You are here » Home » Companies » Company Overview » Soma Textiles & Industries Ltd

Soma Textiles & Industries Ltd.

BSE: 521034 Sector: Industrials
NSE: SOMATEX ISIN Code: INE314C01013
BSE 16:00 | 18 Oct 8.14 0.09
(1.12%)
OPEN

7.90

HIGH

8.18

LOW

7.90

NSE 15:40 | 18 Oct 8.00 0.15
(1.91%)
OPEN

7.85

HIGH

8.50

LOW

7.85

OPEN 7.90
PREVIOUS CLOSE 8.05
VOLUME 8071
52-Week high 10.29
52-Week low 2.43
P/E
Mkt Cap.(Rs cr) 27
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.90
CLOSE 8.05
VOLUME 8071
52-Week high 10.29
52-Week low 2.43
P/E
Mkt Cap.(Rs cr) 27
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Soma Textiles & Industries Ltd. (SOMATEX) - Auditors Report

Company auditors report

TO THE MEMBERS OF

SOMA TEXTILES & INDUSTRIES LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone financial statements of SOMA TEXTILES& INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheetas at 31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the ‘Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (‘Ind AS') specified under Section 133 of theAct of the state of affairs (financial position) of the Company as at 31stMarch 2021 and its loss (financialperformance including other comprehensiveincome)itscashflowsand the changes in equity for the year ended on that date.

Basis of opinion

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilledresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Material uncertainty related to Going Concern

We draw attention to Note No. 40 to the standalone financial statements regardingpreparation of the standalone financial statements on going concern basis for the reasonstated therein. Due to COVID 19 pandemic company had to close down its operation for 195days hence capacity utilisation is very low however company has to incur standingexpenditure which has resulted in EBIDTA loss. The appropriateness of the assumption ofgoing concern is dependent upon various initiatives undertaken by the Company in relationto saving cost optimize revenue management opportunities and enhance ancillary revenueswhich are expected to result in improve operating performance. Further the company hascontinued thrust to improve operational efficeiency and the company is in the process ofidentifying surplus assets and will monitise the same in due course to result insustainable cash flows addressing any uncertainities.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

1. We draw attention to that the company had advanced a loan to the tune of Rs7195.68/- Lakhs (Previous year Rs 9505.07/- Lakhs) to Soma Textiles FZC (UAE) out of GDRproceeds* classifiedas Non-Current Loan. The Company has quasi-equity in addition to thecapital contribution to Soma Textiles FZC. When the said loan was given the said companywas a wholly owned subsidiary however with effect st March 2010 the company's holdingin this from31 company has diluted from 100% to 40%. In the financial statement of SomaTextiles FZC ended as at 31st March 2021 the accumulated loss reflects at AED738716 as against the total capital of AED 900000 (including statutory reserves).

*The Company has received order from SEBI dated 08.02.2021 under section 11 11(4) and11B of the Securities and Exchange Board of India Act 1992 through which the company isrestrained from accessing the securities market for a period of 3 years from the date oforder.

We draw attention to Note no. 44 of auditedstandalonefinancialstatements in respect ofthe order passed by SEBI pertaining to the GDR issue made by the company in 2006. Thecompany promoter directors and others preferred an appeal before the Security AppellateTribunal (SAT). The matter is pending before SAT and the matter is sub judice. Ouropinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

We have determined the there are no key audit matters to be communicated in our report.

Information other than the financial statements and Auditor's Report

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. Our opinion on the financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the standalonefinancial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs(financialposition) profit or loss(financial performance including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financialstatements that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing thecompany'sfinancialreporting . process

Auditor's Responsibilities for the Audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is to provide a basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our We also providethose charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matters

The Company has filed application for voluntary delisting its share in terms ofRegulation 6(a) and Regulation 7 of SEBI (Delisting of Equity Shares) Regulations 2009however approval is pending on the BSE's part. Further the Equity Shares of the companywill continue to be listed on National Stock Exchange of India Limited.

Report on other Legal and Regulatory Requirements

1. As required by the section 143(3) of the Act based on our audit we report that: a)We have sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit; b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books; c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Statement of Cash Flows and Statementof Changes in Equity dealt with by this Report are in agreement with the relevant books ofaccount; d) In our opinion the aforesaid standalone financial statements comply with IndAS specified under Section 133 of the Act; e) The matter described in the materialuncertainty related to Going Concern section above in our opinion may have an adverseeffect on the functioning of the Company; f) On the basis of the written representationsreceived from the directors as on 31st March 2021 and taken on record by theBoard of Directors none of the directors is disqualified as on 31 st March 2021 frombeing appointed as a director in terms of Section 164(2) of the Act; g) With respect tothe adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate Report in"Annexure A". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting; h) In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act. i) with respect tothe other matters to be included in the Auditor's Report in accordance with rule 11 of theCompanies (Audit and Auditors) Rules 2014 (as amended) in our opinion and to the best ofour information and according to the explanations given to us: i. the Company hasdisclosed the impact of pendinglitigations financialposition in the standalone itsfinancial statements (refer note 36); material foreseeable losses; and iii. There were noamounts which were require to be transferred to the Investor Education and Protection Fundby the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For A.K. OSTWAL & CO
CHARTERED ACCOUNTANTS
F.R.N. No.: 107200W
ASHOK KUMAR JAIN
PARTNER
Date : 14th June 2021 M.No.: 038521
Place : Ahmedabad UDIN:21038521AAAAHV8534

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF SOMATEXTILES & INDUSTRIES LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED31st MARCH 2021 ANNEXURE A

Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 (the "Act")

In conjunction with our audit of the financial statements of SOMA TEXTILES &INDUSTRIES LIMITED ("the Company") for the year ended 31st March2021 we have audited the internal financial Company as of that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financialreporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's IFCoFR based on our audit.We conducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to both applicable to an audit ofInternal Financial auditofinternal Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate IFCoFR were established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the IFCoFR and their operating effectiveness. Ouraudit of IFCoFR included obtaining an understanding of IFCoFR assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

A Company's IFCoFR is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements of externalpurposes in accordance with generally accepted accounting principles. A Company's IFCoFRincludes those policies and procedures that (1) pertain to the maintenance of dispositionsof the assets of the company; (2) provide reasonable assurance that transactions recordedas necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Control over Financial Reporting

Because of the inherent limitations of IFCoFR including the possibility of collusionor improper management override of controls material misstatement due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that the IFCoFR may become inadequate because of changesin conditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols system over financial reporting reporting were operating effectively as at 31andsuchinternalfinancialcontrolsoverfinancial st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For A.K. OSTWAL & CO
CHARTERED ACCOUNTANTS
F.R.N. No.: 107200W
ASHOK KUMAR JAIN
PARTNER
Date : 14th June 2021 M.No.: 038521
Place : Ahmedabad UDIN:21038521AAAAHV8534

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF SOMATEXTILES & INDUSTRIES LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEARENDED31st MARCH 2O21 ANNEXURE B

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: 1. a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment. b) TheCompany has a regular program of physical verification of its property plant andequipment under which property plant and equipment are verified in a phased is reasonablehaving regard to the size of the Company and the nature of its assets. In accordance withthis program certain property plant and equipment were verified during the year and nomaterial discrepancies were noticed on such verification. c) The title deeds of immovableproperties other than self-constructed immovable property (buildings) as disclosed infixed assets to the financial statements are held in the name of the Company.

2. As explained to us physical verification of inventory has been conducted atreasonable intervals by the management and the discrepancies noticed on verificationbetween the physical stocks and the book records were not material having regard to thesize of the Company and the same have been properly dealt with in the books of account.

3. The Company has granted an unsecured interest free loan to its Associate SOMATEXTILE FZC. Such Associate is covered in the register maintained under section 189 of theAct. Total amount outstanding on 31st March 2021 was Rs 7195.68/- Lakhs. a)There are no terms and conditions set out by the company as on date for the loan given toSoma Textile FZC therefore we are unable to report on regularity of receipt of principalamount. b) As there is no stipulation of repayment of loan by the Associate we are unableto report on regularity of repayment of principal. c) As there is no set terms andconditions for the repayment there are no overdue amounts in respect of the loan grantedto the Associate.

4. In our opinion the Company has complied with the provisions of Sections 185 and 186of the Act in respect of loans investments guarantees and security.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.

6. We have broadly reviewed the cost records maintained by the Company as specified bythe Central Government under sub-section (1) of Section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

7. a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of custom duty of excise value added tax cess andother material statutory dues applicable to it. Further no undisputed amounts payable inrespect of outstanding statutory dues were in arrears as at 31st March 2021 for a periodof more than six months form the date they became payable.

b) Following amounts have not been deposited as on March 31st 2021 onaccount of dispute are given below:

Name of the Statute Nature of Dues Amount ( Rs In lakhs) Amount paid/ Adjusted Period to which the amount relates Forum where dispute is pending
Central Excise 24.85 - 2002-03 The Dy. Commissioner of C. Excise Div-III Ahmedabad
Excise Act Duty
1.59 - 2004-05 The Dy. Commissioner of C. Excise Div-I Ahmedabad
0.98 - 2005-06 The Commissioner of C. Excise (Appeals) Ahmedabad
5.81 - 2012-13 CESTAT West Zone Ahmedabad (Appeal)
Gujarat sales tax Act Sales Tax (VAT) 6.17 - 1997-98 1998-99 2000-01 Gujarat Value Added Tax Tribunal.
21.66 - 2005-06 Gujarat Value Added Tax Tribunal.
Income Tax Income 143.25 143.25 2008-09 Commissioner of Income Tax (Appeal)
Act Tax 1.00 1.00 2008-09 Commissioner of Income Tax (Appeal)
29.07 29.07 2008-09 Commissioner of Income Tax (Appeal)
138.91 4.94 2009-10 Commissioner of Income Tax (Appeal)
391.25 - 2010-11 Commissioner of Income Tax (Appeal)
24.28 - 2018-19 Commissioner of Income Tax (Appeal)
Employees Provident Fund P.F 140.11 26.23 - ASST. PF Commissioner Ahmedabad.

8. Based on our audit procedures and on the basis of information and explanation givento us by the management the company has not defaulted in repayment of loans or borrowingsto a bank.

9. To the best of our knowledge and belief and according to the information andexplanations given to us the Company did not raise any money by way of initial publicoffer or further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable.

10. To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year. 11. Managerial remuneration hasbeen paid and provided in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.

12. In our opinion the Company is not a Nidhi Company. Accordingly provision ofclause (xii) of paragraph 3 of the Order are not applicable.

13. To the best of our knowledge and belief and according to the information andexplanations given to us all transactions with the related parties are in compliance withsection 177 and 188 of the Act where applicable and the details have been disclosed in theFinancial Statements as required by the applicable Ind AS.

14. During the year the Company has not made any preferential allotment or privateplacement of share or fully or partly convertible debentures. Accordingly provision ofclause (xiv) of paragraph 3 of the Order are not applicable. 15. In our opinion theCompany has not entered into any non-cash transactions with directors or persons connectedwith them covered under section 192 of the Act.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For A.K. OSTWAL & CO
CHARTERED ACCOUNTANTS
F.R.N. No.: 107200W
ASHOK KUMAR JAIN
PARTNER
Date : 14th June 2021 M.No.: 038521
Place : Ahmedabad UDIN:21038521AAAAHV8534

.