Home  »  Company  »  Soma Textiles  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Soma Textiles & Industries Ltd.

Mar 31, 2015

1. The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding in accordance with the provisions of Companies Act 1956.

2. The Company has only one class of Preference shares having a par value of Rs. 100 each. The holders of the Preference Shares shall have a preferential right to receive dividend, at a specified rate on the paid-up Capital including right to recive arrears of cumulative dividends, remaining due on such shares, Other than as permitted under Section 87 and other applicable provisions, if any, of the Companies Act, 1956, the holders of Preference Shares do not have any right to vote at the Company's General (Shareholders) Meeting. They have all such other rights as available to the Preference Shareholders under the provisions of Companies Act, 1956, read with Memorandum & Articles of Association of the Company, as applicable.

In the event of winding up, the holders of preference shares will be entitled to receive in proportion to the number of shares held at the time of Commencement of winding up, any of the remaing assets of the Company, if any, after distribution to all secured creditors and the Preference Shareholders right to receive monies out of the remaining assets shall be rekoned, pari passu with other unsecured creditors however in priority to the Equity Shareholders. The preference Shares shall be redeemed at par, at the option of the Company, at anytime within 20 years from the date of issue. The Board of Directors of the Company, at its discretion reserves the rights to redeem the said Preference shares, earlier.

3. Long term borrowings

b) All term loan repayments are resheduled as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (lOa) No. BY.CDR/AG No. 1110/ 2008-2009 dated 26th February, 2009. The company was under the CDR package, however, as the company had continuing default greater than 6 months, the company's accounts were classified as NPA by its bankers. On account of this, the company's CDR package stood as withdrawn as per letter dated 20.03.2015 from CDR. Their current status has been kept on as is basis until further agreements and conditions are laid down by the bankers. Two of the lending banks, being IDBI Bank Ltd. and EXIM Bank, have raised demand of payment of loan & interest, Amounts of Term Loan being Rs.1827.44 lacs and Rs.659.34 lacs respectively, hence these amounts has been classified accordingly, however in absence of any communication or demand notice from other lending banks, the company has stated the amount and terms of repayment as it is basis of CDR Package.

c) All FITL are repayable on stepped basis as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/ 2008-2009 dated 26th February, 2009.The company was under the CDR package, however, as the company had continuing default greater than 6 months, the company's accounts were classified as NPA by its bankers. On account of this, the company's CDR package stood as withdrawn as per letter dated 20.03.2015 from CDR. Their current status has been kept on as is basis until further agreements and conditions are laid down by the bankers. IDBI Bank Ltd. has raised demand of payment of loan & interest ,amounts of FITL being Rs.65.86 lacs, hence these amounts has been classified accordingly, however in absence of any communication or demand notice from other lending banks, the company has stated the amount and terms of repayment as it is basis of CDR Package.

d) All Interest on FITL are repayable in two equal installments as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CdR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/ AG No. 1110/2008-2009 dated 26th February, 2009. The company was under the CDR package, however, as the company had continuing default greater than 6 months, the company's accounts were classified as NPA by its bankers. On account of this, the company's CDR package stood as withdrawn as per letter dated 20.03.2015 from CDR. Their current status has been kept on as is basis until further agreements and conditions are laid down by the bankers. IDBI Bank Ltd. has raised demand of payment of loan & interest, amounts of Interest on FITL being Rs.33.01 lacs, hence these amounts has been classified accordingly, however in absence of any communication or demand notice from other lending banks, the company has stated the amount and terms of repayment as it is basis of CDR Package.

e) Repayment in 36 monthly instalments.

4. Security

a) Non converible debentures(NCDs), Term Loan, Funded Interest on NCDs, Funded Interest on Term Loans and Funded Interest on Working Capital are secured by way of first mortgage / charge over the immovable properties and first charge by way of hypothecation over the movable (save and except current assets / book debts and certain items of Plant & Machinery purchased and/or to be purchased under the equipment finance/credit scheme) both present and future, and second charge on the current assets i.e. stock of raw materials, finished and finished goods, consumable stores, book debts, receivables and as such other movables subject to prior charges created and/or to be created in favour of company's bankers on stocks of raw materials, finished and semi-finished goods, consumable stores, book debts and other receivables for securing working capital facilities.

b) Term Loan shall rank pari-passu interse without any preference or priority of one or the other.

c) All Term Loans and Funded Interest Term Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

d) Derivative Rupee Term Loan along with Funded Interest on Derivative Term Loan under CDR Scheme are secured by way of pari passu third charge on the fixed assets and immovable properties of the company ranking third and subservient in point of priority to the charges created or to be created in favour of the existing lenders. The said loan is additionally secured by personal guarantee of Shri A K Somany - Managing Director of the Company. Repayment of this Term Loan is subjected to availability of cash flow on subservient basis as per stipulation given under Corporate Debt Restructuring (CDR) scheme.

5 Short term borrowings

1 The company was under the CDR package, however, as the company had continuing default greater than 6 months, the company's accounts were classified as NPA by its bankers. On account of this, the company's CDR package stood as withdrawn as per letter dated 20.03.2015 from CDR. Current status has been kept on as is basis until further agreements and conditions are laid down by the bankers.

2 Working Capital Loans are secured by first pari passue charge against hypothecation of whole of the current assets, present and future of the Company, including stock of Raw Materials, stock in process, finished and semi-finished goods, stores and spares not relating to Plant & Machinery (Consumable stores & spares), Bills Receivables, Book Debts, outstanding monies, receivables, bills, claims and stock in transit, including all other movables etc. and second pari passu charge by way of mortgage of deposit of title deeds of movable and immovable fixed assets, both present and future of the Company, situated at Rakhial Road, Taluka city, Dist. Ahmedabad in the State of Gujarat.

3 Working Capitals Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

4 Working Capital loans are also secured by pledge of 25 lacs Equity Shares of Rs.10/- each of the Company held by Shri S. K. Somany, one of the promoter of the Company, in terms of Pledge Agreement executed in favour of Dena Bank, the Lead Bank of Dena Bank Working Capital Consortium.

6 Long term loans and advances (unsecured, considered good)

1 The Company out of the GDR issue proceeds had made an investment of USD 15 million, which as on 31st March, 2015 is equivalent to INR Rs. 9852.39 lakhs (Previous Year INR Rs. 9,444.17 lakhs), by way of long term loan and also invested in the Equity Share capital i.e 300 equity shares equivalent to INR Rs. 34.21 lakhs (Previous Year INR Rs. 34.21 lakhs) of Soma Textile FZC, Sharjah, U.A.E. an associate (Formerly Soma Textile FZE, Sharjah, U.A.E.,a wholly owned subsidiary).

During the financial year, the said associate has earned Profit of AED 20,850 (Previous Year Profit of AED 38,107).The accumulated loss incurred as on 31st March, 2015 is AED 564,690 (Previous Year AED 585,540) as per audited accounts, as certified by Business Management World Auditors & Business Consultants, Independent Auditors.

2 The auditor of the Company Business Management World Auditors & Business Consultants,independant Auditors has reported that all the Accounts Receivables have been deemed to be good. Major debtors have requested the Company for cooling period of 2 years i.e till March 2016 to pay outstanding receivables due to slow down in economy and weak financial position, which Company has agreed. Improvement in the financial health and general economy may take some more time.

7. The Company had been sanctioned a Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009 for restructuring the Company's existing financial assistance outstanding as on 30th September, 2008, availed from the Institutional Lenders and Working Capital from Banks, and sanctioning additional financial assistance extended/to be extended to the Company in the manner and to the extent set out in the LOA. The salient features of the scheme were injection of fresh working capital and concession in the bank charges, reduction in margins, fresh term loan for completion of pending capital projects, funding of interest, reduction in interest rate, moratorium and deferment of principal amount repayments. The company was under the CDR package, however, as the company had continuing default greater than 6 months, the company's accounts were classified as NPA by its bankers. On account of this, the company's CDR package stood as withdrawn as per letter dated 20.03.2015 from CDR. Their current status has been kept on as is basis until further agreements and conditions are laid down by the bankers. Two of the lending banks, being IDBI Bank Ltd. and EXIM Bank, have raised demand of payment of loan & interest amounts , hence these amounts has been classified accordingly, however in absence of any communication or demand notice from other lending banks, the company has stated the amount and terms of repayment as it is basis of CDR Package.

8. Related party transaction

1 Holding Company Not Applicable

2 Associate Company SOMA TEXTILE F.Z.C., Sharjah, UAE

3 Fellow Subsidiary Not Applicable

4 Other related parties where control exists. Somany Evergreen Knits Ltd. Kechak Credit & Finvest Ltd.

5 Key management personnel and their relatives

Shri S. K. Somany, Chairman (Shri A. K. Somany, Managing Director is son of Shri S. K. Somany) Shri A. K. Somany, Managing Director (Shri S. K. Somany, Chairman is father of Shri A. K. Somany) Ms Anuja Somany, VP ( Garment Division) (Shri Arvind Somany is father of Ms Anuja Somany) Shri Shrikant Bhat, Executive Director Shri Shrikant Bhat, Director, Soma Textile FZC.

9. Contingent liabilities and commitments (to the extent not provided for) (Rs. in lakhs)

As at As at 31st March, 31st March, 2015 2014 (i) Contingent Liabilities

a) Bank Guarantee

Unredeemed Bank Guarantees 207.15 229.11 (margin in form of FDR Rs.38.51 lakhs (Previous year Rs. 22.91 lakhs) provided against Bank Guarantees)

Total (a) 207.15 229.11

b) Litigation

Sales Tax Payment disputed 6.17 6.17 by the Company

Excise Duty demand 33.73 33.73 disputed by the Company

Claims against the Company 42.83 39.78 not Acknowledged as debts

Notice of Income Tax demand - 45.33 for A.Y. 2007-08

Total (b) 82.72 125.01

289.87 354.12

(ii) Commitments

Estimated amount of contracts 43.05 - remaining to be executed on capital account and not provided for (net of advances)

10. As the Company's business activity falls within a single primary and geographical segment viz. 'Textile', the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued under Companies (Accounting Standards) Rules, 2006 is not applicable.

11. Company has entered into a Registered Development Agreement on 20th November,2012, with Shayona Land Corporation for development of Part Leasehold Land owned by Company, by putting up construction of commercial units on the said land situated at Rakhial (sim), Taluka City, in the Registration District , Ahmedabad and Sub District, Ahmedabad No. 7 (Odhav), bearing final Plot No.80, admeasuring about 10648 square yards equivalent to 8903 square meters of town planning scheme No.10 (Rakhial).

12. As reported in the previous years that the Company had signed the Business Transfer Agreement (BTA) on 1st April, 2013, with Messrs GTN Engineering (India) Ltd., a Public Limited Company situated in Hyderabad in the State of Andhra Pradesh, for sale of its cotton spinning Unit at Baramati in Pune in the state of Maharashtra, at a lump-sum consideration of Rs.29.80 Crore.

During the previious year the Company has handed over the physical possessions of its Baramati Unit to M/s. GTN Engineering (India) Ltd. on 9th June 2013, the closing date, as per the terms of Business Transfer Agreement (BTA) upon obtaining all the required permissions/approvals from the concerned Authorities/Departments.

13. Previous year figures have been reclassified to conform to this year's classification


Mar 31, 2014

1.1 The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding in accordance with the provisions of Companies Act 1956.

1.2 The Company has only one class of Preference shares having a par value of Rs. 100 each. The holders of the Preference Shares shall have a preferential right to receive dividend, at a specified rate on the paid-up Capital including right to receive arrears of cumulative dividends, remaining due on such shares, Other than as permitted under Section 87 and other applicable provisions, if any, of the Companies Act, 1956, the holders of Preference Shares do not have any right to vote at the Company''s General ( Shareholders) Meeting. They have all such other rights as available to the Preference Shareholders under the provisions of Companies Act, 1956, read with Memorandum & Articles of Association of the Company, as applicable.

In the event of winding up, the holders of preference shares will be entitled to receive in proportion to the number of shares held at the time of Commencement of winding up, any of the remaining assets of the Company, if any, after distribution to all secured creditors and the Preference Shareholders right to receive monies out of the remaining assets shall be rekoned, pari passu with other unsecured creditors however in priority to the Equity Shareholders. The preference Shares shall be redeemed at par, at the option of the Company,at anytime within 20 years from the date of issue .The Board of Directors of the Company, at its discretion reserves the rights to redeem the said Preference shares, earlier.

b) All term loan repayments are resheduled as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008- 2009 dated 26th February, 2009.

c) All FITL are repayable on stepped basis as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008- 2009 dated 26th February, 2009.

d) All Interest on FITL are repayable in two equal installments as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009.

e) Repayment in 36 monthly instalments. 3.2 Security

a) Non converible debentures(NCDs), Term Loan, Funded Interest on NCDs, Funded Interest on Term Loans and Funded Interest on Working Capital are secured by way of first mortgage / charge over the immovable properties and first charge by way of hypothecation over the movable (save and except current assets /book debts and certain items of Plant & Machinery purchased and/or to be purchased under the equipment finance/credit scheme) both present and future, and second charge on the current assets i.e. stock of raw materials, finished and finished goods, consumable stores, book debts, receivables and as such other movables subject to prior charges created and/or to be created in favour of company''s bankers on stocks of raw materials, finished and semi-finished goods, consumable stores,book debts and other receivables for securing working capital facilities.

b) Term Loan shall rank pari-passu interse without any preference or priority of one or the other.

c) All Term Loans and Funded Interest Term Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

d) Derivative Rupee Term Loan along with Funded Interest on Derivative Term Loan under CDR Scheme are secured by way of pari passu third charge on the fixed assets and immovable properties of the company ranking third and subservient in point of priority to the charges created or to be created in favour of the existing lenders. The said loan is additionally secured by personal guarantee of Shri A K Somany - Managing Director of the Company. Repayment of this Term Loan is subjected to availability of cash flow on subservient basis as per stipulation given under Corporate Debt Restructuring (CDR) scheme

e) Secured by way of hypothecation of Vehicle financed.

2.1 Working Capital Loans are secured by first pari passue charge against hypothecation of whole of the current assets, present and future of the Company, including stock of Raw Materials, stock in process, finished and semi- finished goods, stores and spares not relating to Plant & Machinery (Consumable stores & spares), Bills Receivables, Book Debts, outstanding monies, receivables, bills, claims and stock in transit, including all other movables etc. and second pari passu charge by way of mortgage of deposit of title deeds of movable and immovable fixed assets, both present and future of the Company, situated at Rakhial Road, Taluka city, Dist. Ahmedabad in the State of Gujarat.

2.2 Working Capitals Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

2.3 Working Capital loans are also secured by pledge of 25 lacs Equity Shares of Rs.10/- each of the Company held by Shri S. K. Somany, one of the promoter of the Company, in terms of Pledge Agreement executed in favour of Dena Bank, the Lead Bank of Dena Bank Working Capital Consortium.

3.1 The Company out of the GDR issue proceeds had made an investment of USD 15 million, which as on 31st March, 2014 is equivalent to INR Rs. 9,444.17 lakhs( Previous Year INR Rs. 8,558.24 lakhs) , by way of long term loan and also invested in the Equity Share capital i.e 300 equity shares equivalent to INR Rs. 34.21 lakhs ( Previous Year INR Rs. 34.21 lakhs) of Soma Textile FZC,Sharjah, U.A.E. an associate( Formerly Soma Textile FZE, Sharjah, U.A.E.,a wholly owned subsidiary).

During the financial year, the said associate has earned Profit of AED 38,107 (Previous Year Profit of AED 32,399).The accumulated loss incurred as on 31st March, 2014 is AED 585,540 (Previous Year AED 623,647 ) as per audited accounts, as certified by Business Management World Auditors & Business Consultants, independent Auditors.

3.2 The auditor of the Company Business Management World Auditors & Business Consultants,independant Auditors has reported that all the Accounts Receivables have been deemed to be good . Major debtors have requested the Company for cooling period of 2 years i.e till March 2016 to pay outstanding receivables due to slow down in economy and weak financial position, which Company has agreed . Improvement in the financial health and general economy may take some more time.

4 The Company had been sanctioned a Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009 for restructuring the Company''s existing financial assistance outstanding as on 30th September, 2008, availed from the Institutional Lenders and Working Capital from Banks, and sanctioning additional financial assistance extended/to be extended to the Company in the manner and to the extent set out in the LOA. The salient features of the scheme were injection of fresh working capital and concession in the bank charges, reduction in margins, fresh term loan for completion of pending capital projects, funding of interest, reduction in interest rate, moratorium and deferment of principal amount repayments.

5 Related party transaction

1.1 Holding Company Not Applicable

1.2 Associate Company SOMA TEXTILE F.Z.C., Sharjah, UAE

1.3 Fellow Subsidiary Not Applicable

1.4 Other related parties where control exists. Somany Evergreen Knits Ltd.

Kechak Credit & Finvest Ltd.

1.5 Key management personnel and their relatives Shri S. K. Somany, Chairman

(Shri A. K. Somany, Managing Director is son of Shri S. K. Somany)

Shri A. K. Somany, Managing Director

(Shri S. K. Somany, Chairman is father of Shri A. K. Somany)

Ms Anuja Somany, VP ( Garment Division)

(Shri Arvind Somany is father of Ms Anuja Somany)

Shri Shrikant Bhat, Executive Director

Shri Shrikant Bhat, Director, Soma Textile FZC.

6 Contingent liabilities and commitments (to the extent not provided for) (Rs. in lakhs)

As at As at 31st March, 2014 31st March, 2013

(i) Contingent Liabilities

Unredeemed Bank Guarantees (margin i n form of FDR Rs.22.91 lakhs 229.11 226.43 (Previous year Rs. 22.64 lakhs) provided against Bank Guarantees)

Sales Tax Payment disputed by the Company 6.17 6.17

Excise Duty demand disputed by the Company 33.73 33.73

Claims against the Company not Acknowledged as debts 39.78 23.84

Notice of Income Ta x demand for A.Y. 2007-08 45.33 45.33

354.12 335.50

7 Company has entered into a Registered Development Agreement on 20th November,2012, with Shayona Land Corporation for development of Part Leasehold Land owned by Company, by putting up construction of commercial units on the said land situated at Rakhial (sim), Taluka City, in the Registration District , Ahmedabad and Sub District, Ahmedabad No. 7 (Odhav), bearing final Plot No.80, admeasuring about 10648 square yards equivalent to 8903 square meters of town planning scheme No.10 (Rakhial).

8 As reported last year that the Company had signed the Business Transfer Agreement (BTA) on 1st April, 2013, with Messrs GTN Engineering (India) Ltd., a Public Limited Company situated in Hyderabad in the State of Andhra Pradesh, for sale of its cotton spinning Unit at Baramati in Pune in the state of Maharashtra, at a lump-sum consideration of Rs.29.80 Crore, subject to obtaining necessary permissions by the Company from its shareholders, lenders, Capital Debt Re-structuring (CDR) Empowered group, income tax, and its Labour Union.

During the year the Company has handed over the physical possessions of its Baramati Unit to M/s. GTN Engineering (India) Ltd. on 9th June 2013, the closing date, as per the terms of Business Transfer Agreement (BTA) upon obtaining all the required permissions/approvals from the above concerned Authorities/Departments.

9 Previous year figures have been reclassified to conform to this year''s classification


Mar 31, 2013

1.1 The Company out of the GDR issue proceeds had made an investment of USD 15 million, which as on 31st March, 2013 is equivalent to INR Rs. 8,558.24 lacs (Previous Year INR Rs. 8,021.18 lacs) by way of long term loan and also invested in the Equity Share capital i.e 300 equity shares equivalent to INR Rs. 34.21 lacs (Previous Year INR Rs. 34.21 lacs) of Soma Textile FZC,Sharjah, U.A.E. an associate( Formerly Soma Textile FZE, Sharjah, U.A.E., a wholly owned subsidiary).

During the Financial Year, the said associate has earned Profit of AED 32,399 (Previous Year Profit of AED 25,644 ).The accumulated loss incurred as on 31st March, 2013 is AED 623,647 (Previous Year AED 656,046) as per audited accounts, as certified by Business Management World Auditors & Business Consultants, Independent Auditors.

1.2 The auditor of the Company Business Management World Auditors & Business Consultants, Independent Auditors, Independant Auditors has reported that all the Accounts Receivables have been deemed to be good and further it has been reported that receivables are delayed and the customers who were given cooling period are complying the terms with some delays however debts are considered good. Improvement in the financial health may take some more time.

2.1 The amount of Rs. 214.02 lacs pertaining to entry tax demand on polyster yarn raised by the Sales Tax Department during previous year, which Company had purchased from other states for consumption in manufacturing of fabric.

The Company had relied upon the decision of the Hon''ble Allahabad High Court which held that entry tax is invalid as its not compensatory and against the decision of the Hon''ble Allahabad High Court an appeal with the Hon''ble Supreme Court is filed,which appeal is still pending and the decision is awaited. The Hon''ble Supreme Court in Jindal Stainless Steel Ltd. has also held that as entry tax is not compensatory, it cannot be levied. But the Sales tax department had conveyed to the company during the previous year about the decision of Hon''ble Gujarat High Court in Eagle Corporation Services, which was in favour of revenue that entry tax is to be paid by the Company in Gujarat.

The Company has paid the above said amount during the year.

3 The Company had been sanctioned a Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009 for restructuring the Company''s existing financial assistance outstanding as on 30th September, 2008 availed from the Institutional Lenders and Working Capital from Banks, and sanctioning additional financial assistance extended/to be extended to the Company in the manner and to the extent set out in the LOA. The salient features of the scheme were injection of fresh working capital and concession in the bank charges, reduction in margins, fresh term loan for completion of pending capital projects, funding of interest, reduction in interest rate, moratorium and deferment of principal amount repayments.

4 Related party transaction

1.1 Holding Company Not Applicable

1.2 Associate Company SOMA TEXTILE FZC, Sharjah, UAE

1.3 Fellow Subsidiary Not Applicable

1.4 Other related parties where control exists Somany Evergreen Knits Ltd.

Kechak Credit & Finvest Pvt. Ltd.

1.5 Key management personnel and their relatives Shri S. K. Somany, Chairman

(Shri A. K. Somany, Managing Director is son of Shri S. K. Somany)

Shri A. K. Somany, Managing Director

(Shri S. K. Somany, Chairman is father of Shri A. K. Somany)

Shri Shrikant Bhat, Executive Director

Shri Shrikant Bhat, Director, Soma Textile FZC

1.6 The following transactions were carried out with related parties in the ordinary course of business :

5 Contingent liabilities and commitments (to the extent not provided for)

(Rs. in lakhs)

As at As at 31st March, 2013 31st March, 2012

(i) Contingent Liabilities

Unredeemed Bank Guarantees (margin in form of FDR Rs. 22.64 lacs 226.43 224.23 (Previous year Rs. 22.42 lacs) provided against Bank Guarantees)

Sales Tax Payment disputed by the Company 6.17 6.17

Excise Duty demand disputed by the Company 33.73 27.93

Claims against the Company not Acknowledged as debts 23.84 20.34

Income Tax Payment disputed by the Company 49.17

Notice of Income Tax demand for A.Y. 2007-08 45.33

335.50 327.84

6 As the Company''s business activity falls within a single primary and geographical segment viz. ‘Textile'', the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued under Companies (Accounting Standards) Rules, 2006 is not applicable.

7 Company has entered into a Registered Development Agreement on 20th November, 2012 with Shayona Land Corporation for development of Part Leasehold Land of the Company, by putting up construction of commercial units on the said land situated at Rakhial (sim), Taluka City, in the Registration District, Ahmedabad and Sub District, Ahmedabad No. 7 (Odhav), bearing final Plot No.80, admeasuring about 10648 square yards equivalent to 8903 square meters of town planning scheme No.10 (Rakhial).

8 The Company has signed Business Transfer Agreement on 1st April, 2013 with Messrs GTN Engineering (India) Ltd., a Public Limited Company situated in Hyderabad, in the State of Andhra Pradesh to dispose off the Baramati Unit, situated at D-49, M.I.D.C., Baramati on a slump sale basis as a going concern for a lumpsum consideration of Rs. 29.80 crores. The sale of the unit is governed by the terms & conditions laid down in Business Transfer Agreement. Necessary effect of the said transaction will be given in the books of account of the Company in the Financial Year 2013-14 after completing the transaction.

9 Previous year figures have been reclassified to conform to this year''s classification.


Mar 31, 2012

1.1 The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding in accordance with the provisions of the Companies Act, 1956.

1.2 Rest of disclosures as required to be given under share capital pursuant to Part I of Schedule VI to the Companies Act, 1956 are not applicable.

2 Share application money pending allotment Rs. 975 lakhs

Share application money of Rs. 975 lacs has been received from Promoters and Promoter Group companies towards allotment of 97,50,000 equity shares of Rs. 10 each for cash at par, aggregating to Rs. 975 lacs to the Promoter group in terms of the CDR Scheme sanctioned to the Company and the allotment of the said shares are subject to compliance with the applicable SEBI regulations in this regard, which is in process and expected to be completed in the current financial year.

b) All term loan repayments are rescheduled as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/ 2008-2009 dated 26th February, 2009.

c) All FITL are repayable on stepped basis as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/ 2008-2009 dated 26th February, 2009.

d) All Interest on FITL are repayable in two equal installments as per Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/ AG No. 1110/2008-2009 dated 26th February, 2009.

2.1 Security

a) Non convertible debentures(NCDs), Term Loan, Funded Interest on NCDs, Funded Interest on Term Loans and Funded Interest on Working Capital are secured by way of first mortgage / charge over the immovable properties and first charge by way of hypothecation over the movable (save and except current assets / book debts and certain items of Plant & Machinery purchased and/or to be purchased under the equipment finance/credit scheme) both present and future, and second charge on the current assets i.e. stock of raw materials, finished and finished goods, consumable stores, book debts, receivables and as such other movables subject to prior charges created and/or to be created in favour of Company's bankers on stocks of raw materials, finished and semi-finished goods, consumable stores, book debts and other receivables for securing working capital facilities.

b) Term Loan shall rank pari-passu interse without any preference or priority of one or the other.

c) All Term Loans and Funded Interest Term Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

d) Derivative Rupee Term Loan along with Funded Interest on Derivative Term Loan under CDR Scheme are secured by way of pari passu third charge on the fixed assets and immovable properties of the Company ranking third and subservient in point of priority to the charges created or to be created in favour of the existing lenders. The said loan is additionally secured by personal guarantee of Shri A K Somany - Managing Director of the Company. Repayment of this Term Loan is subjected to availability of cash flow on subservient basis as per stipulation given under Corporate Debt Restructuring (CDR) scheme.

3.1 Working Capital Loans are secured by first pari passu charge against hypothecation of whole of the current assets, present and future of the Company, including stock of Raw Materials, stock in process, finished and semi-finished goods, stores and spares not relating to Plant & Machinery (Consumable stores & spares), Bills Receivables, Book Debts, outstanding monies, receivables, bills, claims and stock in transit, including all other movables etc. and second pari passu charge by way of mortgage of deposit of title deeds of movable and immovable fixed assets, both present and future of the Company, situated at Rakhial Road, Taluka city, Dist. Ahmadabad in the State of Gujarat and Baramati, Dist. Pune in the State of Maharashtra.

3.2 Working Capital Loans are additionally secured by personal guarantees of Shri S. K. Somany-Chairman and Shri A. K. Somany-Managing Director of the Company.

3.3 Working Capital loans are also secured by pledge of 25 lakhs Equity Shares of Rs.10/- each of the Company held by Shri S. K. Somany, one of the promoter of the Company, in terms of Pledge Agreement executed in favour of Dena Bank, the Lead Bank of Dena Bank Working Capital Consortium.

4.1 In accordance with Accounting Standard 22 "Accounting for Taxes on Income" under the Companies (Accounting Standards) Rules 2006, for the year under consideration there is Deferred Tax Asset of Rs. 55.00 lakhs (Previous year Rs. 107.00 lakhs) has been recognized in the Profit and Loss Statement. The net Deferred Tax Asset Rs. 376.08 lakhs (Previous year Rs. 321.08 lakhs) comprises of deferred tax liability related to fixed assets Rs. 1,390.07 lakhs less deferred tax assets as per carried forward unabsorbed depreciation and business losses available as per Income Tax Act, 1961 Rs. 1,766.15 lakhs.

5.1 The Company out of the GDR issue proceeds had made an investment of USD 15 million, which as on 31st March, 2012 is equivalent to INR Rs. 8021.17 lakhs( Previous Year INR Rs. 7031.01 lakhs), by way of long term loan (i.e. Quasi-equity) and also invested in the Equity Share capital i.e. 300 equity shares equivalent to INR Rs. 34.21 lakhs ( Previous Year INR Rs. 34.21 lakhs) of Soma Textile FZC, Sharjah, U.A.E. an associate( Formerly Soma Textile FZE, Sharjah, U.A.E.,a wholly owned subsidiary).

During the financial year, the said associate has earned Profit of AED 25,644 (Previous Year Profit of AED 17,466 ).The accumulated loss incurred as on 31st March, 2012 is AED 656,046 (Previous Year AED 681,690) as per audited accounts, as certified by AL SAIF AUDITING & ACCOUNTANTS, independent Auditors.

5.2 The auditor of the Company AL SAIF AUDITING & ACCOUNTANTS, independent Auditors has reported that all the Accounts Receivables have been deemed to be good and further it has been reported that receivables are delayed and the customers who were given cooling period are complying the terms with some delays however, debts are considered good. Improvement in the financial health may take some more time.

6.1 The receivables includes bill discounted with bankers amounting to Rs. 438.86 lakhs (Previous Year Rs. 587.99 lakhs). The Bills are backed & secured against confirmed Letter of Credit and hypothecation of present and future receivables.

* Fixed deposit with banks include deposits of Rs. 0.48 lakhs (Previous Year Rs. 1.08 lakhs) with maturity of more than 12 months.

7.1 The amount of Rs. 214.02 lakhs pertains to entry tax demand on polyster yarn raised by the Sales Tax Department during the year, which Company had purchased from other states for consumption in manufacturing of fabric.

The Company had relied upon the decision of the Hon'ble Allahabad High Court which held that entry tax is invalid as its not compensatory and against the decision of the Hon'ble Allahabad High Court an appeal with the Hon'ble Supreme Court is filed,which appeal is still pending and the decision is awaited. The Hon'ble Supreme Court in Jindal Stainless Steel Ltd. has also held that as entry tax is not compensatory, it cannot be levied. But the Sales tax department has conveyed to the Company during the year about the decision of Hon'ble Gujarat High Court in Eagle Corporation Services, which is in favour of revenue that entry tax is to be paid by the Company in Gujarat.

As the matter is Subjudice, the Company is depositing the amount of liability of entry tax raised under protest.

8 The Company had been sanctioned a Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009 for restructuring the Company's existing financial assistance outstanding as on 30th September, 2008, availed from the Institutional Lenders and Working Capital from Banks, and sanctioning additional financial assistance extended/to be extended to the Company in the manner and to the extent set out in the LOA. The salient features of the scheme were injection of fresh working capital and concession in the bank charges, reduction in margins, fresh term loan for completion of pending capital projects, funding of interest, reduction in interest rate, moratorium and deferment of principal amount repayments.

9 Contingent liabilities and commitments (to the extent not provided for)

(Rs. in lakhs)

As at As at

31st March, 2012 31st March, 2011

(i) Contingent Liabilities

Unredeemed Bank Guarantees (margin in form of FDR Rs. 22.42 lakhs 224.23 45.51 (Previous year Rs. 6.78 lakhs) provided against Bank Guarantees)

Sales Tax Payment disputed by the Company 6.17 6.17

Excise Duty demand disputed by the Company 27.93 28.18

Claims against the Company not Acknowledged as debts 20.34 24.28

Income Tax Payment disputed by the Company 49.17 39.56

327.84 143.70

(ii) Commitments

Estimated amount of contracts remaining to be executed on

capital account and not provided for (net of advances) 1,108.25 1,110.88

10 As the Company's business activity falls within a single primary and geographical segment viz. 'textile', the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued under Companies (Accounting Standards) Rules, 2006 is not applicable.

11 The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act,1956. Consequent to the notification under the Companies Act,1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.


Mar 31, 2010

1 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.16,173,496/- (Previous year Rs. 40,717,684/- ), advance paid Rs. 282,052/- (Previous year Rs. 32,868,051/-)

2 The Company had been sanctioned a Restructuring Package by Corporate Debt Restructuring (CDR) Cell under the CDR Mechanism of RBI vide Letter of Approval (LOA) No. BY.CDR/AG No. 1110/2008-2009 dated 26th February, 2009 for restructuring the Companys existing financial assistance outstanding as on 30th September, 2008, availed of from the Institutional Lenders and Working Capital from Banks, and sanctioning additional financial assistance extended/to be extended to the Company in the manner and to the extent set out in the LOA. The salient features of the scheme were injection of fresh working capital and concession in the bank charges, reduction in margins, fresh term loan for completion of pending capital projects, funding of interest, reduction in interest rate, moratorium and deferment of principal amount repayments.

3 Contingent Liabilities not Provided for in respect of -

2010 2009 Rupees Rupees

(a) Bills discounted by the company 24,805,638 41,361,821

(b) Sales Tax Payment disputed by the Company 617,257 -

(c) Excise Duty demand disputed by the Company 3,512,963 3,512,963

(d) Claims against the Company not Acknowledged as debts 2,454,330 3,890,130

(e) Tandulwadi Grampanchaat Tax 542,025 -

(f) Electrical Inspection Division, Pune - 17,645,679



4 (a) The Company has been advised that the computation of net profits for the purpose of Directors remuneration under Section 349 of the Companies Act, 1956 need not be enumerated in view of loss in the company. Therefore, the question of payment of commission doesnt arise. However, fixed monthly remuneration has been paid to the whole-time Directors as per Schedule XIII to the Companies Act, 1956.

5 In the opinion of the Board and to the best of their knowledge and belief, the valuation on realisation of current assets, loans and advances in the Ordinary Course of business would not be less than the amount at which they are stated in the Balance Sheet.

6 Other Liabilities include FCD Application Money Refundable of Rs. 127,480 (Previous year Rs.127,480)

7 Stores consumption includes partly for repairs and replacements.

8 Profit/loss on the sale of Raw Material has been adjusted from the consumption.

9 Sundry debit / credit balances and the accounts squared up during the year are subject to confirmation and reconciliation from the parties to the transactions.

10 The company has been making efforts for obtaining informations from its vendors regarding their status under "Micro, Small and Medium Enterprises Development Act, 2006". However, the required information has not been received from the vendors and therefore bifurcation between Total Outstanding Dues of Micro Enterprises and Small Enterprises and Other Dues are not disclosed under the heading "Current Liabilities & Provisions".

11 The receivables includes bill discounted with bankers amounting to Rs. 24,805,640/- (Previous year Rs. 41,361,821/-). The Bills are backed & secured against confirmed L/Cs and hypothecation of present and future receivables. The sundry creditors includes creditors against Letters of Credit outstanding amounting to Rs. 163,163,326/- (Previous year Rs. 63,742,804/-).

12 In absence of any indication of there being potential impairment of any assets , as prescribed in AS-28 "Impairment of Fixed Assets", as at Balance Sheet date, no recoverable amount has been estimated.

13 No amounts are due for deposits as at the Balance Sheet date to the Investors Protection and Education Fund.

14 In accordance with Accounting Standard 22 "Accounting for taxes on income" under the Companies (Accounting Standards) Rules 2006, for the year under consideration there is Deferred Ta x Asset of Rs. 96,400,000/- (Previous year Rs. 23,800,000/-) has been recognised in the profit and loss account. The net Deferred Tax Asset Rs. 21,407,953/- (Previous year net Deferred Ta x Liability Rs. 74,992,047/-) comprises of deferred tax liability related to fixed assets Rs. 169,688,765/- less deferred tax assets as per carried forward unabsorbed depreciation and business losses available as per Income Ta x Act, 1961 Rs. 191,096,718/-.

15 Import purchases are booked on the basis of the amount actually paid.

16 Related Party Transaction

1.1 Holding Company Not Applicable

1.2 Subsidiary Company SOMA TEXTILE F.Z.E., Sharjah, UAE

(Ceased to be a wholly owned subsidiary of the company and its Legal status stood changed from Free Zone Establishment to Free Zone Company, with effect from closure of business hours as on 31st March, 2010.)

1.3 Fellow Subsidiary Not Applicable

1.4 Other related parties where control exists. Somany Evergreen Knits Ltd. Kechak Credit & Finvest Ltd.

1.5 Key Management Perso nnel and their relatives Shri S. K. Somany, Chairman (Shri A. K. Somany, Managing Director is son of Shri S. K. Somany) Shri A. K. Somany, Managing Director (Shri S. K. Somany, Chairman is father of Shri A. K. Somany) Shri Shrikant Bhat, Executive Director Shri Shrikant Bhat, Manager, Soma Textile FZE.

17 Exceptional items :

Exceptional items for the current Year includes foreign exchange fluctuations and Retrenchment compensation. The Previous year figures also includes derivative loss .

18 Use of GDR Proceeds and Investment in Soma Textile FZE :

(a) The company came out with the GDR Issue on 20th October, 2006 for Rs.783,749,725/-. Out of the said GDRs an amount of Rs.707,878,454/- upto 31st March,2010 (Previous year Rs. 799,656,560/-) has been invested in Soma Textile FZE, Sharjah, U.A.E. a wholly owned subsidiary of the company, an establishment with limited liabilities registered in Hamriya Free Zone, Sharjah, U.A.E. to augment its long term resources. However, as per the report on Financial Statement as on 31st March, 2010 as certified by AL SAIF AUDITING & ACCOUNTANTS, independent Auditors pertaining to Soma Textile FZE , its legal status stood changed from FZE (Free Zone Establishment) to FZC(Free Zone Company) with effect from closure of business hours as on 31st March, 2010, as Soma Textile FZE ceased to be a wholly owned Subsidiary of the company with effect from closure of business hours as on 31st March,2010.

During the financial year, the said subsidiary has incurred loss of AED 460,498 equivalent to Rs. 6,056,177/- (Previous year AED 29,949,903 equivalent to Rs. 379,502,708/-). The total loss incurred by the said subsidiary upto 31st March,2010 is AED 699,156 as per audited accounts, as certified by AL SAIF AUDITING & ACCOUNTANTS, independent Auditors.The said AED 699,156 in INR terms is Rupees 53,138,382/- on the basis of report under Section 212 of Companies Act,1956, as certified by Shankarlal Jain & Associates, Chartered Accountants, Mumbai.

(b) As on 31st March 2010, the company has total investment of Rs. 711,299,933/-(Previous year Rs. 803,078,039/-) in its 100% subsidiary, Soma Textile FZE, Sharjah, UAE, out of which Rs. 3,421,479/- (Previous year Rs. 3,421,479/-) is in the form of equity share capital (shown under Schedule 6 - Investments) and balance Rs. 707,878,454/- (Previous year Rs. 799,656,560/-) is in the form of loans (shown under Schedule 11 - Loans and Advances).

19 As the Companys business activity falls within a single primary and geographical segment viz. textile, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued under Companies (Accounting Standards) Rules 2006 is not applicable.

 
Subscribe now to get personal finance updates in your inbox!