To The Members,
Your Directors have pleasure in presenting their Eighty-fourth (85th)
Annual Report of the Company, together with the audited financial statements for the
financial year ended 31 st March, 2023.
1. FINANCIAL PERFORMANCE
There was no improvement in the business scenario of the Textile
Industry and is continued to remain challenging. The revenue from operations for the year
2022-23 was `519.73 lakhs as compared to Rs 1,455.19 lakhs in previous year, an decrease
of 64.28 %.
The loss before Prior period, Exceptional item and Tax was `215.73
lakhs against the previous year loss of Rs 1,749.34 lakhs.
The net profit for the year was` 16547.42 lakhs against the previous
year net loss of ` 1643.21 lakhs.
2. DIVIDEND
The Board of Directors of your Company have not recommended any
dividend for the Financial Year ended 31st March, 2023, considering the loss
during the year and brought forward losses.
3. PRESENT STATUS OF THE UNIT
The unit as other industrial units in Ahmedabad city was discharging
treated liquid effluents through its normal ETP in to the sewer lines of AMC as a result
of directions issued by High court of Gujarat in the suo motu writ petition (PIL) No.98 of
2021 to severe the industrial effluent sewage connection. The court directed the AMC water
and drainage connections of industrial units which release partially treated/untreated
water and added that no re-connection shall be granted by AMC without prior approval of
GPCB.
On January 28, 2022 the high court of Gujarat had rejected applications
filed by 11 industrial units against the AMC and GPCB after they snapped drainage
connections of 393 industrial units during the drive following the High court order. The
industries had raised the issue of the right to discharge treated court discussed the law
in detail and concluded that industries do not have a right to release their treated
sewage lines and mix them with domestic waste water. The industrial units filed an appeal
against the High Court order in the Supreme Court but the same was rejected by Supreme
Court on 25.3.2022 and upheld the high court order by which it refused to allow the
industrial units to discharge their treated effluents into the AMC sewage lines. Due to
this
Manufacturing operations of the company is discontinued.
4. EXPORT
The FOB value of the exports during the Year under review was Nil
against zero export in the previous year due to the closure of the manufacturing operation
as detailed in point no 3
5. ANALYSIS AND REVIEW
India's textiles sector is one of the oldest industries in the
Indian economy, dating back to several centuries. The industry is extremely varied, with
hand-spun and hand-woven textiles sectors at one end of the spectrum, while the
capital-intensive sophisticated mills sector on the other end. The decentralized power
looms/ hosiery and knitting sector forms the largest component in the textiles sector. The
close linkage of textiles industry to agriculture (for raw materials such as cotton) and
the ancient culture and traditions of the country in terms of textiles makes it unique in
comparison to other industries in the country. India's textiles industry has a
capacity to produce wide variety of products suitable for different market segments, both
within India and across the world.
6. OPPORTUNITIES AND CHALLENGES
The future for the Indian textiles industry looks promising. The Indian
textile industry has vast potential for growth, buoyed by strong domestic consumption as
well as export demand. However, to get maximum advantage of the vast potential of this
vibrant industry, the Government and Industry need to work towards addressing key
challenges including obsolete machinery and technology, threats to handloom sector, power
shortage, illicit markets, labour-related concerns, raw materials shortage.
9 EXPANSION AND MODERNISATION
Company's manufacturing operation is closed due to the reason
mentioned in point no 3 hence the Company did not go for expansion and modernization.
10. CONSOLIDATED FINANCIAL STATEMENT
As required by Regulation 33 of the SEBI (LODR) Regulations, 2015, the
Consolidated Audited Financial Statements have been prepared in accordance with the
requirements under Accounting Standard AS-21 on "Consolidated Financial
Statements" read with AS-23 on the "Accounting for Investment in
Associates" read with the provisions of Companies Act, 2013, are provided, forming
part of the Annual Report.
11. CASH FLOW STATEMENT
In compliance with the requirement of Section 34 of the SEBI (LODR)
Regulations, 2015, the Cash Flow Statement for the year ended 31st March, 2023
prepared in accordance with the applicable Accounting Standard, is annexed to the
financial statement, which forms part of the Annual Report.
12. INSURANCE
The Company's properties including its Building, Plant &
Machinery and Stocks among others continue to be adequately insured against fire, flood,
earthquake, explosive and other such risks, as considered to be prudent and necessary.
13. INTERNAL FINANCIAL CONTROL
The Company has in place internal financial control its operations
ensuring proper recording of financials and monitoring of operational effectiveness and
efficient conduct of its business including adherence to the Company's Policies,
safeguarding of its assets, prevention and detection of frauds and errors, accuracy and
completeness of accounting records and compliance of various applicable regulatory and
statutory requirements.
The Internal Auditor monitors and evaluates the efficiency their
report, corrective actions are undertaken by the concerned departments and thereby
strengthen the Controls. Significant audit observations corrective measures and actions
thereon are presented to the Audit Committee of the Board. During the year such controls
were tested and no reportable material weaknesses were observed.
The Audit Committee comprises the majority of Independent Directors in
terms of the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations,
2015.
14. FIXED DEPOSITS
Your Company has not accepted any deposit from the Public/Members under
Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposit) Rules,
2014 during the year under review and there are no deposits pending with the Company as on
the Balance Sheet closure date.
15. SHARE CAPITAL
There has been no change in the Company's Issued, Subscribed and
Paid-up Equity and Preference Share Capital in between the end of financial st March, 2023
and 31st March, 2022. On 31st March, 2023, the Equity Share
Capital stood at ` 3303.30 Lacs, divided in to 33033000 Equity Shares
of ` 10 each and Preference Share Capital stood at ` 975 Lacs, divided in to 975000, 0.01%
Cumulative Redeemable Non-convertible Preference Shares of `
100 each.
16. DIRECTORS AND KEY MANAGERIAL PERSONNEL Rotation
At the forthcoming 85th Annual General Meeting (AGM) of the
Company, Shri S. K. Somany (DIN: 00001131) retires by rotation and being eligible, offers
himself for re-appointment in accordance with the provisions of the Companies Act, 2013
("the Act"), and Articles of Association of the Company. The Board recommends
his re-appointment. Brief resume, nature of expertise and details of directorship held in
other companies of Shri S. K. Somany, proposed to be appointed is given in the Notice of
the Ensuing General Meeting (AGM), as stated under Secretarial Standard 2 and Regulation
36 of the SEBI (LODR) Regulations, 2015
Independent Directors hold office for a fixed term of five years and
are not liable to retire by rotation. None of the Directors are disqualified from being
appointed or holding office as Directors as stipulated under Section 164(2) of the
Companies Act, 2013.
Key Managerial Personnel
Shri Abhishek Kumar Mishra has resigned from the post of Company
Secretary & Compliance Officer of the Company, with effect from 16th May, 2022 vide
his email dated 6th April, 2022, owing to personal reasons and Board has appointed M`
Reena Prasad as the Company Secretary & Compliance Officer of the Company, with
immediate effect. Pursuant to the provisions of sub-section (51) of Section 2 and Section
203 of the Act read with the Rules framed thereunder, the following persons are the Key
Managerial Personnel of the Company as on March 31, 2023 are Shri S. K. Somany,
Non-Executive Chairperson, Shri A. K. Somany, Managing Director & CEO, Shri Shrikant
Bhairaveshwar Bhat, Whole-time Director & Chief Financial Officer and Mrs. Reena
Prasad, Company Secretary & Compliance Officer.
17. DECLARATION OF INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent
Directors, under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria
of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25
of the SEBI (LODR) Regulations, 2015.
18. CORPORATE SOCIAL RESPONSIBILITY
The Company does not fall within the ambit of Section 135 of the
Companies Act, 2013, read with the Companies (Corporate Social Responsibilities Policy)
Rules, 2014. Therefore the Annual Report on Corporate Social Responsibility initiatives as
required under the said act is not applicable to the Company. In view thereof, the Annual
Report on CSR activities is not annexed.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION
186 OF THE COMPANIES ACT, 2013
The Company has not provided any loan to any person or body corporate
or given any guarantee or provided security in connection with such loan or made any
investment in the securities of any Body Corporate pursuant to Section 186 of the
Companies Act, 2013, during the financial year ended 31 st March, 2023.
20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY
The Policy on Related Party Transaction', dealing with the
review and approval of related party transactions, was amended in line with the
requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2018. The policy is available on the Company's
website at the web link: www.somatextiles.com/home. php/investors/policies.
All contracts/ arrangements/ transactions entered into by the Company,
during the financial year, with related parties, as defined under Section 188 of the
Companies Act, 2013 and the relevant rules made thereunder, were in ordinary course of
business and on arm's length.
Further no material contract/ arrangement/ transaction, with related
parties were entered during the financial year under review, in accordance with policy of
the Company on materiality of related party transactions. Accordingly, the disclosure of
related party transactions as required under Section 134(3)(h) of the Companies Act, 2013,
in form AOC-2 is not applicable to your Company. However, members may refer to the notes
to the financial statements, which sets out disclosure on related parties and transactions
entered into with them pursuant to Accounting Standards.
21. LISTING ON STOCK EXCHANGES
The Equity Shares of the Company are listed at the following Stock
Exchanges:-
(a) BSE Limited (BSE).
Address: Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001
(b) National Stock Exchange of India Limited (NSE).
Address: Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai
400051.
NOTE:
(i) Listing fees have been paid to the Stock Exchanges for the year
2023-24.
(ii) The Calcutta Stock Exchange Association Ltd. has vide its Letter
No. CSEA/ID/223/2008 dated 16th April, 2008, confirmed the delisting of Company's
Shares from the official List of their exchange. However Equity Shares have been allowed
to be traded under the "Permitted Category" on the Exchange considering the
interest of General Investors in the Company.
Stock Code
(i) NSE - SOMATEX, (ii) BSE - 521034, (iii) CSE - 29067.
De-mat ISIN Number in NSDL & CDSL ISIN INE 314C01013.
22. DELISTING FROM STOCK EXCHANGE
The Company vide its application dated 31st March, 2021 applied for
Voluntary Delisting of its Equity Shares from BSE Limited in terms of Regulation 6 (a) and
Regulation 7 of SEBI (Delisting of Equity Shares) Regulations, 2009, as approved by the
Board of Directors of the Company at its meeting held on 30th March, 2021.
However, confirmation/ approval for the same, from BSE Limited are awaited.
Further, the Equity Shares of the Company will continue to be listed on
National Stock Exchange of India Limited.
23. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE
REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR
REPORTS
The Auditors Report and Secretarial Auditors Report do not contain any
reservation, qualification or adverse remark and therefore need no explanations or
comments from the Board of Directors.
24. BOARD'S EVALUATION OF THE PERFORMANCE
In compliance with the Companies Act, 2013, and SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an
annual evaluation of its own performance, and that of its Committees and Individual
Directors. Feedback was sought by way of a structured questionnaire covering various
aspect of Board's functioning, such as adequacy of the Composition of the Board and
its Committee, Board culture, execution and performance manner in which the evaluation has
been carried out has been ofspecific provided in the Corporate Governance Report, forming
part of Board's Report.
25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
During the year Five (5) Board Meetings were held, the details of which
are given in the Report on Corporate Governance, that forms part of the Board's
Report.
The maximum interval between the two meetings did not exceeded 120
days, as prescribed in the Companies Act, 2013 and SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015.
26. AUDIT COMMITTEE
The Audit Committee comprises of Four (4) members, Majority of them are
Independent Directors namely; Shri B. K. Hurkat Chairman, Shri M. H. Shah and Mrs. N.
Singh, and Shri S. K. Somany a Non-Independent & Promoter Director, as other member of
the Committee. Thus the composition is in conformity with the requirements of section
134(3) and section 177(8) of the Companies Act, 2013, read with the provisions of SEBI
(LODR) Regulations, 2015. Five (5) Meetings of the Audit Committee were held during the
year under review, the details of which are given in the Report on Corporate Governance,
forming part of this Report. The Board of Directors accepted all recommendations of the
Audit Committee in the reporting period.
27. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER MECHANISM
The Company has in place a Whistle Blower Policy, as a part of Vigil
Mechanism to provide appropriate avenues to the Directors, employees and other
Stakeholders of the Company to bring to the attention of the Management any issue which is
perceived to be in violation of or in conflict with the Code of conduct, values,
principles and beliefs of the Company. The established Vigil Mechanism helps to report
concerns about any unethical conduct, financial malpractices or any unhealthy practice
prevalent in the Company.
The said Vigil Mechanism provides for adequate safeguards against
victimization of persons who use such mechanism and also provides for direct excess to the
Chairman of the Audit Committee.
The details of this Policy is explained in the Corporate Governance
Report forming part of Board's Report and are also available on the Company's
website; www.somatextiles.com/home.php/ investors/policies.
28. REMUNERATION POLICY
The Board has, on recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors, Senior Management
and their remuneration including criteria for determining qualifications, positive
attributes, independence of Directors and other matters as per section 178 and Clause
49(IV)(B) of Listing Agreement. The salient features of Company's Nomination and
Remuneration Policy is stated in the Corporate Governance Report. The Policy is available
on the website of the Company viz. www.somatextiles.com.
29. CORPORATE GOVERNANCE
Your Company upholds the Standards of Governance and is compliant with
the provisions of Corporate Governance, as Stipulated under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (listing Regulations). A Report on
Corporate Governance' as well as the certificate from Company's Statutory
Auditors, confirming compliance with the requirements of SEBI Listing Regulations, forms
part of the Annual Report.
30. CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009
The Ministry of Corporate Affairs, Government of India, had issued a
set of Voluntary Guidelines 2009 on Corporate Governance in December, 2009, for voluntary
adoption of a set of good practices by the Corporate Sector. These guidelines are expected
to serve as a bench mark for the Corporate Sector and also help them in achieving the
highest Standard of Corporate Governance. Guidelines are reviewed by the Management from
time to time to ensure the adherence of the same voluntarily commensurate with the
requirements, best suited to your Company gradually in phases.
31. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report under review, as
stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations,
2015 is presented by virtue of an Annexure, forming part of the Directors'
Report.
32. DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act, 2013, the Board
of Directors of your Company to the best of their knowledge and belief and on the basis of
information and explanation obtained from the operating management, hereby states and
confirms: (a) that in the preparation of attached Annual Accounts for the Financial Year
ended 31st March, 2023 the applicable Accounting Standards have been followed along with
proper explanation relating to material departures, wherever, applicable; (b) that they
have selected the Accounting Policies described in notes to accounts, which have been
consistently applied, except where otherwise stated and made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the state of affairs st
March, 2023 and of the loss of the of
Company for the year ended on that date;
(c) that they have taken proper and sufficient care for the 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) that they have prepared the attached Annual Accounts on a
going concern' basis.
(e) that they had laid down internal financial controls to be followed
by the Company and that such internal controls are adequate and were operating
effectively.
(f) that they had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
33. AUDITORS
In compliance with the provisions of Section 139 and other applicable
provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014
(including any statutory modification(s)/ re-enactment(s)/ amendment(s) thereof, for the
time being in force), the Members at the Eighty-fourth (84th) Annual General Meeting held
on 31st
August 2022, had appointed M/s. Pipara & Co.LLP, Chartered
Accountants (ICAI Registration No. 107929W), as the Statutory Auditors of the Company, to
hold office for a term of five (5) consecutive years from the conclusion of the 84th
Annual General Meeting until the conclusion of the 89th Annual General Meeting of the
Company.
However, with the Notification dated May 7, 2018 issued by the Ministry
of Corporate Affairs (MCA'), the first proviso to section 139(1) of the
Companies Act, 2013, pertaining to the requirement of annual ratification of appointment
of
Auditors by Members is omitted.
Accordingly, as per the Companies (Amendment) Act, 2017, ratification
of the appointment of Statutory Auditors during their period of appointment will not be
considered.
34. SECRETARIAL AUDITOR
The Board has appointed M/s. Drolia & Company, Company Secretaries,
Kolkata, in practice having Certificate of Practice No. 1362, as the Secretarial Auditor,
to carry out Secretarial Audit for the year ending 31st March, 2024, pursuant to the
provisions of Section 204 of the Companies Act, 2013, read with the corresponding rules
framed thereunder.
35. MANAGERIAL REMUNERATION
Details of the ratio of the remuneration of each director to the median
employee's remuneration and other details as required pursuant to Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is attached to this Report.
36. SECRETARIAL AUDIT REPORT
A Secretarial Audit Report given by the Secretarial Auditors for the
financial year ended 31 st March, 2023, in the prescribed form MR-3 is annexed herewith as
Annexure to this Report and forms an integral part of this Report.
There are no qualifications, reservations and adverse remarks made by
the Secretarial Auditors in their Report.
37. INDUSTRIAL RELATIONS
Industrial relations in your Company, during the year under review
continued to be cordial and harmonious.
38. COST AUDITORS
Manufacturing unit of the Company at Ahmedabad was closed as per the
Order of Supreme Court following the order of High Court, Gujarat. Therefore, there is no
requirement to appoint Cost Auditor in terms of the applicable provisions of the Companies
Act, 2013, read with the Companies (Cost Records & Audit) Amendment Rules, 2014.
39. DEPOSITORY SYSTEMS
The Company's Shares are currently traded in dematerialized form,
as per the SEBI directives and the Company has entered in to agreements with the following
Depositories i.e. National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL), for trading in
dematerialized form.
Members are therefore advised to avail of the services either of the
depositories, to dematerialize their physical shares, if any held by them, for trading in
Company's shares smoothly and conveniently.
As on March 31, 2023, 32,534,614 Equity Shares are held in
dematerialized form and represent 98.49% of the
Company's total paid up Capital.
40. SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013 to ensure harassment free workplace for employees.
Sexual harassment cases are dealt as per the Company's Policy on Prevention of
Sexual Harassment'.
Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment.
All employees (permanent, contractual, temporary, trainees) are covered
under this policy.
No sexual harassment complaint was received during the year under
review.
41. ACCOUNTS OF THE SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT
VENTURES
The statement containing the silent features of the financial statement
of the company's associate companies under the first proviso to sub-section (3) of
section 129 of CompaniesAct, 2013 is enclosed as AOC-1 in the Annexure.
42. PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of remuneration for
the year or part of the year under review, in excess of the amount of remuneration
prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as
amended upto date.
The information required under Section 197 of the Act read with Rule
5(1) of the Companies (Appointment and Remuneration) Rules, 2014 is annexed and forms a
part of this Report.
43. EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3)(a) of the Companies
Act, 2013, the Annual Return in prescribed format may be accessed on the Company's
website at www.somatextiles.com.
44. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company is primarily engaged in the business of manufacturing of
Cotton Yarn, Denim Fabrics, Shirtings and Garments.
Information on conservation of energy, technology absorption, foreign
exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the
Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014, as
amended is given in the Annexure and forms part of this Report.
45. RISK MANAGEMENT
The Company has in place mechanism to inform Board Members about the
Risk Assessment and Risk Minimization procedures which are periodically reviewed to ensure
that risks and uncertainties are systematically identified, prioritized and initiated on
constant basis.
The risk management procedure is reviewed by the Audit Committee from
time to time to ensure that the executive management controls the risks and uncertainties
through a proper defined framework and major risks, are properly and systematically
addressed through mitigation actions on continuing basis.
46. BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as per Regulation 34(2)(f) of SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, describing the initiatives taken by them from an
environmental, social and governance perspective is not applicable to the Company, for the
financial year 2022-23 as per the SEBI Notification dated 22 nd December,
2015 and Frequently Asked Questions issued by SEBI on SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 dated 29th January, 2016.
47. CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion
& Analysis describing Company's objectives, expectations or forecasts may be
forward-looking within the meaning of applicable securities laws and regulations.
Many factors may affect the actual results, which could be different
performance and outlook.
48. VARIATION IN VALUATION
During the year under review, there was no instance
ofone-timesettlementwithanybankorfinancialinstitution necessitating disclosure or
reporting in respect of difference in valuation done by the Company.
49. COMPLIANCE OF SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards as
mandated by the Institute of Company Secretaries of India.
50. OTHER DISCLOSURES/REPORTING:
Your Directors state that no disclosure and/or reporting is required in
respect of the following items as there were no transactions on these items during the
year under review:
Issue of equity shares with differential rights as to dividend,
voting or otherwise;
Issue of shares (including sweat equity shares) to employees of
the Company under any scheme;
No significant or material orders were passed by the Regulators
or Courts or Tribunals which impact the going concern status and Company's operations
in future;
51. ACKNOWLEDGEMENT
Your Directors place on record their sincere thanks and appreciation
for the continuing support and assistance received from the financial institutions, banks,
government as well as non-government authorities, customers, exchange and members during
the period under review.
Your Company takes pride in all of its dedicated officers, employees
and workers, who have been wholeheartedly supporting and sincerely contributing their best
for the success and growth of your Company as well as maintaining harmonious relations
throughout the Company.
On behalf of the Board
Place : Ahmedabad (S. K. SOMANY)
Date : 25th May, 2023 Chairman
ANNEXURE TO THE DIRECTORS' REPORT
Information as required under Section 134(3)(m) of the Companies Act,
2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014
(A) CONSERVATION OF ENERGY:
(i) Steps taken or impact on conservation of energy: Nil
(ii) The steps taken by the company for utilization of alternate
sources of energy: Nil (iii) The Capital Investment on energy conservation equipment: Nil
(B) TECHNOLOGY ABSORPTION:
(i) The efforts made towards technology absorption: Nil
(ii) The benefits derived like product improvement, cost reduction,
product (iii) In case of imported technology (imported during the last three years
reckoned from the beginning of the financial year): NOT APPLICABLE
(iv) The expenditure incurred on Research and Development: Nil
(C) FOREIGN EXCHANGE EARNING & OUTGO
Used ` Nil lacs (Previous Year ` NIL lacs), Earned Rs Nil lacs
(Previous Year Nil).
On behalf of the Board
Place : Ahmedabad (S. K. SOMANY)
Date : 25th May, 2023 Chairman
ANNEXURE TO THE DIRECTORS' REPORT
Details of Significant Changes (change of 25% or more as compared to
the immediately previous financial year) in key detailed explanations therefor, pursuant
to sub-clause (h) of clause (1) of Part B of Schedule V of financial the SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2018:
Significant Changes in Financial Ratios
Sr. No. Particulars |
2022-23 |
2021-22 |
Change in % |
Reason for Significant
change, if any |
1 Debtors Turnover |
4.88 |
67.03 |
92.72% |
Due to the direction of the
Gujarat High Court Dt. 23rd |
2 Inventory Turnover |
36.86 |
8.95 |
-311.84% |
September, 2021, the Ahmedabad |
3 Interest coverage ratio |
0.80 |
(0.46) |
273.91% |
Municipal Corporation (AMC) has |
4 Current ratio |
2.3 |
0.36 |
-538.89% |
disconnected water and
drainage connection of the company and |
5 Debt Equity ratio |
2.62 |
4.56 |
42.54% |
the decision of the High Court was |
6 Operating Profit Margin (%) |
134.59 |
(46.99) |
386.42% |
upheld by Hon'ble Supreme
Court of India. Hence, the operations of the |
7 Net Profit Margin (%) |
3453.44 |
(118.00) |
3026.64% |
company are closed with effective |
8 Return on Net Worth (%) |
344.87 |
(65.63) |
625.48% |
from 26th November, 2021. |
Detailed explanation of ratios: (i) Debtors Turnover
The above ratio is used to quantify a Company's effectiveness in
collecting its receivables or money owed by customers. The ratio shows how well a Company
uses and manages the credit it extends to customers and how quickly that short-term debt
is collected or is paid. It is calculated by dividing turnover by average trade
receivables.
(ii) Inventory Turnover
Inventory Turnover is the number of times a Company sells and replaces
its inventory during a period. It is calculated by dividing turnover by average inventory.
(iii) Interest Coverage Ratio
The Interest Coverage Ratio measures how many times a Company can cover
its current interest payment with its available earnings. It is calculated by dividing
PBIT by finance cost.
(iv) Current Ratio
The Current Ratio is a liquidity ratio that measures a Company's
ability to pay short-term obligations or those due within one year. It is calculated by
dividing the current assets by current liabilities.
(v) Debt Equity Ratio
The ratio is used to evaluate a Company's financial leverage. It
is a is financing its operations through debt versus wholly owned funds. It is calculated
liabilities by its shareholder's equity.
(vi) Operating Profit Margin (%)
Operating Profit Margin is a profitability or performance ratio used to
calculate the percentage of profit a Company produces from its operations. It is
calculated by dividing the EBIT by turnover.
(vii) Net Profit Margin (%)
The net profit margin is equal to how much net income or profit is
generated as a percentage of revenue. It is calculated by dividing the profit for the year
by turnover.
(Viii) Return on Net Worth
Return on Net Worth (RONW) is a measure of profitability of a Company
expressed in percentage. It is calculated by dividing total comprehensive income for the
year by average capital employed during the year.
To, The Members,
Soma Textiles & Industries Limited,
CIN: L51909WB1940PLC010070
2, Red Cross Place,
Kolkata 700 001
I have conducted the Secretarial Audit of the compliance of applicable
statutory provisions and the adherence to good corporate practices by M/s. Soma Textiles
& Industries Limited (hereinafter called "the Company"). Secretarial Audit
was conducted in a manner that provided us a reasonable basis for evaluating the corporate
conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of books, papers, minute books, forms and
returns filed and other records maintained by the M/s. Soma Textiles & Industries
Limited digitally , and also the information provided by the Company, its officers,
agents and authorised representatives , I hereby report that in my opinion the Company
has, during the audit period covering the financial st March, 2023 complied with the
statutory provisions listed hereunder and also that the Company yearended31 has proper
Board- processes and compliance-mechanism in place to the extent, in the manner and
subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns
filed and other records maintained by the Company for the financial year ended 31 st
March, 2023 according to the provisions of: I. The Companies Act, 2013 (the Act) and the
rules made there under; II. The Securities Contracts (Regulation) Act, 1956
("SCRA") and the rules made there under and the circulars, guidelines issued
there under by the SEBI from time to time; III. Securities and Exchange Board of India
(Depositories and Participants) Regulations 2018 and Bye-laws framed there under;
IV Foreign Exchange Management Act (FEMA), 1999 and the rules and
regulations made thereunder;
V The following Regulations (as amended from time to time) and
Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(SEBI Act'): - (a) The Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations).
(b) The Securities and Exchange Board of India (Prohibition of Insider
Trading)(Amendment) Regulations,2018; (c) The Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) ( Amendment ) Regulations,2021; (d) The
Securities and Exchange Board of India (Investor Protection and Education Fund) 2009 (e)
The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer
Agents) Regulations,1993 regarding Companies Act and dealing with Clients The following
Regulations (as amended from time to time) and Guidelines prescribed under the Securities
and Exchange Board of India Act, 1992 (SEBI Act') are not applicable, as the
Company did not carry any act under the said Regulations for the period under review.
(a) SEBI (Share based Employee Benefits and sweat equity) Regulations,
2021;
(b) The Securities and Exchange Board of India (Issue and Listing of
Non-convertible Securities) Regulations, 2021; (c) The Securities and Exchange Board of
India (Delisting of Equity Shares) (Amendment) Regulations, 2021; (d) The Securities and
Exchange Board of India (Buyback of Securities) Regulations, 2018; (e) The Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
VI. The following Industry specific laws:
(a) Textiles (Development & Regulation) Order 2001. (b) Textiles
Committee Act 1963 (c) Textiles (Consumer Protection) Regulations 1988. (d) Factories Act,
1948.
(e) Industrial Disputes Act, 1947. (f) The Payment of Wages Act, 1936.
(g) The Minimum Wages Act, 1948. (h) Employee State Insurance Act, 1948.
(i) The Employees Provident Fund and Miscellaneous Provisions Act,
1952. (j) The Contract Labour (Regulations and Abolition) Act, 1970. (k) The Maternity
Benefit Act, 1961.
(l) Environment Protection Act 1986 and Rules there under.
(m) Hazardous Wastes (Management, Handling and Trans boundary Movement)
Rules, 2008 and Amendments thereof and any other laws as may be applicable to the Company
from time to time.
I have also examined compliance with the following:
Secretarial Standards on meetings of Board of Directors and General
Meetings (SS-1 & SS-2), issued by the Institute of Company Secretaries of India as
notified from time to time.
(a) During the period under review the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above
except following contravention of LODR regulation and SEBI Act:
1. The Company violate the provisions of section 12A (a), (b) & (c)
of SEBI Act 1992 read with Regulations 3(a), (b), (c) and (d) and 4(1) of PFUTP
Regulations 2003 and Section 23E of the SCRA in respect of issue of Global Depository
Receipts (GDR) of 17.2975 million US Dollar on 20/10/2006 in this regard SEBI has passed
two orders one for debarring the Company, its directors and its authorized representative
from accessing the securities market for a specified period of 3 years and 2 years
respectively through SEBI Order dated February 8, 2021 and through another SEBI Order
dated August 30, 2021 wherein penalties have been imposed upon the Company, its director
and its authorized representative.
An appealed was filed against above order before The SECURITIES
APPELLATE TRIBUNAL MUMBAI (SAT) by the Aggrieved parties. During the financial year under
review SAT has given their order dated 22.02.2023 wherein SAT has reduced debarment to the
period undergone for the Company, debarment of its directors has not been reduced and
confirmed the above period of 2 years for debarment and penalty of ` 5 lakh imposed by AO
in the circumstances on its directors is also just and proper, however SAT has seaside the
debarment for its authorized representative and penalties thereof.
2. Further SAT has affirmed the penalty of ` 20 lakh imposed against
the Company, Soma Textiles and Industries
Limited and the penalty of ` 5 lakh under Section 23E of the SCRA is
set aside.
I further report that:
The Board of Directors of the Company is duly constituted with proper
balance of Executive Director, Non-Executive Directors, Independent Directors and a Woman
Director. The changes in the composition of the Board of Directors, where ever applicable
during the year under review were carried out in compliance with the provisions of the Act
and Listing
Agreement/Listing Regulations, as and when applicable.
Adequate notice has been given to all the Directors to schedule the
Board Meetings. Agenda and detailed notes on agenda were sent at least seven days in
advance, in compliance with the provisions of Section 173 of the Act and Listing
Regulations during the relevant period, and a system exists for seeking and obtaining
further information and clarifications on the agenda items before the meeting and for
meaningful participation at the meeting.
All decisions of the Board and Board Committee Meetings were carried
out unanimously and the same was captured and recoded as part of the Minutes.
I further report that there are adequate systems and processes in the
Company commensurate with the size and operations of the Company to monitor and ensure
compliance with applicable laws, rules, regulations and guidelines as also represented by
the management.
I further report that during the audit period, the Company has not made
any:
(i) Public/Right/ Preferential issue of Shares/Debentures/Sweat Equity
or any other Security. (ii) Redemption / buy-back of securities.
(iii) Major decisions taken by the Members in pursuance to Section 180
of the Companies Act, 2013.
(iv) Foreign technical collaborations.
(v) Merger /Amalgamation / Reconstruction etc.
FOR PRAVIN KUMAR DROLIA
(Company Secretary in whole time practice)
(Pravin Kumar Drolia)
Proprietor
Place: Kolkata C.P.No.:1362, FCS: 2366
Date: 25 -05-2023 Peer view no: 1928/2022 UDIN: F002366E000355213
Note:
This report is to be read with our letter of even date which is annexed
as Annexure A.1 and forms an integral part of this report.
Annexure-A.1 CS PRAVIN KUMAR DROLIA
(Company Secretary in whole time practice)
Block D, 2nd floor, 13, Selimpur Road, Kolkata - 700031
Mobile: 09831196869; Email: droliapravin12@gmail.com
To, The Members,
Soma Textiles & Industries Limited,
(CIN: L51909WB1940PLC010070)
2, Red Cross Place,
Kolkata 700001.
My report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the
management of the Company. My responsibility is to express as opinion on these secretarial
records based on my audit.
2. I have followed the audit practices and processes as were
appropriate to obtain reasonable assurance about the correctness of the contents of the
Secretarial records. The verification was done on test basis to ensure that correct the
processes and practices, I followed, provide a reasonable facts are reflected basis for my
opinion.
3. I have not verified the correctness and appropriateness of financial
records and Books of Accounts of the Company.
4. Wherever required, I have obtained the management representation
about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of corporate and other applicable
laws, rules, regulations, standards is the responsibility of management. My examination
was limited to verification of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the
future viability of the Company nor of the efficacy or effectiveness with which the
management has conducted the affairs of the Company.
FOR PRAVIN KUMAR DROLIA
(Company Secretary in whole time practice) (Pravin Kumar Drolia)
Place: Kolkata Proprietor
Date: 25 -05-2023 C.P.No.:1362, FCS: 2366
UDIN: F002366E000355213 Peer view no: 1928/2022
Part "A": Subsidiaries NOT APPLICABLE Part
"B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013
related to Associate Companies and Joint Ventures*
(Information in respect of each Associate to be presented with amounts
in ` )
Sl NO Name of Associate |
SOMA TEXTILE FZC |
1. Latest audited Balance Sheet Date |
31.03.2023 |
2. Shares of Associate held by
the company on the year end No. |
300 Equity Shares of AED 1000
each |
Amount of Investment in Associates |
` 3,421,479 |
Extend of Holding% |
40% |
3. Description of how there is significant
influence |
By virtue of Shareholding |
4. Reason why the associate is not
consolidated |
NA |
5. Net worth attributable to
shareholding as per latest Audited Balance Sheet |
` 34,21,479 |
6. Profit/Loss for the year |
|
i. Considered in Consolidation |
NA |
ii. Not Considered in Consolidation |
NA |
* There is no Joint Venture with the Company.
Note:
1. Name of associates or joint ventures which are yet to commence
operations - None
2. Name of associates or joint ventures which have been liquidated or
sold during the year - None
Sd/- |
Sd/- |
Sd/- |
Sd/- |
S. K. Somany |
A. K. Somany |
Shrikant Bhat |
Reena Prasad |
Chairman |
Managing Director |
Chief Financial Officer (CFO) |
Company Secretary |
|