Soma Textiles & Industries Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

2.16 Provisions, Contingent Liabilities and Contingent Assets:

Provisions : Provisions are recognised when there is a present legal or constructive obligation as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured using the cash
flows estimated to settle the present obligation at the Balance sheet date. .

Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain
future events not wholly within the control of the Company or a present obligation that arises from past events where it
is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot
be made.

Contingent Assets : Contingent assets are disclosed, where an inflow of economic benefits is probable.

2.17 Cash and cash equivalents:

Cash and Cash equivalents include cash, cheques on hand, cash at bank and short term deposits with banks having
original maturity of three months or less, which are subject to insignificant risk of changes in value.

2.18 Non-current Assets held for sale:

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally
through a sale rather than through continuing use of the assets and actions required to complete such sale indicate
that it is unlikely that significant changes to the plan to sell will be made or that the decision to sell will be withdrawn.
Also, such assets are classified as held for sale only if the management expects to complete the sale within one year
from the date of classification.

Non-current assets classified as held for sale are measured at their carrying amount as current market valuation is not
available. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or
amortised.

2.19 Statement of Cash Flows:

Cash flows are reported using the indirect method whereby profit / (loss) is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are seggregated based on the available information.

2.20 Earnings per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted
earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average
number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.21 Critical accounting judgements and key sources of estimation uncertainty:

The preparation of financial statements in conformity with Ind AS requires that the management of the Company
makes judgments, estimates and assumptions that affect the reported amounts of income and expenses of the period,
the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of
the financial statements. The judgments, estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to significant accounting estimates include useful lives and impairment of property, plant and equipment,
allowance for doubtful debts/advances, deferred tax assets, future obligations in respect of retirement benefit plans,
expected cost of completion of contracts, allowances for inventories, etc. Difference, if any, between the actual results
and estimates is recognised in the period in which the results are known.

(i) Useful lives and Impairment of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This
re-assessment may result in change in depreciation expense in future periods.

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any such indication exists, or when annual impairment testing for an asset is required, the Company makes an

estimate of the asset''s recoverable amount. An asset''s recoverable amount is the higher of its fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets and the asset''s value
in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part
of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to
its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense
categories consistent with the function of the impaired asset.

(ii) Allowance for doubtful debts/advances

When determining the lifetime expected credit losses for trade receivables, the Company considers reasonable
and supportable information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the Company''s historical experience and credit
assessment and including forward-looking information.

(iii) Deferred tax assets

Significant management judgment is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits. The amount of total deferred tax
assets could change if estimates of projected future taxable income or if tax regulations undergo a change.

(iv) Employee Benefit Obligations

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making
various assumptions that may differ from actual developments in the future. These include the determination of
the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation
and its long-term nature, employee benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

(vi) Allowance for Inventories

An inventory provision is recognised for cases where the realisable value is estimated to be lower than the
inventory carrying value. The inventory provision is estimated taking into account various factors, including
prevailing sales prices of inventory item and losses associated with obsolete / non-moving inventory items.

2.22 Recent Accounting Developments:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies

(Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2025, MCA has not

notified any new standards or amendments to the existing standards applicable to the Company.

Nature & purpose of Reserve:

a) Capital Reserves (Other than Capital Contribution)

Created on forfeiture of equity shares and transfer of Debenture redemption reserve. It shall be utilised as per
provision of the Companies Act, 2013.

b) Equity Component of Compound Financial Instruments

Equity Component of Compound Financial Instruments represent residual amount after deducting liability
component from the fair value of the compound financial instrument.

c) Securities Premium Account

Created on conversion of convertible debenture and issue of equity shares. It shall be utilised as per provision
of the Companies Act, 2013.

d) General Reserve

General Reserve is created out of the profit earned by the company by way of transfer from surplus in the
statement of profit and loss. The company can use this reserve for payment of dividend and issue of fully paid
up shares. As general reserve is created by transfer from surplus in the statement of profit and loss and is not
an item of other comprehensive income, item included in general reserve will not be reclassified to statement of
profit and loss.

a) Provident fund

In accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 eligible
employees of the Company are entitled to receive benefits in respect of provident fund, a defined
contribution plan, in which both employees and the Company make monthly contributions at a specified
percentage of the covered employees'' salary. The contributions, as specified under the law, are made to
the provident fund administered and managed by Government of India (GOI). The Company has no further
obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the
Statement of Profit and Loss in the period they are incurred. The benefits are paid to employees on their
retirement or resignation from the Company.

Contribution to Defined Contribution Plans, recognised in the Statement of Profit and Loss for the year
under employee benefits expense, are as under :

(2) Defined Benefit Plans:

The Defined Benefit Plan is as below:

Gratuity (unfunded)

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit
Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement
and measures each unit separately to build up the final obligation. The obligation for compensated absences is
recognised in the same manner as gratuity.

The plan typically exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity
risk and salary risk.

Investment risk

The Probability or likelihood of occurrence of losses relative to the expected return on any particular investment. .
Interest risk

If the Discount Rate i.e the yield on the Government Bonds decrease in future, the Actuarial Liability will increase
and vice versa.

The quantum of increase in valuation liability corresponding to specific decrease in the Discount Rate and vice
versa, has been shown in the annexure containing the sensitivity Analysis of Key Actuarial Assumption. .

Longevity risk

If the Mortality rate experienced by the staff of a particular company is higher than what is assumed in mortality
Table used in the valuation, the valuation liability will increase.

However, it will be very cumbersome to measure the quantum of increase for assumed reduction of Mortality
rates as can be done in case of changes in salary Growth Rate and Interest Rate.

Salary risk

If the salary Growth Rate over the future years of services is increased, the Actuarial Liability will increase and vice
versa. The quantum of increase in the valuation liability corresponding to specific increase in the salary growth
rate and vice versa has been shown in the annexure containing Sensitivity Analysis of key Actuarial Assumption.

H. Sensitivity Analysis

The Sensitivity Analysis below has been determined based on reasonably possible change of the respective
assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These
sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of
these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation
and the asset value changes may offset the impact to some extent. For presenting the sensitivities, the present
value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of
the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented
above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis
from previous year.

33 Disclosure pursuant to Indian Accounting Standard (Ind AS) - 107 : Financial Instruments: Disclosures

Financial instruments and Risk management

33.1 Capital management

The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total
equity of the Company. The Company trying to manages its capital to ensure that the Company will be able to continue
as going concern. The Company''s management reviews it''s capital structure considering the cost of capital, the risks
associated with each class of capital and the need to maintain adequate liquidity to meet its financial obligations when
they become due.

33.3 Financial risk management

The financial risks emanating from the Company''s operating business include market risk, credit risk and liquidity
risk. These risks are managed by the Company using appropriate financial instruments. The Company has laid down
written policies to manage these risks.

33.3.1 Market risk management

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises of Currency risk, Interest rate risk and other price risk.

A. Foreign currency risk management

The Company is exposed to foreign currency risk arising mainly on import, export (of finished goods) and the
foreign currency loan. Foreign currency exposures are managed within approved policy parameters.

The carrying amounts of the Company''s foreign currency denominated financial assets at the end of the reporting
period are as follows:

A. 1 Foreign currency sensitivity analysis

The Company''s exposure to Foreign Currency changes is not material.

B. Interest rate risk management

The Company does not have interest rate risk exposure on its outstanding loans as at the year end as all the
loans are assigned to ARC as term loans on fixed interest rate basis.

C. Other price risks

The Company is exposed to price risks arising from its investments in mutual funds and equity.

Equity price risk is related to change in market reference price of investments in equity shares held by the
Company. The fair value of quoted investments held by the Company exposes it to equity price risks. In general,
these investments are not held for trading purposes.

The Company manages the surplus funds majorly through investments in mutual fund schemes. The price of
investment in these mutual funds Net Asset Value (NAV) declared by the Asset Management Company on daily
basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on
such Investment schemes.

Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or
market yields which may impact the return and value of such investments. However, due to the very short tenor
of the underlying portfolio in the liquid schemes, these do not hold any significant price risks.

C.1 Mutual fund price sensitivity analysis

The sensitivity analysis below has been determined based on Mutual Fund Investment at the end of the reporting
period. If NAV had been 1% higher / lower, the profit for year ended 31st March, 2025 would have increased/
decreased by '' 90.64 lakhs (2022-23: increase/decrease by '' 23.06 lakhs) as a result of the changes in fair
value of mutual funds.

33.3.2 Credit risk management

Credit risk arises from the possibility that a counter party''s inability to settle its obligations as agreed in full and in time.
The maximum exposure to credit risk in respect of the financial assets at the reporting date is the carrying value of
such assets recorded in the financial statements net of any allowance for losses.

A. Trade Receivables

The Company''s trade receivables consist of a large and regular base customers. Hence the Company is not
exposed to concentration and credit risk.

B. Other Financial Assets

The Company maintains exposure in cash and cash equivalents, time deposits with banks, investments in mutual
funds and Non Convertible Debentures. Investment of surplus funds are made only with approved counter parties.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

33.3.3 Liquidity risk management

The objective of liquidity risk management is to maintain sufficient liquidity to meet financial obligations of the Company
as they become due. The Treasury Risk Management Policy includes an appropriate liquidity risk management
framework for the management of the short-term, medium-term and long term funding and cash management
requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and
reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by matching the maturity
profiles of financial assets and liabilities.

33.3.3.1 Liquidity risk table

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Company can be required to pay. The tables include principal cash
flows along with interest.

41 Exceptional items for the year ended 31^st March, 2025 represent foreign exchange fluctuation on advance to Soma
Textiles FZC (Overseas associate company) in earlier years, Profit on Sale of Assets & Balance Written off for
Receivables and Payables.

42 Other statutory information

i) The Company does not have any benami property, where any proceeding has been initiated or pending against
the Company for holding any benami property.

ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (ultimate beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding
party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the funding party (ultimate beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

v) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read
with the Companies (Restriction on number of Layers) Rules, 2017.

vii) The Company is not declared wilful defaulter by and bank or financial institutions or lender during the year.

viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

ix) The Company does not have borrowings from banks/financial institutions on the basis of security of current
assets during the year ended 31^st March, 2025 and 31^st March, 2024.

x) The title deeds of all the immovable properties, (other than immovable properties where the Company is
the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial
statements included in property, plant and equipment are held in the name of the Company as at the balance
sheet date.

xi) The Company does not have any transactions with the companies struck off under section 248 of the Companies
Act, 2013 or section 560 of the Companies Act, 1956 during the year ended 31^st March, 2025 and 31^st March,
2024.

xii) The Company has not entered into any scheme of arrangement approved by the Competent Authority in terms
of sections 230 to 237 of the Companies Act, 2013 which has an accounting impact during the year ended 31^st
March, 2025 and 31^st March, 2024.

xiii) The Company is not required to spend towards Corporate Social Responsibility (CSR) as per Section 135 of the
Companies Act, 2013, since there is no average profit in the last 3 years calculated as per the provisions of the Act.

43 Based on information available with the company, there are no suppliers who are registered as micro, small or
medium enterprise under "The Micro, Small and Medium Enterprise Development Act, 2006" (Act) till 31^st March,
2024. Accordingly, no disclosure is required to be made under said act.

44 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).

45 The Code on Social Security, 2020(''Code'') relating to employee benefits during employment and post - employment
benefits received Indian Parliament approval and Presidential assent in September 2020. The code has been
published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The
Company will assess the impact of the Code when it comes into effect and will record any related impact in the period
the Code becomes effective.

46 The figures for the previous year have been regrouped / reclassified, wherever necessary, to make them comparable
with the figures for the current year.

As per our report of even date attached

For PIPARA & CO. LLP For and on behalf of the Board

CHARTERED ACCOUNTANTS

(Firm Reg. No. 107929W/W100219)

SURESH GANDHI S. K. SOMANY A. K. SOMANY

PARTNER Chairman Managing Director

Membership No. 046284

Place : Ahmedabad SHRIKANT BHAT REENA PRASAD

Date : 30^th May, 2025 Chief Financial Officer Company Secretary

---

Mar 31, 2024

6.3 The above loan has been given for business purpose.

6.4 During the year ended 31^st March, 2024, the company has recognised a Foreign Exchange fluctuation gain/(loss) of '' 87.37 Lakhs (Previous year '' 558.75 Lakhs)) and interest on fair value adjustment as per Ind AS 113 is '' (202.73) Lakhs (Previous year '' (229.53) Lakhs) with respect to loan given to Soma Textiles FZC. Actual repayment of loan during the year '' 1118.10 Lakhs (Previous year '' 1128.23 Lakhs). So, net repayment of loan during the year '' 1233.46 Lakhs (Previous year '' 799.01 Lakhs)

7.1 The management has assessed that carrying value of the investments to the fair value.

7.2 Increase in the amount of loan during the period is on account of notional interest on fair valuation of financial assets amounting '' 202.73 Lakhs.

7.3 The Company out of the GDR issue proceeds had made an investment of USD 1,79,00,054 in 2006-07, out of which USD 1,15,27,456 has been repaid by Soma Textiles FZC till 31^st March, 2024 leading balance of USD 63,72,597 as on 31⁵¹ March, 2024 which is equivalent to '' 5255.90 Lakhs (Previous Year '' 6083.89 Lakhs) , by way of long term loan and also invested in the Equity Share capital i.e 300 equity shares equivalent to '' 34.21 Lakhs (Previous Year '' 34.21 Lakhs) of Soma Textile FZC,Umm Al Quwain Free Trade Zone, Umm Al Quwain, U.A.E. an associate (Formerly Soma Textile FZE, Sharjah, U.A.E., a wholly owned subsidiary).

Rights, preferences and restrictions attached to shares:

Equity Shares:

The company has one class of shares referred to as equity shares having a par value of ''10 each. Each shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors, if any is subject to the approval of the shareholders in the ensuing Annual General Meeting. 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.

* Equity shares 3,85,300 has been forfeited in the year 1996-97, total amounting to ''19,44,680 (@ ''5.05 per share)

Nature & purpose of Reserve:

a) Capital Reserves (Other than Capital Contribution)

Created on forfeiture of equity shares and transfer of Debenture redemption reserve. It shall be utilised as per provision of the Companies Act, 2013.

b) Equity Component of Compound Financial Instruments

Equity Component of Compound Financial Instruments represent residual amount after deducting liability component from the fair value of the compound financial instrument.

c) Securities Premium Account

Created on conversion of convertible debenture and issue of equity shares. It shall be utilised as per provision of the Companies Act, 2013.

d) General Reserve

General Reserve is created out of the profit earned by the company by way of transfer from surplus in the statement of profit and loss. The company can use this reserve for payment of dividend and issue of fully paid up shares. As general reserve is created by transfer from surplus in the statement of profit and loss and is not an item of other comprehensive income, item included in general reserve will not be reclassified to statement of profit and loss.

32 Employee benefit plans

1) Defined contribution plans :

The Company participates in defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period.

The defined contribution plans are as below:

a) Provident fund

In accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary. The contributions, as specified under the law, are made to the provident fund administered and managed by Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the Statement of Profit and Loss in the period they are incurred. The benefits are paid to employees on their retirement or resignation from the Company.

(2) Defined Benefit Plans:

The Defined Benefit Plan is as below:

Gratuity (unfunded)

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated absences is recognised in the same manner as gratuity.

The plan typically exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk

The Probability or likelihood of occurrence of losses relative to the expected return on any particular investment. . Interest risk

If the Discount Rate i.e the yield on the Government Bonds decrease in future, the Actuarial Liability will increase and vice versa.

The quantum of increase in valuation liability corresponding to specific decrease in the Discount Rate and vice versa, has been shown in the annexure containing the sensitivity Analysis of Key Actuarial Assumption. .

Longevity risk

If the Mortality rate experienced by the staff of a particular company is higher than what is assumed in mortality Table used in the valuation, the valuation liability will increase.

However, it will be very cumbersome to measure the quantum of increase for assumed reduction of Mortality rates as can be done in case of changes in salary Growth Rate and Interest Rate.

Salary risk

If the salary Growth Rate over the future years of services is increased, the Actuarial Liability will increase and vice versa. The quantum of increase in the valuation liability corresponding to specific increase in the salary growth rate and vice versa has been shown in the annexure containing Sensitivity Analysis of key Actuarial Assumption.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out at 31^st March, 2024 by an independent actuary. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

H. Sensitivity Analysis

The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation and the asset value changes may offset the impact to some extent. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.

34 Disclosure pursuant to Indian Accounting Standard (Ind AS) - 107 : Financial Instruments: Disclosures

Financial instruments and Risk management

34.1 Capital management

The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total equity of the Company. The Company trying to manages its capital to ensure that the Company will be able to continue as going concern. The Company''s management reviews it''s capital structure considering the cost of capital, the risks associated with each class of capital and the need to maintain adequate liquidity to meet its financial obligations when they become due.

34.3 Financial risk management

The financial risks emanating from the Company''s operating business include market risk, credit risk and liquidity risk. These risks are managed by the Company using appropriate financial instruments. The Company has laid down written policies to manage these risks.

34.3.1 Market risk management

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of Currency risk, Interest rate risk and other price risk.

A. Foreign currency risk management

The Company is exposed to foreign currency risk arising mainly on import, export (of finished goods) and the foreign currency loan. Foreign currency exposures are managed within approved policy parameters.

A. 1 Foreign currency sensitivity analysis

The Company''s exposure to Foreign Currency changes is not material.

B. Interest rate risk management

The Company does not have interest rate risk exposure on its outstanding loans as at the year end as all the loans are assigned to ARC as term loans on fixed interest rate basis.

C. Other price risks

The Company is exposed to price risks arising from its investments in mutual funds and equity.

Equity price risk is related to change in market reference price of investments in equity shares held by the Company. The fair value of quoted investments held by the Company exposes it to equity price risks. In general, these investments are not held for trading purposes.

The Company manages the surplus funds majorly through investments in mutual fund schemes. The price of investment in these mutual funds Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investment schemes.

Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to the very short tenor of the underlying portfolio in the liquid schemes, these do not hold any significant price risks.

C.1 Mutual fund price sensitivity analysis

The sensitivity analysis below has been determined based on Mutual Fund Investment at the end of the reporting period. If NAV had been 1% higher / lower, the profit for year ended 31^st March, 2024 would have increased/ decreased by '' 23.06 lakhs (2022-23: increase/decrease by '' 0.39 lakhs) as a result of the changes in fair value of mutual funds.

34.3.2 Credit risk management

Credit risk arises from the possibility that a counter party''s inability to settle its obligations as agreed in full and in time. The maximum exposure to credit risk in respect of the financial assets at the reporting date is the carrying value of such assets recorded in the financial statements net of any allowance for losses.

A. Trade Receivables

The Company''s trade receivables consist of a large and regular base customers. Hence the Company is not exposed to concentration and credit risk.

B. Other Financial Assets

The Company maintains exposure in cash and cash equivalents, time deposits with banks, investments in mutual funds and Non Convertible Debentures. Investment of surplus funds are made only with approved counter parties. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. .

34.3.3 Liquidity risk management

The objective of liquidity risk management is to maintain sufficient liquidity to meet financial obligations of the Company as they become due. The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

34.3.3.1 Liquidity risk table

The following table details the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include principal cash flows along with interest.

a) No amount has been written off or written back during the year ended 31^st March, 2024 (Previous year - Nil)

b) Remuneration does not include the provision made for gratuity as they are determined on an actuarial basis for the company as a whole.

c) The transaction with related parties are made in the normal course of business and on terms equivalent to those that prevail in arms length transaction.

40 The Hon''ble Gujarat High Court directed to close down the operations of polluting industries in and around Ahmedabad in the state of Gujarat and the decision of the High Court was upheld by Hon''ble Supreme Court of India, due to which the Company has discontinued its core manufacturing operations. The company has started the new business of trading in cotton from the month of November, 2022. The Company has identified ''Textile'' Business as its only primary reportable segment in Trading and manufacturing in accordance with the requirement of Ind AS 108 “Indian Accounting Standard on Operating Segments”. Accordingly, no separate segment information has been provided.

42 Exceptional items for the year ended 31^st March, 2024 represent foreign exchange fluctuation on advance to Soma Textiles FZC (Overseas associate company) in earlier years, Profit on Sale of Assets & Balance Written off for Receivables and Payables.

43 Other statutory information

i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

vii) The Company is not declared wilful defaulter by and bank or financial institutions or lender during the year.

viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

ix) The Company does not have borrowings from banks/financial institutions on the basis of security of current assets during the year ended 31^st March, 2024 and 31^st March, 2023.

x) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment are held in the name of the Company as at the balance sheet date.

xi) The Company does not have any transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year ended 31^st March, 2024 and 31^st March, 2023.

xii) The Company has not entered into any scheme of arrangement approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 which has an accounting impact during the year ended 31^st March, 2024 and 31^s March, 2023.

xiii) The Company is not required to spend towards Corporate Social Responsibility (CSR) as per Section 135 of the Companies Act, 2013, since there is no average profit in the last 3 years calculated as per the provisions of the Act.

a44 Based on information available with the company, there are no suppliers who are registered as micro, small or medium enterprise under "The Micro, Small and Medium Enterprise Development Act, 2006" (Act) till 31^st March, 2024. Accordingly, no disclosure is required to be made under said act.

45 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).

46 The Code on Social Security, 2020(''Code'') relating to employee benefits during employment and post - employment benefits received Indian Parliament approval and Presidential assent in September 2020. The code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

47 The figures for the previous year have been regrouped / reclassified, wherever necessary, to make them comparable with the figures for the current year.

---

Mar 31, 2016

1. Repayment:

State bank of India, ICICI Bank , Dena Bank , IDBI Bank and EXIM Bank have absolutely assigned their loan together with underline securities their to and all rights of State bank of India, ICICI Bank , Dena Bank , IDBI Bank and EXIM Bank , title and interest in all agreements, deeds and documents in relation to or in connection with the loan to Invent Assets Securitization & Reconstruction Pvt Ltd. a company incorporated under companies act,1956 and registered as Securitization and asset reconstruction company under section 3 of SARFAESI ACT,2002.

The loans of Axis Bank are stated CDR package duly approved by Axis.

Takeover of outstanding bank dues by asset reconstruction company with reference to default in repayment dues to financial institutions and bank as per note: 3, the total outstanding term loans was Rs.3672.01, Debenture was Rs.111.64 ,FITL was Rs.1291.59 and C.C. A/C was Rs.9495.98 totaling to Rs.14571.21 such outstanding amount was taken over by Invent ) and as per the new repayment schedule a total amount of Rs.11893.73 is now payable to invent against the total outstanding amount. The difference of Rs.2677.48 towards reduced liability of repayment would only be crystallized if no default is made by the company in its repayment to Invent Assets Securitization & Reconstruction Pvt Ltd. , and hence has been carried forward by the company recognizing as a long term liability, under the classification of “Long Term Liabilities” under the head “Pending loan after assignment”.

2 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.

3. Term Loan shall rank pari-passu interest without any preference or priority of one or the other.

4. 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.

5. 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.

6.Takeover of outstanding bank dues by asset reconstruction company with reference to default in repayment dues to financial institutions and bank as per note: 3, the total outstanding C.C. A/C ''9495.98 outstanding amount was taken over by Invent and has been regrouped under Long Term Borrowing for the year 2015-16.

7. The Company out of the GDR issue proceeds had made an investment of USD 15 million, which as on 31st March, 2016 is equivalent to INR Rs.10444.46 lakhs( Previous Year INR Rs.9,852.39 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,Umm Al Quwain Free Trade Zone, Umm Al Quwain, U.A.E.(Shifted during the year from 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 11,452 (Previous Year Profit of AED 20,850).The accumulated loss incurred as on 31st March, 2016 is AED 5,53,238 (Previous Year AED 5,64,690 ) as per audited accounts, as certified by SKM International-Chartered Accountant, Independent Auditors.

8. The auditor of the Company M/S. SKM International, Chartered Accountant, Independent Auditors has reported that according to the management all the accounts receivables are good. Major debtors had requested the Company for cooling period of 2 years i.e. till March, 2016. However, their financial position still not improved, they have once again requested for a cooling period of five years from 01/04/2016 after making some part payments. After several rounds of deliberations company has accepted their offer and approved for the cooling period of five years.

9. As per Accounting Standard 15 “Employee Benefits” the disclosure of employee benefits as defined in the Accounting Standard are given below :

Ahmedabad Unit Defined Contribution Plans

10. State bank of India, ICICI Bank , Dena Bank , IDBI Bank and EXIM Bank have absolutely assigned their loan together with underline securities their to and all rights of State bank of India, ICICI Bank , Dena Bank , IDBI Bank and EXIM Bank , title and interest in all agreements, deeds and documents in relation to or in connection with the loan to Invent Assets Securitization & Reconstruction Pvt Ltd. a company incorporated under companies act,1956 and registered as Securitization and asset reconstruction company under section 3 of SARFAESI ACT,2002.

11. Related party transaction

12. Holding Company Not Applicable

13. Associate Company SOMA TEXTILE F.Z.C., Umm Al Quwain, U.A.E.

14. Fellow Subsidiary Not Applicable

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

Kechak Credit & Finvest Ltd.

16. 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.

17. 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.

18. 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).

19. Company has disclosed under Regulation 30 of the SEBI (LODR) vide letter dated 14th May, 2016 that company has closed down the spinning and winding department.

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

---

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, 2011

1 Estimated amount of contracts remaining to be executed on capital account & not provided for Rs. 127,007,572/- (Previous year Rs. 16,173,496/-), advance paid Rs. 15,919,276/- (Previous year Rs. 282,052/-)

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 Company's 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 -

2011 2010

Rupees Rupees

(a) Bills discounted by the Company 58,799,255 24,805,638

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

(c) Excise Duty demand disputed by the Company 2,817,777 3,512,963

(d) Claims against the Company not Acknowledged as debts 2,428,330 2,454,330

(e) Tandulwadi Grampanchayat Tax — 542,025

(f) Income Tax Payment disputed by the Company 3,955,346 —

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 doesn't 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 Sundry debit / credit balances and the accounts squared up during the year are subject to confirmation and reconciliation from the parties to the transactions.

8 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".

9 The receivables includes bill discounted with bankers amounting to Rs. 58,799,255/- (Previous Year Rs. 24,805,640/-). 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. 198,167,834/- (Previous Year Rs. 163,163,326/-).

10 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.

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

12 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.10,700,000/- (Previous Year Rs. 96,400,000/-) has been recognised in the profit and loss account. The net Deferred Tax Asset Rs. 32,107,953/- (Previous year net Deferred Tax Asset Rs. 21,407,953/-) comprises of deferred tax liability related to fixed assets Rs. 156,324,591/- less deferred tax assets as per carried forward unabsorbed depreciation and business losses available as per Income Tax Act 1961 Rs. 188,432,544/-.

13 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 Limited

Kechak Credit & Finvest Limited

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.

14 Amount of exchange rate net fluctuation debited to Profit & Loss Account for the year is Rs. 2,833,515/- (Previous year credited Rs.86,024,509/-)

15 Prior Period Income Represent :

Credit relating to earlier years as above of Rs. 27,192,483/- includes Deemed Duty Draw-back claim made by the Company pertaining to Baramati unit of Rs. 26,724,438/- for the period 1st April, 1994 to 31st March, 2003. The said claim is included in the audited account of Baramati Unit as audited by M/s. Shankarlal Jain & Associates, Chartered Accountants, Mumbai.

16 Exceptional items :

Exceptional items includes foreign fluctuations and retrenchment compensation.

17 Use of GDR Proceeds and Investment in Soma Textile FZC :

(a) The Company came out with the GDR Issue on 20th October, 2006 for Rs.783, 749,725/-. Out of the said GDR's an amount of Rs.703,101,360/- upto 31st March, 2011 (Previous year Rs. 707,878,454/-) had been invested in Soma Textile FZC, Sharjah, U.A.E. (Formerly Soma Textile FZE, Sharjah, U.A.E.,a wholly owned subsidiary), of the Company, an establishment with limited liabilities as per Certificate of Incorporation bearing Registration No 6339 dated 31st March, 2010 issued by the Registrar, Free Zone Companies, Hamriyah Free Zone Authority, Sharjah, U.A.E. to augment its long term resources.

During the financial year, the said associate has earned Profit of AED 17,466 (Previous Year Loss of AED 460,498).The total loss incurred by the said associate upto 31st March,2011 is AED 681,690 as per audited accounts, as certified by AL SAIF AUDITING & ACCOUNTANTS, independent Auditors.

(b) As on 31st March 2011, the Company has total investment of Rs.706,522,839/-(Previous Year Rs. 711,299,933/-) in its associate, Soma Textile FZC, Sharjah, UAE. (Formerly Soma Textile FZE, Sharjah, U.A.E.,a wholly owned subsidiary), 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.703,101,360/- (Previous Year Rs. 707,878,454/-) is in the form of loans (shown under Schedule 11 - Loans and Advances).

18 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.

19 Baramati Branch of the Company has shown income of Rs. 26,724,438/- under the head "Prior Period" in the Profit & Loss Account, pertaining to its claim for Deemed Duty Drawback for the period 1st April 1994 to 31st March, 2003, as separately certified by Branch Auditor, M/s. Shankarlal Jain & Associates, Chartered Accountants, Mumbai, (Firm Registration No.109901W). The said income is based on the claim made by the Company to the Development Commissioner, SEEPZ Special Economic Zone, Mumbai. The said claim is subject to scrutiny and examination by the said Development Commissioner and the finality of the said claim is yet to be ascertained.

20 Company has made an investment into 300 equity shares of Soma Textile FZC of Rs. 3,421,479/- and also advanced a loan of Rs. 703,101,360/- to the said Soma Textile FZC. The accounts of Soma Textile FZC has been separately certified by AL SAIF AUDITING & ACCOUNTANTS, independant Auditors and it has been reported that all the Accounts Receivables have been deemed to be good and further it has been reported that due to slow down and financial crisis in UAE, there are some delay in the receivables and some of them have asked for cooling period to make payment and the same is agreed by the Company. However, debts are considered good. In our opinion, the investment made by the Company in equity shares as well as the amount advanced to the said Soma Textile FZC has direct bearing on the health of the Accounts Receivables of Soma Textiles FZC.

21 Previous year's figures have been re-arranged, re-classified and/or re-grouped wherever considered necessary.

---

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.