REPORT OF DIRECTORS To, The Shareholders Som Distilleries & Breweries Ltd. Sirs, 1.Your Directors have pleasure in presenting the Annual Report of your Company for the year ended on 31st March 2015. 2. Extract of Annual Return The extract of annual return in Form MGT 9 is attached herewith this report as Annexure I. 3. Meetings of Board of Directors During the financial year 2014-15, the Board of Directors met 12 times on 30.05.2014,09.06.2014,16.07.2014, 14.08.2014, 22.08.2014, 14.11.2014, 08.12.2014, 26.12.2014, 12.02.2015, 18.02.2015, 27.02.2015 and 27.03.2015. 4. Directors' Responsibility Statement The Directors hereby certify:- (i) that in the preparation of the accounts for 2014- 15, the applicable accounting standards have been followed (ii) that the Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit of the Company for the year (iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (iv) that the directors prepared the annual accounts on a going concern basis. (v) that the directors had laid down internal financial controls to be followed by the company, which are adequate and were operating effectively. (vi) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 5. Declaration by Independent Directors Independent directors i.e. Shri S.S. Sengar Ms Nishi Arora and Shri D.N.Singh have given the requisite declarations under Section 149(7) of the Companies Act, 2013 to the effect that they meet the criteria of independence as provided under section 149(6). 6. Audit Committee The Audit Committee comprises of Shri D. N. Singh (Chairman), Shri Surjeet Lai, Managing Director and Shri Shailendra Singh Sengar, Director. Two of them are independent. All the members of the committee are financially literate and the Chairman Shri D. N. Singh, an independent director, is having wide experience of industry and has passed Intermediate (Group I) of ICWA. 7. Vigil Mechanism Smt. Kulvinder Kaur, Deputy Manager, HR Department is in-charge of the vigilance matters in the company. All the employees/directors of the Company can report their genuine concerns to her and she will take guidance from the Audit Committee and in this matter report to the Board of Directors through the Audit Committee. 8. Nomination and Remuneration Committee The Nomination and Remuneration Committee of Directors has been constituted by the Board of Directors and comprises of Shri S.S Senger (Chairman), Shri D.N Singh and Ms Nishi Arora in accordance with the provisions of Section 178 of the Companies Act, 2013. 9. Reservation and Qualification on Statutory Audit Report and Secretarial Audit Report There is no qualification, reservation or adverse remark or disclaimer of the statutory auditor/secretarial auditor to which a reply is needed from the Board. The corporate guarantee for Rs. 7.25 crores given to State Bank of India for facilities to Aryavrat Projects and Developers Pvt. Ltd was duly given on 5.11.2013 under the Companies Act, 1956. 10. Particulars of Loan & Investment Under Section 186 The company has complied with the provisions of Section 186 of Companies Act, 2013 in relation to loans, investments & guarantee given by the Company during the year. 11. Particulars of Contract and Arrangement Under Section 188 There were no contracts or arrangements with related parties during the year 2014-15 except dealings in the nature of current accounts with Som Distilleries Private Limited, a company under same management, as detailed in the notes to the accounts for 2014-15. These dealings were arms length transactions. 12. Reserves The Directors recommend transfer of Rs. 10.82 crores to general reserves from the profits of the year. 13. Dividend Directors have recommend for the year 2014-15, a dividend of Rs. 1.5 on each share of Rs. 10(i.e. 15%) on all the 27522400 equity shares payable to shareholders as on the date of Annual General Meeting. 14. Conservation, Technology, Foreign Exchange In terms of Rule 8(3) of Companies (Accounts) Rules, 2014, information about energy conservation and technology absorption is nil in regard to each of the respective items. Information regarding foreign exchange is as follows: - Earnings : Rs.2,41,23,029 Outgo : Rs. 1,69,53,767 15. Risk Management The company constituted a Risk Management Committee in terms of Clause 49 of Listing Agreement consisting of Shri. Surjeet Lai and Ms. Nishi Arora. Details of risk management policy are yet to be cristalized in writing. 16. Corporate Social Responsibility The Board constituted a corporate social responsibility committee in terms of section 135 of the Companies Act 2013 consisting of Shri Deena Nath Singh (Chairman), Shri S.S. Sengar and Smt. Nishi Arora. In respect of CSR Policy, the Board decided that at present the CSR activities of the company shall be through Asha Mohan Foundation which is a registered society engaged in the education of children at Sehatganj for the last more than ten years and has been established by the promoters of this company The CSR Committee shall monitor the CSR expenditure of the company through Asha Mohan Foundation and shall ensure that at least 2% of the average net profit of the company made during the immediately preceding three years is incurred and well utilized for the education and other welfare activities of the society. In respect of the year, 2014-15, a report under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached in Annexure II. 17. Secretarial Audit M.M. Chawla and Associates, Company Secretaries in Practice, Bhopal were appointed as Secretarial Auditor of the company to perform Secretarial Audit of the company for the year 2014-15 in terms of section 204 of the Companies Act, 2013. The secretarial audit report issued by them is attached herewith as Annexure III. 18. Directors/ CFO/ Internal Auditor Ms. Nishi Arora was appointed as an Independent Director with effect from 14.11.2014. The Board welcomes her on the Board of Directors. Shri Rajesh Dubey was appointed as Chief Financial Officer of the company with effect from 14.11.2014. Shri Sourabh Tandon was appointed as Internal Auditor of the company with effect from 14.11.2014 19. Auditors M/s K.C. Khanna & Co., Chartered Accountants, Bhopal retire at the ensuing 22nd Annual General Meeting. They are eligible for reappointment. The Board recommends their reappointment. 20. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, and National Stock Exchange of India, Corporate Governance Report including Management Discussion and Analysis and Certificate from Company Secretary in Practice regarding compliance of conditions of Corporate Governance are attached and form part of this report as Annexures IV and V. 21. Other Statutory Information In respect of other various matters listed in Section 134(3) and other Sections of the Companies Act, 2013 and rules made there under, there is no further information to be furnished in this report. There are adequate internal financial controls keeping in view the size and nature of transactions of the Company A system of evaluation of the performance of Directors is yet to be evolved. There was no employee getting salary in excess of that mentioned in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information/ratios about employees/directors as required under Rule 5(1) of those Rules are attached as Annexure VI. 22. Acknowledgments Directors are grateful for the co-operation received from business associates and the valued customers of the company. Directors wish to place on record their high appreciation of the services of executives, staff and workers of the company. BY ORDER OF BOARD OF DIRECTORS SURJEET LAL CHAIRMAN AND MANAGING DIRECTOR Place: Bhopal Dated: 27.07.2015 |