SENSEX NIFTY
Soma Textiles and Industries | Auditor's Report > Textiles - Composite Mills > Auditor's Report from Soma Textiles and Industries - BSE: 521034, NSE: SOMATEX
YOU ARE HERE > MONEYCONTROL > MARKETS > TEXTILES - COMPOSITE MILLS > AUDITORS REPORT - Soma Textiles and Industries
Soma Textiles and Industries
BSE: 521034|NSE: SOMATEX|ISIN: INE314C01013|SECTOR: Textiles - Composite Mills
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Sep 02, 16:00
3.65
0.05 (1.39%)
VOLUME 15,610
LIVE
NSE
Sep 02, 15:31
3.60
0
VOLUME 12,857
« Mar 12
Auditor's Report (Soma Textiles and Industries) Year End : Mar '13
Report On Financial Statement
 
 1.  We have audited the accompanying financial statements of Soma
 Textiles & Industries Limited, which comprise the Balance Sheet as at
 March 31, 2013, the Statement of Profit and Loss and Cash Flow
 Statement for the year ended, and a summary of Significant Accounting
 Policies and other explanatory information.
 
 Management''s Responsibility For The Financial Statement
 
 2.  Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956. This responsibility includes the design,
 implementation and maintenance of internal control relevant to the
 preparation and presentation of the financial statements that give a
 true and fair view and are free from material misstatement, whether due
 to fraud or error.
 
 Auditor''s Responsibility
 
 3.  Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 4.  An audit involves performing procedures to obtain audit evidence
 about the amounts and disclosures in the financial statements. The
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal control relevant to the
 Company''s preparation and fair presentation of the financial statements
 in order to design audit procedures that are appropriate in the
 circumstances. An audit also includes evaluating the appropriateness of
 accounting policies used and the reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements.
 
 5.  We believe that the audit evidence we have obtained is sufficient
 and appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 6.  In our opinion and to the best of our information and according to
 the explanations given to us, the financial statements give the
 information required by the Act in the manner so required and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2013; (ii) In the case of the Statement of
 Profit and Loss, of the Loss for the year ended on that date; and (iii)
 In the case of the Cash Flow Statement, of the Cash Flows for the year
 ended on that date.  7 Without qualifying our opinion, we draw
 attention to Note No. 13, 13.1 and 13.2 regarding loan amount of
 
 Rs. 8,558.24 Lacs (Previous Year Rs. 8,021.18 Lacs) given to Soma Textile
 FZC (UAE) out of GDR proceeds, being classified as a long term loan
 which had been advanced by the Company as a quasi- equity. When the
 loan was given, the said Company was a wholly owned subsidiary,
 however, with effect from 31st March, 2010, the Company''s holding has
 diluted from 100% to 40% (of the paid up Capital of Soma Textile FZC –
 UAE). Hence the said Company has become an associate of Soma Textiles &
 Industries Ltd. The loan amount is classified as Long Term under Loans
 & Advances (Note 13 of Financial Statements).
 
 In the financial statements of Soma Textile FZC the accumulated loss
 reflects at AED 623,647 as against Total Capital of AED 900,000
 (including Statutory Reserves); The said advance has been considered
 good by the management placing reliance on the Statutory Auditor''s
 Report of Soma Textile FZC (UAE) dated 16th April, 2013.  The Audit was
 conducted by an independent Auditor viz Business Management World
 Auditors & Business Consultants, Dubai, U.A.E. for the financial year
 ended 31st March, 2013.
 
 8.  The Company has signed Business Transfer Agreement on 01.04.2013 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, transaction will
 be given effect in books of accounts in the Financial Year 2013-14.
 
 Report On Other Legal And Regulatory Requirements
 
 9.  As required by the Companies (Auditors'' Report) Order, 2003 as
 amended by the Companies (Auditors'' Report) (Amendment) Order, 2004
 (together the ‘Order'') issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956 of
 India and on the basis of such checks of the books and records of the
 Company as we considered appropriate and according to the information
 and explanations given to us, we enclose in the Annexure a statement on
 the matters specified in paragraphs 4 and 5 of the said Order.
 
 10.  As required by section 227(3) of the Act, we report that:
 
 (i) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 (ii) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books and proper reports adequate for the purposes of our audit
 have been received from the branch not audited by us. The financial
 records of Baramati unit of the Company have been audited by M/S
 Shankarlal Jain & Associates, Chartered Accountants, Mumbai, (Firm
 Registration No. 109901W) a copy of whose report has been forwarded to
 us. We have relied on that report and have appropriately dealt with the
 same in our report.
 
 (iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 accounts along with the audited report of the branch.
 
 (iv) In our opinion, the Balance Sheet, Statement of Profit & Loss
 along with the Cash Flow Statement comply with the Accounting Standards
 referred to in sub-section (3C) of section 211 of the Companies Act,
 1956.
 
 (v) On the basis of written representations received from the directors
 as on 31st March, 2013 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2013 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 Annexure referred to in paragraph 3 of our report of even date to the
 members of SOMA TEXTILES & INDUSTRIES LIMITED on the accounts for the
 year ended on 31st March, 2013.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a phased programme of physical verification of
 fixed assets which, in our opinion, is reasonable having regard to the
 size of the Company and nature of its assets. In accordance with this
 programme, the management has verified fixed assets during the year and
 no material discrepancies have been noticed on such verification.
 
 (c) The Company has not disposed off a substantial part of its fixed
 assets during the year and the Going Concern status of the Company is
 not affected.
 
 (ii) (a) The management conducts regular physical verification of
 inventory at reasonable intervals commensurate and adequate to the size
 of its operations.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. Some
 immaterial discrepancies were noticed on physical verification which
 have been properly dealt with in the books of account.
 
 (iii) (a) The Company has granted interest free loan (quasi-equity) to
 its Associate, Soma Textile FZC. Total amount outstanding on 31st
 March, 2013 was Rs. 8,558.24 lacs.
 
 (b) There are no terms and conditions set out by the Company as on date
 for the loans given to Soma Textile FZC and therefore, we are unable to
 comment on terms and conditions of the said loan.
 
 (c) As there is no stipulation made for repayment of loan by Associate,
 we are unable to report on regularity of receipt of principal amount.
 
 (d) As there is no stipulation of repayment of loan by Associate, we
 are unable to report on overdue amount.
 
 (e) According to the information and explanations given to us the
 Company has taken unsecured loans from companies, firm or other parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956 and the same are as under.
 
                                    (Rs. In lacs)
 
 No. of Parties          Involved Two Parties
 
 Opening Balance                 500
 
 Loan Taken                      244
 
 Balance Outstanding at 
 the end of year                 744
 
 (f) Interest free unsecured loan has been taken from promoters to
 fulfill stipulation of Financial Institution so there is no rate of
 interest specified. Terms and conditions of loans taken are prima facie
 not prejudicial to the interest of the Company;
 
 (g) No stipulation has been specified for the repayment of these loan.
 
 (iv) There is an adequate internal control system commensurate with the
 size of the Company and the nature of its business, for the purchase of
 inventory and fixed assets and for the sale of goods and service.  (v)
 (a) According to the information and explanations given to us, we are
 of the opinion that the transactions that need to be entered into the
 register maintained under Section 301 of the Companies Act, 1956 have
 been so entered.  (b) In our opinion and as explained to us, the
 transactions made in pursuance of contracts or arrangements entered in
 the register maintained under Section 301 of the Companies Act, 1956
 and exceeding value of Rupees Five Lacs in respect of any party during
 the year have been made at prices which are reasonable having regard to
 the prevailing market prices at the relevant time.  (vi) The Company
 has not accepted any deposits from the public during the year.
 Therefore the provisions of Sections 58A, 58AA or any other relevant
 provisions of the Act and the rules framed thereunder or any order
 passed by Company Law Board or National Company Law Tribunal or Reserve
 Bank of India or any Court or any other Tribunal do not apply to
 Company.  (vii) In our opinion and according to information and
 explanations given to us, the Company has an internal audit system
 
 commensurate with its size and nature of its business.  (viii) In our
 opinion, prima facie the Company has maintained proper cost records as
 prescribed by the Central Government under clause (d) of sub-section
 (1) of Section 209 of the Companies Act,1956. We have, however, not
 made a detailed examination of cost records with a view to determine
 whether they are accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 on the basis of our examination of books of account, we are of the
 opinion that the Company is generally regular in depositing undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other
 statutory dues with the appropriate authorities. At the end of the
 year, there were no undisputed dues payable for a period of more than
 six months from the date they became payable.  (b) As on 31st March
 2013, according to records of the Company, some statutory dues were
 disputed and not deposited as given below:
 
 Name of Statute   Nature of Dues      Amount Period to  Forum where
                                                         dispute is
                                                         pending
                                       (Rs.
                                      in Lacs) which it 
                                               relates
 
 Central Excise 
 Act,              Recovery of CENVAT   1.59   2004-05   The Dy. 
                                                         Commissioner
                                                         of C.
                                                         Excise, Div-I,
 1944                                                    Ahmedabad.
 
 Central Excise
 Act,              Recovery of 
                   additional          24.85   2002-03   The Dy. 
                                                         commissioner
                                                         of C. 
                                                         Excise, Div-III,
 1944             TTA duty of Yarn                       Ahmedabad.
                  captively consumed 
 
 Central Excise 
 Act,             Refund claim for      0.98   2005-06   Commissioner of
                                                         Central Excise,
                                                        (Appeals),
 1944             amount short 
                  received                               Ahmedabad
                  against refund 
                  claim of yarn
                  duty after
                  adjusting
                  the old recovery 
 
 Central Excise
 Act,             Demand for old duty  0.50   2008-09    CESAT, West
                                                         Zone, Ahmedabad
 1944
 
 Central Excise 
 Act,             Recovery of 
                  transitional         5.81   2012-13    CESAT, West
                                                         Zone, Ahmedabad
                 (Appeal)
 1944             Cenvat
 
 The Income Tax   Demand of Income     9.77   A.Y.       Asst.
                                                         Commissioner of
                                                         Income Tax,
 Act-1961 Tax                                 2006-07    Cir.-8, 
                                                         Ahmedabad
 
 The Income Tax   Demand for Penalty   7.43   A.Y.       Asst. 
                                                         Commissioner of
                                                         Income Tax,
                                                         Cir.-8,
 Act-1961          U/s. 271(1)(C)             2008-09    Ahmedabad
 
 The Income Tax    Demand of Income 
                   Tax                14.55   A.Y.       Commissioner of
                                                         Income Tax 
                                                        (Appeal),
 Act-1961                                     2007-08    Ahmedabad
 
 Gujarat Sales 
 Tax              Additional Sales
                  Tax                  6.17   1997-98,   Gujarat Value
 Added Tax                                               Tribunal
 Act-1969                                     1998-99
                                              & 2000-01
 
 (x) The Company has accumulated losses at the end of the Financial
 Year. However such losses do not exceed 50% of
 its net worth.  
 
 (xi) Company is under Corporate Debt Restructuring (CDR) package under
 scheme of RBI which was duly approved and implemented. Company has
 defaulted in repayment of Loans and interest as stated in Note No 4.3
 which is mentioned under head Long term borrowing. 
 
 (xii) The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Accordingly the provisions of clause 4(xii) of the order are not
 applicable to the Company.
 
 (xiii) The Company is not a chit fund / nidhi Company / mutual benefit
 fund or society which would be governed by any special statute.
 Accordingly this clause along with sub clauses does not apply. 
 
 (xiv) The Company is not dealing or trading in shares, securities,
 debentures and other investments. Accordingly this clause does not
 apply.
 
 (xv) The Company has not given any guarantee for loans taken by others
 from bank or financial institutions.  Accordingly this clause does not
 apply.
 
 (xvi) In our opinion and according to the explanations given to us the
 term loans were applied only for the purpose for which they were
 obtained.
 
 (xvii) In our opinion and according to explanations given to us, the
 funds raised on short-term basis have not been used for long-term
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties and companies covered in the Register maintained under
 Section 301 of the Act during the year and accordingly this clause does
 not apply.
 
 (xix) The Company has not issued debentures during the year.
 Accordingly this clause does not apply.
 
 (xx) The Company has not raised any money from public issue during the
 financial year. Accordingly this clause does not apply.
 
 (xxi) In our opinion and according to explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 year.
 
                                    For Pipara & Co.
 
                                    Chartered Accountants
 
                                   (Firm Registration No. 107929W)
 
                                    Gyan Pipara
 
 Place: Ahmedabad                   Partner
 
 Date:24th May, 2013                Membership No. 034289
Source : Dion Global Solutions Limited
Quick Links for somatextilesindustries
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.