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Directors Report of Ashima Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the thirty second Annual Report of your Company together with audited statement of accounts for the year ended on 31st March, 2015.

1. FINANCIAL RESULTS

Your Company's performance during the above year is summarized below:

(Rupees in Lacs)

Particulars March 31,2015 March 31,2014

Profit/(Loss) before Interest (676.91) 141.95 and Depreciation

Less : Interest 487.69 191.80

Loss before Depreciation 1164.60 49.85

Add : Depreciation and 455.40 1234.17 amortisation of expenses

Loss before tax 1620.01 1284.02

Add : Provision for tax 0.32 0.39

Loss after tax 1620.33 1284.41

Add: Loss brought forward 51875.15 50590.73 from previous year

Add: Transferred from 2512.44 -- Revaluation Reserve

Deficit carried to Balance Sheet 56007.91 51875.15

2. Dividend

Your Directors regret their inability to recommend any dividend on the equity shares in view of the losses suffered by your Company during the year under review and carried forward losses of earlier years. They are also unable to pay any dividend on preference shares.

3. RESERVES

In view of the losses incurred by your Company, no amount has been transferred to general reserve.

4. Review of Business Operations and Future Prospects

Reported loss for the year works out to Rs.1620.01 lacs at PBT level compared to loss of Rs.1284.02 lacs in previous year. Adjusting for non-recurring/non-operational items of loss of Rs. 1096.73 lacs on sale/ retirement of discarded fixed assets and reduction in depreciation for the year by Rs.778.75 lacs compared to previous year, the loss at PBT level for the year comes to Rs.1302.03 lacs compared to loss of Rs.1284.02 lacs in previous year. Thus, operational performance of the company has slightly declined during the year. Performance of Denim Division has further deteriorated, whereas Spinfab Division has been able to cut its losses.

Spinfab Division saw lower volumes, but higher sales to brands, which as a segment offers better margins, which led to its improved performance. Denim Division reported further decline as it faced limitations in product offering in changing customer preferences in a market plagued with problem of oversupply.

The company continues to operate under severe limitations due to its ageing machinery, which is affecting operational efficiency and product quality and restricting product developments to serve changing needs and preferences of customers. The company has also been facing problems on sales front as it is not been in a position to meet demand of higher credit in the markets due to constraints of working capital. These factors have adversely affected sales realization and margins of fabrics, as the company is having competitive disadvantage. The impact has been more severe on the Denim performance due to the current downturn.

The detailed discussion on performance is highlighted in management discussion and analysis attached to this report.

5. SCHEME OF ARRANGEMENT

Your Company has filed with the Stock Exchanges a draft scheme of arrangement for reconstruction and compromise between the Company and its equity shareholders, preference shareholders and secured creditors under sections 391 to 394 read with sections 100 to 103 of Companies Act, 1956 and section 52 of the Companies Act, 2013 and is in the process of filing the same with the Hon'ble High Court of Gujarat. This Scheme of Arrangement is proposed as financial reconstruction of the Company pursuant to Re-organisation of preference share capital and settlement of Outstanding Secured Debts of the Secured Creditors of the Company in order to provide a fair opportunity to them to receive their long outstanding dues and to bring about long term financial stability to the Company.

6. RIGHTS ISSUE

The Board has decided to come out with an Issue of 8,00,85,089 Equity Shares of Rs. 10/- each for cash at par for an amount aggregating to Rs.8008.51 lacs on a rights basis to the existing equity shareholders of our Company in the ratio of 24 Equity Shares for every 10 fully paid up equity shares held by the existing Equity Shareholders on the Record Date to be decided by the Board or the Rights Issue Committee.

The entire Proceeds of the Rights Issue amounting to Rs. 8008.51 lacs would be utilized towards part repayment of outstanding principal secured debt as per proposed scheme of arrangement. The issue expenses would be borne by the Company from internal sources.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments which affect the financial position of the company occurring between the end of financial year and the date of this Report except as stated specifically in this Report.

8. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any subsidiary, joint venture or associate company for the year ended 31st March, 2015.

9. DEPOSITS

The Company had stopped accepting fresh deposits from April 1, 2004 and has repaid all such deposits on their maturity, in time as per the schedule and hence not exceeded the limits, in view of the approval granted by the Ministry of Corporate Affairs, New Delhi vide order No. 7/15/2006-CL.VI dated February 6, 2007. The said order was subject to observance of certain conditions inter-alia, not accepting any fresh deposits, investment of funds or grant of loans with prior approval of Ministry of Corporate Affairs, depositor's legal right of recovery etc. There were no unpaid or unclaimed deposits as on March 31,2015.

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

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

As required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo forms part of this Report and annexed at Annexure-1.

11. RISK MANAGEMENT

The Company has set up a risk management framework to identify, monitor, minimize, mitigate and report and also to identify business opportunities. The executive management oversees the risk management framework and the Audit Committee evaluates internal financial controls and risk management systems. In the opinion of Board, there are no risk which may threaten the existence of the Company.

12. CORPORATE SOCIAL RESPONSIBILITIES INITIATIVES

The requirements of corporate social responsibility in terms of Section 135 of the Companies Act, 2013 does not apply to your company.

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

There are no loans granted or guarantees given or security provided or investments made under Section 186 of the Companies Act, 2013.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

A Related Party Policy has been devised by the Board of Directors of your Company at its meeting held on 6th February, 2015 for determining the materiality of transactions with related parties and dealing with them. The said policy may be referred to, at the Company's website at the weblink, http://www.ashima.in/ Policy_Related_Party_Transactions.pdf. The Audit Committee reviews all related party transactions quarterly.

The members may note that all transactions entered into by the Company with the Related Parties were on arm's length basis and in the ordinary course of business and therefore provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required.

Details of all material transactions, if any, with related parties have been disclosed quarterly along with the compliance report on corporate governance.

15. NOMINATION AND REMUNERATION POLICY

A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto stating therein the Company's policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management and approved by the Board of Directors at its meeting held on 07.03.2015. The said policy may be referred to, at the Company's website at http://www.ashima.in

16. ANNUAL EVALUATION OF BOARD'S PERFORMANCE

A meeting of Independent Directors was held on 7th February, 2015 wherein the performance of the non- independent directors and Board was evaluated.

In accordance with the policy laid down by the Nomination and Remuneration Committee (NRC) and approved by the Board, the NRC has carried out evaluation of performance of every Director. The Board of Directors also undertook evaluation of its own performance, committees of the Board and all individual directors. After such evaluation the Board came to the conclusion that the Board as a whole as well as all its Members individually and the Committees of the Board continued to adhere to the standards of good governance and continuous improvement in processes and procedures. The Board notes that every individual Member of the Board and its Committees have contributed in the sustained operations and overall performance of the Company. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

17. ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act,2013, is included in this Report as Annexure-2.

18. WEBSITE OF YOUR COMPANY

Your Company maintains a website www.ashima.in where detailed information of the Company and specified details in terms of the Companies Act, 2013 and the Listing Agreement have been provided.

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

The details of Board meeting held during the financial year 2014-2015 have been furnished in the Corporate Governance Report forming part of this Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mrs. Koushlya V Melwani (DIN: 01575110) has been appointed as an Additional Director of the Company with effect from 15th December, 2014. She holds office as Additional Director until the ensuing Annual General Meeting, and is eligible for appointment as Director.

The Company has received notice under Section 160 of the Companies Act, 2013 from a member signifying the intention to propose the candidature of Mrs. Koushlya V Melwani for the office of the Director. A brief profile of Mrs. Koushlya V Melwani has been given in the Notice convening the Annual General Meeting.

Mr. Atul Kumar Singh, Director has resigned with effect from 4th May, 2015. The Board places on record its appreciation of services rendered by Mr. Atul Kumar Singh during his tenure as Director.

In accordance with the Article of Association of the Company and the provision of the Companies Act, 2013, Mr. Chintan N. Parikh, Director (DIN: 00155225) retires by rotation and being eligible seeks reappointment.

During the year, Mr. Hiren Mahadevia relinquished his responsibilities as Chief Financial Officer and continues as Company Secretary. Mr. Jayesh C. Bhayani has been appointed as the Chief Financial Officer of the Company with effect from 15th December, 2014.

21. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that —

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

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

22. DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have given their declaration to the Company stating their independence pursuant to Section 149(6). The terms and conditions of the appointment of Independent Directors have been disclosed on the website of the Company at www.ashima.in

23. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECOTRS

The details of the programme for familiarisation of the Independent Directors with the Company in respect of their roles, rights, responsibilities in the Company, nature of the industry in which Company operates, business model of the Company and related matters are put up on the website of the company in the Investors section under the head "Policies".

24. PARTICULARS OF EMPLOYEES

(A) The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report and is annexed as Annexure - 3 to this Report.

(B) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary.

25. STATUTORY AUDITORS

M/s. Dhirubhai Shah & Doshi, Chartered Accountants (Firm Registration No. 102511W) hold office upto the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.

26. SECRETARIAL AUDIT REPORT

The provisions of Section 204 read with Section 134(3) mandates Secretarial Audit of the Company to be carried out from the financial year commencing on or after 1st April, 2014 by a Company Secretary in Practice. The Board at its meeting held on 29th July, 2014, has therefore appointed Mr. Tapan Shah, Practising Company Secretary (Certificate of Practice No. 2839) as the Secretarial Auditor of the Company for the financial year ended 31st March, 2015. The Secretarial Auditor's Report for the financial year ended 31st March, 2015 is annexed to the Board's Report at Annexure-4.

27. EXPLANATIONS/ COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY

The observations of Statutory Auditors in their report on the financial statements are self explanatory and therefore do not call for any further comments.

Mr. Tapan Shah, Practising Company Secretary was appointed to carry out the secretarial audit for the year ended 31st March, 2015 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report is annexed with this Report. There are no qualifications, reservations or adverse remarks in the said Secretarial Audit Report.

28. CHANGES IN CAPITAL STRUCTURE

During the year ended review the authorised share capital was increased from Rs.100 crore to Rs.150 crores as per the approval granted by the Shareholders at the Annual General Meeting (AGM) held on 29th September, 2014. The Authorised Share capital is proposed to be re-classified and the same is being placed for approval of the Shareholders at the ensuing AGM in order to accommodate the expected increase of equity capital on account of proposed Rights Issue and the Scheme of Arrangement for Reconstruction and Compromise.

29. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM

The details of composition of Audit Committee have been furnished in the Corporate Governance Report forming part of this Annual Report.

Your Company has established Vigil Mechanism (whistle blower policy) for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to this Report and displayed on the website of the Company.

30. LISTING WITH STOCK EXCHANGES

Your Company is listed with the BSE Limited and National Stock Exchange of India Ltd. and the Company has paid the listing fees to each of the Exchanges.

31. DELISTING

During the Financial Year 2014-2015, your Company applied to Ahmedabad Stock Exchange Limited for voluntary delisting of its Equity Shares in accordance with Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 ("Delisting Regulations") as approved by Board of Directors at their meeting held on 29th July, 2014.

Accordingly, the Ahmedabad Stock Exchange Limited has granted its approval to delist the Shares of the Company with effect from 23.12.2014.

32. AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been given in the Corporate Governance Report forming a part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee.

33. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The report on corporate governance along with management discussion and analysis and certificate of compliance from statutory auditors forms part of this Annual Report.

The Certificate of the statutory auditors of the Company certifying compliance of conditions of the corporate governance as per clause 49 of the listing agreement is annexed with the report of the corporate governance.

34. GENERAL

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

a. Issue of equity shares with differential rights as to dividend, voting or otherwise

b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme including Employee Stock Option Scheme.

c. Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees.

There were no significant and material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

35. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Directors state that during the year under review, there were no cases filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

36. APPRECIATION

Your Directors express their gratitude for the dedicated services put in by all the employees of the Company.

37. ACKNOWLEDGEMENTS

Your Directors places on record their sincere thanks to the customers, vendors, investors, banks and financial institutions for the continued support. Your Directors are also thankful to the Government of India, State Government and other authorities for their support and solicit similar support and guidance in future.

For and on behalf of the Board

Place: Ahmedabad Chintan N. Parikh Date: 27th June, 2015 Chairman and Managing Director


Mar 31, 2014

Dear members,

The directors take pleasure in presenting the thirty first annual report of the company, together with audited statement of accounts for the year ended on March 31, 2014.

1. Financial Results:

Your company''s performance during the above year is summarised below:

(Rupees in lacs)

Particulars Mar. 31, 2014 Mar. 31, 2013

Profit before interest and depreciation 141.95 98.46

Less : Interest 191.80 166.33

Loss before depreciation 49.85 67.87

Add : Depreciation and amortisation of expenses 1234.17 1326.93

Loss before tax 1284.02 1394.80

Add : Provision for tax 0.39 0.35

Loss after tax 1284.41 1395.15

Add : Loss brought forward from previous year 50590.73 49195.58

Deficit carried to balance sheet 51875.15 50590.73

2. Dividend:

Your directors regret their inability to recommend any dividend on the equity shares in view of the losses suffered by your company during the year under review and carried forward losses of earlier years. They are also unable to pay any dividend on preference shares also.

3. Performance of the company:

The operational performance of the company showed marginal improvement, with loss at PBT level for the year going down to Rs.1284.02 lacs as against 1394.80 lacs in the previous year. Performance of Spinfab Division showed marked improvement, which was mostly offset by major decline in performance of Denim Division.

Spinfab Division benefited due to better order book position, which helped it sustain volumes and improve its sales realization. Its profitability was also boosted by higher sales to brands, which offers higher prices compared to other segments. Performance of Denim Division, on the other hand, was severely affected due to adverse market conditions that affected volumes and realisations. Domestic denim market faced severe liquidity crunch as well as supply glut in domestic market due to overcapacity, which compelled manufacturers to reduce their capacity utilisation and also lower fabric selling prices. The performance of the company suffered drastically in these tough market conditions, since its product development capabilities are very limited due to ageing and old machinery. Also, it could not offer higher credit period due to lack of working capital facilities. Significant rise in cost of cotton and yarn affected the profitability for the year.

The detailed discussion on the performance is highlighted in the management discussion and analysis attached to this report.

4. Listing Agreement:

The equity shares of the company are presently listed on stock exchanges at Ahmedabad, Mumbai and National Stock Exchange.

5. Corporate Governance:

The report on corporate governance along with management discussion and analysis and certificate of compliance from statutory auditors forms part of this annual report.

The certificate of the statutory auditors of the company certifying compliance of conditions of the corporate governance as per clause 49 of the listing agreement is annexed with the report of corporate governance.

6. Director''s Responsibility Statement:

Pursuant to requirements of section 217(2AA) of the Companies Act, 1956 and on the basis of information placed before them the directors confirm that:

(i) In the preparation of the annual accounts for financial year 2013-2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) They have selected appropriate accounting policies and have applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2014 and of the loss of the company for the said year;

(iii) They have taken proper and sufficient care to the best of their knowledge for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis.

7. Directors:

Mr. Neeraj Golas was appointed as a nominee director of Asset Reconstruction Company (India) Ltd., (ARCIL) on board of the company w.e.f. May 30, 2014 on account of withdrawal of Mr. Pramod Kumar Gupta as nominee director of ARCIL w.e.f. May 30, 2014.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the appointment of Mr. Jaykant R. Baxi, Dr. Bakul H. Dholakia, Mr. Bihari B. Shah & Mr. Atul Kumar Singh as Independent Directors is being placed before the members in ensuing annual general meeting for their approval.

At the ensuing annual general meeting of the company Mr. Chintan N. Parikh, Director is to retire by rotation and being eligible offer himself for re-appointment.

8. Insurance:

All the properties and insurable interests of all the divisions of the company including plant and machinery, stocks and liabilities under the legislative enactments are adequately insured.

9. Auditors:

Dhirubhai Shah & Doshi, Chartered Accountants, Ahmedabad retire at the ensuing annual general meeting of the company and are eligible for re-appointment. They have given their consent to act as auditors of the company, if re-appointed. You are requested to re-appoint Dhirubhai Shah and Doshi, Chartered Accountants as auditors to hold the office till the next annual general meeting.

The relevant notes forming part of accounts are self-explanatory and give full information and explanation in respect of the observations made by the auditors in their report.

10. Information regarding conservation of energy etc. and employees:

Information required under section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information under section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time forms part of this report. However, as per the provisions of section 219(1) (b) (iv), the report and the accounts are being sent to all shareholders of the company excluding the information relating to conservation of energy, technology absorption and foreign exchange earning and outgo, and the statement of particulars of employees. Any shareholder interested in obtaining such particulars may inspect the same at the registered office of the company or write to the secretary for a copy.

11. Fixed Deposits:

The company has stopped accepting fresh deposits from April 1, 2004 and has repaid all such deposits on their maturity, in time as per the schedule and hence has not exceeded the limits, in view of the approval granted by the Ministry of Corporate Affairs, New Delhi vide order no.7/15/2006-CL.VI dated February 6, 2007. The said order is subject to observance of certain conditions inter-alia, not accepting any fresh deposits, investment of funds or grant of loans with prior approval of Ministry of Corporate Affairs, depositor''s legal right of recovery etc.

There are no unpaid deposits (except unclaimed deposits) as on March 31, 2014.

12. Appreciation:

The directors express their gratitude for the dedicated services put in by all the employees of the company.

13. Acknowledgements:

Your directors place on record their sincere thanks to the customers, vendors, investors, banks and financial institutions for the continued support. Your directors are also thankful to the Government of India, State Government and other authorities for their support and solicit similar support and guidance in future.

For and on behalf of the board

Ahmedabad Chintan N. Parikh May 30, 2014 Chairman & Managing Director


Mar 31, 2013

Dear members,

The directors take pleasure in presenting the thirtieth annual report of the company, together with audited statement of accounts for the year ended on March 31, 2013.

1. Financial Results:

Your company''s performance during the above year is summarised below:

(Rupees in lacs)

Particulars Mar. 31, 2013 Mar. 31, 2012

Profit before interest, depreciation, exceptional 98.46 313.72 and extraordinary items (Net)

Less : Interest 166.33 148.64

Profit / (Loss) before depreciation, exceptional (67.87) 165.08 and extraordinary items (Net)

Less : Depreciation and amortisation of expenses 1326.93 1344.84

Loss before tax, exceptional and extraordinary items (Net) 1394.80 1179.76

Add : Provision for tax 0.35 0.33

Loss after tax and before prior period adjustments 1395.15 1180.09

Add : Prior period adjustments - 14.00

Loss after tax 1395.15 1194.09

Add : Loss brought forward from previous year 49195.58 48001.49

Deficit carried to balance sheet 50590.73 49195.58



2. Dividend:

Your directors regret their inability to recommend any dividend on the equity shares in view of the losses suffered by your company during the year under review and carried forward losses of earlier years. They are also unable to pay any dividend on preference shares also.

3. Performance of the company:

The company has reported a substantially lower PBDIT of Rs.98.45 lacs for the year under review as compared to a PBDIT of Rs.313.72 lacs in the year 2011-12. This was mainly due to the steep fall in the performance of the Spinfab division of the company, which has more than offset marked improvement in the performance of Denim division.

Increase in yarn prices, enhanced costs due to wage revision, increase in salary cost and inflationary pressure led to higher costs and expenses. While the prices of dyes and chemicals remained steady, utilities cost increased significantly. The textile market had a difficult year as liquidity position remained tight and there was demand for higher credit from the buyers putting the strain on working capital resources.

The detailed discussion on the performance is highlighted in the management discussion and analysis attached to this report.

4. Listing Agreement:

The equity shares of the company are presently listed on stock exchanges at Ahmedabad, Mumbai and National Stock Exchange.

5. Corporate Governance:

The report on corporate governance along with management discussion and analysis forms part of this annual report. The certificate of the statutory auditors of the company certifying compliance of conditions of the corporate governance as per clause 49 of the listing agreement is annexed with the report of corporate governance.

6. Director''s Responsibility Statement:

Pursuant to requirements of section 217(2AA) of the Companies Act, 1956 and on the basis of information placed before them the directors confirm that:

(i) In the preparation of the annual accounts for financial year 2012-2013, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(ii) They have selected appropriate accounting policies and have applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2013 and of the loss of the company for the said year;

(iii) They have taken proper and sufficient care to the best of their knowledge for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis.

7. Directors:

Mr. Pramod Kumar Gupta was appointed as nominee director of Asset Reconstruction Company (India) Ltd., w.e.f. May 24, 2013.

At the ensuing annual general meeting Mr. Bihari B. Shah and Mr. Atul Kumar Singh, Directors retire by rotation, and being eligible, offer themselves for re-appointment.

8. Insurance:

All the properties and insurable interests of all the divisions of the company including plant and machinery, stocks and liabilities under the legislative enactments are adequately insured.

9. Auditors:

Dhirubhai Shah & Company, Chartered Accountants, Ahmedabad retire at the ensuing annual general meeting of the company and are eligible for re-appointment. They have given their consent to act as auditors of the company, if re-appointed. You are requested to re-appoint Dhirubhai Shah and Company, Chartered Accountants as auditors to hold the office till the next annual general meeting.

The relevant notes forming part of accounts are self-explanatory and give full information and explanation in respect of the observations made by the auditors in their report.

10. Information regarding conservation of energy etc. and employees:

Information required under section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information under section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time forms part of this report. However, as per the provisions of section 219(1) (b) (iv), the report and the accounts are being sent to all shareholders of the company excluding the information relating to conservation of energy, technology absorption and foreign exchange earning and outgo, and the statement of particulars of employees. Any shareholder interested in obtaining such particulars may inspect the same at the registered office of the company or write to the secretary for a copy.

11. Fixed Deposits:

The company has stopped accepting fresh deposits from April 1, 2004 and has repaid all such deposits on their maturity, in time as per the schedule and hence has not exceeded the limits, in view of the approval granted by the Ministry of Corporate Affairs, New Delhi vide order no.7/15/2006-CL.VI dated 6th February, 2007. The said order is subject to observance of certain conditions inter-alia, not accepting any fresh deposits, investment of funds or grant of loans with prior approval of Ministry of Corporate Affairs, depositor''s legal right of recovery etc.

There are no unpaid deposits (except unclaimed deposits) as on March 31, 2013.

12. Appreciation:

The directors express their gratitude for the dedicated services put in by all the employees of the company.

13. Acknowledgements:

Your directors place on record their sincere thanks to the customers, vendors, investors, banks and financial institutions for the continued support. Your directors are also thankful to the Government of India, State Government and other authorities for their support and solicit similar support and guidance in future.



For and on behalf of the board



Ahmedabad Chintan N. Parikh

May 24, 2013 Chairman & Managing Director


Mar 31, 2012

The directors take pleasure in presenting the twenty ninth annual report of the company, together with audited statement of accounts for the year ended on March 31, 2012.

1. Financial Results:

Your company's performance during the above year is summarised below:

(Rupees in lacs)

Particulars Mar. 31, 2012 Mar. 31, 2011

Profit before interest, depreciation, exceptional and extraordinary items (Net) 436.58 1166.88

Less : Interest 148.64 89.18

Profit / (Loss) before depreciation, exceptional and extraordinary items (Net) 287.94 1077.70

Less : Depreciation and amortisation of expenses 1344.84 1443.08

Loss before tax, exceptional and extraordinary items (Net) 1056.90 365.38

Add : Provision for tax 0.33 0.48

Loss after tax and before exceptional and extraordinary items (Net) 1057.23 365.86

Add : Exceptional and extraordinary items (Net) 122.86 158.38

Add : Prior period adjustment (Net) 14.00 -

Loss after tax, exceptional and extraordinary items (Net) 1194.09 524.24

Add : Loss brought forward from previous year 48001.49 47971.71

Less : Balance of general reserve set off - 494.46

Deficit carried to balance sheet 49195.58 48001.49

2. Dividend:

Your directors regret their inability to recommend any dividend on the equity shares in view of the losses suffered by your company during the year under review and carried forward losses of earlier years. They are also unable to pay any dividend on preference shares also.

3. Subsidiary Company:

The company's subsidiary namely Ashima Textiles Inc. USA has been dissolved during the year under review considering the fact that the company has adequate resources to effectively manage its USA business from its corporate office. This is likely to result into cost savings to the company.

4. Performance of the company:

The company has reported a decline in profitability, with PBDIT going down to Rs.436.58 lacs for the year 2011-12 compared to Rs.1166.88 lacs for the year 2010-11. This was mainly due to substantial rise in cotton prices and inflationary trend in prices of almost all other costs including dyes and chemicals, utilities and overhead expenses. A sluggish market, characterised by lower demand and resistance against fabric price-hike, led to lower margins, as the company could not pass on higher costs to customers.

The detailed discussion on the performance is highlighted in the management discussion and analysis attached to this report.

5. Listing Agreement:

The equity shares of the company are presently listed on stock exchanges at Ahmedabad, Mumbai and National Stock Exchange.

6. Corporate Governance:

The report on corporate governance along with management discussion and analysis and certificate of compliance from statutory auditors forms part of this annual report.

The certificate of the statutory auditors of the company certifying compliance of conditions of the corporate governance as per clause 49 of the listing agreement is annexed with the report of corporate governance.

7. Director's Responsibility Statement:

Pursuant to requirements of Section 217(2AA) of the Companies Act, 1956 and on the basis of information placed before them the directors confirm that:

(i) In the preparation of the annual accounts for financial year 2011-2012, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(ii) They have selected appropriate accounting policies and have applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2012 and of the loss of the company for the said year;

(iii) They have taken proper and sufficient care to the best of their knowledge for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis.

8. Directors:

At the ensuing annual general meeting Mr. Chintan N. Parikh and Mr. Jaykant R. Baxi, Directors retire by rotation, and being eligible, offer themselves for re-appointment.

9. Insurance:

All the properties and insurable interests of all the divisions of the company including plant and machinery, stocks and liabilities under the legislative enactments are adequately insured.

10. Auditors:

Dhirubhai Shah & Company, Chartered Accountants, Ahmedabad retire at the ensuing annual general meeting of the company and are eligible for re-appointment. They have given their consent to act as auditors of the company, if re-appointed. You are requested to re-appoint Dhirubhai Shah and Company, Chartered Accountants as auditors to hold the office till the next annual general meeting.

The relevant notes forming part of accounts are self-explanatory and give full information and explanation in respect of the observations made by the auditors in their report.

11. Information regarding conservation of energy etc. and employees:

Information required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information under Section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time forms part of this report. However, as per the provisions of Section 219(1) (b) (iv), the report and the accounts are being sent to all shareholders of the company excluding the information relating to conservation of energy, technology absorption and foreign exchange earning and outgo, and the statement of particulars of employees. Any shareholder interested in obtaining such particulars may inspect the same at the registered office of the company or write to the secretary for a copy.

12. Fixed Deposits:

The company has stopped accepting fresh deposits from April 1, 2004 and has repaid all such deposits on their maturity, in time as per the schedule and hence has not exceeded the limits, in view of the approval granted by the Ministry of Corporate Affairs, New Delhi vide order no.7/15/2006-CL.VI dated 6th February, 2007. The said order is subject to observance of certain conditions inter-alia, not accepting any fresh deposits, investment of funds or grant of loans with prior approval of Ministry of Corporate Affairs, depositor's legal right of recovery etc.

There are no unpaid deposits (except unclaimed deposits) as on March 31, 2012.

13. Appreciation:

The directors express their gratitude for the dedicated services put in by all the employees of the company.

14. Acknowledgements:

Your directors place on record their sincere thanks to the customers, vendors, investors, banks and financial institutions for the continued support. Your directors are also thankful to the Government of India, State Government and other authorities for their support and solicit similar support and guidance in future.

For and on behalf of the board

Ahmedabad Chintan N. Parikh

May 16, 2012 Chairman & Managing Director


Mar 31, 2010

The directors take pleasure in presenting the twenty seventh annual report of the company, together with audited statement of accounts for the year ended on March 31, 2010.

1. Financial Results:

Your companys performance during the above year is summarised below: Rupees in lacs Particulars Mar. 31, 2010 Mar. 31, 2009 Profit before interest, depreciation, exceptional and extraordinary items (Net) 705.03 111.30 Less: Interest 94.52 425.58 Profit / (Loss) before depreciation, exceptional and extraordinary items (Net) 610.51 (314.28) Less: Depreciation and amortisation of expenses 1590.86 1602.88 Loss before tax, exceptional and extraordinary items (Net) 980.35 1917.16 Add: Provision for tax 0.61 16.08 Loss after tax and before exceptional and extraordinary items (Net) 980.96 1933.24 Add: Exceptional and extraordinary items (Net) 3346.32 890.06 Add: Prior period adjustment (Net) 35.00 0.02 Loss after tax, exceptional and extraordinary items (Net) 4362.28 2823.32 Add: Loss brought forward from previous year 43609.43 40786.11 Deficit carried to balance sheet " 47971.71 43609.43

2. Dividend:

Your directors regret their inability to recommend any dividend on the equity shares in view of the losses suffered by your compajiy during the year under review and carried forward losses of earlier years. They are also unable to pay any dividend on preference shares also.

3. Subsidiary Companies:

The company has two subsidiary companies in the name of,,Ashima Cottons Private Limited and Ashima Textiles Inc. USA.

The Ministry of Corporate Affairs, New Delhi has under section 212(8) of the Companies Act, 1956, exempted the company from annexing to this Report, the annual reports of above subsidiary companies. The company will make available these documents/details if and when requested by the members of the company. It may however be noted that in terms of accounting standard AS-21 of The Institute of Chartered Accountants of India, consolidated financial statements have been presented which includes the financials of the subsidiary companies.

4. Performance of the company:

The highlight of the performance of the company for the year 2009-2010 is an improvement in performance of Denim division backed by recovery in denim market. Denim division has able to arrest its losses through higher volumes and better pricing. Attires division has shown improved profitability with shift to higher value added products. Spinfab division has been able to sustain its profitability despite major adverse factors such as increase in yarn prices and appreciation of Rupee against the US dollar. The company has been able to offset the negative impact of these factors by managing raw> material cost with cost-efficient mix and strict control over administrative expenses.

Due to the above factors, the operational profitability of the company has gone up to Rs.705.03 lacs as compared to Rs.111.30 lacs in previous year.

The detailed discussion on the performance is highlighted in the management discussions and analysis attached to this report.

5. Listing Agreement:

The equity shares of the company are presently listed on stock exchanges at Ahmedabad, Mumbai and National Stock Exchange.

6. Corporate Governance:

The report on corporate governance along with management discussion and analysis and certificate of compliance from statutory auditors forms part of this annual report.

The certificate of the statutory auditors of the company certifying compliance of conditions of the corporate governance as per clause 49 of the listing agreement is annexed with the report of corporate governance.

7. Directors Responsibility Statement:

Pursuant to requirements of section 217(2AA) of the Companies Act, 1956 and on the basis of information placed before them the directors confirm that:

(i) In the preparation of the annual accounts for financial year 2009-2010, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(ii) They have selected appropriate accounting policies and have applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2010 and of the loss of the company for the said year;

(iii) They have taken proper and sufficient care to the best of their knowledge for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis.

8. Directors:

Mr. D. K. Jain, nominee Director of IFC1 ceased to be director from July 27, 2009 consequent upon withdrawal of his nomination by IFCI. At the ensuing annual general meeting Mr. Chintan Parikh and Mr. Bihari B. Shah, Directors retire by rotation, and being eligible, offers themselves for re-appointment.

9. Insurance:

All the properties and insurable interests of all the divisions of the company including plant and machinery, stocks and liabilities under the legislative enactments are adequately insured.

10. Auditors:

Dhirubhai Shah & Company, Chartered Accountants, Ahmedabad retire at the ensuing annual general meeting of the company and are eligible for re-appointment. They have given their consent to act as auditors of the company, if re-appointed. You are requested to re-appoint Dhirubhai Shah and Company, Chartered Accountants as auditors to hold the office tiH the next annual general meeting.

The relevant notes forming part of accounts are self-explanatory and give full information and explanation in respect of the observations made by the auditors in their report.

11. Information regarding conservation of energy etc. and employees:

Information required under section 217(1) (e) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information under section 217 (2-A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time forms part of this report. However, as per the provisions of section 219(1) (b) (iv), the report and the accounts are being sent to all shareholders of the company excluding the information relating to conservation of energy, technology absorption and foreign exchange

earning and outgo, and the statement of particulars of employees. Any shareholder interested in obtaining 3 such particulars may inspect the same at the registered office of the company or write to the secretary for a copy.

12. Fixed Deposits:

The company has stopped accepting fresh deposits from April 1, 2004 and has been repaying all such deposits on their maturity, in time as per the schedule and hence has not exceeded the limits, in view of the approval granted by the Ministry of CdrpOrate Affairs, New Delhi vide order no.7/15/2006-CL.VI dated February 6, 2007. The said order fs subject to observance of certain conditions inter-alia, not accepting any fresh deposits, investment of funds or grant of loans with" prior approval of Ministry of Corporate Affairs, depositors legal right of recovery etc.

The,re are no unpaid deposits (except unclaimed deposits) as on March 31, 2010.

13. Appreciation:

The directors express their gratitude for the dedicated services put in by all the employees of the company.

14. Acknowledgements:

Your directors place on record their sincere thanks to the customers, vendors, investors, banks and financial institutions for the continued support. Your directors are also thankful to the Government of India, State Government and other authorities for their support and solicit similar support and guidance in future.

For and on behalf of the board Ahmedabad Chintan N. Parikh April 28, 2010 Chairman & Managing Director

 
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