Som Distilleries & Breweries Ltd

DEAR MEMBERS,

Your Directors have pleasure in presenting the 31st Annual Report together with the Financial Statements (Standalone and Consolidated) of the Company for the Financial Year ended March 31, 2024.

A brief overview on Standalone and Consolidated Financial Performance for the Financial Year ended March 31, 2024 is as follows:

Your Directors do not propose to transfer any amount to the general reserves and the entire amount of profit for the year forms part of the ‘Retained Earnings'.

During FY 2023-24 your Board has not recommend any dividend on equity share in order to conserve Cash and growth plans of the Company.

The Dividend Distribution Policy as adopted and formulated by the Board in terms of Regulation 43A of the Listing Regulations is available on the Company's website and can be assessed at the link: https:// www.somindia.com/pdf/sebi/som-dividend-distribution-policy.pdf.

During the year under review, on consolidated basis, your Company registered Gross Revenue of Rs. 247000.67 Lacs, whereas the Profit Before Tax and Total Comprehensive Income (PAT) for the year stood at Rs. 12193.14 Lacs and Rs. 8652.80 Lacs respectively. On a standalone basis, the Company registered Gross Revenue of Rs. 89655.33 Lacs, whereas the Profit Before Tax and Total Comprehensive Income (PAT) for the year stood at Rs. 6699.99 Lacs and Rs. 4715.88 Lacs, respectively.

The following are the key developments reported by your company –

- Flagship brand "Hunter" has achieved remarking success and proudly held the top spot as the best selling strong beer in Delhi.

- Power Cool has established itself as the brand of Choice in Karnataka.

- Introduction of new Strong Beer brand ‘Legend' in the State of Karnataka

- Commercial Production at the Hassan Plant, Karnataka has commenced after successful trail Production for Increased beer Capacity, enhancing Production capabilities to meet growing demand.

- Expanded Canning line at Bhopal is now in full commercial production, enabling greater efficiency in packing operations.

- Entered into a Strategic Contract Manufacturing agreement in Jammu and Kashmir for the Production of IMFL, targeting the delivery of High Quality Products to the Canteen Stores Departments.

- Strategic tie up with Carlsberg now started Production at our Plant in Odisha. Meeting the Highest Industry Standards while minimizing its environment footprint.

- Secured a Substantial and dominant market share of 45% within the beer Industry across the state of Madhya Pradesh.

- Entered into a Strategic Contract Manufacturing agreement in Jammu and Kashmir for the Production of IMFL, targeting the delivery of High Quality Products to the Canteen Stores Departments.

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this Annual Report.

M/s AKB Jain & Co., Chartered Accountants, (FRN:003904C) the Statutory Auditors of the Company, will hold office till the conclusion of the thirty First Annual General Meeting of the Company. The Board has recommended the re-appointment of M/s AKB Jain & Co., Chartered Accountants, (FRN:003904C) as the statutory auditors of the Company, for a term of three consecutive years, from the conclusion of the thirty first Annual General Meeting scheduled to be held in the year 2024 till the conclusion of the thirty-fourth Annual General Meeting to be held in the year 2027, for approval of shareholders of the Company, based on the recommendation of the Audit Committee.

The Statutory Auditors have submitted a certificate confirming their eligibility under Section 139 of the Act and meet the criteria for appointment specified in Section 141 of the Act. Further, the Company has also received a copy of Peer Review Certificate as prescribed by the Institute of Chartered Accountant of India to the Auditors and declaration from the Auditors that they are not disqualified for such appointment/ reappointment under the said Act.

The Notes on accounts and observations of the Auditors in their Report on the Accounts of the Company are self- explanatory.

There were no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Reports that may call for any explanation from the Directors.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Neelesh Jain & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the FY 2023-24.

The comments of Board on observations of Secretarial Auditor of the Company in their Report for the FY 2023-24 are self-explanatory indicated below and the Report of the Secretarial Audit in Form MR-3 is annexed as Annexure I. Further, in terms of Regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company carried out Secretarial Audit of its material unlisted subsidiaries i.e. (a) Woodpecker Distilleries & Breweries Private Limited and (b) Som Distilleries and Breweries Odisha Private Limited, through M/s MM Chawla & Associates, Company Secretaries in Practice. The reports of the secretarial audit are annexed herewith as Annexure I-A & Annexure I-B respectively. The Annual Secretarial Compliance Certificate duly signed by M/s N.K. Jain & Associates, Company Secretaries has been submitted to the Stock Exchanges and is annexed at Annexure I-C to this_Board's_Report.

Under Companies Act, 2013 -

As per Section 124(6) of the Act read with the IEPF Rules as amended, all the Shares in respect of which dividend has remained unpaid/ unclaimed for seven consecutive years or more are required to be transferred to IEPF Account. The Company is in process to send notice / reminders to the concerned members and to publish notice regarding the same in newspaper(s).

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 -

Inadequate disclosure by the Company regarding deferment of preferential allotment of share warrants to Promoters / Promoter's Group. SEBI AO imposed _ne of Rs.5 Lakh on the Company and an appeal has been filed by the Company with SAT.

Management Response - The Company has paid _ne under Protest. The company feels that adequate disclosure was given to stock exchanges keeping that in mind an appeal has been filed with SAT regarding the same.

The Board of Directors had appointed M/s Sobhani & Agarwal, Chartered Accountant as the Internal Auditors of the Company for the F.Y. 2023-24. Internal Financial Control & Systems of the Company has been devised through its extensive experience that ensures control over various functions of its business. The Company practices Quality Management System for Design, Planning, Construction and Marketing. Periodic audits conducted by Internal Auditors and Statutory Auditors provide means whereby any weakness, whether financial or otherwise, is identified and recti_ed in time.

The Audit Committee receives a quarterly update of the key findings and the action taken report. The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

The company was in requirement of funds for working capital & other objects for which the company came up with a rights issue of equity shares of approx. Rs.48.94 Crores and a preferential Cum Private Placement issue of Equity Shares and convertible equity warrants of approx. Rs.148.50 Crore. The proceeds from the rights issue and preferential issue of equity shares was fully utilised during the year for the specified objects. The period of warrants is ongoing.

The members vide resolution passed in Extraordinary General Meeting on April 30, 2024 approved the sub-division/ split of 1 (One) fully paid-up equity share having face value of 5.00 (Rupees Five only) each into 1 (One) fully paid up equity shares having face value of 2.00 (Rupee Two only) each and consequential alteration in the existing Capital Clause of the Memorandum of Association (MOA) of your Company.

After the requisite approvals of the Stock Exchanges i.e. BSE and NSE and the depositories i.e. NSDL and CDSL, new ISIN (INE480C01038) was allotted to your Company. The effect of change in face value of the share was reflected on the share price at the Stock Exchanges where your Company is listed (BSE and NSE) effective from May 24, 2024 i.e. record date for the purpose of sub-division/ split of equity shares of your Company.

As a result of the sub-division/ split of equity shares of your Company, it has become more affordable and encouraged participation of investors at large.

Accordingly, the capital structure of your Company post sub-division/ split of equity shares is as follows:

On recommendation by the Board, the shareholders of the company in the Extra-Ordinary General Meeting held through Other Audio Visual Means (OAVM) on April, 30, 2024, had approved the change of name of the Company from ‘Som Distilleries Breweries & Wineries Limited' to ‘Som Distilleries and Breweries Limited'. The Certificate w.r.t. change of Name has been received from the concerned ROC.

As on March 31, 2024, the Company has 2 (Two) Subsidiary Companies, one being Wholly Owned Subsidiary i.e. Som Distilleries and Breweries Odisha Private Limited and the other one being Subsidiary Company Woodpecker Distilleries & Breweries Private Limited. List of companies which have been consolidated at the year-end is given in the Significant Accounting Policies of the Consolidated Audited Financial Statements of the Company. During the year Woodpecker Distilleries & Breweries Private Limited ceased to be wholly owned subsidiary of the company.

There has been no material change in the nature of the business of the Subsidiaries. A separate statement containing the report on the performance and financial position of each of subsidiaries is included in the consolidated financial statements of the Company forming part of this Annual Report.

Pursuant to applicable Accounting Standards on Consolidated Financial Statements and Financial Reporting issued by the ICAI and as prescribed by Securities and Exchange Board of India (SEBI), Consolidated Financial Statements, which includes the financial information 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 read with Rule 5 of the Companies (Accounts) Rules, 2014, the Financial Statements of the Subsidiary Companies have not been attached to the Annual Report. However, Company has attached along with its financial statements a separate statement containing the salient features of financial statements of its subsidiaries in Form AOC-1.

Further, the Annual Accounts of the Subsidiary Companies and the detailed related information shall be made available to shareholders of the Company and of its Subsidiary Companies upon request and the Annual Accounts of the subsidiary companies shall also be kept for inspection by any shareholder in the head office of the Company and the office of its subsidiary companies. Further, the annual accounts for the FY 2023-24 of both the subsidiary companies are available on the website of the Company i.e., www.somindia.com.

As per Regulation 34 of the SEBI Listing Regulations, a Business Responsibility and Sustainability Reporting is annexed as Annexure II and forms part of this Annual Report.

The Board, upon the recommendation of the CSR Committee, has adopted CSR Policy and initiated its implementation. The CSR Policy is available on the Company's website www.somindia.com. The details pertaining to composition of CSR Committee are included in the Corporate Governance Report, which forms part of this Annual Report. The Annual Report on CSR activities is annexed as Annexure III.

The Company has Internal Complaints Committee (ICC) with Ms. Anamma Bosco as (Presiding Officer), Mr. Nakul Kam Sethi (Member), Mr. Rajesh Dubey (Member) and Ms. Madhuri Goel a member from 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 under the Policy. There was no complaint received from any employee during the FY 2023-24 and hence no complaint is outstanding as on March 31, 2024 for redressal.

In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Mr. Nakul Kam Sethi (DIN: 06512548), Wholetime Director of the Company retires by rotation at the ensuing Annual General Meeting ("AGM") of the Company and being eligible, offers himself for re-appointment. The Board on the recommendation of the Nomination & Remuneration Committee ("NRC") has recommended his re-appointment in the ensuing AGM.

Mr. Rajesh Kumar (DIN: 08732528), Non-Executive/Independent Director had Resigned from the Board of the Company w.e.f. April 14, 2023. The Board appreciated Mr. Kumar's valuable contribution during his tenure as Independent Director of the Company and noted the content of his resignation letter that there was no material reason for his resignation.

Mr. Nakul Kam Sethi (DIN: 06512548) was re-appointed as Whole time Director of the Company for a further period of 5 years with effect from June 1, 2023 and such re-appointment was approved by the Shareholders at the Extraordinary General Meeting of the company held on August 5, 2023.

Mr. Deena Nath Singh (DIN: 00281542), Non-Executive/Independent Director has Resigned from the Board of the Company w.e.f. December 22, 2023. The Board appreciated Mr. Singh's valuable contribution during his tenure as Independent Director of the Company and noted the content of his resignation letter that there was no material reason for his resignation.

Mr. Satpal Kumar Arora (DIN: 00061420) was re-appointed as Non-Executive Independent Director of the Company for a further period of 5 years with effect from October 13, 2023 and such re-appointment was approved by the Shareholders at the 30th Annual General Meeting of the company held on September 27, 2023.

Mr. Dinesh Kumar Batra (DIN 08773363) was appointed as Non-Executive Independent Additional Director of the Company for a period of 5 years with effect from January 17, 2024 to January 16, 2029 with effect from January 17, 2024 and has been regularized as a Director (Non-Executive/Independent) of the Company in the Extraordinary General Meeting of the Company held on February 15, 2024.

Ms. Shreyansi Goel (DIN:10164947) was appointed as Non-Executive Independent Additional Director of the Company for a period of 5 years with effect from 5th August 2024 to 4th August 2029 (both days inclusive) and proposed to be regularized as a Director (Non-Executive/Independent) of the Company in the 31st Annual General Meeting of the Company.

The Company has formulated a policy on ‘familiarisation programme for independent directors' which is available on the Company's website at the link https://www.somindia.com/pdf/sebi/SOM-Familiarization-Programme-for-Independent-Directors.pdf

The Board, as on March 31, 2024 comprises 7 Members - 2 Executive Directors and 5 Non-Executive/Independent Directors. During the period under review, your directors met 9 (Nine) times. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of number of meetings of Board and various Committees attended during the year by each Director/ Member is disclosed in the Corporate Governance Report forming part of this Annual Report.

The Board, as on March 31, 2024 has Seven Committees namely, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholder Relationship Committee, Risk Management Committee, Executive Legal and

Borrowing Committee and Fund Raising Committee.

A detailed note on the composition of the Board and Committees including meetings, attendance thereat is provided in the Corporate Governance Report which forms part of this Annual Report.

Mr. Jagdish Kumar Arora (DIN: 00224633), is the Chairman and Managing Director, Mr. Nakul Kam Sethi (DIN: 06512548) is the Whole Time Director, Mr. Rajesh Kumar Dubey is the Chief Financial Officer and Mr. Om Prakash Singh is the Company Secretary & Compliance Officer of the Company.

The Independent Directors met on January 17, 2024, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of non-independent directors and the Board as a whole; the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Board confirms that, during the period under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) as amended from time to time.

All the Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; So, as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

In the opinion of the Board, they fulfil the condition for appointment/ re-appointment as Independent Directors on the Board. Further, in the opinion of the Board, the Independent Directors also possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.

Pursuant to the requirement under section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable Accounting Standards have been followed and there are no material departures;

b. The Directors had 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 on March 31, 2024 and of the profit of the Company for the year ended on that date;

c. 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 fraud and other irregularities; and

d. The Directors had prepared the financial statements of the Company for the Financial Year ended March 31, 2024 on a ‘going concern' basis.

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. 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.

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 the Employees are set out in Annexure IV. Further, during the year under review, no director has received any commission from the Company accordingly the provision of Section 197(14) of the Act are not applicable to the Company.

The Company has "SOM Employees Stock Option Plan Scheme 2020" ("SOM ESOP-2020"). The company with requisite approvals had extended the benefits of the SOM ESOP-2020 scheme for the benefit of permanent Employees and/ or Directors of the Company and/ or subsidiary company(ies), as may be permissible under the SEBI Regulations.

During the year under review, the Company did not issue/grant any options under "SOM ESOP-2020 scheme".

Accordingly, there are no outstanding options under SOM ESOP-2020 as on March 31, 2024 and no disclosures in terms of Companies (Share Capital and Debenture) Rules, 2014 and Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is required.

Further the Company had received the in-principle approval from the stock exchanges for the for implementation of SOM ESOP-2020 scheme in terms of the amended regulations.

The information required pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 pertaining to Conservation of Energy, Research & Development, Technology Absorption is set out in Annexure V.

As per the Circular No. CIR/OIAE/2/2011 dated June 3, 2011 issued by the Securities and Exchange Board of India, Company is timely redressing the Investor Complaints through the SEBI complaints Redress System (SCORES). As a part of compliance, the Company has a Stakeholder Relationship Committee to redress the issues relating to investors. It consists of three Members namely Mr. Satpal Kumar Arora, Chairperson, Ms. Nishi Arora and Mr. Nakul Kam Sethi, as Members.

The details of this Committee are provided in the Corporate Governance Report forming part of the Annual Report.

TThe equity shares of the Company are listed on the National Stock Exchange of India Ltd. (NSE) and BSE Limited (BSE). The Company has paid annual listing fees for FY 2024-25 has already been paid to the credit of both the Stock Exchanges.

The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance practices and have implemented all the stipulations prescribed. Secretarial compliances, reporting, intimations etc. Under the Companies Act, 2013, listing agreement(s) and other applicable laws, rules and regulations are noted in the Board/ Committee Meetings from time to time. The Company has implemented several best corporate governance practices as prevalent globally.

The Corporate Governance Report as stipulated under Regulation

34(3) and other applicable Regulations read with Part C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report.

The requisite Certificate from the Company secretary in practice, M/s N.K. Jain & Associates, Company Secretaries, confirming compliance with the conditions of Corporate Governance as stipulated under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Part E of Schedule V of the aforesaid Regulations, forms part of this Report.

The Management Discussion and Analysis Report as required under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

The Annual Return of the Company as on March 31, 2024 is available on the Company's website and can be accessed at the Company's website under the weblink https://www.somindia.com

Your Directors' state that no disclosure or reporting is required in respect of Details relating to deposits covered under Chapter V of the Act, as there were no transactions on these items during the financial year under review.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the business activities of the Company.

All contracts/ arrangements/ transaction entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis.

During the year, the Company had entered any contract/arrangement/ transaction with the related parties which could be considered material in accordance with the Policy of the Company on materiality of related party transactions. The details of related party transactions in form AOC-2 is enclosed as Annaxere-VI. The RPT Policy is available on the Company's website under the weblink https://www.somindia. com. Your Directors' draw attention of the Members to Note no. 42 of the financial statements which set out related party disclosure.

The particulars of loans given, investments made and guarantees provided by the Company under Section 186 of the Companies Act, 2013, have been disclosed in the financial statements provided in this Integrated Annual Report. Please refer to the Notes of the Standalone Financial Statements.

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

The offcials of Income Tax Department had carried out a search operation at the Company's various business premises under Section 132 of the Income-tax Act, 1961 in November, 2023 where the Company had extended full cooperation to the Income-tax offcials during the search and provided all the information sought by them. As on the date of this report, the Company has not received any order from the Income tax department regarding the findings of their investigation / examination.

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate till the date of this report

Your director's draw attention of the Members to Note no. 35 of the financial statements which set out Contingent Liabilities

SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of Directors on various parameters.

Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board on its own performance and that of its Committees, Chairman of the Board and Individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.

The Company has adopted adequate Policy for the evaluation of its Director including independent 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 is available on the website of the Company under the weblink https:// www.somindia.com

Pursuant to the provision of Section 178 of the Companies Act 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board of Directors on the recommendation of Nomination and Remuneration Committee has framed a Policy for the appointment of Directors and Senior Management and their remuneration which is available on the website of the Company under the weblink https://www.somindia.com The details pertaining to composition of Nomination and Remuneration Committee are included in the Corporate Governance Report, which forms part of this Annual Report.

The Company has adopted the Risk Management Policy which is aimed at creating and protecting shareholders value by minimizing threats and losses and identifying and maximizing opportunities. Your Directors periodically review the risks associated with the business or threaten the prospect of the Company. The Risk Management Policy is available on the website of the Company under the weblink https:// www.somindia.com.

The Company has a vigil mechanism named as Whistle Blower Policy of the Company, an avenue to raise concern and access in good faith the Chairman of the Audit Committee which provide for adequate safeguard against victimization of person. The Policy on Whistle Blower Policy is available on the website of the Company under the weblink https://www.somindia.com.

The company's long-term bank loan ratings have been upgraded from BBB to BBB+ by ICRA. This upgrade reflects the company's continued commitment to financial strength, stability, and strategic growth.

Pursuant to the provisions of Companies (Accounts) Rules, 2014, the Company afirms that for the year ended on March 31, 2024:

a. There were no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016, before the National Company Law Tribunal or any other court.

49 b. There was no instance of one-time settlement with any bank or financial institution.

Your Directors' would like to express their sincere appreciation for assistance and co-operation received from the vendors and stakeholders including financial institutions, banks, Central & State Government Authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review.

The relationship with the employees remained cordial during the year. Your Directors' are thankful to the shareholders and customers for their continued patronage. Your Directors' wish to place on record their appreciation for solidarity, cooperation and support of employees and all stakeholders.

Statement made in the Annual Report, including those stated under the caption "Management Discussion and Analysis" describing the Company's plans, executions, achievements, projections and expectations may include approximations and may constitute "forward looking statement" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.