2.12 Provisions
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event; it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be
reimbursed, for example, under an insurance contract, the
reimbursement is recognised as a separate asset, but only when
the reimbursement is virtually certain. The expense relating to a
provision is presented in the statement of profit and loss net of
any reimbursement, if any.
2.13 Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond
the control of the Company or a present obligation that arises
from past events but is not recognised because it is not probable
that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognised because
it cannot be measured reliably. The Company does not recognize
a contingent liability but discloses its existence in the standalone
financial statements.
2.14 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use
or sale are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs. These exchange
difference are presented in finance cost to the extent which the
exchange loss does not exceed the difference between the cost
of borrowing in functional currency when compared to the cost
of borrowing in a foreign currency.
2.15 Earnings per equity share ('EPS')
Basic EPS amounts are calculated by dividing the profit for the
year attributable to equity holders by the weighted average
number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit
attributable to equity holders by the weighted average number
of equity shares outstanding during the year plus the weighted
average number of equity shares that would be issued on
conversion of all the dilutive potential equity shares into equity
shares.
2.16 Financial Instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of
another entity.
Financial assets and liabilities are recognised when the company
becomes a party to the contractual provisions of the instrument.
Financial assets and liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit
or loss) are added to or deducted from the fair value measured
on initial recognition of financial asset or financial liability.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if
these financial assets are held within a business whose objective
is to hold these assets in order to collect contractual cash flows
and the contractual terms of financial asset gave rise on specified
dates to cash flows that are solely payments of principal and
interest on principal amount outstanding.
Financial asset at fair value through other comprehensive
income
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held within
a business whose objective is achieved by both collecting
contractual cash flows on specified dates that are solely payments
of principal and interest on principal amount outstanding and
selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss
unless it measured at amortised cost or at fair value through other
comprehensive income on initial recognition. The transaction
costs directly attributable to the acquisition of financial assets
and liabilities at fair value through profit and loss immediately
recognized in statement of profit and loss.
Financial liabilities
Financial liabilities which carry a floating rate of interest are
measured at amortised cost using the effective interest method.
Equity Instruments
An equity instrument is a contract that evidences residual
interest in the asset of the company after deducting all its
liabilities. Equity instrument by the company are recognised at
the proceeds received net of direct issue cost.
B. Financial risk management objectives and policies
The Company's principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and cash
and cash equivalents that derive directly from its operations. The Company also holds unquoted investments in a wholly owned subsidiary.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of
these risks. The Company's senior management ensures that the Company's financial risk activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. It is
the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The senior management reviews and agrees
policies for managing each of these risks, which are summarized below.
i) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.Financial
instruments affected by market risk include deposits, investmentsand borrowings.
(a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the company's financial instruments will fluctuate because of changes in
market interest rates. The Company's exposure to the risk of changes in market interest rate relates primarily to the Company's borrowings with
floating interest rates.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on borrowings affected, with all other
variables held constant, the Company's profit before tax is affected through the impact on floating rate borrowings, as follows:
ii) Credit risk
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations.
Credit risk encompasses of both, the direct risk of default and the risk of deterioration of credit worthiness as well as concentration of risks.
Credit risk is controlled by analyzing credit limits and credit worthiness of customers on a continuous basis to whom the credit has been
granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, investments,
derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the other financial instruments of
the company result in material concentration of audit risk.
iii) Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings. The table
below summarises the maturity profile of the Company's financial liabilities:
38. The Company has borrowing from banks on the basis of security of current assets, and the statements of current assets filed by the Company
with the banks are in agreement with books of accounts.
39. As per the information available with the company, the companies has no outstanding balances in respect of payables, receivables, investments,
share held by the company or any other outstanding balances with struck off companies.
40. The company is engaged in the business of manufacture and sale of Alcoholic beverages (Beer and IMFL) which constitutes a single business
segment. The company's exports outside India did not exceed the threshold limits for disclosure as envisaged in IndAS 108 on "Operating
Segments” issued by the Institute of Chartered Accountants of India. In view of the above, primary and secondary reporting disclosures for
business/ geographical segment as envisaged in IndAS - 108 are not applicable to the Company.
45) The Company's pending litigations pertain to claim and cases occuring in the normal course of business. The Company has reviewd its pending
litigations and expects that the outcome of the proceedings will not have any material effect on its financial positions.
46) Balances standing at the debit or credit in the accounts of various parties are subject to confirmation and reconciliation.
47) Previous year's figures have been regrouped/ restated wherever considered necessary to make them comparable to those of the current year.
As per our Report of even date
Som Distilleries and Breweries Limited
For AKB Jain & Co.,
For and on Behalf of the Board
Chartered Accountants
Firm Registration No. 003904C Sd/- Sd/-
Sd/- J.K. Arora Nakul K Sethi
Rahul Dewani (Chairman & Managing Director) (Director)
Partner DIN - 00224633 DIN - 06512548
Membership No. 435066
BHOPAL Sd/- Sd/-
Dated: 28.05.2025 Nitin Malviya Om Prakash
UDIN : 24435066BKFOHB8956 (Chief Financial Officer) (Company Secretary)
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