soma textiles industries ltd Directors report

To The Members,

Your Directors have pleasure in presenting their Eighty-fourth (85th) Annual Report of the Company, together with the audited financial statements for the financial year ended 31 st March, 2023.

1. FINANCIAL PERFORMANCE

There was no improvement in the business scenario of the Textile Industry and is continued to remain challenging. The revenue from operations for the year 2022-23 was 519.73 lakhs as compared to Rs 1,455.19 lakhs in previous year, an decrease of 64.28 %.

The loss before Prior period, Exceptional item and Tax was 215.73 lakhs against the previous year loss of Rs 1,749.34 lakhs.

The net profit for the year was 16547.42 lakhs against the previous year net loss of 1643.21 lakhs.

2. DIVIDEND

The Board of Directors of your Company have not recommended any dividend for the Financial Year ended 31^st March, 2023, considering the loss during the year and brought forward losses.

3. PRESENT STATUS OF THE UNIT

The unit as other industrial units in Ahmedabad city was discharging treated liquid effluents through its normal ETP in to the sewer lines of AMC as a result of directions issued by High court of Gujarat in the suo motu writ petition (PIL) No.98 of 2021 to severe the industrial effluent sewage connection. The court directed the AMC water and drainage connections of industrial units which release partially treated/untreated water and added that no re-connection shall be granted by AMC without prior approval of GPCB.

On January 28, 2022 the high court of Gujarat had rejected applications filed by 11 industrial units against the AMC and GPCB after they snapped drainage connections of 393 industrial units during the drive following the High court order. The industries had raised the issue of the right to discharge treated court discussed the law in detail and concluded that industries do not have a right to release their treated sewage lines and mix them with domestic waste water. The industrial units filed an appeal against the High Court order in the Supreme Court but the same was rejected by Supreme Court on 25.3.2022 and upheld the high court order by which it refused to allow the industrial units to discharge their treated effluents into the AMC sewage lines. Due to this

Manufacturing operations of the company is discontinued.

4. EXPORT

The FOB value of the exports during the Year under review was Nil against zero export in the previous year due to the closure of the manufacturing operation as detailed in point no 3

5. ANALYSIS AND REVIEW

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector on the other end. The decentralized power looms/ hosiery and knitting sector forms the largest component in the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce wide variety of products suitable for different market segments, both within India and across the world.

6. OPPORTUNITIES AND CHALLENGES

The future for the Indian textiles industry looks promising. The Indian textile industry has vast potential for growth, buoyed by strong domestic consumption as well as export demand. However, to get maximum advantage of the vast potential of this vibrant industry, the Government and Industry need to work towards addressing key challenges including obsolete machinery and technology, threats to handloom sector, power shortage, illicit markets, labour-related concerns, raw materials shortage.

9 EXPANSION AND MODERNISATION

Companys manufacturing operation is closed due to the reason mentioned in point no 3 hence the Company did not go for expansion and modernization.

10. CONSOLIDATED FINANCIAL STATEMENT

As required by Regulation 33 of the SEBI (LODR) Regulations, 2015, the Consolidated Audited Financial Statements have been prepared in accordance with the requirements under Accounting Standard AS-21 on "Consolidated Financial Statements" read with AS-23 on the "Accounting for Investment in Associates" read with the provisions of Companies Act, 2013, are provided, forming part of the Annual Report.

11. CASH FLOW STATEMENT

In compliance with the requirement of Section 34 of the SEBI (LODR) Regulations, 2015, the Cash Flow Statement for the year ended 31^st March, 2023 prepared in accordance with the applicable Accounting Standard, is annexed to the financial statement, which forms part of the Annual Report.

12. INSURANCE

The Companys properties including its Building, Plant & Machinery and Stocks among others continue to be adequately insured against fire, flood, earthquake, explosive and other such risks, as considered to be prudent and necessary.

13. INTERNAL FINANCIAL CONTROL

The Company has in place internal financial control its operations ensuring proper recording of financials and monitoring of operational effectiveness and efficient conduct of its business including adherence to the Companys Policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and compliance of various applicable regulatory and statutory requirements.

The Internal Auditor monitors and evaluates the efficiency their report, corrective actions are undertaken by the concerned departments and thereby strengthen the Controls. Significant audit observations corrective measures and actions thereon are presented to the Audit Committee of the Board. During the year such controls were tested and no reportable material weaknesses were observed.

The Audit Committee comprises the majority of Independent Directors in terms of the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

14. FIXED DEPOSITS

Your Company has not accepted any deposit from the Public/Members under Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposit) Rules, 2014 during the year under review and there are no deposits pending with the Company as on the Balance Sheet closure date.

15. SHARE CAPITAL

There has been no change in the Companys Issued, Subscribed and Paid-up Equity and Preference Share Capital in between the end of financial st March, 2023 and 31st March, 2022. On 31st March, 2023, the Equity Share

Capital stood at 3303.30 Lacs, divided in to 33033000 Equity Shares of 10 each and Preference Share Capital stood at 975 Lacs, divided in to 975000, 0.01% Cumulative Redeemable Non-convertible Preference Shares of

100 each.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL Rotation

At the forthcoming 85^th Annual General Meeting (AGM) of the Company, Shri S. K. Somany (DIN: 00001131) retires by rotation and being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013 ("the Act"), and Articles of Association of the Company. The Board recommends his re-appointment. Brief resume, nature of expertise and details of directorship held in other companies of Shri S. K. Somany, proposed to be appointed is given in the Notice of the Ensuing General Meeting (AGM), as stated under Secretarial Standard 2 and Regulation 36 of the SEBI (LODR) Regulations, 2015

Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation. None of the Directors are disqualified from being appointed or holding office as Directors as stipulated under Section 164(2) of the Companies Act, 2013.

Key Managerial Personnel

Shri Abhishek Kumar Mishra has resigned from the post of Company Secretary & Compliance Officer of the Company, with effect from 16th May, 2022 vide his email dated 6th April, 2022, owing to personal reasons and Board has appointed M Reena Prasad as the Company Secretary & Compliance Officer of the Company, with immediate effect. Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with the Rules framed thereunder, the following persons are the Key Managerial Personnel of the Company as on March 31, 2023 are Shri S. K. Somany, Non-Executive Chairperson, Shri A. K. Somany, Managing Director & CEO, Shri Shrikant Bhairaveshwar Bhat, Whole-time Director & Chief Financial Officer and Mrs. Reena Prasad, Company Secretary & Compliance Officer.

17. DECLARATION OF INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Directors, under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (LODR) Regulations, 2015.

18. CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall within the ambit of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibilities Policy) Rules, 2014. Therefore the Annual Report on Corporate Social Responsibility initiatives as required under the said act is not applicable to the Company. In view thereof, the Annual Report on CSR activities is not annexed.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not provided any loan to any person or body corporate or given any guarantee or provided security in connection with such loan or made any investment in the securities of any Body Corporate pursuant to Section 186 of the Companies Act, 2013, during the financial year ended 31 st March, 2023.

20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY

The ‘Policy on Related Party Transaction, dealing with the review and approval of related party transactions, was amended in line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment)

Regulations, 2018. The policy is available on the Companys website at the web link: www.somatextiles.com/home. php/investors/policies.

All contracts/ arrangements/ transactions entered into by the Company, during the financial year, with related parties, as defined under Section 188 of the Companies Act, 2013 and the relevant rules made thereunder, were in ordinary course of business and on arms length.

Further no material contract/ arrangement/ transaction, with related parties were entered during the financial year under review, in accordance with policy of the Company on materiality of related party transactions. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013, in form AOC-2 is not applicable to your Company. However, members may refer to the notes to the financial statements, which sets out disclosure on related parties and transactions entered into with them pursuant to Accounting Standards.

21. LISTING ON STOCK EXCHANGES

The Equity Shares of the Company are listed at the following Stock Exchanges:-

(a) BSE Limited (BSE).

Address: Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001

(b) National Stock Exchange of India Limited (NSE).

Address: Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai 400051.

NOTE:

(i) Listing fees have been paid to the Stock Exchanges for the year 2023-24.

(ii) The Calcutta Stock Exchange Association Ltd. has vide its Letter No. CSEA/ID/223/2008 dated 16th April, 2008, confirmed the delisting of Companys Shares from the official List of their exchange. However Equity Shares have been allowed to be traded under the "Permitted Category" on the Exchange considering the interest of General Investors in the Company.

Stock Code

(i) NSE - SOMATEX, (ii) BSE - 521034, (iii) CSE - 29067.

De-mat ISIN Number in NSDL & CDSL – ISIN – INE 314C01013.

22. DELISTING FROM STOCK EXCHANGE

The Company vide its application dated 31st March, 2021 applied for Voluntary Delisting of its Equity Shares from BSE Limited in terms of Regulation 6 (a) and Regulation 7 of SEBI (Delisting of Equity Shares) Regulations, 2009, as approved by the Board of Directors of the Company at its meeting held on 30^th March, 2021. However, confirmation/ approval for the same, from BSE Limited are awaited.

Further, the Equity Shares of the Company will continue to be listed on National Stock Exchange of India Limited.

23. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

The Auditors Report and Secretarial Auditors Report do not contain any reservation, qualification or adverse remark and therefore need no explanations or comments from the Board of Directors.

24. BOARDS EVALUATION OF THE PERFORMANCE

In compliance with the Companies Act, 2013, and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, and that of its Committees and Individual Directors. Feedback was sought by way of a structured questionnaire covering various aspect of Boards functioning, such as adequacy of the Composition of the Board and its Committee, Board culture, execution and performance manner in which the evaluation has been carried out has been ofspecific provided in the Corporate Governance Report, forming part of Boards Report.

25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

During the year Five (5) Board Meetings were held, the details of which are given in the Report on Corporate Governance, that forms part of the Boards Report.

The maximum interval between the two meetings did not exceeded 120 days, as prescribed in the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

26. AUDIT COMMITTEE

The Audit Committee comprises of Four (4) members, Majority of them are Independent Directors namely; Shri B. K. Hurkat Chairman, Shri M. H. Shah and Mrs. N. Singh, and Shri S. K. Somany a Non-Independent & Promoter Director, as other member of the Committee. Thus the composition is in conformity with the requirements of section 134(3) and section 177(8) of the Companies Act, 2013, read with the provisions of SEBI (LODR) Regulations, 2015. Five (5) Meetings of the Audit Committee were held during the year under review, the details of which are given in the Report on Corporate Governance, forming part of this Report. The Board of Directors accepted all recommendations of the Audit Committee in the reporting period.

27. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER MECHANISM

The Company has in place a Whistle Blower Policy, as a part of Vigil Mechanism to provide appropriate avenues to the Directors, employees and other Stakeholders of the Company to bring to the attention of the Management any issue which is perceived to be in violation of or in conflict with the Code of conduct, values, principles and beliefs of the Company. The established Vigil Mechanism helps to report concerns about any unethical conduct, financial malpractices or any unhealthy practice prevalent in the Company.

The said Vigil Mechanism provides for adequate safeguards against victimization of persons who use such mechanism and also provides for direct excess to the Chairman of the Audit Committee.

The details of this Policy is explained in the Corporate Governance Report forming part of Boards Report and are also available on the Companys website; www.somatextiles.com/home.php/ investors/policies.

28. REMUNERATION POLICY

The Board has, on recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of Directors and other matters as per section 178 and Clause 49(IV)(B) of Listing Agreement. The salient features of Companys Nomination and Remuneration Policy is stated in the Corporate Governance Report. The Policy is available on the website of the Company viz. www.somatextiles.com.

29. CORPORATE GOVERNANCE

Your Company upholds the Standards of Governance and is compliant with the provisions of Corporate Governance, as Stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (listing Regulations). A Report on ‘Corporate Governance as well as the certificate from Companys Statutory Auditors, confirming compliance with the requirements of SEBI Listing Regulations, forms part of the Annual Report.

30. CORPORATE GOVERNANCE – VOLUNTARY GUIDELINES 2009

The Ministry of Corporate Affairs, Government of India, had issued a set of Voluntary Guidelines 2009 on Corporate Governance in December, 2009, for voluntary adoption of a set of good practices by the Corporate Sector. These guidelines are expected to serve as a bench mark for the Corporate Sector and also help them in achieving the highest Standard of Corporate Governance. Guidelines are reviewed by the Management from time to time to ensure the adherence of the same voluntarily commensurate with the requirements, best suited to your Company gradually in phases.

31. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report under review, as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is presented by virtue of an Annexure, forming part of the Directors

Report.

32. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, the Board of Directors of your Company to the best of their knowledge and belief and on the basis of information and explanation obtained from the operating management, hereby states and confirms: (a) that in the preparation of attached Annual Accounts for the Financial Year ended 31st March, 2023 the applicable Accounting Standards have been followed along with proper explanation relating to material departures, wherever, applicable; (b) that they have selected the Accounting Policies described in notes to accounts, which have been consistently applied, except where otherwise stated and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs st March, 2023 and of the loss of the of

Company for the year ended on that date;

(c) that they have taken proper and sufficient care for the with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) that they have prepared the attached Annual Accounts on a ‘going concern basis.

(e) that they had laid down internal financial controls to be followed by the Company and that such internal controls are adequate and were operating effectively.

(f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. AUDITORS

In compliance with the provisions of Section 139 and other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s)/ re-enactment(s)/ amendment(s) thereof, for the time being in force), the Members at the Eighty-fourth (84th) Annual General Meeting held on 31^st

August 2022, had appointed M/s. Pipara & Co.LLP, Chartered Accountants (ICAI Registration No. 107929W), as the Statutory Auditors of the Company, to hold office for a term of five (5) consecutive years from the conclusion of the 84^th Annual General Meeting until the conclusion of the 89th Annual General Meeting of the Company.

However, with the Notification dated May 7, 2018 issued by the Ministry of Corporate Affairs (‘MCA), the first proviso to section 139(1) of the Companies Act, 2013, pertaining to the requirement of annual ratification of appointment of

Auditors by Members is omitted.

Accordingly, as per the Companies (Amendment) Act, 2017, ratification of the appointment of Statutory Auditors during their period of appointment will not be considered.

34. SECRETARIAL AUDITOR

The Board has appointed M/s. Drolia & Company, Company Secretaries, Kolkata, in practice having Certificate of Practice No. 1362, as the Secretarial Auditor, to carry out Secretarial Audit for the year ending 31st March, 2024, pursuant to the provisions of Section 204 of the Companies Act, 2013, read with the corresponding rules framed thereunder.

35. MANAGERIAL REMUNERATION

Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 is attached to this Report.

36. SECRETARIAL AUDIT REPORT

A Secretarial Audit Report given by the Secretarial Auditors for the financial year ended 31 st March, 2023, in the prescribed form MR-3 is annexed herewith as Annexure to this Report and forms an integral part of this Report.

There are no qualifications, reservations and adverse remarks made by the Secretarial Auditors in their Report.

37. INDUSTRIAL RELATIONS

Industrial relations in your Company, during the year under review continued to be cordial and harmonious.

38. COST AUDITORS

Manufacturing unit of the Company at Ahmedabad was closed as per the Order of Supreme Court following the order of High Court, Gujarat. Therefore, there is no requirement to appoint Cost Auditor in terms of the applicable provisions of the Companies Act, 2013, read with the Companies (Cost Records & Audit) Amendment Rules, 2014.

39. DEPOSITORY SYSTEMS

The Companys Shares are currently traded in dematerialized form, as per the SEBI directives and the Company has entered in to agreements with the following Depositories i.e. National Securities Depository Limited (NSDL) and

Central Depository Services (India) Limited (CDSL), for trading in dematerialized form.

Members are therefore advised to avail of the services either of the depositories, to dematerialize their physical shares, if any held by them, for trading in Companys shares smoothly and conveniently.

As on March 31, 2023, 32,534,614 Equity Shares are held in dematerialized form and represent 98.49% of the

Companys total paid up Capital.

40. SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 to ensure harassment free workplace for employees. Sexual harassment cases are dealt as per the Companys Policy on ‘Prevention of Sexual Harassment.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary, trainees) are covered under this policy.

No sexual harassment complaint was received during the year under review.

41. ACCOUNTS OF THE SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES

The statement containing the silent features of the financial statement of the companys associate companies under the first proviso to sub-section (3) of section 129 of CompaniesAct, 2013 is enclosed as AOC-1 in the Annexure.

42. PARTICULARS OF EMPLOYEES

None of the employees of the Company was in receipt of remuneration for the year or part of the year under review, in excess of the amount of remuneration prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended upto date.

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration) Rules, 2014 is annexed and forms a part of this Report.

43. EXTRACT OF ANNUAL RETURN

In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return in prescribed format may be accessed on the Companys website at www.somatextiles.com.

44. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company is primarily engaged in the business of manufacturing of Cotton Yarn, Denim Fabrics, Shirtings and Garments.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014, as amended is given in the Annexure and forms part of this Report.

45. RISK MANAGEMENT

The Company has in place mechanism to inform Board Members about the Risk Assessment and Risk Minimization procedures which are periodically reviewed to ensure that risks and uncertainties are systematically identified, prioritized and initiated on constant basis.

The risk management procedure is reviewed by the Audit Committee from time to time to ensure that the executive management controls the risks and uncertainties through a proper defined framework and major risks, are properly and systematically addressed through mitigation actions on continuing basis.

46. BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report as per Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, describing the initiatives taken by them from an environmental, social and governance perspective is not applicable to the Company, for the financial year 2022-23 as per the SEBI Notification dated 22 nd December,

2015 and Frequently Asked Questions issued by SEBI on SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 dated 29th January, 2016.

47. CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations.

Many factors may affect the actual results, which could be different performance and outlook.

48. VARIATION IN VALUATION

During the year under review, there was no instance ofone-timesettlementwithanybankorfinancialinstitution necessitating disclosure or reporting in respect of difference in valuation done by the Company.

49. COMPLIANCE OF SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards as mandated by the Institute of Company Secretaries of India.

50. OTHER DISCLOSURES/REPORTING:

Your Directors state that no disclosure and/or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise;

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future;

51. ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks and appreciation for the continuing support and assistance received from the financial institutions, banks, government as well as non-government authorities, customers, exchange and members during the period under review.

Your Company takes pride in all of its dedicated officers, employees and workers, who have been wholeheartedly supporting and sincerely contributing their best for the success and growth of your Company as well as maintaining harmonious relations throughout the Company.

On behalf of the Board

Place : Ahmedabad (S. K. SOMANY)

Date : 25^th May, 2023 Chairman

ANNEXURE TO THE DIRECTORS REPORT

Information as required under Section 134(3)(m) of the Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014

(A) CONSERVATION OF ENERGY:

(i) Steps taken or impact on conservation of energy: Nil

(ii) The steps taken by the company for utilization of alternate sources of energy: Nil (iii) The Capital Investment on energy conservation equipment: Nil

(B) TECHNOLOGY ABSORPTION:

(i) The efforts made towards technology absorption: Nil

(ii) The benefits derived like product improvement, cost reduction, product (iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): NOT APPLICABLE

(iv) The expenditure incurred on Research and Development: Nil

(C) FOREIGN EXCHANGE EARNING & OUTGO

Used Nil lacs (Previous Year NIL lacs), Earned Rs Nil lacs (Previous Year Nil).

On behalf of the Board

Place : Ahmedabad (S. K. SOMANY)

Date : 25^th May, 2023 Chairman

ANNEXURE TO THE DIRECTORS REPORT

Details of Significant Changes (change of 25% or more as compared to the immediately previous financial year) in key detailed explanations therefor, pursuant to sub-clause (h) of clause (1) of Part B of Schedule V of financial the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018:

Significant Changes in Financial Ratios

Sr. No. Particulars	2022-23	2021-22	Change in %	Reason for Significant change, if any
1 Debtors Turnover	4.88	67.03	92.72%	Due to the direction of the Gujarat High Court Dt. 23rd
2 Inventory Turnover	36.86	8.95	-311.84%	September, 2021, the Ahmedabad
3 Interest coverage ratio	0.80	(0.46)	273.91%	Municipal Corporation (AMC) has
4 Current ratio	2.3	0.36	-538.89%	disconnected water and drainage connection of the company and
5 Debt Equity ratio	2.62	4.56	42.54%	the decision of the High Court was
6 Operating Profit Margin (%)	134.59	(46.99)	386.42%	upheld by Honble Supreme Court of India. Hence, the operations of the
7 Net Profit Margin (%)	3453.44	(118.00)	3026.64%	company are closed with effective
8 Return on Net Worth (%)	344.87	(65.63)	625.48%	from 26th November, 2021.

Detailed explanation of ratios: (i) Debtors Turnover

The above ratio is used to quantify a Companys effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a Company uses and manages the credit it extends to customers and how quickly that short-term debt is collected or is paid. It is calculated by dividing turnover by average trade receivables.

(ii) Inventory Turnover

Inventory Turnover is the number of times a Company sells and replaces its inventory during a period. It is calculated by dividing turnover by average inventory.

(iii) Interest Coverage Ratio

The Interest Coverage Ratio measures how many times a Company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost.

(iv) Current Ratio

The Current Ratio is a liquidity ratio that measures a Companys ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities.

(v) Debt Equity Ratio

The ratio is used to evaluate a Companys financial leverage. It is a is financing its operations through debt versus wholly owned funds. It is calculated liabilities by its shareholders equity.

(vi) Operating Profit Margin (%)

Operating Profit Margin is a profitability or performance ratio used to calculate the percentage of profit a Company produces from its operations. It is calculated by dividing the EBIT by turnover.

(vii) Net Profit Margin (%)

The net profit margin is equal to how much net income or profit is generated as a percentage of revenue. It is calculated by dividing the profit for the year by turnover.

(Viii) Return on Net Worth

Return on Net Worth (RONW) is a measure of profitability of a Company expressed in percentage. It is calculated by dividing total comprehensive income for the year by average capital employed during the year.

To, The Members,

Soma Textiles & Industries Limited,

CIN: L51909WB1940PLC010070

2, Red Cross Place,

Kolkata – 700 001

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Soma Textiles & Industries Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of books, papers, minute books, forms and returns filed and other records maintained by the M/s. Soma Textiles & Industries Limited digitally , and also the information provided by the Company, its officers, agents and authorised representatives , I hereby report that in my opinion the Company has, during the audit period covering the financial st March, 2023 complied with the statutory provisions listed hereunder and also that the Company yearended31 has proper Board- processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended 31 st March, 2023 according to the provisions of: I. The Companies Act, 2013 (the Act) and the rules made there under; II. The Securities Contracts (Regulation) Act, 1956 ("SCRA") and the rules made there under and the circulars, guidelines issued there under by the SEBI from time to time; III. Securities and Exchange Board of India (Depositories and Participants) Regulations 2018 and Bye-laws framed there under;

IV Foreign Exchange Management Act (FEMA), 1999 and the rules and regulations made thereunder;

V The following Regulations (as amended from time to time) and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act): - (a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 (Listing Regulations).

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)(Amendment) Regulations,2018; (c) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) ( Amendment ) Regulations,2021; (d) The Securities and Exchange Board of India (Investor Protection and Education Fund) 2009 (e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,1993 regarding Companies Act and dealing with Clients The following Regulations (as amended from time to time) and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act) are not applicable, as the Company did not carry any act under the said Regulations for the period under review.

(a) SEBI (Share based Employee Benefits and sweat equity) Regulations, 2021;

(b) The Securities and Exchange Board of India (Issue and Listing of Non-convertible Securities) Regulations, 2021; (c) The Securities and Exchange Board of India (Delisting of Equity Shares) (Amendment) Regulations, 2021; (d) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (e) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

VI. The following Industry specific laws:

(a) Textiles (Development & Regulation) Order 2001. (b) Textiles Committee Act 1963 (c) Textiles (Consumer Protection) Regulations 1988. (d) Factories Act, 1948.

(e) Industrial Disputes Act, 1947. (f) The Payment of Wages Act, 1936. (g) The Minimum Wages Act, 1948. (h) Employee State Insurance Act, 1948.

(i) The Employees Provident Fund and Miscellaneous Provisions Act, 1952. (j) The Contract Labour (Regulations and Abolition) Act, 1970. (k) The Maternity Benefit Act, 1961.

(l) Environment Protection Act 1986 and Rules there under.

(m) Hazardous Wastes (Management, Handling and Trans boundary Movement) Rules, 2008 and Amendments thereof and any other laws as may be applicable to the Company from time to time.

I have also examined compliance with the following:

Secretarial Standards on meetings of Board of Directors and General Meetings (SS-1 & SS-2), issued by the Institute of Company Secretaries of India as notified from time to time.

(a) During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except following contravention of LODR regulation and SEBI Act:

1. The Company violate the provisions of section 12A (a), (b) & (c) of SEBI Act 1992 read with Regulations 3(a), (b), (c) and (d) and 4(1) of PFUTP Regulations 2003 and Section 23E of the SCRA in respect of issue of Global Depository Receipts (GDR) of 17.2975 million US Dollar on 20/10/2006 in this regard SEBI has passed two orders one for debarring the Company, its directors and its authorized representative from accessing the securities market for a specified period of 3 years and 2 years respectively through SEBI Order dated February 8, 2021 and through another SEBI Order dated August 30, 2021 wherein penalties have been imposed upon the Company, its director and its authorized representative.

An appealed was filed against above order before The SECURITIES APPELLATE TRIBUNAL MUMBAI (SAT) by the Aggrieved parties. During the financial year under review SAT has given their order dated 22.02.2023 wherein SAT has reduced debarment to the period undergone for the Company, debarment of its directors has not been reduced and confirmed the above period of 2 years for debarment and penalty of 5 lakh imposed by AO in the circumstances on its directors is also just and proper, however SAT has seaside the debarment for its authorized representative and penalties thereof.

2. Further SAT has affirmed the penalty of 20 lakh imposed against the Company, Soma Textiles and Industries

Limited and the penalty of 5 lakh under Section 23E of the SCRA is set aside.

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Director, Non-Executive Directors, Independent Directors and a Woman Director. The changes in the composition of the Board of Directors, where ever applicable during the year under review were carried out in compliance with the provisions of the Act and Listing

Agreement/Listing Regulations, as and when applicable.

Adequate notice has been given to all the Directors to schedule the Board Meetings. Agenda and detailed notes on agenda were sent at least seven days in advance, in compliance with the provisions of Section 173 of the Act and Listing Regulations during the relevant period, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions of the Board and Board Committee Meetings were carried out unanimously and the same was captured and recoded as part of the Minutes.

I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines as also represented by the management.

I further report that during the audit period, the Company has not made any:

(i) Public/Right/ Preferential issue of Shares/Debentures/Sweat Equity or any other Security. (ii) Redemption / buy-back of securities.

(iii) Major decisions taken by the Members in pursuance to Section 180 of the Companies Act, 2013.

(iv) Foreign technical collaborations.

(v) Merger /Amalgamation / Reconstruction etc.

FOR PRAVIN KUMAR DROLIA

(Company Secretary in whole time practice)

(Pravin Kumar Drolia)

Proprietor

Place: Kolkata C.P.No.:1362, FCS: 2366

Date: 25 -05-2023 Peer view no: 1928/2022 UDIN: F002366E000355213

Note:

This report is to be read with our letter of even date which is annexed as Annexure A.1 and forms an integral part of this report.

Annexure-A.1 CS PRAVIN KUMAR DROLIA

(Company Secretary in whole time practice)

Block D, 2nd floor, 13, Selimpur Road, Kolkata - 700031

Mobile: 09831196869; Email: droliapravin12@gmail.com

To, The Members,

Soma Textiles & Industries Limited,

(CIN: L51909WB1940PLC010070)

2, Red Cross Place,

Kolkata 700001.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to express as opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct the processes and practices, I followed, provide a reasonable facts are reflected basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, I have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

FOR PRAVIN KUMAR DROLIA

(Company Secretary in whole time practice) (Pravin Kumar Drolia)

Place: Kolkata Proprietor

Date: 25 -05-2023 C.P.No.:1362, FCS: 2366

UDIN: F002366E000355213 Peer view no: 1928/2022

Part "A": Subsidiaries – NOT APPLICABLE Part "B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures*

(Information in respect of each Associate to be presented with amounts in )

Sl NO Name of Associate	SOMA TEXTILE FZC
1. Latest audited Balance Sheet Date	31.03.2023
2. Shares of Associate held by the company on the year end No.	300 Equity Shares of AED 1000 each
Amount of Investment in Associates	3,421,479
Extend of Holding%	40%
3. Description of how there is significant influence	By virtue of Shareholding
4. Reason why the associate is not consolidated	NA
5. Net worth attributable to shareholding as per latest Audited Balance Sheet	34,21,479
6. Profit/Loss for the year
i. Considered in Consolidation	NA
ii. Not Considered in Consolidation	NA

* There is no Joint Venture with the Company.

Note:

1. Name of associates or joint ventures which are yet to commence operations - None

2. Name of associates or joint ventures which have been liquidated or sold during the year - None

Sd/-	Sd/-	Sd/-	Sd/-
S. K. Somany	A. K. Somany	Shrikant Bhat	Reena Prasad
Chairman	Managing Director	Chief Financial Officer (CFO)	Company Secretary