV of Section II of Part II of Schedule V of the Companies Act 2013 is provided in theReport on Corporate Governance which forms part of this Annual Report.

Risk Management

During the year the risk assessment parameters were reviewed andmodified. The audit committee reviewed the element of risks and the steps taken tomitigate the risks. In the opinion of the Board there are no major elements of risk whichhave the potential of threatening the existence of the Company.

The audit committee provides the framework of Risk Management bydescribing mechanisms for the proactive identification and prioritization of risks basedon the scanning of the external environment and continuous monitoring of internal riskfactors.

Analysis of the risks identified is carried out by way of focuseddiscussion at the meetings of the Board. The robust governance structure has also helpedin the integration of the Enterprise Risk Management process with the Company'sstrategy and planning processes where emerging risks are used as inputs in the strategyand planning process. Identified risks are used as one of the key inputs in the strategyand business plan.

Internal Financial Control Systems and their adequacy

The Company has an Internal Control System commensurate with the sizescale and complexity of its operations.

Various Audit Systems in the Company monitors and evaluates theefficacy and adequacy of internal control system in the Company its compliance withoperating systems accounting procedures and policies of the Company. Based on the auditreports Company undertakes corrective actions in respective areas and strengthens thecontrol. Significant audit observations and corrective actions thereon are presented tothe Audit Committee of the Board periodically.

The Board of Directors of the Company have adopted various policieslike Related Party Transactions policy Whistle Blower Policy and such other proceduresfor ensuring the orderly and efficient conduct of its business for safeguarding itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial information.The details in respect of internal financial control and their adequacy are included inthe management discussion & analysis which forms part of this report.

Consolidated financial statements

The Consolidated Financial Statements of the Company and itssubsidiaries for FY 2020-21 are prepared in compliance with the applicable provisions ofthe Act and as stipulated under Regulation 33 of the Listing Regulations as well as inaccordance with the Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015. The Audited Consolidated Financial Statements togetherwith the Auditor's Report thereon forms part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act the FinancialStatements of the Company Consolidated Financial Statements along with relevant documentsand separate annual accounts in respect of subsidiaries are available on the website ofthe Company. The annual accounts of the subsidiaries and related detailed information willbe made available to investors seeking information till the date of the AGM.

Material changes and commitments affecting the financial position ofthe company between the end of the financial year and the date of the report. There are nomaterial changes and commitments affecting financial position of the company whichoccurred after the end of the financial year i.e. March 31 2021.

Listing of Company's Equity Shares

The Company's Equity shares were listed with M/s. BSE Limited(Stock Exchange) Phiroze JeeJeebhoy Towers Dalal Street Mumbai 400 001. However thetrading approval was kept on hold by the BSE.

The Company has paid the Annual Listing Fees to the said Stock Exchangefor the Financial Year 2021-22.

Whistle blower Policy

The Company has adopted a Whistle-blower Policy to provide a formalmechanism to the Directors Employees and its Stakeholders to report their concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct. Protected disclosures can be made by a whistle-blower through several channels.

The Policy provides for adequate safeguards against victimisation ofemployees who avail of the mechanism and also provides for direct access to theChairperson of the Audit Committee. No personnel of the Company have been denied access tothe Audit Committee.

The Whistle-blower Policy also facilitates all employees of the Companyto report any instance of leak of Unpublished Price Sensitive Information. The Policy isalso posted on the website of the Company at www.sol.net.in.

Vigil Mechanism

The Vigil Mechanism of the Company is governed by the Company'sCode of Business Conduct and Vigil Mechanism/ Whistle-blower Policy. The documents areavailable on Company's website at www.sol.net.in.

The said mechanism is available to the Director(s)/ Employee(s) whocan report to the Company Secretary on a confidential basis any practices or actionsbelieved to be inappropriate or illegal under the Company's Code of Business Conduct("the Code"). The Code/ Policy provides for adequate safeguards againstvictimization of director(s)/ employee(s) who avail of the mechanism and also provides fordirect access to the Chairman of the Audit Committee in exceptional cases. It is affirmedthat no person has been denied access to the Audit Committee.

The Company sensitizes the availability of the above vigil mechanismfrom time to time to the directors and employees of the Company.

Reporting of Fraud

During the year under review the Statutory Auditors Cost Auditors andSecretarial Auditors have not reported any instances of frauds committed in the Company byits Officers or Employees to the Audit Committee under Section 143(12) of the Act detailsof which need to be mentioned in this Report.

Annual Return

The Extract of Annual Return as per the provisions of Section 92 of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014in Form MGT-9 is enclosed as Annexure-IV to this Report and the copy of the AnnualReturn is placed on the website of the Company at www.sol.net.in.

Prevention of Sexual Harassment of Women at Workplace

The Company has adopted policy on Prevention of Sexual Harassment ofWomen at Workplace in accordance with The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The internal complaints committee wasduly constituted as required. During the financial year ended March 31 2021 the Companyhas not received any Complaints pertaining to Sexual Harassment.

Particulars of Loans Guarantees or Securities or Investments

The Company has not given loans / guarantees or made any investmentsduring the year under review.

Declaration as per Section 134(3) (ca) of the Companies Act 2013

During the year the statutory auditors and secretarial auditor havenot reported any instances of frauds committed by or against the Company by its Directors/Officers/ Employees to the Audit Committee or Board under section 143(12) of the CompaniesAct 2013 and rules made thereof. Therefore no detail is required to be disclosed underSection 134 (3) (ca) of the Act.

Managing Director (MD) & Chief Financial Officer (CFO)Certification

The Managing Director and the Chief Financial Officer of the Companyhave given annual certification on financial reporting and internal controls to the Boardin terms of Regulation 17(8) of the SEBI (Listing Obligation & DisclosureRequirements) Regulation 2015.

Managing Director and the Chief Financial Officer also give quarterlycertification on financial results while placing the financial results before the Board interms of Regulation 33(2)(a) of the SEBI (Listing Obligation & DisclosureRequirements) Regulation 2015.

The annual certificate given by the Managing Director and the ChiefFinancial Officer forms part of the Annual Report.

Disclosure under Section 197(14) of the Companies Act 2013

The Managing Director and other Directors does not receive any suchremuneration or commission from the Company or its subsidiary company which requiresdisclosure under Section 197(14) of the Companies Act 2013.

Related party transactions

All transactions entered with Related Parties for the year under reviewwere on arm's length basis and in the ordinary course of business. There were nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. All Related Party Transactions areplaced before the Audit Committee and also the Board for approval where ever required.Prior omnibus approval of the Audit Committee is obtained for the transactions which areof a foreseeable and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval so granted are placed beforethe Audit Committee and the Board of Directors on a quarterly basis. The Company hasdeveloped a Policy on Related Party Transactions for the purpose of identification andmonitoring of such transactions. The policy on Related Party

Transactions as approved by the Board is uploaded on the Company'swebsite www.sol.net.in.

The particulars of contracts or arrangements with related partiesreferred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause(h) of the Companies (Accounts) Rules 2014 and the same is annexed herewith as Annexure-IIIto this Report.

Particulars in respect of conservation of energy technologyabsorption foreign exchange earnings and outgo

The information on Conservation of Energy Technology AbsorptionForeign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 areprovided in the Annexure-I forming part of this Report.

Statement showing the names of the top ten employees in terms ofremuneration drawn and the name of every employee

A statement showing the names of the top ten employees in terms ofremuneration drawn and the name of every employee is provided as Annexure V to thisreport.

Ratio to remuneration to each directors and particulars of employees

Information required pursuant to Section 197 (12) of the Companies Act2013 read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided along with a statement containing inter alia names ofemployees employed throughout the financial year and in receipt of remuneration of Rs. 102lakhs or more employees employed for part of the year and in receipt of Rs. 80.50 lakhsor more per month pursuant to Rule 5(2) the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided as Annexure VI to this report.

Human Resources

The industrial relations of the Company continued to be harmoniousduring the year under review.

Dematerialisation of Shares

As on March 31 2021 all the old share capital was extinguished as perthe Order of the Hon'ble NCLT dated November 26 2019 and the Company allotted newequity shares of 45000000 of Rs. 10/- each on December 12 2020 in compliance with thesaid Order of Hon'ble NCLT. All the new shares are yet to be dematerialized afterobtaining the BSE approval for listing. The Company has obtained the listing approval fromBSE on February 12 2021 and is in the process of obtaining the trading approval from theBSE for the new shares of the Company.

Insurance

The properties and assets of your Company are adequately insured.

Revision of Financial Statements

There was no revision of the financial statements for the year underreview

Compliance with SEBI (LODR) regulations 2015:

In compliance with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has signed uniform listing agreement with BSELimited and framed the following policies which are available on Company's website i.e.www.sol.net.in

Board Diversity Policy

Policy on preservation of Documents

Risk Management Policy

Whistle Blower Policy

Familiarisation programme for Independent Directors

Sexual Harassment Policy

Related Party Policy

Code of Conduct

Nomination and Remuneration Policy

Policy on determination of materiality of events

Non-Executive Directors Compensation and disclosures

None of the Independent / Non-Executive Directors has any pecuniaryrelationship or transactions with the Company which in the Judgment of the Board mayaffect the independence of the Directors. The details of sitting fee paid were given inthe Report on corporate governance.

Industry based disclosure

The Company is not a NBFC Housing Companies etc. and hence Industrybased disclosures is not required.

Event based disclosure

During the year under review the Company has not taken up any of thefollowing activities:

1. Issue of sweat equity share: The Company has not issued anysweat equity shares during the year under review and hence no information as perprovisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (ShareCapital and Debenture) Rules 2014.

2. Issue of shares with differential rights: The Company has notissued any shares with differential rights and hence no information as per provisions ofSection 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital andDebenture) Rules 2014.

3. Issue of shares under employee's stock option scheme:The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014.

4. Non- Exercising of voting rights: During the year underreview there were no instances of non-exercising of voting rights in respect of sharespurchased directly by employees under a scheme pursuant to Section67(3) of the Act readwith Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014.

5. Disclosure on purchase by company or giving of loans by it forpurchase of its shares: The Company did not purchase or give any loans for purchase ofits shares.

6. Preferential Allotment of Shares: The Company did not allotany shares on preferential basis during the period under review.

However Hon'ble NCLT Hyderabad bench issued a written Order onNovember 26 2019 directing that the old paid up equity share capital shall standextinguished and all those shareholders will not be entitled to any shares of the Companyand they may approach the then liquidator of the Company for making claims fromliquidation proceeds u/s 53 of the Code. The said NCLT Order directed that without furtheract deed or thing the Company shall allot 45000000 equity shares at a face value ofRs. 10/- each to the successful bidder i.e. Dr Devaiah Pagidipati and his Associates whichshall constitute 100% of the equity of the Company and such allotment shall be deemed tohave been made in accordance with applicable laws.

Employees Stock Options

Not applicable as no options were granted till date to the employees bythe Company.

Directors' responsibility statement

Pursuant to the requirement under Section 134 of the Companies Act2013 with respect to the Directors' Responsibility Statement the Board of Directors ofthe Company hereby confirms:

i. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;

ii. Such accounting policies as mentioned in the notes to the financialstatements have been selected and applied consistently and judgments and estimates thatare reasonable and prudent made so as to give a true and fair view of the state of affairsof the Company at the end of the financial year 2020-21 and of the statement of profit ofthe Company for that period;

iii. Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. The annual accounts for the year 2020-21 have been prepared on agoing concern basis.

v. Those proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively.

That system to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.

Appreciation

The board wish to place on record their appreciation to employees atall levels for their hard work dedication and commitment. The enthusiasm and unstintingefforts of the employees have enabled the Company to stream line all the pendingcompliances and thereby to have a fresh start for the Company.

Cautionary Statement

Statements in this Report particularly those which relate toManagement Discussion and Analysis as explained in the Corporate Governance Reportdescribing the Company's objectives projections estimates and expectations mayconstitute ‘forward looking statements' within the meaning of applicable lawsand regulations. Actual results might differ materially from those either expressed orimplied in the statement depending on the circumstances.

Acknowledgement

The board take this opportunity to place on record their sincere thanksto the suppliers customers strategic partners Banks and Financial InstitutionsInsurance Companies Central and State Government Indian Railways Organisation forAlternate Fuels Indian Railways Telangana State Road Transport Corporation AndhraPradesh State Road Transport Corporation Material suppliers customers and the newshareholders for their support and co-operation extended to the Company from time to time.Board is pleased to record their appreciation of the sincere and dedicated services of theemployees and workmen at all levels.

By order of the Board
For Southern Online Bio Technologies Limited
Dr Devaiah Pagidipati Mr Brijmohan Venkata Mandala
Date: June 30 2021 Chairman & Managing Director Director
Place: Hyderabad DIN: 05147621 DIN: 00295323

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