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									                                                                                                                   Draft Prospectus

                                Soma Textiles & Industries Limited
(originally incorporated as R.B. Rodda & Co. Ltd on 29th March, 1940 as Limited Company with Registrar of Joint
   Stock Companies, Bengal & got Fresh Certificate of Incorporation consequent to change of name to Soma
                Textiles & Industries Limited on 21st January, 1992 under the Companies Act, 1956)
                                                   Registered Office:
                                          2, Red Cross Place, Kolkata – 700 001
                         Phone: 033–22487406-07 Fax: 033–22487045 Email: rssharma@somanyent.com
                                              Website: www.somatextiles.com
                                   Contact Person: Mr. R.S. Sharma, Compliance Officer

PUBLIC ISSUE OF 1,00,00,000 UNSECURED ZERO INTEREST FULLY CONVERTIBLE DEBENTURES (FCDs) OF RS. 105/- EACH
FOR CASH AT PAR AGGREGATING TO RS.10500 LACS. THE FACE VALUE OF THE FCD IS RS.105/- AND THE ISSUE PRICE
IS ONE TIME OF THE FACE VALUE. THE FACE VALUE OF EQUITY SHARE ARISING ON CONVERSION WILL BE RS.10/- AND
                THE CONVERSION PRICE WILL BE 3.5 TIMES OF THE FACE VALUE OF EQUITY SHARE.
                                                          GENERAL RISKS
 “Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue
unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before
taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the
Issuer and the offer including the risks involved. The securities have not been recommended or approved by the Securities and
Exchange Board of India (SEBI) nor does the SEBI guarantee the accuracy or the adequacy of this document.”
 Investors are advised to refer to the page no.——- for the statement on risk factors pertaining to this offer.
                                              ISSUERS’ ABSOLUTE RESPONSIBILITY
  Soma Textiles & Industries Ltd, the Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this
Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the issue, that the
information contained in this Prospectus is true and correct in all material respects and is not misleading in any material respect,
that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes
this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material
respect.

              LEAD MANAGER TO THE ISSUE                                         REGISTRAR TO THE ISSUE
              CHARTERED CAPITAL AND INVESTMENT LTD.                             PINNACLE SHARES REGISTRY PVT LTD,
              711, Mahakant, Opp. V S Hospital,                                 Near Asoka Mills, Naroda Road,
              Ellisbridge, Ahmedabad – 380006                                   Ahmedabad – 380 025
              Tel: 079 – 2657 7571/2657 5337                                    Tel : 91-79-2220 0338
              Fax: 079 – 2657 5731                                              Fax: 91-79-22202963
              Email: info@charteredcapital.net                                  Email: investor.service@psrpl.com
              Website: www.charteredcapital.net                                 Contact Person : Mr. Gautam Shah
              Contact Person : Mr. Manojkumar Ramrakhyani

              ISSUE OPENS ON                                          —————————-
              ISSUE CLOSES ON                                         —————————-

                                                         CREDIT RATINGS
The FCDs being issued through this Prospectus have been rated by Fitch Ratings India Pvt. Ltd as “BBB(ind)” [Triple B ind]
(Investment grade).
The FCDs being issued through this Prospectus have also been rated by Credit Analysis & Research Ltd as “CARE BBB”
(Triple B) (Investment grade).
The credit ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The
Credit Rating agencies reserve the right to change the rating, should the business, financial or other conditions warrant and
disseminate the same.

                                                              LISTING
 The existing equity shares of the company are presently listed with Bomaby Stock Exchange Ltd (BSE) (Designated Stock Exchange)
and National Stock Exchange of India Ltd, Mumbai (NSE) & The Calcutta Stock Exchange Association Ltd, Kolkata. The FCDs and the
Equity Shares arising on conversion of FCDs are sought to be listed on Bombay Stock Exchange Ltd (BSE) and National Stock Exchange
of India Ltd, Mumbai (NSE). The Equity Shares arising on conversion of the FCDs shall rank pari-passu, w.e.f. date of conversion,
with the existing Equity Shares in all respects. In principle approval from BSE and NSE have been received vide their letter dated
——————— and ————————— respectively.


                                                                  i
                                              TABLE OF CONTENTS
                                                          CONTENTS                   PAGE NO.

SECTION I - DEFINITION AND ABBREVIATIONS
SECTION II - RISK FACTORS
   1   Certain Conventions; Use of Market Data
   2   Forward looking Statement
   3   Risk Factors & Management perception

SECTION III – INTRODUCTION
   1   Summary
   2   General Information
   3   Capital structure of the Company
   4   Objects of the Issue
   5   Appraisal
   6   Schedule of implementation
   7   Deployment of Funds in the Project
   8   Year wise break up of expenditure proposed to be incurred on the Project
   9   Interim Use of Funds
  10   Basic Terms of Issue
  11   Basis for Issue price
  12   Statement of Tax Benefits

SECTION IV – ABOUT THE ISSUER COMPANY
   1   Industry Overview
   2   Business Overview
   3   History and Corporate Structure
   4   Management
   5   Promoters
   6   Currency of presentation
   7   Dividend Policy

SECTION V – FINANCIAL STATEMENT
   1   Financial Information of the Company
   2   Financial information of Group Companies
   3   Changes in the Accounting Policies
   4   Servicing behavior of the term loan and fixed deposit for the last one year
   5   Management’s discussion and Analysis of Financial condition and Results of
       Operations as Reflected in the Financial Statements

SECTION VI – LEGAL AND OTHER INFORMATION
   1   Outstanding Litigations and Material Developments
   2   Government Approvals / Licensing Arrangements

SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES
SECTION VIII – OFFERING INFORMATION
   1   Terms of the Issue
   2   Issue Procedure

SECTION IX – DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION
SECTION X – OTHER INFORMATION
   1   Material Contracts and Documents for Inspection
   2   Declaration



                                                               ii
                                                            (ii)
                                         SECTION I - DEFINITION AND ABBREVIATIONS
CONVENTIONAL / GENERAL TERMS
 Term                                 Description
 Act                                  The Companies Act, 1956 & subsequent amendments thereto.
 Book Value                           Networth/ Number of outstanding Shares
 Company / Issuer/ STIL/Soma          Soma Textiles & Industries Limited
 EPS                                  Earning Per Share (EPS = Profit After Tax/No. of equity shares)
 FY                                   Financial Year
 FEMA                                 The Foreign Exchange Management Act, 1999
 FERA                                 Foreign Exchange Regulation Act, 1973
 HUF                                  Hindu Undivided Family
 NAV                                  Net Asset value
 NRI                                  Non-Resident Indian.
 PAN                                  Permanent Account Number
 PAT                                  Profit After Tax
 PLR                                  Prime Lending Rate
 RBI                                  Reserve Bank of India
 ROC                                  Registrar Of Companies, West Bengal, Nizam Palace, 2nd MSO Building,
                                      2nd Floor, 234/4, A.J.C.B. Road, Kolkata - 700020
 ROCE                                 Return on Capital Employed{ROCE = Profit before Interest and Tax/Capital Employed)*100}
 ROE                                  Return on Equity {ROE=Profit After Tax/Equity Capital)*100}
 RONW                                 Return on Networth {RONW = Profit After Tax/Networth)*100}
 ISSUE RELATED TERMS
 Term                                 Description
 AMCs                                 Asset Management Company
 Articles / Articles of Association   Articles of Association of Soma Textiles & Industries Limited
 Auditors                             The Statutory auditors of the company, M/s Pipara & Company, Chartered Accountants,
                                      Ahmedabad.
 Board /Board of Directors/           Board of Directors of Soma Textiles & Industries Limited or a Committee thereof.
 Directors
 BSE/Designated Stock Exchange        Bombay Stock Exchange Ltd.
 CDSL                                 Central Depository Services (India) Ltd.
 Company / Issuer/ STIL/ Soma         Soma Textiles & Industries Limited
 Compliance Officer                   Mr. R.S. Sharma
 Depository                           A Depository registered with SEBI under the SEBI (Depositories & Participant) Regulations,
                                      1996 as amended from time to time.
 DP/ Depository Participant           Depository Participant as defined under the Depositories Act.
 Face Value                           Face value of FCD of STIL is Rs. 105/- per FCD
 FCD(s)/Debenture(s)                  Unsecured Zero Interest Fully Convertible Debenture(s)
 Issue price                          Rs. 105/- per FCD
 Issue size                           1,00,00,000 Unsecured Zero Interest FCDs of Rs.105/- each for cash aggregating to
                                      Rs.10,500 lacs.
 Issuer                               Soma Textiles & Industries Ltd
 Lead Manager                         Chartered Capital And Investment Limited
 Memorandum/ Memorandum               Memorandum of Association of Soma Textiles & Industries Limited
 of Association
 NSDL                                 National Securities Depository Ltd.
 NSE                                  National Stock Exchange of India Ltd, Mumbai


                                                                 iii
Prospectus / Offer Document          The offer document filed with ROC containing inter alia the issue price and the
                                     number of FCDs to be issued, issue price and other incidental information.

Registered Office of the company     2, Red Cross Place, Kolkata – 700 001

Registrar/ Registrar to Issue /RTA   Pinnacle Shares Registry Pvt Ltd,

Retail Individual Investor           Means an investor who applies for securities for a value of not more than Rs.1,00,000/-

SEBI                                 Securities and Exchange Board of India.

SEBI Act                             Securities and Exchange Board of India Act, 1992 as amended from time to time.

SEBI (SAST) Regulations 1997         Securities and Exchange Board of India (Substantial Acquisition of Shares &
                                     Takeovers) Regulations, 1997

SEBI DIP Guidelines                  SEBI (Disclosure and Investor Protection) Guidelines, 2000 as amended from
                                     time to time.

Stock Exchanges                      BSE & NSE

COMPANY/ INDUSTRY RELATED TERMS

DEPB                                 Duty Exemption Pass Book

EPCG                                 Export Promotion Capital Goods

TUFS                                 Technology Upgradation Fund Scheme
TECHNICAL TERMS/ ABBREVIATIONS

A/C                                  Account

AGM                                  Annual General Meeting

AS                                   Accounting Standard issued by the Institute of Chartered Accountants of India

BV                                   Book Value

DPR                                  Detailed Project Report

EGM                                  Extra-ordinary General Meeting

EMD                                  Earnest Money Deposit

EPS                                  Earning Per Share (EPS = Profit After Tax/No. of equity shares)

FEMA                                 The Foreign Exchange Management Act, 1999

FERA                                 Foreign Exchange Regulation Act, 1973

FY                                   Financial Year

HUF                                  Hindu Undivided Family

INR / Rs.                            Indian rupees

NAV                                  Net Asset value

NRI                                  Non-Resident Indian.

PAN                                  Permanent Account Number

PAT                                  Profit After Tax

P/E Ratio                            Price earning ratio

PLR                                  Prime lending rate

RBI                                  Reserve Bank of India

ROC                                  Registrar of Companies, West Bengal, Nizam Palace, 2nd MSO Building,
                                     2nd Floor, 234/4, A.J.C.B. Road, Kolkata - 700020


                                                               iv
                                                   SECTION - II RISK FACTORS
1. CERTAIN CONVENTIONS; USE OF MARKET DATA
In this Prospectus, unless the context otherwise requires, all references to one gender also refers to another gender and the word
“Lakhs” or “Lac/ Lacs” means “one hundred thousand” and the word “Million” means “Ten lacs” and word “Crore/ Crores” means
“Ten Million”. In this Prospectus, any discrepancy in any table between total and the sum of the amounts listed are due to rounding
off.
Throughout this prospectus, all figures have been expressed in Lacs unless otherwise stated. All references to “India” contained
in this Prospectus are to the Republic of India.
For additional definitions used in this prospectus, see the section “Definitions and Abbreviations” on page ———- of this Prospectus.
In the sections entitled “Main Provisions of Articles of Association” on page —————- of this Prospectus, defined terms have
the meaning given to such terms in the Articles of Association of the Company. Industry data used throughout this prospectus has
been obtained from industry publications and other authenticated published data. Industry publications generally state that the
information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and
completeness are not guaranteed and their reliability cannot be assured. Although we believe industry data used in this prospectus
is reliable, it has not been independently verified. Similarly, internal company reports, while believed by us to be reliable, have
not been verified by any independent sources.
Currency of Presentation
In this prospectus, all references to “Rupees” and “Rs.” are to the legal currency of India.
2. FORWARD LOOKING STATEMENT
This Prospectus contains certain “forward-looking statements”. These forward looking statements can generally be identified by
words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will
continue”, “will pursue” or other words or phrases of similar import. Similarly, statements that describe the objectives, plans or goals
also are forward-looking statements.
All forward looking statements are subject to risks, uncertainties and assumptions about the company that could cause actual results
to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual
results to differ materially from the expectations include, among others:
•    General economic and business conditions in India;
•    The ability to successfully implement the strategy, growth and expansion plans and technological changes;
•    Changes in the value of the Rupee and other currency changes;
•    Changes in the Indian and international interest rates;
•    Allocations of funds by the Government;
•    Changes in laws and regulations that apply to the customers of the Company and the infrastructure and construction industry;
•    Increasing competition in and the conditions of the customers of the Company and the infrastructure and construction
     industry; and
•    Changes in political conditions in India.
For further discussion of factors that could cause actual results to differ, please see the section entitled “Risk Factors” beginning
on page ————- of this Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that
have been estimated. Neither the Company, the Directors, any member of the Lead Manager team nor any of their respective
affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof
or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with
SEBI requirements, the Company and the Lead Manager will ensure that investors in India are informed of material developments
until such time as the grant of listing and trading permission by the Stock Exchanges.
3. RISK FACTORS AND MANAGEMENT PERCEPTION
An investment in equity shares or equity related securities involves a high degree of risk. One should carefully consider all of the
information in this Prospectus, including the risks and uncertainties described below, before making an investment in the Equity
Shares or other securities of the Company. If any of the following risks actually occur, the business, financial condition and results
of operations could suffer, the trading price of the Equity Shares could decline, and you may lose all or part of your investment.
Unless specified or quantified in the relevant risk factors below, the financial or other implications of any of the risks described
in this section cannot be quantified:
A. SPECIFIC TO THE PROJECT
1.    The total cost of the project is Rs.12000 lacs. The project is not appraised by any Bank or Financial Institution. Further, the total
      project cost comprises of an amount of Rs.787 lacs towards working capital requirements, which is as per the estimates of


                                                                       v
     the Company and has not been appraised by any Bank. The funds received from the issue will be deployed at the sole discretion
     of the Management
     Management Perception
     The Management of the company has rich experience in carrying out such projects in past. It has experienced personnel to assess
     fund requirements for such project. The working capital requirement has been assessed taking into consideration various aspects
     like average production cycle, average number of days, debtors and creditors outstanding, requirement of finished goods.
2.   The present project is funded substantially from the proceeds of present Public Issue. Any delay in the public issue will adversely
     impact the performance of the Company.
     Management Perception
     The Company is optimistic about completing project timely due to its rich experience of the Industry.
3.   Status of the Government Approval & pollution clearance required
     The Company has obtained all the required government approvals and pollution clearance for its Baramati Unit. As regards to
     its Ahmedabad unit, the Company has applied for the consent from Gujarat Pollution Control Board, and the same is in process.
     As regards to its Garment unit, land is yet to be acquired. Therefore, the company will apply for the necessary approvals once
     the land is acquired.
4.   Placement of orders for Fixed Assets
     The Company is yet to appoint architect and contractors for construction of the Buildings for its Garment manufacturing unit and
     the Company is yet to place orders of machineries for Rs.8961 lacs (being 100% of the Plant & Machinery required for the project)
     towards the implementation of the utilization of the proceeds of this fresh Issue. The Company is also in the process of acquiring
     the land for its Garment unit.
     Management Perception
     The Company is in process of negotiations with architects and contractors for the construction of new building for Garment
     Unit. The Company has already received quotations from the Architects and Contractors. The Company has applied for acquiring
     land at the Apparel Park, being set up by Government in (Khokhra-Mehmedabad) Ahmedabad.
     The proposed park will have all the manufacturing facilities like effluent treatment plant, training centre for sewing section, power
     supply, water supply, etc.
     The Company has invited quotations from various machinery suppliers and estimated its total fund requirement for the project
     which it plans to fund from the proceeds of this Issue.
5.   Significant increase in the share capital of the company
     The company proposes to significantly raise its share capital after conversion of Unsecured Zero Interest Fully Convertible
     Debentures from Rs.1472.75 lacs to Rs. 4472.75 lacs. This will lead to a significant increase in the shareholding and servicing
     of enhanced equity.
     Management Perception
     The Company’s management is confident of servicing the expanded equity.
6.   Delay in Project Implementation
     The project implementation would take 1 ½ years to complete. Any delay in the implementation of the Project may adversely affect
     the productivity & profitability of the Company.
     Management Perception
     The management is of the opinion that though the project implementation is longer, it will start generating revenues from first year
     of implementation itself.
7.   Reduction or termination of policies instituted to promote textile sector.
     The Government of India has instituted several policies to promote the growth of Indian textile sector. These include interest rate
     subsidies, duty / tax reimbursement scheme like duty draw back/DEPB. Termination or variation in the terms of such policies can
     adversely impact the profitability of the textile companies in the Country.
     Management Perception
     Since the quantitative restrictions stands eliminated with the removal of quota. Countries like India will have to gear up to compete
     with countries like China. Therefore, it is perceived by the Management that the Government will not lift such benefits in a short
     period of time.
8.   Emergence of competition from other manufacturing countries having Free Trade Agreements (FTAs) and Preferential Trade
     Agreements (PTAs) with the major importing countries.
     Management Perception
     The Company’s marketing strategy is to concentrate on both Domestic as well as international market. Therefore, the Company
     does not foresee any difficulty in facing the global competition. The Company has experience of exporting its yarn in global market
     from its 100% EOU at Baramati.
9.   Acquisition of land for new Garment Unit
     The Company is yet to acquire the land of the new Garment Unit


                                                                    vi
      Management Perception
      No additional land is required either for expansion of its Denim Manufacturing capacity from 18 million meters to 28 million meters
      or to modernize its plant and machineries. Additional land is required only to set up garment unit. The cost of the land is estimated
      at Rs. 500 lacs which shall be paid out of the proceeds of the issue offered for subscription.
      The Company has already made an application and is in process to purchase the land in the apparel park established by the
      Government of India & Gujarat Industrial Development Corporation for the Garment Manufacturers, near Khokhra, Mahemdabad
      Road, Ahmedabad. The Company is planning to purchase 20000 squares yards for its Garmenting Unit.
10.   Diversification & Relevant Experience
      The company is new entrant in the Garment Industry and yet to establish it on quality & price parameters. Inability to meet the
      required quality standards and supply at competitive price would significantly affect the performance of the project.
      Management Perception
      The Company’s niche activity is in textile field. Though the Company, at present, is not engaged in the Garmenting, the Company
      is having rich experience in textiles. The Company’s new venture is vertical integration of existing activity. The Company has
      adequate knowledge and information about garmenting, and going forward in garment industry will not be difficult except in the
      initial stage.
B.    INTERNAL TO THE COMPANY
1.    PROMOTERS INTEREST IN SIMILAR VENTURES
      Mr. Surendra Kumar. Somany, promoter of the Company together with their relatives has interest in the following venture which
      is authorised by its main objects clause to carry on similar line of activities. This may result in conflict of business interest with
      the venture.
             Name of the Venture                       Nature of Interest
             Somany Evergreen Knits Ltd.               Director & Shareholding (40.18 %)
2.    MARKETING ARRANGEMENTS
      The Company has not made firm arrangements for the Marketing of garments.
      Management Perception
      The STIL has experience of about 36 years of manufacturing and marketing of various textile products. The Company has wide
      network of distributors and dealers all over India to sell its products. The Company has also been exporting its products to various
      countries like Korea, China, Middle-East, Pakistan, European Countries, etc. The Company will capitalize this well established domestic
      and export market for marketing its proposed products.
3.    MAJOR EXPANSION FOR THE FIRST TIME
      The Company is going for such a large expansion for the first time.
      Management Perception
      The Company is under the management of entrepreneurs who have adequate experience in the textile industry. The Company
      has experience of setting up a Greenfield project at Baramati, Maharashtra. The promoters of the Company are having rich
      experience of textile industry supported by professionals from various faculties. Thus the Management is confident to take
      up the project successfully.
4.    There is a contingent liability of Rs.4418.43 lacs as on 30th September, 2005, details of which are mentioned below:
                Contingent Liabilities not Provided for in respect of -
       (a)      Municipal Education Cess disputed by the Company                                                               76.54
       (b)      Sales Tax Payment disputed by the Company                                                                        0.11
       (c)      Excise Duty demand disputed by the Company                                                                    294.74
       (d)      Claims against the Company not Acknowledged as debts                                                           41.58
       (e)      Income Tax Matters                                                                                               6.14
       (f)      Electrical Inspection Division, Pune                                                                          144.91
       (g)      Bills discounted with bankers                                                                                711.10
       (h)      L/C outstanding in favour of suppliers                                                                       3143.31
      Management Perception
      The above contingent liabilities are in normal course of business, hence no provision is required.
5.    Competition from existing and new players could have an impact on the business prospects of the company.
      Management Perception
      The Company has over a period of time built up specialist skills, rich experience and reputation for supplying qualitative material
      as per delivery schedules. The Company has good exposure in the export market as well as domestic market and is confident
      to compete with existing as well as new players.
6.    DEPENDENCE ON KEY MANAGEMENT TEAM
      Any significant change in the key managerial personnel may affect the performance of the Company.


                                                                       vii
      Management Perception
      The Company has a professional set up and most of the key personnel have been with the organization for many years. The
      Company takes care of its key personnel by providing various facilities and amenities within and outside the Company’s premises.
      Hence no problems are envisaged in attracting fresh talent and retained the existing employees.
7.    MONITORINGAGENCY
      In the absence of any monitoring agency, the deployment of funds is entirely at the Company’s discretion.
      Management Perception
      The Company has established similar projects in the past. Such projects have been established without any cost or time overrun.
      The management of the company is of the opinion that the utilization of the proceeds would be strictly for the project and
      as per schedule of implementation.
8.    OUTSTANDING LITIGATIONS
      The Company and its Directors are defendants in a number of legal proceeding incidental to their business and operation.
      They are also subject to claims/litigations/non-compliance in relation to Sales tax, creditor dispute, labour dispute and other
      disputed demands. For further information regarding litigation, please refer to the section on “Outstanding litigation and material
      developments” on the page no.__
      Management Perception
      The litigations stated are of business nature.
9.    SHORTFALL IN PROMISE VS. PERFORMANCE OF THE ISSUER COMPANY
      In the Year 1993-94, the Company came up with Public Issue of 25,98,983 Zero Interest Secured Fully Convertible Debentures
      of Rs. 100/- each aggregating Rs. 2598.98 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily
      converted into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 18th January 1994 and Part
      – B: Fully Paid Up debentures of Rs.60/- of each debentures was compulsorily converted into 1 Equity Share of Rs.10/-
      each Fully Paid at a premium of Rs.50/- per share on 18th July, 1994. The actual performance achieved by the Company
      against the projections specified, is shown in the table below:
                                                                                                                                                                       (Rs in lacs)
                                            31.03.1994                          31.03.1995                                31.03.1996                           31.03.1997

                                Promise         Actual   Deviation    Promise      Actual          Deviation    Promise         Actual Deviation     Promise       Actual   Deviation
      Net Sales                  5,065.00    4,493.00    (572.00)    8,950.00   6,959.00       (1,991.00)      9,921.00   10,582.68      661.68     9,921.00 11,037.37       1,116.37
      Profit Before Tax           622.00      407.27     (214.73)     685.00     310.64            (374.36)    1,285.00     303.38      (981.62)    1,395.00      213.65    (1,181.35)
      NP after tax                622.00      407.27     (214.73)     685.00     310.64            (374.36)    1,042.00     303.38      (738.62)    1,070.00     213.65       (856.35)
      Cash Profit                 907.00      704.95     (202.05)    1,721.00    682.92        (1,038.08)      2,107.00      890.99    (1,216.01)   2,187.00      843.53    (1,343.47)
      Equity capital              631.00      630.39        (0.61)   1,009.00    985.30             (23.70)    1,127.00    1,106.69       (20.31)   1,127.00    1,106.75       (20.25)
      EPS                            9.86       6.46        (3.40)       6.79       3.15             (3.64)        9.25        2.74        (6.50)       9.49        1.93        (7.56)
      Book Value Rs.               44.90       35.28        (9.62)     53.40      44.97              (8.43)       59.50       45.42       (14.08)      69.10      44.65      (24.45)

10.   DAMAGE TO PROPERTY
      Mishaps or accidents at the Company’s facilities could lead to property damage, property loss and accident claims.
      Management Perception
      The Company’s fixed assets and various properties are insured against various risks viz. Fire, Strike, Malicious damages etc.
      with the insurance companies. Thus the Company does not foresee any major impact on income and profitability arising out of
      property damage and accidents. However, uncovered risks may impact operations and profitability of the Company.
11.   EXTRACT OF QUALIFICATION IN FINANCIAL STATEMENTS OF THE COMPANY
      (a) On the Accounts of the Financial year ended 31st March, 2001,
          Para 2(e)
              i)          The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2001 as per actuary
                          valuation was Rs.186.56 lacs.
              ii)         The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
                          aggregating to Rs.29.64 lacs.
      (b) On the Accounts of the Financial year ended 31st March, 2002,
          Para 2(e)
              i)          The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2002 as per actuary
                          valuation was Rs.212.09 lacs.
              ii)         The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
                          aggregating to Rs.28.62 lacs.

                                                                                            viii
      (c) On the Accounts of the Financial year ended 31st March, 2003,
          Para 2(e)
          i)    The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2003 as per actuary
                valuation was Rs.248.22 lacs.
          ii)   The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
                aggregating to Rs.31.20 lacs.
      Management Perception
      The Company had not provided for the Gratuity and Leave Encashment Liability due to losses and insufficient net profit during
      the above financial years. The Company had started providing for gratuity and leave encashment liability from the Financial Year
      ended 31st March, 2004.
12.   TIE UP FOR ADDITIONAL WORKING CAPITAL
      The Company is yet to tie up for its additional working capital requirement for the proposed project.
      Management Perception
      The Company plans to meet its additional working capital requirement from its internal accruals.
13.   LOSSES INCURRED BY THE COMPANY OR GROUP/ ASSOCIATE COMPANIES
      STIL has incurred the losses of Rs.502.61 lacs & Rs.608.09 lacs during the period ended 31st March, 2001 and 31st March, 2002
      respectively.
      The following group / associate companies made losses during the respective years:
      Simplex Trading & Agencies Ltd has incurred the losses of Rs.18.70 lacs, & Rs.25.01 lacs during the period ended 31st March,
      2002, and 31st March, 2004 respectively.
      Somany Evergreen Knits Ltd has incurred the losses of Rs.302.67 lacs, Rs.208.17 lacs, Rs.213.81 lacs, Rs.155.83 lacs & Rs.10.09
      lacs during the year ended 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004 and 31st March, 2005 respectively.
      Krishna Glass Private Ltd has incurred the losses of Rs.73.78 lacs and Rs.25.33 lacs during the year ended 31st March, 2001
      and 31st March, 2003 respectively.
      Sarvopari Investment Private Ltd has incurred the losses of Rs.7.37 lacs, & Rs.17.51 lacs during the period ended 31st March,
      2003, and 31st March, 2004 respectively.
      Management Perception:
      The Company suffered losses for the Financial Year ended 31st March, 2001 and 31st March, 2002. The losses were mainly
      on account of various external factors like depressed market conditions, poor economic growth and sluggish world economy.
      More so during that period of time, the Indian Textile Industry in general faced recessionary trend and the Company was not
      exception to this. However, the company is generating profits since last three years and it is expected to improve further in
      the years to come. In addition, the losses of group Companies shall not affect the performance of the Issuer.
14.   LOW PROMOTER HOLDING
      The Promoters holding post issue and post conversion will be 27.41%.
C.    EXTERNAL RISK FACTORS
1.    Price of the major raw materials for the Company i.e. Cotton and Cotton Yarn is susceptible to volatility and forms major portion
      of the total cost. Cotton is a natural product, vulnerable to monsoon season across the globe. Therefore, the price of cotton
      and cotton yarn varies depending upon the monsoon season, availability of required quality of cotton, etc.
      Management Perception
      The Company believes that volatility impacts all the manufacturers in the textile industry and any adverse change in the purchase
      price would lead to a near corresponding adjustment in the selling price as well. However the Company acknowledges that
      it is exposed to and will have to absorb any fluctuations in the prices of raw materials partially.
2.    CHANGE IN THE DUTY STRUCTURE
      Increase of Excise Duty on Yarn, Manmade fibres and other raw materials. Inception of Excise Duty on Raw Cotton.
      Management Perception
      At present there is no duty raw cotton. Further, in the WTO Regime, there may not be any further increase in Excise Duty on
      Yarn, Manmade Fibres and other raw materials. At present the government has given option to the textile industry to either opt
      for paying the duty with Cenvat Credit or Nil duty route without Cenvat Credit. Thus the excise duty burden on the industry is
      getting reduced.
3.    AVAILABILITY OF DUTY DRAWBACK FOR EXPORT
      Availability of duty drawback for export.
      Management Perception
      Since STIL shall be availing benefit of CENVAT; the Company will not be entitled to any benefit of duty drawback. As regards
      DEPB benefits it may be noted that the said benefit of DEPB is available against Custom duties so that raw materials purchased


                                                                    ix
      from indigenous sources can be brought at par with International rates. Incase DEPB benefit is withdrawn, STIL shall have an
      option of Custom Duty as well as Excise Duty free import of Raw Material.
4.    PROBABILITY OF SETTING UP TEXTILE UNITS BY MULTINATIONALS
      Opening of Textile Production center by multinationals in India /Pakistan.
      Management Perception
      While it is understood that multinationals have advantages like economies of scale etc. the Company is prepared to face such
      challenges as it proposes to increase production and maintain quality on a continuous basis so that it can compete with any
      multinational Company.
5.    ANTIDUMPING DUTY BY IMPORTING COUNTRIES
      Antidumping duty by USA, UK and other importing countries.
      Management Perception
      The company focuses on domestic as well as global market. Therefore, the company’s sales would be balanced and will not
      dependent upon any particular country or market. The management is confident to take up such challenges of the market as
      it is capable of supplying quality products.
6.    IMPACT OF WTO
      Management Perception
      The elimination of quota restriction will open the way for the most competitive developing countries to develop stronger clusters
      of textile expertise, enabling them to handle all stages of the production chain from growing natural fibres to producing finished
      clothing. The STIL will benefit in terms of export of its Denim fabric and Garments.
7.    COMPETITION FROM EXISTING ESTABLISHED PLAYERS
      Soma Textiles will be competing with established players like Arvind Mills Ltd, Ashima Ltd and Bombay Dyeing & Manufacturing
      Company Ltd.
      Management Perception
      The STIL has experience of about 36 years of manufacturing and trading of various textile products. The Company has strong
      network of Dealers and distributors throughout India, The Company has also been exporting its products to various countries
      like Korea, China, Italy, Pakistan, Germany and other countries. The Company will capitalize this well established export market
      for marketing its proposed products.
      It is expected that domestic as well as global demand for the fabric will increase in manifold. With the phasing out of quota system,
      the Company will be in position to explore exporting of Denim Fabric and Garments. Since the Company is expanding its present
      capacity of Denim production, the Company will be in better position to compete with its established players in the market.
8.    OVERSEAS MARKET
      Overseas market is highly competitive.
      Management Perception:
      Indian manufacturers including STIL have advantages over overseas players on account of their lower operating cost and abundant
      availability of raw cotton across the country.
9.    CHANGE IN FASHION TRENDS
      Fashion trend in overseas market changes very fast.
      Management Perception
      Denim is mainly used for the manufacture of jeans. Jeans has been popular for more than three decades and is growing every
      year. To keep pace with the fast changing global styles, the Company has a strong team of marketing personnel, with constant
      watch on the market & fashion trends movement. The experience and proximity to the market will help the Company in manufacturing
      the fabrics of latest trend.
10.   MINIMIZING PRODUCTION COSTS IS CRITICAL
      The player with lower production costs would be in a position to utilize capacities optimally.
      Management Perception
      STIL enjoys cost advantages which will enable it to withstand competition.
11.   FOREIGNEXCHANGEFLUCTUATION
      Export realization is subject to exchange rate fluctuation.
      Management Perception
      The Company has over the years developed its risk management systems in the currency markets.
12.   FINANCIAL STATEMENTS IN THE OFFER DOCUMENT
      Management Perception
      The financial statements and derived ratios there-from contained in the Offer Document are prepared as per the permissible
      accounting practices. The investors may want to make their own adjustments to the same before arriving at an investment decision
      in the Offer.


                                                                     x
13.   CHANGE IN GOVERNMENT POLICIES
      Changes in Government policies on import duties, export concessions. Changes in tax laws etc may have an adverse impact
      on the profitability of the Company.
      Management Perception
      Policies of Government of India pertaining to exports have been favourable in the past and it is expected that the policies will
      continue to be beneficial to the export sector. As regards possible changes in the other policies, the Company is confident of
      countering the changes with suitable changes in the price margins and marketing strategies.
14.   DEPENDENCE ON LABOUR
      The Company is in labour intensive industry. Labour Strikes, lockouts etc can significantly reduce its productivity.
      Management Perception
      Historically, the STIL has never faced any labour problem. The Company maintains harmonious relationship with its workers.
15.   RISK ARISING OUT OF VOLATILITY OF CAPITAL MARKETS
      The prices of the Equity Shares on the Stock Exchanges may fluctuate as a result of several factors including:
      -   Volatility in the Indian and global securities market,
      -   Company’s results of operations and performance
      -   Performance of the Indian Economy
      -   Significant developments in India’s fiscal and environmental regulations
NOTES:
1.    Networth of the company as on March 31, 2005 is Rs.4962.41 lacs.
2.    Present Public is of Issue 1,00,00,000 Unsecured Zero Interest Fully Convertible Debenture of Rs.105/- each for cash aggregating
      Rs.10500 lacs convertible into 3 equity shares of Rs. 10/- each at premium of Rs.25/- each.
3.    Book Value of the equity shares of the company as on March 31, 2005 is Rs.34.15 per share.
4.    STIL is an existing listed company with an existence of over six decades and experienced management team.
5.    The company, its directors, company’s associates or group companies have not been prohibited from accessing the capital market
      under any order or direction passed by SEBI. The promoters, their relatives, issuer, group companies, associate companies are
      not detained as willful defaulters by RBI/Government authorities and there is no violation of securities laws committed in the past
      or pending against them, except against one group concern M/s Simplex Trading & Agencies Ltd, for violations of regulations
      6 and 8 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 regarding non filing of shareholding details
      and changes thereof.
6.    For related party transactions, please refer to the section entitled “Related Party Transactions” beginning on page —————
      - of this Prospectus,
7.    Investors are advised to refer to the paragraph entitled “Basis for Issue Price” beginning on page no. ————- of this prospectus
      before making an investment in this issue.
8.    Investor may note that in case of over subscription, the allotment shall be on proportionate basis and for details; reference may
      be made to para “Basis of Allotment” on page ——- of the Prospectus.
9.    Investor may note that trading in the FCD/Equity Shares of the company shall be done only in dematerialised form.
10.   There is a contingent liability of Rs. 4418.43 as on 30th September 2005.
11.   There are no relationships with the Statutory Auditors to the company other than auditing and certification of financial statement.
12.   Company has not declared any dividend during the last Five years.
13.   The average cost of acquisition of Equity Shares to the Promoter is as under:
      Name of the Promoter                                   Cost of acquisition of Equity Share

      Surendra Kumar Somany                                  Rs.5.71
      Arvind Somany                                          Rs.9.15
      Sarvopari Investment Pvt. Ltd.                         Rs.16.27
14.   The lead manager and the Company shall update this Prospectus and keep the shareholders/public informed of any material
      changes till the listing and trading commencement.




                                                                    xi
Pre-issue Networth                           Rs. 4962.41 lacs
(as on 31/03/2005)

Post Issue Networth after conversion         Rs.15462.41 lacs

Issue Size                                   Public Issue of 1,00,00,000 Unsecured Zero Interest Fully Convertible
                                             Debenture (FCD) of Rs. 105/- each for cash at par aggregating to
                                             Rs.10,500 lacs

Face Value                                   Rs.105/- per FCD

Issue Price                                  Rs.105/- per FCD i.e. one time of the face value of the FCD.

Conversion Terms                             Each FCD will be converted into 3 Equity Shares of Face value
                                             Rs.10/- each at a premium of Rs.25/- per share i.e. conversion price
                                             is 3.5 times the face value of the Equity Share.

Net Asset Value per share as on 31/03/2005   Rs.34.15
(Face Value Rs. 10/-per share)




                                                   xii
                                             SECTION III: INTRODUCTION
INTRODUCTION
1.     SUMMARY
       You should read the following summary with the risk factors from page no. v and the detailed information about the company
       and its financial statements included in this Prospectus.
       INDUSTRY SCENARIO AND COMPANY’S BUSINESS
       Industry Scenario
       The textile industry in India (including the garment sector) is vital to the economy of the country. It contributes to over 6 per
       cent of the gross domestic product of India and earns 18 per cent of the total foreign exchange earnings of the country. The
       country has the largest acreage under cotton in the world but is almost totally dependent on monsoon, yielding a poor 308
       Kilograms / hectare. The country has a well – developed textile industry of cotton as well as synthetic fibers/yarn supported
       by silk, wool and jute.
       The organized mill sector of the textile industry (excluding garments) which is over a century old is currently a decimated
       lot with the bulk of the production of fabrics having been taken over by the power loom sector which purchases yarn from
       spinners. Each unit of the organized cotton mill sector consists of departments ranging from the opening and mixing of cotton,
       upto spinning of yarn which is subsequently reeled into larger packages preparatory to the weaving of grey fabric for further
       processing in its processing section for final finishing.
       The garment industry in India is $23 billion industry (the current rate of exchange of Rs.44 = 1 $) Like its textile counterpart,
       this industry also comprises the organized and unorganized sector. The organized sector is, by and large, update with modern
       technology, has economies of scale, is cost-competitive and in a position to execute orders on time.
       Source: www.expresstextile.com
       Promotional Measures
       In order to encourage upgradation of textiles sector and to give a fillip to exports of textile products, some of the important
       initiatives taken are as follows:
i)     Announcement of New Textile Policy: - One of the main objectives of the New Textile Policy (NTxP-2000) announced in
       November 2000 is to facilitate the textile industry to attain and sustain a pre-eminent global standing in the manufacture and
       export of clothing. The policy endeavors to achieve the target of textile and apparel exports from the present level to US $
       50 billion by 2010, of which the share of garments will be US $ 25 billion. Subsequent to the announcement of NTxP- 2000,
       woven segment of readymade garment sector has been de-reserved from SSI and the announcement has been made for
       de-reservation of knitwear from SSI.
       The Schemes applicable last year, such as follows, continued during the year for promotion of exports:
ii)    Technology Up-gradation Fund Scheme:- In view of the urgent need for stepping up the process of modernisation and
       technology upgradation of the textile industry in India, Ministry of Textiles launched a Technology Upgradation Fund Scheme
       (TUFS) for the textile and jute industry for a five years time frame w.e.f. 01.04.1999 to 31.3.2004, providing for 5% interest
       reimbursement in respect of loans availed thereunder from the concerned financial institutions for investments in benchmarked
       technology for the sectors of the Indian textile industries specified thereunder. An amount of Rs. 7148.89 Crore involving 2634
       applications has been sanctioned upto 29th February, 2004. Out of which, an amount of Rs.5129.81 Crore stands disbursed
       to 2227 applicants.
iii)   Liberalization of FDI Policy: Government has allowed foreign equity participation upto 100%, through automatic route, in
       the textile sector with the only exception in knitwear/knitting sector which is still reserved for SSI. SSI investment limit for
       the knitwear/knitting sector has been increased from Rs.1 Crore to Rs. 5 Crore w.e.f. 9th October, 2001.
(iv) Export Promotion Capital Goods (EPCG) Scheme: The scheme facilitates import of capital goods at 5% concessional rate
     of duty with appropriate export obligation. Import of second hand capital goods is allowed under the EXIM Policy as announced
     on 31.03.2003.
(v)    Advance Licensing Scheme: With a view to facilitating exports and to access duty-free inputs under the scheme, standard
       input-output norms for about 300 textiles and clothing export products have been prescribed and this scheme remained under
       operation.
(vi) Duty Exemption Pass Book (DEPB) Scheme: DEPB credit rates have been prescribed for 82 textiles and clothing products.
     The nomenclature and rates for DEPB entries pertaining to certain textile products have been rationalized.
(vii) Duty Drawback Scheme: The exporters are allowed refund of the excise and import duty suffered on raw materials under
      the scheme so as to make the products more competitive in the international market. Changes in All Industry Drawback Rates
      for year 2003-04 were last revised on 29.01.2004, which came into effect from 09.02.2004. These changes were effected
      consequent on reduction in Basic customs duty from 25% to 20% and abolition of SAD(Special Additional Duty).
(viii) Construction of Apparel International Mart: Apparel Export Promotion Council is constructing an Apparel International Mart
       at Gurgaon with assistance from Government. For this purpose a grant of Rs. 15 Crore was released during the year 2001-
       02 and of Rs. 30 Crore has been released during the year 2003-04. The total area of the plot is 5 acres and it is proposed
       to build an Apparel International Mart (AIM) Complex and 250-300 showrooms also which will be allotted to the exporters.
       This will provide a world class facility to the apparel exporters to showcase their products and will serve as one stop shop
       for reputed international buyers. The work for construction of apparel mart is in progress. The apparel international mart is
       expected to start functioning from November/December.


                                                                    1
(ix) Setting up of modern laboratories: The Ministry of Textiles has assisted the Textile Committee in setting up of modern textile
     laboratories to ensure that the textiles exported from the country meet all international environmental standards.
(x)    Apparel Park for Exports Scheme: A centrally sponsored scheme titled “Apparel Parks for Exports Scheme” has been launched.
       The scheme is intended to impart focused thrust to setting up of apparel manufacturing units of international standards at potential
       growth centers and to give fillip to exports. Since the inception of scheme in March 2002, eleven Project Proposals has been
       sanctioned for setting up Apparel Parks at Tronica City & Kanpur (U.P.), Surat (Gujarat), Thiruvananthapuram (Kerala), Visakhapatnam
       (Andhra Pradesh), Ludhiana (Punjab), Bangalore (Karnataka), Tirupur & Kanchipuram (Tamil Nadu), SEZ, Indore (Madhya Pradesh)
       and Mahal (Jaipur, Rajasthan).
       Source : www.indianbusiness.nic.in
Business of the Company
The principal activity of Soma Textiles & Industries Ltd. (STIL) is manufacturing and sales of Spinned Cotton Yarn, Polyester Yarn,
Denim (Indigo Dyed), Cotton Shirting and Ready-for-Dyeing Shirt Materials, Bottom Weights, etc.
The company plans to increase its Denim manufacturing capacity from present 8 million metres per annum to 28 million metres per
annum. The company also wishes to venture into garment industry considering upcoming demand from European and American countries.
Major events of the Company
The Company was originally started as a partnership firm under the name and style of M/s. R B Rodda & Co., in 1930 and it was
incorporated as Limited Company as R B Rodda & Co. Ltd. on 29th March, 1940 at Kolkata. Five years later, the management of the
Company was taken over by Somany brothers. Initially the Company was engaged in trading activities. In 1969, the Company purchased
New Commercial Mills Co. Limited at Ahmedabad which was under liquidation, named this unit as “Soma textiles”. The name of the
Company was changed to Soma Textiles & Industries Limited” on 21st January, 1992.
•      In the Year 1987 the Company started producing Denim fabric.
•      The Company started its 100% Export Oriented Unit at Baramati, Dist, Pune, Maharashtra in the Financial Year 1993-94 for which
       the Company came up with the Public offer, detailed hereunder:
       In the Year 1993-94, the Company came up with Right Issue of 5,89,432 Zero Interest Secured Fully Convertible Debentures
       of Rs.85/- each and Preferential Issue of 5,88,235 Zero Interest Secured Fully Convertible Debentures of Rs.85/- each aggregating
       Rs.1001.02 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily and automatically converted
       into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 1st April, 1994 and Part – B: Fully Paid Up
       debentures of Rs.45/- of each debentures was compulsorily and automatically converted into 1 Equity Share of Rs.10/- each
       Fully Paid at a premium of Rs.35/- per share on 1st April, 1995.
       In the Year 1993-94 the Company came up with Public Issue of 25,98,983 Zero Interest Secured Fully Convertible Debentures
       of Rs. 100/- each aggregating Rs. 2598.98 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily
       converted into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 18th January 1994 and Part –
       B: Fully Paid Up debentures of Rs.60/- of each debentures was compulsorily converted into 1 Equity Share of Rs.10/- each Fully
       Paid at a premium of Rs.50/- per share on 18th July, 1994.

•      During the Year 2002-03, in terms of the restructuring of the outstanding loans and overdue, the Company has allotted 3,22,000
       and 3,52,000 - 15% Optionally Fully Convertible Debentures of Rs.100 each at par to ICICI Ltd. and IDBI respectively on 7th August,
       2002 by converting the portion of the Company’s overdue liabilities.
•      During the year 2003-04, the Company has issued and allotted 36,60,000 equity Shares of Rs.10/- each at par, aggregating to
       Rs.366 lacs to the Financial Institutions in lieu of option exercised by them to convert a portion of their holding of 15% Optionally
       Fully Convertible Debentures (OFCDs) of Rs.100/- each. Further, the balance OFCDs of Rs.100/- each held by them after conversion
       in Equity Shares, were converted into 3,08,000 - 15% Secured Redeemable Non - Convertible Debentures of Rs.100/- each, which
       shall be redeemed by the Company in six equal half yearly installments, commencing from August 7, 2007.
•      The Company has continuously focused on application of state of the art technology, accordingly it has replaced almost all traditional
       looms to high speed looms
•      During the Financial Year 2004-05, the Company planned modernization cum expansion plan to increase its denim manufacturing
       capacity from existing 8 million meters per annum to 18 million meters per annum, replacement of its existing process machineries
       and replacement of spinning machineries at Baramati at a cost of Rs. 8700.00 lacs. The Project is under implementation and will
       start commercial production from February, 2006.
•      Soma Textiles is now plans an expansion strategy to increase its Denim Manufacturing capacity from 18 million meters to 28
       million meters, modernize its plant and machineries and to set up garment unit at a cost of Rs.12000 Lacs.
OFFERING DETAILS
THEISSUE
    Type of Issue        Type of Instrument                     No. of FCDs           Face              Issue               Consideration
                                                                                      Value (Rs.)       Price (Rs.)
    Public Issue         Unsecured Zero Interest                1,00,00,000           105/-             105/-               Cash
                         Fully Convertible Debentures



                                                                      2
ISSUE BREAK-UP
 FCDs offered                                       1,00,00,000 FCDs of Rs.105/- each for cash at par
 Out of which Promoters participation in the        20,00,000 FCDs of Rs.105/- each for cash at par
 Issue to the extent of
 Net Offer to the public                            80,00,000 FCDs of Rs.105/- each for cash at par
 Face Value of FCD                                  Each FCD will have face value of Rs.105/- and consist of two parts:
                                                    Part A: Convertible Portion of Rs.35/- each
                                                    Part B: Convertible Portion of Rs.70/- each
 Issue Price of FCD                                 Rs.105/- per FCD
 Terms of payment
 On Application                                     Rs.40/- per FCD
 On Allotment                                       Rs.65/- per FCD
 Interest on FCDs                                   No Interest will be payable to the debenture holders.
 Conversion Terms                                   Part A of FCD will be converted into 1 Equity Share of Rs.10/- each fully
                                                    paid up at a premium of Rs.25/-, on Allotment of Debentures.
                                                    Part B of FCD will be converted into 2 Equity Share of Rs.10/- each fully
                                                    paid up at a premium of Rs.25/-, within a period of 6 months from the
                                                    date of allotment of debentures but not earlier than 3 months from the
                                                    date of allotment.
 Conversion Price                                   Rs.35/- per share (Face value Rs.10/- on premium of Rs.25/- per share) i.e.
                                                    Conversion price will be 3.5 times of the face value of the Equity Share.
 Credit Ratings                                     Fitch Rating India Pvt. Ltd has assigned “BBB(ind)” and CARE Ltd has assigned
                                                    “CARE BBB” to the Proposed Issue. Both the ratings are of investment grade.
 Equity shares outstanding prior to the Issue       1,45,33,000 Equity Shares
 Equity shares outstanding after the issue          1,45,33,000 Equity Shares
 but before conversion
 Equity shares outstanding after the issue          4,45,33,000 Equity Shares
 and after the conversion
 Use of Issue proceeds                              To set up additional denim manufacturing capacity of 10 million meters per annum
                                                    and upgrade weaving facility in its existing factory premises at Ahmedabad, to
                                                    modernize its existing spinning facility at its Ahmedabad and Baramati Unit and
                                                    set up garment unit in new premises. Further the proceeds will be used to
                                                    meet working capital requirements & to meet issue expenses.
FINANCIAL HIGHLIGHTS
Statement of Profit and Loss Account as restated
                                                                                                                        (Rs. In Lacs)

Particular                           For the six                                        For the year ended on
                                   months ended on
                                         30-Sep-05            31-Mar-05      31-Mar-04      31-Mar-03       31-Mar-02   31-Mar-01
Income
a. Sales                                       8,424.12        17,236.64        16,213.42   14,898.65       12,582.60   12,355.49
b. Less: Excise Duty                              32.06           532.02         1,082.02    1,011.24          889.30      828.00
c. Net Sales (a)- (b)                          8,392.06        16,704.62        15,131.40   13,887.41       11,693.30   11,527.49
Other Income                                      73.69           311.37           149.61      141.44          221.58      420.04
Increase/(Decrease) in Stocks                    489.18         (769.78)           330.49    (333.98)          310.55      212.25
Total                                          8,954.93        16,246.21        15,611.50   13,694.87       12,225.43   12,159.78
Expenditure
Raw Materials Consumed                         4,508.11         9,094.39         8,359.68    6,844.42        6,545.71     6,289.42
Staff Costs                                      529.14         1,012.67         1,002.98      904.16          870.26       908.12
Manufacturing Expenses                         2,090.04         3,343.78         3,243.87    3,229.82        3,213.88     3,105.08
Administration Expenses                          276.24           357.65           366.40      324.79          287.38       320.20
Selling and Distribution Expenses                123.46           238.14           265.08      285.19          280.70       261.29
Finance Charges & Exchange Fluctuation           377.70           400.45           567.17      774.56          955.27     1,095.48
Depreciation/amortisation                        510.14           788.24           701.04      639.07          650.17       658.65
Misc. Exp. Written Off                            24.76            42.37            27.62       33.00           30.15        24.15
Total                                          8,439.59        15,277.69        14,533.84   13,035.01       12,833.52   12,662.39


                                                                  3
Profit before Exceptional Items                  515.34      968.52       1,077.66       659.86      (608.09)       (502.61)
Add/(Less) : Exceptional Items ( Net )                              -      240.82        462.71              -             -
Profit before tax                                515.34      968.52        836.84        197.15      (608.09)       (502.61)
Less : Provision for Tax
Current Tax                                                    65.00        30.00              -             -             -
Deferred Tax Liability / (Assets)                             23.16        (30.45)             -             -             -
Profit after tax                                 515.34      880.36        837.29        197.15      (608.09)       (502.61)
Income Tax relating to earlier year Cr/(Dr)
Net Profit                                       515.34      880.36        837.29        197.15      (608.09)       (502.61)

Statement of Assets and Liabilities as restated
                                                                                                                  (Rs. In Lacs)

Particulars                            For the six                                   For the year ended on
                                     months ended on
                                              30-Sep-05      31-Mar-05     31-Mar-04    31-Mar-03     31-Mar-02   31-Mar-01
1 Fixed Assets
   Gross Block                                16,828.71    16,123.02     15,174.62     14,726.23    14,152.59     13,933.20
   Less: Depreciation                          8,899.05     8,522.28      8,389.85     7,811.09     6,808.28        6,311.12
   Net Block                                   7,929.66     7,600.74      6,784.77     6,915.14     7,344.31        7,622.08
   Capital Work in Progress                      454.99       10.02        336.32         11.94        27.26           38.57
   Total Net Block                             8,384.65     7,610.76      7,121.09     6,927.08     7,371.57        7,660.65
2 Investments (Non Trade)                          0.21         0.21          0.05         0.96         0.96            0.96
3 Current Assets, Loans and Advances
   Inventories                                  3,211.36    4,334.51      5,425.56     3,378.55     2,761.44        2,916.38
   Sundry Debtors                              1,024.05      981.51       1,102.26     1,073.88     1,163.58        1,293.71
   Cash and Bank Balances                        890.49      433.45        684.56         99.14        54.64          116.55
   Loans and Advances                            819.87      768.12        442.78        333.23       408.82          545.05
   Total                                       5,945.77     6,517.59      7,655.16     4,884.80     4,388.48        4,871.69
4 Total Assets (1)+(2)+(3)                    14,330.63    14,128.56     14,776.30     11,812.84    11,761.01     12,533.30
5 Less: Liabilities and Provisions
   Secured Loans                               6,284.27     6,575.71      5,981.18     6,698.88     6,586.06        6,189.83
   Unsecured Loans                               809.79      738.34        590.90        420.03       580.21          472.61
   Liabilities                                   974.13     1,025.61      3,306.70     1,246.49     1,366.38        2,002.48
   Provisions                                    380.68      366.57        315.37          5.75         6.15            8.24
   Total                                       8,448.87     8,706.23     10,194.15     8,371.15     8,538.80        8,673.16
6 Net Worth before Deferred Tax
   Liability (4) - (5)                         5,881.76     5,422.33      4,582.15     3,441.69     3,222.21        3,860.14
7 Deferred Tax Liability                         459.92      459.92        436.76              -             -             -
8 Adjusted Net Worth (6)-(7)                   5,421.84     4,962.41      4,145.39     3,441.69     3,222.21        3,860.14
   Net Worth represented by:
a. Share Capital                               1,472.75     1,472.75      1,472.75     1,106.75     1,106.75        1,106.75
b. Reserves and Surplus                        4,170.06     3,654.72      2,774.36     2,404.28     2,207.13        2,815.21
   Less: Miscellaneous Expenses                  220.97      165.06        101.72         69.34        91.67           61.82
   (to the extent not written
   off or adjusted)
Adjusted Net Worth                             5,421.84     4,962.41      4,145.39     3,441.69     3,222.21        3,860.14



                                                                4
2. GENERAL INFORMATION
                                   SOMA TEXTILES & INDUSTRIES LIMITED
  (originally incorporated as R.B. Rodda & Co. Ltd on 29th March, 1940 as Limited Company with Registrar of Joint
     Stock Companies, Bengal & got Fresh Certificate of Incorporation consequent on change of name to Soma
                  Textiles & Industries Limited on 21st January, 1992 under the Companies Act, 1956)
                                                     Registered Office:
                                            2, Red Cross Place, Kolkata – 700 001
                           Phone: 033–22487406-07 Fax: 033–22487045 Email: rssharma@somanyent.com
                                               Web site: www.somatextiles.com
                                    Contact Person: Mr. R.S. Sharma, Compliance Officer
                                              Company Registration No. 21-10070
                                  Address of Registrar of Companies where company is registered
                                            “Registrar of Companies” West Bengal
                                                 Nizam Palace, 2nd MSO Building,
                                                  2nd Floor, 234/4, A.J.C.B. Road
                                                          Kolkata - 700020
The Company was originally started as a partnership firm under the name and style of M/s. R B Rodda & Co., in 1930 and it was
incorporated as Limited Company on 29th March, 1940 at Registrar of Companies of Joint Stock Companies, Bengal with Registration
No. 9231 of 1939-1940, Five years later, the management of the Company was taken over by Somany Brothers. Initially the Company
was engaged in trading activities. In 1969, the Company purchased New Commercial Mills Co. Limited at Ahmedabad which was under
liquidation, named this unit as “Soma textiles”. The name of the Company was changed to Soma Textiles & Industries Limited” on 21st
January, 1992, consequently the Registration Number was changed to 21-10070.
The Registered Office of the Company is located at 2, Red Cross Place, Kolkata – 700 001, West Bengal and the works are located
at ;
Unit No.1                                                                       Unit No.2
Soma Textiles & Industries Ltd.                                                 Soma Textiles & Industries Ltd.
Rakhial Road                                                                    D-49,MIDC, Baramati–413133
Ahmedabad – 380 023, Gujarat                                                    Dist. Pune, Maharashtra
The corporate office of the Company is located at ;
6, Vaswani Mansions
Dinshaw Wachha Road
Backbay Reclamation
Mumbai – 400 023
Board of Directors of the Company
Name of the Director                                 Designation                          Status
Shri Surendra Kumar Somany                           Chairman                             Non Executive Director
Shri Arvind Kumar Somany                             Managing Director                    Whole-time Director
Shri P. Bandyopadhyay                                Executive Director                   Whole-time Director
Shri Ashok C Gandhi                                  Director                             Independent & Non Executive Director
Shri Prafull Anubhai                                 Director                             Independent & Non Executive Director
Shri M S Shekar                                      ICICI Nominee                        Independent & Non Executive Director
Brief details of Chairman, Managing Director and Whole Time Directors:
Shri Surendra Kumar Somany, Chairman, has more than five decades experience in administration and management. The Company
owes its growth to Shri Surendra Kumar Somany for his valuable guidance. His foresightedness, experience and business acumen
are far reaching aspects for the progress of the Company. Shri Somany is well versed and technically well experienced in Textile Industry.
He is connected with Bombay Mill Owners’ Association, Ahmedabad Textile Mill Owners’ Association and Bombay Textile Research
Association and has been working on various Technical Sub-Committees formed by those Institutions. He is very much interested in
technical education and Research Projects undertaken by those Institutions.
Shri Arvind Somany, Managing Director, is a Science Graduate who looks after the affairs of the Company. The dint of his foresight,
planning and hard work remains the inspiration behind the consistent growth of the Company. He was the Chairman of Ahmedabad
Mill Owners’ Association for 2003-2004 and has been a member of The Indian Cotton Mills’ Federation and several other committees
constituted by governmental bodies. He combines comprehensive mix of academic qualifications and professional experience. Having
traveled widely around the world, he has a good understanding of global business issues.
Shri P. Bandyopadhyay looks after the day-to-day operations of the Ahmedabad unit, is having experience in Textile Industry of 25
years. He is post graduate in Textile Engineering and Industrial Management. He is also a fellow member of Institute of Valuers. He
has experience of setting up three Greenfield Textile Projects viz. Denim plant at Soma Textiles & Ind. Ltd, Spinning unit at Baramati,
second unit of Soma Textiles & Ind. Ltd. & Garment unit of Sunanda Ind. Ltd. (Mafatlal Group).



                                                                     5
Company Secretary                                                      Legal Advisor
Shri R S Sharma                                                        C.C. Gandhi & Co,
Soma Textiles & Industries Ltd.                                        Advocates
2, Red Cross Place                                                     9th Floor, Sumeru Centre,
Kolkata – 700 001                                                      Nr. Suvidha Shopping Centre, Paldi, Ahmedabad - 380007
Tel No. – +91 33 22487406-07                                           Phone +91 79 26602082/84, 26640410
Fax No. – +91 33 22487045                                              Fax: +91 79 26620810, 26634439
e-mail : rssharma@somanyent.com                                        e-mail: ccgandhi@indiatimes.com
                                                    Bankers to the Company

Dena Bank                                                              State Bank of India
Ashram Road Branch                                                     Commercial Branch
Denalaxmi Building                                                     Paramsiddhi Complex
Ashram Road                                                            Ellisbridge
Ahmedabad – 380 009                                                    Ahmedabad – 380 006
Telefax : + 91 79 26580624                                             Phone : +91 79 26585623
E-mail : ashram@denabank.co.in                                         Fax : +91 79 26580803

Compliance Officer                                                     Auditors to the Company
Shri R S Sharma                                                        Pipara & Company
Soma Textiles & Industries Ltd.                                        Chartered Accountants
2, Red Cross Place                                                     104,N R House Nr.Popular House
Kolkata – 700 001                                                      Ashram Road Ahmedabad – 380 009
Tel No. – +91 33 22487406-07                                           Phone : 091 79 27541199, 27541462
Fax No. – +91 33 22487045                                              Fax : +91 79 27540610
E-mail : rssharma@somanyent.com                                        E-mail : info@pipara.com
                                                                       Website : www.pipara.com
Lead Managers with the Issue                                           Registrar to the Issue

Chartered Capital And Investment Ltd.                                  Pinnacle Shares Registry Pvt Ltd
711, Mahakant, Opp. V. S. Hospital,                                    Near Asoka Mills, Naroda Road,
Ellisbridge, Ahmedabad – 380006                                        Ahmedabad – 380 025
Tel: +91 79 2657 7571/2657 5337                                        Tel : +91 79 2220 0338
Fax: +91 79 2657 5731                                                  Fax: +91 79 22202963
Email: info@charteredcapital.net                                       Email: investor.service@psrpl.com
Website: www.charteredcapital.net                                      Contact person: Mr. Gautam Shah
Contact person: Mr. Manoj Kumar Ramrakhyani

Banker to the Issue                                                    Debenture Trustee

Dena Bank                                                              The Western India Trustee and Executor Co. Ltd,
Ashram Road Branch                                                     161/C, 16th Floor, Mittal Court, Nariman Point,
Denalaxmi Building                                                     Mumbai – 400 021,
Ashram Road                                                            Tel: +91 22 22812883, 22880988
Ahmedabad – 380 009                                                    Fax:+91 22 22816477
Telefax : + 91 79 26580624                                             Email: witco@vsnl.net
E-mail : ashram@denabank.co.in

Brokers to the issue
All the members of the Stock Exchanges would be eligible to act as Brokers to the issue.
Credit Rating
Fitch Ratings India Pvt Ltd has assigned a “BBB(ind)” rating to the proposed issue. The rating indicates moderate expectation of credit
risk. The capacity for timely payment of financial commitments is considered sufficient, but adverse changes in the circumstances
and in economic conditions are more likely to impair this category. This is the lowest investment-grate category.
Credit Analysis & Research Ltd has assigned a “CARE BBB” (Triple B) rating to the proposed issue. They indicate sufficient safety
for payment of interest and principal, at the time of rating. However, adverse changes in assumptions are more likely to weaken the
debt servicing capability compared to the higher rated instruments.
Both the ratings are of Investment grade.
Appraising Entity
Since the cost of project is funded by proposed issue of fully convertible debentures & remaining amount is proposed to be met by
internal resources of the company. The project is not required to be appraised.


                                                                   6
Debenture Trustee
Western India Trustee & Executor Company Limited, 161/C, 16th Floor, Mittal Court, Nariman Point, Mumbai – 400 021 has agreed to
act as the trustees for the Debenture holders (hereinafter referred to as the ‘Trustees”) vide its letter dated 04/10/2005.
Underwriters
The present Public Issue is not underwritten
3. CAPITAL STRUCTURE OF THE COMPANY
      PARTICULARS                                                                                   NOMINAL         AGGREGATE
                                                                                                  VALUE (RS.)       VALUE (RS.)
A)    AUTHORIZED
      5,00,00,000 Equity shares of Rs.10/-each                                                    50,00,00,000
B)    ISSUED, SUBSCRIBED & PAID-UP SHARE CAPITAL
      1,45,33,000 Equity Shares of Rs.10/- each fully paid up.                                    14,53,30,000
C)    PRESENT ISSUE
      1,00,00,000 Unsecured Zero Interest FCDs of Rs.105/- each                                 1,05,00,00,000      1,05,00,00,000
      Out of which
      20,00,000 Unsecured Zero Interest FCDs of Rs.105/- each are
      reserved for Promoters/ Directors, their friends, relatives
      and associates on firm basis at a price of Rs.105/- each.                                   21,00,00,000        21,00,00,000
D)    NET OFFER TO PUBLIC
      80,00,000 Unsecured Zero Interest FCDs of Rs.105/- each                                     84,00,00,000        84,00,00,000
E)    PAID-UP CAPITAL AFTER THE ISSUE BUT BEFORE
      CONVERSION OF FCDs                                                                          14,53,30,000
F)    PAID-UP CAPITAL ON CONVERSION OF FCDs                                                       44,53,30,000
G)    SHARE PREMIUM ACCOUNT
      Before the issue                                                                                               27,26,15,144
      After the issue                                                                                               1,02,26,15,144
1)    Note to the capital structure
      As per the requirement of Clause 3(1)(a) of SEBI ( Substantial Acquisition of Shares and Takeover) Regulations, 1997; necessary
      disclosure in respect of acquisition of Equity Shares consequent upon conversion of FCDs allotted in the present Public Issue
      to Promoters‘ group as part of Promoters‘ Contribution in the issue is mentioned hereunder:
      The identity of the acquirer /allottees who has               Disclosed under Sr. No.6 of “Notes to Capital Structure”
      agreed to acquire the shares
      The purpose of acquisition / allotment                      Towards Promoters‘ Contribution
      Consequential changes in voting rights                      The voting rights will be changed based upon subscription by the
                                                                  Promoters‘ Group, as disclosed under Sr. No. 8 “Notes to Capital
                                                                  Structure”
      Consequential changes in the Shareholding                   Disclosed under Sr. No.8 of “Notes of Capital Structure”
      Pattern of the Company, if any
      Consequential changes in the Board of Directors of          No
      the Company, if any
      Whether such allotment would result in change in            No
      control over the company
2).   The current Capital Structure of the company has been built-up as under

      Date of       Nature of            Numbers of Face Value Issue Price Consideration Cumulative  Cumulative
      Allotment /   Allotment           Equity Shares  (Rs.)       (Rs.)                 Numbers of Paid-up Equity
      Fully paid up                                                                        Shares    Capital (Rs.)
      29.03.1940*     Original Issue           17500         10           10             Cash              17500         175000
      04.03.1949      Rights                   47500         10           10             Cash              65000         650000
      26.08.1969      Rights                130000           10           10             Cash            195000         1950000
      24.03.1970      Preferential             65000         10           10             Cash            260000         2600000
      03.03.1990      Bonus                 260000           10           10             N.A.            520000         5200000
      16.04.1991      Rights                260000           10           10             Cash            780000         7800000
      04.10.1991      Bonus                 780000           10           10             N.A.           1560000        15600000
      11.09.1992      Bonus                2145000           10           10             N.A.           3705000        37050000
      18.01.1994 **   Public               2598983           10           40             Cash           6303983        63039830


                                                                  7
     Date of       Nature of              Numbers of Face Value Issue Price Consideration               Cumulative   Cumulative
     Allotment /   Allotment             Equity Shares  (Rs.)      (Rs.)                                Numbers of Paid-up Equity
     Fully paid up                                                                                        Shares    Capital (Rs.)

     01.04.1994 *** Right &                 1177667           10            40             Cash             7481650        74816500
                    Preferential Issue
     18.07.1994 **   Public                 2598983           10            60             Cash            10080633       100806330
     01.04.1995 *** Right &                 1177667           10            45             Cash            11258300       112583000
                    Preferential Issue
     24.01.2004      Preferential           3660000           10            10             Cash            14918300       149183000
                                                                                           Less:            385300#         3853000
                                                                                                           14533000       145330000
*    Original Issue including Subscriber to the Memorandum.
**   On Conversion of 2598983 FCDs (Part A on 18.01.1994 & Part B on 18.07.1994) of Rs. 100/- each issued and allotted on 18.01.94
     under Public Offer in term of Offer Document dated 12th October, 1993.
*** On Conversion of 1177667 FCDs (Part A on 01.04.1994 & Part B on 01.04.1995) of Rs. 85/- each issued and allotted on 31.01.94
    under Right and Preferential Issue in term of Offer Document dated 12th October, 1993.
#    385300 Equity Shares of Rs. 10/- each were forfeited during the year ended 1997-98.
Shares Issued for consideration other than cash
All the shares have been allotted for cash only except the Bonus Shares issued out of Free Reserves as per the table above.
3)   Classes of Shares
     The Authorised Share Capital of the company is Rs. 50,00,00,000 divided into 5,00,00,000 Equity Shares of Rs. 10/-each.
4)   Capital History
     Details of increase in authorized capital

     Sr. No.   Particulars of Increase                                                                              Date of Meeting
     1.        From 2000 Equity Shares of Rs.100/- each to 2000 Equity Shares of
               Rs.100/- each ; 1,50,000 Shares of Rs.10/- each and 8000 Preference
               Shares of Rs.100/- each totaling to Rs.25,00,000/-                                                          22.03.1947
     2.        Reclassification from 2000 Equity Shares of Rs.100/- each ; 1,50,000 Shares
               of Rs.10/- each and 8000 Preference Shares of Rs.100/- each to 1,70,000 Equity Shares
               of Rs.10/- each and 8000 Preference Shares of Rs.100/- each totaling to Rs.25,00,000/-                      28.08.1947

     3.        From 1,70,000 Equity Shares of Rs.10/- each and 8000 Preference Shares of Rs.100/-
               each to 3,50,000 Equity Shares of Rs.10/- each and 15000 Preference Shares of
               Rs.100/- each totaling to Rs.50,00,000/-                                                                    10.04.1969
     4.        Reclassification and increase from 3,50,000 Equity Shares of Rs.10/- each and 15000
               Preference Shares of Rs.100/- each to 50,00,000 Equity Shares of Rs.10/- each
               totaling to Rs.5,00,00,000/-                                                                                31.10.1989
     5.        From 50,00,000 Equity Shares of Rs.10/- each to 75,00,000 Equity Shares of
               Rs.10/- each totaling to Rs.7,50,00,000/-                                                                   27.01.1992
     6.        From 75,00,000 Equity Shares of Rs.10/- each to 100,00,000 Equity Shares of
               Rs.10/- each totaling to Rs.10,00,00,000/-                                                                  27.07.1992
     7.        From 1,00,00,000 Equity Shares of Rs.10/- each to 1,20,00,000 Equity Shares of
               Rs.10/- each totaling to Rs.12,00,00,000/-                                                                  30.09.1993
     8.        From 1,20,00,000 Equity Shares of Rs.10/- each to 1,80,00,000 Equity Shares of
               Rs.10/- each totaling to Rs.18,00,00,000/-                                                                  29.07.2002
     9.        From 1,80,00,000 Equity Shares of Rs.10/- each to 5,00,00,000 Equity Shares of
               Rs.10/- each totaling to Rs.50,00,00,000/-                                                                   08.09.2005
5)   The subscription by the Promoters/Directors, their relatives & associates for equity shares to be allotted shall be brought in at
     least one day before the opening of the Issue. The company would furnish to SEBI a Certificate from their Auditor confirming
     the contribution. The equity shares to be allotted under this category shall be for a minimum amount of Rs.25,000/- in case of
     individuals and Rs.1,00,000/- in the case of corporate bodies. The said amount shall be kept in an escrow account with a scheduled
     commercial Bank & the said contribution / amount shall be released to the Company along with the public issue proceeds.
     The equity shares to be held by the Promoters, their relatives & associates under the lock-in period shall not be sold/hypothecated/
     transferred during the lock-in period. However, inter se transfers between the Promoters names as such would be permitted,
     provided that the requirements of lock-in-period guidelines continue to apply, to the extent initially prescribed.



                                                                   8
     Only those securities for which a specific written consent has been obtained from the shareholders for lock-in have been offered
     under Promoters contribution.
6)   PROMOTERS CONTRIBUTION AND LOCK IN PERIOD
     As per clause 4.3.1 of the SEBI DIP Guidelines, Promoter/Promoter group are participating to the extent of 20% of the proposed
     issue, which will result in 60,00,000 Equity Shares after conversion. The same will be contributed as under:

     Name of Promoter/             Nature of                 Conside-    No. of         Face      Issue      % of present      Lock in
     Promoter Group                allotment                 ration      Shares*        value     Price      in (Post)         period **
                                                                                                             issue
                                                                                                             capital
     1) Sarvopari Investment       On conversion             Cash         15,00,000     10        35         5.00              3   years
        Pvt. Ltd                   of FCD offered                                                            (3.37)
     2) Krishna Glass Pvt. Ltd     On conversion of          Cash         45,00,000     10        35         15.00             3   years
                                   FCD offered                                                               (10.10)
     * Arising after conversion of FCDs
     ** The lock in period shall commence from the date of allotment in the proposed Public Issue and last date of the lock in shall
     be 3 years from the date of commencement of commercial production or the date of allotment in the issue whichever is later.
     Accordingly, the shares which are subject to lock in shall carry inscription “non transferable”.
7)   The detail of the shareholding of persons participating to the Promoters Contribution is as under:

     Name                      Date of         Nature of            Conside-      No. of        Face      Issue    % of post    Lock in
                               allotment/      allotment/            ration      Shares         value      Price    issue       period
                               acquisition     acquisition                                                          capital
     Sarvopari Investments     25.09.1986      Market Purchase          Cash          24250      10       12.56                    NIL
     Private Limited
                               19.11.1986      Market Purchase          Cash           7950      10       12.56                    NIL
                               03.03.1990      Bonus                     -            32200      10            -                   NIL
                                               (1:1)
                               16.04.1991      Right                    Cash          32200      10       10.00                    NIL
                                               (1:2)
                               04.10.1991      Bonus                     -            96600      10            -                   NIL
                                               (1:1)
                               11.09.1992      Bonus                     -         265650        10            -                   NIL
                                               (11:8)
                               13.08.1993      Market purchase          Cash           9000      10       72.16                    NIL
                               17.05.1994      Market Purchase          Cash           9000      10       60.00                    NIL
                               17.05.1994      Market Purchase          Cash       134158        10       55.83                    NIL
                               24.08.1994      Market Purchase          Cash           1200      10       64.77                    NIL
                               10.08.1994      Market Purchase          Cash           1000      10       64.80                    NIL
                               10.08.1994      Market Purchase          Cash           140       10       47.55                    NIL
                               07.02.1997      Market Purchase          Cash       377693        10       15.00                    NIL
                               14.02.1997      Market Purchase          Cash       476658        10       10.07                    NIL
                               11.02.1997      Market Purchase          Cash       314925        10       10.17                    NIL
                               31.07.1997      Market purchase          Cash           4400      10       10.45                    NIL
                               04.03.2002      Market Purchase          Cash           353       10        2.51                    NIL
                               29.09.2003      Settlement with          Cash          37000      10       15.00                    NIL
                                               Sri H.L.Somany

                                                                    Total (A)    1824377

     Name                      Date of         Nature of            Conside-      No. of        Face      Issue    % of post    Lock in
                               allotment/      allotment/            ration      Shares         value      Price    issue       period
                               acquisition     acquisition                                                          capital
     Teamwork Holdings         19.03.1982      Market Purchase          Cash       113000        10       11.30                    NIL
     Private Limited @
                               03.03.1990      Bonus (1:1)               -       133000          10            -                   NIL
                               16.04.1991      Right (1:2)              Cash     133000          10       10.00                    NIL
                               04.10.1991      Bonus (1:1)               -       339000          10            -                   NIL


                                                                    9
Name                   Date of       Nature of              Conside-      No. of   Face    Issue    % of post   Lock in
                       allotment/    allotment/              ration      Shares    value   Price      issue     period
                       acquisition   acquisition                                                     capital

                       11.09.1992    Bonus (11:8)               -        932250     10          -                 NIL
                       17.09.1993    Market Purchase          Cash        21382     10     53.35                  NIL
                       12.03.1995    Market Purchase          Cash         4435     10     50.30                  NIL
                       01.09.1995    Market Purchase          Cash       170000     10     23.35                  NIL
                       26.06.1997    Market Purchase          Cash          200     10     10.04                  NIL
                       29.09.2003    Settlement with Shri     Cash         3000     10     15.00                  NIL
                                     H L Somany
                                                            Total (B)   1809267

Name                   Date of       Nature of              Conside-     No. of    Face    Issue    % of post   Lock in
                       allotment/    allotment/              ration     Shares     value    Price    issue      period
                       acquisition   acquisition                                                     capital
Vicky Investments      31.03.2000    Received from              -           980     10     10.50                  NIL
Limited @                            Rohit Leasing as
                                     amalgamation
                       29.09.2003    Settlement with         Cash         32620     10     15.00                  NIL
                                     Shri H L Somany
                       25.11.2004    Market Purchase         Cash        340000     10     33.00                  NIL

                                                            Total (C)    373600
                                     Grand Total (A+B+C)                4007244                       9.00
@ merged with Sarvopari Investment Pvt Ltd w.e.f. 01.04.2003
Details of shareholding of persons whose name figure in the offer document as Promoters in the paragraph “Promoters” is
as under:

Name                   Date of       Nature of              Conside-      No. of   Face    Issue    % of post   Lock in
                       allotment/    allotment/              ration      Shares    value   Price      issue     period
                       acquisition   acquisition                                                     capital
Arvind Somany          17.02.1995    Market Purchase         Cash          3304     10     56.33                  NIL
                       18.02.1995    Market Purchase         Cash           454     10     56.33                  NIL
                       22.02.2002    Market Purchase          Cash        11000     10      2.30                  NIL
                       (Purchase)
                       07.12.2001    Market Purchase          Cash       350600     10      3.28                  NIL
                       21.03.2003    Market Purchase          Cash         3900     10      3.50                  NIL
                       29.09.2003    Market Purchase          Cash        67750     10     15.00                  NIL
                       28.04.2004    Market Purchase          Cash       260000     10     14.50                  NIL
                       1999-2000     Market Purchase          Cash          600     10     24.49                  NIL
                       1999-2000     Market Purchase          Cash         8400     10      3.00                  NIL
                       2000-2001     Market Purchase          Cash        53000     10      3.77                  NIL
                       29.09.2003    Market Purchase          Cash        24631     10     15.00                  NIL
                       28.04.2004    Market Purchase          Cash        40000     10     14.50                  NIL
                       29.09.2003    Market Purchase          Cash        27000     10     15.00                  NIL

                                                             Total       850639                        1.91

Name                   Date of       Nature of              Conside-     No. of    Face    Issue    % of post   Lock in
                       allotment/    allotment/              ration     Shares     value    Price    issue      period
                       acquisition   acquisition                                                     capital
Surendra Kumar         15.09.1993    In Right                 Cash         2038     10     45.00                  NIL
Somany                               Renouncement
                       18.03.2001    Market Purchase          Cash       400000     10      3.28                  NIL
                       15.11.2003    Market Purchase          Cash          600     10     15.00                  NIL
                        11.02.2005   Market Purchase          Cash          200     10      3.92                  NIL


                                                        10
     Name                      Date of        Nature of            Conside-        No. of     Face         Issue   % of post    Lock in
                               allotment/     allotment/            ration        Shares      value        Price     issue      period
                               acquisition    acquisition                                                           capital

                               11.04.1990     Market Purchase         Cash              100       10       10.00                  NIL
                               04.10.1991     Bonus               Other than            300       10         NIL                  NIL
                                                                    Cash
                               11.09.1992     Bonus             Other than Cash         825       10         NIL                  NIL
                               17.10.1993     Right issue             Cash              454       10        42.5                  NIL
                               31.03.2002     Market Purchase         Cash              700       10        2.24                  NIL
                               28.04.2004     Market Purchase         Cash        100000          10       14.50                  NIL

                                                                      Total       505217                              1.13

8)   LIST OF PROMOTERS & THEIR RELATIVES (AS ON 30.09.2005)

     Sr. No. Name                                                       No of shares                           % of post issue
                                                                                                                shareholding.
     01      Sarvopari Investment Pvt. Ltd.                                   4007244                                  9.00
     02      Arvind Somany                                                    850639                                   1.91
     03      Surendra Kumar Somany                                            505217                                   1.13
     04      Simplex Trading & Agencies Ltd.                                  390273                                   0.88
     05      Nalini Somany                                                    300000                                   0.67
     06      Anupama Agarwal                                                   76000                                   0.17
     07      Nandita Patodia                                                   75000                                   0.17
     08      Prasanna Somany                                                    2330                                   0.01
     09      Nitya somany                                                       1879                                   0.00

             TOTAL                                                            6208582                                 13.94

9)   Pre-issue and post issue shareholding pattern as on 30.09.2005

     Sr. Category                                                             Pre Issue                     Post Issue & Post
     No.                                                                                                   conversion of FCDs
                                                                  No. of                   % of              No. of               % of
                                                            Shares held                 holding        Shares held             holding
     A.   Promoters’ holding
     1.   Promoters                                                                                       12208582               27.41
          -Indian Promoters                                       6208582               42.72%
          -Foreign Promoters                                            -                0.00%
     2.   Persons acting in concert                                     -                0.00%
          Sub-total                                               6208582               42.72%
     B.   Non-promoters Holding                                                                           32324418               72.59
     3.   Institutional Investors
     a.   Mutual Funds and UTI                                         3688              0.03%
     b.   Banks, Financial Institutions, Insurance                    35000              0.24%
          Companies (Central/ State Govt. Institutions/
          non-Government Institutions)
     c.   FIIs                                                        20000              0.14%
          Sub-total                                                   58688              0.40%
     4.   Others
     a.   Private Corporate Bodies                                1960114               13.49%
     b.   Indian Public                                           4996562               34.38%
     c.   NRIs/OCBs                                               1204139                8.29%
     d.   Any Other, Clearing Members / Brokers                    104915                0.72%

          Sub-total                                               8265730                56.88%
          Grand Total                                            14533000               100.00%             44,533,000          100.00

                                                                 11
10) Particulars of top ten shareholders as on 30/09/05 (being the date of filing of the Prospectus with ROC)

    Sr.     Name                                                         No of shares                 % of post issue
    No.                                                                                                 shareholding
    1       Sarvopari Investment Pvt. Ltd.                                    4,007,244                             9.00
    2       Transworld Corporation Ltd.                                       1,176,470                             2.64
    3       Arvind Somany                                                       850,639                             1.91
    4       Surendra Kumar Somany                                               505,217                             1.13
    5       Simplex Trading & Agencies Ltd.                                     390,273                             0.88
    6       Nalini Somany                                                       300,000                             0.67
    7       SPL Limited                                                         232,279                             0.52
    8       Zen Securities Ltd                                                   92,483                             0.21
    9       Anagram Securities Ltd                                               83,695                             0.19
    10      Anupama Agarwal                                                      76,000                             0.17
11) Particulars of top ten shareholders as on 20.09.2005
    (Being ten days prior to the date of filing of the Prospectus with ROC)

    Sr.     Name                                                         No of shares                       % of post
    No.                                                                                            issue shareholding
    1       Sarvopari Investment Pvt. Ltd.                                    4,007,244                             9.00
    2       Transworld Corporation Ltd.                                       1,176,470                             2.64
    3       Arvind Somany                                                       850,639                             1.91
    4       Surendra Kumar Somany                                               505,217                             1.13
    5       Simplex Trading & Agencies Ltd.                                     390,273                             0.88
    6       Nalini Somany                                                       300,000                             0.67
    7       SPL Limited                                                         232,279                             0.52
    8       Zen Securities Ltd                                                   92,483                             0.21
    9       Anagram Securities Ltd                                               83,695                             0.19
    10      Anupama Agarwal                                                      76,000                             0.17

12) Particulars of top ten shareholders as on 30.09.2003
    (Being two years prior to the date of filing of the Prospectus with ROC)

    Sr.     Name                                                        No. of Shares                       % of post
    No                                                               (of Rs.10/- each)             issue shareholding
    1       Teamwork Holding Pvt. Ltd.                                         1806267                           16.61%
    2       Sarvopari Investment Pvt. Ltd.                                     1787377                           16.44%
    3       Transworld Corporation Ltd.                                        1176470                           10.82%
    4       Simplex Trading & Agencies Ltd.                                      345873                           3.18%
    5       Surendra Kumar Somany                                                294617                           2.71%
    6       Unit Trust of India                                                  242600                           2.23%
    7       Arvind Somany                                                        139758                           1.29%
    8       Anjana Somany                                                        122870                           1.13%
    9       Pradeep Kumar Agrawal                                                108000                           0.99%
    10      Santosh Kumar Kejriwal Securities Pvt Ltd.                           100000                           0.92%
    The Company confirms that the Promoter contribution does not consist of:
    a) Shares acquired for consideration other than cash and revaluation of assets or capitalization of intangible assets or bonus
       shares out of revaluation reserves or reserves without accrual of cash resources.
    b) Securities issued during the preceding one year, at a price lower than the price at which equity shares is being offered
       to public.
    c) Private placement made by solicitation of subscription from unrelated persons either directly or through any intermediary.
    d) Shares for which specific written consent has not been obtained from the respective shareholders for inclusion of their
       subscription in the minimum promoter’s contribution subject to lock-in.
    e) Shares issued to promoters on conversion of partnership firms into limited company.
    f) Shares with a contribution less than Rs.25,000/- per application from each individual and contribution less than Rs.1,00,000/
       - from firms and companies.


                                                                12
13) As on 30th September, 2005, promoter group and the directors of the promoters holds 6208582 Shares.
14) No share of the company was purchased and or sold/ financed by the Promoter Group/ directors of the Company/ directors
    of the Promoter of the Company during the past six months.
15) The Company, its promoters, its directors and the Lead Manager to this Issue have not entered into any buy back and/ or
    stand by arrangements for purchase of equity shares of the company from any person in respect of this Issue.
16) There are no outstanding warrants, options or rights to convert debentures or other instruments into equity shares as on date.
    The Company does not currently have any Employee Stock Option Plan.
17) The Company had 11835 members/shareholders as on 30.09.2005.
18) No single applicant can make an application for number of securities, which exceeds the securities offered through this Issue.
19) The Company has not issued any shares out of revaluation reserves.
20) The equity shares of the Company are available in dematerialized mode and the market lot is one equity share. The Company
    undertakes that at any given time there shall be only one denomination for the shares of the Company and the Company
    shall comply with such disclosure and accounting norms specified by SEBI from time to time.
21) The Company has not issued any shares for consideration other than cash (other than by way of capitalization of reserves).
22) The Company undertakes that there would be no further issue of capital whether by way of issue of bonus shares, preferential
    allotment, rights issue or in any other manner during the period commencing from submission of the Draft Prospectus with
    SEBI until the equity shares offered through this Prospectus have been listed.
23) The Company presently does not have any intention or proposal to alter its capital structure for a period of six months from
    the date of opening of the Issue, by way of split/consolidation of the denomination of equity shares or further issue of equity
    shares (including issue of securities convertible into exchangeable, directly or indirectly for equity shares) whether preferential
    or otherwise. If the Company goes in for acquisitions and joint ventures the Company might consider raising additional capital
    to fund such activity or use share as currency for acquisition and/or participation in such joint venture.
24) No shares have been allotted on firm basis or through private placement in the last two years nor has the Company bought
    back its equity shares in the last six months.
25) As per SEBI guidelines, a minimum of 50% of the net offer to the public is reserved for allotment to retail individual investors
    applying for Equity Shares for a value of not more than Rs.1,00,000/-. The remaining 50% of the offer to the public is reserved
    for individuals applying for Equity Shares for a value more than Rs.1,00,000/- and corporate bodies/institutions etc. Unsubscribed
    portion in either of these categories shall be added to the other category interchangeably.
26) An over-subscription to the extent of 10% of the net offer to public can be retained for the purpose of rounding off to the
    nearest integer subject to a minimum allotment being equal to 50 FCDs, which is the minimum application size in this Issue,
    while finalizing the allotment.
27) In terms of the clause 6.8.3.2 (h) of SEBI (Disclosure & Investor Protection) Guidelines, 2000, the Securities offered through
    this Public Issue shall be made fully paid up or may be forfeited with in 12 months from the date of the allotment of the Securities.
28) The post issue promoters holding would be 27.41%.
29) At any given point of time, there shall be only one denomination for the Equity Shares of the Company.
OBJECTS OF THE ISSUE
The company proposes the present issue:
a.    To set up additional denim manufacturing capacity of 10 million meters per annum and upgrade weaving facility in its existing
      factory premises at Ahmedabad, to modernise its existing spinning facility at its Ahmedabad and Baramati Unit and set up
      garment unit in new premises.
b.    To meet working capital requirements.
c.    To meet issue expenses
The main objects, objects incidental and ancillary to the main objects and other objects of the Memorandum of Association of the
Company enable the Company to undertake its existing activities and the activities for which the funds are being raised through
this Issue.
COST OF PROJECTS AND MEANS OF FINANCE
The Cost of the Project and the proposed Means of Finance as envisaged by the Management of the company are as under:
COST OF PROJECT
                                                                                                                           Rs. in Lacs

Particulars                                         Ahmedabad                   Baramati              Ahmedabad               Total
                                                   Composite Unit             Spinning Unit          Garment Unit
Land and Site Development                                     0                         0                     500                500
Building                                                    139                         4                     500                643
Plant and Machineries                                     5261                      1935                     1765               8961
Electrical Installation                                      68                         6                      20                 94
Other Assets                                                156                         0                       0                156


                                                                   13
Working Capital                                           210                         0                    577                           787
Sub Total                                                5834                     1945                    3362                   11141
Contingencies @ 2.50%                                     292                        97                    155                           544
Share Issue Expenses                                      165                        55                     95                           315

Total Cost of Project                                    6291                     2097                    3612                  12000
MEANS OF FINANCE
                                                                                                                         Rs. in Lacs

Particulars                                                                                                                               Total
Public issue of Fully Convertible Debenture of Rs. 105 each                                                                               10500
Internal Accrual                                                                                                                           1500
Total Means of Finance                                                                                                                    12000
Notes:
(1)   Firm arrangements of finance through verifiable means towards 75% of the above stated means of finance, excluding the amount
      to be raised through proposed Public Issue have been made.
(2)   Any shortfall in meeting project cost will be met through internal accruals and/or promoters contribution.
(3)   No part of the issue proceeds will be paid as consideration to promoters, directors, key management personnel, associate or
      group company.
5.    Appraisal
      Project has not been appraised by any bank or Financial Institutions
6.    Schedule of Implementation / Utilization of Issue Proceeds
      The Schedule of implementation of the project originally envisaged is as under:
Project implementation schedule                                        Commencement Date                  Completion Date
A)    Denim Plant
1)    Civil Works                                                                  01/04/2005                      31/12/2006
2)    Placements of Orders for Plant & Machinery                                   01/12/2005                      30/06/2006
3)    Arrival of Plant & Machinery, etc. at site                                   01/06/2006                      31/01/2007
4)    Installation/erection of equipment                                           15/06/2006                      15/02/2007
5)    Testing and trial run                                                        01/11/2006                      25/03/2007
6)    Commercial Productions                                                       01/04/2007                          !!!!!!!!!!!!!!!
B)    Weaving Upgradation
1)    Placements of Orders for Plant & Machinery                                   01/12/2005                      31/01/2006
2)    Arrival of Plant & Machinery, etc. at site                                   01/02/2006                      15/02/2006
3)    Installation/erection of equipment                                           15/02/2006                      22/10/2006
4)    Testing and trial run                                                        22/03/2006                      31/03/2006
5)    Commercial Productions                                                       01/04/2006                          !!!!!!!!!!!!!!!
C)    Spinning Upgradation Ahmedabad
1)    Placements of Orders for Plant & Machinery                                   01/12/2005                      31/12/2005
2)    Arrival of Plant & Machinery, etc. at site                                   01/08/2006                      28/02/2007
3)    Installation/erection of equipment                                           15/08/2006                      15/03/2007
4)    Testing and trial run                                                        01/09/2006                      25/03/2007
5)    Commercial Productions                                                       01/04/2007                          !!!!!!!!!!!!!!!
d)    Spinning Upgradation Baramati
1)    Civil Works                                                                  01/12/2005                      31/12/2005
2)    Placements of Orders for Plant & Machinery                                   01/02/2006                      15/02/2006
3)    Arrival of Plant & Machinery, etc. at site                                   01/08/2006                      28/02/2007
4)    Installation/erection of equipment                                           15/08/2006                      15/03/2007
5)    Testing and trial run                                                        01/09/2006                      25/03/2007
6)    Commercial Productions                                                       01/04/2007                          !!!!!!!!!!!!!!!


                                                                  14
Project implementation schedule                                       Commencement Date                    Completion Date
e)   Garmenting Unit
1)   Acquisition of land                                                          01/12/2005                      31/12/2005
2)   Civil Works                                                                  01/01/2006                      31/10/2006
3)   Placements of Orders for Plant & Machinery                                   01/01/2006                      31/01/2006
4)   Arrival of Plant & Machinery, etc. at site                                   01/08/2006                      28/02/2007
5)   Installation/erection of equipment                                           15/08/2006                      15/03/2007
6)   Testing and trial run                                                        01/09/2006                      25/03/2007
7)   Commercial Productions                                                       01/04/2007                           !!!!!!!!!!!!!!!
7.   Deployment of Funds in the Project
     The company has incurred an expenditure of Rs.32.72 lacs as on 25th October, 2005 on the proposed Project. The fund deployment
     in the Project and its Means of Finance have been certified by M/s Pipara & Co., Chartered Accountants, Ahmedabad the Auditors
     of the Company vide their certificate dated 25th October, 2005, the details of which are as follows:
                                                                                                                        (Rs. in lacs)

     Description                                                                                                         Amount
     Preliminary Expenditure
     Lead Manager Fees Advance                                                                                                    5.00
     Rating Agences Fees                                                                                                        11.71
     Share Issue Expenditure                                                                                                    16.01
                      TOTAL                                                                                                     32.72
     Means of Finance
     Internal Accruals                                                                                                          32.72
8.   Year wise break up of expenditure proposed to be incurred on the project
     Ahmedabad Composite Unit
     Denim Expansion, Weaving Upgradation & Spinning Upgradation
                                                                                                                              Rs. In lacs

     Sr.   Particulars                                             From 1.6.2005 to            Period ended               Total
                                                                      31.03.2006                31.03.2007
           Cost of Project
     1     Building & Civil Work                                           139                        0                   139
     2     Plant & Machinery including utilities                          1097                     4388                  5485
     3     Preliminary including start up expenses                           0                        0                     0
     4     Escalation & Contingencies                                        0                      292                   292
     5     Share Issue Expenses                                            165                        0                   165
     6     Working capital                                                   0                      210                   210
     7     Interest during construction                                      0                        0                     0
           Total                                                          1401                     4890                  6291
     Spinning Upgradation Baramati
                                                                                                                             Rs. In lacs

     Sr.   Particulars                                          From 1.6.2005            Period ended                    Total
                                                                 to 31.03.2006              31.03.2007
           Cost of Project
     1     Building & Civil Work                                              4                       0                     4
     2     Plant & Machinery including utilities                           1167                     774                  1941
     3     Preliminary including start up expenses                            0                       0                     0
     4     Escalation & Contingencies                                         0                      97                    97
     5     Share Issue Expenses                                              55                       0                    55
     6     Margin for working capital                                         0                       0                     0
     7     Interest during construction                                       0                        0                        0

           Total                                                           1226                     871                   2097



                                                                 15
        Garmenting Unit
                                                                                                                              Rs. In lacs

        Sr.     Particulars                                        From 1.6.2005             Period ended                  Total
                                                                    to 31.03.2006               31.03.2007
                Cost of Project
        1       Land & Site development                                        500                          0                500
        2       Building & Civil Work                                          250                       250                 500
        3       Plant & Machinery including utilities                          357                      1428                1785
        4       Preliminary including start up expenses                           0                         0                   0
        5       Escalation & Contingencies                                        0                      155                 155
        6       Share Issue Expenses                                             95                         0                 95
        7       Working capital                                                   0                      577                 577
        8       Interest during construction                                      0                         0                   0

                Total                                                         1202                      2410                3612
9.      Interim Use of Funds
The management, in accordance with the policies established by the Board, will have flexibility in deploying the proceeds received
from the Issue. Pending utilization of the proceeds out of the Issue for the purposes described above, the Company intends to temporarily
invest the funds in high quality interest bearing liquid instruments including deposits with banks. Such investments would be in accordance
with the investment policies approved by the Board of Directors from time to time.
10.     Basic Terms of Issue
The FCDs being issued & the Equity Share to be issued on conversion of the FCDs, are subject to the terms of this Prospectus, the
application form & Memorandum & Articles of Association of the Company, the guidelines for listing of Securities issued by Government
of India and guidelines issued by the Securities and Exchange Board of India (SEBI) from time to time, the Depositories Act, 1996 and
the provisions of the Companies Act, 1956. The Debentures shall also be subject to such other terms & conditions as may be contained
in the Debenture Trust Deed, Debenture/share/Debenture cum share Certificates/Letter of Allotment or any other deed or document
to be executed by the Company and the Trustees for the Debenture Holders, other relevant documents/certificates and laws as applicable
and the guidelines for listing of securities issued from time to time by SEBI or any other authority.
Authority for the Issue
Pursuant to Section 81 (1 A) of the Act, the present issue of Unsecured Zero Interest Fully Convertible Debentures has been authorized
vide a special resolution passed at the Annual General Meeting of the Company held on September 8, 2005. The Board of Directors
have approved the issue by a resolution passed at its meeting held on dated July 30, 2005.
Terms of Payment
The application must be for a minimum 50 Debenture or in multiples of 50 thereafter. The amount is payable as under:
On application          :     Rs.40/- per FCD
On allotment            :     Rs.65/- per FCD
Total                   :     Rs.105/- per FCD
To be apportioned towards,

                                                 Part A (Rs.)              Part B (Rs.)                  Total (Rs.)
                                                (Convertible)             (Convertible)
        On Application                               35                          5                              40
        On Allotment                                ——                           65                             65
        Total                                        35                          70                          105

Principal Terms of Debentures
1. Face Value and Issue price
Each FCD will have a face value of Rs. 105/- and Issue price is one time of the face value. Each FCD shall consist of two parts :
Part A : Convertible portion of Rs.35/-
Part B : Convertible portion of Rs.70/-
2. Terms of Conversion
1)      Part A of Rs.35/- of each FCD will be compulsorily and automatically converted into 1 equity share of Rs. 10/- fully paid up at
        a premium of Rs.25/- on allotment without further act or application on the part of the Debenture holders.
2)      Part B of Rs.70/- of each FCD would be converted into two Equity share of Rs.10/- each fully paid up at a premium of Rs.25/
        - each on completion of three months at any time from the date of allotment of the Debentures at the discretion of the Board
        of Directors but within the period of 6 months from the date of allotment.


                                                                    16
Upon conversion of Part A and/or Part B of the FCD as aforesaid the face value of the FCD will stand reduced proportionately and
the Convertible portion of the FCD shall be deemed to have been redeemed to the extent of Part A and/or Part B on the date of conversion.
The Debenture holder shall be deemed by the terms of the Debenture to have authorised the Company to enter his/her name in the
Register of Members of the shares allotted on conversion. The shares so allotted shall be subject to the provisions of the Articles
of Association of the Company.
Ranking
The Equity shares of Rs. 10/- each which will be issued upon conversion of Debentures as aforesaid shall rank pari passu in all
respects with the existing paid up Equity Shares of the Company except that they shall rank, for dividend, pro-rata from the date
of conversion on the amount paid up and will be subject to the provisions of the Act and the Memorandum and Articles of Association
of the Company.
Agents and Trustees for the Debenture holders
Western India Trustee & Executor Company Limited, 161/C, 16th Floor, Mittal Court, Nariman Point, Mumbai – 400 021 has agreed to
act as the trustees for the Debenture holders (hereinafter referred to as the ‘Trustees”). The Debenture holders shall without any
further act or deed be deemed to have irrevocably given their consent to and authorised the Trustees or any of their agents appointed
by the said Trustees of authorised officials to do, interalia, all acts, deeds, matters and things in respect of or relating to the security
to be created for securing the Debentures, including the right to exclude, substitute or restore any property charged in their favour
and/ or to create a charge on additional properties in their favour including the right to substitute relevant title deeds in respect thereof.
All rights and remedies under the Debenture Trust Deed(s) and for other security documents shall vest in and be exercised by the
said Trustees without any further reference to the debenture holders.
Security
The Debentures issued in terms of this offer documents being unsecured, zero interest, fully convertible, no security is required to
be created in favour of the Trustees.
Listing
In principle approvals of BSE & NSE have been received whereat these FCDs and the new Equity Shares arising on conversion are
to be listed.
Rights of Debenture holders
(a) The Debentures shall be transferable and transmittable in the same manner and to the same extent and be subject to the same
     restrictions and limitations as in the case of equity shares of the Company. The provisions in relation to transfer and transmission
     of equity shares of the Company as contained in the Articles, shall also apply mutates mutandis to the Debentures.
(b)   The Debentures shall not confer upon the holders thereof a right to receive notices or to attend and/or vote at General Meeting
      of the shareholders of the Company either in person or by proxy or to receive Annual Reports of the Company.
(c)   A Register of the holders of the Debentures (hereinafter referred to as the ‘Register of Debentures’) will be maintained in accordance
      with Section 152 of the Act and all interest and principal sums becoming due and payable will be paid to the registered holders
      for the time being or in the case of joint holders, to the person whose name stands first in the register of Debenture holders.
(d)   The registered holder of the Debentures and in the case of joint holders, the one whose name stands first in the register of
      Debenture holders, shall be entitled to vote in respect of such Debentures, either in person or by proxy at any meeting of the
      holders of Debentures.
(e)   The provisions contained in Annexure ‘C’ and/or ‘D’ to the Companies ( Central Government) Rules & Forms 1956 as in force
      for the time being shall apply to the meetings of the debenture holders. Each debenture holders shall, on voting by a show of
      hands be entitled to one vote only and on a poll shall be entitled to one vote per Debenture held by him.
(f)   The rights of Debenture holders in respect of Debentures now offered and then outstanding may be modified or varied of abrogated
      by a Special Resolution passed at a meeting of Debenture holders provided, however, that nothing in such a Resolution that is
      not acceptable to the Company shall be operative against the Company.
(g)   The holders of the Debentures will not be entitled to any other rights and/or privileges available to the shareholders of the Company
      except to the extent of the equity shares that will be allotted to the Debenture holders on conversion.
(h)   The Debenture shall be subject to such other terms and conditions as may be incorporated in the Debenture Certificates that
      will be issued.
(i)   The Debenture holders will be entitled to their Debentures free from equities or cross claims, by the Company against the original
      or any intermediate holders thereof.
Rights of Equity Shareholders
a)    Right to receive dividend, if declared.
b)    Right to attend general meetings and exercise voting rights, unless prohibited by law.
c)    Right to vote either personally or by proxy.
d)    Right to receive offer for right shares and receive allotment of bonus shares.
e)    Right to receive surplus on liquidation.
f)    Such other rights, as may be available to a shareholder of a Public Limited Company under the Companies Act, 1956.


                                                                      17
Minimum Subscription
If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if
the subscription level falls below 90% after the closure of the issue on account of cheques having been returned unpaid or withdrawal
of applications, the Company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after
the Company becomes liable to pay the amount, the Company shall pay interest as per Section 73 of the Companies Act, 1956.
Minimum and maximum application size
Applications should be for minimum of 50 FCDs and in multiples of 50 thereafter. An applicant in the net public category cannot
make an application for that number of FCDs exceeding the number of FCDs offered to the public.
Interest on excess application money
Payment of interest at rate of 15% per annum on the excess application money, after adjusting the amount due on allotment will
be made to the applicants, if the refund orders are not dispatched within 30 days from the date of closure of the subscription list.
Proportionate allotment procedure
Allotment shall be on proportionate basis within the specified categories, rounded off to the nearest integer subject to a minimum
allotment being equal to the minimum application size i.e. 50 FCDs.
Reservation for Retail Individual Investor
The above proportionate allotments of FCDs in an Issue that is oversubscribed shall be subject to the reservation for Retail individual
investors as described below:
a)   A minimum 50% of the net offer of FCDs to the public shall initially be made available for allotment to retail individual investors,
     as the case may be.
b)   The balance net offer of FCDs to the public shall be made available for allotment to:
     i) Individual applicants other than retail individual investors, and;
     ii) Other investors including corporate bodies/ institutions irrespective of the number of shares, debentures, etc. applied for.
c)   The unsubscribed portion of the net offer to any one of the categories specified in (a) or (b) shall / may be made available
     for allotment to applicants in the other category, if so required.
The drawal of lots (where required) to finalize the basis of allotment, shall be done in the presence of a public representative on
the Governing Board of BSE (designated stock exchange).
The basis of allotment shall be signed as correct by the Executive Director/Managing Director of BSE (designated stock exchange)
and the public representative in addition to the Lead Manager and the Registrar to the Issue.
11. BASIS FOR ISSUE PRICE
QUALITATIVE FACTORS
1.   Promoted by Shri Surendra Kumar Somany, an industrialist.
2.   The Company is in this line of activity since 1969, has rich experience in Textile Industry.
3.   The Company’s Baramati Unit is 100% EOU, engaged in spinning of cotton yarn. Ahmedabad Unit is a Composite Mill. The Company
     has strong market presence at Domestic and International market.
4.   Wide dealer network all over India.
5.   Locational advantages, as cotton available in plenty in Gujarat and Maharashtra..
QUANTITATIVE FACTORS
Information presented in this section is derived from the audited financial statements.
1.   Earnings per Share (on Rs. 10/-per share)
     Accounting year                                                                   EPS (Rs.)                   Weightage
     2003                                                                                 1.81                          1
     2004                                                                                 7.29                          2
     2005                                                                                 6.06                          3
     Weighted average EPS                                                                 5.76
2.   Price Earnings ratio (P/E Ratio) in relation to conversion price of Rs.35/-
     Particulars                                                                                                At Issue Price
     Based on 31/03/2005 EPS                                                                                          5.77
     Based in weighted average EPS                                                                                    6.07
     Industry P/E
      - Highest                                                                                                       220.3
      - Lowest                                                                                                         2.6
      - Average                                                                                                       16.01
Industry average is calculated as average of high and low
(Source: Capital Market - Volume XX/14, Sep. 12-25, 2005.)



                                                                   18
Comparison of the accounting ratios of the company with accounting ratios of the some companies in the industry group for the financial
year for the year ended on March, 2005:

Name of the Company                     Face Value of          EPS (Rs.)           P/E Ratio             RONW          NAV (Rs.)
                                        Equity Shares
Soma Textiles & Industries Ltd.               10                  6.06                  8.5              19%              34.15
Aarvee Denims                                 10                   11.9               10.7               49%              46.8
K G Denims                                    10                   4.6                12.3               14.8%            23.6
Arvind Mills                                  10                   6.2                17.6               10.6%            62.2
Mahaveer Spinning                             10                  29.6                  14               18.8%            207.8
(Source: Capital Market - Volume XX/14, Sep. 12-25, 2005.)
3.   Return on Networth (RONW)
     Accounting Year                                                           RONW(%)                   Weight
     a)   2003                                                                    20%                      1
     b)   2004                                                                    26%                      2
     c)   2005                                                                    19%                      3
          Weighted Average                                                       21.5%
4.   Minimum return on total net worth needed after the issue to maintain EPS (as on March 31, 2005) at Rs.6.06 is 17.45%
5.   Net asset value per share
     Pre – Issue as on 31/03/2005                                                             Rs.34.15
     Post Issue                                                                               Rs.34.72
     Conversion Price                                                                         Rs.35.00
6.   The face value of the share is Rs.10/- and the conversion price of FCD is @ Rs.35/- per Equity Share. Therefore conversion
     price will be 3.5 times of the face value of the Equity Share.
     The Lead Manager believes that the Conversion Price of Rs. 35/- is justified in view of the above qualitative and quantitative
     parameters. The investors may want to peruse the risk factors and financials of the Company including important profitability
     and return ratios, as set out in the Auditor’s report to have a more informed view of the investment proposition.




                                                                  19
12.   STATEMENT OF TAX BENEFITS
The company has been advised by its statutory auditors M/s. Pipara & Co., vide their certificate dated 31st August, 2005 that under
the current provisions of the Income Tax Act, 1961 and the existing laws for the time being in force, the following benefits, inter-
alia, will be available to the Company and the Members. However, an investor is advised to consider in his own case the tax implications
of an investment in the shares from time to time. The statement of tax benefits certificate from the tax auditors of the Company is
reproduced below:
The Board of Directors
Soma Textiles & Industries Ltd.
Rakhial Road
Ahmedabad – 380 023, Gujarat
Subject: Tax Benefit available to Company and its members
Dear Sirs,
Please refer to your letter dated 16.08.2005 requesting us to provide the certificate regarding benefits available to the company and
its members under the Income Tax Act 1961, the Wealth Tax Act 1957 and the Gift Tax Act 1958.
It is hereby certified that under the current provisions of the Income tax Act, 1961 and existing laws for the time being in force, the
following benefits, inter-alia, will be available to the company and its members.
A. To the Company
The Company will be entitled for the following tax benefits in computing the Taxable Income under the provisions of the Income Tax
Act, 1961 (The Act):
      1.     Under Section 32 of the Act, the Company is entitled to claim depreciation on tangible and intangible assets as explained
             in the said section.
      2.     Subject to compliance of certain conditions laid down in Section 32 (iia) of the Act, the company is entitled to additional
             depreciation on new machinery or plant acquired and installed after 31.03.2005.
      3.     Subject to compliance of certain conditions laid down in Section 35(1) (iv) of the Act, the company is entitled to claim as
             deduction the whole of capital expenditure, other than the expenditure incurred on the acquisition of any land, incurred
             on scientific research related to the business of the Company.
      4.     The company can carry forward and set-off the unabsorbed depreciation allowances, if any, against the income of future
             years. The company is also entitled to carry forward and set-off its unabsorbed business losses for a period up to eight
             subsequent years for set-off against its business income.
      5.     The company can carry forward the excess of tax paid under MAT (Section 115 JB) over and above the normal tax payable
             on its Total Income. The same can be carried forward and set-off against normal tax payable in subsequent five years,
             subject to the stipulated limits. No credit will be allowed in respect of MAT paid in any assessment year for the period ending
             upto 31/03/2005.
      6.     In accordance with and subject to the conditions specified in Section 80IA of the Act the Company would be entitled to
             deduction of 100% of profits derived from Industrial Undertaking engaged in generation and/or distribution or transmission
             of power for any 10 consecutive assessment years out of fifteen years beginning from the year, in which the undertaking
             generated power or commences transmission or distribution of power before 31.03.2006.
      7.     By virtue of Section 10(34) of the Act, income earned by way of dividend income from another domestic company referred
             to in Section 115O of the Act, are exempt from tax in the hands of the company.
      8.     Under Section 35D of the Act, the company will be entitled to a deduction equal to 1/5 of the expenditure of the nature
             specified in the said Section, including the expenditure on the proposed issue by way of amortisation over a period of 5
             years, subject to the stipulated limits.
      9.     Under Section 36 (1) (iii) of the Act, the Company is entitled to claim deduction of Banking Cash Transaction Tax paid on
             Taxable Banking Transactions entered into by it.
      10.    The Company is entitled for depreciation @ 50% on the assets purchased under Technology Upgradation Fund Scheme
             (TUFS) announced by the Government of India in the form of a resolution of the Ministry of Textiles.
B. To the members of the Company
      1.     As per the provisions of Section 10(38) of the Act, income arising from transfer of long term capital assets, being an equity
             share in a company is exempt from tax, if the transaction of such sale has been entered into on or after 01.10.2004 and
             such transaction is chargeable to the securities transaction tax..
      2.     As per the provisions of Section 111A of the Act, short term capital gain arising from transfer of equity share in a company
             shall be chargeable to tax @ 10%, if the transaction of such sale has been entered into on or after 01.10.2004 and such
             transaction is chargeable to the securities transaction tax. However, where the income includes any such short term capital
             gain, it shall not be considered for deduction under chapter VIA.
      3.     As per the provisions of section 54ED of the Act and subject to the conditions specified therein, capital gains not exempt
             under section 10(38) and arising from transfer of long term assets, being listed securities or units shall not be chargeable
             to tax, to the extent such gains are invested in acquiring Equity Shares forming part of an “eligible issue of share capital”
             within six months from the date of transfer of the long term assets (provided they are not transferred within one year


                                                                     20
            of acquisition). Eligible issue of share capital has been defined as an issue of Equity Shares which satisfies the following
            conditions:
       *    the issue is made by a public Company formed and registered in India; and
       *    the shares forming part of the offer for subscription to the public.
            The issue of shares by the Company being an eligible issue of share capital, the subscribers thereto would be eligible to
            claim the exemption granted under section 54ED.
       4.   As per the provisions of Section 54F of the Act and subject to the conditions specified therein, in the case of an individual
            or a Hindu Undivided Family (HUF), gains arising on transfer of a long term capital asset (not being a residential house)
            are not chargeable to tax, if the entire net consideration received on such transfer is invested within the prescribed period
            in a residential house. If part of such net consideration is invested within the prescribed period in a residential house,
            then such gains would not be chargeable to tax on a proportionate basis. For this purpose, net consideration means
            full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any
            expenditure incurred wholly and exclusively in connection with such transfer.
       5.   As per the provisions of Section 115AD of the Act and subject to the conditions specified therein, income received by
            Foreign Institutional Investor in respect of securities shall be taxed @ 20% and income by way of Long Term Capital
            Gains arising from the transfer of such securities shall be taxed @ 10%. The income by way of short term capital gains
            referred to in Clause (b) of Section 115AD shall be taxed @ 30% and income by way of short term capital gains referred
            to in Section 111A shall be taxed @ 10%.
       6.   Section 10(34) provides that any income by way of dividends referred to in section 115(O) i.e. dividend declared, distributed
            or paid by a domestic Company, on or after 1st April, 2003 is exempt in the case of all categories of assesses.
C.     Additional Benefits Available to non-residents Indians
       Non-resident Indians have an option to be governed by the special provisions of Chapter XIIA of the Act according to which;
       1.   Under Section 115 G of the Act, it shall not be necessary for the Non-resident Indian to furnish their return of income, under
            Section 139(1) of the Act, if their source of income is only investment income or income by way of long term capital gains
            or both, provided income tax deductible at source under the provisions of chapter XVII B has been deducted from such
            income.
       2.   The benefit conferred on a Non-resident Indian assessee will be available even after the assessee becomes a resident
            if declaration in writing is filed along with the return of income under Section 139(1) of the Act, to the effect that the provisions
            of Chapter XII A shall continue to apply to him in respect of investment income derived from foreign exchange asset vide
            Section 115 H of the Act, until the Transfer or conversion (otherwise than by transfer) into money of such assets.
       3.   Under Section 115 I of the Act, a Non-resident Indian, if he elects by so declaring in the return of his income for that assessment
            year, not be governed by the above mentioned special provisions of chapter XII-A, than he will be entitled to tax benefits
            available to resident individuals.
D. Benefits available to Mutual Funds
Under Section 10(23D) of the Act, all Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or regulations
made there under, Mutual Funds set up by Public Sector Bank or Public Financial Institutions, or authorised by the Reserve Bank of
India and subject to such conditions as may be notified by the Central Government will be exempt from income tax on any income.
Wealth Tax
The Shares held in a Company are not liable to Wealth Tax under the Wealth Tax Act, 1957.
Notes:
a.     All above benefits are as per the current tax law as amended by the Finance Act, 2005.
b.     The stated benefits will be available only to the sole/first named holder in case the shares are held by joint holders.
c.     In respect of non residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefit
       available under the Double Taxation Avoidance Agreements, if any, between India and the country in which the non resident
       has fiscal domicile.
d.     In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect
       to specific tax consequences of his/her participation in the scheme.
For, Pipara & Co.
Chartered Accountants,



Sd/-
(G C Pipara)
Partner


Place: Ahmedabad
Date: 31st August, 2005



                                                                       21
                                SECTION IV – ABOUT THE ISSUER COMPANY
1. Industry Overview:
The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14%
of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after
agriculture.
Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving
quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products,
with substantial value-addition at each stage of processing; it is a major contribution to the country’s economy.
Its vast potential for creation of employment opportunities in the agricultural, industrial, organized and decentralized sectors & rural
and urban areas, particularly for women and the disadvantaged is noteworthy.
Although the development of textile sector was earlier taking place in terms of general policies, in recognition of the importance
of this sector, for the first time a separate Policy Statement was made in 1985 in regard to development of textile sector. The textile
policy of 2000 aims at achieving the target of textile and apparel exports of US $ 50 billion by 2010 of which the share of garments
will be US $ 25 billion. The main markets for Indian textiles and apparels are USA, UAE, UK, Germany, France, Italy, Russia,
Canada, Bangladesh and Japan.
The main objective of the textile policy 2000 is to provide cloth of acceptable quality at reasonable prices for the vast majority
of the population of the country, to increasingly contribute to the provision of sustainable employment and the economic growth
of the nation; and to compete with confidence for an increasing share of the global market.
Current scenario
Developing countries with both textile and clothing capacity may be able to prosper in the new competitive environment after the
textile quota regime of quantitative import restrictions under the multi-fibre arrangement (MFA) came to an end on 1st January,
2005 under the World Trade Organization (WTO) Agreement on Textiles and Clothing.
As a result, the textile industry in developed countries will face intensified competition in both their export and domestic markets.
However, the migration of textile capacity will be influenced by objective competitive factors and will be hampered by the presence
of distorting domestic measures and weak domestic infrastructure in several developing and least developed countries. The elimination
of quota restriction will open the way for the most competitive developing countries to develop stronger clusters of textile expertise,
enabling them to handle all stages of the production chain from growing natural fibres to producing finished clothing.
The OECD paper says that while low wages can still give developing countries a competitive edge in world markets, time factors
now play a far more crucial role in determining international competitiveness. Countries that aspire to maintain an export-led strategy
in textiles and clothing need to complement their cluster of expertise in manufacturing by developing their expertise in the higher
value-added service segments of the supply chain such as design, sourcing or retail distribution. To pursue these avenues, national
suppliers need to place greater emphasis on education and training of services-related skills and to encourage the establishment
of joint structures where domestic suppliers can share market knowledge and offer more integrated solutions to prospective buyers.
The textile industry is undergoing a major reorientation towards non-clothing applications of textiles, known as technical textiles,
which are growing roughly at twice rate of textiles for clothing applications and now account for more than half of total textile production.
The processes involved in producing technical textiles require expensive equipments and skilled workers and are, for the moment,
concentrated in developed countries. Technical textiles have many applications including bed sheets; filtration and abrasive materials;
furniture and healthcare upholstery; thermal protection and blood-absorbing materials; seatbelts; adhesive tape, and multiple other
specialized products and applications. India must take adequate measures for capturing its market by promoting research and
development in this sector.
The mood in the Indian textile industry given the phase-out of the quota regime of the multi-fibre arrangement (MFA) is upbeat
with new investment flowing in and increased orders for the industry as a result of which capacities are fully booked up to April
2005. As a result of various initiatives taken by the government, there has been new investment of Rs.50,000 Crore in the textile
industry in the last five years. Nine textile majors invested Rs.2,600 Crore and plan to invest another Rs.6,400 Crore. Further,
India’s cotton production increased by 57% over the last five years; and 3 million additional spindles and 30,000 shuttle-less looms
were installed. The industry expects investment of Rs.1,40,000 Crore in this sector in the post-MFA phase. A Vision 2010 for textiles
formulated by the government after intensive interaction with the industry and Export Promotion Councils to capitalize on the upbeat
mood aims to increase India’s share in world’s textile trade from the current 4% to 8% by 2010 and to achieve export value of
US $ 50 billion by 2010 Vision 2010 for textiles envisages growth in Indian textile economy from the current US $ 37 billion to
$ 85 billion by 2010; creation of 12 million new jobs in the textile sector; and modernisation and consolidation for creating a globally
competitive textile industry.
There will be opportunities as well as challenges for the Indian textile industry in the post-MFA era. But India has natural advantages
which can be capitalised on strong raw material base - cotton, man-made fibres, jute, silk; large production capacity (spinning -
21% of world capacity and weaving - 33% of world capacity but of low technology); vast pool of skilled manpower; entrepreneurship;
flexibility in production process; and long experience with US/EU (European Union). At the same time, there are constraints relating
to fragmented industry, constraints of processing, quality of cotton, concerns over power cost, labour reforms and other infrastructural
constraints and bottlenecks. E.g., cost of power was Rs. 8 per garment in India whereas in China it was only Rs. 2 per garment.
Further, for the benefit of exporters, there should be a state-owned cargo shipping mechanism. Several initiatives have already
been taken by the government to overcome some of these concerns including rationalisation of fiscal duties; technology upgradation
through the Technology Upgradation Fund Scheme (TUFS); setting up of Apparel Parks; and liberalisation of restrictive regulatory
practices.


                                                                       22
Shri Kamal Nath, Union Minister of Commerce & Industry, has said that India will take up the issue of non-tariff barriers (NTBs) in
the World Trade Organisation (WTO) Doha round of multilateral trade negotiations, which are expected to gather steam from March
2005 onwards
On the eve of republic day president Shri Kalam said that. “India is presently exporting six billion U.S. Dollars worth of garments, whereas
with the WTO regime in place, we can increase the production and export of garments to 18 to 20 billion U.S. Dollars within the next
five years. This will enable generation of employment in general and in rural areas in particular. By tripling the export of apparels,
we can add more than 5 million direct jobs and 7 million indirect jobs in the allied sector, primarily in the cultivation of cotton. Concerted
efforts are needed in cotton research, technology generation, transfer of technology, modernisation and upgrading of ginning and pressing
factories and an aggressive marketing strategy.”
     Latest news in textile sector
1.   Ministry of finance has added 165 new textile products under duty drawback schedule. The new products included wool tops,
     cotton yarn, acrylic yarn, viscose yarn, various blended yarn/fabrics, fishing nets etc. Further, the existing entries in the drawback
     schedule relating to garments have been expanded to create separate entries of garments made up of (1) cotton; (2) man
     made fibre blend and (3) MMF. Separate rates have been prescribed for these categories of garments on the basis of composition
     of textiles.
2.   After the phasing out of quota regime under the multi-fibre pact, India can envisage its textile sector becoming $100b industry
     by 2010. This will include exports of $50b. The proposed targets would be achieved provided reforms are initiated in textile
     sector and local manufacturers adopt measures to improve their competitiveness. A 5-pronged strategy aiming to attract FDI
     by making reforms in local market, replacement of existing indirect taxes with a single nationwide VAT, liberalization of contract
     norms for textile and garments units, elimination of restrictions that cause poor operational and organizational performance
     of manufacturers, was suggested.
3.   The Union Minister Shri Shankarsinh Vaghela said that the Board for Industrial and Financial Reconstruction (BIFR) had approved
     rehabilitation schemes for sick NTC mills at a cost of Rs 3,900 Crore. Of the 66 mills, 65 unviable mills have been closed
     after implementing voluntary retirement scheme (VRS) to all employees. According to him, the government has already constituted
     assets sale committees comprising representatives of Central and state governments, operative agency, BIFR, NTC and the
     concerned NTC subsidiary to effect sale of assets through open tender system.
4.   Proposals for modernization of NTC mills have been made to the consultative committee members, including formation of
     a committee of experts to improve management of these mills. Even the present status of jute industry was under the scanner
     of the consultative committee.
5.   The Government had announced change from the value-based drawback rate hitherto followed to a weight-based structure
     for textile exports that will discourage raw material exports and also curtail the scope for misusing the drawback claims by
     boosting invoice value of exports.
6.   NCDEX launched its silk contract (raw silk and cocoon) on Thursday, January 20,2005.. With this launch, the total number
     of products offered by NCDEX goes up to 27.The launch of the silk contract will offer the entire suite of fibres to the entire
     value chain ranging from farmers to textile mills. With the objective of protecting the interests of the those affected but WTO
     agreements and globalisation process, Government of India jointly with NCDEX has adopted a policy of encouraging future
     contracts of silk. The Ministry of Textiles and the Central Silk Board (CSB) had decided to introduce futures trading in mulberry
     cocoons and raw silk on NCDEX. The basic purpose is to mitigate the risk associated with the changing prices through an
     efficient price discovery mechanism. Futures trading on the NCDEX will provide an alternative trading avenue for farmers,
     weavers and traders and help them make a better price discovery for their produce. It will also help them to reduce risks
     associated with price volatility through hedging
7.   Union Budget 2005 for Textiles Industry :
     • Polyester duty cut
     • Machinery to cost less as custom duties on machineries reduced
     • Duties of Manmade Yarns - Polyester, Filament Yarns reduced to 15%
     • To invest Rs 30,000 Crore in textiles in FY06 vs Rs 20,000 Crore
     • To extend insurance scheme for 20 lakh handloom weavers
     • 30 items dereserved in textile sector Schemes:
     • 10% Cap Subsidy Plan For Textile Processing Sector
     • TUF scheme to continue
     • To launch manufacturing competitiveness plan for SMEs
     • To ask RBI to open window for ECBs for micro-finance firms
     • Hike in funds for technological improvements
     • To extend insurance scheme for 20 lakh handloom weavers
Source: http://www.economywatch.com
2. Business Overview:
The Company is engaged in textile industry since 1969. The Company’s Ahmedabad Unit is Composite Textile Mills, manufactures
cotton and blended yarn, cotton and blended bottom weigh and Denim fabrics. The Company’s Baramati Plant is 100% EOU engaged
in manufacturing of cotton yarn. The Company has long presence in the Textile Market.


                                                                      23
Location
The existing works of the Company are located at :
Unit No.1                                                                       Unit No.2
Soma Textiles & Industries Ltd.                                                 Soma Textiles & Industries Ltd.
Rakhial Road                                                                    D-49,MIDC, Baramati–413133
Ahmedabad – 380 023, Gujarat                                                    Dist. Pune, Maharashtra
The Company envisages increasing its Denim manufacturing capacity from existing 8 million meters to 28 million meters in a phased
manner. Expansion is planned in two phases each of 10 million meters capacity addition. For the first phase, the Company has tied
up most of its critical machineries; construction work has started since May, 2005. The project will start commercial production by
February, 2006. The Company plans to add further 10 million meters capacity in this 2nd phase. The proposed project is being carried
out in the existing factory premises of the Company. Infrastructure including building is being set up considering 1st and 2nd phase
expansion.
The upgradation of existing spinning machineries is proposed to be carried out in the existing premises of the Company.
The proposed project of Garment Unit is envisaged to be set up on additional 20,000 square yard of land. The proposed cost of additional
land is estimated at Rs. 500 lacs @ Rs 2500 per yard. The Gujarat Industrial Development Corporation (GIDC) is developing Apparel
Park in Khokhara area of Ahmedabad city which is near the company’s existing premises. The Company has applied for suitable plot
for its new project. It is under consideration by GIDC. The proposed site will have following advantages:
• Ease in Availability of Raw Material from existing unit.
• Negligible transport cost leading to better operating margins.
• Leverage on familiarity to the current area in terms of past experience.
Brief details of the Project
The Company wishes to leverage on its core competence of textile industry. With the envisaged project the Company will have a
complete supply chain and will assist to supply final product in form of garment to its prospective customers. The Company foresees
huge demand in Denim Garments in the years to come from Domestic as well as International market with phasing our of quota system.
The Company has rich experience in Global market due to its presence in supplying yarn to its overseas customers located throughout
the globe. At present there is adequate demand of Denim in domestic as well as international markets.
In order to achieve the right quality and productivity, it is essential that the right technology is adopted. The company’s conversance
with the current trends and technology ensures that no corners are cut in order to ensure that its products are of International Standards
at the lowest possible cost.
Scope of New Project
Due to locational advantages, past experience in this sector, core competence in making high quality, yarn and fabrics – bottom weight
and denim, STIL is now planning an expansion that envisages setting up of 10 million meters of Denim, upgradation of its some of
the spinning machineries, setting up garment unit with capacity to manufacture 20,000 garments per day. The Expansion Project is
being set up with an aim to become a leading player in textile and apparel segment.
The project encompasses the following critical elements for its successful implementation:
• Additional land of approximately 20,000 yards, to set up its Garment unit with capacity of manufacturing 20000 garments per day.
• 10 million meters additional capacity for Denim Plant.
The detailed break up of each component of the project cost is as under:
                               STATEMENT SHOWING THE COST OF PROJECT                                                       (Rs. In Lacs)
Sr. Machine Particulars                              Manufacturer    Quotation Date    Qty.      Total          Date of         Expected
No.                                                                                              Cost       Purchase Order Date of Delivery
      Ahmedabad - Denim Unit
A     LAND AND SITE DEVELOPMENT
1       BUILDING
i)    FACTORY                                  Estimated                                 1      132.50
ii)   BOILER HOUSE                             Estimated                                1        6.27
      SUB TOTAL:                                                                                138.77
B     PLANT AND MACHINERIES
1     WARPING MACHINE
      High speed direct beaming m/cmodel
      bendirect -1400-1800 gv/optostop-560     Benninger                                1        91.48     Yet to be placed        —-
2     WARPING BEAM                             Bharat Bobbins Ltd                      48        49.07            “                —-
3     BEAMS STORAGE STOKER                     Visco                                    2        33.71            “                —-
4     INDIGO DYEING AND SIZING MACHINE         Benninger                                1       1,219.69          “                —-
5     DRYING CYLINDER                          Kuster-Calico                            1        34.29            “                —-
6     PIPING, CABLING & STORAGE TANK FOR RANGE Local                                    1        42.48            “                —-
7     OVERHEAD CRANE -3 MT                     Hi- Tech                                 1         4.94            “                —-
8     COMBINATION SOFT FEEL,FLAT FEEL
      FINISHING RANGE FOR DENIM                Dhall                                    1       122.67            “                —-
9     WEAVING MACHINE . -AIRJET


                                                                    24
      fabric width 190 cm speed 900 rpm.              Itochu Texmach Corp+E1               50      870.41     “    —-
      WEAVERS BEAM WITH GEAR                          Bharat Bobbins Ltd 111              45.33         “     —-
10    DROP     PINS                                   Local                                324        4.33    “    —-
11    HEALD     WIRE                                  National                           180,000      7.04    “    —-
12    BATCHING          MOTION                        Shree Laxmi Vijay Engg               50        71.44    “    —-
13    ROLL INSPECTION CUM ROLL
      FOLDING MACHINE FOR FABRICS                     Shree Laxmi Vijay Engg                4        14.81    “    —-
14    KNOTTING MACHINE                                Jaytex                                2          6.06   “    —-
15    BOILER- 10 TPH                                  Thermax Ltd                           1        68.89    “    —-
16    CENTRIFUGAL COMPRESSOR                          Ingersold Rand                        1        70.96    “    —-
17    AIR RECEIVER(accessory to Air Comp.)            Rachna Corp                           1          2.04   “    —-
18    SOFTENING PLANT                                 Delta Corporation                     1        17.40    “    —-
19    HUMIDIFICATION PLANT-70000
      CFMWEAVING LUWA                                 Luwa                                  1        30.71    “    —-
      SUB TOTAL:                                                                                   2807.75
C     ELECTRICAL EQUIPMENTS
21    ELECTRICAL EQUIPMENTS WITH CABLES
i)    CABLE                                           Gloster                               1        38.77    “    —-
iv)   LT DISTRIBUTION BOARD FOR NEW TRANSFORMER                             Estimated       1        17.39    “    —-
v)    PCC FOR DEPARTMENT                              Estimated                             1        12.10    “    —-
      SUB TOTAL:                                                                                     68.26
D     OTHERS
22    MISCELLANEOUS FIXED ASSETS @ 5% OF TOTAL                                                      155.70
      SUB TOTAL:                                                                                    155.70
      TOTAL:                                                                                       3170.48
      Ahmedabad - Weaving Upgradation
1     Sizing Machine                                  Benninger                             1       276.16    “    —-
      Ahmedabad - Spinning Upgradation
1     BLOW ROOM                                       Rieter
      Rieter                                                                                1       678.87    “    —-
2     CARDC-60                                        Rieter                                8                 “    —-
      Accessories (Rieter)                            Rieter                                1        24.36    “    —-
3     SPEED FRAME                                     Rieter                                3       239.60    “    —-
      F15 with 3/3 drafting 120spindles /mc ,                                                                 “    —-
      16*7" bobbin size                                                                                       “    —-
4     RING FRAME                                      Rieter                                6       618.17    “    —-
      Rieter auto doffing 1200 spindles /mc,                                                                  “    —-
      54 mm ring dia 75 mm gauge ,                                                                            “    —-
      240/280 mm lift                                                                                         “    —-
5     AUTO CONER                                      Muratec                               3       278.91    “    —-
6     FILTER UNIT CF-75                               Trumac                                1        33.03    “    —-
7     Draw frame (Finisher )                          Rieter                                3        83.86    “    —-
8     Draw frame (Breaker )                           Rieter                                2        43.93    “    —-
9     Misc. accessories                               Local                                 1        46.72    “    —-
      TOTAL:                                                                                       2,047.46
      Ahmedabad - Upgradation of testing Facilities                                                 129.86
      Ahmedabad - Unit Phase II
      Total Building Plant & Machinery                                                             5623.96
      Baramati Unit - Spinning Upgradation
A     BLOWROOM
1     Uniflex B60 Machine                             Rieter                                1        31.10    “    —-
2     New MBO for Line 3 Mixing Area                  Lakshmi Machine Works12.08.2005       1        10.25    “    —-
3     Vision Shield                                   Rieter                10.02.2005      3       298.26    “    —-
B     CARD


                                                                       25
1    Card Cans 600 mm                                  Tat a i s h i                      24.08.2005            20       0.98    “   —-
2    Card Cans 1000 mm                                 Tat a i s h i                      24.08.2005            10       3.11    “   —-
3    Sliver Data                                       Uster                                                    5        7.89    “
C    PRE      DRAW      FRAMES                                                                                           0.00
1    SB2 Cans 600 mm                                   Tat a i s h i                      24.08.2005            24       1.36    “   —-
2    Sliver Data                                       Uster                                                    1        1.58    “   —-
D    UNILAP                                                                                                                      “
1    Sliver Data                                       Uster                                                    2        3.16    “   —-
E    COMBER                                                                                                                      “
1    Comber       Machine       E65                    Rieter                                                   2      141.62    “   —-
2    Comber Cans 600 mm                                Tat a i s h i                                            20       1.14    “   —-
3    Sliver Data                                       Uster                                                    4        6.31    “   —-
F    POST       DRAW       FRAME
1    Draw Frame machine D35                            Rieter                                                   1       29.84    “   —-
2    Sliver Data                                       Uster                                                    1        1.58    “   —-
3    RSB Cans 500 mm                                   Rimtex                             06.01.2005           450       7.77    “   —-
G    SPEED        FRAME
1    Speed Frame Machine 68i                           Zincer                             11.08.2005            1       49.71    “   —-
2    Bobbins                                           Naval           Overseas                                10000     1.74    “   —-
3    Drafting      Conversion                          Lakshmi          Machine   Works                         4       18.45    “   —-
4    OHTC (2 machines per unit)                        Elgi                               16.08.2005            3        5.03    “   —-
5    S/F Bobbin Trolley                                Local      Party                   19.04.2005            10       0.87    “   —-
H    RING       FRAME
1    LMW      AUTO      DOFFING       RING    FRAME    Lakshmi          Machine   Works   1 0 . 0 8 .2 0 0 5    17     707.35    “   —-

2    Ring     Tubes       (accessories)                Naval Technoplast                  07.07.2005 100000             15.89    “   —-
                                                       Ind. Ltd.
3    Spindle tape etc. (accessories)                   Habasit Iakoka Pvt. Ltd.           31.05.2005           4300      0.76    “   —-
4    OVERHEAD CLEANER                 FOR
     RING FRAMES                                       Luwa India Pvt. Ltd                26.05.2005            17      19.09    “   —-
                                                                                                                                 “   —-
5    Premier Ring Data modification                    Premier Evolvics Pvt. Ltd          2 7 . 0 5 .2 0 0 5    17       3.57    “   —-
6    Roving      Bobbin      Transportation   System   Utit                                                     30      78.69    “   —-
7    Ring Frame Doff Box Trollies                      Rimtex                             27.05.2005            55       4.64    “   —-
8    Ring Frame Floor Slit Conversion                  Raj     industries                 21.07.2005            17       0.07    “   —-
I    WINDING
1    Winding      Machine                              Schlafhorst 338 / Murata           18.08.2005            1      136.75    “   —-
                                                       21C+
J    PACKING
1    Carton Sealing Machine                            ITW                                25.07.2005            1        2.70    “   —-
2    Carton      Strapping      machine                ITW                                03.08.2005            1        0.60    “   —-
K    QUALITY          CONTROL
1    Tenso      Rapid                                  Uster                              11.08.2005            1       60.76    “   —-
2    AFIS       Up-gradation                           Uster                              11.08.2005            1       49.71    “   —-
L    H Plant Modification                              LTG                                                       1       20.60   “   —-
M    Power Project/ MSEB                               Electricity Board/ Contractor                             1      120.00   “   —-
N    Building/Godowns                                  Contractor                                                1       75.00   “   —-
O    Consumables                                       Various Party                                             1        8.00   “   —-
P    Building Modification/ Civil Work                 Estimated Cost                                                     3.90   “   —-
Q    Electrical Installations                          Estimated Cost                                                     5.70   “   —-
R    Erection Charges                                  Estimated Cost                                                     9.30   “   —-
     Total                                                                                                             1944.86
     Garment Unit -
A    LAND AND SITE DEVELOPMENT
1)   Land and Site Development                                             Estimated                                    500.00



                                                                            26
     (20000 Sq.yard @ 2500 Rs.)
i)   Factory     Building                                Estimated               500.00
     (10000 Sq.yard @ 5000 Rs.)
     SUB       TOTAL:                                                           1000.00
B    PLANT       AND      MACHINERIES
     Cutting      Section
1    Automatic      cutting      machine     GT-7250     Gerber            1      88.47   “   —-
2    Automated       Spreader       SY-101               Gerber            2      54.06   “   —-
3    Cutting Table 30M*2M                                Mable             2      17.69   “   —-
4    Professional      additional     CAD      system    Gerber            1      12.29   “   —-
5    Straight Knife Cutting Machine 627 (8") Brute       Eastman           4       2.56   “   —-
6    band Knife Cutting Machine EC-900 N                 Eastman           1       2.03   “   —-
     Sewing       Section
1    1-Needle Lockstitch M/c with underbed thread
     trimmer DDL-8700-WB/SC 500                          Juki             200     92.98   “   —-
2    2-Needle,Needle Feed Lockstitch M/c with
     underbed trimmer LH-3178G-7-WB/SC 910/CP160         Juki             40      79.21   “   —-
3    Feed-off-the Arm M/c with Puller MS-1261 MF/PF -H   Juki             30      55.42   “   —-
4    2 Needle double chainstitch machine MH-380 U        Juki             20      23.52   “   —-
5    Belt Loop macking machine B-2000C                   Kansai    SPL     4       2.80   “   —-
6    2 Needle 5 Thread Safetystitch machine with
     puller  MO-6716S-FH6-60H/PQ                         Juki             20      16.09   “   —-
7    4 Needle double chainstitch machine with skip
     stitch device DLR- 1508P/AJ-90S                     Kansai    SPL    13      16.31   “   —-
8    Single Needle Cylinder Bed Lockstitch machine
     for bottom heming DLN-6390 S-7-WOA/SC 380           Juki             13      34.60   “   —-
9    Bartack M/c LK-1900AHS/MC -590 K                    Juki             15      24.66   “   —-
10   Automatic      Pocket        hammingMHA-P100L       Hams              4      42.60   “   —-
11   Computer controlled cyclic machine
     AMS-221 DHS 6047SZ KCB                              JUKI             10     107.98   “   —-
12   Computer controlled cyclic machine
     AMS-210DHL 6100 SZKAB                               Juki              5      32.19   “   —-
13   Automatic Front Fly Attaching M/C U-9906-D          Yuho              5      41.33   “   —-
14   Automatic Pocket            attaching    machine
     AVP-875-SEZ999              ZSZ                     Juki              7     225.18   “   —-
15   Automatic Belt Loop attaching machine MHA-B200P     Hams              5      33.51   “   —-
16   Computerised eyelet button holing
     machine    MEB-3200CS                               Juki              5      29.49   “   —-
     Mid    process       Section
1    Pneumatic Snap attaching NS-47                      Ngai     SHING    8       4.17   “   —-
2    Foam      Finisher     TF/AL                        Rotondi          13      59.90   “   —-
3    Thread     sucking       machine      NS-55         Ngai     SHING    8       7.90   “   —-
4    Thread     cleaning      machine        T-16-3450   Texmatic         10       8.36   “   —-
     Laundry & Finishing Section
1    Washing      machine        SP-550      (550Kg)     Cosmotex          8     221.17   “   —-
2    Drier machine -GAS DRIER 250                        Cosmotex          5      78.33   “   —-
3    Topper     NT-2      with     microprocessor        Cosmotex         10      33.79   “   —-
4    Top    Press      machines                          Cosmotex         10      41.78   “   —-
5    Work Station for brushing (6 positions)             Cosmotex          1       7.68   “   —-
6    Work Station for spraying (6 positions)             Cosmotex          1       7.68   “   —-
7    Hydro-extractor        NS      2500-200             Ngai     SHING    4      19.02   “   —-
8    Automatic legger press BL-E30                       Rotondi           5      18.43   “   —-
9    Automatic topper press BL-B99                       Rotondi          10      27.65   “   —-
10   Steam Iron HI-550 P                                 Hashima          12      11.80   “   —-
     Laboratory



                                                         27
1   Washing machine SP-35 for samples                              Cosmotex                         1              8.29     “            —-
2   Drier machine S-27 for samples                                 Cosmotex                         1              2.86     “            —-
3   Hydro-extractor     for   samples   HE-18                      Cosmotex                         1              2.33     “            —-
    Utilities
1   Boilers (3 ton)                                                Thermax                          1             19.74     “            —-
2   Air    Compressor                                              Firdos & Cambatta                1              3.35     “            —-
3   Effluent treatment plant                                       Micro   Vision                   1             53.83     “            —-
4   Bore                                                           M B Tubewell & Co                1              6.89     “            —-
5   Power House and Cabling                                                                         1             20.00     “            —-
6   Lighting etc.                                                                                   1              4.00     “            —-
    Miscellanceous fixed assets @ 5% of
    Total Plant & Machinery                                                                                       81.02
    SUB TOTAL:                                                                                                  1,784.93

    Garment Unit Total Cost (Land, Building, Plant and machinery)                                               2784.93                  -
The Company does not propose to buy any second hand machinery.
Purchase of Property
The Company is in process to purchase the land in the apparel park established by the Government of India & Gujarat Industrial Development
Corporation for the Garment Manufacturers, near Khokhra, Mahemdabad Road, Ahmedabad. The Company is planning to purchase
20000 squares yards for its Garmenting Unit.
The cost of the land is estimated at Rs. 500 lacs which shall be paid out of the proceeds of the issue offered for subscription.
Details of land to be acquired by the Company for the Garmenting Unit of the proposed project:

Sr. No.         Date of application              Name of the Land Owner                   Address                          Area

1               STA/203/3143                     Apparel Park to be established           Apparel Park near                20000
                Dt. 21-09-2005                   by GIDC & Government                     Khokhra, Mahemdabad              square
                                                                                          Road, Ahmedabad                  yards
The company has not purchased nor proposes to purchase any land from promoters / directors of the company.
Public Issue Expenses
The Expenses of the Issue payable by the Company inclusive of fees payable to the Lead Manager, Fees of Legal Advisors, Stamp
duty, Printing, Publication, Advertising and Distribution expenses, Bank Charges, Fees payable to the Registrar to the Issue, Listing
Fees, Brokerage and other miscellaneous Expenses are estimated to be approximately Rs.315 lacs and will be met out of the proceeds
of the issue.
Deployment of Funds in the Project:
The company has incurred an expenditure of Rs.32.72 lacs as on 25th October, 2005 on the proposed Project. The fund deployment
in the Project and its Means of Finance have been certified by M/s Pipara & Co., Chartered Accountants, Ahmedabad the Auditors
of the Company vide their certificate dated 25th October, 2005, the details of which are as follows:
                                                                                                                                (Rs. in lacs)

     Description                                                                                                            Amount
     Preliminary Expenditure
     Lead Manager Fees Advance                                                                                                    5.00
     Rating Agences Fees                                                                                                         11.71
     Share Issue Expenditure                                                                                                     16.01
                        TOTAL                                                                                                    32.72
     Means of Finance
     Internal Accruals                                                                                                           32.72
Collaboration
The Company has not entered into any technical or marketing collaboration for existing or proposed business.
Plant, Machinery, Technology & Process
The list of plant, machinery & other equipments required for the project and related details are given above in the section entitled “Scope
of new project”.



                                                                    28
Process of the Existing and Proposed Project
1.     BARAMATI UNIT
1.1    Process and Technologies used for Yarn Manufacturing at Company’s 100% EOU at Baramati, Maharashtra
1.1.1 MIXING: Cotton of different varieties is mixed by machine called as pre opener. The contaminations in opened cotton is picked
      up manually and put in the form of layers. It is allowed to remain in mixing form for about 24 hours to absorb its natural moisture.
      For this purpose a relative humidity is maintained.
1.1.2 BLOW ROOM AND CARDING: Cotton laid in the form of mixing is still compressed to some extent and consists of big lumps
      and contains impurities like cottonseeds, leafy matter and dust etc. In order to remove these impurities cotton is opened and
      given a beating through openers and beaters. The trash falls down and goes on collecting beneath the openers/beaters.
       The cotton, which is cleaned of heavy impurities and opened to a large extent, is fed to carding. The main functions of carding
       machines are to further open the cotton to the extent of individualization of fibers, reduction in neps generated in blow room,
       removal of fine trash and conversion of material from truft form to the sliver form.
       The cotton coming from blow room is fed to the licker in of carding machine having saw tooth type wires for preliminary
       opening and to main cylinder and further opening. After that the fibers are condensed at doffer, stripped off in the form of
       web and then converted to form sliver. The waste (unusable) is collected under the machine in the form of droppings and
       on the flat strips collecting roller near the flats. Floating fibers short in length are sucked by fan.
1.1.3 COMBING: As it is not possible to comb card slivers directly, the material is taken first to pre raw frame machine for further
      orientation of fibers. About 24 slivers of pre draw frames are fed together to Unilap machine, which forms a lap suitable
      for combing machine. Fixed length laps are doffed automatically as per pre-setting done on machine. These laps are then
      fed to combers.
       The main function of the combing machine is to remove short fibers below some predetermined length & finer trash. The
       material is fed to comber machine intermittently. It is gripped by the nippers and combing operation is done by half lap and
       top comb. The short fibers, trash etc., go on collecting at the back of the machine. This waste is known as noil.
1.1.4 DRAWING: After combing, the sliver is fed to 2nd & final draw frame with doubling and drafting of 6 - 8 slivers to get the
      same thickness of delivered sliver as that of fed sliver. Here, the regularity of sliver is improved and also parallelization of
      fibers takes place. This draw frame is attached with Autolevellers, which ensures uniform weight of sliver delivered along
      the length. Subsequently this enables to control count CV.
1.1.5 SPEED FRAME: As with the spinning machine available, it is not possible to spin yarn directly from sliver in single step,
      the job is done in two steps. First step is to reduce the thickness of the sliver by drafting and then impart some false twist
      to the drafted fleece known as roving with a view to give compactness. At the same time, roving is wound on a plastic tube
      known as bobbin.
1.1.6 RING FRAME: The roving bobbins produced on speed frames are creeled on Ring Frame. Then this roving is drafted as
      per fineness of yarn required i.e. as per count of yarn. Twist is imparted through the rotating spindles with the help of ring
      travelers. The yarn produced is wound on tubes known as bobbins. When the bobbins are full, the machine is stopped and
      all the full bobbins are replaced with empty bobbins and machine is restarted. In case of an end breakage, the drafted roving
      is not twisted. It is sucked by a suction fan and collected in a box. The same is reused as soft waste.
1.1.7 AUTOCONER WINDING:
       Full bobbins taken out from ring frames are fed to Autoconer winding machine by a feeder mechanism. These bobbins go
       to winding positions. The function of winding is to clear various types of objectionable faults and convert small bobbins into
       big packages called as cones. The yarn faults are cleared with the help of electronic yarn clearers. If fault is cut then yarns
       are joined with splice. When the cone reaches its pre-set diameter the drum and cone stop and the full cone is replaced
       with the empty cone automatically.
1.1.8 TFO: The yarns, which are sold as single, are going directly for finish packing whereas the yarns, which are to be doubled,
      are taken for doubling operation. This operation is carried out in two steps. In first step two yarns are wound on plastic cheese
      parallels (without twist). In second step these cheeses are creeled on TFO machines (Two for One Twister). This machine
      imparts twist to the parallel yarn according to requirement. After twisting the yarn is wound on cone. This machine has
      spindle, which imparts twist to the yarn. In one revolution of spindle two twists are imparted. So this is called as two for
      One Twister (T.F.O.)
1.1.9 PACKING: Before packing cones are conditioned in standard temperature and humidity. After this full cones are packed
      manually in corrugated boxes according to customers requirement and tape and strapping is done by machine. Shipping
      marks are printed on boxes according to customer’s requirement and finally boxes are shifted to excise bonded godown
      for dispatch.
1.2    Raw Materials
       Cotton is available in a number of varieties based on the length and softness of the fiber. Depending upon the type of yarn
       required to be manufactured, a particular variety or a mix of several varieties of cotton is used. The Company is procuring
       its cotton requirement from various states like Maharashtra, Gujarat, Andhra Pradesh, Punjab and Rajasthan. The Company
       also imports cotton from USA, Australia and Africa which mainly depends upon requirement of variety of cotton, cotton prices
       in international market and availability of cotton.
       Domestic crop of cotton is likely to reach 23.5 million bales, up from 21.5 million bales a year ago because of more area
       under cultivation, good weather and extensive use of transgenic seeds. Source: http://www.financialexpress.com
1.3    Utilities


                                                                    29
1.3.1 Power : The unit is self sufficient in power and has got captive power plant of having D.G sets of Skoda and Hyundai make
      (7.2 MW installed capacity). No additional power is requirement is envisaged.
1.3.2 Water : The Company sources the water required for the existing operations and for drinking from Maharashtra Industrial
      Development Corporation. No additional water requirement is envisaged
1.3.3 Fuel: The Company requires buying Furnace Oil for operating its captive power plant. There is no difficulty envisaged in procurement
      of furnace oil. The annual consumption of Furnace oil is 6000 KL. The Company procures its furnace oil from Hindustan Petroleum
      and Bharat Petroleum depots located at Mahol (Mumbai) which are about 300 Kms. from factory. The Company has storage
      tank of 240 KL. No additional fuel requirement is envisaged.
1.3.4 Air : The existing requirement of air is about 2000 CFM which is met by compressors installed along with Air Dryers.
1.3.5 Effluent Treatment Plant: The spinning mill is not generating any effluent water and hence Effluent Treatment Plant is not
      required.
1.3.6 Air Pollution : The Company has installed automatic waste collection system to take care of Air Pollution.
1.3.7 Noise Pollution : Main source of noise in a Spinning Mill is from Ring frame machines. The company is taking adequate measures
      to ensure noise level is maintained within the limits prescribed Maharashtra Pollution Control Board.
1.3.8 Pollution Control: This is non polluting industry. The company is certified with Environmental Management System ISO 14001.
      The company has Automatic humidification system with which air circulation in each dept are regulated. The Company has obtained
      consent from Maharashtra Control Board for treatment of domestic waste, air, and noises vide consent no. ROP/E-25/CC/UB/
      PUNE/1766/4238/04 dated 4th December, 2004.
1.4    Product manufactured by the Company : The company produces cotton yarn in different counts ranging from Ne 24’s
       to Ne 100’s and Ne 30/2 to 100/2.
1.5    Company’ Product grades and applications: The company produces single as well as double, hosiery as well as warp
       yarns made out of 100 % cotton. The yarn quality produced by the company is accepted by quality conscious customers of
       Indian and Overseas markets.
       Most of the yarn quality parameters are matching with 5 % Uster Statistics (2001). The company has established its name in
       producing super fine quality of contamination free yarns. The yarn supplied by the company is used as raw material for textile
       products i.e. for weaving of the fabric.
1.6    Marketing and Sales Strategy: The Company has a team of marketing personnel experienced in domestic as well as international
       market for selling yarn. The company operates its business through domestic agents who are having rich experience in this
       line of business. As a matter of policy the Company exports most of its consignments against irrevocable letters of credit.
       Names of the Major customers
       Name                                                         Place
       Pacific Textiles Ltd.                                        Hong Kong.
       Elof Hanson                                                  Sweden
       ITS                                                          Tunisia
       Mantafil                                                     Italy
       Manifattura C.A.P.                                           Italy
       Sotrimo                                                      Tunisia
       Ashima Ltd.                                                  Ahmedabad, India.
       Arvind Mills Ltd.                                            Santej, India
1.7    Export Performance
       Export performance of Baramti Unit of the Company for last five years is highlighted as under:
                                                                                                                              Rs. in lacs

       Year                                FOB Value of Exports                     Net Sales                    % of Net Sales
       31st March 2005                             2,975.07                         16,704.62                          18%
         st
       31 March 2004                               3,585.91                         15,131.40                          24%
       31st March 2003                             4,101.00                         13,887.41                          30%
       31st March 2002                             4,158.35                         11,693.30                          36%
       31st March 2001                             5,009.27                         11,527.49                          43%
2.     AHMEDABAD UNIT
2.1    Process and Technologies used for Fabric
2.1.1 SPINNING : Cotton and/or Man-made fibre in the pressed bale form are opened and mixed in the pre-determined proportion
      according to the yarn to be manufactured. The mixed raw material is passed through Blow Room Machineries where hard pressed
      lumps are opened out by beating process and all the foreign matter such leaves, seeds, sand, etc. are thrown out by Centrifugal
      Force. The loose cotton is converted in the forms of laps.
       The final laps are fed to the Carding Machines where short fibers and waste are taken out. The fibers separated in soft form
       are converted into the form of Slivers.

                                                                    30
        These slivers are fed in the Draw Frame where 6 or 8 slivers are drawn in one sliver. In this process, staples are made parallel.
        Thick and thin portion is removed and the sliver is made more uniform. Draw Frame slivers are fed into can-fed inter where
        size of the sliver is reduced and twist is applied to make it withstand the strain in Ring Frame Process.
        Where very fine counts are to be spun, combing process is taken up. In this process, short fibres and foreign matters are
        further removed to make the slivery more clean, strengthened and parallel It gives silky appearance to the sliver.
        Inter Bobbins are then fed to the Ring Frame where final spinning of yarn of desired Count is obtained by applying drafting
        and twisting. The ready yarn is doffed from the Ring Frame and sent to the Winding System.
2.1.2 WEAVING:


2.1.2.1 Winding :- From Ring Bobbins, bigger packages are made in the Winding Process. During the Winding Process, the defects
        of the yarn such as foreign matters, slub, snarls, bad piecing, weak thin and thick places are eliminated.
2.1.2.2 Warping :- The bigger packages are then sent to Warping process where thy yarn in laid in a form of sheet over the beam
        with equal density and spacing. Approx. 450 to 550 ends are generally taken in Warping. The total number of ends are
        adjusted according to quality of cloth to be woven.
2.1.2.3 Sizing :- In the final stage of waving the fabric, the yarn is subjected to heavy stresses and strains. It is, therefore, required
        that the yarn is strengthened by passing it through size paste.The beams are put at the back of the Sizing Machine and
        the yarn is passed through the Sizing Machine and the sized beams come out in front of the Sizing Machine.
2.1.2.4 Drawing-in Department :- All the individuals threads are drawn through Heald and Reeds to control each individual end
        of the yarn and keep it at a equal distance in the fabric. Such drawn beams are sent to Weaving Department where actual
        fabric is woven.
2.1.2.5 Loom-shed :- The drawn beams are sent to the Weaving Shed and the beams are gaited on the looms. In the Weaving
        Machine, the yarn is controlled in the form of sheet and the insertion of the weft is done in between two groups of sheets
        as per the construction of the cloth. With the insertion of the weft at equal interval of the space, final cloth is produced,
        which is know as Grey Cloth.
2.1.3    PROCESSING of Grey/Blended/Polyester/Cotton Fabric:
2.1.3.1 Shearing & Cropping : - The grey cloth from the loom stage is stitched end to end to obtain a greater lengths so that
        it can be passed through Shearing & Cropping machine with ease. The purpose of passing the fabric through Shearing
        & Cropping Machine is to cut all the protruding loose ends of the body and the selvedge of the cloth.
2.1.3.2 Singeing :- Thereafter, the cloth is passed through the Singing Machine to burn out the loose ends, fluffs and the foreign
        matters, etc. it is also at the same time de-sized.
2.1.3.3 Bleaching :- The grey fabric is first treated for desizing and then given treatment like Soda Boil, Chemicking, Hydrogen
        Peroxide, boil etc. and washing of fabric takes place after every treatment. Now all these operations are carried out in
        JT-10 machines, only, in open width form.
2.1.3.4 Heat Setting :- a) If the cloth is to be sold as Bleached only, the fabrics will be given a treatment of optical whitening
        agent with Hydrogen Peroxide on the Stentering Machine to get the optimum whiteness on the fabric. b) If the cloth is
        meant for Dyeing only, it is passed through the water and then heat setting is done on the Stentering Machine and then
        given to the Dyeing Department for necessary dyeing.
2.1.3.5 Dyeing: - Dyeing is carried out on Jiggers and Jets. The cloth is dyed with various types of dyes like direct Napthol, reactive
        and disperse etc. and dried after final development and washing.
2.1.3.6 Finishing :- The Dyed/Bleached cloth is passed through the Stentering Machine where some finishing auxiliaries are added
        to give lusture and required finish. Thereafter, it is passed through Pre-shrinking or ‘Zero-Zero’ range, which is the final
        finishing stage and finally, the cloth is delivered for packing.
2.1.4    FOLDING & PACKING: The finished Cloth is then folded in book-fold or roll fold form. Fabric is inspected and cut into
         different categories like Fresh, Seconds, Fents, Rags and Chindies The pieces are stamped, bundled and finally packed
         in bales or cases of different sizes according to the requirement of the customers.
2.1.5    PROCESS FOR DENIM FABRIC:
2.1.5.1 Spinning Yarn Preparation :- Raw Cotton is fed to the Blow Room machine where it is opened, and most of the trash
        and impurities are removed and are directly fed to the Carding Machine through Chutes where cleaning of the cotton is
        further improved and it is converted into sliver and collected in Can. Subsequently, it is fed to the Draw Frame Machine
        where the parallisation of fibre takes place by running it twice in breaker and finisher draw frames and collected again
        in the can is sliver form. These sliver cans are then fed to the open End Rotor Spinning Machine where the sliver is converted
        into yarn in the required counts and collected on spool each weighing about 5 kgs.
2.1.5.2 Fabric Weaving Process:- These yarn spools are further fed to the Warping Machine where the yarn is converted from
        the smaller package into bigger warping beams where during these warping beams are put on the Indigo Dyeing Sizing
        Plant where about 12 such beams are used to make a warp sheet which passes through dyeing baths and subsequently
        to the Sizing Machine in the continuous manner where the weaver’s beams are prepared. After the yarn threads of the
        weavers’ beams are drawn through heald and read, it is gaited on to the Sulzer & N.P. Looms for weaving process.
2.1.5.3 Finishing & Packing :- After the fabrics is woven, it is singed in the Singeing Machine where the fabric passes through
        flame to burn out the superfluous yarn hairiness and subsequently, processed on pre-shrinking range which is equipped with
        foam finishing where finishing and dimensional stability is achieved by giving proper warp-wise and weft-wise shrinkage to


                                                                    31
        the fabric. After the finishing of the fabric, it is inspected in the fabric inspection machine for quality gradation and packed
        into rolls for delivery.
2.2     Raw Materials: Major raw material of the Company is Cotton, Cotton Yarn and other Synthetic man made fibers like polyester
        and viscose. Cotton is available in a number of varieties based on the length and softness of the fiber. Depending upon the
        type of yarn required to be manufactured, a particular variety or a mix of several varieties of cotton is used. The Company
        is procuring its cotton requirement from various states like Maharashtra, Gujarat, Andhra Pradesh, Punjab and Rajasthan. The
        Company also imports cotton from USA, Australia and Africa which mainly depends upon requirement of variety of cotton,
        cotton prices in international market and availability of cotton.
        Domestic crop of cotton is likely to reach 23.5 million bales, up from 21.5 million bales a year ago because of more area under
        cultivation, good weather and extensive use of transgenic seeds. Source: http://www.financialexpress.com
        Cotton yarn availability is dependent upon availability of cotton. As regards to manmade fibres major suppliers are Reliance
        Industries Limited, Indorama Synthetics Limited, Grasim Industries Limited. The Company do nor foresee any difficulty in raw
        material procurement.
2.3     Utilities
2.3.1   Power : The Company requires 4.65 MW for its existing production facility, which will increase to 7.00 MW considering expansion
        cum modernization project of the Company. The Company receives power through grid of Torrent Power AEC Limited. The
        Company has applied for the additional power requirement. It is expected to get additional power supply in 2-3 months. The
        supply of Torrent Power AEC Limited is uninterrupted and with 11 KV supply voltage which sufficient for the Company’s operations.
2.3.2   Water : The Company sources the water required for the existing operations from two tube wells. Additional requirement
        of water will be met by new tube well. The groundwater table is only 400 feet below level.
2.3.3   Fuel: The Company operates two DG sets with capacity of 1450 KVA each as standby power supply. The Company requires
        to buy Light Diesel Oil for operating these DG Sets. There is no difficulty envisaged in procurement of Light Diesel Oil. The
        annual consumption of Light Diesel Oil is negligible and the Company procures from local The Company has storage tank of
        40 KL.
2.3.4   Steam: Steam is required for process in heating application. The total steam requirement works out to 7 TPH. The Company
        has installed 7 TPH solid fuels FBC Boiler to meet this steam requirement. The Company envisages additional requirement of
        8 TPH after expansion for which the Company has placed order for 10 TPH boilers.
2.3.5   Air: The Company requires air for almost all machineries. The existing requirement of air is 4900 CFM with standby capacity
        of 2400 CFM. This requirement is met by five compressors along with air dryers. For its expansion project the Company has
        placed order for three compressors 360 CFM each along with air dryers.
2.3.6   Effluent Treatment Plant: The Company’s Ahmedabad Unit, for its existing manufacturing facility of processing, sizing and
        dyeing & Denim requires treatment of following effluents.
        BOD (Biological Oxygen Demand) at 300-400 Milligram /Litre
        COD (Chemical Oxygen Demand) at 700-800 Milligram /Litre
        SS (Suspended Solids) at 1000-1200 Milligram /Litre
        The target value of effluent as per Gujarat Pollution Control Board are:
        PH                                                                     6.5 -8.5
        Temperature                                                            40 C
        Colour (Point Colour Scale)                                            100 Unit
        Suspended Solids                                                       100 Milligram /Litre
        Oil and Greese                                                         10 Milligram /Litre
        Phenolic Compounds                                                     1 Milligram /Litre
        Suphides                                                               2 Milligram /Litre
        Amonical Nitrogen                                                       50 Milligram /Litre
        Biological Oxygen Demand (5 days at 20 C)                              30 Milligram /Litre
        Chemical Oxygen Demand                                                 100 Milligram /Litre
        The effluent load is 12 to 15 lacs litres per day. To treat before discharge, the Company has effluent treatment plant which
        consist two sections viz Process and Denim.
        Main components of the Effluent Treatment Facilities are described hereafter:
        i) Collection Tank
        The proposed Denim Plant will generate process effluent of 20 lacs litres per day. So total effluent from the existing and proposed
        Denim plant will amount to 32 to 35 lacs litres per day which will be discharged to AMC drain.
        The present and proposed requirements in the Effluent Treatment Plant are summarized below:

                                                                    32
        Present Setup                                                      Proposed
        1.         Collection Tank                                         1.      Collection Tank
        2.         Oil & Grease Tank                                       2.      Oil & Grease Tank
        3.         Equalizer Pit                                           3.      Equalizer Pit
        4.         Equalizer Tank (Neutralization Tank)                    4.      Equalizer Tank (Neutralization Tank)
        5.         Clarifier                                               5.      Clarifier
        6.         Supernant Sump                                          6.      Supernant Sump
        7.         Bio Reactor                                             7.      Bio Reactor
        8.         Dual Filter Media                                       8.      Dual Filter Media
        9.         Sludge Well                                             9.      Sludge Well
        10.        Sludge Pit                                              10.     Sludge Pit
        11.        Filter Press                                            11.     Dewatering System
        12.        Sludge Drying Bed                                       12.     Sludge Drying Bed
        Necessary provision in the proposed scheme has been made for modifications in the existing set up/creation of additional
        facilities of the Effluent Treatment Plant so as to meet the norms and other requirements stipulated by G.P.C.B. and other
        statutory authorities.
        The Company has consent from Gujarat Pollution Control Board under Hazardous Waste (Management and Handling)
        Rules 1989 under E. P. Act 1986 for management and handling of Hazardous waste of 10 MT per Month for the disposal
        to secured disposal facility developed and specified by the GPCB. For the proposed expansion, the Company is in process
        of getting similar consent for the additional generation of Hazardous waste.
2.3.7   Air Pollution : The Company has installed mechanical dust collector, cyclones and bag filter system to reduce air pollution.
        Necessary consents have obtained for its existing plant and for the proposed expansion the Company is in process of
        getting necessary consents and will install necessary equipments to cope up additional air pollution.
2.3.8   Noise Pollution : Textile Industry is noise intensive in general. The Company has obtained necessary consents for its
        existing plant for Noise Pollution and for the proposed expansion the Company is in process of getting necessary consents
        and will install necessary equipments to cope up additional noise pollution.
2.3.9   Pollution Control : Textile industry in general is a polluting industry. The Company has obtained consent from Gujarat
        Pollution Control Board as listed hereunder:
2.3.10 Product manufactured by the Company: The Ahmedabad Unit of the Company is a Composite Textile Mill engaged in
       production of cotton and blended yarn, cotton & blended fabric and Denim.
2.4     Marketing and Sales Strategy: For the existing products of the Company, the Company has set up distributors and dealers
        network throughout the country. The Company niche products are cotton and blended fabric, cotton and blended yarn and
        Denim. The Company has strong domestic market network due to its long experience in the industry. The major customers
        are:
        NAME OF PARTY                                                         PLACE
        SHREE NARSING TRADING CO.                                             MUMBAI
        SUYAS FABRICS                                                         MUMBAI
        PRAKASH BROTHERS                                                      DELHI
        OMPRAKASH MANOJ KUMAR                                                 DELHI
        MADANLAL ARVIND KUMAR                                                 AHMEDABAD
        FASHION FABRICS                                                       AHMEDABAD
        NEELKANTH TRADERS                                                     AHMEDABAD
        MANDAR TEXTILES                                                       AHMEDABAD
        SARABHAI BARKATRAM & SONS.                                            AHMEDABAD
        VINAM ENTERPRISE                                                      KOLKATA
        Post expansion, the Company plans to explore domestic as well as export markets. The Company is in dialogue with prospective
        customers and management is confident to cater market. The Company is also proposing to set up denim garment unit,
        which will require approx 10 million meters denim fabric manufactured by the Company from the proposed expansion project.
2.5     Market Potential of Company’s product: With the phasing out of the quota system, buyers across the world will have
        more power in selecting their source of material requirement. The global textile industry is estimated to be around $360 billion
        and together, both the US and Europe account for 64% of the total textile trade. With post-quota, dismantling, the same
        figure is expected to be around $ 650 billion by the end of 2010. Indian textile companies command a leadership position.
        Source : www.financialexpress.com
        Considering the above demand scenario the management is confident to take up the opportunities due to its strong presence
        in the Domestic Market and International market. The Company has already started dialogue with prospective customers.
        The promoters of the Company are having rich experience of the industry. The Company’s product qualities are acceptable
        in the international markets.

                                                                  33
3.      GARMENT MANUFACTURING UNIT
3.1     Process and technologies used for Garment Manufacturing
3.1.1   Quality check of Raw Material : The process begins with the quality checking of the fabric which is the input material.
        The main quality parameters that are to be checked are fabric defects i.e. compliance to 4 point inspection system comprising
        of total defects per 100 linear metres specifying the minor defects, major defects and total point. The shade grouping is another
        aspect which is to be verified prior to the garment manufacturing. The supplied fabric will be segregated according to the
        shade groups prior to the fabric laying and cutting.
3.1.2   Cutting : The pattern pieces are laid out for efficient cutting by a large CAM plotter. Stacks of material are cut simultaneously
        so that all pieces are absolutely identical. It takes several pieces of denim to assemble a pair of jeans.
3.1.3   Stitching : The pieces are stitched in sewing department on various types of automatic sewing machines, according to the
        required fashion and style. Once the jeans have been sewed they are ready to be pre-washed first.
3.1.4   Washing: The garments are washed to strip dye and starch from the material where they are physically and chemically abraded
        with pumice and enzymes to give the jeans a faded and worn look. An abrasive is used in 10% of the washing loads. This
        is done once or several times in huge washing machines. Pre-washing makes the trousers soft and fuller in handle. There
        are different techniques of washing such as stone washed, double stone washed, bomber washed, sand washed etc. The
        finished jeans are sorted by size and style, and the final tags are applied.
3.1.5   Quality Checking & Packing: The finished product gets checked in the Quality Control Department for any manufacturing
        or technical defects. Once the quality of the product is ensured, it will be tagged as per requirement of customers & packed
        in a polyethylene bag and finally the products are packed in corrugated boxes as per requirement and specifications of the
        customers. The goods are now ready for shipment.
3.1.6   Process Flow of Garment Unit
3.2     Raw Materials: The basic raw material required is Denim Fabric. Since the Company is engaged in manufacturing of denim
        fabric, the Company will be self sufficient for raw material for its proposed Garment Unit:
3.3     Utilities


         Denim Fabric from                                                     Fabric Quality                       Fabric Laying &
         Denim Unit (Raw                   Sample Designing                  Checking & Laying                          Cutting
             Material)




         Thread Cutting &                                                     Stitching on High
                                               Trimming &                                                            Segregation &
             Labeling                                                         Speed Industrial
                                                Inspection                                                             Bundling
                                                                             Automatic Machine




        Washing, Drying &                    Q.C. Check &
            Pressing                            Tagging                       Individual Packing                     Bulk Packing in
                                                                                                                         Cartons




        The company is in the look-out for a suitable land. Once the land is located and finalized, the company will ensure to arrange
        the following utilities, with the permission of competent authorities:
3.3.1   Power: To meet with the power requirement of 1500 KW for its Garment manufacturing unit, the company plans to install
        a transformer to utilize the power from available grid.
3.3.2   Water: The proposed requirement of water viz. 500 M3/day will be met by installing necessary bore-wells. It will be ensured
        at the time of buying land that water-table and quality of underground water are as per the required specifications.
3.3.3   Steam: The Company proposes to install Boiler to take care of its steam requirement of 3000 kgs/hr, for washing segment.
3.3.4   Air Compressor: There will be a daily requirement of 1000 liters/day of compressed air to take care of sewing machine,
        cleaning process, etc. For the purpose, the company will purchase and install necessary Air Compressors along with Air Dryers.



                                                                   34
3.3.5   Effluent Treatment Plant: The Company will install Effluent Treatment Plant (ETP) to treat the effluent as per the applicable
        guidelines of Pollution Control Board.
3.3.6   Water Softening Plant: If required, the company will install a water softening plant to treat the water coming from ETP to
        make it almost neutral and maintain the PH value at 6.5 % to 8.5%.
3.3.7   Air & Noise Pollution: The industry is neither air nor noise pollutant and therefore no specific machineries are required for
        the purpose.
3.3.8   Manpower: The unit is proposed to be headed by President (Unit Head) who will be responsible for day to day operations
        of the unit. He will be assisted by a team of experienced and qualified head of departments consisting of Personnel &
        Administration, Finance, Purchase, Production, Quality Assurance, Marketing (both domestic and international), etc. The
        company proposes to employ 2100 workers for the project who will be skilled and semi skilled. The company will have
        tie-up with Government and non Government institutes which are engaged in imparting training for the cutting, stitching,
        washing, quality checking, packing, etc. The arrangement will be in two tier – firstly we will recruit staff and then train through
        the above institutions and secondly we will directly recruit trained staff/workers qualified from such institutions. In Ahmedabad,
        broadly institutes like National Institute of Fashion Design, National Institute of Fashion Technology, National Institute of
        Design, etc. are providing such training/services.
        The company in its new garment unit proposes to set up welfare facilities like meal, medical, uniform, recreation club, health
        club for its employees.
        Further for the employees/workers, the company’s garment manufacturing unit will be registered with Employees’ Provident
        Fund Organization, ESI and other government bodies, as may be stipulated.
3.4     Product of the Garment Manufacturing Unit: The proposed Garment Manufacturing Unit will be manufacturing jeans
        for both men and women. Jeans are trousers made from denim. Now, jeans-wear is a fashionable item worn across all
        age groups particularly by the younger generation. The jeans are manufactured from denim which is available in different
        varieties such as tencel denim, stretch denim, chinos, polyester blends, tinted denim, rain denim, crosshatch denim and
        others. The process involved is cutting the denim fabric for various sizes, stitching, sewing & washing in various fashion
        & styles
3.5     Product grades and applications: The Company proposes to manufacture and supply its product to European and American
        markets. It is envisaged that with post quota removal, demand of garments will be tremendously increased. The Company
        wishes to focus on supplying of Denim Trousers to middle segment market where the Denim Trouser-wears are sold in
        the range of US$ 40 to US$ 100. In this particular market, as per survey conducted by the Company Denim Trouser-wears
        is available ranging from US$ 20 to US$ 2000. The Company’s focus is on middle range considering the demand of this
        range is comparatively higher than upper grades. The margins in the middle range are better compared lower range. The
        Company will have tie-up with well established brands and products made available in form of ready to put on the shelves.
        The Company will integrate all garmenting requirements in such a way that the customer will not require any further processing
        on the garments supplied by the Company.
4.      Competitive Scenario
        The Indian textile and apparel industry has made a major contribution to the national economy in terms of direct and indirect
        employment generation and net foreign exchange earnings. The textile and apparel sector accounts for 18 per cent of
        employment in the industrial sector, 20 per cent of industrial production, 9 per cent of excise duty collections and more
        than 30 per cent of Indian’s total exports.
        India had few competitors in the booming international textile trade during the post-independence period of the 1950s and
        1960s, due to abundant supply of cotton and cheap labour and thriving mill sector. But Indian trade lost market share during
        1970s in the face of growing competition from few new industrializing nations (NICs) in an expanding global economy.
        The 1980s marked rapid growth for apparel exports which were valued at Rs 6500 million in 1981, Rs 8500 million in 1985.
        Due to devaluation of the rupee in 1991 and enactment of export-oriented policies, value of apparel exports jumped to
        Rs 62823 million in 1991-92, Rs 183896 million in 1998-99 and to Rs 254799 million in 2000-01.
        Indian apparels accounted for a tiny fraction of less than 3 per cent of overall world export of apparel, suggesting an opportunity
        for considerable growth. There is a very large domestic market for Indian apparel manufactures. As per McKinsey study,
        the market size is of Rs 20,000 Crore, out of which only Rs 4,000 Crore is catered to by branded apparel. So there is
        still a Rs 16,000 Crore market, which is catered by the unorganized small size units. The developed nations, which are
        the destinations for Indian textile products, use textiles in the form of apparel. Therefore, in order to improve the presence
        in these markets and capture larger values of the chain the focus needs to be shifted towards the effective performance
        of the textile-apparel supply chain network, rather than looking at textile industry in isolation.
        Source : http://www.expresstextile.com/20040122/edit02.shtml
        Considering the need of supply chain network rather than looking at Textile industry in isolation, Soma Textiles & Industries
        Ltd. has embarked on vertical integration and with expanded capacity of Denim manufacturing and garment manufacturing,
        the Company will be in a position to offer final products to its customers in form of ready-to-wear garments. This will increase
        product-mix, strengthen its existing market network, value addition to its products and Total Quality Management (TQM)
        application for the finished goods manufactured by the Company.
        Within India, there are number of large players compared to capacity of STIL. Major players in Denim and Garment at
        large are Arvind Mills Limited, Ashima Limited, Aarvee Denims Limited, K G Denim Limited etc. The Company’s share in
        total textile market is not very remarkable, but the Company’s name has been established due to its long presence in the
        market and is considered as steady player in textile industry.


                                                                    35
     The management of the Company is confident to market its products considering various opportunities available in post quota
     regime.
5.   Market Potential of Company’s product
     The Indian textile industry is globally more competitive than other industries in the country on relative terms. Most of the inputs
     required for this sector being available from domestic sources. With the phasing out of MFA by the end of 2004 and with
     full implementation of “Agreement on Textile and Clothing” it is important to have textile – apparel supply chain to service customer
     requirement. The demand of the company’s products is expected to increase in multifold in the years to come. To take care
     of the upcoming opportunities, the Company has planned setting up additional capacities and venture into Garment segment.
     The recent market survey of Government is reproduced hereunder.
     The jeans wear market in India is estimated to be INR 20 billion (USD 0.44 billion) with demand estimated at 43 million pieces
     per annum. The market is currently growing at the rate of 12.5% per annum. Men make up the chunk of consumption at 76
     %, followed by women at 17 % and kids accounting for the remaining 7 %. The premium jeans segment (priced at INR 1000-
     2000), the middle segment (priced at INR 500-1000) and the economy segment (priced at INR 300-500) are all growing at
     25 %, 15 % and 10 % respectively .Due to rapid exposure to new culture, trends and urbanization the per capita consumption
     of denim fabrics in India is bound to go up from the existing 0.03 jeans per head against 2 pairs in the USA.
     Source: http://www.vibrantgujarat.com
6.   Key Marketing Practices: The Company’s marketing objective is divided in three segments. First objective is to strengthen
     the existing distributor and dealers network, second to focus on supplying to Readymade Garment segment and third to supply
     readymade garment to brand sellers in the international market. The Company wishes to leverage on its core competence
     of making quality product and building the long term relationships with its customers. The company offers supplying best quality
     products to its customers, with a commitment of timely delivery.
     In a long term initiatives, the Company has vision of promoting its own brand in readymade garment segment. This will be
     translated into complete chain and will take the Company to the end customer.
     The Company’s objective is to drive growth through quality products.
7.   Business Strategy: The Company is engaged in textile products and with the proposed expansion its main product will be
     denim. The Company’s present location is having advantage of availability of skilled labour, other manpower, raw material and
     infrastructure like road, rail etc. Ahmedabad is now known as Denim city. This is considered as added advantage to the Company.
     Since the Company’s Baramati Unit is 100% EOU, the Company’s international presence and reputation is also very good in
     terms of timely delivery of goods, competitive price structure, quality products. The existing presence of the Company in
     international market will help the Company to export its Denim fabric and Readymade Garments smoothly. It is envisaged that
     in coming years, the Company will be considered as one of the major textile players in India.
8.   Outlook : With the phasing out of the quota system, buyers across the world will have more power in selecting their source
     of material requirement. The global textile industry is estimated to be around $ 360 billion and together, both the US and Europe
     account for 64% of the total textile trade. Post-quota dismantling, the same figure is expected to be around $650 billion by
     the end of 2010. Indian textile companies command a leadership position.
     According to the latest data issued by the Office of Textile Export of America (OTEXA), textile exports to the US grew by
     24.18% in January-June 2005 at 1169.28 million metres against 941.53 million metres in the first six months of the last year.
     Apparel exports went up by 32.31% at 413.75 million metres.
     The sector analysis of Q1 results reveals that the textile industry is amongst one of the best performers after the hotels,
     paper and construction sectors. The current size of the Indian textile industry is $36 billion and is expected to grow by 18.75%
     CARG to touch $85 billion by the end of 2010. Out of the total estimated increase, the domestic market share would be around
     $45 billion and export will account for $40 billion. About 60% of exports will be attributed to garments.
     Source: http://www.financialexpress.com/
9    Competitive Scenario: No doubt that market is becoming competitive and we are of the opinion that good product mix with
     complete range, consistency of quality and better productivity will get the priority in any kind of market situation. Also keeping
     harmonious relations with customers and agents and regular visits to them will help to build up the reputation. Also in case
     of any problem of product quality fast action for solving such problem was found to be extremely useful as this builds up
     customer’s confidence.
10   Key Marketing Practices: Know the market demand, latest fashion trends, maintain the consistency of quality, supply the
     material in good packing so that material is received safely at customer’s place is very important. Due attention is given for
     same. In order to ensure that customer will get the material as per agreed schedule the Company is trying its best to arrange
     the dispatch / shipments as agreed upon. As regards shipment the company is arranging the shipments on reputed shipping
     line who are also offering competitive rates so that both buyer as well as seller are benefited.
11   Business Strategy: Business strategy is to be followed by the company will be to try to run the plant in such a way to
     get maximum possible profitability by supplying best possible quality and simultaneously try the best to get maximum possible
     productivity. We shall ensure that each of its customers is satisfied in order to have long-term association. The company shall
     also try to work with selected top end customers.
12   Capacity and Capacity Utilisation
     Capacity and Capacity Utilisation


                                                                  36
      Particulars                                         For the year ended on (Rs. In lacs)
                                        Unit           31-Mar-05        31-Mar-04         31-Mar-03       31-Mar-02   31-Mar-01
      Licensed Capacity
      Ahmedabad Unit
      Ring Spindles                     Nos.              25200            25200                 25200       25200       25200
      Rotors                            Nos.                552              552                   552         552         552
      Looms                             Nos.                476              476                   476         476         476
      Baramati Unit
      Ring Spindles                     Nos.              60480            60480                 60480       60480       60480
      Installed Capacity
      Ahmedabad Unit
      Ring Spindles                     Nos.              24472            24472                 24472       24472       24472
      Rotors                            Nos.                552              552                   552         552         552
      Looms                             Nos.                142              146                   146         141         196
      Baramati Unit
      Ring Spindles                    Nos.                30240            30240                 30240      30240       30240
      Cloth Production              Lac Metres            137.61           128.09                130.68      117.17      134.17
      Yarn Production                Lac Kgs               69.84             69.17                68.45       67.59       65.64
      Capacity Utilisation
      Cloth                                              88.00%           97.00%               95.00%       91.00%      97.00%
      Yarn (Ahmedabad)                                   99.00%           99.00%               99.00%       96.00%      98.00%
      Yarn (Baramati)                                    98.36%           98.59%               95.12%       97.00%      97.00%

      Proposed Capacity Utilisation
      Particulars                                                         For the year ended on
                                                              Unit                        31-Mar-06       31-Mar-07   31-Mar-08
      Licensed Capacity
      Ahmedabad Unit
      Ring Spindles                                           Nos.                               25200       25200       25200
      Rotors                                                  Nos.                                 552         552         552
      Looms                                                   Nos.                                 476         476         476
      Baramati Unit
      Ring Spindles                                           Nos.                               60480       60480       60480
      Installed Capacity
      Ahmedabad Unit (Present Product)
      Ring Spindles                                           Nos.                               25200       25200       26352
      Rotors                                                  Nos.                                 552         552         552
      Looms                                                   Nos.                                 176         176         226
      Baramati Unit (Present Product)
      Ring Spindles                                           Nos.                               30240       30240       30240
      Garment Unit (Proposed Product)
      No. of Garments per annum                            Lac Pieces                                 -           -       62.40
      Capacity Utilization %
      Cloth                                                                                    95.00%       95.00%      95.00%
      Yarn (Ahmedabad)                                                                         95.00%       95.00%      95.00%
      Yarn (Baramati)                                                                          95.00%       95.00%      95.00%
      Garment Unit                                                                                    -           -     90.00%
13.   Property
      As per the audited balance sheet dated 31st March, 2005 the company owns the following immovable properties: (Rs. In lacs)
      SL. No.         Description                                                    Net block
      1               Land                                                            29.82
      2               Building Factory & Non Factory                                  827.42


                                                                   37
Purchase of Property
Except as stated in “Objects of the Issue” in this Prospectus and save in respect of the property purchased or acquired or to be
purchased or acquired in connection with the business or activities contemplated by the objects of the Issue, there is no property
which the Company has purchased or acquired or proposes to purchase or acquire which is to be paid for wholly or partly out of
the proceeds of the present Issue or the purchase or acquisition of which has not been completed on the date of this Prospectus,
other than property in respect of which:
*         The contracts for the purchase or acquisition, if any, were entered into in the ordinary course of the business, and the contracts
          were not entered into in contemplation of the Issue nor is the Issue contemplated in consequence of the contracts; or
*         The amount of the purchase, if any, is not material.
The Company has not purchased / propose to purchase any property in which any of its Promoters and/ or Directors, have any direct
or indirect interest in any payment made thereof.
KEY INDUSTRYREGULATIONS
There are no specific regulations applicable to the industry in which our Company operates.
3. HISTORY AND CORPORATE STRUCTURE
The Company was promoted by Somany brothers in 1940 and started Textile industry in 1969 by purchasing textile unit New Commercial
Mills Co. Limited at Ahmedabad which was under liquidation, named this unit as “Soma textiles”.
Major events of the Company:
The Company was originally started as a partnership firm under the name and style of M/s. R B Rodda & Co., in 1930 and it was
incorporated as Limited Company as R B Rodda & Co. Ltd. on 29th March, 1940 at Kolkata. Five years later, the management of the
Company was taken over by Somany brothers. Initially the Company was engaged in trading activities. In 1969, the Company purchased
New Commercial Mills Co. Limited at Ahmedabad which was under liquidation, named this unit as “Soma textiles”. The name of the
Company was changed to Soma Textiles & Industries Limited” on 21st January, 1992.
•    In the Year 1987 the Company started producing Denim fabric.
•    The Company started its 100% Export Oriented Unit at Baramati, Dist, Pune, Maharashtra in the Financial Year 1993-94 for which
     the Company came up with the Public offer, detailed hereunder:
     In the Year 1993-94, the Company came up with Right Issue of 5,89,432 Zero Interest Secured Fully Convertible Debentures
     of Rs.85/- each and Preferential Issue of 5,88,235 Zero Interest Secured Fully Convertible Debentures of Rs.85/- each aggregating
     Rs.1001.02 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily and automatically converted
     into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 1st April, 1994 and Part – B: Fully Paid Up
     debentures of Rs.45/- of each debentures was compulsorily and automatically converted into 1 Equity Share of Rs.10/- each
     Fully Paid at a premium of Rs.35/- per share on 1st April, 1995.
     In the Year 1993-94 the Company came up with Public Issue of 25,98,983 Zero Interest Secured Fully Convertible Debentures
     of Rs. 100/- each aggregating Rs. 2598.98 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily
     converted into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 18th January 1994 and Part –
     B: Fully Paid Up debentures of Rs.60/- of each debentures was compulsorily converted into 1 Equity Share of Rs.10/- each Fully
     Paid at a premium of Rs.50/- per share on 18th July, 1994.
•    During the Year 2002-03, in terms of the restructuring of the outstanding loans and overdue, the Company has allotted 3,22,000
     and 3,52,000 - 15% Optionally Fully Convertible Debentures of Rs.100 each at par to ICICI Ltd. and IDBI respectively on 7th August,
     2002 by converting the portion of the Company’s overdue liabilities.
•    During the year 2003-04, the Company has issued and allotted 36,60,000 equity Shares of Rs.10/- each at par, aggregating to
     Rs.366 lacs to the Financial Institutions in lieu of option exercised by them to convert a portion of their holding of 15% Optionally
     Fully Convertible Debentures (OFCDs) of Rs.100/- each. Further, the balance OFCDs of Rs.100/- each held by them after conversion
     in Equity Shares, were converted into 3,08,000 - 15% Secured Redeemable Non - Convertible Debentures of Rs.100/- each, which
     shall be redeemed by the Company in six equal half yearly installments, commencing from August 7, 2007.
•    The Company has continuously focused on application of state of the art technology, accordingly it has replaced almost all traditional
     looms to high speed looms
•    During the Financial Year 2004-05, the Company planned modernization cum expansion plan to increase its denim manufacturing
     capacity from existing 8 million meters per annum to 18 million meters per annum, replacement of its existing process machineries
     and replacement of spinning machineries at Baramati at a cost of Rs. 8700.00 lacs. The Project is under implementation and will
     start commercial production from Feb-06. The brief highlights of the that project is as under:
     1)    EXPANSION OF DENIM CAPACITY
     At present the Company has a capacity of manufacturing Denim Fabric to the tune of 8 million metres per annum. The Company
     was considered one of the first few textile units which started manufacturing Denim Fabrics in India. Considering good demand
     of Denim Fabrics, the Company has planned to increase the existing capacity of 8 million metres to 18 million metres per annum.
     There is a very good demand of Denim Fabrics in Indian as well as International markets. It is expected that the demand will


                                                                     38
increase multifold in view of removal of quota system and closure of weaving sector in the western countries.
The total cost of Denim plant is worked out at Rs.54 crores.
2)   EXPANSION OF PROCESSING FACILITIES
The existing facilities of processing machineries of the company are conventional batch process which is very old in age and
requires technological upgradation of machineries. The total cost of upgradation is worked out at Rs.17 crores.
Almost 60% of the construction work of new denim project is over. The company has placed orders for almost all the machineries.
It is expected that the project will start commercial production from February 2006 onwards.
3)   EXPANSION OF SPINNING FACILITIES
The Company’s spinning unit at Baramati was set up in 1994. This unit is 100% EOU and exporting to various countries like
China, Taiwan, Pakistan, Korea and Middle East. After the post quota scenario, to compete globally, the Company requires
latest machineries for better productivity at less cost. To achieve this objective, the Company has planned to replace 13 Ring
Frames with brand new Ring Frames.
The Company has already purchased 13 Ring Frames from M/s. Lakshmi Machines Works Ltd., Coimbatore along with ancillary
machines like Rieter make C-60 Card, etc. at a total cost of Rs.9 crores.
The commercial production of the expansion has already started in October, 2005. Apart from above, the Company will require
working capital margins to the tune of Rs. 3 crores and has provided for contingencies amount to Rs.4 crores. Thus the total
cost of project is worked out at Rs.87 crores.
The expansion cum modernization project planned by the company is in progress and it is expected that the project will be
completed as per the schedule.
COST OF PROJECT

SR. NO.     PARTICULARS                                                          RS. IN LACS              RS. IN LACS
A           Ahmedabad Unit
            Additional Denim Plant                                                   5363.40
            Modernisation                                                            1700.20                   7063.60
B           Baramati Unit
            Spinning Upgradation                                                      856.10                     856.10
            Total (A+B)                                                                                        7919.70
C           Contingencies, Foreign Exchange Risk, Pre-Operative &
            Erection Expenses                                                                                    433.20
D           Margin For Working Capital                                                                           347.10

            TOTAL COST OF PROJECT                                                                              8700.00
MEANS OF FINANCE

SR. NO.     PARTICULARS                                                        RS. IN LACS               RS. IN LACS
A           Capital Subsidy On Process Machineries                                                               170.80
B           Term Loan                                                                  80.0%                    6950.00
C           Internal Accruals                                                                                   1079.20
D           Unsecured Loans                                                                                      500.00

            TOTAL MEANS OF FINANCE                                                                              8700.00
The project is funded by way of term loan to the tune of Rs.69.50 crores, from different banks, as under:

Name of Bank                    Amount Sanctioned                              Sanction Letter No.
                                (Rs. In cores)
IDBI Ltd.                       35.00                                          MBO/CFD/LOI/621 dt. 29.06.2005
DENA Bank                       20.00                                          ASRM/ADV/SOMA/52/2005 dt.02.08.2005
EXIM Bank                       14.50                                          CBG:EOU:O-563:304




                                                           39
         Detailed break up of the cost of Project
         AHMEDABAD UNIT
                                                                                                                                       Rs. in lacs

     SR. NO.               TYPE OF ASSETS                                                                                              AMOUNT
     A                     Factory Buildings                                                                                             886.30
     B                     Plant & Machineries                                                                                          6033.50
     C                     Electric Installation                                                                                         144.00

                           TOTAL                                                                                                        7063.60
BARAMATI UNIT
                                                                                                                                        Rs. in lacs

SR. NO.                    TYPE OF ASSETS                                                                                              AMOUNT
     A                     Factory Buildings                                                                                               10.50
     B                     Plant & Machineries                                                                                           845.60
     C                     Electric Installation                                                                                                -

                           TOTAL                                                                                                         856.10
STATEMENT OF CAPITAL EXPENDITURE INCURRED FROM 1ST FEBRUARY 2005 TO 05TH OCTOBER, 2005

Particulars                                                          Ahmedabad Unit                     Baramati Unit                       Total
Buildings                                                                      301.73                                                    301.73
Plant & Machinery                                                              633.33                      807.18                       1440.52
Miscellaneous Fixed Assets & Utilities                                          66.68                                                      66.68
Pre-Operative & Preminiary Expenses                                             83.75                                                      83.75

Total                                                                       1085.49                         807.18                      1892.68

•        Soma Textiles now plans an expansion strategy to increase its Denim Manufacturing capacity from 18 million meters to 28 million
         meters, modernize its plant and machineries and to set up garment unit at a cost of Rs.120.00 Crores.
Main Objects of the Company
Object clauses (7), (7A),(7B),(7C),(7D)
1.       To buy, sell, take or let on hire, import, export, manufacture, manipulate, treat, prepare for market and deal in merchandise, commodities
         and articles of all kinds, and generally to carry on business as merchants, importers and exports.
2.       To carry on the business of growing, cultivating, processing, combing, preparing, ginning, spinning, weaving, dyeing, bleaching,
         printing, manufacturing, bailing, pressing, selling, buying and otherwise dealing in Cotton Kapas, yarn, Cotton waste, yarn
         waste, cotton cuttings, cotton rejections, artificial fibres, silk, jute, hemp, flax, linen, cloth and other fabrics whether textile felted
         netted or looped made from raw cotton silk, flax, hemp, jute, wool and artificial fibre and other material and to erect maintain
         or otherwise acquire and work mills and factories for the purpose.
3.       To carry on the business of manufacturing, buying, selling, importing, exporting, distributing, processing, exchanging, converting,
         altering, twisting or otherwise handling or dealing in cellulose viscose rayon yarns and fibres, synthetic fibres and yarn staple
         fibre yarns and such other fibres or fibrous materials, transparent paper and auxiliary chemical products allied products byproducts
         or substances or substitutes for all or any of them or yarn or yarns for textile or other use as the company may deem necessary
         expedient or practicable.
4.       To manufacture, prepare, import, export, buy, sell and otherwise deal in all kinds of glass, glass-ware, glass goods, mirrors
         looking glass, scientific glass-wares, sheet and plate glass, bangles, false pearls, bottles, phials and all kind of articles prepared
         of glass and to carry on the business of glass leveler, glass embosser, glass tablet.
5.       To produce, manufacture, refine, prepare, import, export, purchase, sell, treat and generally to deal in all kinds of sanitary-
         ware (including sanitary-ware made of plastic, fibre-glass or any other synthetic product), earthenware, stoneware, glass china,
         terra cotta, porcelain, products, bricks, tiles, pottery, pipes, insulators refractories of all description and or by products thereof.
Subsidiaries of the Company
The company has no subsidiary.
Shareholders’ agreement
There is no shareholders’ agreement existing as on date.
Other agreements
Except the Agreements, as mentioned under the subheading “Material documents & Contracts” and the contracts/Agreements entered
into in the ordinary course of business on or intended to be carried on by the Company, the Company has not entered into any
other Agreement/Contract.


                                                                          40
Financial Partners
                                                                                                                       Rs. In lacs

     Sr. Name of Bank / FI                 Loan         Outstanding as on          Interest            Terms of Repayment
                                          Availed                                    Rate
     No.                                    Rs.      31/03/2005       30/09/2005      %           Installment   Payable
                                                                                                 Amount Rs.
     1  ICICI BANK LTD                      2000      1731.34          1552.24          10.89         29.85     Monthly
        - Rupee Term Loan
     2 ICICI BANK LTD                        132          132            132.00         14.82         22.00     Half Yearly from
        - Non Convertible Debentures                                                                            Aug-07
     3 IDBI LTD.                            1200        753.38           692.11          6M           32.72     Quarterly
        - Foreign Currency Loan                                                    LIBOR+3.10
     4 IDBI LTD.                             176          176              176              9         29.33     Half Yearly from
        - Non Convertible Debentures                                                                            Aug-07
     5 IFCI LTD.
        - Rupee Term Loan                 407.17           100              80              9         20.00     Quarterly
     6 SBI-Rupee Term Loan                658.57        658.57          658.57           8.75         29.94     Quarterly
     7 IDBI LTD.                            3500             0          175.00           8.75        109.37     Quarterly from
        - Rupee Term Loan                                                                                       July -08
     8 DENA BANK                            2000             0           466.95          8.75         62.50     Quarterly from
        - Rupee Term Loan                                                                                       Jan -08
     9 EXIM BANK                            1450             0                0          8.75         45.31     Quarterly from
        - Rupee Term Loan                                                                                       July -08
     10 Various Car Loans                    55.9        35.67            26.03              —           —      —

           Total                       11,579.64     3,586.96          3,958.90
     Security
     •   Term Loans and Debentures are secured by way of first pari passu charge on the present and future immovable and movable
         properties of the Company and second pari passu charge on working capital of the Company, except Term Loans from
         SBI and IFCI which are specific having first charge on the assets financed by them.
     •   Foreign Currency Term Loans are additionally secured by personal guarantees of Shri Arvind Kumar Somany – Managing
         Director of the Company and Shri Surendra Kumar Somany Chairman of the Company.
     Changes in the Memorandum of Association of the Company

     Particulars                                                                                  Date of       Type of
                                                                                                  Meeting       meeting
     From 2,000 Equity Shares of Rs.100/- each totaling to Rs. 2,00,000 to 2,000                  22.03.1947    Extraordinary
     Equity Shares of Rs.100/- each, 1,50,000 Equity Shares of Rs.10/- each 8,000                               General Meeting
     Preference shares of Rs. 100 each totaling to Rs.25,00,000/-
     Conversion / sub-division of Equity Shares of Rs. 100/- each into Equity Shares of           22.08.1947    Extraordinary
     Rs. 10 each, 2,000 Equity Shares of Rs.100/- each, 1,50,000 Equity Shares of                               General Meeting
     Rs.10/- each 8,000 Preference shares of Rs. 100 each totaling to Rs.25,00,000/-
     to 1,70,000 Equity Shares of Rs. 10/- each & 8,000 Preference Shares of
     Rs. 100/- each totaling to Rs. 25,00,000/-
     From 1,70,000 Equity Shares of Rs. 10/- each & 8,000 Preference Shares of                    10.04.1969    Extraordinary
     Rs. 100/- each totaling to Rs. 25,00,000/- to 3,50,000 Equity Shares of Rs 10/-                            General Meeting
     each & 15,000 Preference Shares of Rs. 100/- each totaling to Rs. 50,00,000/-
     Amendment to Object Clause 3 of the Memorandum of Association altered by                     21.07.1969    Extraordinary
     inserting the clause 7A & 7B, as appearing in the existing Memorandum of Association.                      General Meeting
     Amendment to Object Clause 3 of the Memorandum of Association altered by way of              29.10.1983    Extraordinary
     insertion of clause 7C & 7F, as appearing in the existing Memorandum of Association.                       General Meeting
     3,50,000 Equity Shares of Rs 10/- each & 15,000 Preference Shares of Rs. 100/-               31.10.1989    51st Annual
     each totaling to Rs. 50,00,000/- to 50,00,000 Equity Shares of Rs. 10/- each                               General Meeting
     totaling to Rs. 5,00,00,000.
     From 50,00,000 Equity Shares of Rs.10/- each to 75,00,000 Equity Shares of                   27.01.1992    Extraordinary
     Rs.10/- each totaling to Rs.7,50,00,000/-                                                                  General Meeting
     From 75,00,000 Equity Shares of Rs.10/- each to 100,00,000 Equity Shares of                  27.07.1992    54th Annual
     Rs.10/- each totaling to Rs.10,00,00,000/-                                                                 General Meeting
     From 1,00,00,000 Equity Shares of Rs.10/- each to 1,20,00,000 Equity Shares of               30.09.1993    55th Annual
     Rs.10/- each totaling to Rs.12,00,00,000/-                                                                 General Meeting
     From 1,20,00,000 Equity Shares of Rs.10/- each to 1,80,00,000 Equity Shares of               29.07.2002    Extraordinary
     Rs.10/- each totaling to Rs.18,00,00,000/-                                                                 General Meeting
     From 1,80,00,000 Equity Shares of Rs.10/- each to 5,00,00,000 Equity Shares of               08.09.2005    67th Annual
     Rs.10/- each totaling to Rs.50,00,00,000/-                                                                 General Meeting
4.   MANAGEMENT
     The Company is a professionally managed organisation. The Company functions under the control of a Board consisting of


                                                                 41
professional Directors. The day-to-day matters are looked after the qualified key personnel, under the supervision of Managing
Director.
Board of Directors of the Company
The Board of Directors of the Company comprises:
Name, age, address, Designation           Appointment       in   the       Other Directorships
and Occupation of the Directors           Company and the date of
                                          expiration of current term
                                          of office.
Shri Surendra Kumar Somany                01.04.1949                        1) Jamshri Ranjitsihghji Spg.& Wvg. Mills Co. Ltd.
S/o. Late Shree Murlidhar Somany          (Rotational)                      2) Navbharat Refrigeration & Ind. Ltd.
74 years
                                                                            3) Simplex Mills Co. Ltd.
81, Las Palmas
Little Gibbs Road                                                           4) Simplex Trading & Agencies Ltd.
Mumbai – 400 006.                                                           5) Somany Evergreen Knits Ltd.
Chairman, Industrialist                                                     6) Shreelekha Global Finance Ltd.

Shri Arvind Kumar Somany                                 29.09.1988 -       1) Krishna Glass Ltd.
S/o. Shree Surendra Kumar Somany          30.04.2009                        2) Pudumjee Agro Ind. Ltd.
50 years
“Soma” House
Nr. Samrtheshwar Mahadeo
Nr. Law Garden
Ellisbrdige
Ahmedabad – 380 006
Managing Director, Industrialist          25.01.2001



Shri Prabir Bandyopadhyay                 24.01.2006                        None
S/o. Late H C Bandyopadhyay               25.01.2006
A-504, Sarjan Tower
                                          24.01.2011
Gurukul Road
Memnagar
Ahmedabad – 380 052
Executive Director, Service


Shri Ashok C Gandhi                       24.01.2004                        1) Amol Dicalite Limited
S/o. C C Gandhi                                                             2) Bloom Dekor Limited
M/s. C C Gandhi & Co.                                                       3) Jayatma Spinners Limited
2, Prabhat Society                                                          4) Ahmedabad Steelcraft Limited
Paldi,                                                                      5) Aarvee Denims & Exports Limited
Ahmedabad – 380007                                                          6) Gujarat Ambuja Exports Limited
Director, Advocate                                                          7) Mateor Satellite Pvt. Limited
                                                                            8) Dishman Pharmaceuticals and
                                                                              Chemiclas Limited
                                                                            9) MSK Projects (India) Limited
                                                                            10) Mafatlal Industries Limited

Shri Prafull Anubhai                      24.01.2004                        1) Unichem Laboratories Ltd.
S/o. Shri Anubhai Shah                                                      2) Mahavir Spinning Mills Ltd.
Brij House, 1st Floor
                                                                            3) Gruh Finance Ltd.
Stadium Road
Ahmedabad – 380 009.                                                        4) Torrent Cables Ltd.
Director, Industrialist                                                     5) The H K Finechem Ltd.
                                                                            6) The EMSAF – Mauritius.
                                                                            7) Niche Generics Ltd, London

Shri M S Shekar                           04.04.2004                        None
ICICI Bank Ltd.
9th Floor, JMC House
Ambawadi
Ahmedabad – 380 015
Nominee Director, Banker



                                                              42
Details of the borrowing powers
The shareholders vide a resolution pursuant to section 293(1) (d) of the Companies Act, 1956, passed a the Annual General Meeting
of the Company held on 8th September, 2005, had approved and delegated powers to the Board for borrowing upto a sum of Rs.300
crores apart from temporary loans obtained or to be obtained from Company’s bankers in the ordinary course of business not withstanding
that it is over and above the aggregate of the paid-up share capital and free reserves.
Compensation of Managing Director / Whole Time Director

Name                     Arvind Kumar Somany                                            P. Bandyopadhyay
Designation              Managing Director                                              Executive Director
Period                   5 years w.e.f. 11th September, 2002                            5 years w.e.f. 25th January, 2001.
Remuneration           (a) SALARY: At the rate of Rs. 50,000/- p.m. (The           (a) SALARY
                       Board may at its sole discretion, at the recommendation     At the rate of Rs.35,350/- p.m. (including Basic & DA)
                       of the Remuneration Committee, consider and grant           or such amount as may be decided by the Board with
                       an Annual increment of, upto 20% of the existing            the yearly increment effective from the date, as may
                       salary.)                                                    be considered by the Board.
                                                                                   The Board may its sole discretion, at the recommendation
                                                                                   of the Remuneration Committee, consider and grant an
                                                                                   annual increment as per the graded scale specified by
                                                                                   the Company for such Senior Executive, subject however
                                                                                   to a ceiling on increment of 30% of the last drawn salary,
                                                                                   per annum.
                       (b) COMMISSION: At the rate of 1% (one percent)             (b) BONUS/EXGRATIA:
                       of net profits of the Company for each financial year       Payment of Bonus or Exgratia, in lieu of Bonus, subject
                       computed in the manner laid down in Section 198             to a ceiling of one month’s salary or as may be fixed
                       and 309 of the said Act, subject however to a ceiling       and determined by the Board of Directors of the
                       of Annual Salary.                                           Company.
                       (c) PERQUISITES: Shri Somany will be entitled to            (c) PERQUISITES:
                       the following perquisites in addition to salary and         The appointee shall be entitled to the following perquisites
                       commission restricted to an amount equal to the             in addition to salary and bonus or exgratia restricted
                       annual salary of Sri Somany or Rs. 4,50,000/- per           to an amount equal to appointee annual salary.
                       annum, whichever is less.
                                                                                   Unless the context otherwise requires, perquisites are
                       Unless the context otherwise requires, perquisites          classified into three categories A, B and C as follows:
                       are classified into three categories A, B and C as
                       follows :                                                   CATEGORY –A
                       CATEGORY – A This will comprise of house rent               This will comprise of house rent allowance, leave travel
                       allowance, leave travel concession, medical                 concession, medical reimbursement, fees on clubs and
                       reimbursement, fees of clubs and personal accident          personal accident insurance. These may be provided
                       insurance. These may be provided for as under :             for as under:
                                                                                   HOUSING
                       HOUSING                                                     (i) The expenditure incurred by the Company on hiring
                       (i) The expenditure incurred by the Company on              furnished accommodation for the appointee will be
                       hiring furnished accommodation for Shri Somany will         subject to the ceiling – 60 (sixty) percent of the salary,
                       be subject to the ceiling – 60 (sixty) percent of the       over and above 10 (ten) percent payable by the
                       salary, over and above 10 percent payable by Shri           appointee.
                       Somany.                                                     (ii) In case the accommodation is owned by the
                       (ii) In case the accommodation is owned by the              Company, 10 (ten) percent of the salary of the appointee
                       Company, 10 (ten) percent of the salary of Shri             shall be deducted by the Company.
                       Somany shall be deducted by the Company.                    (iii) In case no accommodation is provided by the
                       (iii) In case no accommodation is provided by the           Company, the appointee shall be entitled to House Rent
                       Company, Shri Somany shall be entitled to House Rent        Allowance subject to the ceiling laid down in Housing-
                       Allowance subject to the ceiling laid down in Housing-      i.
                       (I).                                                        EXPLANATION:
                       EXPLANATION :                                               The expenditure incurred by the Company on Gas,
                       The expenditure incurred by the Company on Gas,             Electricity, Water and Furnishings shall be valued as per
                       Electricity, Water and Furnishings shall be valued as       the Income Tax Rules, 1962. This shall, however, be
                       per the Income Tax Rules, 1962. This shall, however,        subject to a ceiling of 10 (ten) percent of the salary
                       be subject to a ceiling of 10 (ten) percent of the salary   of the appointees.
                       of Shri Somany.                                             MEDICAL REIMBURSEMENT
                       MEDICAL REIMBURSEMENT                                       Expenses incurred for the appointee and his family
                       Expenses incurred for Shri Somany and his family            subject to a ceiling of one month’s salary in a year or



                                                                     43
subject to a ceiling of one month’s salary in a year      three months’ salary over a period of three years.
or three months’ salary over a period of three years.     LEAVE TRAVEL CONCESSION
LEAVE TRAVEL CONCESSION                                   For the appointee and his family once in a year, while
For Shri Somany and his family once in a year, while      on leave, incurred in accordance with the Rules of
on leave, incurred in accordance with the Rules of        the Company.
the Company.                                              CLUB FEES
CLUB FEES                                                 Fees of Clubs subject to a maximum of two clubs
Fees of Clubs subject to a maximum of two clubs           as may be permissible by the Company. This will not
as may be permissible by the Company. This will not       include admission and life membership fees.
include admission and life membership fees.               PERSONAL ACCIDENT INSURANCE
PERSONAL ACCIDENT INSURANCE                               Of an amount, the annual premium of which shall be
Of an amount, the annual premium of which does            paid as per Rules of the Company.
not exceed Rs.10,000/- per annum.                         OTHER BENEFITS & ALLOWANCES
OTHER BENEFITS & ALLOWANCES                               Any other benefits, facilities and allowances as may
Any other benefits, facilities and allowances as may      be available and allowed to the appointee as per
be available and allowed to Shri Somany as per            Rules of the Company.
Rules of the Company.                                     The value of the perquisites for the purpose of
The value of the perquisites for the purpose of           calculating the above annual ceiling shall be evaluated
calculating the above annual ceiling shall be evaluated   as per Income Tax Rules wherever applicable
as per Income Tax Rules wherever applicable               otherwise at actuals.
otherwise at actuals.                                     EXPLANATION:
EXPLANATION :                                             For the purpose of CATEGORY ‘A’, family means,
For the purpose of CATEGORY ‘A’, family means,            the spouse, the dependent children and dependent
the spouse, the dependent children and dependent          parents of the appointee.
parents of Shri Somany.                                   CATEGORY –B
CATEGORY –B                                               (i) Contributions to Provident Fund and
(i) Contributions to Provident Fund and                   Superannuation/Annuity Fund will not be included
Superannuation/Annuity Fund will not be included          in the computation of the ceiling on perquisites to
in the computation of the ceiling on perquisites to       the extent these either singly or put together are not
the extent these either singly or put together are not    taxable under the Income Tax Act, 1961.
taxable under the Income Tax Act, 1961.                   (ii) Gratuity payable should not exceed half a month’s
(ii) Gratuity payable should not exceed half a month’s    salary for each completed year of service, subject
salary for each completed year of service, subject        to such ceiling as may be fixed by the Government
to such ceiling as may be fixed by the Government         from time to time and will not be included in the
from time to time and will not be included in the         computation of the ceiling on perquisites.
computation of the ceiling on perquisites.                (iii) Encashment of Leave at the end of the tenure
(iii) Encashment of Leave at the end of the tenure        will be permitted as per the Rules of the Company
will be permitted as per the Rules of the Company         and will not be included in the computation of the
and will not be included in the computation of the        ceiling on perquisites.
ceiling on perquisites.                                   CATEGORY –C
CATEGORY –C                                               Provision of Car for use on Company’s business and
Provision of Car for use on Company’s business and        telephone at residence will not be considered as
telephone at residence will not be considered as          perquisites, personal long distance calls on telephone
perquisites. Personal long distance calls on telephone    and use of Car for private purpose shall be billed
and use of Car for private purpose shall be billed        by the Company to the appointee.
by the Company to Shri Somany.                            OVERALL REMUNERATION
OVERALL REMUNERATION                                      Subject to an overall limit of 5% of the net profits
Subject to an overall limit of 5% of the net profits      individually and 10% of the net profits collectively
individually and 10% of the net profits collectively      payable to the Managing Director and Executive
payable to the Managing Director and Executive            Director(s) as calculated in accordance with Section
Director(s) as calculated in accordance with Section      198 and 309 and other applicable provisions of the
198 and 309 and other applicable provisions of the        Companies Act, 1956 read with Schedule XIII to the
Companies Act, 1956 read with Schedule XIII to the        said Act, as may for the time being in force.
said Act, as may for the time being in force.             MINIMUM REMUNERATION
MINIMUM REMUNERATION                                      In the event of loss or inadequacy of profits in any
In the event of loss or inadequacy of profits in any      financial year during the currency of tenure of office
financial year during the currency of tenure of office    of the appointee, the Company may pay his
of Shri Somany, the Company may pay him                   remuneration by way of salary, Bonus or Exgratia
remuneration by way of salary, perquisites and            in lieu of Bonus and perquisites as specified under
allowances as specified above subject to the limits       the Remuneration Clause above within the limits laid


                                           44
laid down under Section II of Part II of Schedule XIII     down under para I of Section II of Part II of Schedule
to the Companies Act, 1956 now in force and as may         XIII to the Companies Act, 1956 now in force and
be amended from time to time.                              as may be amended from time to time.
The perquisites specified in paragraph 2 of Section        The perquisites specified in paragraph 2 of Section
II of Part II of Schedule XIII to the Act, however         II of Part II of Schedule XIII to the Act, however shall
shall not be included in the computation of the            not be included in the computation of the ceiling on
ceiling on the minimum remuneration specified under        remuneration specified under Para I of Section II of
Para I of Section II of Part II of Schedule XIII to        Part II of Schedule XIII to the Act.
the Act.                                                   SITTING FEE
SITTING FEE                                                The appointee shall not so long as he acts as the
Shri Somany shall not so long as he acts as the            Executive Director of the Company be paid any sitting
Managing Director of the Company be paid any               fees for attending any meetings of the Board or any
sitting fees for attending any meetings of the Board       Committee thereof.
or any Committee thereof.                                  OTHER TERMS
OTHER TERMS                                                The appointee shall not during the continuance of his
Shri Somany shall not during the continuance of his        employment hereunder or at any time thereafter,
employment hereunder or at any time thereafter,            divulge or disclose to any person or make use
divulge or disclose to any person or make use              whatever for his own or for any other purpose any
whatever for his own or for any other purpose any          confidential information or knowledge acquired by him
confidential information or knowledge acquired by          during his employment under the Company as to the
him during his employment under the Company as             business or affairs of the Company or as to any trade
to the business or affairs of the Company or as to         secret or secrets, processes of the Company and
any trade secret or secrets, processes of the Company      shall during the continuance of his employment
and shall during the continuance of his employment         hereunder use his best endeavors to prevent any
hereunder use his best endeavors to prevent any            other person from doing so.
other person from doing so.                                The appointee hereby undertakes that so long as he
                                                           functions as the Executive Director of the Company
Shri Somany hereby undertakes that so long as he           he shall not become interested or otherwise concerned
functions as the Managing Director of the Company          directly or indirectly, or through his wife and/or minor
he shall not become interested or otherwise concerned      children in any selling agency of the Company in future
directly or indirectly, or through his wife and/or minor   without the prior approval of the Central Government.
children in any selling agency of the Company in           Nothing herein contained shall entrust or be deemed
future without the prior approval of the Central           to entrust the appointee with substantial powers of
Government.                                                management of the affairs of the Company.
                                                           The Board of Directors may, in their discretion, revise
The Board of Directors may, in their discretion, revise    or modify any of the terms of appointment and
or modify any of the terms of appointments and             remuneration from time to time within the limits laid
remunerations from time to time within the limits laid     down in Schedule XIII to the Act.
down in Schedule XIII to the Act.                          RETIREMENT BY ROTATION
RETIREMENT BY ROTATION                                     Shri Bandyopadhyay shall not be liable to retire by
                                                           rotation. If at any time Shri Bandyopadhyay ceases
Shri Somany shall not be liable to retire by rotation.
                                                           to be a Director of the Company for any cause
If at any time Shri Somany ceases to be a Director
                                                           whatsoever he shall cease to be a Whole-time Director
of the Company for any cause whatsoever he shall
                                                           of the Company hitherto designated as Executive
cease to be a Managing Director of the Company.
                                                           Director.
                                                           TERMINATION
TERMINATION                                                Notwithstanding anything contained in this Agreement,
                                                           either party, shall be entitled to determine this Agreement
Notwithstanding anything contained in the Agreement,
                                                           by giving two calendar months’ notice in writing in that
either party, shall be entitled to determine the
                                                           behalf to the other party and on the expiry of the period
Agreement by giving six calendar months’ notice in
                                                           of such notice, this Agreement shall stand terminated.
writing in that behalf to the other party and on the
                                                           The Company shall also be entitled without assigning
expiry of the period of such notice, the Agreement
                                                           any reason whatsoever to terminate the Agreement
shall stand terminated. The Company shall also be
                                                           on giving to the appointee two month’s salary as
entitled without assigning any reason whatsoever to
                                                           specified under the Remuneration Clause above in lieu
terminate the Agreement on giving to the appointee six
                                                           of two calendar month’s notice required to be given
month’s salary as specified above in lieu of six
                                                           under this clause.
calendar month’s notice required to be given under
this clause.                                               SERVICE OF NOTICE
                                                           Any notice to be given hereunder shall be sufficiently
SERVICE OF NOTICE                                          given or served in the case of the appointee by being
Any notice to be given hereunder shall be sufficiently     delivered either personally to him or left for him at his
given or served in the case of Shri Somany by being        address last known to the Company or sent by


                                            45
                         delivered either personally to him or left for him at his    registered post addressed to him at such address and
                         address last known to the Company or sent by                 in the case of the Company by being delivered at or
                         registered post addressed to him at such address and         sent by registered post addressed to its registered
                         in the case of the Company by being delivered at or          office; any such notice if so posted shall be deemed
                         sent by registered post addressed to its registered          served on the day following that on which it was
                         office; any such notice if so posted shall be deemed         posted.
                         served on the day following that on which it was
                         posted.

Corporate Governance
The company firmly believes in and continues to practice good Corporate Governance. Accordingly, it follows the business practices
which result in enhanced shareholder value and enables it to fulfill its obligations to customers, the government, employees, lenders
and to society in general.
The Company has complied with SEBI guidelines in respect of Corporate Governance especially with respect to board basing of
Board, Constituting the Committees such as shareholding/investor grievance committee, etc.
Composition of the Board
The Board of Directors of the Company has an optimum combination of executive and Non – Executive Directors as envisaged
in Clause 49 of the Listing Agreement. Accordingly not less than 50% of the Board of Directors comprises of non- executive and
not less than 50% are independent directors.
Audit Committee
The Company has set up an independent Audit Committee. Audit Committee comprises of Shri Prafull Anubhai, Shri Surendra Kumar
Somany, Shri A C Gandhi, Shri P. Bandyopadhyay and Shri M. S. Shekar. The members of the committee are well versed in matters
relating to finance, accounts, taxation, company law and general management practices. The functions of the Committee inter-alia include
overseeing the Company’s financial reporting process and disclosure of its financial information and reviewing the annual financial
statements with the management before submission to the Board.
Remuneration Committee
The Company has constituted Remuneration Committee of the Board to consider the remuneration of the Whole Time Directors, which
is a part of non-mandatory requirement of the code. The Remuneration Committee comprises of Shri M S Shekar, Shri Prafull Anubhai
and Shri Surendra Kumar Somany.
The Remuneration Committee of the Board recommends the remuneration of the Executive Directors. The remuneration package is governed
by the industry pattern and as per the provisions of the Companies Act, 1956.
Shareholders’/Investors’ Grievance Committee
The Board of the Company has constituted a Shareholders’ / Investors’ Grievance Committee comprising of Shri Surendra Kumar Somany,
Shri Arvind Kumar Somany, Shri P. Bandyopadhyay.
The Committee inter-alia approves share transfer, issue of duplicate share certificates and oversee and reviews all matters connected
with the share transfers.
The Committee also looks into redressing the shareholders’ complaints regarding transfer of shares, non-receipt of Annual Report,
non – receipt of declared dividends, etc. The Committee oversee the performance of the Registrar and Transfer Agent and recommends
measures for overall improvement in the quality of investor services.
Shares held by Directors (As at 30/09/2005)
     Sr. No.     Name                                                                No of shares                  % of post issue
                                                                                                                    shareholding.
     01          Arvind Kumar Somany                                                   850,639                          1.91 %
     02          Surendra Kumar Somany                                                 505,217                          1.13 %
Interest of Directors and Promoters
The Directors of the company other than Mr. Arvind Kumar Somany & Mr. P Bandyopadhyay may be deemed to be interested to the
extent of sitting fees for attending the Board Meeting & Committee Meeting. Mr. Arvind Kumar Somany & Mr. P Bandyopadhyay are
interested in the remuneration and reimbursement of expenses, if any, as per terms of their appointment and other related party transaction
as required to be, are disclosed in the Auditors for the year 31.03.2005.
None of the Director of the Company is interested in any transaction relating to acquiring of any property during last two years.
Changes in the Board of Directors during last three years.
Name of Director                                   Date of Appointment         Date of Resignation           Reasons of Resignation
Shri Gouri Shanker Mantry                         29.09.1962                   24.01.2004                             Death
Shri Shreekant Somany                             23.03.1966                   24.01.2004                        Pre-occupation
Shri Piyush Bhatia (Nominee, ICICI)               28.06.2001                   25.09.2003                  Nomination withdrawn by ICICI
Shri Mayank Agarwal (Nominee, ICICI)              28.09.2003                   07.05.2004                  Nomination withdrawn by ICICI
Shri Prafull Anubhai                              24.01.2004
Shri Ashok C Gandhi                               24.01.2004
Shri R S Verma                                    25.01.2001                   06.05.2005                        Personal reasons
Shri M S Shekar
(Nominee, ICICI)                                  07.05.2004


                                                                      46
Management and Organisation Structure
The Company is managed by Shri Arvind Kumar Somany Managing Director, an industrialist who looks after the affairs of the Company.
The dint of his foresight, planning and hard work remains the inspiration behind the consistent growth of the Company. He was
the Chairman of Ahmedabad Mill Owners’ Association for 2003-2004 and has been a member of The Indian Cotton Mills’ Federation
and several other committees constituted by governmental bodies. He combines a comprehensive mix of academic qualifications
and professional experience. Having traveled widely around the world, he has a good understanding of global business issues.
He is supported by Executive Director Shri P. Bandyopadhyay who looks after the day-to-day operations of the Ahmedabad unit
and having 25 years experience in Textile Industry. He is post graduate in Textile Engineering and Industrial Management. He is
also a fellow member of Institute of Valuers. He has experience of setting up three Greenfield Textile Projects. The Executive Director
is assisted by a team of professional from various fields like Engineering, Chartered Accountants, Marketing and Technocrats who
are capable of taking the Company to new heights.
Organisation Chart



                                     S O M A TE X TIL E S & IN D . L TD .
                                     O rgan i zati on C h art (A h m edab ad U n i t)
                                                      C H A IR M A N      (S H R I
                                                           S .K .SO M A N Y )



                                                       M A N A G IN G D IR E C T O R
                                                       (S H R I A .K .S O M A N Y)
                                                                                                            EX EC . A SSTT. TO M .D .
                                                                                                          (SH R I A SH O K K O TH A R I)




      PR E SID EN T       NEW           PR E SID E N T               EX E C U T IV E D IR E C T O R                          C O M PA N Y
            G ARMENT                 B A R A M A T I U N IT        (SH R I P.B A N D Y O PA D H Y A Y )               SE C R ET A R Y (SH R I R .
       M A N U FA C T U R IN G                                         (A H M E D A BA D U N IT )                           S. SH A R M A )
               U N IT                                                                                                    (R E G D .O FFIC E,
                                                                                                                            K O L KA T A )




                          A dm in istration                                                           P rodu ction
                          (C om m ercial)                                                             (T ech n ical)

               V ic e Pre side nt (S ales                                                                   G . M . (Pro ce ss)
                       & M k tg.)

                 G . M . (Fin ance &                                                                      S r. M anager (T e ch.
                     A cc o un ts)                                                                              Se rv ices)

                     S r. M anager                                                                            S r. M anager
                       (Pu rch ase                                                                           (E n gin eering)

               S r. M anager (P & A )                                                                        Sr. M an ager
                                                                                                              (Sp in nin g)

                                                                                                             Sr. M an ager
                                                                                                              (W e aving)




                                                                        47
                          S O M A TE X TIL E S & IN D . L TD .
                            O rganization C h art (B aram ati U n i t)
                                       K .B.S.P A C H L A N G IA
                                           (P R ES ID E N T )

     TEC H N IC A L                                                                C O M M ER C IA L




V . P. (T ech n ical)                                                                 V . P. S ales &
                                                                                       M ark etin g




     D y. G . M .                                                                         G. M.
    (Pro d u ctio n )                                                                (C o m m ercial)




                                                                                        D y. G . M .
                                                                                         (P & A )




                           S O M A T E X T IL E S & IN D . L T D .
          O rg a n iz a tio n C h art (o f P ro p o se d G a rm e n t M an u f ac tu rin g U n it)
                                             P R E S ID E N T


      T E C H N IC A L                                                              C O M M E R C IA L




V . P . (T e chnical)                                                                  V . P . S ale s &
                                                                                        M ark e ting




      Dy. G. M .                                                                           G. M.
     (P ro d u ctio n)                                                                (C o m m erc ial)




                                                      48
Key Management Personnel
A. Ahmedabad Unit

Sr.N a m e             A g e Designation               Qualification         E x p . Functional                  Date          Past     Experience
No.                                                    (Yrs)                         Responsibilities            of Joining
1. Mr. A B Raju        40    Vice President            B.Tech (Mech),        16     Sales strategy,            15.12.2003      Worked with Atlantic
                             (Marketing & Sales)        PGDRM                       product mix, business                      Mills (Thailand) Co.
                                                                                    developments, part of                      Ltd., Bangkok, Thailand as Head
                                                                                    core management think-tank                 of the Company and has manifold
                                                                                                                               experience in Textile marketing.

2. Mr. Ashok Kothari    49   Executive Asst. to M.D.   B. E. (Mech), MBA     25     Business strategy, project  21.05.2005     Worked with Qumex Moulds Pvt. Ltd.,
                                                                                    implementation, augmenting                 Kolkata as overall incharge of
                                                                                    new business lines part of                 production planning, marketing &
                                                                                    core management think-tank.                administration.

3. Mr. Rahul I Shah    38    G. M. (F&A)               B. Com., ACA,         15     Head of Finance &          21.11.2001      Worked with Pepsi Cola Bottlers,
                                                       Grad. CWA                    Accounts. Finance Planning                 Fahari Beverages Ltd., Tanzania as
                                                                                    & Mobilization                             Manager (Finance & IT ). Has very
                                                                                                                               good exposure of working capital
                                                                                                                               management, resource mobilization
                                                                                                                               and was part of management think
                                                                                                                               tank.

4. Mr. Shrikant Bhat   40    G.M. (Finance)            B.Com., CA            14     Head of Finance at           Aug-1998      Worked with SPL Limited as Manager
                                                                                    Corporate Office,                          (Commercial), Krishna Glass Pvt Ltd
                                                                                    Responsible for Long Term                  as Manager (Commercial)
                                                                                    Fund Mobilization

5. Mr. R S Sharma      59    Company Secretary         B.Com., LLB           40     Secretarial Work             05.05.1965    Worked with Hotly Hydraulic Co.

6. Mr. S M Soni        66    G. M. (Processing)        B.Sc., DTC            42     Head of Process Dept.        22.11.1999    Worked with Standard Mills, Mumbai.
                                                                                    Production planning, quality               Vast experience in production
                                                                                    maintenance, modernization,                planning, quality maintenance,
                                                                                    etc.                                       modernization, etc.

7. Mr. P Viswanath     39    Sr Man. (TSD)             M Tech & B Tech       13     Head of technical service    07.08.2000    Worked with Mafatlal Industries Ltd.
                                                       (Textile)                    department.                                Nadiad. good experience in technical
                                                                                                                               planning, quality maintenance,
                                                                                                                               modernization, etc.

8   Mr. P Chandarana   33    Sr. Man. (Purchase)       B.E. & PGDBM          12     Head of Purchase dept.       01.07.2003    Worked with Anil Starch Products Ltd.
                                                                                                                               Ahmedabad. As Asst. Manager
                                                                                                                               (purchase) good experience in
                                                                                                                               purchase of capitals items & handling
                                                                                                                               of contracts with the suppliers.

9   Mr. A. Dave        50    Sr. Man. (P&A)            BA, LLB, DLP          35     Head of Personnel             24.04.2002   Worked with PBM Petlad. As Factory
                                                       & DPM                        department handling all                    Manager good experience in all the
                                                                                    the legal matters relating to              legal & administrative works relating
                                                                                    labour & related works                     to labour.

10. Mr.C C Shah        41    Sr. Man (Eng)             Diploma in Electric   22     Head of Engineering         06.08.1969     Worked with New Shorvock Mills,
                                                       Eng.                         department handling all the                Nadiad. (division of Mafatlal Industries
                                                                                    operation & maintenance of                 Ltd.) As Electric supervisor good
                                                                                    the engineering tools &                    experience Engineering works.
                                                                                    machineries

11. Mr. R R Agarwal    54    Sr. Mgr. (Weaving)        B. Tex. (Tech)        31     Head of Weaving              29.06.1988    Worked with New Cotton Mills,
                                                                                    department looking after                   Ahmedabad. (division of Lalbhai
                                                                                    weaving preparatory &                      group).
                                                                                    production planning of
                                                                                    weaving department.

12. Mr.B K Pandit      45    Sr. Mgr. (Spinning)       B.Sc. Technical       21     Head of Spinning department 15.04.1998     GSL India Ltd., as Spinning Manager
                                                       (Textile)                    looking after spinning
                                                                                    preparatory & production
                                                                                    planning of weaving
                                                                                    department.




                                                                             49
B. Baramati Unit
Sr.N a m e            A g e Designation            Qualification    E x p . Functional                 Date     Past    Experience
No.                                                                 (Yrs)                              Responsibilities       of Joining
1 . Mr. K. B. S.       58    President             ATA             36    Overall   operations.     06.05.2005       Worked     with  M/s.R    S    R
    Pachlangia                                                                                                      MohotaSpining & W e a v i n g
                                                                                                                    Mills Ltd., Highanghat and its
                                                                                                                    other group of companies, as
                                                                                                                    President since April, 2000
                                                                                                                    and has experience of setting
                                                                                                                    up Greenfield projects in textile
                                                                                                                    industries.

2 . Mr. R P Joshi      43    V. P. (Exports)       M. Text         18    Exports of Yarn and       01.02.1994       Has vast experience in exporting
                                                                         negotiation with                           Cotton yarn. Worked with GTN
                                                                         overseas as well as                        Textiles Ltd. Mumbai, Keshavlal
                                                                         domestic customers.                        Talakchand & Co., Mumbai and
                                                                                                                    Mafatlal Fine Mills, Mumbai.

3 . Mr. S D Nandanikar 3 9   V. P. (Technical)     B. Text.        17    Production planning, 2 3 . 1 0 . 2 0 0 0   Worked with Spentex Industries
                                                                         assurance and                              Limited, Baramati as Manager
                                                                         maintenance of                             (Technical Services). Has good
                                                                         plant and machineries.                     exposure of cotton, yarn, production
                                                                                                                    planning, quality assurance and
                                                                                                                    maintenance       of    plant   and
                                                                                                                    machineries.

4   Mr.K B Pise        35    DGM    (Production)   B. Text         21                              09.08.1997       Worked with R S R Mohata Spinning
                                                                                                                    & Manufacturing Mill as Spinning
                                                                                                                    Superitendent. Has good exposure in
                                                                                                                    technical, Operation, erection &
                                                                                                                    commissioning of the plant &
                                                                                                                    machinery.

5 . Mr.S M Tak         45    DGM (P & A)           B.S.C & MBA     19                              04.07.2005       Worked with R S R Mohata Spinning
                                                                                                                    & Manufacturing Mill as Senior
                                                                                                                    Manager (Personnel). Has good
                                                                                                                    exposure in implementation of HR
                                                                                                                    policies & maintaining industrial
                                                                                                                    relations.

6 . Mr.N M Mishra      54     Man. (Accounts)      B. Com          32                              05.08.1994       Worked with R K Spinners Pvt. Ltd.
                                                                                                                    as Asst. Manager (Accounts). Has
                                                                                                                    good exposure in Accounts.

-     The persons mentioned above are in the employment of the Company as permanent employees.
-      None of the key personnel mentioned above are related to the promoters/Directors of the Company.
-      No director or member of Senior Management has been selected pursuant to any arrangement/understanding with major
       shareholders/customers/suppliers.
-      No portion of the compensation was paid pursuant to a bonus or profit sharing plan.
Changes in key managerial personnel
Mr. K B S Pachlangia has been appointed as President with effect from 07.05.2005 & Mr. Ashok Kothari has been appointed as Executive
asst. to MD with effect from 21.05.2005. Other than above, there are no material changes in the key managerial personnel during
last one year.
Shares held by the key Managerial Personnel
No share is held by any of the Key Managerial Personnel.
Manpower
The proposed expansion will mean a change in the technology adopted, equipment installed and the skills needed for their operation.
Therefore, the technical manpower needs to be strengthened with qualified and experienced professional with a background in operating
the high-speed textile machineries. The project team will also need to have additional operational manpower.
The present and proposed manpower strength of the Company is as under:

Category                                 Present                                                 Proposed                                      Total
                            Ahmedabad               Baramati            Ahmedabad                Baramati             Garment
Permanent                         629                    376                  773                     376                2270                   3419
Mills Trainee                      75                     38                   75                      38                   0                    113
Badli Workers                      56                      0                   56                       0                   0                     56
Contractor employee                 0                      0                    0                       0                   0                      0

      Total                          760                     414                   904                 414                  2270               3588


                                                                    50
The additional manpower required for the project would be recruited by advertising in the newspapers & in recruitment websites,
campus interviews, personal contacts, etc.
Disclosure Regarding Employees Stock Option Scheme / Employee Stock Purchase Scheme
Till date, the Company has not introduced any Employees Stock Option Scheme / Employees Stock Purchase Scheme, as required by
the Guidelines or Regulations of SEBI relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme.
Payment of Benefit to Promoters and Officers of the Company.
No amount or benefit has been paid or given to the Company’s officers since the incorporation of the Company nor is intended to
be paid or given to any officer of the Company except their normal remuneration and / or reimbursement for service as Directors,
Officers or Employees of the Company or otherwise in accordance with Law.
5. PROMOTERS
Shri Surendra Kumar Somany, Chairman, aged 74 years & Commerce Graduate has more than five decades experience in
administration and management.
He is well versed and technically well experienced in Textile Industry and known as a respected person in the field of Textile in India.
The Company owes its growth for his valuable guidance. His foresightedness, experience and business acumen are far reaching
aspects for the progress of the Company.
 Residential Address         81, Las Palmas, 20, Little Gibbs Road, Mumbai 400 006
 PAN                         AAGPS6467H
 Bank A/c no.                Savings A/c No. 222726 with Dena Bank, BMO, Mumbai 400023
 Voter ID                    MT/04/024/048268
 Passport No.                B0948731
 Driving License no.         20374
 Shri Arvind Kumar Somany, Managing Director, aged 50 years is a Science Graduate who looks after the affairs of the Company.
 The dint of his foresight, planning and hard work remains the inspiration behind the consistent growth of the Company.
 He was the Chairman of Ahmedabad Mill Owners’ Association for 2003-2004 and has been a member of The Indian Cotton Mills’
 Federation and several other committees constituted by governmental bodies. He combines a comprehensive mix of academic
 qualifications and professional experience. Having traveled widely around the world, he has a good understanding of global business
 issues.
 Residential Address         Soma Hose, Nr. Samartheswar Mahadev Mandir, Law Garden,
                             Ellisbridge, Ahmedabad-380006
 PAN                         ACBPS8983M
 Bank A/c no.                Savings A/c No, 0691050017001 with HDFC Bank
                             -Mithakhali Branch, Mithakhali- Ahmedabad - 380 009
 Voter ID                    DDV3243227
 Passport No.                E7915627
 Driving License no.         GJ01/607354/00


The Permanent Account Number (PAN), Bank Account Number and the Passport Number of the Promoters have been submitted to
Bombay Stock Exchange Ltd (BSE) & National Stock Exchange of India Ltd, Mumbai (NSE) at the time of filing the Prospectus.
6. COMMON PURSUITS
There are no common pursuits among the company and its Promoter/ Group/ Associate companies.
7. INTEREST OF PROMOTERS AND DIRECTORS
Except as stated under caption, “Related Party Transaction” appearing on page no. __ in the Prospectus, all the Directors may be
deemed to be interested to the extent of remuneration and fees payable to them for attending the meeting of Board or committee thereof
and reimbursement of traveling and other incidental expenses, if any, for such attendance as per the Articles of Association of the
Company
All directors/Promoters of the Company shall be deemed to be interested to the extent of share held by them and/or their friends and
relatives and which may be allotted to them out of the present issue and are deemed to be interested to the extent of remuneration
and perquisites being drawn by them from the Company.
The Whole time Director is interested to the extent of remuneration paid to him for services rendered to the Company. Further,
the Whole time Director is interested to the extent of equity shares held by him and also to the extent of any dividend payable
to him and other distributions in respect of the said equity shares.
The promoters/directors/group concerns have no interest in any transaction in acquisition of land, construction of building and supply
of machinery.
Except as stated otherwise in this Prospectus, the Company has not entered into any contract, agreements or arrangement during
the preceding two years from the date of the prospectus in which the Directors are interested directly or indirectly and no payments


                                                                   51
have been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them.
8. PAYMENT OF BENEFIT TO PROMOTERS OF THE COMPANY
No amount or benefit has been paid or given to the Company’s Promoters since the incorporation of the Company not is intended
to be paid or given to any promoter of the Company except their normal remuneration and/or reimbursement for services as Directors
of the Company or otherwise in accordance with the law.
9.   RELATED PARTY TRANSACTIONS
Please refer “Related Party Disclosures” as mentioned under Annexure XIV of the Auditors report given on page no.
__ in this Prospectus.
10. CURRENCY OF PRESENTATION
In this Prospectus, all references to “Rupees” and “Rs.” are to the legal currency of India.
11. DIVIDEND POLICY
Dividend may be declared at the Annual General Meeting of the shareholders on a recommendation of the Board of Directors. The
Board of Directors may recommend dividends, at its discretion, to be paid to the members. Generally the factors that may be considered
by the Board, but not limited to, before making any recommendations for the dividend include future expansion plans and capital
requirements, profit earned during the financial year, cost of raising funds from alternate sources, liquidity, applicable taxes including
tax on dividend as well as exemptions under the tax laws available to various categories of investors from time to time and money
market conditions.
However, the Company has not paid any dividend during last 5 years.




                                                                    52
                                    SECTION V : FINANCIAL INFORMATION,
1. FINANCIAL INFORMATION OF SOMA TEXTILES & INDUSTRIES LTD.
The Board of Directors
Soma Textiles & Industries Ltd.
Rakhial Road Ahmedabad - 380 023 Gujarat.
                                                        Sub.: Your Proposed Public Issue
Dear Sr,
      We have examined the Audited Accounts of Soma Textiles & Industries Ltd. for the past five financial years ended 31st March,
2001, 31st March, 2002, 31st March, 2003, 31st March, 2004 and 31st March, 2005 being the last date upto which the accounts of
the Company have been made up and audited by us. We have also examined the accounts for the period of Six Months from 1st
April, 2005 to 30th September, 2005. prepared and approved bv the Board of Directors of the Company. Based on these Audited
Accounts upto 31st March, 2005 and for the six months ending on 30th September, 2005, a statement of Profit & Loss Account as
restated and statements of Assets & Liabilities as restated, has been prepared, which is annexed herewith as Annexure I and II and
found the same to be correct.
     At the date of signing this report, we are not aware of any material adjustment which would affect the result shown by these
accounts in accordance with the requirement of Part II of Schedule II to the Companies Act, 1956, subject to Notes on Accounts
of the said audited financial statements.
      In accordance with the requirements of Paragraph B (1) of Part II of Schedule II to the Companies Act 1956 (the Act), the
Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (SEBI Guidelines) and our terms
of reference with the Company dated 17th October, 2005 requesting us to make this report for the purpose of the Offering Memorandum
as aforesaid, we report that:
     In our opinion the above financial information of the Company read with Significant Accounting Policies and notes on account
attached in Annexure III & IV to this report, after making adjustments and re-grouping as considered appropriate has been prepared
in accordance with Part II of Schedule II of the Act and the SEBI Guidelines.
(a)    The restated profits/losses of the Company for the five financial years ended 31st March, 2001, 31st March, 2002, 31st March,
       2003, 31st March, 2004, 31st March, 2005 and six months ended 30th September, 2005 are as set out in Annexure I to this report.
       These profits have been arrived at after charging all expenses                  including depreciation and after making such
       adjustment and regroupings as in our opinion are appropriate and in more fully described in the Significant Accounting Policies
       as appearing in Annexure III to this report for the year ended 31 st March, 2005 and Notes
       on Accounts as appearing in Annexure IV.
(b)    The restated assets and liabilities of the Company as at 31 st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004,
       31st March, 2005 and 30th September, 2005 are as set out in Annexure II to this report after making such adjustments and
       regroupings as in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes
       appearing in Annexure III & IV respectively to this report.
(c)    The restated cash flow statement of the Company as at 31 st March, 2001, 31st March, 2002, 31st March, 2003, 31st
       March, 2004, 31st March, 2005 and 30th September, 2005 are as shown in Annexure V to this report.
(d)    We have examined the following financial information relating to the Company and as approved by the Board of Directors
       for the purpose of inclusion in the Offer document, and found the same either in order or correct:
       (i)       Accounting Ratios as appearing in Annexure VI to this report.
       (ii)      Capitalization Statement as at 30th September, 2005 as appearing in Annexure VII to this report.
       (iii)     Statement of tax shelters as appearing in Annexure VIII to this report,
       (iv) Details of other income as appearing in Annexure IX to this report,
       (v)       Details of sundry debtors as appearing in Annexure X to this report,
       (vi) Details of loans and advances as appearing in Annexure XI to this report,
       (vii) Details of Unsecured loans as appearing in Annexure XII to this report,
       (viii) Details of secured loans as appearing in Annexure XIII to this report,
       (ix) Statement of Transactions with related parties as preceding three years as appearing in Annexure XIV.
       (x)       Changes in Significant Accounting Policies as appearing in Annexure XV to this report,
       (xi) Extract of qualification in the Financial Statement as appearing in Annexure XVI to this report.
     This report is intended solely for your information and for inclusion in the Offer document in connection with the specific Public
Offer of equity shares of the Company and is not to be used, referred to or distributed for any other purpose without our written
consent.
Thanking you,
                                                                                                                    For.Plpara & Company
                                                                                                                    Chartered Accountants
Place : Ahmedabad                                                                                                             G.C Plpara
Date           : October 25, 2005                                                                                                 Partner
                                                                                                                    Membership No. 034289

                                                                        53
Statement of Profit and Loss Account as restated
                                                                                                                    Annexure - I
                                                                                                                   (Rs. In Lacs)

                                                     For the six                        For the year ended on
                                                           months
                                                          ended on
            Particulars
                                                          30-Sep-05     31-Mar-05 31-Mar-04 31-Mar-03 31-Mar-02 31-Mar-01
            Income
            a.             Sales                           8,424.12     17,236.64   16,213.42   14,898.65   12,582.60 12,355.49
            b.             Less: Excise Duty                  32.06       532.02     1,082.02   1,011.24      889.30     828.00
            c.             Net Sales (a)- (b)              8,392.06     16,704.62   15,131.40   13,887.41   11,693.30 11,527.49
            Other Income                                      73.69        311.37     149.61      141.44      221.58     420.04
            Increase/(Decrease) in Stocks                    489.18      (769.78)     330.49     (333.98)     310.55     212.25
            Total                                          8,954.93     16,246.21   15,611.50   13,694.87   12,225.43 12,159.78
            Expenditure
            Raw Materials Consumed                          4,508.11     9,094.39    8,359.68   6,844.42     6,545.71   6,289.42
            Staff Costs                                      529.14      1,012.67    1,002.98     904.16      870.26     908.12
            Manufacturing Expenses                         2,090.04      3,343.78    3,243.87   3,229.82     3,213.88   3,105.08
            Administration Expenses                          276.24       357.65      366.40      324.79      287.38     320.20
            Selling and Distribution Expenses                123.46       238.14      265.08      285.19      280.70     261.29
            Finance Charges & Exchange Fluctuation           377.70       400.45      567.17      774.56      955.27    1,095.48
            Depreciation/amortisation                        510.14       788.24      701.04      639.07      650.17     658.65
            Misc. Exp. Written Off                            24.76        42.37       27.62       33.00       30.15      24.15
            Total                                          8,439.59     15,277.69   14,533.84   13,035.01   12,833.52 12,662.39
            Profit before Exceptional Items                  515.34       968.52     1,077.66     659.86     (608.09)   (502.61)
            Add/(Less) : Exceptional Items ( Net )                              -     240.82      462.71            -          -
            Profit before tax                                515.34       968.52      836.84      197.15     (608.09)   (502.61)
            Less : Provision for Tax
            Current Tax                                                    65.00       30.00            -           -          -
            Deferred Tax Liability / (Assets)                              23.16      (30.45)           -           -          -
            Profit after tax                                 515.34       880.36      837.29      197.15     (608.09)   (502.61)
            Income Tax relating to earlier year Cr/(Dr)
            Net Profit                                       515.34       880.36      837.29      197.15     (608.09)   (502.61)




                                                                   54
Statement of Assets and Liabilities as restated                                                             Annexure - II
                                                                                                             (Rs. In Lacs)

                                                  For the six                       For the year ended on
                                                      months
                                                   ended on
              Particulars                          30-Sep-05     31-Mar-05 31-Mar-04 31-Mar-03 31-Mar-02 31-Mar-01
     1       Fixed Assets
             Gross Block                            16,828.71    16,123.02   15,174.62   14,726.23   14,152.59 13,933.20
             Less: Depreciation                      8,899.05     8,522.28    8,389.85    7,811.09    6,808.28   6,311.12
             Net Block                               7,929.66     7,600.74    6,784.77    6,915.14    7,344.31   7,622.08
             Capital Work in Progress                 454.99        10.02      336.32        11.94      27.26      38.57
             Total Net Block                         8,384.65     7,610.76    7,121.09    6,927.08    7,371.57   7,660.65
     2       Investments (Non Trade)                     0.21         0.21        0.05        0.96        0.96       0.96
     3       Current Assets, Loans and Advances
             Inventories                             3,211.36     4,334.51    5,425.56    3,378.55    2,761.44   2,916.38
             Sundry Debtors                          1,024.05      981.51     1,102.26    1,073.88    1,163.58   1,293.71
             Cash and Bank Balances                   890.49       433.45      684.56       99.14       54.64     116.55
             Loans and Advances                       819.87       768.12      442.78      333.23      408.82     545.05
             Total                                   5,945.77     6,517.59    7,655.16    4,884.80    4,388.48   4,871.69
     4       Total Assets (1)+(2)+(3)               14,330.63    14,128.56   14,776.30   11,812.84   11,761.01 12,533.30
     5       Less: Liabilities and Provisions
             Secured Loans                           6,284.27     6,575.71    5,981.18    6,698.88    6,586.06   6,189.83
             Unsecured Loans                          809.79       738.34      590.90      420.03      580.21     472.61
             Liabilities                              974.13      1,025.61    3,306.70    1,246.49    1,366.38   2,002.48
             Provisions                               380.68       366.57      315.37         5.75        6.15       8.24
             Total                                   8,448.87     8,706.23   10,194.15    8,371.15    8,538.80   8,673.16
     6       Net Worth before Deferred Tax
             Liability (4) - (5)                     5,881.76     5,422.33    4,582.15    3,441.69    3,222.21   3,860.14
     7       Deferred Tax Liability                   459.92       459.92      436.76            -           -          -
     8       Adjusted Net Worth (6)-(7)              5,421.84     4,962.41    4,145.39    3,441.69    3,222.21   3,860.14
             Net Worth represented by:
     a.      Share Capital                           1,472.75     1,472.75    1,472.75    1,106.75    1,106.75   1,106.75
     b.      Reserves and Surplus                    4,170.06     3,654.72    2,774.36    2,404.28    2,207.13   2,815.21
             Less: Miscellaneous Expenses             220.97       165.06      101.72       69.34       91.67      61.82
     (to the extent not written
     off or adjusted)
         Adjusted Net Worth                          5,421.84     4,962.41    4,145.39    3,441.69    3,222.21   3,860.14




                                                            55
SIGNIFICANT ACCOUNTING POLICIES (As per Audited Accounts for the year ended 31st March, 2005) :
                                                                                                                         Annexure - III

1   BASIS OF ACCOUNTING :
    The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with
    the provisions of Companies Act, 1956, accounting principles generally accepted in India and Accounting Standards issued by
    The Institute of Chartered Accountants of India (ICAI) to the extent applicable.
2   REVENUE RECOGNITION :
    (a)   Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded
          at net of Cash Discounts, Shortages, claims settled, rate difference, rebate allowed to customers, Textile Committee Cess,
          fee and Excise Duty.
    (b)   Export Sales are booked on an average rate and the resultant gain or loss on realisation or on translation is accounted
          as “Foreign Exchange Rate Fluctuation” and is dealt with in the statement of Profit and Loss Account.
3   A) FIXED ASSETS :
          (a)   Fixed Assets are stated at cost, net of CENVAT (upto 23rd October, 2004) and accumulated depreciation. Fixed
                Assets of Baramati Unit are further reduced by the amount of Sales Tax refund due. All costs, including financing
                costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments
                arising from exchange rate variation related to the acquisition and installation of the respective assets are capitalised.
          (b)   Cost of leasehold land is not amortised over the period of lease.
          (c)   Amount incurred towards capital work-in-progress will be suitably apportioned to the respective Fixed Assets on
                commissioning of assets.
          (d)   Assets, identified and evaluated technically as obsolete and held for disposal have been written off during the
                year and adjusted from profit on sale of Fixed Assets.
    B) DEPRECIATION :
    (a)   Ahmedabad Unit :
          Depreciation on fixed assets purchased prior to 1st April, 1988 is charged on Straight-Line Method, whereas depreciation
          on all other fixed assets is charged on Written-Down Value method on pro-rata basis, by applying the rates as specified
          in Schedule XIV to the Companies Act, 1956.
    (b)   Baramati Unit :
          Depreciation on fixed assets is charged on Straight-Line Method on pro-rata basis, by applying the rates as specified
          in Schedule XIV to the Companies Act, 1956. However, the Plant & Machineries have been considered as Continuous
          Process Plant based on technical assessment and are depreciated accordingly.
4   INVENTORIES :
    -     The cost of work-in-progress and finished goods comprises of raw material, direct labour, other direct costs and related
          production overheads, but excludes interest expense.
    -     Cost is determined on first-in first-out (FIFO) basis.
    -     The method of valuation of inventories are as under :
          (a)   Stores & Spares                                     Ahmedabad Unit                     Baramati Unit
          (b)   Raw Materials                                       At Cost                            At Cost
          (c)   Finished Goods                                      At Cost                            At Cost
          (d)   Cotton & Yarn in Process                            At the Lower of cost and           At the Lower of cost and
                                                                    Net Realisable Value               Net Realisable Value
          (e)   Cloth in Process                                    At Budgeted Cost                   At Cost
          (f)   Stock in Trade                                      At Budgeted Cost                   N. A.
          (g)   Stock in Transit                                    At Cost                            N. A.
          (h)   Saleable Waste                                      At Cost                            At Cost
                                                                    At contracted selling price.       At contracted selling price.

5   Investments are valued and stated at cost.
6   FOREIGN EXCHANGE TRANSACTIONS :
    (a)   Foreign currency transactions are recorded at the exchange rates at the date of transaction.
    (b)   Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and
          liabilities denominated in foreign currencies, are recognised in the Profit and Loss Account.
    (c)   Premium in respect of forward contracts is accounted over the period of the contract.
    (d)   Forward Exchange contracts entered for trading purposes are valued and marked to its current market value and the
          resultant gain or loss is dealt with in Profit and Loss Account.


                                                                  56
7    EXCISE DUTY :
     Since the Ahmedabad Unit has opted for exemption of excise duty w.e.f. 10th November, 2004 no provision has
     been made towards the estimated liability of excise duty on unsold finished goods lying at Ahmedabad Unit at
     the end of the year (previous year Rs. 4,954,047/-) . The same does not have any impact on the profits for the
     year.
8    RETIREMENT BENEFITS :
     (a)   Contribution in respect of Provident Fund and Family Pension Fund whether in pursuance of any law or otherwise is accounted
           on accrual basis and is charged to the Profit & Loss Account.
     (b)   Liability towards gratuity is provided for on actuarial valuation basis.
9    RESEARCH AND DEVELOPMENT EXPENSES :
     Research and development expenditure of revenue nature is recognised as an expense in the year in which it is incurred and
     the expenditure of capital nature are depreciated over the useful lives of the assets.
10   TREATMENT OF CONTINGENT LIABILITIES :
     Contingent Liabilities not provided for are disclosed by way of Notes on Accounts.
11   AMORTISATION OF DEFERRED REVENUE EXPENDITURE :
     -     Compensation paid to the employees under Voluntary Retirement Scheme are amortised over a period of five years.
     -     Borrowing costs are amortised over a period of ten years.
     -     Preliminary expenses are amortised over a period of ten years.
     -     Upfront fees paid to IFCI on Reschedulement of loan is being amortised over a primary period of loan of three years.
     -     Upfront fee and loan processing charges paid to ICICI Bank Ltd. are amortised over a period of five years.
     -     Overhauling charges of DG Set is amortised over expected running hours of the DG Sets.
12   EXPORT INCENTIVES :
     Following the Accrual Concept of Accountancy, the Company has taken credits as income for Rs. 69,000/- (Previous Year
     Rs.181,455/-) being DEPB license available to the Ahmedabad Unit at the close of the year.
13   TAXATION :
     (a)   Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per the applicable
           provisions of the Income Tax Act, 1961.
     (b)   Deferred tax resulting from “timing difference” between the book profits and taxable profits is accounted for using the
           current tax rates and laws that have been enacted or substantively enacted as on the balance sheet date.




                                                                 57
NOTES ON ACCOUNTS                                                                                                           Annexure - IV
                                                                                                                                (Rs. In Lacs)

                  Particulars                    For the six                              For the year ended on
                                                    months
                                                  ended on
                                                  30-Sep-05       31-Mar-05       31-Mar-04        31-Mar-03        31-Mar-02     31-Mar-01
     1      Estimated amount of
            capital commitments
            (Net of advances)                       1,433.25            789.10           78.31            4.47         214.91           0.74
     2   Contingent Liabilities not
         Provided for in respect of -
     (a) Municipal Education Cess
         disputed by the Company                   76.54                 76.54           73.32           70.09          66.86          63.64
     (b) Sales Tax Payment disputede
         by th Company                              0.11                  0.11            0.11             0.11          1.68           1.68
     (c) Excise Duty demand disputed
         by the Company                           294.74                294.74          255.94          417.14         376.56         375.17
     (d) Claims against the Company
         not Acknowledged as debts                 41.58                 41.58           40.02           38.70          36.32          27.17
     (e) Income Tax Matters                         6.14                 22.09           32.20           25.64           4.58           4.58
     (f) Electrical Inspection Division, Pune     144.91                144.91          144.91          109.28              -              -
     (g) Custom duty demand disputed
         by the company                                                      -            -                0.37          2.50           2.50
     (h) Bills discounted with bankers            711.10                790.48     1,129.20            1,151.23        918.52         573.82
     (i) Compensation demanded by
         Textile Commissioner, Mumbai                                        -            -                  -              -           2.45
     (j) Special property tax levied by AMC                                  -            -               5.51           1.74              -
     (k) Gratuity Liability to Employees                                     -            -             248.22         212.09         186.56
     (l) Leave Encashment Liability to Employees                             -            -              31.20          28.62          29.64
     (m) L/C outstanding in favour of suppliers  3143.31                357.88     2,209.80             202.57          74.52         115.32
     (n) Textile Committee Cess on export sales                              -            -               8.30           6.27              -
     3   Unredeemed Bank Guarantees
         (F.D.R. of Rs. 188,000/-)                 16.33                 16.33           13.44             7.50             -          54.97
     4      Bonds executed in favour of
            Central Excise Department
            (F.D.R. of Rs. 7,90,000/- pledged)       202.10             202.10          202.10          161.10         161.10         161.10
2.       Additional information as required under paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act,
         1956 are as under:
                                                                                                                                (Rs. In Lacs)

     Particulars                                         For the six                   For the year ended on
                                                               months
                                                          ended on
                                                  Unit    30-Sep-05      31-Mar-05 31-Mar-04 31-Mar-03 31-Mar-02 31-Mar-01

     a)     Details for each class of
            goods manufactured, sold
            and stocks (as certified by
            the management)
     Ahmedabad Unit
     Ring Spindles                               Nos.           25200        25200          25200           25200       25200         25200
     Rotors                                      Nos.             552            552             552          552          552          552
     Looms                                       Nos.             476            476             476          476          476          476
     Baramati Unit
     Ring Spindles                               Nos.           60480        60480          60480           60480       60480         60480
     Installed Capacity
     Ahmedabad Unit


                                                                  58
Ring Spindles                         Nos.        24472     24472         24472      24472    24472     24472
Rotors                                Nos.          552       552           552       552       552        552
Looms                                 Nos.          142       142           146       146       141        196
Baramati Unit
Ring Spindles                         Nos.        30240     30240         30240      30240    30240     30240
Cloth

Opening Stock                 Lac Metres            3.33      6.52          8.57     11.53       6.4      5.97

                                   Lac Rs.        234.40    459.18        599.80    713.33    353.31    347.45

Production                    Lac Metres           65.87    137.61        128.09    130.68    117.17    134.17

Closing Stock                 Lac Metres            3.28      3.33          6.52      8.57     11.53      6.40

                                   Lac Rs.        224.35    234.40        459.18    599.80    713.33    353.31

Sales                         Lac Metres           65.90    140.80        130.14    133.64    112.04    133.74

                                   Lac Rs.       4712.48   8671.76       7274.18   7364.44   5323.26   4780.57

                                                                                                  (Rs. In Lacs)

Particulars                                  For the six             For the year ended on
                                                months
                                              ended on
                                      Unit    30-Sep-05 31-Mar-05 31-Mar-04 31-Mar-03 31-Mar-02 31-Mar-01
Yarn
Opening Stock                      Lac Kgs          2.18      2.60          2.26      3.11      2.41      1.92
                                   Lac Rs.        240.32    380.73        273.14    400.03    322.52    230.34
Production                         Lac Kgs         37.14     69.84         69.17     68.45     67.59     65.64
Self Consumed                      Lac Kgs          9.32     18.12         18.44     18.07      18.7      20.9
Closing Stock                      Lac Kgs          3.52      2.18          2.60      2.26      3.11      2.41
                                   Lac Rs.         396.1    240.32        380.73    273.14    400.03    322.52
Sales                              Lac Kgs         26.48     52.14         50.39     51.23     48.19     44.25
                                   Lac Rs.       3346.16   7230.45       7130.80   6921.39   6603.27   6746.26
Waste Opening Stock                Lac Kgs          0.24      1.27          0.34      0.53       0.5      0.67
                                   Lac Rs.          5.02     48.33          6.27      9.54     13.45     12.91
Production                         Lac Kgs         11.93     23.82         22.87      22.5     22.94     23.74
Closing Stock                      Lac Kgs          0.56      0.24          1.27      0.34      0.53      0.50
                                   Lac Rs.         11.39      5.02         48.33      6.27      9.54     13.45
Sales                              Lac Kgs         11.61     24.85         21.94     22.69     22.91     23.91
                                   Lac Rs.        294.93    799.73        696.81    531.12    611.09    559.47
                                                                                                  (Rs. In Lacs)

Particulars                                  For the six             For the year ended on
                                                months
                                              ended on
                                      Unit    30-Sep-05 31-Mar-05 31-Mar-04 31-Mar-03 31-Mar-02 31-Mar-01
Merchandise Ceramic Glazed Tiles
Opening Stock                      Cartons          0.00      0.00          304       415       640        727
                                   Lac Rs.          0.00      0.00          1.20       1.5      2.29      2.18
Purchase                           Cartons          0.00      0.00         2120       4278     4462       4671
                                   Lac Rs.          0.00      0.00          9.73     18.29     14.04     14.86
Closing Stock                      Cartons          0.00      0.00          0.00      304       415        640
                                   Lac Rs.          0.00      0.00          0.00      1.20      1.50      2.29
Sales                              Cartons          0.00      0.00         2424       4389     4687       4758
                                   Lac Rs.          0.00      0.00         11.62     20.64     16.16     16.14


                                                     59
Sanitary Ware Opening Stock          Pieces           0.00            0.00            451        552          781           570
                                   Lac Rs.            0.00            0.00        2.77           3.41        4.77          3.69
Purchase                             Pieces           0.00            0.00      146.00           343          306          1176
                                   Lac Rs.            0.00            0.00        1.75           2.96        2.25          7.22
Closing Stock                        Pieces           0.00            0.00        0.00         451.00      552.00        781.00
                                   Lac Rs.            0.00            0.00        0.00           2.77        3.41          4.77
Sales                               Pieces            0.00            0.00         597           444         535           965
                                   Lac Rs.            0.00            0.00        4.55           3.86        4.04          6.66
Fittings Opening Stock                 Nos            0.00        1304            1630          1544         1656          1615
                                   Lac Rs.            0.00            0.15        0.82           1.66         1.8          1.74
Purchase                               Nos            0.00            0.00      111.00           404          279           678
                                   Lac Rs.            0.00            0.00        0.40           0.97        0.63          1.06
Closing Stock                          Nos            0.00            0.00        1304          1630         1544          1656
                                   Lac Rs.            0.00            0.00        0.15           0.82        1.66          1.80
Sales                                  Nos            0.00        1304                437        318          391           637
                                   Lac Rs.            0.00            0.32        1.36           1.24        1.23            1.7
                                                                                                                    (Rs. In Lacs)


Particulars                             For the six                                   For the year ended on
                                           months
                                         ended on
                                          30-Sep-05    31-Mar-05        31-Mar-04       31-Mar-03      31-Mar-02     31-Mar-01
Merchandise (Continued...)
Cloth
Opening Stock                 Meters           0.00            0.00            0.00         18066             0               0
                              Lac Rs.          0.00            0.00            0.00          13.13            0               0
Purchase                      Meters           0.00           3829           42301          179863        90767               0
                              Lac Rs.          0.00           19.53           10.89          42.37         36.83              0
Closing Stock                 Meters           0.00            0.00            0.00           0.00      18066.00           0.00
                              Lac Rs.          0.00            0.00            0.00           0.00         13.13           0.00
Sales                         Meters           0.00           3829           42301          197929        72701               0
                              Lac Rs.          0.00           20.66           11.68          55.96         23.53              0
Cartridge & Arms
Opening Stock                 Nos              0.00          340.00          351.00            351          351             351
Lac Rs.                       0.00             0.01            0.02            0.02           0.02          0.02
Purchase                      Nos              0.00            0.00            0.00                                           4
                              Lac Rs.          0.00            0.00            0.00                                        0.41
Closing Stock                 Nos              0.00            0.00            340             351          351             351
                              Lac Rs.          0.00            0.00            0.01           0.02          0.02           0.02
Sales                         Nos              0.00            340              11                                            4
                              Lac Rs.          0.00            0.29            0.40                                        0.41
Plywood
Opening Stock                 Sq Meters        0.00                                                                           0
                              Lac Rs.          0.00                                                                           0
Purchase                      Sq Meters        0.00                                                                      66810
                              Lac Rs.          0.00                                                                      121.03
Closing Stock                 Sq Meters        0.00                                                                        0.00
                              Lac Rs.          0.00                                                                        0.00
Sales                         Sq Meters        0.00                                                                      66810
                              Lac Rs.          0.00                                                                      239.99
Cutter
Opening Stock                 No               0.00                                                                           0


                                                      60
                                             Lac Rs.          0.00                                                                      0
     Purchase                                No               0.00                                                                     22
                                             Lac Rs.          0.00                                                                   5.39
     Closing Stock                           No               0.00                                                                   0.00
                                             Lac Rs.          0.00                                                                   0.00
     Sales                                   No               0.00                                                                     22
                                             Lac Rs.          0.00                                                                   4.29
                                                                                                                             (Rs. In Lacs)

            Particulars                                For the six                               For the year ended on
                                                          months
                                                        ended on
                                             Unit       30-Sep-05    31-Mar-05       31-Mar-04     31-Mar-03    31-Mar-02      31-Mar-01

     b)     Raw material consumed
            Cotton & Yarn                Lacs Kg            27.93         1,003.99       96.05         90.35        87.43           78.63
                                             Lac Rs.      1513.42         7,789.38    7,188.21       5,632.93    5,683.37        5,110.59
            Man made Fibres                  Lacs Kg                         11.80       11.73         12.00        10.66           10.10
                                             Lac Rs.                       918.57       764.50        703.13       563.52          545.37
            Polyester Yarn                   Lacs Kg                          3.23        2.86           2.39        1.27            1.82
                                             Lac Rs.                       321.60       235.58        241.77       149.10          213.21
     c)     Value of Raw Material
            Consumed
            Raw Materials
            Imported                                       281.81         1,417.03    1,895.57       1765.04      1503.69        1246.12
            Indigenous                                    1231.61         7,612.53    6,292.72       4812.79      4892.29        4623.05
            Stores
            Imported                                        15.67          226.04       234.60        196.38       207.69         228.63
            Indigenous                                      99.91         1,171.95      970.06        860.03       801.23         676.28
     d)     CIF Value of Imports
            Capital Goods                                  332.44          947.29       473.23        212.39       112.53           80.65
            Raw Material                                        0         1,194.25    2,061.55        1613.4      1223.15        1140.04
            Components & Spare Parts                        14.92          243.05       170.28        179.12       155.04          183.11
     e)     Expenditure in Foreign Currency
            Interest on Foreign Currency Loans              35.64           62.94        48.89         56.24       124.29         189.27
            Travelling Expenses                               7.26          20.66        14.72           11.7        7.78            8.18
            Others                                            8.99            7.29        1.52           1.09            0
     f)     Earnings in Foreign Currency
            FOB Value of Exports                          1516.12         2,975.07    3,585.91          4101      4158.35        5009.27


3.   Directors Remuneration :
                                                                                                                             (Rs. In Lacs)

            Particulars                                For the six                               For the year ended on
                                                          months
                                                        ended on
                                                        30-Sep-05    31-Mar-05       31-Mar-04     31-Mar-03    31-Mar-02      31-Mar-01
     i)     Salary                                            9.78          14.95        13.50         13.16        11.83            9.72
     ii)    Contribution to Provident Fund                    0.61            1.77        1.59           1.47        1.40            1.16
     iii)   Perquisites                                       1.55            5.12        4.51           1.88        3.15            2.01
            Total                                            11.94          21.84        19.60         16.51        16.38           12.89




                                                                     61
4.   Auditors’ Remuneration:
                                                                                                                             (Rs. In Lacs)

             Particulars                         For the six                 For the year ended on
                                                     months
                                                   ended on
                                                  30-Sep-05       31-Mar-05       31-Mar-04       31-Mar-03    31-Mar-02       31-Mar-01
     A)      Fees paid to Auditors in
             Other Capacities for :
             i)   Taxation matters                         0.25          0.45             0.27         0.20           0.20           0.55
             ii)  Certification & Other work               0.16          0.32             0.46         0.11           0.16           0.13
             iii) Tax Audit Work                           0.18          0.36             0.36         0.30           0.30           0.30
             iv) Reimbursement of Expenses                 0.09          0.19             0.15         0.10           0.12           0.13
     B)      Fees paid to Cost Auditors                    0.23          0.46             0.49         0.41           0.37           0.37
             Total                                         0.91          1.78             1.73         1.12           1.15           1.48
5.   Income tax assessment has been completed upto the assessment year 2002-2003
6.   The Deferred Tax Liability comprises of tax effect of timing differences on account of:
                                                                                                                             (Rs. In Lacs)

             Particulars                                                        For the year ended on
                                                      31-Mar-05        31-Mar-04         31-Mar-03       31-Mar-02       31-Mar-01
     Deferred Tax Assets
     Items covered u/s 43 B                                   -                   -               -               -                  -
     Unabsorbed depreciation                              23.16                   -         1122.28               -                  -
     MAT Credit U/S 115JAA of the Income Tax
     Act, 1961                                                -                   -                -              -                  -
     Provision for doubtful Debts                             -                   -                -              -                  -
     Deferred Tax Liabilities
     Excess of net block over written Down                    -                   -                -              -                  -
     Value as per the provisions of the
     Income Tax Act, 1961                                     -          (30.45)           1589.49                -                  -
     Net Deferred Tax Liabilities                         23.16          (30.45)            467.21                -                  -
     Net increase in liability debited to
     Profit and Loss Account                              23.16           436.77                   -              -                  -
For the Six Months ended 30th September, 2005, Taxation and Deferred Tax Liabilities will be provided at the year end.
7. Other Information
    (a) Exceptional Items :
                                                                                                                             (Rs. In Lacs)

             Particulars                          For the six                   For the year ended on
                                                     months
                                                   ended on
                                                   30-Sep-05       31-Mar-05          31-Mar-04   31-Mar-03 31-Mar-02          31-Mar-01
     Exceptional Income
     Profit on fixed Assets sold/discarded                              16.03              4.02         3.83       21.19            21.47
     Liabilities no longer required written-back                        44.13             10.89        11.48        3.72             2.61
     Bad debts recovered                                                    -                 -            -           -                -
     Total                                                    -         60.16             14.91        15.31       24.91            24.08
     Exceptional Expenditure
     Loss on Fixed Assets sold/discarded                  40.20              -                -         0.14             -               -
     Share Issue Expenses written off                         -              -                -            -             -
     Provision for Bad and doubtful debts/write off                          -                -         1.22             -               -
     Loss on Investment sold/Written off                     0              -              0.61            -             -               -
     Loss due to Flood                                                      -                 -            -             -          17.48
     Total                                                40.20             -              0.61         1.36             -          17.48

     Exceptional Items ( net ) ( a) - (b)               (40.20)         60.16             14.30        13.95       24.91             6.60


                                                                  62
   (b) Investments (Non Trade - Long Term)
                                                                                                                       (Rs. In Lacs)

        Particulars                            For the six                  For the year ended on
                                                   months
                                                 ended on
                                                30-Sep-05     31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02         31-Mar-01
   Total cost of unquoted investments                 0.21          0.21           0.05           0.96       0.96              0.96
   Aggregate Market value of
   quoted investments
Cash Flow Statement as restated                                                                                        Annexure - V
                                                                                                                       (Rs. In Lacs)

        Particulars                            For the six                  For the year ended on
                                                   months
                                                ended on
                                                30-Sep-05     31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02         31-Mar-01
   Net Profit Before Tax & Extra Ordinary Items       515            969          1,078            660      (608)             (503)
   Adjustment for:
   -    Depreciation (Net)                            510            788            701            639        650              659
   -    Profit on Sale of Fixed Assets                 40            (16)            (4)            (4)      (21)              (21)
   -        Interest (Net)                            300            441            666            791        882              970
   -    Dividend                                         -              -              -              -            -              -
                                                      850          1,213          1,363          1,426      1,511             1,607
        Operating Profit Before
        Working Capital Changes                     1,365          2,182          2,440          2,086        903             1,105
        Adjustment for :
   -    Trade and other receivables                   (92)         (207)          (134)            165        267             (206)
   -    Inventories                                 1,123          1,091         (2,047)          (617)       155               95
   -    Trade Payables                                (77)        (2,234)         2,403           (139)     (579)              556
   -    Expenditure                                   (56)           (63)           (32)            22       (30)              (10)
                                                      898         (1,413)           190           (569)     (187)              435
        Cash Generated From Operations              2,264            769          2,630          1,517        716             1,540
   -    Interest paid                                (273)         (477)          (725)           (781)     (949)             (965)
   -    Direct Taxes paid                                           (65)           (30)               -         -                 -
                                                     (273)         (542)          (755)           (781)     (949)             (965)
        Cash Flow Before Extraordinary Items        1,991            226          1,875            736      (234)              575
   -    Extraordinary items                                             -         (241)            (27)            -              -

        Net Cash Flow From Operating Activities     1,991            226          1,634            709      (234)              575

                                                                                                                       (Rs. In Lacs)

        Particulars                            For the six                                 For the year ended on
                                                  months
                                                ended on
                                                30-Sep-05     31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02         31-Mar-01
   B    Cash Flow From Investing Activities :
        -       Purchase of Fixed Assets           (1,288)        (1,324)         (910)           (633)     (375)             (371)
        -       Sale of Fixed Assets                  (36)            62             19              6         35               55
        -       Sale of Investments                      -            (0)             1               -            -              -
        -       Interest received                      13             44             24              9             8            19
                Net Cash Used In
                Investing Activities               (1,311)        (1,218)         (866)           (617)     (332)             (297)
   C    Cash Flow From Finance Activities :
        -       Issue of Equity Share                                               366


                                                             63
         -    Total proceeds from borrowings
              (Net of repayments)                      (220)             742           (547)          (47)       504           (293)
         -    Payment of Unpaid Dividend                                  (1)            (2)             -        (0)            (0)
              Net Cash Used In Financing Activities    (220)             741           (182)          (47)       504           (293)
              Net Increase In Cash and
              Cash Equivalents (A+B+C)                   459            (251)            585           44        (62)           (15)
              Cash and Cash Equivalent
              (Opening Balance)                          433             685              99           55        117            132
              Cash and Cash Equivalent
              (Closing Balance)                          891             433             685           99         55             117
Statement of Accounting Ratios                                                                                          Annexure -VI
                                                                                                                        (Rs. In Lacs)

    Particulars                                  For the six                    For the year ended on
                                                    months
                                                  ended on
                                                  30-Sep-05      31-Mar-05        31-Mar-04     31-Mar-03 31-Mar-02       31-Mar-01

          Profit before tax and Exceptional Items     515.34          968.52        1,077.66       659.86    (608.09)       (502.61)
          Add Back/(Less) : Exceptional Item                -              -          240.82       462.71           -              -
          Profit before Tax                           515.34          968.52           836.84      197.15    (608.09)       (502.61)
          Less: Provision for Current Tax                  -           65.00            30.00           -           -              -
    (i) Profit after Current Tax                      515.34          903.52          806.84       197.15    (608.09)       (502.61)
          Less: Deferred Tax                                -          23.16          (30.45)           -           -              -
    (ii) Profit after Deferred Tax                    515.34          880.36          837.29       197.15    (608.09)       (502.61)
    (iii) Profit after current Tax but
          before depreciation and write-off         1,050.24         1,734.13       1,535.50       869.22       72.23        180.19
    (iv) Weighted Average number
          of Equity Share                         14,533,000    14,533,000        14,533,000    10,873,000 10,873,000    10,873,000
          EPS Basic / Diluted (Rs. Per Share)
          -After Current Tax {(i)/(iv)}                 3.55             6.22           5.55         1.81      (5.59)         (4.62)
          -After Deferred Tax {(ii)/(iv)}               3.55             6.06           5.76         1.81      (5.59)         (4.62)
          Cash EPS {(iii)/(iv)}                         7.23            11.93          10.57         7.99        0.66           1.66
          Net Worth / NAV / Return on Net Worth
          -Profit before Tax                          515.34          968.52        1,077.66       659.86    (608.09)       (502.61)
          -Net Worth before Deferred Tax
          Net Worth                                 5,881.76         5,422.33       4,582.15      3,441.69   3,222.21       3,860.14
          Return on Net Worth %                          9%              18%            24%           19%       -19%           -13%
          Net Asset Value per Share (NAV) - Rs         40.47            37.31          31.53         31.65      29.63          35.50
          - Net Worth after Deferred Tax
          Adjusted Net Worth                        5,421.84         4,962.41       4,145.39      3,441.69   3,222.21       3,860.14
          Return on Net Worth %                         10%              20%            26%           19%       -19%           -13%
          Net Asset Value per Share (NAV) - Rs         37.31            34.15          28.52         31.65      29.63          35.50

Capitalisation Statement                                                                                          Annexure – VII
                                                                                                                    (Rs. in Lacs)

         Particulars                              Pre Issue      Pre Issue Post Issue
                                                      as at          as at
                                                  30-Sep-05      31-Mar-05

    1    Secured Loans                              6,284.27         6,575.71      13915.70
    2    Unsecured Loan                               809.79           738.34        666.60
    3    Total Debt                                 7,094.06         7,314.05      14582.30
    4    Less: Short term debt                        316.02           621.78        693.00
    5    Total Long Term Debt                       6,778.04         6,692.27      13889.30
         Shareholders’ Funds
    6    Share Capital                              1,472.75         1,472.75       4472.70
    7    Reserve & Surplus                          4,170.06         3,654.72      11967.50
    8    Total Shareholders’ Funds                  5,642.81         5,127.47      16440.20
         Long term Debt / Equity Ratio (5/8)            1.20             1.31          0.84

                                                                64
                                                                                                                Annexure - VIII
Tax Shelter Statement
                                                                                                                      (Rs. In Lacs)

            Particulars                                                                     For the year ended on
                                                               31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02       31-Mar-01
    Tax Rate (including Surcharge & Cess)                      36.5925%         35.8750%       36.7500%   35.7000%       39.5500%
    (including surcharge and Education Cess)
    Profit as per Profit & Loss Account                            968.52        1,077.66        659.86    (608.08)       (502.61)
    Adjustments
    Export profits                                                       -         75.39          11.15           -              -
    Difference between Tax depreciation
    and book depreciation                                          (12.14)         (6.24)         24.36      10.48           83.78
    Other adjustments                                                    -              -             -           -              -
    Net Adjustments                                                (12.14)         (6.24)         24.36      10.48           83.78
    Tax Saving thereon                                                   -         24.81          16.81          -               -
Details of Other Income                                                                                               Annexure - IX
                                                                                                                      (Rs. In Lacs)

            Particulars                         For the six                  For the year ended on
                                                   months
                                                 ended on
                                                 30-Sep-05     31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02       31-Mar-01

    Interest Received                                 13.08         41.08          27.90           8.84       8.06           19.41
    Commission                                                           -           0.34         16.44       0.92            4.41
    Rent Received                                      0.25          1.29            1.65          1.16       0.60            0.88
    Miscellaneous Receipt                             19.14        103.61          72.28          93.50     113.75           54.99
    Insurance Claim Received                           4.10         13.72          32.54           6.19      19.92          204.35
    Processing & Printing Charge                          -             -              -              -          -            1.69
    Liability no longer required written back                       44.13          10.89          11.49       3.72            2.61
    Central Sales Tax Refund                                             -              -             -      53.42          110.22
    Profit on sale of fixed assets\                       -         16.03           4.02           3.83      21.19           21.47
    Exchange Rate Difference                                        81.90         126.54          25.12           -              -
    Interest Incentive under TUF Scheme               37.12         91.51               -             -           -              -

    Total                                             73.69        393.27         276.16         166.57     221.58          420.03

Sundry Debtors (Unsecured)                                                                                            Annexure - X
                                                                                                                      (Rs. In Lacs)

            Particulars                         For the six                  For the year ended on
                                                    months
                                                  ended on
                                                 30-Sep-05     31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02       31-Mar-01
    Over Six Months                                   24.25         24.47          27.51          73.70     144.92          119.45
    Secured by irrevocable letter of credit         162.73         285.04          66.09         342.69     298.09          386.90
    Unsecured                                        837.07        671.99        1,008.66        657.50     720.57          787.36
    Less- Provision for Doubtful Debts                    -              -              -             -           -              -
            Total                                  1,024.05        981.50        1,102.26      1,073.89   1,163.58        1,293.71
    None of the debtor is related to the directors or promoters of the company.
    Top 10 Sundry Debtors as on 30.09.2005




                                                              65
   Sr. No.       Name of Debtors                                                 Amount
                                                                            Outstanding

   1     Pacific Textiles Ltd.                                                    574.45
   2     H T Barma Ltd                                                            104.43
   3     Shree Narsing Trading Co.                                                 84.48
   4     Pantaloon Retail (Ind) Ltd.                                               81.94
   5     Shilvi Impex                                                              73.01
   6     Suyas Fabrics                                                             72.33
   7     Arvind Mills Ltd                                                          68.09
   8     Mantafil Spa                                                              60.68
   9     Fashion Fabric                                                            57.51
   10    Poorvi Traders                                                            48.27

Loans and Advances (Unsecured considered Good)                                                                         Annexure XI
                                                                                                                       (Rs. In Lacs)

         Particulars                           For the six                                 For the year ended on
                                                   months
                                                 ended on
                                                30-Sep-05      31-Mar-05      31-Mar-04      31-Mar-03 31-Mar-02         31-Mar-01

   -     Advances recoverable in
         cash or in kind or for
         value to be received                        586.82        564.60         324.51        246.92       329.25          459.54
   -     Balance with Central Excise in
         Current Account                              21.36         41.42          40.74         17.93        10.54           15.32
   -     Income Tax Advance                          137.07        104.17          47.78         48.73        47.84           47.02
   -     Interest Receivable under TUF Scheme         45.66         30.64              -             -             -              -
   -     Security & other Deposits                    23.73         24.70          24.62         18.71        20.18           22.30
   -     Interest Accrued                              5.23          2.60           5.14          0.94          1.01           0.87

         Total                                       819.87        768.12         442.78        333.23       408.82          545.05

Top 10 Loans & Advances as on 30.09.2005
                                                                                                                       (Rs. In Lacs)

   Sr.               Loans and Advances                                                                     Amount
   No.                                                                                                   Outstanding

   1     Kusters Calico Machinery Ltd.                                                                        116.59
   2     M B Associates                                                                                       104.91
   3     Osthoff Senge Gmbh & Co.Kg.                                                                           77.50
   4     A T E Industries Pvt Ltd.                                                                             32.60
   5     Pragati Sales Corporation                                                                             30.49
   6     Torrent Power Aec Ltd                                                                                 29.90
   7     Dhall Enter. & Engg.Pvt Ltd                                                                           22.60
   8     Gujarat Mineral Devlp.Corp.Ltd.                                                                       21.66
   9     Bhatt Bros.                                                                                           17.34
   10    Ardip Agencies                                                                                        16.76

   None of the debtor is related to the directors or promoters of the company.



                                                              66
Statement of Unsecured Loans                                                                                                   Annexure - XII
                                                                                                                                (Rs. In Lacs)

             Particulars                               For the six                    For the year ended on
                                                           months
                                                         ended on
                                                        30-Sep-05       31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02       31-Mar-01

    A        External Commercial Borrowings                  352.63         377.30         482.72         379.76     390.40          373.60
    B        From associate/group companies                  457.00         360.88         108.01          40.10     189.53           98.72
    C        Others
             - Fixed Deposits                                                                                           0.11            0.11
             - Other loans (inter corporate)                   0.16            0.16           0.16           0.18       0.18           0.18

                    Total                                    809.79         738.34         590.89         420.04     580.22          472.61

Statement of Secured Loans                                                                                                Annexure - XIII
                                                                                                                               (Rs. In Lacs)

    Particulars                                         For the six                                  For the year ended on
                                                           months
                                                         ended on
                                                         30-Sep-05      31-Mar-05       31-Mar-04      31-Mar-03 31-Mar-02       31-Mar-01
    a.       Debentures
             15% Secured Redeemable
             Non Convertible Debentures
             of Rs. 100 each
             -      132,000 Debentures - ICICI               132.00         132.00         132.00
             -      176,000 Debentures - IDBI                176.00         176.00         176.00
                    15% Secured Redeemable
                    Convertible Debentures
                    of Rs. 100 each
             -      322,000 Debentures - ICICI                                                            322.00
             -      352,000 Debentures - IDBI                                                             352.00
    b.       Term loans
             -      IDBI - FC Term Loan                      692.11         753.38         950.33        1,224.55   1,587.90       1,486.36
             -      IDBI                                     175.00
             -      ICICI                                   1552.24        1,731.34       2,000.00       2,130.54   2,306.91       2,070.63
             -      IFCI                                      80.00         100.00         180.00         240.00     240.00          320.00
             -      SBI                                      658.57         658.57
             -      Dena Bank                                466.95
                    Working Capital Loans
             -      Dena Bank                                1715.7        2,474.91       1,940.18       1,848.46   1,909.26       1,802.25
             -       SB                                      609.67         513.83         574.93         557.50     540.56          508.43
                    Car Loans                                 26.03          35.68          27.74          23.83        1.42            2.16

                    Total                                  6,284.27        6,575.71      5,981.18        6,698.88   6,586.05       6,189.83
1       Securities for secured loans as at 31st March,2005
        a.       For Term Loan & Debentures
                 Secured against equitable mortgage of fixed assets and hypothecation on moveable assets and personal guarantee
                 of Directors.
        b.       For Working Capital Loan
                 Cash Credit Limits are secured against hypothecation of finished and semi finished stock, stock of raw materials, stores,
                 stock in transit and book debts and by second charge over movable and immovable properties both present and future
                 in consortium ranked pari-passu and personal guarantee of two Directors
2       Debentures are redeemable in six equal half yearly installments starting from 7th August, 2007



                                                                      67
3    The Term loan of Rs. 753.38 lacs (USD1722212.35)from IDBI is at an interest rate of LIBOR + 3.10% and repayable in quarterly
     instalments of USD 74,800 equivalent
4    The Term loan of Rs. 100 lacs from IFCI is at an interest rate of 9% and repayable in quarterly installments of Rs. 20 lacs
5    The Term loan of Rs. 1731.34 lacs from ICICI is at an interest rate of 10.89% and repayable in monthly installments of Rs. 29.85
     lacs
6    The Term loan of Rs. 658.57 lacs from SBI is at an interest rate of 8.75% and repayable in quarterly installments of Rs. 20.58
     lacs from Sept-05 onwards.
7    There is no re-schedulement / pre-payment in respect of loans outstanding as on 30.09.2005
8    There is no amount in default in respect of principal and interest thereon as on 30.09.2005
9    The Term loan from ICICI and SBI are eligible for the interest subsidy under Technology Upgradation Scheme @ 5%

Statement of Transactions with related parties in preceding three years:                                           Annexure - XIV
a.   Key management personnel (Directors) and transactions with them
     Shri S. K. Somany, Shri. A. K. Somany, Mr. Prafull Anubhai, Shri Ashok C. Gandhi, Shri P. Bandyopadhyay, Shri R. S. Verma
     & Shri. M. S. Shekar.
b.   Relatives of key management personnel and transactions with them.
c.   Entities & Associates and transactions with them.
     Krishnaa Glass Pvt. Ltd., Simplex Trading & Agencies Ltd., Sarvopari Investments Pvt. Ltd. (Erstwhile Vicky Investments Ltd.,
     ,Somany Evergreen Knits Ltd., Simplex Mills Co. Ltd., and Arvind Kumar Somany (HUF)(Rs. In Lacs)

      Particulars                                             For the six                      For the year ended on
                                                                 months
                                                               ended on
                                                               30-Sep-05         31-Mar-05            31-Mar-04        31-Mar-03
      KRISHNAA GLASS PVT. LTD.
      Short Term Loan opening                                      225.00             78.00               15.00                  -
      Short Term Loan received                                     100.00            421.00              140.00             85.00
      Short Term Loan repaid                                          5.00           274.00               77.00             70.00
      Interest paid on short term loan                                                15.63                3.55              2.23
      Short Term Loan at Balance Sheet date                        320.00            225.00               78.00             15.00
      Accrued interest at Balance Sheet date                         10.52             0.71                2.08              1.76
      SIMPLEX TRADING & AGENCIES LTD.
      Short Term Loan opening                                        88.00                 -                   -            19.07
      Short Term Loan received                                        2.00            88.00               23.00              5.50
      Short Term Loan repaid                                             -                 -              23.00             24.57
      Interest paid on short term loan                                   -             0.14                0.56              1.94
      Short Term Loan at Balance Sheet date                          90.00            88.00                    -                -
      Accrued interest at Balance Sheet date                          3.57             0.11                0.44              0.19


                                                                                                                       (Rs. In Lacs)

      Particulars                                            For the six                       For the year ended on
                                                                 months
                                                               ended on
                                                               30-Sep-05         31-Mar-05            31-Mar-04        31-Mar-03

       SARVOPARI INVESTMENTS PVT. LTD.
      (Erstwhile Vicky Investments Ltd.)
      Short Term Loan opening                                        47.00                 -                   -                 -
      Short Term Loan received                                           -            47.00                    -                 -
      Short Term Loan repaid                                             -                 -                   -                 -
      Interest paid on short term loan                                   -             0.08                    -                 -
      Short Term Loan at Balance Sheet date                          47.00            47.00                    -                 -
      Accrued interest at Balance Sheet date                          0.94             0.06                    -                 -
      SOMANY EVERGREEN KNITS LTD.


                                                                68
       Sales of Goods & Services                                                        11.05                18.13                 -
       Interest Received                                                                     -                1.18                 -
       Testing Charges                                                 0.23              0.40                 0.75              0.28
       Amount payable at Balance Sheet Date                            0.02                  -                0.02                 -
       Amount Receivable at Balance Sheet Date                             -                 -                0.26                 -
       SIMPLEX MILLS CO. LTD.                                              -                 -
       Sale of Goods                                                       -                 -               15.57                 -
       Amount payable at Balance Sheet Date                                -                 -                0.08                 -
       ARVIND KUMAR SOMANY (HUF)                                                             -
       Short Term Loan opening                                             -                 -                   -           114.20
       Short Term Loan Received                                            -                 -                   -            58.37
       Short Term Loan Repaid                                              -                 -                   -           172.57
       Interest paid on Short Term Loan                                    -                 -                   -              9.43
       Short Term Loan at Balance Sheet Date                               -                 -                    -                -
       Accrued Interest at Balance Sheet Date                              -                 -                   -                 -

CHANGE IN ACCOUNTING POLICIES:                                                                                        Annexure - XV
Financial Year 2004-05: There is no change in accounting policy during this Financial Year
Financial Year 2003-04
(a)   Inventories:
      Hitherto the company was valuing the finished goods at Contract Selling Price. From the current year the finished goods are
      valued at lower of cost and net realizable value. Due to this change, the profit for the year and the inventory of finished goods
      are under stated by an amount of Rs. 65,65,887/-
(b)   Gratuity:
      Hitherto the company was accounted the amounted of gratuity on “as and when paid” basis. Form the current year the company
      has changed the method of providing the liability in respect of gratuity to actuarial valuation. Due to this change, the profit
      of the year have been understated by an amount of Rs. 2,62,75,848/-
(c)   Leave Encashment:
      The Baramati Unit, hitherto, has changed the accounting policy for providing leave encashment from unavailed leave balance
      to the credit of employees to actuarial basis. Consequent to this change profit for the year is higher by Rs. 6,11,140/-

      Hitherto, the Ahmedabad unit was not providing the liability towards leave encashment. During the year, the Ahmedabad unit
      has provided the liability of leave encashment on the basis of unavailed leave balance to the credit of the employees at the
      year end by applying current encashable salary rates. Due to this change, the profit for the year are understated by an amount
      of Rs. 33,67,337/-.
Financial Year 2002-03
      During the year, the Ahmedabad Unit has changed the method of charging the deprecation in the books of accounts. As
      per the revised policy, the Ahmedabad Unit has charged the depreciation as per Written Down Value method instead of Straight
      Line Method as charged in earlier years on all the fixed assets purchased by the Unit after 31st March, 1988. Accordingly,
      the difference amount of Rs.4,35,45,204/- has been charged to the Profit & Loss Account of the current year as Extra ordinary
      items and accordingly the profits of the current year and the Block of Fixed Assets are reduced by Rs.4,35,45,204/-. However,
      no effect has been given to the assets purchased by the Unit prior to 1st April, 1988.
Financial Year 2001-02
      During the year the Company has changed its method of accounting of borrowing costs from recognizing as expenses in
      the period in which they are incurred to writing off the amount of borrowing cost over the principal period of loans, consequently
      loss for the year is lower by Rs. 54,00,000/-
Financial Year 2000-01
      (a)   During the year the Company has changed its method of valuation of finished goods by inclusion of excise Duty, payable
            on clearance, amounting to Rs. 68,16,842/-, however the same doesn’t have any impact on the losses for the year.
      (b)   The Company has started writing off the amount paid/ payable under Voluntary Retirement Scheme over a period of
            five years, the loss for the year is lower by Rs. 27,04,467/-
            Servicing behavior of Term Loans for the last one years
            No term Loan installments, interest were delayed or defaulted in last one year.


                                                                  69
Extract of qualification in Financial statement:                                                Annexure - XVI
(a)   On the Accounts of the Financial year ended 31st March, 2001, Para 2(e)
      i)    The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2001 as per actuary
            valuation was Rs.186.56 lacs.
      ii)   The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
            aggregating to Rs.29.64 lacs.
(b)   On the Accounts of the Financial year ended 31st March, 2002, Para 2(e)
      i)    The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2002 as per actuary
            valuation was Rs.212.09 lacs.
      ii)   The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
            aggregating to Rs.28.62 lacs.
(c)   On the Accounts of the Financial year ended 31st March, 2003, Para 2(e)
      i)    The Company has not provided liability in respect of Gratuity. Liability in this respect as on 31-03-2003 as per actuary
            valuation was Rs.248.22 lacs.
      ii)   The Company, except Baramati Unit, has not provided liability in respect of Leave Encashment payable on retirement
            aggregating to Rs.31.20 lacs.

2. FINANCIAL INFORMATION OF THE GROUP COMPANIES

A.    Simplex Trading & Agencies Ltd.

      The company was incorporated to undertake Trading and Financing activities on 09/07/1981 with registration no. 11-024768.
      The company’s shares are listed on Mumbai Stock Exchange Association Limited. The company is also registered (Registration
      No. 13.01183 as Non-Banking Finance Company with Reserve Bank of India.

      Financial Highlights                                                                         (Rs. In lacs)

      Particulars                                          2004-05             2003-04             2002-03

      Equity Capital (paid up)                                 50.00              50.00              50.00
      Reserves & Surplus
      (excluding revaluation Reserve)                         292.84             213.72             242.12
      Income                                                  92.62               51.66               7.97
      Profit after tax                                        82.53             (25.01)              19.28
      EPS (Rs.)                                               16.51              (5.00)               3.86
      Net Asset Value (Rs.)                                 342.84              263.72              292.12
      Board of Directors of Simplex Trading & Agencies Ltd. as on August 31, 2005.
      Name & Designation of Directors
      1. Shri Surendra Kumar Somany              -                                  Director
      2. Shri O.D.Purohit                        -                                  Director
      3. Shri R.S.Sharma                         -                                  Director
      4. Smt.Prasann Somany                      -                                  Director

      Shareholding of Simplex Trading & Agencies Ltd. as on September 30, 2005.

      Name of the Shareholder                No. of Shares                  Percentage of
                                                      held                  Shareholding
      Shri Surendra Kumar Somany                     236000                           47.20
      Smt. Nalini Somany                             208010                           41.60
      Shri Arvind Kumar Somany                        10000                               2.0
      Shri Prasann Somany                             17630                            3.53
      Indian Public                                   28360                            5.67
      TOTAL                                          500000                         100.00
      Simplex Trading & Agencies Ltd., Shri Surendra Kumar Somany and Shri Arvind Kumar Somany have not been restrained from
      accessing the capital market for any reasons by SEBI or any other authorities
      The Company has received a notice dated 11 January, 2005 from SEBI for violation of Regulations of 6 (2) and 6 (4) for
      1997 and 8 (3) for 1998, 1999, 2001 and 2002 of SEBI (Substantial Acquisition of shares and Takeover) Regulations, 1997.
      SEBI has decided to consider the request for consent order if the Company was willing to pay the amount of Rs. 1,75,000/
      -.as penalty for the aforesaid violations. The Company as requested SEBI for reduction of Penalty and personal hearing and
      the same is pending as on date.

                                                                 70
     Highest and lowest market price of shares during the preceding 6 months: No trading of shares of the Company hence prices
     of shares can not be provided.
     The Company has not made any public or rights issues in the preceding three years.
     The Company has not become sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 or is
     under winding up.
     For details of litigation against promoters and the ventures promoted by promoters please refer the section” Outstanding litigation
     and material development
B.   Krishnaa Glass Pvt. Ltd.
     The company was incorporated to undertake Manufacturing of Amber Glass Bottles and Trading activities on 26/03/1969 with
     registration no. 11-014312.
     Financial Highlights                                                                                                (Rs. In lacs)

     Particulars                                                         2004-05                2003-04                2002-03

     Equity Capital (paid up)                                             190.51                  190.51                190.51
     Reserves & Surplus (excluding revaluation Reserve)                    99.59                 (57.40)               (107.89)
     Income                                                               215.05                 805.75                  112.44
     Profit after tax                                                     157.00                   79.25                (25.33)
     EPS (Rs.)                                                              8.24                    4.16                       -
     Net Asset Value (Rs.)                                               1523.20                1198.49                1575.83

           Board of Directors of Krishnaa Glass Pvt. Ltd. as on August 31, 2005.
           Name & Designation of Directors


      1.     Shri Arvind Kumar Somany          -          Director
      2.     Shri Devpriya Kanoria                        Director
      3.     Shri Nandkishore Hurkat           -          Director

      Shareholding of Krishnaa Glass Pvt. Ltd. as on September 30, 2005.

     Name of the Shareholder                           No. of Shares held                    Percentage of Shareholding
     Shri Surendra Kumar Somany                             398000                                          20.89
     Smt. Nalini Somany                                     985000                                          51.71
     Shri Arvind Kumar Somany                                10000                                           0.53
     Shri Prasann Somany                                     91900                                           4.82
     Smt. Nitya Somany                                      420100                                          22.05
     Devpriya Kanoria                                          100                                           0.00

     TOTAL                                                 1905100                                         100.00
     The Company is not listed in any Stock Exchange and has
     The Company has made rights issue in the year 2002-2003.
     The Company has not become sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 or
     is under winding up.
     For details of litigation against promoters and the ventures promoted by promoters please refer the section” Outstanding litigation
     and material development”
C.   Somany Evergreen Knits Ltd
     The company was incorporated to undertake Manufacturing of Knitted Fabrics on 20/09/1993 with registration no. 11-74039.
     Financial Highlights                                                                                                  (Rs. In lacs)

     Particulars                                                         2004-05                 2003-04               2002-03
     Equity Capital (paid up)                                            1120.00                  1120.00               1120.00
     Preference Share Capital (Paid up)                                    240.00                  240.00                240.00
     Reserves & Surplus (excluding Revaluation Reserve)                (1291.56)                (1478.13)             (1326.32)
     Income                                                                876.77                  505.95               1562.83
     Profit after tax                                                     (10.09)                (155.83)              (213.81)
     EPS (Rs.)                                                                  -                       -                     -
     Net Asset Value (Rs.)                                               1789.94                  1936.70               2160.54


                                                                  71
     Board of Directors of Somany Evergreen Knits Ltd. as on August 31, 2005.
     Name & Designation of Directors
     1. Shri Surendra Kumar Somany          -    Director
     2. Shri Suresh Kumar Jatia             -    Director
     3. Shri S. C. Harne                    -    Director

     Shareholding of Somany Evergreen Knits Ltd as on September 30, 2005.

     Name of the Shareholder                                       No. of Shares held           Percentage of Shareholding

     Mr. Surendra Kumar Somany                                                   6,71,100                         5.99
     Mr. Suresh Kumar Jatia                                                           100                         0.00
     Mr. Arvind Kumar Somany                                                    30,85,700                        27.55
     Mrs. Nalini Somany                                                          6,70,000                         5.98
     Ms. Nitya Somany                                                               73,000                        0.65
     Mr. Omprakash Gandhi                                                             100                         0.00
     Mr. Jeshraj Mantri                                                               100                         0.00
     Mr. Rajendra Kumar Sharma                                                        100                         0.00
     Mr. Ashok Kumar Jatia                                                            100                         0.00
     Rhythm Exports Pvt Ltd.                                                   19,00,000                         16.96
     Vaj Marketing & Investments Pvt Ltd.                                        2,00,000                         1.79
     Evergreen Realty & Enterprises Pte Ltd.                                   23,99,700                         21.43
     Banks, Financial Institutions[M/s ICICI Trusteeship Services Ltd          22,00,000                         19.64
     (Account ICICI Equity Fund)]

     TOTAL                                                                     11200000                         100.00

     Somany Evergreen Knits Ltd. is not listed in any Stock Exchanges. Shri Surendra Kumar Somany has not been restrained from
     accessing the capital market for any reasons by SEBI or any other authorities.
     The Company has to made any public or right issues in the preceding three years.
     The Company has become sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1956
D.   SARVOPARI INVESTMENTS PRIVATE LIMITED
     The Company was promoted by Somany brothers. SARVOPARI was incorporated on 17th April 1985 under the Companies
     Act, 1956, as a Private Company limited by shares. The Certificate No. of Registration is 21-38802 of 1985. The Registered
     Office of the Company is situated at 2, Red Cross Place, Kolkata – 700 001, since its incorporation.
     The main objects of Sarvopari, to be pursued on its incorporation to carry on as its principal business, the business of Investment
     Company and to invest in and acquire and hold or otherwise deal in Shares, Stocks, Debentures and such other Securities
     and to carry on all or any business of financiers of industrial, commercial and other enterprises and general financiers and
     such other financing activities.
     The Company has been and is still carrying on the business of investments in securities and financing and also the trading activities.
     The Company is registered with Reserve Bank of India, as a Non-Banking Financial Company (‘NBFC’) vide Certificate of
     Registration No. 05.00996 dated 18th day of March 1998, under Section 45 IA of RBI Act, 1934 as amended from time to time.
     AMALGAMATION/ MERGER
     The Company has acquired Vicky Investments Ltd. (Vicky) and Team Work Holdings Private Ltd. (Teamwork) (transferor
     companies) by way of amalgamation, approved by Hon’ble High Court, Calcutta by an Order dated 12th October 2004 with
     effect from 1st April 2003. All the Assets and Liabilities as on that date including working for the financial year ended 31st
     March 2004 and 2005 of the erstwhile Vicky and Teamwork have been incorporated and included in the Accounts of the
     Company for the year ended 31st March 2004 and 31st March 2005 respectively.

     FINANCIAL HIGHLIGHTS                                                                                                   (Rs. in lacs)

     Particulars                                                          2004-05                    2003-04                 2002-03
     Equity Capital (paid up)                                              51.07*                      51.07*                  14.82
     Reserves & Surplus (excluding revaluation reserve)                    399.65                     374.62                  206.80
     Income                                                                 96.89                     120.89                     0.20
     Profit after tax                                                       25.84                     (17.51)                  (7.37)
     EPS (Rs.)                                                               5.06                           -                       -

     Net Asset Value (Rs.)                                                 450.72                     425.69                  221.63


                                                                   72
     *including share suspense account for Rs. 50.64 Lacs on account of shares of the o Sc Company allotted to the shareholders
     of erstwhile Vicky and Teamwork on 09.05.2005 heme of Amalgamation.
     BOARD OF DIRECTORS OF SARVOPARI INVESTMENTS PVT. LTD. (AS ON 31.08.05)
     1.      Shri Shyam Newar                  -         Director
     2.      Shri Basant Kumar Periwal         -         Director
     3.      Shri R.S. Sharma                  -         Director

     Shareholdings of Sarvopari Investments Private Limited as on 30.09.05


                                                                            No. of Shares                            Percentage
     Name of the Shareholder                                                            held                   of Shareholding

     Smt. Nalini Somany Jt. Surendra Kumar Somany                                    217982                                 42.68
     Shri Prasann Somany Jt Arvind Kumar Somany                                       51421                                 10.07
     Shri Surendra Kumar Somany A/C HUF Nalini Somany                                 92654                                 18.14
     Shri Surendra Kumar Somany Jt Nalini Somany                                      18380                                  3.60
     Simplex Trading & Agencies Ltd                                                  127477                                 24.96
     Shri Arvind Kumar Somany                                                            10                                  0.00
     Others                                                                            2783                                  0.54

     Total                                                                           510707                                100.00

     CONTROLLING INTEREST
     Since inception of the Company it was under joint control of Somany Brothers, namely Shri H.L. Somany, Shri Surendra Kumar
     Somany, Shri C.K. Somany and Shri R.K. Somany. As per the family settlement arrived at among the four Somany Brothers,
     some time in 1994, this Company came under the joint control of Shri H.L. Somany and Shri Surendra Kumar Somany along
     with their groups. Subsequently the Company came under the control of Shri Surendra Kumar Somany and his group, in terms
     of the Order dated 11th September 2003, of Hon’ble High Court, Calcutta.
     Shri Surendra Kumar.Somany, Smt. Nalini Somany, Shri Arvind Somany and Smt. Prasann Somany hold the controlling interest
     in the company.
     SHOW CAUSE NOTICES/ LITIGATIONS
     The Company has been issued 9 (Nine) Show-cause Notices, some time in September 2004 by The Deputy Registrar of Companies,
     West Bengal, for violation of some section of the Companies Act, 1956, mainly on account of procedural, disclosures and technical
     discrepancies, as observed in course of inspection of books of accounts carried out under Section 209A of the Companies
     Act, 1956 and filed criminal proceedings in some of the cases in the Court of Chief Metropolitan Magistrate at Kolkata. The Company
     has taken appropriate steps for compounding of offence and filed necessary petitions before the Company Law Board, Eastern
     Region, Kolkata and also filed a petition before Hon’ble High Court, Calcutta under Section 633 of the Companies Act, 1956 for
     relief in respect of proceedings for violation under Section 628 of the Companies Act, 1956.
     The Company is not listed in any Stock Exchange.
     The Company has not made any rights issues during the preceding 3 years.
     The Company has not become sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 or is
     under winding up.
     For details of litigation against promoters and the ventures promoted by promoters please refer the section” Outstanding litigation
     and material development”
E.   VICKY INVESTMETS LIMITED
     Vicky Investments Ltd (“Vicky”) was incorporated on 28th June,1974 under the Companies Act, 1956, as a Public Limited Company
     under the Company registration No 21-29497 of 1974. The Registered Office of the Company was situated at 58D, N. S. Road,
     Room No. 403, Kolkata – 700 001,
     The main objects, to be pursued on its incorporation were to carry on as its principal business, the business of Investment
     Company and to invest in and acquire and hold or otherwise deal in Shares, Stocks, Debentures and such other Securities
     and to carry on all or any business of financing as financiers and to undertake and to carry on and execute all kinds of financial
     commercial and trading operations.
     The Company had been carrying on the business of investments in securities and financing and also the trading activities.
     The Company was registered with Reserve Bank of India (RBI), as a Non-Banking Financial Company (‘NBFC’) vide Certificate
     of Registration No. 05.00988 dated 18th day of March 1998, under Section 45 IA of RBI Act, 1934 as amended up-to-date.
     AMALGAMATION/ MERGER
     By an order dated 12th October 2004, passed by the Hon’ble High Court, Calcutta in the Company petition No. 340 of 2004, connected
     with the Company application No. 333 of 2004, the Company stands amalgamated with Sarvopari Investments Private Limited,
     with effect from 1st April 2003.


                                                                    73
      DISSOLUTION
       By an order dated 5th April 2005, passed by the Hon’ble High Court, Calcutta, in the company application No. 257 of 2005
     for dissolution of the Company without winding up, the Company stands dissolved upon filing of Form No. 21 with Registrar
     of Companies, West Bengal on 13th July, 2005.
     FINANCIAL HIGHLIGHTS                                                                                                (Rs. In Lacs)

               Particulars                                             2004-05               2003-04                   2002-03

     Equity Capital (paid up)                                                -                       -                  198.90
     Reserves & Surplus (excluding revaluation reserve)                      -                       -                    50.86
     Income                                                                  -                       -                    12.40
     Profit after tax                                                        -                       -                   (3.94)
     EPS (Rs.)                                                               -                       -                         -
     Net Asset Value (Rs.)                                                   -                       -                  249.76
     (*) No Separate Accounts have been made for the financial years ended 31st March 2004 and 2005, in view of the reasons
     that the Company stands amalgamated with Sarvopari Investments Private Limited, effective from 1st April 2003 as stated
     above. In view of Scheme of Amalgamation, all the business activities carried out by the Company during the financial year
     ended 31st March 2004 and 2005 have been duly incorporated in the accounts of Sarvopari Investments Private Limited.
     Board of Directors of VICKY INVESTMENTS LTD. AS ON 13.07.2005 (BEING THE DATE OF DISSOLUTION)
     Name & Designation of Directors
     1. Shri Shyam Newar              -         Director
     2. Shri Basant Kumar             -         Director
     3. Shri Arun Kumar Periwal       -         Director
     SHAREHOLDING OF VICKY INVESTMENTS LIMITED (AS ON 25.04.2005. BEING THE RECORD DATE FOR ENTITLEMENT
     OF SHARES OF TRANSFEREE COMPANY I.E., SARVOPARI INVESTMENTS PRIVATE LIMITED, IN TERMS OF THE
     SCHEME OF AMALGAMATION)

                                                                          No. of Shares                         Percentage
     Name of the Shareholder                                                         held                 of Shareholding

     Nalini Somany Jt. Surendra Kumar Somany                                      944590                               47.49
     Prasann Somany Jt Arvind Kumar Somany                                        222825                               11.20
     Surendra Kumar Somany A/C HUF Nalini Somany                                  401500                               20.19
     Surendra Kumar Somany Jt Nalini Somany                                        14600                                0.73
     Simplex Trading & Agencies Ltd                                               393550                               19.79
     others                                                                        11925                                0.60

     Total                                                                       1988990                             100.00

     The Equity Shares of the Company were listed on The Calcutta Stock Exchange Association Ltd. There was no trading in
     the shares of the Company during last six months, preceding the date of its amalgamation with Sarvopari Investments Private
     Limited as well as filing of the prospectus.
     There has been no trading in the Shares of the Company for last more than 3 years.
     There has been no Public or Rights Issue in the last 3 years.
     There has been no change in Management in last 3 years.
     The Company never became sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 or was
     under winding up. However, the Company stands dissolved without winding up upon amalgamation with Sarvopari Investments
     Private Limited, in terms of Order of the Hon’ble High Court, Calcutta.
     For details of litigation against promoters and the ventures promoted by promoters please refer the section “Outstanding litigation
     and material development”
F.   TEAMWORK HOLDINGS PRIVATE LIMITED
     Teamwork Holdings Private Limited (“Teamwork”) was incorporated on 29th May,1981 under the Companies Act, 1956, as
     a Private Limited Company limited by shares under the Company registration No 21-33717 of 1981. The Registered Office
     of the Company was situated at 2, Red Cross Place, Kolkata-700 001, sine its incorporation.
     The main objects, to be pursued by the Company on its incorporation were to carry on, as its principal business, the business
     of Investment Company and to invest in and acquire and hold or otherwise deal in Shares, Stocks, Debentures and such
     other Securities and to carry on all or any business of financing as financiers and to undertake and to carry on and execute
     all kinds of financial commercial and trading operations.
     The Company had been carrying on the business of investments in securities and financing.


                                                                  74
The Company was registered with Reserve Bank of India (RBI), as a Non-Banking Financial Company (‘NBFC’) vide Certificate of
Registration No. 05.01616 dated 20th April, 1998, under Section 45 IA of RBI Act, 1934 as amended up-to-date.
AMALGAMATION/ MERGER
By an order dated 12th October 2004, passed by the Hon’ble High Court, Calcutta in the Company petition No. 340 of 2004, connected
with the Company application No. 333 of 2004, the Company stands amalgamated with Sarvopari Investments Private Limited,
with effect from 1st April 2003.
DISSOLUTION
By an order dated 5 th April 2005, passed by the Hon’ble High Court, Calcutta, in the company application No. 257 of 2005 for
dissolution of the Company without winding up, the Company stands dissolved upon filing of Form No. 21 with Registrar of Companies,
West Bengal on 13th July, 2005.
FINANCIAL HIGHLIGHTS                                                                                                 (Rs. In lacs)

     Particulars                                                            2004-05              2003-04               2002-03

     Equity Capital (paid up)                                                       -                    -                15.02
     Reserves & Surplus (excluding revaluation reserve)                             -                    -                79.38
     Income                                                                         -                    -                 0.47
     Profit after tax                                                               -                    -                 0.19
     EPS (Rs.)                                                                      -                    -                 0.13
     Net Asset Value (Rs.)                                                          -                    -                94.40

(*) No Separate Accounts have been made for the financial years ended 31st March 2004 and 2005, in view of the reasons that
the Company stands amalgamated with Sarvopari Investments Private Limited, effective from 1st April 2003 as stated above. In
view of Scheme of Amalgamation, all the business activities carried out by the Company during the financial year ended 31st March
2004 and 2005 have been duly incorporated in the accounts of Sarvopari Investments Private Limited.
BOARD OF DIRECTORS OF TEAMWORK HOLDINGS PVT.. AS ON 13.07.2005 (BEING THE DATE OF DISSOLUTION)
Name & Designation of Directors
1.     Shri Shyam Newar              -      Director
2.     Shri Basant Kumar Periwal     -      Director
3.     Shri Radhey Shyam Sharma -           Director
SHAREHOLDING OF TEAMWORK HOLDINGS PRIVATE LIMITED (as on 25.04.2005. being the Record Date for entitlement of
shares of transferee company i.e., Sarvopari Investments Private Limited, in terms of Scheme of Amalgamation)

                                                                                                                 Percentage
       Name of the Shareholder                                          No. of Shares held                   of Shareholding

       Shri Surendra Kumar Somany Jt Nalini Somany                                       14550                          9.69
       Simplex Trading & Agencies Ltd                                                    49750                         33.12
       Vicky Investments Ltd                                                             85900                         57.19

       Total                                                                            150200                        100.00
Since inception of the Company it was under joint control of Somany Brothers, namely Shri H.L. Somany, Shri Surendra Kumar Somany,
Shri C.K. Somany and Shri R.K. Somany. As per the family settlement arrived at among the four Somany Brothers, some time in 1994,
this Company came under the joint control of Shri H.L. Somany and Shri Surendra Kumar Somany along with their groups. Subsequently
the Company came under the control of Shri Surendra Kumar Somany and his group, in terms of the Order dated 11th September
2003, of Hon’ble High Court, Calcutta.
Shri Surendra Kumar Somany and Simplex Trading & Agencies Limited, one of the Promoter group Company hold the controlling interest
in the company.
The Company was not listed in any Stock Exchange.
The Company has not made any rights issue during the preceding 3 years.
The Company never became sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 or was under
winding up. However, the Company stands dissolved without winding up upon amalgamation with Sarvopari Investments Private
Limited, in terms of Order of the Hon’ble High Court, Calcutta.
For details of litigation against promoters and the ventures promoted by promoters please refer the section “Outstanding litigation
and material development”
3. CHANGE IN ACCOUNTING POLICIES DURING LAST THREE YEARS
The change in accounting policies, if any, during proceeding three years are disclosed as part of the auditors report.


                                                                75
4.    SERVICING BEHAVIOR OF THE TERMS LOANS AND DEBENTURES FOR LAST ONE YEAR.
      There is no default in payment of interest or any installment of principal of any term loan or debenture during last one year.
5.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS AS REFLECTED
      IN THE FINANCIAL STATEMENTS
NDUSTRY STRUCTURE AND DEVELPOMENT
The Indian Textile Industry accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is
the second largest employment generator after agriculture. Textile Industry is providing one of the most basic needs of people and
holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from
the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it
is a major contribution to the country’s economy.
Developing countries with both textile and clothing capacity may be able to prosper in the new competitive environment after the textile
quota regime of quantitative import restrictions under the multi-fibre arrangement (MFA) came to an end on 1st January, 2005 under
the World Trade Organisation (WTO) Agreement on Textiles and Clothing. As a result, the textile industry in developed countries will
face intensified competition in both their export and domestic markets. However, the migration of textile capacity will be influenced
by objective competitive factors and will be hampered by the presence of distorting domestic measures and weak domestic infrastructure
in several developing and least developed countries. The elimination of quota restriction will open the way for the most competitive
developing countries to develop stronger clusters of textile expertise, enabling them to handle all stages of the production chain from
growing natural fibers to producing finished clothing.
Souce: http: http://www.economicwatch.com
OPPORTUNITIES
Considering the favorable textile scenario, the Company has identified opportunities in the upcoming global market. The Company has
plans for the expansion of its existing Denim manufacturing capacity and modernization of its plant and machinery. This will increase
production and productivity of the Company and the Company will be able to compete in the competitive scenario.
OUTLOOK ON THREATS
With the dawn of 2005, the global textile industry has entered into a new phase. As ATC (Agreement in textiles and clothing) comes
into play, all textile and clothing products will be traded internationally without any quota restrictions. The dismantling of the quota
regime represents both opportunities as well as threats for Indian textile industry. The markets will no longer be guaranteed by
quotas; even the domestic market will be open to competition. In view of this, the Company focuses to reduce its overheads and
improvise productivity.
INDUSTRIAL RELATIONS AND HUMAN RESORCE MANAGEMENT
The Company’s industrial relation continued to be harmonious during the year under review. The Company is guided by the philosophy
of ‘growing together’ and people are considered as lifeline of the organisation. The Company provides in-house training to its employees
by way of various work shops.
Significant developments subsequent to the Last Financial Year
The Directors of the Company confirm that in their opinion, no circumstances have arisen since the date of the last financial statements
as disclosed in the draft Prospectus and which materially and adversely affect or is likely to affect the trading or profitability of
the Company, or the value of its assets or its ability to pay its liabilities within the next twelve months.
Factors that may affect results of the Operations of the Company
Except as otherwise stated in this draft Prospectus and the following important factors could cause actual results to differ materially
from the expectations,
a)    Constrains in availability of raw materials i.e. Cotton, Cotton Yarn, Synthetic Polyester Fibre
b)    The Company is in cyclical industry
c)    International prices of Yarn, Denim Fabrics & Bottom Weights.
d)    Rupee depreciation vis-à-vis major international currencies
e)    Import tariffs
f)    Domestic duties and taxes
g)    Changes in brand preferences / fashion trend
h)    Changes in government policies
i)    Changes in fiscal, economic or political conditions in India
j)    Increases in fuel cost, electricity cost, labour costs, raw material prices and allied costs
Financials
The following discussion on the financial operations and performance should be read in conjunction with the audited financial results
of the Company for the year ended 31st March 2003, 31st March 2004 and 31st March 2005


                                                                   76
    Particulars                                        Year Ended                    Year Ended               Year Ended
                                                        31.03.2005                    31.03.2004               31.03.2003

  Net sales                                               16,704.62                     15,131.40                13,887.41
  Other income                                               311.37                         149.61                  141.44
  Increase or decrease in stock                             (769.78)                        330.49                (333.98)
  Total Income                                            16,246.21                      15,611.50               13,694.87
  Manufacturing expenses                                  12,438.17                      11,603.55               10,074.24
  % to net sales                                               74%                            77%                     73%
  Administrative expenses                                    357.65                         366.40                  324.79
  % of net sales                                                 2%                            2%                      2%
  Selling and distribution expenses                          238.14                         265.08                  285.19
  % of net sales                                                 1%                            2%                      2%
  Finance Charges & Exchange fluctuation                     400.45                         567.17                  774.56
  % to net sales                                                 2%                            4%                      6%
  Depreciation / Amortisation                                830.61                         728.66                  672.07
  % to net sales                                                 5%                            5%                      5%
  Exceptional Items                                                -                        240.82                  462.71
  Profit before tax                                          968.52                         836.84                  197.15
  Current tax                                                 65.00                          30.00                        -
  Deferred tax                                                23.16                        (30.45)                        -
  Profit after tax                                           880.36                         837.29                  197.15

FY 2003-04 Vs FY 2004-05
Sales Turnover during FY 2004-05 increased by 10% in comparison to sales turnover during FY 2003-04. Raw material cost remained
lower by about 3%. Finance charges and exchange fluctuation reduced from 4% of net sales to 2% of net sales while other costs
remained more or less same.
FY 2002-3 Vs FY 2003-04
Sales Turnover during FY 2003-04 increased by about 9% in comparison to sales turnover during FY 2002-03. Raw material cost
remained higher by about 3% during FY 2003-04 in comparison to FY 2002-03. Finance charges and exchange fluctuation reduced
from 6% of net sales to 4% of net sales while other costs to net sales remained more or less same.
INFORMATION REQUIRED AS PER CLAUSE 6.10.5.5 (a) OF SEBI DIP GUIDELINES
Unusual or infrequent events or transactions
The Ahmedabad unit of the Company faced two floods, one in FY 2000-01 and second one in 2003-04 due to which the Company
suffered losses. Both the losses were insured and the claims made were duly received. Due to unprecedented shortfall in rain
during FY 2003-04, the cost of Raw Material viz. Cotton remained higher.
Significant economic changes that materially effected or are likely to effect income from continuing operations
The Excise Duty rationalization by the government has had both positive and negative impacts on the finances of the Company.
The same would continue to affect the bottom line as and when changes are made. Presently the Excise duty for cotton yarn and
cotton fabrics stands at 4.08% and on Blended Yarn and Blended Fabrics the Excise duty stands at 8.16% respectively. During
Union Budget 2005, the Govt. of India has given option to the textile industry to either opt for paying the duty as stated above
with Cenvat Credit or Nil duty route without Cenvat Credit.
The Company’s brought forward losses may exhaust by FY 2008-09 resulting in outgo of income tax. This will affect the bottom
line and the tax amount will increase accordingly.
The increasing fuel price effects transportation cost and cost of production. The increase in ocean freight will lead to increase in
cost of imported raw material and will also add on the cost of exports.
Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income
from continuing operations
Since the Company has a diversified product range this has not effected by the vagaries of seasons or sudden surges in the market.
Future changes in relationship between costs and revenues, in case events such as future increase in labour or material
costs or prices that will cause a material changes are known
The primary raw material of Company is Cotton which is seasonal and come from various cotton growing areas spread all over
the country. The cotton crop is vulnerable to monsoon season accordingly the cost of raw material may go up or down depending
availability of cotton across the globe.
The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new
products or services or increased sales prices


                                                                 77
The company is engaged in textile products, the increase in revenue will be mainly on account of increase in capacities or replacement
of low speed machines to high speed machines. The company will be able to demand higher prices from the market with its increased
product mix and consistent quality.
Total turnover of each major industry segment in which the Company operates
The quantum of total production of yarn in the country is 3221 million Kilograms and the fabric production is 45653 Million Sq.
metres. Where as the company produces 7 million Kilograms yarn and fabric 20 million Sq. metres.
Status of any publicly announced new products or business segment
The entire operations of the Company relates one segment i.e. Textiles.
The extent to which the business is seasonal, any significant dependence on a single or few suppliers or customers
The company has diversified product-mix. this has not effected by the vagaries of seasons or sudden surges in the market. Certain
events in the year create additional demand such as Diwali , X-mas.
Competitive conditions
Since the Company is engaged in Textile business since 1969 the company does not foresee any adverse conditions due to competition.
The company is also consistently increasing its sales volume as well as introduces variety of products due to which the Company
has better mileage in terms of seeking higher price from the market.
The important raw material of the Company is Cotton which is vulnerable to monsoon. The cotton prices are coming down year
to year due to BT cotton, increase in acreage and good monsoon across the world. In the circumstances of shortfall in rain in
cotton growing areas, there are chances of increase in cotton prices. To that extent, bottom line of the Company would get adversely
affected.




                                                                  78
                         SECTION VI: LEGAL AND OTHER INFORMATION
1.    OUTSTANDING LITIGATIONS, AND MATERIAL DEVELOPMENTS
A.    Litigation against STIL (Ahmedabad Unit)

Sr.   Case No.(s)            Plaintiff /       Name of Court           Amount        Subject Matter              Status as on date
No.   Institution Date        Defendants                               Involved      and Relief
                                                                       (in Rs.)      sought
01    Appeal no              STIL v/s S. C.    Industrial Court        2,20,000      Case filed by on            Hearing on 05.10.05
      99/2003                Tygi              Ahmedabad               (estimated)   employee against the
      06.01.2004                                                                     order of labour court
                                                                                     for re-instatement &
                                                                                     full back wages Relief
                                                                                     sought: To give full
                                                                                     back wages & re
                                                                                     -instatement (T 381/88)
02    Appeal no              STIL v/s Amarat   Industrial Court        1,40,000      Case filed by an            Hearing on 5.10.05
      95/2003                Baba              Ahmedabad                             employee against
      29.12.2003                                                                     the order of labour
                                                                                     court for re-
                                                                                     instatement &
                                                                                     full back wages.
                                                                                     Relief sought. To give
                                                                                     full back wages & re-
                                                                                     instatement. T. 02/89
                                                                                     (T 157/2000)
03    Appeal no              STIL v/s          Industrial Court        140000        Case filed by an            Hearing on 14.10.05
      94/2003                Arajun Chelaji    Ahmedabad                             employee against the
      29.12.2003                                                                     order of labour court
                                                                                     for re-instatement &
                                                                                     full back wages Relief
                                                                                     ought: To give full back
                                                                                     wages & re-instatement.
                                                                                     T. 03/89 (T. 148/2000)
04    Appeal no              STIL v/s          Industrial Court        140000        Case filed by an            Hearing on 14.10.05
      01/2004                Kanaji Rajaji     Ahmedabad                             employee against the
      20.02.2004                                                                     order of labour court
                                                                                     for re-instatement &
                                                                                     full back wages. Relief
                                                                                     sought: To give full back
                                                                                     wages & reinstatement.
                                                                                     T 5/89.
05    Appeal no              STIL v/s          Industrial Court        195000        Case filed by an            Hearing on 05.10.05
      05/2002                Harvier Shivlal   Ahmedabad                             employee against the
      27.02.2002                                                                     order of labour court for
                                                                                     re-instatement & full
                                                                                     back wages. Relief
                                                                                     sought: To give full back
                                                                                     wages & re-instatement.
                                                                                     -Voucherwala.T.403/88
06    Appeal no              STIL v/s          Industrial Court        1,20,000      Case filed by an            Hearing on 23.09.05
      24/2005                Shivbahadur R.    Ahmedabad                             employee against the
      10.08.2005                                                                     order of labour court for
                                                                                     re-instatement & full
                                                                                     back wages. Relief
                                                                                     sought: To give full
                                                                                     back wages & re-
                                                                                     instatement.T.958/91.
07    Appeal no              STIL v/s          Industrial Court        1,95,000      Case filed for . To quash   Hearing on
      57/2003                Dalichand         Ahmedabad                             and set aside the order     22.09.05
      19.06.2003             Ambaida                                                 of labour court for re-
                                                                                     instatement & 50%
                                                                                     Back wages.
                                                                                     Relief sought:To
                                                                                     cancelled the order of
                                                                                     labour court. (T. 411/88)

                                                                  79
Sr.   Case No.(s)           Plaintiff /         Name of Court      Amount     Subject Matter                     Status as on date
No.   Institution Date       Defendants                            Involved   and Relief
                                                                   (in Rs.)   sought

08    Appeal no 118/2001    STIL v/s            Industrial Court   2,25,000   Case filed for—                    Hearing on 08.09.05
      31.01.2002            Lalji Gangadin      Ahmedabad                     To quash and set aside the
                                                                              order of labour court for
                                                                              re-instatement & 40% back
                                                                              ages. Eagle security watch
                                                                              men Relief sought: To cancelled
                                                                              the order of labour
                                                                              court (T 125/88)
09    Appeal no 5/2004      STIL v/s            Industrial Court   1,25,000   Case filed for—To quash and        Hearing fix on
      15.03.2002            Ramesh Ramjiyava    Ahmedabad                     set aside the order of labour      21.09.05
                                                                              court for re-instatement & 100%
                                                                              back wages Relief sought:To
                                                                              cancelled the order of labour
                                                                              court (T 98/95)
10    Appeal no 56/2003     STIL v/s            Industrial Court   180000     Case filed for—To quash and        Hearing fix on
      16.06.2003            Sardarsing          Ahmedabad                     set aside the order of labour      21.10.05
                            Pratapsing                                         court for re-instatement &
                                                                              100% back wages Relief
                                                                              sought: To cancelled the
                                                                              order of labour court (T 16/96)
11    Appeal no 35/2005     STIL v/s            Industrial Court   1,35,000   Case filed for—To quash and        Hearing on 21.09.05
      28.07.2005            Jyotiben J.Bariya   Ahmedabad                     set aside the order of labour
                                                                              court for re-instatement & 45%
                                                                              back wages. Relief sought:
                                                                              To cancelled the order of labour
                                                                              court (T 52/2001)
12    Appeal no. 34/2005    STIL v/s            Industrial Court   2,80,000   Case filed for—To quash and        Hearing on 21.09.05
      28.07.2005            O.P.Somany          Ahmedabad                     set aside the order of labour
                                                                              court for re-instatement & 25%
                                                                              back wages. Relief sought:To
                                                                              cancelled the order of labour
                                                                              court (T 152/2001)
13    T. App. No 434/93     STIL v/s            Labour Court       1,35,000   Case filed by an employee          Evidence on
      03.05.1993            Manish Ishaverlal   Ahmedabad                     against the termination of his     06.01.06 from
                                                                              service. Relief sought:To          company side
                                                                              reinstate with back - wages
                                                                              from 03.03.1993
14    T.App. No. 278/1992   STIL v/s            Labour Court       1,45,000   Case filed by an employee          Evidence on
      13.08.1992            Rashamikant R.      Ahmedabad                     against the termination of his     07.12.05 from union
                                                                              service. Relief sought:To          side
                                                                              reinstate with back - wages
                                                                              from 13.05.1992
15    T.App.no. 266/1995    STIL v/s            Labour Court       1,35,000   Case filed by an employee          Evidence on
      18.12.1995            B. D. Gajjar        Ahmedabad                     against the termination of his     06.12.05 from union
                                                                              service. Relief sought. To         side
                                                                              reinstate with back wages from
                                                                              04.09.1995
16    T.App. No. 252/1995   STIL v/s            Labour Court       1,45,000   Case filed by an employee          Evidence on
      06.12.1995            C.B. Malam          Ahmedabad                     against the termination of his     20.09.05 from union
                                                                              service. Relief sough. To          side
                                                                              reinstate with back wages
                                                                              from 31.08.1995
17    T.App. No. 20/1997    STIL v/s            Labour Court       1,05,000   Case filed by an employee          Evidence on
      21.03.1997            Aravind Parelal     Ahmedabad                     against the termination of his     25.10.05 from union
                                                                              service. Relief sought. To         side
                                                                              reinstate with back wages
                                                                              from 31.10.1996


                                                                   80
Sr.   Case No.(s)            Plaintiff /            Name of Court   Amount     Subject Matter                    Status as on date
No.   Institution Date        Defendants                            Involved   and Relief
                                                                    (in Rs.)   sought

18    T. App. No. 323/1996   STIL v/s               Labour Court    1,05,000   Case filed by an employee         Evidence on
      30.01.1997             Indrapal               Ahmedabad                  against the termination of his    05.09.05 from
      Laxminarayan                                                             service. Relief sought. To        company side
                                                                               reinstate with back wages
                                                                               from 31.10.1996.
19    T.App.no. 131/1998     STIL v/s               Labour Court    1,15,000   Case filed by an employee         Evidence on
      20.07.1998             Popat Rama             Ahmedabad                  against the termination of his    27.12.05 from union
                                                                               service. Relief sought: To        side
                                                                               reinstate with back - wages
                                                                               from 24.09.1997.
20    T.App. no. 62/2001     STIL v/s               Labour Court    80,000     Case filed by an employee         Evidence on
      14.05.2001             Shrikrishan D.         Ahmedabad                  against the termination of his    18.10.05 from union
                                                                               service. Relief sought.           side
                                                                               To reinstate with back
                                                                               wages from 14.12.2000
21    T.App.no.63/2001       STIL v/s               Labour Court    80,000     Case filed by an employee         Evidence on
      14.05.2001             Joginder Darusing      Ahmedabad                  against the termination of his    18.10.05 from union
                                                                               service. Relief sought. To        side
                                                                               reinstate with back wages
                                                                               from 23.11.2000
22    T.App.no. 67/2001      STIL v/s               Labour Court    95,000     Case filed by an employee         Evidence on
      15.05.2001             Devada Dolatsing       Ahmedabad                  against the termination of his    07.12.05 from union
                                                                               service. Relief sought. To        side
                                                                               reinstate with back wages
                                                                               from 15.01.2001
23    T.App.no. 410/1999     STIL v/s               Labour Court    70,000     Case filed by an employee         Evidence on
      12.11.1999             Dharamsinh M.          Ahmedabad                  against the termination of his    18.10.05 from union
                                                                               service. Relief sought. To        side
                                                                               reinstate with back wages
                                                                               from 12.10.1999.
24    App. No. 386/1998      STIL v/s               Labour Court    85,000     Case filed by an employee         Evidence on
      15.01.1998             Gunshekher Kalidas     Ahmedabad                  against the termination of his    14.10.05 from union
                                                                               service. Relief sought. To        side
                                                                               reinstate with back wages
                                                                               from 15.12.1997
25    T.App.no. 863/2002     STIL v/s               Labour Court    1,05,000   Case filed by an employee         Evidence on
      03.02.2003             Devmani S.+1           Ahmedabad                  against the termination of his    24.11.05 from union
                                                                               service. Relief sought. To        side
                                                                               reinstate with back wages
                                                                               from Dec-2002
26    T.App.no               STIL v/s 246/1996      Labour Court    1,05,000   Case filed by an employee         Evidence on
      06.08.1996             Ramprakash             Ahmedabad                  against the termination of his    27.09.05 from union
                             P.-Yadav                                          service. Relief sought To         side
                                                                               reinstate with back wages
                                                                               from 06.07.1996
27    T.App. No. 188/1997    STIL v/s               Labour Court    12,000     Case filed by an employee         Evidence on
      23.04.2003             Kuber Vira             Ahmedabad                  against the earlier retirement.   20.10.05 from union
                                                                               Relief sought for back wages      side
                                                                               up to retirement.
28    Recoveries             All other recoveries   Labour Court    2,40,000   Cases filed by employees for      Evidence on
      & other App.           and applications       Ahmedabad                  claiming their dues and other     18.10.05 from union
                                                                               dameges, losses.                  side
29    Civil App. 3652/2003   STIL v/s               High court      50,000     Case filed by an employee         Hearing on 05.12.05
      20.07.2003             Natwer Dahya           Ahmedabad                  against the earlier retirement.
                                                                               Relief sought. For back wages
                                                                               up to Retirement.


                                                                    81
Sr.   Case No.(s)            Plaintiff /           Name of Court   Amount     Subject Matter                     Status as on date
No.   Institution Date        Defendants                           Involved   and Relief
                                                                   (in Rs.)   sought

30    Civil App. 3692/2003   STIL v/s              High court      50,000     Case filed by an employee          Hearing on 05.12.05
      20.07.2003             Virchand Kachara      Ahmedabad                  against the earlier retirement.
                                                                              Relief sought. For back wages
                                                                              up to Retirement.
31    Civil App. 1264/2005   STIL v/s              High court      48,000     Case filed by Textile Labour       Arguments
      11.07.2005             TLA/Frame worker      Ahmedabad                  Association for getting            (Arbitration) on
                                                                              retrenchment compensation          22.12.05 Negotiation
                                                                              of one worker.
                                                                              Relief sought. For getting
                                                                              retrenchment compensation.
32    Civil App. 1295/2005   STIL v/s              High court      98,000     Case filed by Textile Labour       Arguments
      11.07.2005             TLA/Card workers      Ahmedabad                  Association for getting            (Arbitration) on
                                                                              retrenchment compensation          22.12.05 Negotiation
                                                                              of two workers.
                                                                              Relief sought :For getting
                                                                              retrenchment compensation.
33    Rec. no. 2887/1993     Abbas Avadha v/s      Labour court    24000      Case filed by an employee for      Evidences
      16.06.1993             STIL-1                Ahmedabad                  getting the amount of lay-off &    on 08.09.05
                                                                              previlage leave from 16.06.1992    from union side
                                                                              to 31.12.1992 Relief sought:
                                                                              To get the above amount
                                                                              as a damages
34    Rec. no. 621/1997      Ramprakash P v/s      Labour court    8000       Case filed by an employee for      Evidences
      18.08.1997             STIL-1                Ahmedabad                  getting the amount of bonus &      on 13.10.05
                                                                              previlege leave Relief sought:     from union side
                                                                              To get the above amount as a
                                                                              damages
35    Rec, no. 2953/1999     Dala Kala v/s         Labour court    4000       Case filed by an employee for      Evidences
      21.09.1999             STIL-1                Ahmedabad                  getting the difference of          on 29.11.05 from
                                                                              retrenchment compensation          union side
                                                                              Relief sought: To get the above
                                                                              amount of difference of
                                                                              R.C.(year-wise)
36    App.no. 889/1992       T.L.A./Vinod    Karsan Labour court   70000      Case filed by an employee for      Evidences
      15.06.1992             v/s STIL-1             Ahmedabad                 getting the wages for not          on 24.10.05
                                                                              providing work. Relief sought:     from union side
                                                                              To get the above amount as a
                                                                              damages
37    App.no. 354/1995       T.L.A./Kanti Ishaver Labour court     8000       Case filed by an employee for      Evidences
      15.06.1995             v/s                 Ahmedabad                    getting the wages for 02.01.1995   on 13.10.05
                             STIL-1                                           to 10.02.1995.                     from union side
                                                                              Relief sought: To get the above
                                                                              amount as damages
38    App.no. 392/1995       A.Sakur A.Kadar       Labour court    68800      Case filed by an employee for      Evidences
      16.06.1995              v/s STIL-1           Ahmedabad                  getting the wages for not          on 14.10.05
                                                                              providing work as per siniority    from union side
                                                                              Relief sought: To get the above
                                                                              amount as a damages
39    App.no. 84 to          Manoj Baijanath       Labour court    3200       Case filed by an employee for      Evidences
      87/2004                v/s                   Ahmedabad                  getting the wages for the          on 12.12.05
      25.03.2004             STIL-1                                           suspension period.                 from union side
                                                                              Relief sought: To get the above
                                                                              amount as a damages
40    App.no. 386/1998       Gunshekher K.         Labour court    54000      Case filed by an employee for      Evidences
      21.03.1998             v/s STIL-1            Ahmedabad                  getting the wages for not          on 14.10.05
                                                                              providing work. Relief sought:     from union side
                                                                              To get the above amount as a
                                                                              damag es


                                                                   82
Litigation against STIL (Baramati Unit)
Sr.   Case No.(s)            Plaintiff /           Name of Court    Amount       Subject Matter                    Status as on date
No.   Institution Date        Defendants                            Involved     and Relief
                                                                    (in Rs.)     sought
1     ULP 263/99             Mr. B.N. Jarad        In the First     2,50,000     Dismissed                         Cross examination
                             V/S. STIL             Labour                        Reinstatement                     on 23.09.05
                                                   Pune Court
2.    UPL 253/97             Mr. S.B.Jagtap        In the First     2,50,000     Dismissed                         For hearing of
                             V/s. STIL             Labour Pune                   with Back wages                   inquiry on 04.10.05
                                                   Court
3     104/05                 Mr. R V Jumade        Controlling      40,000       Non-payment of gratuity           Matter is pending,
                             V/s STIL              authority pune                                                  date not received.
B.    Litigation filed by STIL (Ahmedabad Unit)
Sr. Case No.(s)              Plaintiff /           Name of Court    Amount          Subject Matter                 Status as on date
N o . Institution Date         Defendants                           I n v o l v e d and Relief
                                                                    (in Rs.) s o u g h t
1.    5945 of 2000           Soma Textiles &       City Civil       1993729      Case filed against Sudhir         Decree passed by
                             Industries Ltd.       Court at                      Jhunjhunwala                      Hon. Court for
                             V/s Sudhir            Ahmedabad                     Prop. M/s.Jhunjhunwala            payment for
                             Jhunjhunwala                                        International, Mumabi for cost    principal amount
                             Prop. M/s.                                          of supply of Denim Fabrics.       with interest @ 6%.
                             Jhunjhunwala                                        Relief Sought – to get the        Above decree have
                             International,                                      principal amount with interest.   been got set aside
                             Mumbai                                                                                by filing Misc. Civil
                                                                                                                   Appln. No. 340 of
                                                                                                                   2005 and by order
                                                                                                                   dt. 18.8.2005. next
                                                                                                                   dtd. Of hearing filed
                                                                                                                   on 20.09.2005 for
                                                                                                                   filing reply against
                                                                                                                   above order.
2.    4615 of 1990           Soma Textiles &       City Civil       266663       Case filed against Continental    Rs.50000.00
                             Industries Ltd. V/s   Court,                        Exporters, Bangalore, for cost    Deposited in Court
                             Continental           Ahmedabad                     of goods i.e. Fabrics supplied    in year 1991 as per
                             Exporters,                                          with interest.                    Court direction.
                             B angalore                                          Relief sought – To                Matter still to come
                                                                                 issue decree on                   for hearing, etc.
                                                                                 Defendant.
3.    5824 of 1991           Soma Textiles &     City Civil         858435       Transformer of 1500              Matter to come up
                             Industries Ltd. V/s C o u r t ,                     KVA supplied by Defendant        for hearing
                             Gujarat Transformer                                 found defective during
                             Pvt. Ltd., Baroda   Ahmedabad                       guarantee period. Claim for
                                                                                 loss of production, repairing
                                                                                 charges and with interest filed.
                                                                                 Relief sought – to issue decree
                                                                                 on Defendant
Litigation filed by STIL (Baramati Unit)
1     WRIT PETITION          STIL V/s              High Court         7315881 Electricity duty on captive          Matter has not
      Sep. 2001              The State of          Mumbai                     power generation.                    come on board
                             Maharashtra                                                                           and still waiting for
                                                                                                                   hearings.
2     234/94    15.12.1994   STIL V/s              Civil Judge      16,13,567 Recovery of supply of                Order of execution
                             Roofit Ind. Ltd.      Court                      defective                            is still pending
                             Ratanagiri            Baramati                   A.C.Sheet by party.                  Orders found,
                                                                              Ex prate judgment awarded            affixed on factory
                                                                              in our favour. Attachment            gate for attachment
                                                                              warrant submitted in mumbai          of property from
                                                                              High Court.                          various parties.

                                                                    83
Sr.   Case No.(s)           Plaintiff /            Name of Court       Amount      Subject Matter                            Status as on date
No.   Institution Date       Defendants                                Involved    and Relief
                                                                       (in Rs.)    sought

3     1183/1998             STIL V/s               Judicial Court      2,15,000    Case filed under indian                   The matter is to be
      12.10.1998            S.S.Yarn     Fabres    Baramati                        penal court and                           settled agreed by
                            Mumbai                                                 Negotiable instrument Act for             the party on next
                                                                                   bounced Cheque’s ,complaint               date i.e. 18.10.2005.
                                                                                   lodge under sec. 138
4     309/99 17.11.1999     STIL V/S.              Civil Court         13350       Recovery                                  Issue arrest
                            Mr. Shetti K.M.        - Baramati          with        Settled in lok adalat                     warrant (Next
                                                                       interest                                              Dt.23.09.05)
5     310/99 17.11.1999     STIL V/S.              Civil Court         15000       Recovery                                  Summons/Notice
                            Mr. Awaghade           – Baramati          with                                                  (Next Dt.14.09.05)
                            B.S                                        Intrest
C.    Tax Litigation
Sr.   Case No.(s)           Plaintiff /            Name of Court       Amount      Subject Matter                            Status as on date
No.   Institution Date       Defendants                                Involved    and Relief
                                                                       (in Rs.)    sought
01 1) V52(3-54)DA/96/00     The Asst. Comm. C.     The Asst. Comm.     1,03,78,412 Demand of Excise Duty at every            Reply filed. Personal
      Dt. 4.3.96                                   C. Excise                       process stage for goods used              Hearing Awaited
   2) V52(3-112)DA/96/291   Excise Division III,   Division I,         53,87,366 captively i.e. Bleaching, Dyeing,
      Dt.10.5.96                                                                   Printing,etc. Period
   3) V52(3-206)DA/96/908   Ahmedabad              Ahmedabad                       Aug. ’95 to Jan ’96.
      Dt.22.8.96                                                       39,89,553 Feb. ’96 to April ‘96
                                                                                   May ’96 to 22.7.96
02 1 F.No. V 52(3-88)     CEGAT, Mumbai            Hon’ble High        17,437      MODVAT taken on HM HDPP Roll.             Personal Hearing held.
      DA/97/138           and the                  Court of Gujarat,               Dispute regarding filing of declaration   Demand Confirmed vide
      Dt. 13.3.97 from AC                          Ahmedabad.          7,991       as description not tally with the         AC Order No. 6869 dtd.
   2. F.No.ARII/Soma/STA/                                                          declaration.                              22.1.98. Appeal No. 170
      SCN 97-98/475                                                                                                          AHD-1/98 paid Rs.13000/
      dt. 26.5.97 (AC                                                                                                        - on 6.1.99 under protest
      confirmed demand on                                                                                                    as per stay order No.
      above two SCN                                                                                                          966/88 dt.23.12.98 of the
      vide OIA No.68-69                                                                                                      Comm. Appeal,
      dt.22.1.98) Penalty                                                                                                    Ahmedabad. Personal
      imposed Rs.2000/-                                                                                                      Hearing fixed on 28.4.98
   3. CEGAT, Mumbai                                                                                                          at 5.00 p.m. Mr. Kailash
      confirmed Demand                                                                                                       Arrawatia attended the
      vide OIA                                                                                                               Personal Hearing Order
      No. C-II/3597                                                                                                          in Appeal No. 2246/
      dt.7.12.2000                                                                                                           99(490-Ahd-I)         CE
                                                                                                                             dt.28.10.99 received
                                                                                                                             allowing Modvat Credit
                                                                                                                             and set aside order and
                                                                                                                             allow appeal. Refund
                                                                                                                             claim of Rs.13000 filed &
                                                                                                                             received & taken vide
                                                                                                                             RG23C Entry No.1/2
                                                                                                                             dt.5.4.00. Department
                                                                                                                             filed an appeal with
                                                                                                                             CEGAT vide File No.V52
                                                                                                                             (338)        DA/97/153
                                                                                                                             dt.28.2.2002. CEGAT
                                                                                                                             Mumabi Appeal No. E
                                                                                                                             641/2000-Mum. PH fixed
                                                                                                                             on 4.7.2000 and CEGAT
                                                                                                                             Order No. C-II/3597
                                                                                                                             dt.7.12.2000 received
                                                                                                                             confirming the Demand.
                                                                                                                             ReferenceApplication No.
                                                                                                                             CEGAT No.8/2001 field
                                                                                                                             in The Hon’ble High Court
                                                                                                                             against CEGAT Order.


                                                                       84
03 F No. V52(3-34)          The Dy. Commissioner The Dy.           1,58,973           Recovery of Deemed Modvat Credit       Reply filed. Personal
     DA/11/04               of C. Excise, Div-I, Commissioner of                      taken on inputs i.e. outside purchased Hearing awaited
     dt.24.03.2004          Ahmedabad.           C. Excise, Div-I,                    of Grey Fabrics Period Marh ‘03
                                                 Ahmedabad.
0 4 SCN No. V52/3-21/       The Dy.                  The Dy.           10,95,839 Recovery of Additional TTA Duty              Reply filed. Personal
    DA/II/2002              Commissioner of          Commissioner of             on Yarn Captively Consumed                   Hearing awaited
    dt. 3.5.2002            C.Ex.                    C.Ex.                       Period April ’01 to June ’01.
                            Div. III, Ahmedabad      Div. I, Ahmedabad
4 A SCN No.-V52(3-25)/      The Dy.                  The Dy.          9,63,720        Recovery of Additional TTA Duty         Reply filed. Personal
    DA/II/2002              Commissioner of          Commissioner of                  on Yarn Captively Consumed              Hearing awaited.
    dt. 31.7.2002           C. Ex.                   C. Ex.                           Period July ’01 to Sept. ’01.
                            Div.III, Ahmedabad       Div.I, Ahmedabad
4 B SCN No.V52(3-27)/       The Dy.                  The Dy.           3,97,948       Recovery of Additional TTA Duty         Reply filed. Personal
    DA/II/2002              Commissioner of          Commissioner of                  on Yarn Captively Consumed              Hearing awaited.
    dt. 27.9.2002           C. Ex.                   C. Ex.                           Period Oct.’01 to Dec.. ’01.
                            Div. III, Ahmedabad.     Div.I, Ahmedabad.
4 C SCN No.V52(3-79)/DA/    The Dy.                  The Dy.           5,32,730       Recovery of Additional TTA Duty on Reply filed. Personal
    II/2002                 Commissioner of          Commissioner of                  Yarn Captively Consumed         Hearing awaited.
    dt. 22.01.2003          C. Ex.                   C. Ex.                           Period Jan.’02 to Mar ’02.
                            Div.III, Ahmedabad.      Div.I, Ahmedabad.
4 D 1 SCN No.V52(3-5)/ The Dy.                       The Dy.               5,91,088   Recovery of Additional TTA Duty on      Reply filed. Personal
      DA/2003             Commissioner of            Commissioner     of              Yarn Captively Consumed                 Hearing awaited.
      dt. 6.3.2003
    2 SCN No.V52(3-30)/ C. Ex.                       C. Ex.            7,07,918       Period April ’02 to June ‘02
      DA/03 dt.16.7.2003  Div.III, Ahmedabad.        Div.I, Ahmedabad.
    3 SCN No.V52(3-32)/                                                13,28,424      Period July ’02 to Sept. ‘02
      DA/03 dt. 18.7.2003
    4 SCN No.V52/15-177/                                                   11,76,773 Period Oct. ’02 to Mar. ’03
      DEM/04                                                                         Period - Apr. ’03 to Sep. ‘03
      dt.13.04.2004
4 E SC No.V52, 52-55/       The Dy.                  The Dy.               13,39,606 Recovery of Additional TTA Duty      Reply filed. Personal
    15-229/Dem/2004         Commissioner       of    Commissioner                    in yarn used for Captive Consumption Hearing awaited.
    dt.13.08.2004           C.Ex. Div.I              of C.Ex. Div.I                  for the period Oct.03 to Mar 04.
4 F SC No.V52, 52-55/   The Addl.                    The Addl.       9,29,617         Period April ‘04 to June ‘04            Reply filed. Personal
    15-263/ Dem/2004-05 Commissioner of              Commissioner of                                                          Hearing awaited.
    dt.07.03.2005       Central Excise,              Central Excise,
                        Ahmedabad                    Ahmedabad
05 SCN No. V52(3-89)        Dy. Commissioner of      Dy. Commissioner 50,034          Recovery of Duty on shortage of         Personal Hearing fixed
   DA/II/04 dt.21.09.2004   Central Excise, Div.-I   of                               goods as claimed with Insurance         on 18.1.2005 and
                            Ahmedabad.               Central Excise,                  Co., due to flood.                      attended with Adv.
                                                     Div.-I Ahmedabad.                                                        Paresh Dave File with
                                                                                                                              Advocate. OIA No. 12/
                                                                                                                              A C / D A / 2 0 0 5
                                                                                                                              dt.21.04.2005 passed
                                                                                                                              by Asst. Commissioner,
                                                                                                                              confirming Demand and
                                                                                                                              imposing penalty. Appeal
                                                                                                                              filed on 24.06.2005 vide
                                                                                                                              No. 105/P-I/05. PH Fiex
                                                                                                                              on 08.08.2005, attended
                                                                                                                              by Mr Paresh Dave,
                                                                                                                              Advocate.
06 OIA No. 188/2004/AC/Ref Commissioner of     Commissioner of             97,711     Refund claim for amount short           Appeal No. V2(52)123/
   Dt.13.08.2005           Central Excise,     Central Excise,                        received against refund claim of        A-7104 dt. 14.10.2004
                           (Appeal), Ahmedabad (Appeal),                              yarn duty after adjusting the old       Personal Hearing fixed
                                               Ahmedabad                              recovery.                               and attended on
                                                                                                                              08.08.2005. Decision
                                                                                                                              awaited.
0 7 V54/3-86/DA/II/04       Dy. Commissioner Dy. Commissioner 3,23,118                Demand for Double Credit taken Reply filed. Personal
    Dt.27.12.2004           of Central Excise. of Central Excise                      on textile yarn.               Hearing fixed and
                                                                                                                     attended on
                                                                                                                     29.07.2005. Decision
                                                                                                                     awaited


                                                                       85
D. Details of Re-schedulement of Loans to Banks/FIs are as under:
RESTRUCTURING OF DUES BY ICICI , IDBI & IFCI
As a part of combating the financial crisis the Company was facing, it had approached its prime lenders viz. ICICI and IDBI to restructure
its outstanding debts. Both the institutions had considered its request favorably and sanctioned restructuring plan and salient features
of the restructuring plans were as under.
ICICI (Vide their letter dtd. 24.10.2001)
a.   Conversion of a portion of the Company’s over dues to the extent of Rs 3.22 crores into 15% Optionally Fully Convertible Debenture
     (OFCDs) (earlier it was approved to convert dues into equity share capital at par).
b.   Reschedulement of the outstanding principal amount of Rs. 18.52 crores as on October 1,2001 to be payable in 28 equal quarterly
     instalments commencing from April 1, 2004 and ending on January 1, 2011.
c.   Conversion of the balance simple interest fallen due/falling due till September 30, 2002 in respect of term loan into under interest
     term loan (FITL) carrying interest at the rate of 11.50% p.a. payable quarterly. The FITL would be repaid in 28 equal quarterly
     instalments commencing from April 1, 2004.
d.   Reduction in the rate of interest on all existing term loans to 11.50% p.a.
IDBI (Vide their letter dtd. 02.04.2002)
a.   Reschedulement of outstanding principal FC loan of USD 2,096,212.35 under USD SCP Sources to be repayable in 28 quarterly
     instalments commencing from April 1, 2004.
b.   Conversion of Rs. 3.52 crores of the rupee-tied overdue of Rs. 4.84 crores of FC loan into 15% Optionally Fully Convertible
     Debenture (OFCDs).
c.   Deferment of balance rupee-tied overdue FC loan of Rs. 1.32 crores so as to be repayable in 8 quarterly instalments commencing
     from April 1, 2003 .
d.   Deferment of overdue interest of Rs. 37 lacs as on January 1, 2002 together with interest falling due upto September 30,2002
     on rupee-tied principal amount.
e.   Waiver of overdue interest and liquidated damages aggregating Rs. 6 lacs as on January 1, 2002.
IFCI (Vide their letter dtd. 02.08.2002)
Considered reduction in interest rate on Rupee Term Loan from 16% p.a. to 14.5% p.a. for which the company compensated IFCI
for the total interest loss on account reduction of interest rate.
E. Details of Legal Cases/proceeding involving the Promoters & group Companies
There were some defaults / reschedulement of term loan payable to the financial institutions / banks details of which are mentioned
below:
1) Krishna Glass Private Ltd, promoted by Shri Surendra Kumar Somany and Shri Arvind Kumar Somany, has made representation
to Government of India, Ministry of Finance for one time settlement of term loan under excise relief scheme through ICICI Bank Ltd
(acting as agent), decision from Government of India, Ministry of Finance is pending as on date. (amount involved Rs.57.00 lacs)
2) Somany Evergreen Knits Ltd, promoted by Shri Surendra Kumar Somany jointly with others, was in default to ICICI Bank and State
Bank of India. Both ICICI Bank and State Bank of India sold the debt to ARCIL and ARCIL has restructured the Loan. Repayment of
installment and interest on restructured loan to ARCIL is regular.
3) Simplex Trading & Agencies Ltd, a Company incorporated by Shri Surendra Kumar Somany, has received one order from SEBI for
payment of penalty of Rs.1,75,000/- (Rupees One Lac Seventy Five Thousand only) for violations of regulations 6 and 8 of SEBI (Substantial
Acquisition of Shares and Takeovers) Regulation, 1997 regarding non filing of shareholding details and changes thereof. The Company
has requested SEBI for reduction in penalty and for a personal hearing. Personal hearing is yet to take place.
4) Sarvopari Investment Pvt. Ltd, one of the group Company, has been issued various Show-cause Notices, details of which is mentioned
below, some time in 2004 and 2005 by the Office of Registrar of Companies, West Bengal, for violation of various sections of the
Companies Act, 1956, mainly on account of procedural, disclosures and technical discrepancies, as observed in course of inspection
of books of accounts carried out under Section 209A of the Companies Act, 1956.
In addition, Office of Registrar of Companies, West Bengal has also filed criminal proceedings in some of the cases in the Court of
Chief Metropolitan Magistrate at Kolkata.
Details of Show Cause Notices by Registrar Of Companies, West Bengal
The Office of Registrar of Companies, West Bengal, has issued following Show Cause Notices to the Sarvopari Investment Pvt. Ltd
and its Directors/Officer in default, which are based the inspection report dated 14.05.2004 on inspection of the books of accounts
and other relevant records of the Company under section 209-A of the Companies Act, 1956 by an officer of the Ministry of Company
Affairs, Kolkata that the Company has violated section 628 of the said act.




                                                                    86
Date of Show Section                                            Details
cause Notice
03.02.2005   628        Counter folio of the Share certificates were issued to 3 subscriber of MOA prior to the date of Company’s
                        registration and Share Certificates issued by the Company contains false statements which is material
                        in particular
03.02.2005   628        The Company disclosed an amount of Rs.6572.22 as book overdraft in the Company’s Balance Sheet
                        as on 31/03/2003 whereas the Company did not have any overdraft and hence the statement ”book
                        overdraft” shown ion the liabilities side of the Company’s Balance Sheet as on 31.03.03 was a false
                        statement which is material particular.
03.02.2005   628        Company disclosed on the assets side of the Balance Sheet as on 31/03/2003, a balance of Rs. Nil
                        whereas the company’s bank ledger shown balance of Rs.6572.22 and hence the NIL bank balance
                        as on 31/03/2003 is a false statements which is material particular.
03.02.2005   628        Director of the Company Shri RS Sharma gave a statement on oath that the company did not make
                        any entries in Register of Contracts whereas it was reported in the Audit Report dated 21/07/1998 that
                        the Company has taken loans from the parties listed under section 301 and/or from the companies
                        under the same management as defined under section 370(1B) of the Companies Act. In view of the
                        Auditor’s report stated above the statement on oath of Shri RS Sharma is a false statement which
                        is material particular.
03.02.2005   628        The Company’s issued subscribed and paid up capital as on 31/03/1998 and 31/03/1999 was Rs.1482300/
                        - but the Company’s Balance Sheet abstract and Company’s general business profile states Rs.940000/
                        - as the capital raised during the year on account of private placement which appears to be false statement
                        made in material particular.
                        The Company’s issued subscribed and paid up capital as on 31/03/1999 and 31/03/2000 was Rs.1482300/
                        - but the Company’s Balance Sheet abstract and Company’s general business profile states Rs.940000/
                        - as the capital raised during the year on account of private placement which appears to be false statement
                        made in material particular.
                        The Company’s issued subscribed and paid up capital as on 31/03/2000 and 31/03/2001 was Rs.1482300/
                        - but the Company’s Balance Sheet abstract and Company’s general business profile states Rs.940000/
                        - as the capital raised during the year on account of private placement which appears to be false statement
                        made in material particular.
02.09.2004   147(1)(a) The Company did not display name board containing the name and address of its registered office
                       duly painted and affixed.
02.09.2004   150(1)     The entries in the Register of members were not authenticated by secretary or by any person as may
                        be appointed by the Board.
02.09.2004   171(1)     The Company contravene by not sending the notice dated 21/07/1998 of AGM held on 24/09/1998 to
                        M/s Delstar Commercial and Finance Limited and Durga Marketing Ltd
02.09.2004   193(1-B)   Minutes of the proceedings of all the Board Meetings and General Meetings were being attached to
                        the minute’s books without being bound periodically say for every six months or for every year.

02.09.2004   211(1)     The Company shown an amount of Rs.6572.22 as book overdraft under the head ‘Current Liabilities
                        and Provisions” in the Company’s Balance Sheet as on 31/03/2003 whereas it related to the Current
                        Liability for expenses.
                        The Company’s bank ledger shows a minus balance of Rs.6572.22 whereas Company’s Balance Sheet
                        as on 31/03/2003 does show a different picture.
02.09.2004   217(3)     The Directors in their report dated 19/08/2003 did not give fullest information and explanation to the
                        adverse remarks of the auditors in respect of valuation of stock.
03.02.2005   224(8)     The Company paid Rs.2700/- for the year 2002-2003 as audit fee to the statutory Auditor on account
                        of audit fee but no resolution was passed by the Board fixing the remuneration, though the matter was
                        left to the Board by the General Meeting.
                        The Company paid Rs.2625/- for the year 2001-2002 as audit fee to the statutory Auditor on account
                        of audit fee but no resolution was passed by the Board fixing the remuneration, though the matter was
                        left to the Board by the General Meeting.
                        The Company paid Rs.2625/- for the year 2000-2001 as audit fee to the statutory Auditor on account
                        of audit fee but no resolution was passed by the Board fixing the remuneration, though the matter was
                        left to the Board by the General Meeting.
02.09.2004   307(1)     The column “the price or other consideration” has not been filled in the Register of Directors shareholding
                        under section 307(1) of the Companies Act and left blank.
02.09.2004   301(1)     There was a transaction as per Auditors Report dated 21/07/1998 on the Company’s account for the
                        year ended 31/03/1998 but there was no entries in the register of contracts as required under section
                        301(1) of the Companies Act.


                                                             87
Criminal Proceedings under various section of Criminal Procedure Code before Metropolitan Magistrate, Calcutta by
Registrar of Companies, West Bengal
Various Criminal Proceedings, details of which is given below, have also been initiated with Metropolitan Magistrate, 10th Court, Calcutta
by the Office of Registrar of Companies, West Bengal against the Sarvopari Investment Pvt. Ltd and its Directors/Officers under Section
147(2), 150(2), 171(1), 224(8) read with Section 629A of the Companies Act, 1956

Case No.            Details
C/4680/05           In the matter of various breaches of Section 147(2) companies act as stated above.
C/4679/05           In the matter of various breaches of Section 150(2) companies act as stated above.
C/4678/05           In the matter of various breaches of section 171(1) of the Companies Act as stated above.
C/4681/05           In the matter of various breaches of section 629A read with 224(8) of the Companies Act as stated above.
The Company has taken appropriate steps for compounding of offence and filed necessary petitions before the Company Law Board,
Eastern Region, Kolkata and also filed a petition before Hon’ble High Court, Calcutta under Section 633 of the Companies Act,
1956 for relief in respect of proceedings for violation under Section 628 of the Companies Act, 1956.
F. Proceedings/cases involving the directors of the Company

1) Bank of Baroda, Bank of India & others have impleaded Shri Prafull Anubhai, as a Director of M/s Rustom Mills & Industries
Ltd for recovery of amount due to them as Shri Prafull Anubhai has given personal guarantee to them. Mr. Prafull Anubhai is a
non executive Director of the Company.

Other than the above,

1.    There are no litigations against the company or against any other company whose outcome could have a materially adverse
      effect on the position of the company.

2.    Except as provided in Para E(4) above, there is no litigations against the directors or promoters or Companies promoted by
      the Promoters, involving violation of statutory regulations or alleging criminal offence.

3.    There are no cases of litigations pending against the Promoters/ Directors in their personal capacities and also involving in
      statutory regulations or criminal offences except as mentioned in Para F above;

4.    There are no pending proceedings initiated for economic offences against the Company, Directors, its Promoters, Companies
      and Firms promoted by the Promoters;

5.    Other than above there are no outstanding litigations, disputes pertaining to the matters likely to effect the operations and
      financials of the Company including disputed tax liability, prosecution under any enactment in respect of Schedule XIII of the
      Companies Act, 1956;

6.    None of the Directors have any litigation towards tax liabilities, or any criminal/civil prosecution against them for any offences
      (irrespective of whether “specified in paragraph (i) of Part I of Schedule XIII of the Act.);

7.    There are no litigations outstanding against the Promoters/ Directors in their personal capacity. The Company, its Promoters
      and other Companies with which promoters are associated have neither suspended by SEBI nor has any disciplinary action
      been taken by SEBI. There are no prosecution launched by Income Tax Authorities and no liability compounded by the Promoters/
      Company/Other Ventures with which the Promoters are associated is subsisting;

8.    There are no cases of pending litigations/ defaults in respect of firms/ Companies with which the Promoters are associated
      in the past but are no longer associated.

9.    Except as provided above in Para D, E(1) and E(2) , There are no overdues, defaults to the Financial Institutions/ Banks,
      Re-schedulement of Loans to Banks/FIs and dues towards instrument holders like debenture holders, fixed deposits and arrears
      on cumulative preference shares by the Promoters and the Companies/Firms promoted by the Promoters or by the Company.
      There are no pending offences of non-payment of statutory dues by the Promoters of the Company.

10. Except as provided in Para E(3) above, No disciplinary action was taken by the SEBI/ Stock Exchanges or any other regulatory
    authority against the Issuer Company, its Promoters or its Directors, associates and other ventures promoted by the promoters
    or the issuer’s directors.

11.   There are no proceedings known to be contemplated by governmental authorities.

12. There are no past cases in which penalties were imposed by the regulatory authorities on the company or its directors.
13. Promoters, their relatives (as per Companies Act, 1956) and the Company, Group Companies, associate companies are not
    detained as willful defaulters by RBI/Government authorities and there are no violations of securities laws committed by them
    in the past and are pending against them.
      Names of SSI or any other creditor to whom the company owes more than Rs.1.0 lacs outstanding for more than
      30 days as on 30/09/2005.



                                                                    88
      Sr.     Name of Creditor                                                                                     Outstanding
      No.                                                                                                     Amt. (Rs. in lacs)

      1       Naval Overseas Pvt. Ltd.                                                                                   6.00
      2       Bleach Chem                                                                                                1.98
      3       Jaytex Corporation                                                                                         1.06
      4       Meghmani Dyes& Intermediates Ltd                                                                           1.66
      5       Mukesh Textiles                                                                                            7.23
      6       Transpek-Silox Industry Ltd.                                                                               3.08

              TOTAL                                                                                                    21.01

Defaults
Except as provided above, the Company has not defaulted in meeting any statutory dues, institutional dues and dues towards instrument
holders like debenture holders, fixed deposit holders.
There are no proceedings launched or initiated against the promoters of the Company for any economic offences.
Material Developments
There are no material developments after the date of the last audited balance sheet as on March 31, 2005, which may materially
affect the performance, or prospects of the Company.
As per the opinion of the Directors, no circumstances have arisen since the date of last financial statement disclosed in the Prospectus
that materially and adversely affect or are likely to effect the trading or profitability of the Company, the value of its assets, or its
ability to pay liabilities within the next twelve months.
GOVERNMENT APPROVALS / LICENSING ARRANGEMENTS.
The following approvals are obtained / required for by the present/ proposed project:
Ahmedabad Unit:

Sr.       Particulars of the clearances                                           Existing            New project
No.                                                                              operations
1         Certificate of Importer- Exporter Code                                  Obtained            Same is valid for new project
2         Central Excise Registration Number                                      Obtained            Same is valid for new project
3         Factory license                                                         Obtained            Same is valid for new project
4         Registration Certificate issued by Ministry of Textiles, Delhi          Obtained            Same is valid for new project
5         Two Star Export House Certificate issued by DGFT, Mumbai.               Obtained            Same is valid for new project
6         RCMC issued by TEXPROCIL, Mumbai                                        Obtained            Same is valid for new project
7         RCMR issued by STREPC, Mumbai                                           Obtained            Same is valid for new project
8         Petroleum License issued by Chief Controller of Explosive, Mumbai       Obtained            Same is valid for new project
9         NOC for Effluent water discharge                                        Obtained            NOC application has been
                                                                                                      submitted
10        NOC for Air emission                                                    Obtained            NOC obtained for the boiler
                                                                                                      installation
Baramati Unit:

Sr.       Particulars of the clearances                                  Existing operations          New project
No.
1          Factory License                                                      Obtained              Same is valid for new project
2         Explosive License                                                     Obtained              Same is valid for new project
3         ISO Certificate                                                       Obtained              Same is valid for new project
4         Export Certificate                                                    Obtained              Same is valid for new project
5         License for Private Bonded House                                      Obtained              Same is valid for new project
6         BST Certificate                                                       Obtained              Same is valid for new project
7         CST Certificate                                                       Obtained              Same is valid for new project
8         Importer – Exporter Code Certificate                                  Obtained              Same is valid for new project
9         Green Card                                                            Obtained              Same is valid for new project
10        NOC for Air emission                                                  Obtained              NOC obtained for
                                                                                                      the boiler installation

                                                                   89
The Company can undertake all the present and proposed activities in view of the present approvals and on receipt of the approvals
for the proposed activities. No further approvals from any government authorities/ RBI are required by the Company to undertake
the present and proposed activities except those approvals that may be required to be taken in the normal course of business
from time to time.
It must be specifically understood that in giving the above approvals, the concerned authority does not take any responsibility for
the financial soundness or correctness of the statements made by the Company.




                                                                90
           SECTION VII: OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
Pursuant to Section 81 (1A) of the Act, the present issue of Unsecured Zero Interest Fully Convertible Debentures has been authorized
vide a special resolution passed at the Annual General Meeting of the Company held on September 8, 2005. The Board of Directors
have approved the issue by a resolution passed at its meeting held on dated July 30, 2005.
Prohibition by SEBI
The Company, its directors/ Promoters and persons in control, its associates and companies/entities with which the Company’s directors/
promoters and any of the company’s associates of group companies are associated as directors have not been prohibited from accessing/
operating in the capital markets under any direction or order passed by SEBI. The listing of any securities of the Issuer has never
been refused at anytime by any of the Stock Exchanges in India.
Eligibility of the Company to come out with Public Issue
As the Company’s shares are already listed on the Bombay Stock Exchange Ltd (BSE) and National Stock Exchange of India Ltd.
& The Calcutta Stock Exchang Association Ltd. Kolkata The proposed issue and all previous issues in the current financial year does
not exceed five (5) times its pre-issue net worth, the company is eligible for the proposed public issue in terms of clause 2.3 of SEBI
(Disclosure and Investor Protection) Guidelines, 2000.
                                                                                                                          (Rs. in Lacs)

a)   Proposed Issue Size                                                                                                 10500.00
b)   All the previous issues made in the same financial year in terms of size
     ( i.e. offer through offer document + firm allotment + promoters‘ contribution through the offer document)               NIL
c)   Aggregate of (a) & (b)                                                                                              10500.00
d)   Pre-Issue Networth as per the audited balance sheet of the last financial year i.e. March 31, 2005                   4962.41
e)   Five times of (d)                                                                                                   24812.05
Further there is no change in the name of the Company within the last 1 year (reckoned from the date of filling the Draft Prospectus)
SEBI DISCLAIMER CLAUSE
AS REQUIRED A COPY OF THE DRAFT OFFER DOCUMENT HAS BEEN SUBMITTED TO SEBI, MUMBAI. IT IS TO BE DISTINCTLY
UNDERSTOOD THAT SUBMISSION OF THE DRAFT PROSPECTUS TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED
THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE
FINANCIAL SOUNDNESS OF ANY SCHEME OR PROJECT FOR WHICH THE OFFER IS PROPOSED TO BE MADE, OR FOR THE
CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE PROSPECTUS. LEAD MANAGER,
CHARTERED CAPITAL AND INVESTMENT LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE PROSPECTUS ARE
GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION
FOR THE TIME BEING IN FORCE. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR
MAKING INVESTMENT IN THE PROPOSED OFFER. IT SHOULD ALSO, BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER
IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL THE RELEVANT INFORMATION
IN THE PROSPECTUS, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER,
CHARTERED CAPITAL AND INVESTMENT LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 7TH
NOVEMBER, 2005 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS AS FOLLOWS:
1.   WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES,
     PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC., AND OTHER MATERIALS IN CONNECTION WITH THE
     FINALIZATION OF THE PROSPECTUS PERTAINING TO THE SAID ISSUE;
2.   ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER
     OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE
     OFFER, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN
     THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;
WE CONFIRM THAT
a) THE PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT
     TO THE ISSUE;
b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS ALSO THE GUIDELINES,                                 INSTRUCTIONS,
     ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY                               IN THIS BEHALF HAVE
     BEEN DULY COMPLIED WITH; AND
c) THE DISCLOSURES MADE IN THE PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE
     A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.
d) BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE PROSPECTUS ARE REGISTERED WITH SEBI AND THAT
     TILL DATE SUCH REGISTRATION IS VALID;
e) IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFILL THEIR
     UNDERWRITING COMMITMENTS.”
THE FILING OF THIS PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER
SECTION 63 OR 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY


                                                                  91
OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER, RESERVES THE
RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER TO THE ISSUE, ANY IRREGULARITIES OR LAPSES
IN THE PROSPECTUS.
GENERAL DISCLAIMER & CAUTION
Investors may note that the Company and the Lead Manager accepts no responsibility for statements made other than in this Prospectus
or in the advertisements or in any other material issued by or at the instance of the Company or the Lead Manager and that anyone
placing reliance on any other source of information would be doing so at his/her own risk. All information shall be made available
by the Lead Manager and the Issuer to the members at large and no selective or additional information would be available for
a section of the members in any manner whatsoever. Further, Lead Manager and the Issuer undertake to update the offer document
and keep the public informed of any material changes till the listing and trading commencement.
Disclaimer in respect of Jurisdiction
This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are majors, Hindu
Undivided Families, companies, corporate bodies and societies registered under the applicable laws in India and authorized to
invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks,
co-operative banks (subject to RBI permission), Trusts registered under the Societies Registration Act, 1860, or under any other
trust law and who are authorized under their constitution to hold and invest in shares) and to NRIs, and FIIs as defined under
the applicable Indian laws. This Prospectus does not, however, constitute an Issue to sell or an invitation to subscribe to shares
issued hereby in any other jurisdiction to any person to whom it is unlawful to make an Issue or invitation in such jurisdiction.
Any person into whose possession this Prospectus comes into is required to inform himself about and to observe any such restrictions.
Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Kolkata, West Bengal only. No action
has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except
that this Prospectus has been submitted to the SEBI. Accordingly, the FCD or the Equity Shares arising on conversion thereof,
represented thereby may not be offered or sold, directly or indirectly, and this Prospectus may not be distributed, in any jurisdiction,
except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Prospectus nor any
sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company
since the date hereof or that the information contained herein is correct as of any time subsequent to this date.
The draft Prospectus has been filed with SEBI for its observations and SEBI has given its observations and that the final Prospectus
has been filed with the RoC as per the provisions of the Companies Act.
Disclaimer clause of the Stock Exchanges
a) Bombay Stock Exchange Ltd., (BSE/ Designated Stock Exchange)
As required, a copy of this Prospectus has been submitted to BSE. The BSE has given vide their letter dated ———————
——- permission to the Company to use the BSE’s name in this Prospectus as one of the stock exchanges on which the Company’s
securities are proposed to be listed. The BSE has scrutinized this Prospectus for its limited internal purpose of deciding the matter
of granting the aforesaid permission to the Company.
The BSE does not in any manner:
i)     Warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; or
ii)    Warrant that the Company’s securities will be listed or will continue to be listed on the exchange;
iii)   Take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme
       or project of this Company.
       and it should not for any reason be deemed or construed that this Prospectus has been cleared or approved by the BSE.
       Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent
       inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which
       may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything
       stated or omitted to be stated herein of for any other reason whatsoever.
b)     National Stock Exchange of India Ltd, Mumbai (NSE)
The National Stock Exchange of India Ltd, Mumbai (NSE), has given vide its letter dated ——————- permission to the Company
to use the Exchange’s name in this offer Document as one of the Stock Exchanges on which this Company’s securities are proposed
to be listed. The exchange has taken on record this Offer Document for its limited internal purpose of deciding on the matter of
granting the aforesaid permission to the Company based on the assurances, averments, statements and other managerial,
administrative, technical and financial information duly seen and examined by the Lead Managers/ Managers/ Advisors and Directors
and Managers of the Company.
The National Stock Exchange of India Ltd, Mumbai (NSE), does not in any manner:-
i)     Warrant, certify or endorse the correctness or completeness of any of the contents of this Document; or
ii)    Warrant that this company’s securities will be listed or will be listed or will continue to be listed on the Exchange; or
iii)   Take any responsibility for the financial or other soundness of this company, its promoters, its management or any scheme
       or project of this company;
And it should not for any reason be deemed or construed that this Offer Document has been cleared or approved by the Exchange.
Every person who desires to apply for or otherwise acquires any securities of this company may do so pursuant to independent
inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which
may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything
stated or omitted to be stated herein or any other reason whatsoever.

                                                                   92
FILING
Copy of this Prospectus along with the documents required to be filed under Section 60 of the Act having attached thereto, has been
delivered for registration to the Registrar of Companies, West Bengal at Nizam Palace, 2nd MSO Building, 2nd Floor, 234/4, A.J.C.B.
Road, Kolkata - 700020.
Copy of the Prospectus has been filed with SEBI, B Wing, First Floor, Mittal Court, Nariman Point, Mumbai 400021.
A copy of the Prospectus has also been filed with Bombay Stock Exchange Ltd., (Designated Stock Exchange) (BSE) and National
Stock Exchange, Mumbai (NSE).
LISTING
The existing Equity Shares of the company are presently listed on Bombay Stock Exchange Ltd., (BSE) (Designated Stock Exchange)
and National Stock Exchange of India Ltd, Mumbai (NSE) and The Calcutta Stock Exchange Association Ltd (CSE). The FCD offered
through this Prospectus & also the Equity Share arising on conversion thereof, are proposed to be listed on BSE and NSE. Applications
have been made to all the Stock Exchanges mentioned above for permission to deal and for an official quotation of the Equity Shares.
If the permission to deal in for an official quotation of the Equity Shares is not granted by any of the Stock Exchanges mentioned
above, the company shall forthwith repay, without interest all monies received from the applicants in pursuance of the prospectus.
If such money is not repaid within 8 days after the company becomes liable to repay it (i.e. from the date of refusal or within 70
days from the date of issue closing date, whichever is earlier) then the Company and every director of the Company who is an officer
in default shall, on and from the expiry of 8 days will be jointly and severally liable to pay money, at the interest rate of 15% per
annum on application money as prescribed under Section 73 of the Companies Act, 1956.
The Company together with the assistance of the Lead Managers shall ensure that all the steps for the completion of the necessary
requirements for listing and commencement of trading at all the Stock Exchanges mentioned above are taken within 7 working days
of finalisation and adoption of the Basis of Allotment for the Issue.
Consents
Consents in writing of the Directors, Auditors, Lead Manager to the Issue, Bankers to the Company, Banker to the Issue, Company
Secretary and Compliance Officer, Legal Advisors, Registrars to the Issue to act in their respective capacities have been obtained
and filed along with Copy of Prospectus with the Registrar of Companies, West Bengal at Kolkata as required under Section 60 of
the Act, and none of them have withdrawn the said consents up to the time of delivery of a copy of this prospectus for Registration
with the said Registrar of Companies, West Bengal at Kolkata.
M/s. Pipara & Company, Chartered Accountants, Ahmedabad, Auditors of the Company have also given their consent to the inclusion
of their report as appearing hereinafter in the form and context in which it appears in this Prospectus and also of the tax-benefits
accruing to the company and to the members of the company and such consent and report have not been withdrawn upto the time
of delivery of this Prospectus for Registration with the Registrar of Companies, West Bengal at Kolkata.
Expert Opinion
Except for the various tax benefits available to the Company and its members expressed by the auditors of the Company, the Company
has not obtained any other expert opinion.
Public Issue Expenses
The expenses of the Issue payable by the Company inclusive of fees payable to the Lead Manager, fees payable to the Registrars
to the Issue, fees of Legal Advisors, Stamp Duty, Printing, Publication, Advertising and Distribution expenses, Bank charges, Listing
Fees, Brokerage and other Miscellaneous Expenses are estimated to be approximately Rs.315 lacs and will be met out of the proceeds
of the Issue.
Details of Fees Payable

Particular                              Amount (Rs. in lacs)             % of Total Issue Exp.            % of Total Issue size
Lead Manager to the issue                        15.00                           4.76%                             0.14%
Registrar to the Issue                           1.50                            0.48%                             0.01%
Trustee for Debenture Holders                    2.50                            0.79%                             0.02%
Fees Payable to the Lead Manager to the Issue
The total fees payable to the Lead Manager will be as per the Memorandum of Understanding signed with the Lead Manager, a copy
of which is available for inspection at the Registered Office and Corporate Office of the Company.
The Lead Managers will be reimbursed for all relevant out-of-pocket expenses including such as cost of travel, stationery, postage
& communication expenses.
Fees Payable to the Registrar to the Issue
The fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding signed with the Company, a copy
of which is available for inspection at the Registered Office and Corporate Office of the Company.
The Registrar will be reimbursed for all relevant out-of-pocket expenses including such as cost of travel, stationery, postage, stamp
duty & communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to send refund orders
or allotment advice by registered post.


                                                                 93
Underwriting Commission
The issue is not proposed to be underwritten. Hence, no underwriting commission is payable.
Brokerage
Brokerage will be paid by the Company at the rate of 1.50 % on the issue price of Equity Shares offered to the Public on the basis
of allotment made against applications bearing the stamp of the members of any recognized Stock Exchanges in India in the broker’s
column. Brokerage at the same rate will also be payable to the Bankers to the Issue in respect of allotments made against applications
procured by them provided the relevant forms of applications bear their respective stamps in the Broker’s column.
In case of tampering or over-stamping of Brokers/Agent’s codes on the application form, the company’s decision to pay brokerage
in this respect will be final and no further correspondence will be entertained in this matter.
Previous Public or Rights Issues
The Company has not made any Public or Rights issues in the last 5 years.
Previous Issues of shares otherwise than for cash.
The Company has issued 260000, 780000 & 2145000 Equity Shares by way of Bonus by capitalization of free reserves on 03.03.1990,
04.10.1991 & 11.09.1992 respectively. Except for the above, no shares were issued for consideration other than cash. For details,
you may refer the notes to the Capital Structure.
Commission and Brokerage on Previous Issue
The Company has paid 1.5% of Brokerage and 2.5% of Underwriting Commission on previous issue.
Issues made by the Companies under the same management under Section 370(1B) of the Companies Act, 1956.
There are no listed Companies under the same management with the meaning of Section 370(1B) of the Companies Act, 1956,
which made any capital issue during the last three years.
Capital Issues in the past and Promises Vs Performance
In the Year 1993-94, the Company came up with Public Issue of 25,98,983 Zero Interest Secured Fully Convertible Debentures
of Rs. 100/- each aggregating Rs. 2598.98 lacs. Part – A: Fully Paid Up debentures of Rs.40/- of each debentures was compulsorily
converted into 1 Equity Share of Rs.10/- each Fully Paid at a premium of Rs.30/- per share on 18th January 1994 and Part –
B: Fully Paid Up debentures of Rs.60/- of each debentures was compulsorily converted into 1 Equity Share of Rs.10/- each Fully
Paid at a premium of Rs.50/- per share on 18 th July, 1994. The actual performance achieved by the Company against the projections
specified, is shown in the table below:
Financial Projections vis-à-vis performance

                               31.03.1994                             31.03.1995                            31.03.1996                          31.03.1997
                    Promise        Actual Deviation        Promise        Actual   Deviation     Promise        Actual Deviation     Promise       Actual Deviation
Net Sales           5,065.00     4,493.00     (572.00)     8,950.00     6,959.00   (1,991.00)    9,921.00 10,582.68        661.68    9,921.00 11,037.37      1,116.37
Profit Before Tax    622.00       407.27      (214.73)      685.00        310.64    (374.36)     1,285.00      303.38     (981.62)   1,395.00      213.65   (1,181.35)
NP after tax         622.00       407.27      (214.73)      685.00        310.64    (374.36)     1,042.00      303.38     (738.62)   1,070.00      213.65    (856.35)
Cash Profit          907.00       704.95      (202.05)     1,721.00      682.92    (1,038.08)    2,107.00      890.99 (1,216.01)     2,187.00     843.53    (1,343.47)
Equity capital       631.00       630.39          (0.61)   1,009.00       985.30      (23.70)    1,127.00     1,106.69     (20.31)   1,127.00 1,106.75         (20.25)
EPS                    9.86         6.46          (3.40)      6.79          3.15        (3.64)       9.25        2.74       (6.50)       9.49        1.93       (7.56)
Book Value Rs.        44.90        35.28          (9.62)     53.40         44.97        (8.43)     59.50        45.42      (14.08)      69.10       44.65      (24.45)

The actual performance of the Company against the objects of the issue for the last public issue is shown below

                                   Object                                                                                Performance
To raise a part of finance required for the setting up of 100% The Company has achieved each of the objects in this table as
Export Oriented cotton spinning unit and to augment resources         specified in the offer document dated 12.10.1993
for the long term working capital requirements of the Company.
The other promises as made by the Company in the offer document last issue and performance are as under:

Capacity utilization for
year ended                                  31.03.95                                      31.03.96                                      31.03.97
                                      Promise     Performance                      Promise      Performance                   Promise        Performance
100% EOU UNIT                               75%              98.30%                  95%                   94.89%                95%                 81.00%
Details of implementation schedule and actual date of commencement of commercial production for the IPO made in
1993-94

Implementation Schedule                                                                                As per IPO                                Actual
Building and civil construction                                                                             Sep-93                               Sep-93
Placement of orders for Plant & Machinery                                                                   Jul-93                                Jul-93
Delivery of Plant & Machinery                                                                               Aug-93                               Aug-93


                                                                                   94
Implementation Schedule                                                             As per IPO                         Actual

Erection of Plant & Machinery                                                          Dec-93                          Dec-93
Trial Runs of Production                                                               Jan-94                          Jan-94
Commencement of Commercial Production                                                  Mar-94                          Mar-94
The business of the Company has proceeded along the lines as disclosed in the Prospectus for the previous issue. The amount raised
by way of last public issue has been fully utilised and deployed.
Promises Vs Performance of the Group Company
Simplex Trading and Agencies Ltd, one of the group company came up with a public Issue in 1981, around 24 years back. To give
“Promise Vs Performance” of the Issue is not possible for us as neither the prospectus not any other document relevant thereto is
available with the Company’s officials.
Outstanding debentures or redeemable preference shares
The Company has outstanding 3,08,000 15% Secured Redeemable Non Convertible Debentures of Rs.100/- each aggregating to Rs.
308 lacs as on 31st march, 2005 issued to ICICI & IDBI being conversion of outstanding debt as per restructuring arrangement.
Stock Market Data
Movement of share prices of the Company at National Stock Exchange of India Ltd., Mumbai (NSE) is given in the following tables.
YEARLY PRICES

FIN. YEAR                        HIGH                                       LOW                             TOTAL          AVERAGE
                   HIGH        DATE OF        VOLUME            LOW       DATE OF        VOLUME            VOLUME            PRICE
                    RS.         HIGH         ON THE DT          RATE        LOW         ON THE DT          FOR THE       FOR THE YEAR
                                              OF HIGH                                    OF LOW             YEAR
                             (mm/dd/yyyy) (NO.OF -SHARES)               (mm/dd/yyyy) (NO.OF -SHARES)
2002               11.50           7/10/2002     118019          1.25      5/31/2002             403          685503             7.58
2003               30.00           12/30/2003    15403           2.75      3/31/2003             650         4217996            14.11
2004               40.00           12/29/2004    354739          9.50      3/25/2004            2215        13805087            26.24
MONTHLY PRICES

FIN. YEAR                        HIGH                                       LOW                             TOTAL     AVERAGE
                   HIGH        DATE OF        VOLUME            LOW       DATE OF        VOLUME            VOLUME       PRICE
                    RS.         HIGH         ON THE DT          RATE        LOW         ON THE DT          FOR THE FOR THE MONTH
                                              OF HIGH                                    OF LOW             MONTH
                             (mm/dd/yyyy) (NO.OF -SHARES)               (mm/dd/yyyy) (NO.OF -SHARES)
May-05             54.75      5/23/2005         1042498         36.50      5/2/2005             29328       4632605             47.44
Jun-05             56.50      6/8/2005          211962          44.10     6/21/2005             63957       3126788             51.79
Jul-05             58.20      7/25/2005         581105          42.25      7/7/2005             31521       2654132             51.12
Aug-05             57.00      08/22/2005         270911         47.00    08/17/2005             42641       2789026             52.51
Sept-05            64.25      09/19/2005         791076         43.60    09/23/2005         195717          4401509             55.87
Oct.-05            52.85      10/05/2005         27907          34.00    10/31/2005             42918        637283             44.33
Source : http//www.nse-india.com
The closing share price on NSE on 1 st August, 2005 being the first day of trading after the Board Meeting approving the further Public
Offer was Rs. 49.50.
Redressal of Investor Grievances
The Company has a team of qualified and experienced staff in its Secretarial Department for attending the correspondence / queries
of its investors. A Shareholders/Investors’ Grievance Committee has also been constituted in terms of provisions of the Listing
Agreement with the Stock Exchanges. The meetings of the Committee are held from time to time to deal with investor grievances.
The Company has appointed M/s Pinnacle Share Registry Pvt. Ltd, Ahmedabad as its Registrar and Share Transfer Agent. The
Company ensures that all the correspondence / queries of its investors are replied satisfactorily and promptly.
The Company assures that the following schedules shall be adhered to by the Board of Directors in respect of the complaints,
if any, to be received.

Solano.       Nature of the Complaint                                            Time taken
1             Non-receipt of the refund warrants or share certificates           Within 7 days of receipt of complaint, subject to
                                                                                 production of satisfactory evidence.
2             Change of address notification                                     Within 7 days of receipt of information.
3             Any other complaint in relation to public issue                    Within 7 days of receipt of complaint with all relevant
                                                                                 details.


                                                                   95
The Company has appointed Mr. R.S. Sharma, as Compliance Officer who would directly deal with SEBI office with respect to
implementation of various laws, rules, regulations and other directives issued by SEBI and matters related to investor complaints. The
investors may contact the compliance officer in case of any pre-issue/post issue related problems. The Compliance Officer will be
available at the following address:
Soma Textiles & Industries Limited
2, Red Cross Place
Kolkata – 700 001
Tel No. – +91 33 22487406-07
Fax No. – +91 33 22487045
e-mail : rssharma@somanyent.com
The Company has not received any complaint for the quarter ended September 30, 2005 and the same were resolved. There are
no complaints pending for more than one month.
Changes in Auditors during the last three years and reasons thereof
There has been no change in the Auditors of the Company during the last three years.
Capitalisation of reserves or profits
The Company has issued 260000, 780000 & 2145000 Equity Shares by way of Bonus by capitalization of free reserves on 03.03.1990,
04.10.1991 & 11.09.1992 respectively. Except for the above, no shares were issued for consideration other than cash.
Revaluation of Assets
The Company has not revalued any of its assets since its incorporation.




                                                                  96
                                     SECTION VIII: OFFERING INFORMATION
1. TERMS OF THE ISSUE
The FCDs being issued & the Equity Share to be issued on conversion of the FCDs are subject to the terms of this Prospectus, the
application form & Memorandum & Articles of Association of the Company, the guidelines for listing of Securities issued by Government
of India and guidelines issued by the Securities and Exchange Board of India (SEBI) from time to time, the Depositories Act, 1996
and the provisions of the Companies Act, 1956.. The Debentures shall also be subject to such other terms & conditions as may be
contained in the Debenture Trust Deed, Debenture/share/Debenture cum share Certificates/Letter of Allotment or any other deed or
document to be executed by the Company and the Trustees for the Debenture Holders, other relevant documents/certificates and laws
as applicable and the guidelines for listing of securities issued from time to time by SEBI or any other authority.
In addition, the Equity Shares shall also be subject to such other terms and conditions as may be incorporated in the Letter of Allotment,
Share Certificates, as per guidelines, notifications and other regulations for the issue of the capital and listing of securities laid down
from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the
Equity Shares.
Ranking of Equity Shares
The Equity shares of Rs. 10/- each which will be issued upon conversion of Debentures as aforesaid shall rank pari passu in all
respects with the existing paid up Equity Shares of the Company except that they shall rank, for dividend, pro-rata from the date
of conversion on the amount paid up and will be subject to the provisions of the Act and the Memorandum and Articles of Association
of the Company.
Mode of payment of dividend
The dividend is paid in cash only.
Principal Terms of Debentures
1. Face Value and Issue Price
Each FCD will have a face value of Rs.105/- and the Issue price is one time of the face value. Each FCD shall consist of two
parts:
Part A : Convertible portion of Rs.35/-
Part B : Convertible portion of Rs.70/-
Terms of Payment
The application must be for a minimum 50 Debenture or in multiples of 50 thereafter. The amount is payable as under:
On application                 :         Rs.40/- per FCD
On allotment                   :         Rs.65/- per FCD
Total                                    Rs.105/- per FCD
To be apportioned towards,

                                      Part A (Rs.) (Convertible)         Part B (Rs.) (Convertible)                 Total (Rs.)
On Application                                    35                                 5                                  40
On Allotment                                       —                                 65                                  65
Total                                             35                                 70                                 105
2. Terms of Conversion
a)      Part A of Rs.35/- of each FCD will be compulsorily and automatically converted into 1 equity share of Rs. 10/- fully paid up at
        a premium of Rs.25/- on allotment without further act or application on the part of the Debenture holders.
b)      Part B of Rs.70/- of each FCD would be converted into two Equity share of Rs.10/- each fully paid up at a premium of Rs.25/
        - each on completion of three months at any time from the date of allotment of the Debentures at the discretion of the Board
        of Directors but within the period of 6 months from the date of allotment.
Upon conversion of Part A and/or Part B of the FCD as aforesaid the face value of the FCD will stand reduced proportionately
and the Convertible portion of the FCD shall be deemed to have been redeemed to the extent of Part A and/or Part B on the
date of conversion. The Debenture holder shall be deemed by the terms of the Debenture to have authorised the Company to
enter his/her name in the Register of Members of the shares allotted on conversion. The shares so allotted shall be subject to
the provisions of the Articles of Association of the Company.
Agents and Trustees for the Debenture holders:
Western India Trustee & Executor Company Limited, 161/C, 16th Floor, Mittal Court, Nariman Point, Mumbai – 400 021 has agreed
to act as the trustees for the Debenture holders (hereinafter referred to as the ‘Trustees”). The Debenture holders shall without
any further act or deed be deemed to have irrevocably given their consent to and authorised the Trustees or any of their agents
appointed by the said Trustees of authorised officials to do, interalia, all acts, deeds, matters and things in respect of or relating
to the security to be created for securing the Debentures, including the right to exclude, substitute or restore any property charged
in their favour and/ or to create a charge on additional properties in their favour including the right to substitute relevant title deeds
in respect thereof. All rights and remedies under the Debenture Trust Deed(s) and for other security documents shall vest in and
be exercised by the said Trustees without any further reference to the debenture holders.



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Security
The Debentures issued in terms of this offer documents being unsecured, zero interest, fully convertible, no security is required to
be created in favour of the Trustees.
Listing
In principle approvals of BSE & NSE have been received whereat these FCDs and the new Equity Shares arising on conversion are
to be listed.
Rights of Debenture holders
(a)   The Debentures shall be transferable and transmittable in the same manner and to the same extent and be subject to the same
      restrictions and limitations as in the case of equity shares of the Company. The provisions in relation to transfer and transmission
      of equity shares of the Company as contained in the Articles, shall also apply mutates mutandis to the Debentures.
(b)   The Debentures shall not confer upon the holders thereof a right to receive notices or to attend and/or vote at General Meeting
      of the shareholders of the Company either in person or by proxy or to receive Annual Reports of the Company.
(c)   A Register of the holders of the Debentures( hereinafter referred to as the ‘ Register of Debentures’) will be maintained in
      accordance with Section 152 of the Act and all interest and principal sums becoming due and payable will be paid to the
      registered holders for the time being or in the case of joint holders, to the person whose name stands first in the register
      of Debenture holders.
(d)   The registered holder of the Debentures and in the case of joint holders, the one whose name stands first in the register
      of Debenture holders, shall be entitled to vote in respect of such Debentures, either in person or by proxy at any meeting
      of the holders of Debentures.
(e)   The provisions contained in Annexure ‘C’ and/or ‘D’ to the Companies (Central Government) Rules & Forms 1956 as in force
      for the time being shall apply to the meetings of the debenture holders. Each debenture holders shall, on voting by a show
      of hands be entitled to one vote only and on a poll shall be entitled to one vote per Debenture held by him.
(f)   The rights of Debenture holders in respect of Debentures now offered and then outstanding may be modified or varied of
      abrogated by a Special Resolution passed at a meeting of Debenture holders provided, however, that nothing in such a Resolution
      that is not acceptable to the Company shall be operative against the Company.
(g)   The holders of the Debentures will not be entitled to any other rights and/or privileges available to the shareholders of the
      Company except to the extent of the equity shares that will be allotted to the Debenture holders on conversion.
(h)   The Debenture shall be subject to such other terms and conditions as may be incorporated in the Debenture Certificates that
      will be issued.
(i)   The Debenture holders will be entitled to their Debentures free from equities or cross claims, by the Company against the
      original or any intermediate holders thereof.
Rights of the Equity Shareholders
a)    To receive dividend, if declared.
b)    To attend general meeting and exercise voting rights unless prohibited by law.
c)    To vote either personally or by proxy.
d)    To receive offer for rights shares and be allotted bonus shares.
e)    To receive surplus on liquidation.
f)    Such other rights, as may be available to a shareholder of a Public Limited Company under the Companies Act, 1956.
Market Lot
In terms of Section 68B of the Act, the FCDs and the Equity Shares of the Company arising on conversion of FCDs, shall only
be in dematerialized form. In terms of existing SEBI Guidelines, the trading in the FCDs and Equity Shares of the Company shall
only be in dematerialized form for all investors.
Since trading of FCD and Equity Shares of the Company is in dematerialized mode, the tradable lot is one Equity Share. For the
purpose of basis of allotment, the market lot is assumed as 50 FCDs.
Nomination facility to investor
In accordance with Section 109A of the Act, the sole or first Applicant, along with other joint Applicants, may nominate any one
person in whom, in the event of death of sole Applicant or in case of joint Applicants, death of all the Applicants, as the case may
be, the Debentures or Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Debentures or Equity
Shares by reason of death of the original holder(s), shall in accordance with Section 109A of the Act, be entitled to the same advantages
to which he or she would be entitled if he or she were the registered holder of the Debentures or Equity Shares. Where the nominee
is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Debentures
or Equity Shares in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale of Debentures
or Equity Shares by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh
nomination can be made only on the Prescribed Form available on request at the Registered Office of the Company or at the
Registrar and Transfer Agents of the Company. In accordance with Section 109B of the Act, any person who becomes a nominee



                                                                    98
by virtue of the provisions of Section 109A of the Act, shall upon the production of such evidence as may be required by the Board,
elect either:
a.   To register himself or herself as the holder of the Debentures or Equity Shares; or
b.   To make such transfer of the Debentures or Equity Shares, as the deceased holder could have made.
Further, the Board may, at any time, give notice requiring any nominee to choose either to be registered himself or herself or to
transfer the Debentures or Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may
thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Debentures or Equity Shares,
until the requirements of the notice have been complied with.
Minimum subscription
If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or
if the subscription level falls below 90% after the closure of the issue on account of cheques having been returned unpaid or withdrawal
of applications, the Company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after
the Company becomes liable to pay the amount, the Company shall pay interest as per Section 73 of the Companies Act, 1956.
Minimum and maximum application size
Applications should be for minimum of 50 FCDs and in multiples of 50 thereafter. An applicant in the net public category cannot
make an application for that number of FCDs exceeding the number of FCDs offered to the public.
Interest on excess application money
Payment of interest at rate of 15% per annum on the excess application money, after adjusting the amount due on allotment will
be made to the applicants, if the refund orders are not dispatched within 30 days from the date of closure of the subscription list.
Proportionate allotment procedure
Allotment shall be on proportionate basis within the specified categories, rounded off to the nearest integer subject to a minimum
allotment being equal to the minimum application size i.e. 50 FCDs.
Reservation for Retail Individual Investor
The above proportionate allotments of FCDs in an Issue that is oversubscribed shall be subject to the reservation for Retail individual
investors as described below:
a)   A minimum 50% of the net offer of FCDs to the public shall initially be made available for allotment to retail individual investors,
     as the case may be.
b)   The balance net offer of FCDs to the public shall be made available for allotment to:
     i) Individual applicants other than retail individual investors, and;
     ii) Other investors including corporate bodies/ institutions irrespective of the number of shares, debentures, etc. applied for.
c)   The unsubscribed portion of the net offer to any one of the categories specified in (a) or (b) shall / may be made available
     for allotment to applicants in the other category, if so required.
The drawal of lots (where required) to finalize the basis of allotment, shall be done in the presence of a public representative on
the Governing Board of BSE (designated stock exchange).
The basis of allotment shall be signed as correct by the Executive Director/Managing Director of BSE (designated stock exchange)
and the public representative in addition to the Lead Manager and the Registrar to the Issue.
Arrangement for disposal of odd lots
The Company has not made any arrangements for disposal of odd lot shares arising out of this issue as the tradable lot is ONE.
Restrictions, if any, on transfer and transmission of shares/debentures and on their consolidation/ splitting
a)   Subject to the provisions of Section 111 of the Act or any statutory modification of the said provisions for the time being in
     force, the directors may decline to register or acknowledge any transfer of shares and in which the company has lien upon
     the shares or any of them or whilst any money in respect of the shares desired be transferred, or any of them remain unpaid
     or unless the transfer is approved by the directors and such refusal shall not be affected by, the fact that the proposed transferee
     is already a member. The Registration of the transfer shall be conclusive evidence of the approval of the directors for transfer,
     registration of transfer shall not be refused on the ground of the transfer being either alone or jointly with any such other
     person or persons indebted to the company on any account whatsoever except lien on shares.
b)   No transfer shall be made to a minor infant or person of unsound mind without the consent of the Board.
c)   There is no restriction on consolidation and splitting.
2.   Issue Procedure
Availability of Application Forms & Prospectus
The Memorandum, Form 2A containing the salient features of the Prospectus together with Application Forms and copies of the
Prospectus may be obtained from the Registered Office and Corporate Office of the Company, Lead Manager to the Issue, Registrar
to the Issue and at the collection centers of the Bankers to the Issue, as mentioned on the Application Form.
Option to subscribe
Except as otherwise stated in this Prospectus, the Company has not entered into, nor does it at present propose to enter into
any contract or arrangements whereby any option or preferential right of any kind has been, or is proposed to be, given to any
person to subscribe for any shares of the Company.


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The Investor shall have an option either to receive the security certificate or to hold the securities in dematerialized
form with the depository.
Application may be made by
a)   Indian nationals resident of India who are adult individuals in single name or joint names (not more than three)
b)   Hindu Undivided Families through the Karta of the Hindu Undivided Family
c)   Companies, Bodies Corporate and Societies registered under the applicable laws in India and authorised to invest in the Shares.
d)   Indian Mutual Funds registered with SEBI.
e)   Indian Financial Institutions and Banks.
f)   Venture Capital Funds / Foreign Venture Capital investors registered with SEBI.
g)   State Industrial Development Corporation.
h)   Insurance Companies registered with Insurance Regulatory and Development Authority;
i)   Provident Funds with minimum corpus of Rs.25 Crore;
j)   Pension Funds with minimum corpus of Rs.25 Crore;
k)   Trusts that are registered under the Societies Registration Act, 1860 or any other trust law and are authorised under its constitution
     to hold and invest in shares.
l)   Commercial Banks and Regional Rural Banks. Co-operative Banks may also apply subject to permission from the Reserve
     Bank of India.
m)   Non-Resident Indians (NRIs) on repatriable/ non-repatriable basis.
n)   Foreign Institutional Investors (FIIs) on repatriation / non-repatriation basis.
o)   Foreign Nationals and Foreign Companies.
Applications cannot be made by
a)   Minors
b)   Partnership firms or their nominees
c)   Overseas Corporate Bodies
Applications by Hindu Undivided Families (HUF)
Applications may be made by Hindu Undivided Families (HUF) through the Karta of the (HUF) and will be treated at par with individual
applications.
Subscription by NRIs/ FIIs
There is no reservation and separate application form for NRIs and FIIs and all NRI and FII applicants will be treated on the same
basis with other categories for the purpose of allotment.
A.   General instructions
1.   Application must be made in the prescribed Application Form and completed in Full in BLOCK LETTERS in English as per
     the instructions contained herein and in the Application Form and are liable to be rejected if not so made.
2.   The application for FCDs should be for a minimum of 50 FCDs and in multiples of 50 shares thereafter. An applicant in the
     public category can make an application only for a maximum of FCDs that are offered to the public.
3.   Thumb impressions and signatures other than in English/ Hindi or any other language specified in the 8th Schedule to the
     Constitution of India, must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his/ her
     official seal.
4.   Bank Account Details of Applicant:
     The name of the Applicant, Depository Participant’s name, Depository Participant’s Identification (DPID) number and the
     Beneficiary number provided by the Depository participant must be correctly mentioned in the Application Form at the appropriate
     place. The Registrars will obtain the Demographic details such as Address, Bank account details and occupation from the
     depository participants. The refunds, if any, will be printed with the Bank details as given by the Depository participant.
5.   Applications under Power of Attorney:
     In case of applications under Powers of Attorney or by Companies, Bodies Corporate, Societies registered under the applicable
     laws, trustees of Trusts, Provident Funds, Superannuation Funds, Gratuity Funds, a certified copy of the Power of Attorney
     or the relevant authority, as the Case may be, must be lodged separately at the office of the Registrars to the Issue simultaneously
     with the submission of the Application Form, indicating the serial number of the Application Form and the name of the Bank
     and the branch office where the application is submitted.
     The Company in its absolute discretion reserves the right to relax the above condition of simultaneous lodging of the Power
     of Attorney along with the Application Form subject to such terms and conditions as it may deem fit.
6.   PAN/ GIR Number
     Where an application is for a total value of Rs.1,00,000 or more, the Applicant or in Case of applications in joint names, each
     of the Applicants should mention his/ her/ their Permanent Account number (PAN) allotted under Income Tax Act, 1961 or
     where the same has not been allotted, the GIR Number and the IT Circle/ Ward/ District should be mentioned. In Case where
     neither the PAN nor the GIR Number has been allotted, or the applicant is not assessed to Income Tax, the appropriate box


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     provided for the purpose in the Application Form must be ticked. Applications without this will be considered incomplete and are
     liable to be rejected.
7.   Joint Applications in the case of individuals
     Applications can be in single or joint names (not more than three). In the case of joint applications, all payments will be made
     out in favour of the first applicant. All communications will be addressed to the first named Applicant whose name appears
     in the Application Form at the address mentioned therein.
8.   Applications may be made by Hindu Undivided Families (HUF) through the Karta of the HUF and will be treated at par with individual
     applications.
9.   Multiple Applications
     An Applicant should submit only one Application Form (and not more than one) for the total number of Equity Shares applied
     for. Two or more applications in single or joint names will be deemed to be multiple applications if the sole and/ or first Applicant
     is one and the same.
     In case of application by Mutual Funds, a separate application can be made in respect of each scheme of an Indian Mutual
     Fund registered with SEBI and such applications will not be treated as multiple applications provided that the application made
     by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application
     has been made.
     The Company reserves the right to accept or reject, in its absolute discretion, any or all multiple applications. A separate single
     Cheque/draft must accompany each Application Form.
10. Stock invest
     Investors will not have the facility of applying through Stockinvest instrument, as RBI has withdrawn the Stockinvest scheme
     vide notification No.DBOD.NO.FSC.BC.42/ 24.47.001/2003-04 dated 5.11.2003.
11. Depository Option to Investors
     In terms of Section 68B of the Companies Act, the FCDs and the Equity Shares arising on the conversion thereof shall be
     allotted only in dematerialised form. (i.e. not in the form of physical certificates but be fungible and be represented by the
     statement issued through electronic mode).
     The ISIN No of the Equity Share of the Company is: INE 314C01013.
     New ISIN for the FCD is :
     Applications from any investor without the following details of his or her depository account are liable to be rejected:
•    An applicant applying for FCDs must have at least one beneficiary account either of the depository participants of NSDL or
     CDSL prior to making the Application.
•    The applicant must necessarily fill in the details (including the beneficiary account number and depository participants identification
     number) appearing in the application form.
•    FCDs allotted to applicant will be credited in electronic form directly to the beneficiary account (with the depository participant)
     of the applicant.
•    Names in the application form should be identical to those appearing in the account details in the depository. In case of joint
     holders, the names should necessarily be in the same sequence as they appear in the depository account of the applicants(s).
•    If incomplete or incorrect details are given under the heading ‘Applicant Depository Account Details’ in the Application Form
     it is liable to be rejected.
•    The applicant is responsible for the correctness of his or her demographic details given in the application form vis-à-vis those
     with his or her depository participant.
•    It may be noted that FCDs and the Equity Shares in electronic form can be traded only on stock exchanges having electronic
     connectivity with NSDL or CDSL. All the stock exchanges where the equity shares are proposed to be listed are connected
     to NSDL and CDSL.
•    The trading of FCDs and the Equity Shares would be in dematerialised form only for all investors.
Note:
a)   Applicants are requested to write their names and the serial number of the Application Form on the reverse of the instruments,
     by which the payments are being made to avoid misuse of instruments submitted along with the applications for FCDs.
b)   Investors may contact the compliance officer in case of any pre-issue/post issue related problems such as non-receipt of
     letters of allotment/share certificates/refund orders, etc.
B.   Payment Instructions
1.   Payment shall be made only by way of cash or Cheque/ demand draft (money/ postal orders will not be accepted) drawn
     on any Bank, including a Co-operative Bank, which is situated at and is a member or sub-member of the Banker’s clearing-
     house located at the place where the Application Form is submitted, i.e. at designated collection centers.
2.   Outstation cheques / demand drafts drawn on Banks not participating in the clearing process will not be accepted.


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3.   All cheques/ demand drafts accompanying the Application Form should be payable in the name of “STIL-Public Issue” in case
     of resident Indians and “STIL - Public Issue - NR” in case of NRI investors and crossed “A/C payee only”.
4.   If the amount payable on application is Rs. 20,000 or more, such payment must be effected only by way of an account payee
     Cheque/ or Bank Draft in terms of section 269SS of the Income-Tax Act, 1961. Otherwise the applications may be rejected
     and application money refunded without any interest.
Specific Instructions for Applications by NRIs/FIIs (on Repatriable Basis)
1.   As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under automatic route
     of Reserve Bank, the Company is not required to make an application for Issue of Equity Shares or Convertible Debentures
     to NRIs/FIIs with repatriation benefits.
2.   However, the allotment / transfer of the Equity Shares or Convertible Debentures to NRIs/FIIs shall be subject to prevailing
     RBI Guidelines. Sale proceeds of such investments in Equity Shares or Convertible Debentures will be allowed to be repatriated
     along with the income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and
     any other applicable laws.
3.   In case of application by NRIs on repatriation basis, the payments must be made through Indian rupee drafts purchased abroad
     or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds
     held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks
     authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will
     not be accepted out of Non-Resident Ordinary (NRO) Account of Non-Resident Subscribers applying on a repatriation basis.
     Payment by bank drafts should be accompanied by bank certificate confirming that the bank draft has been issued by debiting
     to NRE or FCNR account.
4.   In case of application by FIIs on repatriation basis, the payment should be made out of funds held in Special Non-Resident
     Rupee Account along with documentary evidence in support of the remittance like certificates such as FIRC, bank certificate
     etc. from the authorised dealer. Payment by bank drafts should be accompanied by bank certificate confirming that the bank
     draft has been issued by debiting to Special Non-Resident Rupee Account.
5.   Duly filled Application Forms by NRIs / FIIs will be accepted at designated branches of the Bankers to the Issue at Mumbai
     and New Delhi only.
6.   Refunds/dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges / commission.
     In case of applicants who remit their application money from funds held in NRE / FCNR accounts, such payments shall be
     credited to their respective NRE / FCNR accounts (details of which shall be furnished in the space provided for this purpose
     in the Application Form), under intimation to them. In case of applicants who remit their money through Indian Rupee Drafts
     from abroad, such payments in Indian Rupees will be converted into U.S. Dollars or any other freely convertible currency
     as maybe permitted by RBI at the exchange rate prevailing at the time of remittance and will be dispatched by registered
     post, or if the applicants so desire, will be credited to their NRE / FCNR accounts, details of which are to be furnished in
     the space provided for this purpose in the Application Form. The Company will not be responsible for loss, if any, incurred
     by the applicant on account of conversion of Foreign Currency into Indian Rupees and vice versa.
7.   Applications in this category may please note that only such applications as are accompanied by payment in free foreign
     exchange shall be considered for allotment under the reserved category. The NRIs who intend to make payment through Non-
     Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the forms meant for reserved
     category.
Applications by Indian Mutual Funds & Indian and Multilateral Development Financial Institutions
1.   A separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such
     applications will not be treated as multiple applications. The applications made by the asset Management Company or Trustees
     / Custodians of a Mutual Fund shall clearly indicate the name of the concerned scheme for which application is being made.
2.   Indian Mutual Funds & Indian and Multilateral Development Financial Institutions should apply in this Public Issue based upon
     their own investment limits and approvals.
3.   Application forms together with cheques or bank drafts drawn in Indian Rupees for the full amount payable must be delivered
     before the close of subscription list to such branches of the Bankers to the Issue at places mentioned in the application form.
4.   A separate cheque / bank draft must accompany each application form.
For further instructions regarding applications for the FCDs, investors are requested to read the application form carefully.
APPLICATION WILL NOT BE ACCEPTED BY THE LEAD MANAGER(S) OR REGISTRAR TO THE ISSUE.
GROUNDS FOR TECHNICAL REJECTIONS
Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:-
a.   Bank Account details are not provided.
b.   Age is not mentioned.
c.   Application by minors.
d.   PAN or GIR numbers is not given if the value of the application is for Rs.1,00,000/- or more.
e.   Multiple applications.
f.   Incase of under power of attorney or by limited companies, corporate, trust, etc. relevant documents are not submitted.
g.   Applications accompanied by stock invest.


                                                                102
h.   Applications by OCBs.
i.   Applications not duly signed by the sole/joint applicants.
j.   Application forms do not have the applicant depository account details.
k.   Application for less than 50 FCDs or not in multiples of 50 FCDs thereafter.
Submission of completed Application Forms
All applications duly completed and accompanied by cash/ cheques/ demand drafts shall be submitted at any of the branches of the
Bankers to the Issue (listed in the Application Form) before the closure of the Issue.
Applications should not be sent to the Company or the Lead Managers to the Issue.
Application Forms along with Bank drafts payable at Ahmedabad can also be sent by registered post with acknowledgement due
to the Registrars to the Issue, Pinnacle Share Registry Private Limited so that the same can be received before the closure of the
subscription list. The envelopes should be superscribed with the words “STIL- Public Issue”.
No separate receipts will be issued for the application money. However, the Bankers to the Issue or their approved collecting branches
receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant
the acknowledgement slip at the bottom of each Application Form.
Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their
designated branches or on receipt by the Registrars as detailed above and not otherwise.
For further instructions, please read the Application Form carefully.
Acceptance of Applications
The Company reserves the right to accept or reject, any application, in whole or in part, without assigning any reason thereof.
If the application is rejected in full, the whole of the application money received will be refunded by Registered Post to the applicant.
If the Application Form is accepted in part, the excess application money will be refunded to the Applicant. Such refund, if any,
will carry interest @ 15% p.a. after 30 days from the closure of the Issue for the period of delay beyond 30 days.
Disposal of Application and Application Money
No receipt will be issued for application money. However, the Bankers to the issue receiving the application will acknowledge the
receipt of the application by stamping and returning the detachable acknowledgment slip appended to each application.
The sum received in respect of the issue will be kept in separate bank accounts and the Company will not have any access to
the funds unless approval of the Bomaby Stock Exchange Ltd., is obtained for the basis of allotment and listing approval from
the Stock Exchanges where listing is proposed.
The Company reserves the full unqualified and absolute right to accept or reject any application in whole or part and in either case
without assigning any reason thereof.
Impersonation
Attention of applicants is specifically drawn to sub-section (1) of Section 68-A of the Act, which is reproduced below:
“Any person who
1.   Makes in a fictitious name, an application to a Company for acquiring, or subscribing for, any shares therein, or
2.   Otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other person in a
     fictitious name, shall be punishable with imprisonment for a term which may extend to five years” as applicable under
     the provisions of law.
Basis of Allotment
For Net offer to the Public portion
In the event of public Issue of Equity Shares being over-subscribed, the allotment will be on a proportionate basis subject to minimum
allotment being equal to the minimum application size, i.e. 50 FCDs as explained below:
1.   A minimum 50% of the net Issue to the Indian public will be made available for allotment in favour of those individual applicants
     who have applied for Equity Shares of or for a value of not more than Rs.1,00,000/-. This percentage may be increased in
     consultation with the Designated Stock Exchange depending on the extent of response to the Issue from investors in this
     category. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, the
     balance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant
     SEBI Guidelines. The Executive Director/ Managing Director of the Designated Stock Exchange along with the Lead Manager
     and the Registrars to the Issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper
     manner in accordance with the SEBI Guidelines.
2.   The balance of the net Issue to Indian public shall be made available to investors including Corporate Bodies/ Institutions
     and individual Applicants who have applied for allotment of FCDs for a value of more than Rs.1,00,000/-.
3.   The Unsubscribed portion of the net Issue to any of the categories specified in (1) or (2) shall be made available for allotment
     to Applicants in the other category, if so required.
4.   Applicants will be categorized according to the number of FCDs applied for.
5.   The total number of FCDs to be allotted to each category as a whole shall be arrived at on a proportionate basis i.e. the
     total number of FCDs applied for in that category (number of applicants in the category multiplied by the number of FCDs
     applied for) multiplied by the inverse of the over subscription ratio.



                                                                  103
6.    Number of the FCDs to be allotted to the successful allottees shall be arrived at on a proportionate basis i.e. total number of
      FCDs applied for by each Applicant in that category multiplied by the inverse of the over subscription ratio.
7.    All the Application Forms where the proportionate allotment works out to less than 50 FCDs per Applicant, the allotment shall
      be made as follows:
      a.   Each successful Applicant shall be allotted a minimum of 50 FCDs; and
      b.   The successful Applicants out of the total Applicants for that category shall be determined by draw of lots in such a
           manner that the total number of FCDs allotted in that category is equal to the number of FCDs worked out as per (6)
           above.
8.    If the proportionate allotment to an Applicant works out to a number that is more than 50 but is a fraction, then the fraction
      equal to or higher than 0.50 shall be rounded off to the next integer and if that fraction is lower than 0.50, the fraction shall
      be ignored.
9.    All Applicants in such categories shall be allotted FCDs arrived at after such rounding off.
10. If the FCDs allocated on a proportionate basis to any category is more than the FCDs allotted to the Applicants in that category,
    the balance available FCDs for allotment shall be first adjusted against any other category, where the allocated FCDs are
    not sufficient for proportionate allotment to the successful Applicants in that category.
11.   The balance FCDs, if any, remaining after such adjustment shall be added to the category comprising applicants applying
      for minimum number of FCDs.
12. The process of rounding off to the nearest integer subject to a minimum allotment being equal to 50, which is the minimum
    application size in this Issue, may result in the actual allotment being higher than the FCDs offered. However, it shall not
    exceed 10 % of the net offer to public.
Allotment/Refund Orders
Allotment Letter(s) and/or Letter of Regret as the case may be together with refund cheques / pay order shall be dispatched by
registered post (refund cheques / pay order of value upto Rs. 1500/- by ordinary post under postal certificate) at the sole/first named
applicant address within 10 weeks from the date of closing of the subscription list. If such money is not repaid within 8th day from
the day the company becomes liable to pay. The Company and every Director of the Company who is an officer in default shall
on and from the expiry of the 8th day be jointly and severally liable to repay that money with interest @ 15% per annum. In case
of joint applications, Refund Orders, if any, will be made out in the First applicant’s name and all communication will be addressed
to the person whose name appears on the Application form.
The Company, as far as possible, will allot the FCDs within 30 days from closure of the subscription list and pay interest at the
rate of 15% p.a. (except to applicants through Stock invests), if the allotment is not made and the refund orders are not dispatched
to the investors within 30 days from closure of the issue period for delay beyond 30 days. However, applications received after
the closure of issue in fulfillment of underwriting obligations to meet the minimum subscription requirement shall not be entitled
for the said interest.
The Company will also make available adequate funds to the Registrars to the Issue for the purpose of dispatch of Allotment letters/
Debenture Certificates/Refund Orders as stated above.
Where the permission have been sought for dealing and listing of FCDs in the stock exchange(s) referred to above, if such permission
has not been granted by the stock exchange(s) within 70 days from the date of closure of the subscription list or where such permission
is refused before the expiry of 78 days from the date of subscription list, then the Company shall forthwith repay without interest
all money received from applicants in pursuance of the Offer Document, and if any such money is not repaid within eight days
after the company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the date of closure of subscription
list, whichever is earlier), the company and every director of the company who is an officer in default shall, on and from the expiry
of eight days, be jointly and severally liable to repay that money with interest for the delayed period @ 15% per annum, if however,
an appeal against the decision of any recognized stock exchange(s) refusing permission for the FCDs to be dealt on that stock
exchange has been preferred under section 22 of the Securities Contract (Regulation) act, any allotment made under this Offer
Document shall not be void until the appeal is dismissed.
Refunds will be made by cheques or pay orders drawn on the bank(s) appointed by the company as refund banker. Such instruments
will be payable at par at the places where applications are accepted. Bank charges, if any, for encashing such cheques or pay
orders will be payable by the applicant
Application u/s 269 SS of the Income Tax Act, 1961
In respect of the provisions of section 269SS of the Income Tax act, 1961,the subscription against the FCDs or Equity Shares
should be effected only by an account payee cheques or an account payee draft, if the amount payable is Rs. 20000/- or more.
In case the payment is made in contravention of this provision, the application money will be refunded and no interest will be paid.
Issue of Debenture Certificates
In case the Company issues Letters of Allotment, the related Debenture certificates will be dispatched through registered post within
two (2) months from the date of allotment in exchange of the Letters of Allotment.
Denomination of Share Certificates
As the trading of the Company’s FCDs and Equity Shares will be undertaken in dematerialized form only, the Company shall Issue
the FCDs to all applicants who provide their demat account details in dematerialized form only. However, an investor will have
an option to hold the FCDs in physical form or demat form. The Registrar to the Issue will issue to the said allottee a single certificate
for all the FCDs allotted to the said applicant in case an investor requests for rematerialisation of his/ her FCDs.


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Despatch of Refund Orders
The Company shall ensure despatch of Refund Orders of value up to Rs.1500/- Under Certificate of Posting and refund order over
the value of Rs.1500/- by Registered Post only. The Company would also make available adequate funds to the Registrars to the
Issue for this purpose.
Interest In Case of Delay on Allotment/Dispatch
The Company agrees that
a.     As far as possible, allotment of securities offered to the public shall be made within 30 days of the closure of the public issue.
b.     It shall pay interest @ 15% per annum if the allotment has not been made and the allotment letters/refund orders have not
       been dispatched to the investors within 30 days from the date of the closure of the issue.
Undertaking by the Company
The Company undertakes:
i)     that the complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and satisfactorily.
ii)    that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where
       the securities are to be listed are taken within seven working days of finalisation of basis of allotment.
iii)   that the issuer company shall apply in advance for the listing of equities on the conversion of debentures/ bonds.
iv)    that the funds required for despatch of refund orders/ allotment letters/ certificates by registered post shall be made available
       to the Registrar to the Issue by the issuer company.
v)     that the promoters’ contribution in full, wherever required, shall be brought in advance before the Issue opens for public subscription
       and the balance, if any, shall be brought in pro rata basis before the calls are made on public.
vi)    that the certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within specified time.
vii)   that no further issue of securities shall be made till the securities offered through this prospectus are listed or till the application
       moneys are refunded on account of non-listing, undersubscription, etc.
The Company further undertakes:
(i)    that the issuer company shall forward the details of utilisation of the funds raised through the debentures duly certified by
       the statutory auditors of the issuer company, to the debenture trustees at the end of each half year.
(ii)   that the issuer company shall disclose the complete name and address of the debenture trustee in the annual report.
(iii) that the issuer company shall provide a compliance certificate to the debenture holders (on yearly basis) in respect of compliance
      with the terms and conditions of issue of debentures as contained in the prospectus, duly certified by the debenture trustee.
(iv) that necessary cooperation with the credit rating agency (ies) shall be extended in providing true and adequate information
     till the debt obligations in respect of the instrument are outstanding.
Utilisation of Issue Proceeds
The Board certifies that –
a)     All monies received out of the Issue of Fully Convertible Debentures (FCDs) to the public shall be transferred to a separate
       Bank Account other than the Bank Account referred to in sub-section (3) of Section 73 of Act, 1956;
b)     Details of all monies utilized out of this Issue referred to in item (a) shall be disclosed under an appropriate separate head
       in the Balance Sheet of the Company indicating the purpose for which such monies had been utilized;
c)     Details of all unutilized monies out of this Issue of shares, if any referred to in item (a) shall be disclosed under an appropriate
       separate head in the balance sheet of the Company indicating the manner in which such unutilized monies have been invested;
d)     The utilization of monies received under Promoters’ contribution and public issue shall be disclosed under an appropriate
       head in the Balance Sheet of the Company indicating the purpose for which such monies have been utilized; and
e)     The details of all unutilized monies, out of the funds received under Promoters contribution and public issue, shall be disclosed
       under a separate head in the Balance Sheet of the Company indicating the manner in which such unutilized monies have
       been invested;




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SECTION IX – DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES
                           OF ASSOCIATION
Share Capital :-
The Authorised Share Capital of the Company is Rs. 50,00,00,000/- (Rupees Fifty Crores only) divided into 5,00,00,000 Equity
Shares of Rs.10/- (Rupees Ten Only ) each with power to increase and reduce the capital.
                                                               SHARES
3. Allotment of Shares
Subject to the provisions of these Articles and of Section 81 of the Act, the shares shall be under the control of the Directors who
may allot or otherwise dispose of the same to such persons on such terms and conditions, and at such times as the Directors
think fit. Provided that the option or right to call of shares shall not given to any person except with the sanction of the Company
in General Meeting.
4. Returns of Allotments
As regards all allotments made from time to time the Directors shall duly comply with Section 75 of the Act.
5. Commissions placing shares
The Company may, subject to compliance with the provisions of Section 76 of the Act, exercise the power of paying commission.
6. Brokerage
The Company may pay on the issue of shares or debentures such brokerage as may be lawful.
7. Shares at a discount
With the previous authority of the Company in General Meeting and the sanction of the Court and upon otherwise complying with
section 79 of the Act, the Directors may issue at a discount shares of a class already issued.
8. Redeemable Preference Shares
Subject to the provisions of Section 80 of the Act, the Company may issue Preference Shares, which are or at the option of the
Company are liable to be redeemed on such terms and in such manner as the Company may determine.
9. Installments on shares to be duly paid
If, by the conditions of allotment of any share, the whole or part of the amount or issue price thereof shall be payable by installments,
every such installment shall, when due, be paid to the Company by the person who for the time being shall be the member registered
in respect of the share or by his executor or administrator.
10. Liability of joint holders of shares
Members who are registered jointly in respect of a share shall be severally as well as jointly liable for the payment of all installments
and calls due in respect of such share.
12. Trusts not recognised
Save as herein otherwise provided, the Company shall be entitled to treat the member registered in respect of any share as the
absolute owner thereof and accordingly shall not, except as ordered by a Court of competent jurisdiction or as by statue required,
be bound to recognize any equitable or other claim to or interest in such share on the part of any other person.
                                                            CERTIFICATES
13. Certificates
The Certificate of title of shares and duplicates thereof when necessary shall be issued under the Seal of the Company in accordance
with the provisions of Section 84 of the Act and the Rules prescribed by the Central Government for the said purposes as in force
from time to time.
14. Members’ right to Certificates
Every member shall be entitled to one certificate for all the shares registered in his name, or if the Directors so approve, to several
Certificates each for one or more of such shares.
15. To which of the joint holders certificates to be issued
The Certificate of shares registered in the name of two or more persons shall be delivered to the person first named on the Register.
                                              DEMATERIALISATION OF SECURITIES
15A. For the purpose of this Article.
“Beneficial Owner” means a person or persons whose name is recorded as such with a Depository.
“SEBI” means the Securities and Exchange Board of India established under Securities and Exchange Board of India Act, 1992.
 “Depository” means a company formed and registered under the Companies Act,1956, and which has been granted a certificate
of registration to act as a as a depository under SEBI Act, 1992.
“Depositories Act” means the Depositories Act, 1996 or any statutory modification or re-enactment thereof;
“Registered Owner” means a Depository whose name is entered as such in the records of the Company;
“Security” means such security as may be specified by the SEBI from time to time.




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(2)   Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialize/rematerialize its securities
      and to offer securities in the dematerialized form pursuant to the Depositories Act and the Rules framed thereunder, if any.
(3)   Every person subscribing to Securities offered by the Company shall have the option to receive Security Certificates or to
      hold the Securities with a Depository. Such a person who is the beneficial owner of the securities can at any time opt out
      of a Depository, if permitted by law, in respect of any security in the manner provided by the Depositories Act, and the Company
      shall, in the manner and within the time prescribed, issue to the beneficial owner the required certificates or Securities. Where
      a person opts to hold his security with a Depository the Company shall intimate such Depository the details of allotment of
      the security, and on receipt of such information, the Depository shall enter in its record the name of the allottee as the beneficial
      owner of the security.
(4)   All securities held by a Depository shall be dematerialized and shall be in fungible form. No Certificate shall be issued for
      the securities held by the Depository. Nothing contained in Section 153, 153A, 153B, 187B, 187C, and 372 of the Companies
      Act, 1956 shall apply to a depository in respect of the Securities held by it on behalf of the beneficial owners.
(5)   Nothing contained in Section 108 of the Companies Act, 1956 or these Articles shall apply to a transfer of securities effected
      by a transferor and transferee, both of whom are entered as beneficial owners in the records of a Depository.
(6)   Notwithstanding anything contained in the Act of these Articles, where the securities are dealt with in or by a Depository, the
      Company shall intimate the details of allotment of relevant securities to the Depository immediately on allotment of such securities.
(7)   Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for Securities issued by
      the Company shall apply to Securities held with a Depository.
(8)   The Register and index of Beneficial Owners maintained by a Depository under the Depositories Act shall be deemed to be
      the Register and Index of members and other security holders for the purposes of these Articles.
(9)   (a)   Notwithstanding anything to the Contrary contained in the Companies Act, 1956 or these Articles, a Depository shall be
            deemed to be the registered owner for the purpose of effecting transfer of ownership of security on behalf of the beneficial
            owner.
      (b)   Save as otherwise provided in (a) above, the Depository as the registered owner of the Securities shall not have any
            voting rights or any other rights in respect of the securities held by it.
      (c)   Every person holding Securities of the Company and whose name is entered as the beneficial owner in the records
            of the Depository shall be deemed to be a member of the Company. The beneficial owner of securities shall be entitled
            to all the rights and benefits and be subject to all liabilities in respect of their securities, which are held in or by the
            Depository.
(10) Notwithstanding anything contained in the Act or these Articles to the contrary, where Securities are held in a Depository,
     the records of the beneficial ownership may be served by such Depository on the company by means of electronic mode
     or by delivery of floppies of discs.
            Resolution passed at the Annual General Meeting held on September 26, 2000.
                                                                 CALLS
16. Calls
The Directors may, from time to time, subject to the terms on which any shares may have been issued and subject to Section
91 of the Act, make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them
respectively, and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount
of every call so made on him to the person and at the time and place appointed by the Directors. A call may be made payable
by installments, and shall be deemed to have been made at the time when the resolution of the Directors authorizing such call
was passed.
17. Restriction on power to make calls and notices
No call shall be made payable within one month after the last preceding call was payable. Not less than fourteen days notice of
any call shall be given specifying the time and place of payment and to whom such call shall be paid.
18. When interest on call or installment payable
If the sum payable in respect of any call or installment be not paid on or before the day appointed for payment thereof, the holder
for the time being of the share in respect of which the call shall have been made or the installment shall be due shall pay interest
for same at the rate of 12 percent per annum from the day appointed for the payment thereof to the time of the actual payment
or at such other rate as the Directors may determine. The Directors shall be at liberty to waive payment of any such interest wholly
or in part.
19. Amount payable at fixed times or installments payable as calls
If by the terms of issue or any share or otherwise any amount is made payable at any fixed time or by installments at fixed times,
whether on account of the amount of the share or by way of premium, every such amount or installment shall be payable as if
it were a call duly made by the Directors and of which due notice had been given, and all the provision herein contained in respect
of calls shall relate to such amount of installment accordingly.
20. Evidence in actions by Company against shareholders
On the trial or hearing of any action or suit brought by the Company against any shareholder or his representatives to recover
any debt or money claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of
the defendant is or was, when the claim arose, on the Register or share-holders of the Company as a holder, or one of the holders,
of the shares in respect of which such claim is made, and that the amount claimed is not entered as paid in the books of the


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Company and it shall not necessary to prove the appointment of the Directors who made any call, or nor that a quorum of Directors
was present at the meeting at which any call was made nor that the meeting at which any call was made duly convened or constituted
nor any matter whatsoever, but the proof of matters aforesaid shall be conclusive evidence of the debt.
21. Payment of calls in advance
The Directors may, if they think fit, receive from any member willing to advance the same, all or any part of the money due upon
the shares held by him beyond the sums actually called for, and upon the money so paid in advance, or so much thereof as from
time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the
company may pay interest at such rate as the Directors think fit. Money so paid in excess of the amount of calls shall not in respect
thereof confer a right to dividend or to participate in the profits of the Company. The Directors may at any time repay the amount
so advanced upon giving to such member not less than three months notice in writing.
22. Revocation of calls
A call may be revoked or postponed at the discretion of the Directors.
                                                      FORFEITURE AND LIEN
23. If call or installment not paid notice may be given
If any member fails to pay any call or installment of a call on or before the day appointed for the payment of the same, the Directors
may at any time thereafter during such time as the call or installment remains unpaid, serve a notice on such member requiring
him to pay the same, together with any interest that may have accrued and expenses that may have been incurred by the Company
by reasons of such non-payment.
24. Form of Notice
The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and at which
such call or installment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event
of non-payment on or before the time, and at the place appointed, the shares in respect of which such call was made or installment
is payable will be liable to be forfeited.
25. If notice not complied with share may be forfeited
If the requisitions of any such notice as aforesaid be not complied with, any shares in respect of which such notice has been given,
may at any time thereafter before payment of all calls or installments, interest and expenses, due in respect thereof be forfeited
by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares
and not actually paid before the forfeiture.
26. Notice after forfeiture
When any share shall have been so forfeited, notice of the resolution shall be given to the member in whose name it stood immediately
prior to the forfeiture and an entry of the forfeiture with the date thereof shall forthwith be made in the Register but no forfeiture
shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.
27. Forfeited share to become property of the company
Any share so forfeited shall be deemed to be the property of the Company and the Directors may sell, re-allot or otherwise dispose
of the same in such manner as they think fit.
28. Power to annul forfeiture
the Directors may, at any time before any share so forfeited shall have been sold, re-allotted or otherwise disposed of, annul the
forfeiture there of upon such conditions as they think fit.
29. Liability on forfeiture
Any member whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding,
such forfeiture be liable to pay and shall forthwith pay to the Company, all calls installments, interest and expenses, owing upon
or in respect of such shares at the time of the forfeiture, together with interest thereon, from the time of forfeiture until payment,
at the rate of 12 percent per annum or at such other rate as the Directors may determine and the Directors may enforce payment
thereof, or any part thereof, without any deduction or allowance for the value of the shares at the time of forfeiture shall not be
under any obligation to do so.
30. Evidence of forfeiture
A duly verified declaration in writing that the declarant is a Director of the Company and that certain shares in the Company have
been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons
claiming to be entitled to the shares and such declaration and the receipt of the Company for the consideration, if any, given for
the shares on the sale or disposition thereof shall constitute a good title to such shares and the person to whom the shares are
sold shall be registered as the holder of such shares and shall be neither bound to see to the application of the purchase money
nor shall his title to such shares be affected by any irregularity or invalidity in the proceedings in reference to such forfeiture, sale
or disposition.
31. Forfeiture provision to apply to non payment in terms of issue
The provisions of Articles 23 to 30 hereof shall apply in the case of non-payment of any sum which by the terms of issue of a
share becomes payable at a fixed time whether on account of the nominal value of a share or by way of premium as if the same
had been payable by virtue of a call duly made and notified.
32. Company’s lien on shares
The Company shall have a first and paramount lien upon every share not being fully paid up registered in the name of each member


                                                                  108
(whether solely or jointly with others), and upon the proceeds of sale thereof for moneys called or payable at a fixed time in respect
of such share whether the time for the payment thereof shall have actually arrived or not and no equitable interest in any share
shall be created except upon the footing and condition that Article 12 hereof is to have full effect. Such lien shall extend to all
dividends from time to time declared in respect of such share. Unless otherwise agreed the registration of a transfer of a share
shall operate as a waiver of the Company’s lien, if any, on such share.
33. As to enforcing lien by sale
The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien:
Provide that no sale be made –
(a) Unless a sum in respect of which the lien exists is presently payable, or
(b) until the expiration of fourteen days after a notice in writing stating and demanding payment of such part of the amount in respect
of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share or the
person entitled thereto by reason of his death or insolvency.
34. Validity of sale
(1) To give effect to any such sale, the Directors may authorize some person to transfer the shares sold to the purchaser thereof.
(2) The purchaser shall be registered as the holder of the shares comprised in any such transfer.
(3) The purchaser shall be neither bound to see to the application of the purchase money, nor shall his title to the shares be
    effected by any irregularity or invalidity in the proceeding in reference to the sale.
35. Application of sale proceeds
(1) The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect
    of which the lien exists as is presently payable.
(2) The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the shares before the sale,
    be paid to the person – entitled to the shares at the date of the sale.
36. Directors may issue new certificates.
Where any shares under the powers in that behalf herein contained are sold by the Directors and the Certificate thereof has not
been delivered upto the Company by the former holder of the said shares, the Directors may issue a new Certificate for such shares
distinguishing it in such manner as they think fit from the Certificate not so delivered up.
                                                   TRANSFER AND TRANSMISSION
37. Registration of transfer
(1)   Subject to the provisions of Section 108 of the Act no transfer of shares shall be registered unless a proper instrument of
      transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee has been delivered
      to the Company together with the Certificate or, if no such Certificate is in existence, the Letter of Allotment of the share.
      The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register
      in respect thereof.
(2)   The instrument of transfer shall be in the form prescribed by the Act or the Rules made there under or where no such form
      is prescribed in the usual common form or as near thereto as circumstances will admit.
38. Application by transferor
Application for the registration of transfer of a share may be made either by the transferor, or the transferee, provided that where
such application is made by the transferor no registration shall in the case of partly paid shares be effected unless the Company
gives notice of the application to the transferee in the manner prescribed by Section 110 of the Act, and subject to the provisions
of these Articles the Company shall, unless objection is made by the transferee within two weeks from the date of receipt of the
notice, enter in the Register of members the name of the transferee in the same manner and subject to the same conditions as
if the application for registration was made by the transferee.
39. In What cases Directors may decline to register transfer
Subject to the provisions of Section 111 of the Act, the Directors may, without assigning any reason for such refusal, decline to
register any transfer of or the transmission by operation of law of the right to a share. Provided that registration of a transfer shall
not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company
on any account whatsoever.
40. No transfer to Minor etc
No transfer shall be made to a minor or person of unsound mind.
41. Transfer to be left at office and evidence of title given.
Every instrument of transfer shall be left at the office for registration, accompanied by the Certificate of the shares to be transferred
or if no such Certificate is existence by the Letter of Allotment of the shares and such other evidence as the Directors may require
to prove the title of the transferor or his right to transfer the shares and the transferee shall (subject to the Director’s right to decline
to register hereinbefore mentioned) be registered as a member in respect of such shares.
42. When transfer to be reinstated
All instruments of transfer, which shall be registered, shall be retained by the Company, but any instruments of transfer which the
Directors may decline to be registered shall be returned to the person depositing the same.



                                                                    109
43. Notice of refusal to register transfer
If the Directors refuse to register the transfer of the transmission by operation of law of the right to any shares, the Company shall,
within one month from the date of which the instrument of transfer or the intimation of such transmission as the case may be
was lodged with the Company, send to the transferee and the transferor or to the person giving intimation of such transmission
as the case may be the notice of the refusal.
44. Transmission of registered shares
The executor or administrator of a deceased member (not being one of several joint-holders) shall be the only person recognized
by the Company as having any title to the shares registered in the name of such member, and in case of the death of any one
or more of the joint-holders of any shares the survivor shall be the only person recognized by the Company as having any title
to or interest in such shares but nothing herein contained shall be taken to release the estate of deceased joint-holder from any
liability on shares held by him jointly with any other person. Before recognizing any executor or administrator, the Directors may
require him to obtain a Grand of Probate or Letters of Administration or other legal representation as the case may be from some
competent Court in India and having effect in the place where the Office of the Company is situated. Provided nevertheless that
in any case where the Directors, in their absolute discretion, think fit, it shall be lawful for the Directors to dispense with the production
of Probate or letters of Administration or such other legal representation upon such terms as to indemnity or otherwise as the Directors,
in their discretion, may consider necessary.
45. As to transfer of shares of insane, minor, deceased or bankrupt members
Any committee or guardian of a lunatic or minor member or any person becoming entitled to or to transfer shares in consequence
of the death, bankruptcy or insolvency of any member, upon producing such evidence that be sustains the character in respect
of which he process to act under this Article, or of his title as the Directors think sufficient may, with the consent of the Directors,
(which they shall not be under any obligation to give), be registered as a member in respect of such shares or may, subject to
the regulations as to transfer hereinbefore contained, transfer such shares. This article is hereinafter referred to as “The Transmission
Article”.
46. Election under the transmission article
(1)   If the person so becoming entitled under the Transmission Article, shall effect to be registered as a member in respect of
      the share himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.
(2)   If the person aforesaid shall elect to transfer the share, he shall testify his election by executing an instrument of transfer
      of the share.
(3)   All the limitations, restrictions and provisions of these Articles relating to the right to the right to transfer and the registration
      of an instrument of transfer of a share shall be applicable to any notice of transfer as aforesaid as if the death, lunacy, bankruptcy
      or insolvency of the member had not occurred and the notice of transfer were a transfer signed by that member.
47. Right of persons entitled to shares under the transmission article
A person so becoming entitled under the Transmission Article to a share of reason of the death, lunacy, bankruptcy or insolvency
of a member shall, subject to the provisions of Article 75 and Section 206 of the Act, be entitled to the same dividends and other
advantages to which he would be entitled if he were the member registered in respect of the share.
Provided that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to
transfer the share, and if the notice is not complied with within ninety days, the Directors may thereafter with-hold payment of all
dividends, bonuses or other moneys payable in respect of the share, until the requirements of the notice have been complied with.
47A. Nomination
(1)   Every shareholder or debentureholder of the Company, may at anytime, nominate, in the prescribed manner, a person to whom
      his/her shares in, or debentures of the Company shall vest in the event of his/her death.
(2)   Where the shares in, or debentures of the Company are held by more than one person jointly, the joint holders may together
      nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the Company as the case
      may be, shall vest in the event of death of all the joint holders.
(3)   Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary
      or otherwise, in respect of such shares in or debentures of the Company, where a nomination made in the prescribed manner
      purports to confer on any person the right to vest the shares in or debentures of the Company, the nominee shall, on the
      death of the shareholder or debentureholder or as the case may be, on the death of the joint holders, become entitled to
      all rights in such shares or debentures or, as the case may be, on the death of the joint holders, become entitled to all the
      rights in such shares or debentures or, as the case may be, all the joint holders, in relation to such shares or debentures,
      to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
(4)   Where the nominee is a minor, it shall be lawful for the holder of the shares or debentures, to make the nomination to appoint,
      in the prescribed manner, any person to become entitled to shares in or debentures of the Company, in the event of his/
      her death, during the minority.
47B. Transmission of securities by nominee
A nominee, upon production of such evidence as may be required by the Board as per the relevant Law and subject as hereinafter
provided elect, either;
(1)   to be registered himself/herself as holder of the share or debenture, as the case may be; or
(2)   to make such transfer of the share or debenture, as the case may be, as the deceased shareholder or debenture-holder,
      could have made;


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(3)   If the nominee elects to be registered as holder of the share or debenture, himself/ herself, as the case may be he/she deliver
      or send to the Company, a notice in writing signed by him/her stating that he/she so elects and such notice shall be accompanied
      with the death certificate of the deceased shareholder or debenture holder as the case may be;
(4)   A nominee shall be entitled to the same dividends and other advantages to which he/she would be entitled to, if he/she was
      the registered holder of the share or debenture except that he/she shall not, before being registered as a member in respect
      of his/her share or debenture, be entitled in respect of it to exercise any right conferred by membership in relation to meetings
      of the Company;
Provided further that the Board may, at any time, give notice requiring any such persons to elect either to be registered himself/
herself or to transfer the share or debenture, and if the notice is not complied with within ninety days, the Board may thereafter
withhold payment of all dividends, bonuses or others moneys payable or rights accruing in respect of such share or debenture,
until the requirements of the notice have been complied with.
Resolution passed at the Annual General Meeting held on September 14,1999.
                                            INCREASE AND REDUCTION OF CAPITAL
48. Power to increase capital
The Company may from time to time in General Meeting alter the conditions of its Memorandum of Association to increase the
capital by the creation of further shares of such amount and class as may be deemed expedient.
49. On what conditions further shares may be
Subject to any special rights or privileges for the time being attached to any issued shares, further shares shall be issued upon
such terms and condition and with such rights and privileges annexed thereto as the resolution creating the same shall direct and
if no direction be given, in the manner provided in Section 81 of the Act.
50. Provisions relating to the issue
Before the issue of any further shares, the Company in General Meeting may, subject to the provisions of the Act make provisions
as to the allotment and issue of further shares and in particular may determine to whom the same shall be offered in the first
instance and whether at par or at a premium or at a discount.
51. How far further shares to rank with shares in original capital
Except so far as otherwise provided by the conditions of issue or by these Articles, any capital raised by the creation of further
shares shall be considered part of the then existing capital and shall be subject to the provisions herein contained with reference
to the payment of dividends calls and installments, transfer and transmission, forfeiture, lien, surrender and, otherwise.
52. Inequality in number of further shares
If owing to any inequality in the number of further shares to be issued and the number of shares held by members entitled to
have the offers of such further shares, any difficulty shall arise in the apportionment of such further shares of\r any of them amongst
the members, such difficulty shall, in the absence of direction in the resolution creating the shares or by the Company’s in General
Meeting, be determined by the Directors.
53. Reduction of capital
The Company may from time to time by Special Resolution reduce its capital and any share premium account or capital redemption
reserve account in any manner and with and subject to any incident authorized and consent required by law.
53A. Notwithstanding what is stated in Article the Company shall if and when permitted by the applicable provisions of the Act
and subject to such other approvals, permissions and sanctions as may be necessary, have the powers to purchase any of its
own fully paid up shares, whether or not they are redeemable on such terms and conditions and at such time to as may be provided
by law from time to time and may make such a payment out of its capital in respect of such purchases, provided that, nothing
herein contained shall be deemed to effect the provisions of Section 100 to 104 and Section 402 of the Companies Act,1956 in
so far as they are applicable.
Resolution passed at the Annual General Meeting held on September 26,1999.
                                                     ALTERATION OF CAPITAL
54. Power to sub-divide and consolidate
The Company may be Ordinary Resolution, from time to time:-
(a)   consolidated and divide all or any of its share capital into shares of larger amount than its existing shares;
(b)   sub-divide its shares or any of them into shares or smaller amount than the amount fixed by the memorandum so, however,
      that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall
      be the same as it was in the case of the share from which the reduced share is derived;
(c)   Cancel any shares which, at the date of the passing of the resolution, have not been taken up or agreed to be taken up
      by any person and diminish the amount of its share capital by the amount of the shares so cancelled.
55. Sub-division into Preference and Equity
The resolution whereby any share is sub-divided may determine that, as between the members registered in respect of the shares
resulting from such subdivision, one or more of such shares shall have some preference or special advantage regards dividend,
capital, voting or otherwise over or as compared with the other or others subject nevertheless, to the provisions of Sections 85,
87,88 and 106 of the Act.


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56. Surrender
Subject to the provisions of Section 100 to 105 of the Act, the Directors may accept from any member the surrender on such terms
and conditions as well as agreed of all or any of his shares.
                                             CONVERSION OF SHARES INTO STOCK
57. Conversion of shares into stock and reconversion
The company may exercise the power of conversion of its shares into stock and vice versa and in that case Regulations 37 to
39 of Table “A” to Schedule I of the Act shall apply.
                                                     MODIFICATION OF RIGHTS
59. Power to modify rights
If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided
by the terms of issue of the shares of that class) may, whether or not the Company is being wound up, be varied with the consent
in writing of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution
passed at a Separate Meeting of holders of the shares of that class. To every such Separate Meeting the provisions of these Articles
relating to General Meeting shall apply, but so that two members present in person or by proxy shall constitute a quorum at such
Separate Meeting or any adjournment thereof and that any holder of shares of that class present in person or by proxy may demand
a poll and, on a poll, shall have one vote for each share of the class of which he is the holder.
                                                       BORROWING POWERS
60. Power to borrow
The Directors may, from time to time, at their discretion raise or borrow and secure the payment of any sum or sums of money
for the purposes of the Company and may themselves lend to the Company on security or otherwise.
61. Conditions on which money may be borrowed
The Directors may raise or secure the repayment or payment of any sum or sums in such manner and upon such terms and conditions
in all respects as they think fit, and in particular, by the creation of any mortgage or charge on the undertaking of the whole or
any part of its property, present or future, or uncalled capital of the Company or by the issue of bonds, perpetual or redeemable,
debentures of debenture-stock of the Company charged upon all or any part of the property of the Company both present and
future including its uncalled capital for the time being.
62. Issue at discount etc. or with special privilege
Any debenture, debenture-stock, bonds or other securities may be issued at a discount, premium or otherwise and with any special
privileges as to redemption, surrender, drawings, allotment of shares, appointment of Director and otherwise. Debenture, debenture-
stocks, bonds and other securities may be made assignable free from any equities between the Company and the person to whom
the same may be issued. Provided that debenture with the right to allotment of or conversion into shares shall not be issued except
in conformity with the provisions of Section 81 (3) of the Act.
                                              PROCEEDINGS AT GENERAL MEETING
63. Extraordinary General Meetings
(1)   All general meeting other than annual general meetings shall be called extraordinary general meetings.
(2)   The Directors may, whenever they think fit, call an Extra-ordinary General Meeting. If at any time there are not within Indian
      Directors capable of acting who are sufficient in number to form a quorum, the Directors present in India may call an extraordinary
      general meeting, in the same manner, as nearly as possible, as that in which such a meeting may be called by the Directors.
64. Calling of Extraordinary General Meeting on requisition
The Board of Directors of the Company shall, or the requisition of such member or members of the Company as is specified in
sub-section (4) of Section 169 of the Act, forthwith proceed duly to call an extraordinary general meeting of the Company and
in respect of any such requisition and of any meeting to be called pursuant thereto, all other provisions of Section 159 of the Act,
shall apply.
65. Quorum
No business shall be transacted at any General Meeting unless a quorum of members is present at the time when the meeting
proceeds to business. For all purposes the quorum for a General Meeting shall be five members present in person.
66. Resolution
Any Act or resolution which, under the provisions of these Articles or of the Act, is permitted or required to be done or passed
by the Company in General Meeting shall be sufficiently so done or passed it effected by an ordinary resolution unless either the
Act or these Articles specifically require such act to be done or resolution passed by a special resolution.
67. Chairman of General meeting
The Chairman of the Directors shall be entitled to take the Chair at every General Meeting. If there be no such Chairman or if
at any meeting he shall be not present within fifteen minutes after the time appointed for holding such meeting, or is unwilling
to act, the members present shall choose another Director as Chairman and if no Director be present or if all the Directors present
decline to take the Chair then the members present shall choose one of their number, being a member entitled to vote, to be Chairman
of the meeting.
68. When, if quorum not present meeting to be dissolved and when to be adjourned
If within half-an-hour form the time appointed for the meeting a quorum be not present, the meeting if convened upon such requisition


                                                                   112
as aforesaid shall be dissolved but in any other case it shall stand adjourned to the same day in the next week at the same time
and place or to such other day and at such time and place as the Directors may by notice appoint and if at such adjourned meeting
a quorum be not present, those members who are present not being less than two shall be a quorum and may transact the business
for which the meeting was called.
69. How questions to be decided at the meetings
Every question submitted to a meeting shall be decided in the first instance by a show of hands and in case of an equality of
votes the Chairman shall, both on a show of hands and at the poll have a casting vote entitled as a member.
70. Power to adjourn General Meetings
The Chairman of a General Meeting may adjourn the same from time to time and from place to place but no business shall be
transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
71. In what cases poll taken without adjournment
Any poll duly demanded on the election of a Chairman of a meeting or on any question of adjournment shall be taken at the meeting
and without adjournment.
72. Business may proceed notwithstanding demand of poll
If a poll be demanded the demand of a poll shall not prevent the continuance of a meeting for the transaction of business other
than the question on which a poll has been demanded.
                                                        VOTES OF MEMBERS
73. Votes of members
(a)   On a shown of hands every member present in person and being a holder of Equity Shares shall have one vote and every
      person present either as a proxy on behalf of a holder of an Equity Share or as a representative of a body corporate (in
      accordance with Article 74) being a holder of an Equity Share if he is not entitled to vote in his own right shall have on vote.
(b)   On poll the voting rights of a holder of Equity Shares shall be as specified in Section 87 of the Act.
(c)   The holder of a Preference Share shall not be entitled to vote at general meeting of the Company except as provided for
      in Section 87 of the Act. At any meeting at which or upon any question which holders of the said Preference Shares and
      entitled to vote the said Preference Shares shall on a show of hands and on a poll confer the same voting rights Equity Shares.
(d)   No company or body corporate shall vote by proxy so long as a resolution of its Board of Directors under the provisions of
      Section 187 of the Act is in force and the representative named in such resolution is present at the General Meeting at which
      the vote by proxy is tendered.
74. Procedure where a company is member of the Company
Where a company or a body corporate (hereinafter called “member company”) is a member of the Company a person duly appointed
by resolution in accordance with the provisions of Section 187 of the Act to present such member company at a meeting of the
Company shall not, by reason of such appointment, be deemed to be a proxy, and the production at the meeting of a copy of
such resolution duly signed by one Director of such member company and by its Managing Agents (if any) and certified by him
or them as being a true copy of the resolution shall be accepted by the Company as sufficient evidence of the validity of his appointment.
Such a person shall be entitled to exercise the same rights and powers, including the right o vote by proxy on behalf of the member
company which he represents, as that member company could exercise if it were an individual member.
75. Votes in respect of deceased, insane and insolvent members
Any person entitled under the Transmission Article to transfer any shares may vote at any General Meeting in respect thereof in
the same manner as if he was the registered holder of such shares, provided that forty-eight hours at least before the time of
holding the meeting or adjourned meeting as the case may be at which he proposes to vote he shall satisfy the Directors of his
right to transfer such shares, unless the Directors shall have previously admitted his right to vote at such meeting in respect thereof.
If any member be a lunatic, idiot or non composement is, he may vote (whether by a show of hands or at a poll) by his committee,
curator bonis or other legal curator and such last mentioned persons may give their vote by proxy.
76. Joint Holders
Where there are join registered holders of any share, any one of such persons may vote at any meeting either personally or by
proxy in respect of such shares as if he was solely entitled thereto; and if amore than one of such joint holders be present at
any meeting either personally or by proxy, that one of the said persons so present whose name stands first on the Register in
respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member
in whose name any share stands shall, for the purpose of this Article, be deemed join-holders thereof.
77. Instrument appointing proxy to be in writing
The instrument appointing a proxy shall be in writing under the hands of the appointer or of his Attorney duly authorized in writing
or if such appointer is a body corporate under its common seal or the hands of its Attorney duly authorized. A proxy who is appointed
for a specified meeting only shall be called a Special Proxy. Any other proxy shall be called a General Proxy.
78. Instrument appointing proxy to be deposited at the office
The instrument appointing a proxy and the Power of Attorney or other authority (if any) under which it is signed or a notarially
certified copy of that power of authority shall be deposited at a the Office not less than forty 0 eight hours before the time for
holding the meeting at which the person name in the instrument proposes to vote and in default the instrument of proxy shall not
be treated a valid.



                                                                   113
79. When vote by proxy valid though authority revoked
A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the previous death or
insanity of the principal or revocation of the instrument or transfer of the share in respect of which the vote is given, provided, no
intimation in writing of the death, insanity, revocation or transfer of the shares shall have been received at the office before the
commencement of the meeting or adjourned meeting at which the proxy is given. Provided nevertheless that the Chairman of any meeting
shall be entitled to require such evidence as he may in his discretion think fit of the due execution of an instrument of proxy and
that the same has not been revoked.
80. Form of instrument appointing a special proxy
Every instrument appointing a Special Proxy shall as nearly as circumstances admit, be in any of the forms set out in Schedule IX
to the Act.
81. Restriction on voting
No member shall be entitled to exercise any voting rights, either personally or by proxy, at any meeting of the Company in respect
of any shares registered in his name on which any call or other sums presently payable by him have not been paid or in regard
to which the Company has and has exercise any right of lien.
82. Validity of vote
(1)   Any objection as to the admission or rejection of a vote, on a show of hands or, on a poll made in due time, shall be referred
      to the Chairman who shall forthwith determine the same and such determination shall be final and conclusive.
(2)   No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which a the vote
      objected to is given or tendered and every vote not disallowed at such meeting shall be valid for all purposes.
                                                            DIVIDENDS
113. How profits shall be divisible
Subject to the right of members, if any, entitled to shares with preferential or special rights attached, thereto, the profits of the
Company which it shall from time to time determine to divide in respect of any year other period shall be applied in the payment
of a dividend on the Equity shares of the Company but so that partly paid up shares only entitle the holder with respect there
to such a proportion of the distribution upon a fully paid up share as the amount paid thereon bears to the nominal amount of
such share. All dividends shall be apportioned and paid proportionately to the amounts paid credited as paid on the shares during
any portion or portions of the period respect of which the dividend is paid; but if any share is issued on terms providing that it
shall rank for dividend accordingly. Where capital is paid up in advance of calls upon the footing that the same shall carry interest,
such capital shall not, whist carrying interest, confer a right to participate in profits.
114. Declaration of dividends
The Company in General Meeting may declare a dividend to be paid to the members according to their rights and interest in the
profits and subject to provisions of Section 297 of the Act and fix the time for payment.
115. Restriction on amount of dividend
No larger dividend shall be declared than is recommended by the Directors; but the Company in General Meeting may declare
a smaller dividend.
116. Dividend out of profits only
No dividend shall be payable except out of profits of the Company of the year or any other undistributed profits and no dividend
shall carry interest as against the Company.
117. What to be deemed not profits
The declaration of the Directors as to the amount of the net profits of the Company any year shall be conclusive.
118. Interim dividend
The Directors may from time to time pay to the members such interim dividends as in their judgment the position of the Company
justifies.
119. Retention of dividends
The Directors may retain any dividend on which the Company has a lien and may apply the same in or towards satisfaction of
the debts, liabilities or engagements in respect of which the lien exists.
120. Dividends and call together
Any General Meeting declaring a dividend may make a call on the members of such amount as the meeting fixes but so that the
call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as
the dividend and the dividend may, if so arranged between the Company and the member, be set off against the call.
121. Effect of transfer
A transfer of shares shall not pass the rights to any dividend declared thereon before the registration of the transfer.
122. Dividend to joint holders
Any one of the several persons who are registered as the join-holders of any share may give effectual, receipts for all dividends
and payments on account of dividends in respect of such shares.
123. Payment by post
Unless otherwise directed in accordance with Section 206 of the Act, any dividend, interest or other moneys payable in cash in


                                                                 114
respect of a share may be paid by cheque or warrant set through the post to the registered address of the member or in the case
of members who are registered jointly to registered address of that one of such members who is first named in the Register in
respect of the join-holding or to such person and such address as the member or members who are registered jointly, as the case
may be, may direct and every cheque or warrant so sent shall be made payable to the order of the person to whom it is sent.
The Company shall not be liable or responsible for any cheque or warrant lost in transmission or for any dividend lost to the member
or person entitled thereto by the forged endorsement of any cheque or warrant or the fraudulent recovery thereof by any other
means.
124. Unclaimed dividend
All dividends unclaimed for one year after having been declared may be invested or otherwise made use of by the Directors for
the benefit of the Company until claimed and all dividends unclaimed till the claim thereto become barred by law may be forfeited
by the Directors for the benefit of the company but the Directors may annual the forfeiture whenever they may think proper.
                                                              SECURITY
138. No shareholder to enter the premises of the Company without permission
No member or other person (not being a Director) shall be entitled to enter upon the property of the Company or to inspect or
examine the Company’s premises or properties without the permission of the Directors or subject to Articles 126, to require discovery
of or any information respecting any detail of the Company’s trade or any matter which is or may be in the nature of a trade secret,
mystery of trade, or secret process or of any matter whatsoever which may relate to the conduct of the business of the Company
and which in the opinion of the Directors it will be inexpedient in the interest of the members of the Company to communicate.
                                                             WINDING UP
139.
(1)    In the event of the company being wound up, the holders of Preference Shares, if any shall be entitled to have the surplus
       assets available for distribution amongst members as such applied in the first place in repayment to them the amount paid
       up on the Preference Shares held by them respectively and payment of arrears of dividend up to the commencement of the
       winding up, whether declare or not, but shall not be entitled to any further participation in such surplus assets, if the surplus
       available as aforesaid shall be insufficient to repay the whole of the amount paid up on the Preference Shares and any arrears
       of dividend, such assets shall be distributed amongst the holders of Preference Shares so that the losses shall be borne
       by the holders of Preference Shares in proportion to the capital paid up or which ought have been paid up thereon and the
       arrears of dividend as aforesaid.
(2)    The assets, if any, available for distribution, after payment to the Preference Shares holders as aforesaid shall be distributed
       amongst the holders of equity shares in proportion to the capital, a the commencement of the winding up, paid or which ought
       to have been paid up, on the shares in respect of which they were respectively registered.
(3)    This Article is to be without prejudice to the rights and privileges amongst holders of Preference Shares of different series.
140. Distribution of assets in specie
If the Company shall be wound up, whether voluntarily or otherwise, the liquidators may, with the sanction of a Special Resolution,
divide among the contributories, in specie or kind, any part of the assets of the Company and may, with like sanction, vest any
part of the assets of the Company in Trustees upon such trusts, for the benefit of the contributors or any of them, as the liquidators,
with like sanction, shall think fit.
                                                              INDEMNITY
141. Indemnity
Every Director, Managing Agents, Secretaries and Treasurers, Managing Director, Manager, Secretary of Officer of the Company
or any person (whether an office of the Company or not) employed by the Company and any person appoint as Auditor shall be
indemnified out of the funds of the Company against all liability incurred by him as such Director, Managing Agents, Secretaries
and Treasurers, Managing Director, Manager, Secretary, Officer, Employees or Auditor in defending any proceedings, whether civil
of criminal, in which judgment is given in his favour on in which he is acquitted or in connection with any application under Section
633 of the Act in which relief is granted to him by the Court.




                                                                   115
                                       SECTION X: OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS
The following contracts mentioned in Para A below (not being contracts entered into the ordinary course of business carried on by
the Company) are or may be deemed to be material contracts. Copies of these contracts along with documents referred to in Para
(B) below have been attached to the copy of this Prospectus delivered to the Registrar of Companies, West Bengal at Kolkata for
registration and may be inspected at the Registered Office of the Company between 10.30 AM and 3.30 PM on any working day
until the closing of the Issue.

(A) MATERIAL CONTARCTS

      1.    Copy of Memorandums of Understanding signed with M/s Chartered Capital And Investment Limited, Lead Manager to the
            Issue dated 14th October, 2005.

      2.    Copy of Memorandum of Understanding signed with M/s. Pinnacle Shares Registry Private Limited, Registrars to the issue
            dated 24th October, 2005.

      3.    Copy of tri-partite agreement dated 2nd November, 2000 between the Company, M/s.Pinnacle Shares Registry Private Limited,
            Registrar and National Securities Depository Limited for dematerialization of shares.

      4.    Copy of tri-partite agreement dated 31st October, 2000 between the Company, M/s.Pinnacle Shares Registry Private Limited,
            Registrar and Central Depository Services (India) Limited for dematerialization of shares.

(B)   DOCUMENTS FOR INSPECTION

      1.    Memorandum and Articles of the Company as amended up to date.

      2.    Certificate of Incorporation of the Company dated 29th March, 1940 and Fresh Certificate dated 21st January, 1992 obtained
            consequent to change of name.

      3.    Resolution passed under Section 81 (1 A) of the Act, at the 67th Annual General Meeting of the Company held on 8th
            September, 2005.

      4.    Copy of Board Resolution dated 30th July, 2005 authorizing the Board for Public Issue

      5.    Consents from the Directors, Compliance Officer, Auditor, Lead Manager, Registrar, Bankers to the Issue and Bankers to
            the Company, to act in their respective capacities.

      6.    Auditors Report dated 25th October, 2005 and letter dated 31st August, 2005 from M/s.Pipara & Co., Chartered Accountant,
            certifying the availability of tax benefits as mentioned in this Prospectus.

      7.    Copies of the Annual Accounts of the last 5 accounting years of the Company.

      8.    Copies of listing application made to the Bombay Exchange Ltd., (BSE), and National Stock Exchange of India Ltd, Mumbai.

      9.    Letters from Bombay Exchange Ltd., and National Stock Exchange of India Ltd, Mumbai for permission to use their names
            in the Prospectus.

      10.   Copies of the Resolution appointing Mr. Arvind Kumar Somany as Managing Director of the Company & Shri P. Bandyopadhyay
            as Executive Director of the Company.

      11.   Copy of Auditors report on Financial Statement of Soma Textiles & Industries Limited for last 5 years and their consent
            to include the same in prospectus.

      12.   SEBI Observations letter dated ———————— of this Prospectus.

      13.   Reply of the Observation letter by the Lead Manager Chartered Capital And Investment Limited dated ——————
            to SEBI.




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                                              DECLARATION

We declare that all the relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government
or the guidelines issued by the Securities and Exchange board of India established under section 3 of the Securities
and Exchange board of India Act, 1992, as the case may be, have been complied with and no statement made
in this Prospectus is contrary to the provisions of the Companies Act, 1956 or Securities and Exchange board
of India Act, 1992 or rules made there under or guidelines issued, as the case may be.


We, the directors of the Company declare and confirm that no information / material likely to have a bearing
on the decision of the investors in respect of the equity shares offered in terms of the prospectus has been
suppressed/withheld and/or incorporated in the manner that would amount to misstatement /misrepresentation
and in the event of it transpiring at any point of time till allotment/refund as the case may be that any information
/ material has been suppressed/ withheld and or amounts to misstatement /misrepresentation we undertake
to refund the entire application money to all the subscribers within seven days thereafter without prejudice
to the provisions of the section 63 of the Act


The Issuer accepts no responsibility for statements made otherwise than in the Prospectus or in the advertisements
or any other material issued by or at the instance of the Issuer and that anyone placing reliance on any other
source of information would be doing so at his/ her own risk



Signed by the Directors



Shri Surendra Kumar Somany,



Shri Arvind Kumar Somany,



Shri P. Bandyopadhyay



Shri Ashok C GandhI



Shri Prafull Anubhai



Shri M S Shekar



Place: __________



Date : _______ 2005




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