Directors Report of Ashima Ltd.

Mar 31, 2025

Your Directors take pleasure in presenting the Forty-Second Annual Report of your Company together with
Audited Financial Statements for the year ended on March 31, 2025.

1. FINANCIAL RESULTS

Your Company''s performance during the financial year under review is summarized below:

Particulars	Standalone		Consolidated
	March 31, 2025	March 31, 2024	March 31, 2025	March 31, 2024
Total Income - Continuing Operations	1,329	9,123	1,360	9,123
Profit / (Loss) before Finance Costs, Depreciation and Amortization Expenses, Exceptional Items and Tax Expenses	734	7,353	719	7,353
Less: Finance Costs	680	365	680	365
Profit/(Loss) before Depreciation and Amortization Expenses, Exceptional Items and Tax Expenses	54	6988	39	6,988
Less: Depreciation and Amortization	66	78	66	78
Profit / (Loss) before Exceptional Items and Tax Expenses	(12)	6,910	(27)	6,910
Add/ (Less) Exceptional Items - Income / (Expenses)	-	-	-	-
Profit/(loss) before Tax Expenses	(12)	6,910	(27)	6,910
Less: Tax Expenses	-	(6)	3	(6)
Profit/(loss) after Tax - Continuing Operations	(12)	6,904	(24)	6,904
Profit/(Loss) from Discontinued operations before tax	(227)	(763)	(227)	(763)
Exceptional Items from Discontinued operations	(3,134)	-	(3,134)	-
Deferred Tax Assets/(Liabilities) of Discontinued operations	1,486	3,500	1,485	3,500
Profit/(Loss) from Discontinued operations after tax	(1,876)	2,737	(1,876)	2,737
Profit/(Loss) after Tax	(1,888)	9,641	(1,900)	9,641
Other Comprehensive Income (Net of Tax)	70	17	70	17
Total Comprehensive Income	(1,818)	9,658	(1,830)	9,658

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares and preference shares for the
financial year ended March 31, 2025.

3. RESERVES

During the financial year under review, no amount has been transferred to any reserve.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

The overall performance of the Company has declined during the year under review, with reported
loss of J 1,888 lacs compared to profit of J 9,641 lacs in the previous year. The amount of reported
profitability is after considering lower positive impact of J 1,486 lacs on account of deferred tax asset
for the year under review, which was much higher at J 3,500 lacs in the previous year due to first
time recognition thereof.

Operational profitability declined due to lower revenue of Real Estate business and adverse impact
of bearish and volatile stock markets on profitability of Investment Division.

The bottomline was also affected significantly upon closure of the cotton textile operations of the
Company during the year, including non-recurring items relating to it.

Real Estate Division:

The Division has two ongoing projects: “Swan Lake”, a plotted development project and “The
Sovereign”, a luxurious high-rise residential apartment project. There is consistent progress in
construction and development work for the projects. The Division booked revenue of J 526 lacs
during the year.

Investment Division:

Performance of the Division was affected due to significant decline in the stock market during the
year. However, over a longer time-frame, the division has outperformed the benchmark indices. The
XIRR for the investments of the Company since inception was at 27%, compared to XIRR of various
benchmark indices ranging from 11% to 13%. For the year, it was at 3% compared to benchmark
returns of 5%.

The investment portfolio of the Company was moved to its wholly owned subsidiary, Ashima Capital
Management Limited (“ACML”), in February 2025 upon ACML having got PMS licence from SEBI.
The performance of the portfolio is being rep orted on continuing basis after the transition, since
ACML is also managed by Mr. Krishnachintan Parikh, Executive Director of the Company, who has
been managing Investment Division of the Company since its inception. He is the Principal Officer
of ACML as per SEBI regulations.

Consolidated Financials:

The Consolidated financials of the Company which include financials of Ashima Capital Management
Limited (“ACML”), a wholly owned subsidiary, are presented for the year under review. ACML was
incorporated in May 2024, so this is its first financial year. As per consolidated financials, there is
a loss of J 1,900 lacs compared to loss of J 1,888 lacs on standalone basis. ACML has made a small
loss in its first year on account of set up expenses and as it earned revenues only from February
2025 upon commencing its operations after getting SEBI license.

Outlook:

A detailed discussion on performance and outlook appears as part of Management Discussion and
Analysis Report attached to this report.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF
OUR 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, affecting the financial position of the Company
which has occurred between the end of financial year and the date of this Board''s Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has formed a Wholly Owned Subsidiary Company (‘WOS'') in the name of ''ASHIMA
CAPITAL MANAGEMENT LIMITED'' (CIN: U66309GJ2024PLC151485) on May 14, 2024. The Board
of Directors also reviewed the affairs of the wholly owned subsidiary company. In accordance with
the provisions of Section 129(3) of the Companies Act, 2013, we have prepared Consolidated
Financial Statements of the Company and its Subsidiary, which forms part of this Annual Report.

Further, a statement containing the salient features of the financial statements of our Subsidiary
Companies is in the prescribed format AOC-1 is appended as Annexure-5 to the Board''s report.

The Company does not have any Joint Venture (JV) or Associate Company as on March 31, 2025.

7. DEPOSITS

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. There were no unpaid or
unclaimed deposits as on March 31, 2025.

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

Pursuant to Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies
(Accounts) Rules, 2014, information on conservation of energy, technology absorption and foreign
exchange earnings and outgo forms part of this Report and is annexed at Annexure-1.

9. RISK MANAGEMENT

The Company has framed and adopted a “Risk Management Policy” to identify, monitor, minimize
and mitigate risks and determine the responses to various risks to minimize their adverse impact on
the organization. The Company is exposed to various financial risks viz. credit risk, liquidity risk,
interest rate risk etc. The management oversees the risk management framework and the Audit
Committee evaluates internal financial controls and risk management systems. However, the details
of risk management objectives and policies made by the Company under the said provision is given
in the notes to the Financial Statements. In the opinion of Board, there are no risk which may
threaten the existence of the Company. The Risk Management Policy is available on the website of
the Company and weblink of the same is https://ashima.in/wp-content/uploads/2018/08/Risk-
Management-Policy.pdf.

10. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

In terms of requirements of Section 135(1) of the Companies Act, 2013, the Board of Directors at
its meeting held on August 8, 2024 has reconstituted the Corporate Social Responsibility (CSR)
Committee. The CSR Committee consists of 3 (Three) Directors viz., Mr. Chintan N. Parikh - Chairman,
Mr. Nilesh Mehta and Mrs. Koushlya Melwani, non-executive Independent Directors, members of the
Committee as on March 31, 2025.

During the Financial Year, the CSR Committee met on February 13, 2025 for consideration, review
and recommendation to the Board of Directors of the Company for CSR expenditure. The Committee
has noted that no amount was required to be spent towards CSR expenditure for the Financial Year
2024-25 in terms of Section 135(5) of the Companies Act, 2013. CSR Policy is available on the
website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2023/04/
CSR-Policy.pdf

11. CHANGE IN NATURE OF BUSINESS

The Company closed its cotton textile operations during the year.

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

During the Financial Year under review, the Company has made investments. However, there were
no loans or advances granted or guarantees given or security provided under Section 186 of the
Companies Act, 2013 during the Financial Year. The details of investments made as on March 31,
2025 are given in the Notes to the Financial Statements forming part of the Annual Report.

13. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with Indian
Accounting Standards (Ind AS) 110, issued by the Ministry of Corporate Affairs, forms part of this
Annual Report.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the transactions with Related Parties are placed before the Audit Committee for its approval. A
statement containing details of all Related Party Transactions is placed before the Audit Committee
and the Board of Directors for review on a quarterly basis and for prior approval whenever there is
a requirement for such approvals. The omnibus approval of the Audit Committee is obtained on a
yearly basis for the transactions which are of a foreseeable and repetitive nature. The transactions
entered pursuant to omnibus approval are placed before Audit Committee and Board of Directors on
a quarterly basis. The policy on Related Party Transactions (RPT) is available on the website of the
Company and weblink of the same is https://ashima.in/wp-content/uploads/2025/02/Policy-on-Related-
Party-T ransaction.pdf

During the year under review, all the related party transactions entered pursuant to Section 188 of
the Companies Act, 2013 were in the ordinary course of business and on an arm''s length basis and
hence disclosure in Form AOC-2 is not required and there were no materially significant transactions
with any of the related parties that may have potential conflict with the interest of the Company at
large.

15. NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a
policy for appointment of Directors, Key Managerial Personnel and Senior Management and their
remuneration. The same is available on Company''s website and weblink of the same is
https://ashima.in/wp-content/uploads/2025/02/Nomination-and-Remuneration-Policy.pdf

16. ANNUAL EVALUATION OF BOARD''S PERFORMANCE, ITS COMMITTEES AND OF INDIVIDUAL
DIRECTORS

The Nomination and Remuneration Committee has laid down the manner in which formal evaluation
of the performance of the Board, its Committees and individual Directors has to be made, which is
broadly in compliance with the Guidance Note on Board Evaluation issued by SEBI vide its Circular
No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 5, 2017.

Pursuant to the provisions of Section 178 of Companies Act, 2013 read with Regulation 17 and 19
of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Nomination
and Remuneration Committee has carried out annual performance evaluation of Board of Directors,
Committees of the Board and the individual directors for the year under review.

Further, pursuant to the provisions of Section 178 read with Schedule IV of the Companies Act, 2013
and Regulation 17(10) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations,
2015, the Board of Directors have carried out the evaluation of the Independent Directors and
fulfillment of the independence criteria of the Independent Directors as specified under Section
149(6) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and
Disclosures Requirements) Regulations, 2015, for the year under review.

A separate meeting of Independent Directors was held on March 21, 2025. In the said meeting
performance of Non-Independent Directors, performance of the Board as a whole and performance
of Chairperson of the Company was evaluated.

The manner in which the evaluation was carried out has been explained in the Corporate Governance
Report attached to this report.

17. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return
for the financial year ended on March 31, 2025 is available on the website of the Company and
weblink of the same is https://ashima.in/wp-content/uploads/2025/05/Form-MGT-7-for-the-year-2024-
25.pdf

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 SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 have been provided.

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

During the financial year, 7 (Seven) meetings of the Board of Directors were held, as per the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. The details of Board meetings held during the financial year 2024-25 have been furnished in
the Corporate Governance Report forming part of this Annual Report.

During the financial year, your Company has complied with applicable Secretarial Standards issued
by the Institute of Company Secretaries of India (ICSI).

20. COMMITTEES OF BOARD:

As required under the Act and the SEBI Listing Regulations, the Company has constituted various
Statutory Committees. Additionally, the Board has formed other governance committees and sub¬
committees to review specific business operations and governance matters including any specific
items that the Board may decide to delegate. As on March 31, 2025, the Board has constituted the
following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

Details of all the committees such as terms of reference, composition, and meetings held during the
year under review are disclosed in the Corporate Governance Report, which forms part of this
Integrated Annual Report.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment/Reappointment during the Financial Year:

(i) The shareholders at the 41st Annual General Meeting held on August 17, 2024 approved
reappointment of Mr. Chintan N. Parikh, Chairman and Managing Director (DIN: 00155225) as
Director retiring by rotation.

(ii) The shareholders at the 41st Annual General Meeting held on August 17, 2024 approved
appointment of Mr. Nilesh Mehta as an Independent Director of the company for a period of
five (5) years from May 25, 2024 to May 24, 2029.

(iii) The Board of Directors of the Company at their Meeting held on August 8, 2024, appointed
Mr. Harshil Shah, as Company Secretary (CS) (KMP)of the Company w.e.f. August 20, 2024
and Mrs. Shweta Sultania resigned from the post of Company Secretary w.e.f. the close of
working hours on May 31, 2024.

(iv) Dr. Bakul Dholakia (DIN: 00005754) ceased to be an Independent Director upon the completion
of his term on September 28, 2024.

(v) Mr. Shrikant Pareek (DIN: 02139143) resigned as a Whole-time Director, designated as “Director
(Operations)” w.e.f. the close of working hours on March 31, 2025.

Retirement by Rotation:

In accordance with the Articles of Association and as per provisions of Section 152(6) of the Companies
Act, 2013, Mr. Krishnachintan Parikh, Executive Director (DIN:- 07208067) of the Company retires
by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself
for reappointment. Your Board recommends his reappointment.

Except as stated above, there was no change in the composition of the Board of Directors and Key
Managerial Personnel.

Key Managerial Personnel:

The followings persons are the Key Managerial Personnel (KMP) as per the provisions of Section
203 of the Companies Act, 2013, as on March 31, 2025:

1. Mr. Chintan N. Parikh Chairman & Managing Director

2. Mr. Krishnachintan C. Parikh Whole-time Director

3. Mr. Shrikant Pareek Director (Operations)

4. Mr. Jayesh C. Bhayani Chief Financial Officer

5. Mr. Harshil Shah Company Secretary

22. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board
of Directors confirms that to the best of its knowledge and belief:

a. in the preparation of the annual accounts for the financial year ended March 31, 2025, the
applicable accounting standards have been followed along with proper explanation relating to
material departures;

b. the directors have 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 profit of the
company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013, for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis; and

e. the directors have laid down internal fina ncial controls to be followed by the company and that
such internal financial controls are adequate and were operating effectively;

f. the directors have devised proper system to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.

23. DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have given their declaration to the Company stating their independence
pursuant to Section 149(6) of the Companies Act, 2013 and complied with the code for Independent
Directors prescribed in schedule IV of the Companies Act, 2013 and Regulation 16( 1 )(b) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. They have further declared
that they are not debarred or disqualified from being appointed or continuing as directors of companies
by the SEBI /Ministry of Corporate Affairs or any such statutory authority. In the opinion of Board, all
the Independent Directors are persons of integrity and possess relevant expertise and experience
including the proficiency. All the Independent Directors of the company are registered with the Indian
Institute of Corporate Affairs (IICA) as notified by the Central Government under Section 150(1) of
the Companies Act, 2013.

The terms and conditions of the appointment of Independent Directors have been disclosed on the
website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2024/01/
Terms-and-Conditions-of-Appointment-of-IndependentDirectors.pdf

24. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, and as per provisions of the Companies Act, 2013 and Rules made thereunder,
the Company has put in place a Familiarisation Program for the Independent Directors to familiarise
them with the Company, their roles, rights, responsibilities and obligations in the Company, nature
of the industry in which the Company operates, business model etc. The same is available on the
website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2025/02/

Details-of-Familiarization-Programmes-imparted-to-Independent-Directors-under-SEBI-LODR-

Regulations-2015-2025.pdf

25. INSURANCE

The Company''s plant, property, equipment and stocks are adequately insured against major risks.
The Company has also taken Directors'' and Officers'' Liability Insurance Policy to provide coverage
against the liabilities arising on them.

26. PARTICULARS OF EMPLOYEES

a. Disclosures pertaining to remuneration and other details as required under Section 197(12) 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 are annexed as
Annexure-2 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. However, the
said statement is not being sent along with this Annual Report to the members in line with the
provisions 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.

27. AUDITORS

a. STATUTORY AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No.
106625W) were appointed as Statutory Auditors of the Company at the 39th Annual General
Meeting of the Company for a second term of five (5) consecutive years, commencing from
the conclusion of 39th Annual General Meeting of the Company till the conclusion of 44th
Annual General Meeting to be held in t he year 2027.

The Auditors'' Report for the financial year 2024-25 forms part of this Annual Report and does
not contain any qualification, reservation or adverse remark or disclaimer.

b. COST AUDITORS

On recommendation of the Audit Committee, the Board of Directors have appointed M/s. Ankit
Sheth & Co., Cost Accountants (Firm Registration No: 102785) as Cost Auditors of the Company
for the financial year 2025-26 under Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Rules, 2014, at a remuneration as mentioned in the
Notice convening the 42nd Annual General Meeting for conducting the audit of the cost
records maintained by the Company.

M/s. Ankit Sheth & Co., Cost Accountants have confirmed that they are free from any
disqualification specified under Section 141 and 148 of the Companies Act, 2013 and Rules
framed thereunder.

The Company has filed the Cost Audit Report for the financial year 2023-24 as prescribed
under the Companies (Cost Records and Audit) Rules, 2014.

c. SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 and the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Regulation 24A(1A) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,
and other applicable provisions, if any, including any statutory modification(s) or re-enactment(s)
thereof for the time being in force, the consent of the Board be and is hereby accorded to
appoint M/s. Shah & Shah Associates, Practicing Company Secretaries (Firm Regn. No.
P2000GJ013500, Peer Review No. 1125/2021), as the Secretarial Auditor of the Company for
a term of five (5) consecutive financial years commencing from the financial year 2025-26 to

financial year 2029-30 i.e. from the conclusion of 42nd Annual General Meeting till the conclusion
of 46th Annual General Meeting of the Company.

The Secretarial Audit Report for the financial year ended March 31, 2025, pursuant to Section
204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 and Regulation 24A(1) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure-3.

The Secretarial Audit Report for the year ended on March 31, 2025 does not contain any
qualifications, reservations or adverse remarks.

d. INTERNAL AUDITORS

M/s Dhirubhai Shah & Co. LLP, Chartered Accountants, Ahmedabad, (FRN No. 102511W/
W100298), were appointed as the Internal Auditors of the Company to conduct the Internal
Audit for the Financial Year 2024-25 in accordance with the provisions of Section 138 of the
Act read with the Companies (Accounts) Rules, 2014. The Audit Committee considers and
reviews the Internal Audit Reports submitted by the Internal Auditors on a quarterly basis.

28. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Auditors u/s 143 (12) of the Companies Act,
2013 and rules framed thereunder either to the Company or to the Central Government.

29. VIGIL MECHANISM

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, which is available on the website of the Company and weblink of the same is
https://ashima.in/wp-content/uploads/2021/08/Ashima-Ltd.-Vigil-Mechanism_Whistle-Blower-Policy.pdf.

30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There have been no significant and material orders passed by the regulators or courts or tribunals
impacting the going concern status of the company and its operations.

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details on Internal Control Systems and their adequacy are provided in the Management Discussion
and Analysis, which forms part of this Report.

32. LISTING WITH STOCK EXCHANGES

Your Company is listed with the BSE Limited and National Stock Exchange of India Ltd. and has paid
the annual listing fees for the financial year 2025-26 to both the Stock Exchanges.

33. AUDIT COMMITTEE

The Company has an Audit Committee as per Section 177 of the Companies Act, 2013 read with
the rules framed thereunder and Regulation 18 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The details of composition of Audit Committee and other details
relating to the same are given in the Report of Corporate Governance forming part of this Report.
During the Financial Year 2024-25, there has been no instance where the Board has not accepted
the recommendations of the Audit Committee.

34. CORPORATE GOVERNANCE

The Company is committed to maintain good Corporate Governance practices. Pursuant to Regulation
34(3) read with Part C of Schedule V of SEBI (Listing Obligations and Disclosures Requirements)
Regulations, 2015, a separate report on Corporate Governance along with a certificate of compliance
with corporate governance received from M/s. Mukesh M. Shah & Co., Chartered Accountants,
Statutory Auditors of the Company, is annexed as Annexure 4 forming part of this Annual Report.

35. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulation 34(2)(e) read with Part B of Schedule V of SEBI (Listing Obligations and Disclosures

Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the year
2024-25 is annexed as Annexure 6 forming part of this Annual Report.

36. SHARE CAPITAL

There has been no change in the Authorised Share Capital and Paid up Share Capital during the
financial year under review.

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 financial 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.

37. NON-CONVERTIBLE DEBENTURES

During the financial year under review, the, company has issued and allotted 1,000 Unlisted, Secured,
Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“NCDs”) of face value of
J 1,00,000/- (Rupees One Lakh only) each, aggregating to J 10,00,00,000/- (Rupees Ten Crores
only) on Private Placement basis in multiple tranches.

38. COST RECORDS

The Company is required to maintain cost records as specified by the Central Government under
Section 148(1) of the Companies Act, 2013 for the reporting year and accordingly such accounts and
records are made and maintained by the company.

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

The Company has constituted an Internal Complaints Committee (ICC) in due compliance with the
provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 to redress complaints received regarding sexual harassment.

Your Directors state that during the financial year under review, no complaints relating to sexual
harassment were received nor any cases filed pursuant to the said Act.

40. GENERAL

a. There was no application made or any proceeding pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) during the year.

b. There has been no instance of valuation for settlement or for taking loan from the Banks or
Financial Institutions.

41. APPRECIATION

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

42. ACKNOWLEDGEMENTS

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

For and on behalf of the Board
Chintan N. Parikh

Date: May 24, 2025 Chairman & Managing Director

Place: Ahmedabad (DIN: 00155225)

---

Mar 31, 2024

The Directors take pleasure in presenting the Forty-first Annual Report of your Company together with Audited Financial Statements for the year ended on March 31, 2024.

1. FINANCIAL RESULTS

Your Company’s performance during the financial year under review is summarized below:

(INR in Lacs)
Particulars	March 31, 2024	March 31, 2023
Total Income -Continuing Operations	33,129	21,062
Profit / (Loss) before Finance Costs, Depreciation and Amortization Expenses, Exceptional Items and Tax Expenses	7,102	(126)
Less: Finance Costs	511	225
Profit/(Loss) before Depreciation and Amortization Expenses, Exceptional Items and Tax Expenses	6,591	(351)
Less: Depreciation and Amortization	447	413
Profit / (Loss) before Exceptional Items and Tax Expenses	6,144	(764)
Add/ (Less) Exceptional Items-Income / (Expenses)	-	(5)
Profit/(loss) before Tax Expenses	6,144	(769)
Less: Tax Expenses	(3,494)	0
Profit/(loss) after Tax-Continuing Operations	9,638	(769)
Profit/(Loss) from Discontinued operations	3	104
Profit/(Loss) after Tax	9,641	(665)
Other Comprehensive Income (Net of Tax)	17	(31)
Total Comprehensive Income	9,658	(696)

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares and preference shares for the financial year ended March 31, 2024.

3. RESERVES

During the financial year under review, no amount has been transferred to any reserve.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

There has been substantial improvement in the performance of the Company during the year under review, with reported profit of '' 9,641 lacs compared to loss of ''665 lacs during the preceding year. Profit for the year includes an amount of '' 3500 lacs on account of first-time recognition of deferred tax assets.

The overall profitability of the Company was boosted by the real estate division, which commenced booking revenue for its maiden project “Swan Lake” this year. The textile business has shown improved performance, with its loss being narrowed compared to the previous year. The Investment division has reported significantly higher profits, while outperforming all benchmark indices year after year.

Textiles Division: The Company resumed its inhouse wet production activities during the year upon commissioning of new Effluent Treatment Plant (ETP) and Zero Liquid Discharge (ZLD) system. As a result, it could significantly curtail outsourcing. This worked favourably for the Company in terms of higher operating volumes and better cost management. Effective cost management on part of the Company was supported by softened prices of most of the raw materials, dyes, chemicals and fuel. The textiles business has been able to increase the levels of operations and reduce its losses during the year.

Real Estate Division: The Division contributed significantly to the profitability of the Company, with its “Swan Lake” project booking revenue of '' 6983 lacs during the year. The division, which commenced its business about two years ago, is doing well with two projects on hand-“Swan Lake”, a week-end homes project and the recently launched project “The Sovereign”, a luxurious high-rise residential apartment project. The company received excellent response from the market for its Swan Lake project, with bookings having been received for about 60% of the overall project. Execution of the project is going on very well. As regards the Sovereign project, which started during the last quarter of the year, the construction work is in progress. The total built up area of the project is about 6,46,000 Sq Ft. The company has already invested '' 9200 lacs for the project.

Investment Division: The investment division has reported remarkably good profitability (based on mark-to-market accounting) during the year. The Division makes investment in equity shares with a longterm perspective with the approach of value investing. As per accounting norms, periodic performance is reported based on market value of shares held at the end of the period. The division has outperformed the benchmark indices in terms of XIRR year on year, with the current year XIRR at 78% being far superior to XIRR of various benchmark indices ranging from 25% to 39%.

Outlook:

A detailed discussion on performance and outlook appears as part of Management Discussion and Analysis Report attached to this report.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF OUR 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, affecting the financial position of the Company which has occurred between the end of financial year and the date of this Board’s Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture (JV) or Associate Company as on March 31, 2024.

The Company has formed a Wholly Owned Subsidiary Company (‘WOS’) in the name of ‘ASHIMA CAPITAL MANAGEMENT LIMITED’ (CIN: U66309GJ2024PLC151485). The said WOS is incorporated on May 14, 2024.

7. DEPOSITS

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. There were no unpaid or unclaimed deposits as on March 31, 2024.

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

Pursuant to Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, information on conservation of energy, technology absorption and foreign exchange earnings and outgo forms part of this Report and annexed at Annexure-1.

9. RISK MANAGEMENT

The Company has framed and adopted a “Risk Management Policy” to identify, monitor, minimize and mitigate risks and determine the responses to various risks to minimize their adverse impact on the organization. The Company is exposed to various financial risks viz. credit risk, liquidity risk, foreign currency risk, interest rate risk etc. The executive management oversees the risk management framework and the Audit Committee evaluates internal financial controls and risk management systems. However, the details of risk management objectives and policies made by the Company under the said provision is given in the notes to the Financial Statements. In the opinion of Board, there are no risk which may threaten the existence of the Company. The Risk Management Policy is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2018/08/Risk-Management-Policy.pdf.

10. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

In terms of requirements of Section 135(1) of the Companies Act, 2013, the Board of Directors at its meeting held on August 11, 2017 has constituted a Corporate Social Responsibility (CSR) Committee. The CSR Committee consists of 3 (Three) Directors viz., Mr. Chintan N. Parikh-Chairman, Dr. Bakul H. Dholakia and Mrs. Koushlya Melwani, the members of the committee as on March 31, 2024.

During the Financial Year, the CSR Committee met on November 02, 2023 for consideration, review and recommendation to the Board of Directors of the Company for CSR expenditure. The Committee has noted that no amount was required to be spent towards CSR expenditure for the Financial Year 2023-24 in terms of Section 135(5) of the Companies Act, 2013. CSR Policy is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2023/04/CSR-Policy.pdf

11. CHANGE IN NATURE OF BUSINESS

During the financial year under review there has been no change in the nature of Business of the Company.

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

During the Financial Year under review, the Company has made investments. However, there were no loans or advances granted or guarantees given or security provided under Section 186 of the Companies Act, 2013 during the Financial Year. The details of investments made as on March 31, 2024 are given in the Notes to the Financial Statements forming part of the Annual Report.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the transactions with Related Parties are placed before the Audit Committee for its approval. A statement containing details of all Related Party Transactions is placed before the Audit Committee and the Board of Directors for review on a quarterly basis and for prior approval whenever there is a requirement for such approvals. The omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to omnibus approval are placed before Audit Committee and Board of Directors on a quarterly basis. The policy on Related Party Transactions (RPT) is available on the website of the Company and weblink of the same is

https://ashima.in/wp-content/uploads/2022/05/Related-Party-Transactions-Effective-from-

April-1-2022.pdf

During the year under review, all the related party transactions entered pursuant to Section 188 of the Companies Act, 2013 were in the ordinary course of business and on an arm’s length basis and hence disclosure in Form AOC-2 is not required and there were no materially significant transactions with any of the related parties that may have potential conflict with the interest of the Company at large.

Further, pursuant to the provisions of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations’), during the year under review, the Company has entered into material related party transaction with Subahu Enterprises LLP, a Related Party, for issue of

Unlisted, Secured, Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“NCDs”) on private placement basis. The said material related party transaction was entered pursuant to the approval of the Board of Directors at its meeting held on July 26, 2023 read with shareholders’ approval at the Annual General Meeting of the Company held on August 25, 2023.

The details of transactions with related parties as per the requirement of IND-AS are disclosed in the notes to the Financial Statements.

14. NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The same is available on Company’s website and weblink of the same is https://ashima.in/wp-content/ uploads/2023/04/Nomination-and-Remuneration-Policy.pdf

15. ANNUAL EVALUATION OF BOARD''S PERFORMANCE, ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS

The Nomination and Remuneration Committee has laid down the manner in which formal evaluation of the performance of the Board, its Committees and individual Directors has to be made, which is broadly in compliance with the Guidance Note on Board Evaluation issued by SEBI vide its Circular No. SEBI/HO/ CFD/CMD/CIR/P/2017/004 dated January 5, 2017.

Pursuant to the provisions of Section 178 of Companies Act, 2013 read with Regulation 17 and 19 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Nomination and Remuneration Committee has carried out annual performance evaluation of Board of Directors, Committees of the Board and the individual directors for the year under review.

Further, pursuant to the provisions of Section 178 read with Schedule IV of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board of Directors have carried out the evaluation of the Independent Directors and fulfillment of the independence criteria of the Independent Directors as specified under Section 149(6) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, for the year under review.

A separate meeting of Independent Directors was held on March 28, 2024. In the said meeting performance of Non-Independent Directors, performance of the Board as a whole and performance of Chairperson of the Company was evaluated.

The manner in which the evaluation was carried out has been explained in the Corporate Governance Report attached to this report.

16. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the financial year ended on March 31, 2024 is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2024/05/Form-MGT-7-for-the-year-2023-24.pdf

17. 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been provided.

18. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE FINANCIAL YEAR UNDER REVIEW

During the financial year, 4 (Four) meetings of the Board of Directors were held, as per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Board meetings held during the financial year 2023-24 have been furnished in the Corporate Governance Report forming part of this Annual Report.

During the financial year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

19. COMMITTEES OF BOARD:

As required under the Act and the SEBI Listing Regulations, the Company has constituted various Statutory Committees. Additionally, the Board has formed other governance committees and sub-committees to review specific business operations and governance matters including any specific items that the Board may decide to delegate. As on March 31, 2024, the Board has constituted the following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

Details of all the committees such as terms of reference, composition, and meetings held during the year under review are disclosed in the Corporate Governance Report, which forms part of this Integrated Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment during the Financial Year:

(i) The shareholders at the 40th Annual General Meeting held on August 25, 2023 approved appointment of Mr. Krishnachintan C. Parikh, Executive Director (DIN: 07208067) as Director retiring by rotation.

(ii) The shareholders at the 40th Annual General Meeting held on August 25, 2023 approved reappointment of Mr. Shrikant S. Pareek, (DIN: 02139143) as a Whole-time Director, designated as “Director (Operations)” of the Company for a period of three (3) years w.e.f. August 01, 2023.

(iii) The shareholders at the 40th Annual General Meeting held on August 25, 2023 approved reappointment of Mr. Sanjay S. Majmudar (DIN: 00091305) as an Independent Director of the Company for a second term of five (5) consecutive years commencing from November 03, 2023 to November 02, 2028.

(iv) The shareholders at the 40th Annual General Meeting held on August 25, 2023 approved reappointment of Mrs. Koushlya V. Melwani (DIN: 01575110) as an Independent Director of the Company for a second term of five (5) consecutive years commencing from May 25, 2024 to May 24, 2029.

(v) The Board of Directors of the Company at their Meeting held on July 26, 2023, appointed Mr. Jayesh C Bhayani, as Chief Financial Officer (CFO) (KMP) of the Company w.e.f July 26, 2023 and Mr. Hiren S Mahadevia has resigned from the post of Chief Financial Officer w.e.f the close of working hours on June 30, 2023.

(vi) Mr. Krishnachintan C. Parikh, Executive Director, (DIN: 07208067) was re-appointed as Executive Director of the company for a period of three years with effect from June 05, 2024 by shareholders through Postal Ballot process and voting results were declared on March 18, 2024.

Retirement by Rotation:

In accordance with the Articles of Association and as per provisions of Section 152(6) of the Companies Act, 2013, Mr. Chintan N. Parikh (DIN: 00155225), Chairman and Managing Director of the Company retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Your Board recommends his re-appointment.

Except as stated above, there was no change in the composition of the Board of Directors and Key Managerial Personnel.

Key Managerial Personnel:

The followings persons are the Key Managerial Personnel (KMP) as per the provisions of Section 203 of the Companies Act, 2013, as on March 31, 2024:

1. Mr. Chintan N. Parikh Chairman & Managing Director

2. Mr. Krishnachintan C. Parikh Executive Director

3. Mr. Shrikant S. Pareek Director(Operations)

4. Mr. Jayesh C. Bhayani Chief Financial Officer

5. Ms. Shweta Sultania Company Secretary

21. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors confirms that to the best of its knowledge and belief:

a. in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the directors have 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 profit of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis; and

e. the directors have 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 have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are 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) of the Companies Act, 2013 and complied with the code for Independent Directors prescribed in schedule IV of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. They have further declared that they are not debarred or disqualified from being appointed or continuing as directors of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. In the opinion of Board, all the Independent Directors are persons of integrity and possess relevant expertise and experience including the proficiency. All the Independent Directors of the company are registered with the Indian Institute of Corporate Affairs (IICA) as notified by the Central Government under Section 150(1) of the Companies Act, 2013.

The terms and conditions of the appointment of Independent Directors have been disclosed on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2024/01/ Terms-and-Conditions-of-Appointment-of-IndependentDirectors.pdf

23. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and as per provisions of the Companies Act, 2013 and Rules made thereunder, the Company has put in place a Familiarization Program for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities and obligations in the Company, nature of the industry in which the Company operates, business model etc. The same is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2024/04/Details-of-Familiarization-Programmes-imparted-to-Independent-Directors-under-SEBI-LODR-Regulations-2015-2024.pdf

24. INSURANCE

The Company’s plant, property, equipment and stocks are adequately insured against major risks. The Company has also taken Directors’ and Officers’ Liability Insurance Policy to provide coverage against the liabilities arising on them.

25. PARTICULARS OF EMPLOYEES

a. Disclosures pertaining to remuneration and other details as required under Section 197(12) 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-2 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. However, the said statement is not being sent along with this Annual Report to the members in line with the provisions 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.

26. AUDITORSa. STATUTORY AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 106625W) were appointed as Statutory Auditors of the Company at the 39th Annual General Meeting of the Company for a second term of five (5) consecutive years, commencing from the conclusion of 39th Annual General Meeting of the Company till the conclusion of 44th Annual General Meeting to be held in the year 2027.

The Auditors’ Report for the financial year 2023-24 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark or disclaimer.

b. COST AUDITORS

On recommendation of the Audit Committee, the Board of Directors have appointed M/s. Ankit Sheth & Co., Cost Accountants (Firm Registration No: 102785) as Cost Auditors of the Company for the financial year 2024-25 under Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, at a remuneration as mentioned in the Notice convening the 41st Annual General Meeting for conducting the audit of the cost records maintained by the Company.

M/s. Ankit Sheth & Co., Cost Accountants have confirmed that they are free from any disqualification specified under Section 141 and 148 of the Companies Act, 2013 and Rules framed thereunder.

The Company has filed the Cost Audit Report for the financial year 2022-23 as prescribed under the Companies (Cost Records and Audit) Rules, 2014.

c. SECRETARIAL AUDITORS

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the Company has appointed Mr. Tapan Shah, Practicing Company Secretary, Ahmedabad, to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2024.

The Secretarial Audit Report for the financial year ended March 31, 2024, pursuant to Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure-3.

The Secretarial Audit Report for the year ended on March 31, 2024 does not contain any qualifications, reservations or adverse remarks.

d. INTERNAL AUDITORS

M/s Dhirubhai Shah & Co. LLP, Chartered Accountants, Ahmedabad, (FRN No. 102511W/W100298), were appointed as the Internal Auditors of the Company to conduct the Internal Audit for the Financial Year 2023-24 in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014. The Audit Committee considers and reviews the Internal Audit Reports submitted by the Internal Auditors on a quarterly basis.

27. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Auditors u/s 143 (12) of the Companies Act, 2013 and rules framed thereunder either to the Company or to the Central Government.

28. VIGIL MECHANISM

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 is available on the website of the Company and weblink of the same is https:// ashima.in/wp-content/uploads/2021/08/Ashima-Ltd.-Vigil-Mechanism Whistle-Blower-Policy.pdf.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the company and its operations.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details on Internal Control Systems and their adequacy are provided in the Management Discussion and Analysis which forms part of this Report.

31. 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 annual listing fees for the financial year 2024-25 to both the Stock Exchanges.

32. AUDIT COMMITTEE

The Company has an Audit Committee as per Section 177 of the Companies Act, 2013 read with the rules framed thereunder and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of composition of Audit Committee and other details relating to the same are given in the Report of Corporate Governance forming part of this Report. During the Financial Year 2023-24, there has been no instance where the Board has not accepted the recommendations of the Audit Committee.

33. CORPORATE GOVERNANCE

The Company is committed to maintain good Corporate Governance practices. Pursuant to Regulation 34(3) read with Part C of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a separate section on Corporate Governance along with a certificate of compliance with corporate governance received from M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the Company, is annexed as Annexure ''4'' forming part of this Annual Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulation 34(2)(e) read with Part B of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the year 2023-24 is annexed as Annexure ''5'' forming part of this Annual Report.

35. SHARE CAPITAL

There has been no change in the Authorised Share Capital and Paid up Share Capital during the financial year under review.

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 financial year under review:

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

b. I ssue 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.

36. NON-CONVERTIBLE DEBENTURES

During the financial year under review, the, company has issued and allotted 5,500 Unlisted, Secured, Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“NCDs”) of face value of '' 1,00,000/- (Rupees One Lakh only) each, aggregating to '' 55,00,00,000/- (Rupees Fifty Five Crores only) on Private Placement basis in multiple tranches.

37. COST RECORDS

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 for the reporting year and accordingly such accounts and records are made and maintained by the company.

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

The Company has constituted an Internal Complaints Committee (ICC) in due compliance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

Your Directors state that during the financial year under review, no complaints relating to sexual harassment were received nor any cases filed pursuant to the said Act.

39. GENERAL

a. There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.

b. There has been no instance of valuation for settlement or for taking loan from the Banks or Financial Institutions.

40. APPRECIATION

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

41. ACKNOWLEDGEMENTS

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

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Mar 31, 2023

Your Directors take pleasure in presenting the Fortieth Annual Report of your Company together with Audited Financial Statements for the year ended on March 31, 2023.

1. FINANCIAL RESULTS

Your Company’s performance during the financial year under review is summarized below:

('' in Lacs)
Particulars	March 31, 2023	March 31, 2022
Total Income -Continuing Operations	21,062	20,999
Profit / (Loss) before Finance Costs, Depreciation and Amortization Expenses, Exceptional Items & Tax Expenses	(126)	(453)
Less: Finance Costs	225	229
Profit/(Loss) before Depreciation and Amortization Expenses, Exceptional Items & Tax Expenses	(351)	(682)
Less: Depreciation and Amortization	413	311
Profit / (Loss) before Exceptional Items & Tax Expenses	(764)	(994)
Add/ (Less) Exceptional Items - Income / (Expenses)	(5)	3,579
Profit/(loss) before Tax Expenses	(769)	2,585
Less: Tax Expenses	0	0
Profit/(loss) after Tax - Continuing Operations	(769)	2,585
Profit/(Loss) from Discontinued operations
Profit/(Loss) from Discontinued operations	104	(477)
Exceptional Items from Discontinued operations	-	(316)
Profit/(Loss) from Discontinued operations	104	(793)
Profit/(Loss) after Tax	(665)	1,792
Other Comprehensive Income	(31)	(90)
Total Comprehensive Income	(696)	1,702

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares as well as preference shares for the financial year ended March 31, 2023.

3. RESERVES

During the financial year under review, no amount has been transferred to any reserve.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

During the Financial Year 2022-23, the company has reported a loss of '' 665 lacs compared to a profit of '' 1,792 lacs during the preceding year. Profitability for the previous year includes exceptional items of '' 3,579 lacs towards profit on sale of land and a loss of '' 316 lacs related to discontinued operations. Excluding such exceptional items, the performance for the year has improved by '' 811 lacs during the year.

During the year, the Company has been able to improve its operational performance in spite of abrupt disruption of business activities consequent to legal matter. The company took many initiatives in order to continue the business operations by making outsourcing arrangement for a part of activities wherever required and has been able to maintain the level of revenues during the year and has been able to bring down the operational loss compared to previous year. The textile operations have also been able to increase export revenues. During the year, the company has also installed the Zero Liquid Discharge facility for effluent treatment and received requisite statutory permission and has started trial operations of its newly-installed Effluent Treat Plant (ETP) and Zero Liquid Discharge (ZLD) plant for effluent treatment during the fag-end of the year. At the same time, improved performance of the Investment division has enabled the company to post improved PBT (before exceptional items). The Real Estate activities of the company is also likely to pick up pace and add to the revenues and profitability of the Company.

Denim Division : Production and sales volumes of the division have seen marginal de-growth due to plant disruption. However, there has been a shift in terms of customer-base wherein the business with the brand segment has registered decent growth along with improved margins. On the other hand, the input costs of the materials, dyes, chemicals and fuel as well as the fixed costs of the division have largely remained under check. As a result, the overall performance of the division has improved significantly and its operational loss has reduced by 40% during the year.

Dyecot Division : All the production activities of this division are of wet-processing nature, the business disruption has impacted this division the most. During the year under review, the volumes across various market segments have gone down significantly. As the resources were constrained, the division decided to be very selective in terms of its customer base and focussed more on high-value added segment. These efforts helped the division to have much better margins on its product range. However, the overall reduction in the volumes resulted into the operational loss for the division moving up during the year.

Garment Division : The production and sales volumes of the division have seen improvement during the year. However, business scenario for the apparel market at the macro level has remained subdued during the year owing to general inflationary pressures and thereby weakened consumer demand. The prices and margins of the products have therefore been able to post only marginal improvement. At the same time, the division continues to remain profitable year after year.

Attires Division : This division mainly represents ready-to-stitch fabrics under the brand name “ICON”. Though the volumes during the year have seen a decent growth of more than 25% year-on-year, the margins have shrunk due to multiple reasons including highly volatile raw material price scenario and additional costs related to outsourcing requirements. The profitability of the division has therefore reduced during the year.

Textile Activity (as a whole) : In overall terms, the textiles business has been able to maintain the levels of revenues and margins in spite of a very challenging year for the company from many perspectives. Expenses have remained under control and the loss before exceptional items has marginally reduced during the year.

Real Estate Division : The division has commenced its activities during the year and is well poised to take advantage of the fast-growing Real Estate market of Ahmedabad. Currently the Company has two projects: “Swan Lake”, which is a weekend homes project and a yet to be launched project of high-end, high-rise luxurious residential units. The Company has received overwhelming market response to the Swan Lake project. The project is likely to generate revenues from the next year, i.e. financial year 2023-24.

I nvestment Division : It makes investment in equity shares with a long-term perspective. As per accounting norms, periodic performance is reported based on market value of shares held at the end of the period, apart from profit/loss on sale of investments and dividend income during the reporting period. Accordingly, the Division has reported higher profit than the previous year, mainly due to mark-to-market valuation of stocks held by it. The division has consistently outperformed the benchmark indices in terms of XIRR.

Outlook:

A detailed discussion on performance and outlook appears as part of Management Discussion and Analysis Report attached to this report.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF OUR COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no any material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of this Board’s Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture (JV) or Associates Company as on March 31, 2023. During the financial year under review Shardul Garments Private Limited has ceased to be an Associate Company w.e.f. 30th April, 2022.

7. DEPOSITS

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. There were no unpaid or unclaimed deposits as on March 31, 2023.

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

Pursuant to Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, information on conservation of energy, technology absorption and foreign exchange earnings and outgo forms part of this Report and annexed at Annexure-1.

9. RISK MANAGEMENT

The Company has framed and adopted a “Risk Management Policy” to identify, monitor, minimize and mitigate risks and determine the responses to various risks to minimize their adverse impact on the organization. The Company is exposed to various financial risks viz. credit risk, liquidity risk, foreign currency risk, interest rate risk etc. The executive management oversees the risk management framework and the Audit Committee evaluates internal financial controls and risk management systems. However, the details of risk management objectives and policies made by the Company under the said provision is given in the notes to the Financial Statements. In the opinion of Board, there are no risk which may threaten the existence of the Company. The Risk Management Policy is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2018/08/Risk-Management-Policy.pdf.

10. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

In terms of requirements of Section 135(1) of the Companies Act, 2013, the Board of Directors at its meeting held on August 11, 2017 has constituted a Corporate Social Responsibility (CSR) Committee. The CSR Committee consists of 3 (Three) Directors viz., Mr. Chintan N. Parikh-Chairman, Dr. Bakul H. Dholakia and Mrs. Koushlya Melwani, the members of the committee as on March 31, 2023.

During the Financial Year, the said Committee met on 12th November, 2022 for consideration, review and recommendation to the Board of Directors of the Company for CSR expenditure. The Committee has noted that no amount was required to be spent towards CSR expenditure for the Financial Year 2022-23 in terms of Section 135(5) of the Companies Act, 2013. CSR Policy is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2023/04/CSR-Policy.pdf

11. CHANGE IN NATURE OF BUSINESS

During the financial year under review there has been no change in the nature of Business of the Company.

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

During the Financial Year under review, the Company has made investments. However, there were no loans or advances granted or guarantees given or security provided under Section 186 of the Companies Act, 2013 during the Financial Year. The details of investments made as on March 31, 2023 are given in the Notes to the Financial Statements forming part of the Annual Report.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the transactions with Related Parties are placed before the Audit Committee for its approval. A statement containing details of all Related Party Transactions are placed before the Audit Committee and the Board of Directors for review on a quarterly basis and for prior approval whenever there is a requirement for such approvals. The omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to omnibus approval are placed before Audit Committee and Board of Directors on quarterly basis. The policy on Related Party Transactions (RPT) is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2022/05/Related-Party-Transactions-Effective-from-April-1-2022.pdf

All the related party transactions for the year under review were in the ordinary course of business and on an arm’s length basis and hence disclosure in Form AOC-2 is not required. No material related party transactions were entered with related parties during the year under review and there were no materially significant transactions with any of the related parties that may have potential conflict with the interest of the Company at large.

The details of transactions with related parties as per the requirement of IND-AS are disclosed in the notes to the Financial Statements.

14. NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The same is available on Company’s website and weblink of the same is https://ashima.in/wp-content/ uploads/2023/04/Nomination-and-Remuneration-Policy.pdf

15. ANNUAL EVALUATION OF BOARD''S PERFORMANCE, ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS

The Nomination and Remuneration Committee have laid down the manner in which formal evaluation of the performance of the Board, its Committees and individual Directors has to be made, which is broadly in compliance with the Guidance Note on Board Evaluation issued the by SEBI vide its Circular No. SEBI/ HO/CFD/CMD/CIR/P/2017/004 dated January 5, 2017.

Pursuant to the provisions of Section 178 of Companies Act, 2013 read with Regulation 17 and 19 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Nomination and Remuneration Committee has carried out annual performance evaluation of Board of Directors, Committees of the Board and the individual directors for the year under review.

Further, pursuant to the provisions of Section 178 read with Schedule IV of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board of Directors have carried out the evaluation of the Independent Directors and fulfillment of the independence criteria of the Independent Directors as specified under Section 149(6) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, for the year under review.

A separate meeting of Independent Directors was held on 24th March, 2023. In the said meeting performance of Non-Independent Directors, performance of the Board as a whole and performance of Chairperson of the Company was evaluated.

The manner in which the evaluation was carried out has been explained in the Corporate Governance Report attached to this report.

16. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the financial year ended on March 31, 2023 is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2023/07/Form-MGT-7-for-the-year-2022-23.pdf

17. 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 SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 has been provided.

18. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE FINANCIAL YEAR UNDER REVIEW

During the financial year, 5 (Five) meetings of the Board of Directors were held, as per the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of Board meetings held during the financial year 2022-23 have been furnished in the Corporate Governance Report forming part of this Annual Report.

During the financial year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment during the Financial Year:

(i) The shareholders at the 39th Annual General Meeting held on August 25, 2022 approved appointment of Mr. Chintan N. Parikh, Director (DIN: 00155225) as Director retiring by rotation.

(ii) The Board of Directors of the Company at their Meeting held on 14th May, 2022, appointed Ms. Shweta Sultania, as Company Secretary & Compliance Officer (KMP) of the Company w.e.f 15th July, 2022 and Mr. Dipak Thaker has resigned from the post of Company Secretary and Compliance officer w.e.f 15th July, 2022.

(iii) Mr. Chintan N. Parikh, Chairman & Managing Director, (DIN: 00155225) was re-appointed as a Managing Director of the company for a period of three years with effect from 07th February, 2023 by shareholders through Postal Ballot process and voting results were declared on 26th December, 2022.

Retirement by Rotation:

In accordance with the Articles of Association and as per provisions of Section 152(6) of the Companies Act, 2013, Mr. Krishnachintan Parikh, Director (DIN: 07208067) retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Your Board recommends his re-appointment.

Except as stated above, there was no change in the composition of the Board of Directors and Key Managerial Personnel.

Key Managerial Personnel:

The followings persons are the Key Managerial Personnel (KMP) as per the provisions of Section 203 of the Companies Act, 2013, as on 31 March 2023:

1. Mr. Chintan N. Parikh Chairman & Managing Director

2. Mr. Krishnachintan C. Parikh Executive Director

3. Mr. Shrikant S. Pareek Director(Operations)

4. Mr. Hiren S. Mahadevia Group Chief Financial Officer

5. Ms. Shweta Sultania Company Secretary

20. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors confirms that to the best of its knowledge and belief:

a. in the preparation of the annual accounts for the financial year ended March 31, 2023, 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 profit 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 the Companies Act, 2013, 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.

21. DECLARATION OF INDEPENDENT DIRECTORS

All the Independent Directors have given their declaration to the Company stating their independence pursuant to Section 149(6) of the Companies Act, 2013 and complied with the code for Independent Directors prescribed in schedule IV of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. They have further declared that they are not debarred or disqualified from being appointed or continuing as directors of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority. In the opinion of Board, all the Independent Directors are persons of integrity and possess relevant expertise and experience including the proficiency. All the Independent Directors of the company are registered with the Indian Institute of Corporate Affairs (IICA) as notified by the Central Government under Section 150(1) of the Companies Act, 2013.

The terms and conditions of the appointment of Independent Directors have been disclosed on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2019/07/ Terms-and-Conditions-of-Appointment-of-Independent-Directors.pdf

22. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and as per provisions of the Companies Act, 2013 and Rules made there under, the Company has put in place a Familiarization Program for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities and obligations in the Company, nature of the industry in

which the Company operates, business model etc. The same is available on the website of the Company and weblink of the same is https://ashima.in/wp-content/uploads/2023/04/Details-of-Familiarization-Programmes-imparted-to-Independent-Directors-under-SEBI-LODR-Regulations-2015-2023.pdf

23. INSURANCE

The Company’s plant, property, equipments and stocks are adequately insured against major risks. The Company has also taken Directors’ and Officers’ Liability Insurance Policy to provide coverage against the liabilities arising on them.

24. PARTICULARS OF EMPLOYEES

a. Disclosures pertaining to remuneration and other details as required under Section 197(12) 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-2 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. However, the said statement is not being sent along with this Annual Report to the members in line with the provisions 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. AUDITORS

a. STATUTORY AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 106625W) were appointed as Statutory Auditors of the Company at the 39th Annual General Meeting of the Company for a second term of five (5) consecutive years, commencing from the conclusion of 39th Annual General Meeting of the Company till the conclusion of 44th Annual General Meeting to be held in the year 2027.

The Auditors’ Report for the financial year 2022-23 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark or disclaimer.

b. COST AUDITOR

On recommendation of the Audit Committee, the Board of Directors have appointed M/s. Ankit Sheth & Co., Cost Accountant (Firm Registration No: 102785) as Cost Auditor of the Company for the financial year 2023-24 under Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014., at a remuneration as mentioned in the Notice convening the 40th Annual General Meeting for conducting the audit of the cost records maintained by the Company.

M/s. Ankit Sheth & Co., Cost Accountants have confirmed that they are free from any disqualification specified under Section 141 and 148 of the Companies Act, 2013 and Rules framed thereunder.

The Company has filed the Cost Audit Report for the financial year 2021-22 within the stipulated timeline prescribed under the Companies (Cost Records and Audit) Rules, 2014.

c. SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended, the Company has appointed Mr. Tapan Shah, Practicing Company Secretary, Ahmedabad, to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2023.

The Secretarial Audit Report for the financial year ended 31st March 2023, pursuant to Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 “is annexed herewith as Annexure-3.

The Secretarial Audit Report for the year ended on March 31, 2023 does not contain any qualifications, reservations or adverse remarks.

d. INTERNAL AUDITOR

M/s Dhirubhai Shah & Co. LLP, Chartered Accountants, Ahmedabad, (FRN No. 102511W/W100298), were appointed as the Internal Auditors of the Company to conduct the Internal Audit for the Financial Year 2022-23 in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014. The Audit Committee considers and reviews the Internal Audit Report submitted by the Internal Auditors on a quarterly basis.

26. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Auditors u/s 143 (12) of the Companies Act, 2013 and rules framed thereunder either to the Company or to the Central Government.

27. VIGIL MECHANISM

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 is available on the website of the Company and weblink of the same is https:// ashima.in/wp-content/uploads/2021/08/Ashima-Ltd.-Vigil-Mechanism Whistle-Blower-Policy.pdf.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status of the company and it’s operations.

29. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details on Internal Control Systems and their adequacy are provided in the Management Discussion and Analysis which forms part of this Report.

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 annual listing fees for the financial year 2023-24 to both the Stock Exchanges.

31. AUDIT COMMITTEE

The Company has an Audit Committee as per Section 177 of the Companies Act, 2013 read with the rules framed thereunder and Regulation 18 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of composition of Audit Committee and other details relating to the same are given in the Report of Corporate Governance forming part of this Report. During the Financial Year 2022-23, there has been no instance where the Board has not accepted the recommendations of the Audit Committee.

32. CORPORATE GOVERNANCE

The Company is committed to maintain good Corporate Governance practices. Pursuant to Regulation 34(3) read with Part C of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a separate section on Corporate Governance along with a certificate of compliance with corporate governance received from M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the Company, is annexed as Annexure-4 forming part of this Annual Report.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulation 34(2)(e) read with Part B of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the year 2022-23 is annexed as Annexure-5 forming part of this Annual Report.

34. SHARE CAPITAL

There has been no change in the Authorised Share Capital or Paid up Share Capital during the financial year under review.

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 financial year under review:

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

b. I ssue 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.

35. NON-CONVERTIBLE DEBENTURES

During the financial year under review, the, company has issued and allotted 4000 partly paid, Unlisted, Secured, Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“NCDs”) of face value of '' 1,00,000/- (Rupees One Lakh only) each, aggregating to '' 40,00,00,000/- (Rupees Forty Crores only) on Private Placement basis, out of which '' 43,750/- (Rupees Forty Three Thousand Seven Hundred Fifty only) per debenture has been paid-up till March 31, 2023.

36. EXPANSION PLAN

During the financial year under review, the, company has undertaken Expansion Plan of Garment Division of the Company at its existing manufacturing unit to increase the garment making capacity by 9.36 lac pcs p.a., thereby increasing the capacity from current level of 8.64 lac pcs p.a. to 18 lac pcs p.a. The said Division is currently operating at its 100% capacity.

The said brownfield expansion plan is undertaken to enlarge its customer base, to identify and enter new markets, to serve customers requiring larger volumes per order and to get benefit from its operational leverage. This can lead to an increase in revenues and profits of the company.

37. COST RECORDS

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 for the reporting year and accordingly such accounts and records are made and maintained by the company.

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

The Company has constituted an Internal Complaints Committee (ICC) in due compliance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

Your Directors state that during the financial year under review, no complaints relating to sexual harassment were received nor any cases filed pursuant to the said Act.

39. GENERAL

a. There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.

b. There has been no instance of valuation for settlement or for taking loan from the Banks or Financial Institutions.

40. APPRECIATION

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

41. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to the customers, vendors, investors and banks for their 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

Chintan N. Parikh

Date: May 16, 2023 Chairman & Managing Director

Place: Ahmedabad (DIN: 00155225)

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Mar 31, 2018

The Directors take pleasure in presenting the Thirty Fifth Annual Report of your Company together with audited Financial Statements for the year ended on March 31, 2018.

1. FINANCIAL RESULTS

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

(Rs. in Lacs)

Particulars	March 31, 2018	March 31,2017
Total Income	23261	19339
Profit / (Loss) before Finance Costs, Depreciation and Amortization Expenses, Exceptional Items & Tax Expenses	(871)	(1232)
Less: Finance Costs	654	921
Profit/(Loss) before Depreciation and Amortization Expenses, Exceptional Items & Tax Expenses	(1525)	(2153)
Less: Depreciation and Amortization	367	339
Profit/(Loss) before Exceptional Items & Tax Expenses	(1892)	(2492)
Add: Exceptional Item (Income)	14540	5255
Profit Before Tax	12648	2764
Less: Tax Expenses	-	41
Profit After Tax	12648	2723
Other Comprehensive Income	(61)	(116)
Total Comprehensive Income	12587	2607

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares as well as preference share.

3. RESERVES

No amount has been transferred to any reserve.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

During the year under review, the company has reported a profit ofRs.12648 lacs for the year at PBT level compared to Rs.2764 lacs in the preceding year. It may be noted that the performance for the year includes Rs.14540 lacs (last year Rs.5255 lacs) being an exceptional and extraordinary item in terms of gain on account of sale of a major part of surplus asset by the company. The operational performance is marginally down and the loss at PBT level stands atRs. 1849 lacs (arrived at after adjusting reported PBT for non-recurring expenses (net) of'' 42.51 lacs) compared to loss ofRs. 1759 lacs in y ear 2016-17 (adjusted for non-recurring expenses (net) of Rs.733.46 lacs). The proceeds from the said sale helped the company in repaying its secured debts.

Hardened yarn prices, stiff competition and the resultant pricing pressures adversely affected the performance of the Denim Division. There was a reduction in overall margins, despite double-digit growth in volumes. Introduction of new looms and other equipment during the year enabled the denim division to achieve higher business volumes from brands and garment exporters thereby reducing its dependence on low value-added distributor business channel.

Higher business volumes from garment exporters and large format stores helped the Spinfab Division register significant increase in volumes. However, margins remained tight on account of a number of factors related to market as well as stressed operating cycle. Division’s capability to offer better products, newer designs and speed of product development strengthened on account of installation of new looms and few other machines.

The Company’s focused investments into plant and machinery over last two years has given a boost to manufacturing set up and strengthened its technical competence in terms of product offerings and enable it to operate in a high value-added market segment. Since the Company had been passing through difficult times for past several years, it is expected that the trend reversal would require some time. The management is confident of taking appropriate steps to achieve an operational turnaround as the stage is set right for the same.

A detailed discussion on performance appears as part of Management Discussion and Analysis attached to this report.

5. INDIAN ACCOUNTING STANDARDS (IND AS)

Indian Accounting Standards (IND AS) have become applicable to your Company with effect from 1^st April,2017 pursuant to Rule 4 (1) (iii) (a) of Companies (Indian Accounting Standards) Rules, 2015. Accordingly, your Company has prepared Financial Statements for the year ended on March 31, 2018 in accordance with IND AS, prescribed under section 133 of the Companies Act, 2013 read with relevant rules issued there under and the other recognized accounting practices and policies to the extent applicable.

6. CHANGE IN ARTICLE OF ASSOCIATION (AOA).

During the year under review, the company adopted a new set of Articles of Association with a view to aligning the same with the provisions of the Companies Act, 2013, as approved by the members at the 34^th Annual General Meeting held on August 11,2017.

7. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF OUR 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 on March 31,2018.

9. DEPOSITS

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. There were no unpaid or unclaimed deposits as on March 31,2018.

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

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, forms part of this Report and annexed at Annexure -1.

11. RISKMANAGEMENT

The Company has set up a risk management framework to identify, monitor, minimize, mitigate and report and also to identify business opportunities. The company exposed to various financial risks viz. credit risk, liquidity risk, foreign currency risk, interest rate risk etc. The executive management oversees the risk management framework and t he Audit Committee evaluates internal financial controls and risk management systems. However, the details of risk management objectives and policies made by the Company under the said provision is given in the notes to the Financial Statements. In the opinion of Board, there are no risk which may threaten the existence of the Company.

12. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

In terms of requirements of Section 135(1), the Board of Directors at its meeting held on 11th August, 2017 has constituted a Corporate Social Responsibility (CSR) Committee. The CSR Committee consists of 3 (Three) Directors viz., Mr.Chintan N. Parikh-Chairman, Dr.BakulDholakia- Independent Director and Mr.Atulkumar Singh- Independent Director.

During the Financial Year, the said Committee met on November 11, 2017 to recommend the CSR Policy to the Board and the Board of Directors approved the said CSR Policy in its meeting held on same date. The CSR Policy is placed on the website of the company i.e. www.ashima.in

The Company is not required to spend any amount towards CSR activities in view of the fact that it does not have any average net profit during the three immediately preceding financial years.

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 investment made under Section 186 of the Companies Act, 2013.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the transactions with Related Parties are placed before the Audit Committee for its approval and at the Board of Directors for information. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to omnibus approval are placed before Audit Committee and Board of Directors on quarterly basis. The policy on Related Party Transaction (RPT) as adopted by the Board of Directors is available at the Company’s website at the web link http://www.ashima.in/Policy_Related_Party_Transactions.pdf.

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. Transactions with related parties as per requirements of IND-AS are disclosed in the notes to accounts annexed to financial statements.

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 March 7, 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

Pursuant to the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with the policy laid down by the Nomination and Remuneration Committee (NRC), as approved by the Board of Directors, the Board has carried out an annual evaluation of its performance, its Committees and all individual Directors.

In a separate meeting of Independent Directors, performance of Non Independent Directors, performance of the Board as a whole and performance of the Chairman & Managing Director was evaluated. 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 OFYOURCOMPANY

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 SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have been provided.

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

During the year, 4 (four) meetings of the Board of Directors were held, as required under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of Board meetings held during the financial year 2017-18 have been furnished in the Corporate Governance Report forming part of this Annual Report.

During the year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, Mr.Krishanachintan Parikh was appointed as Executive Director on the Board w.e.f. June 1, 2017 and his appointment and remuneration was approved by the members at the 34^th Annual General Meeting of the Company held on August 11, 2017.

Further, in accordance with the Articles of Association and the relevant provisions of the Companies Act, 2013, Mrs.KoushlyaMelwani retires by rotation and being eligible seeks re-appointment.

21. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) (c) and 134 (5) of the Act, 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 profit 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) and SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015. 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 DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the Company has put in place a Familiarization Program for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarization Program are available on the website of the Company at www.ashima.in.

24. INSURANCE

The Company’s plant, property, equipments and stocks are adequately insured against major risks. The Company has also taken Directors’ and Officers’ Liability Insurance Policy to provide coverage against the liabilities arising on them.

25. PARTICULARS OF EMPLOYEES

(i) 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.

(ii) 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. However, the said statement is not being sent along with this Annual Report to the members in line with the provisions 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.

26. AUDITORS

(a) STATUTORY AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 106625W) were appointed as Statutory Auditors of the Company at the 34th Annual General Meeting held on August 11, 2017, for a term of five (5) consecutive financial years i.e. commencing from FY 2017-18, subject to their appointment being ratified by the shareholders in every AGM.

The Companies Amendment Act, 2017 has with effect from May 7, 2018 omitted the requirement of ratification of appointment of Statutory Auditors at every intervening Annual General Meeting and accordingly the same is not required to be placed before the Members at the Annual General Meeting. Pursuant to the amendment, the Board recommends to the shareholders for their approval that the requirement of seeking ratification of appointment of Statutory Auditors at every Annual General Meeting (referred to in the resolution passed at the 34th Annual General Meeting held on August 11, 2017), be deleted.

The Auditors’ Report for FY 2017-18 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.

(b) COST AUDITOR

The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. AnkitSheth& Co., Cost Accountant (Membership No: M/ 34404) as Cost Auditor of the Company for the financial year 2018-19, on a remuneration as mentioned in the Notice convening the 35^th Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. AnkitSheth& Co., Cost Accountants has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder.

(c) SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr.Tapan Shah, Practicing Company Secretary, Ahmedabad, to undertake the Secretarial Audit of the Company for the financial year ended 31^st March, 2018. The Secretarial Audit Report is annexed herewith as Annexure - 4.

The Secretarial Audit Report for the year ended on 31^st March, 2018 does not contain any qualifications, reservations or adverse remarks.

27. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Auditors u/s 143 (12) of the Companies Act, 2013 and rules framed thereunder either to the company or to the Central Government.

28. 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 at www.ashima.in.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY.

There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations. All orders received by the Company during the year are of routine in nature which have no significant / material impact.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY.

The details on Internal Control Systems and their adequacy are provided in the Management Discussion and Analysis which forms part of this Report.

31. 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.

32. AUDIT COMMITTEE

The Company has an Audit Committee pursuant to the requirements of the Companies, Act, 2013 read with the rules framed there under and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in the Report of Corporate Governance forming part of this Report. During the Financial Year 2017-18, 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

As required under Regulation 34 (3) read with Schedule V (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, a report on Corporate Governance along with Certificate of compliance from M/s. Mukesh M. Shah & Co, Chartered Accountants and Management Discussion and Analysis Report forms part of this report as Annexure 5&6 respectively.

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.

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 and banks for their 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

Chintan N. Parikh

Place: Ahmedabad Chairman and Managing Director

Date : May19,2018 (DIN:00155225)

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Mar 31, 2017

Notice is hereby given that the 34^th ANNUAL GENERAL MEETING (AGM) of Ashima Limited will be held on Friday, the 11^th August, 2017 at 11.00 a.m. at the Registered Office of the Company situated at Texcellence Complex, Khokhara-Mehmedabad, Ahmedabad -380 021, to transact the following businesses:

Ordinary Business :

1. To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended 31^st March, 2017 and the Reports of the Board of Directors and the Auditors thereon.

2. To appoint Mr. Chintan N. Parikh, Managing Director (DIN: 00155225), who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint Statutory Auditors.

To consider and if though fit to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), M/s. Mukesh M. Shah & Co., Chartered Accountants (Firm Registration No. 106625W) be and hereby appointed as the Statutory Auditors of the Company (in place of Dhirubhai Shah & Doshi, Chartered Accountants, Ahmedabad, the retiring Auditors) for a term of five (5) years commencing from the Company''s financial year 2017-18 to hold office from the conclusion of 34^th Annual General Meeting till the conclusion of 39^th Annual General Meeting of the Company, subject to ratification of their appointment by the members at every intervening Annual General Meeting, on such remuneration, excluding service tax, other applicable levies and out-of-pocket expenses etc. as may be mutually agreed upon by the Board of Directors and the Auditors.

RESOLVED FURTHER THAT the Board of Directors of the Company (including its Committee thereof) be and is hereby authorized to do all acts and take all such steps as may be considered necessary, proper or expedient to give effect to this resolution”

Special Business :

4. Re-appointment of Mr. Chintan N. Parikh as Managing Director of the Company and approval of his remuneration.

To consider and if though fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to provisions of Section 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) (including any statutory modification or re-enactment thereof for the time being in force) read with Schedule V of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Articles of Association of the Company and subject to such approvals, permissions and sanctions, if required, consent of the Company be and is hereby accorded to the re-appointment of Mr. Chintan N. Parikh (DIN-00155225) as Managing Director of the Company for a further period of three (3) years with effect from February 7, 2017 on terms and conditions of re-appointment and remuneration as set out hereunder:

I. Salary:

The Managing Director shall be entitled to a salary of Rs.5,00,000/-. (Rupees five lacs only) per month.

II. House Rent Allowance: House rent allowance of Rs.2,00,000/- p.m. (Rupees two lacs only) per month.

III. Perquisites:

a. Contribution to provident fund to the extent of Rs.60,000/- p.m. (Rupees sixty thousand only) and superannuation fund to the extent of Rs.8333/- p.m. (Rupees eight thousand three hundred thirty three only).

b. Provision of car with chauffeur for use on Company''s business and telephone at residence. However, personal long distance calls on telephone and use of car for private purpose shall be billed by the Company to the Managing Director.

c. Encashment of leave at the end of tenure not to exceed salary and house rent allowance for a period of 28 days in a year. The amount shall not exceed Rs.6,53,333/- p.a. (Rupees six lacs, fifty three thousand three hundred and thirty three only per annum) at current salary.

IV Sitting Fees - The Managing Director shall not be paid any sitting fees for attending the meetings of the board of directors or committee thereof from the date of his appointment.

V The headquarter of the Managing Director shall be Ahmedabad in the State of Gujarat.

VI. Subject to the provisions of the Act the Managing Director shall be liable to retire by rotation and he shall automatically assume the office of the Managing Director on his re-appointment as director when retired by rotation at the relevant annual general meeting of the Company and this resolution shall remain valid and effective as if there is no change in date of his appointment as the Managing Director.

VII. The Managing Director shall not during the continuance of his employment or at any time thereafter divulge or disclose to any person whomsoever or make any use whatever for his own or for whatever purpose, of any confidential information or knowledge obtained by him during his employment as to the business or affairs of the Company or as to any trade secrets or secret processes of the Company and the Managing Director shall during the continuance of his employment hereunder also use his best endeavors to prevent any other person from doing so.

VIII. Subject to the superintendence, control and direction of the Board as it may from time to time determine, the Managing Director shall have substantial powers of the management of the Company and perform all other acts and things which in the ordinary course of business he may consider necessary or proper or in the interest of the Company

“RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts, deeds, matters and things and also take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

5. Appointment of Mr. Atul Kumar Singh (DIN: 00156228) as an Independent Director of the Company.

To consider and if though fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to the provision of Section 149, 150, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, Mr. Atul Kumar Singh (DIN: 00156228), who was appointed as an Additional Director in the capacity of Independent Director of the Company by the Board of Directors with effect from 15^th October, 2016 and who holds office till the date of Annual General Meeting in terms of Section 161 of the Companies Act, 2013, and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 signifying her intention to propose Mr. Atul Kumar Singh as a candidate for the office of Director of the Company, be and is hereby appointed as an Independent Director of the Company to hold office for a term upto 5 (five) consecutive years commencing from 15^th October, 2016, whose term of office shall not be subject to retirement by rotation.”

6. Appointment of Mr. Neeraj Golas (DIN: 06566069) as an Independent Director of the Company.

To consider and if though fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to the provision of Section 149, 150, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, Mr. Neeraj Golas (DIN: 06566069), who was appointed as an Additional Director in the capacity of Independent Director of the Company by the Board of Directors with effect from 12^th August, 2016 and who holds office till the date of Annual General Meeting in terms of Section 161 of the Companies Act, 2013, and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 signifying its intention to propose Mr. Neeraj Golas as a candidate for the office of Director of the Company, be and is hereby appointed as an Independent Director of the Company to hold office for a term upto 5 (five) consecutive years commencing from 12^th August, 2016, whose term of office shall not be subject to retirement by rotation.”

7. Appointment of Mr. Krishnachintan Parikh (DIN: 07208067) as Director of the Company.

To consider and if though fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution :

“ RESOLVED THAT pursuant to the provision of Section 152 and other applicable provisions of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), Mr. Krishnachintan Parikh (DIN: 07208067), who was appointed as an Additional Director by the Board of Directors with effect from 1^st June,

2017 and who holds office till the date of Annual General Meeting in terms of Section 161 of the Companies Act, 2013, and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Companies Act, 2013 signifying its intention to propose Mr. Krishnachintan Parikh as a candidate for the office of Director of the Company, be and is hereby appointed as a Director of the Company liable to retire by rotation.”

8. Appointment of Mr. Krishnachintan Parikh (DIN: 07208067) as an Executive Director of the Company.

To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution :

“RESOLVED THAT pursuant to provisions of Section 196, 197 and 203 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) (including any statutory modification or re-enactment thereof for the time being in force) read with Schedule V of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subject to such approvals, permissions and sanctions, if any required, including the Central Government, the approval of members of the Company be and is hereby accorded to the appointment of Mr. Krishnachintan Parikh as an Executive Director of the Company for a period of 3 (three) years w.e.f. 1^st June, 2017 to 31^st May, 2020, whose period of office shall be liable to retirement by rotation, on the terms and conditions and payment of remuneration as set out hereunder:

I. Salary: The Executive Director shall be entitled to a salary of Rs.1,43,000/-. (Rupees one lac forty three thousand only) per month.

II. House Rent Allowance: House rent allowance of Rs.57,000/- (Rupees fifty seven thousand only) per month.

III. Perquisites:

a. Contribution to provident fund to the extent of Rs.17,160/- per month (Rupees seventeen thousand one hundred sixty only) and superannuation fund to the extent of Rs.8333/- per month (Rupees eight thousand three hundred thirty three only).

b. Provision of car for use on Company''s business and telephone at residence. However, personal long distance calls on telephone and use of car for private purpose shall be billed by the Company to the Director.

c. Encashment of leave at the end of tenure not to exceed salary and house rent allowance for a period of 28 days in a year. The amount shall not exceed Rs.1,86,666/- (Rupees one lac, eighty six thousand, six hundred and sixty six only) per annum at current salary.

d. Gratuity payable at a rate not exceeding half month''s salary for each completed year of service.

IV Sitting Fees - The Director shall not be paid any sitting fees for attending the meetings of the board of directors or committee thereof from the date of his appointment.

V The headquarter of the Executive Director shall be Ahmedabad in the State of Gujarat.

VI. Subject to the provisions of the Act the Executive Director shall be liable to retire by rotation and he shall automatically assume the office of the Executive Director on his re-appointment as director when retired by rotation at the relevant annual general meeting of the Company and this resolution shall also remain valid and effective as if there is no change in date of his appointment as the Executive Director.

VII. The Executive Director shall not during the continuance of his employment or at any time thereafter divulge or disclose to any person whomsoever or make any use whatever for his own or for whatever purpose, of any confidential information or knowledge obtained by him during his employment as to the business or affairs of the Company or as to any trade secrets or secret processes of the Company and the Executive Director shall during the continuance of his employment hereunder also use his best endeavors to prevent any other person from doing so.

VIII. The Executive Director shall report to the Managing Director and shall subject to the superintendence, control and direction of the Board as it may from time to time determine, shall have powers that may be specifically delegated to him by the Board and those under the Companies Act, 2013 and/or under the Articles of Association of Company and perform all other acts and things which in the ordinary course of business he may consider necessary or proper or in the interest of the Company.

“RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to do all such acts, deeds, matters and things and also take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

9. Approval of Cost Auditor’s Remuneration

To consider and if though fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), M/s. Ankit Sheth & Co., Cost Accountants, (Firm Registration No. 102785), appointed by the Board of Directors of the Company as Cost Auditor, on recommendation of Audit Committee to conduct the audit of cost records of the Company pertaining to Company''s Product “Textile”, be paid remuneration, for the financial year ending 31^st March, 2018 amounting to Rs.60,000/- (Rupees sixty thousand only) exclusive of service tax and other applicable levies and reimbursement of out of pocket expenses incurred by them in connection with the aforesaid audit, be and is hereby ratified and confirmed.” “RESOLVED FURHTER THAT the Board of Directors of the Company (including its Committee thereof) be and is hereby authorized to do all acts and take all such steps as may be considered necessary, proper or expedient to give effect to this resolution”

10. Approval of Material Related Party Transactions

To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT in terms of provisions of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consent of the members be and is hereby accorded for ratification / approval of material related party transactions entered into by the Company with a related party as set out in the explanatory statement attached to this Notice.”

RESOLVED FURTHER THAT the Board be and is hereby authorized to take all such steps as may be deemed necessary, proper or expedient to give effect to this resolution.”

11. Alteration of Articles of Association (AOA) of the Company as per the provision of the Companies Act, 2013

To consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of Companies Act, 2013, read with Companies (Incorporation) Rules, 2014 (including any statutory modifications or re-enactment thereof, for the time being in force), consent of the Company be and is hereby accorded to substitute the entire existing Articles of Association of the Company by a new set of Articles of Association.”

“RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to undertake all such acts, deeds, matters and things to finalize and execute all such deeds, documents and writings as may be deemed necessary, proper, desirable and expedient in its absolute discretion, to enable this resolution, and to settle any question, difficulty or doubt that may arise in this regard.”

“RESOLVED FURTHER THAT any one of the Directors of the Company and/or the Company Secretary be and is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to this resolution.”

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON HIS / HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY A person can act as a proxy on behalf of not more than fifty (50) members and holding in aggregate not more than 10% of the total share capital of the Company. Members holding more than 10% of the total share capital of the Company may appoint a single person as proxy, who shall not act as a proxy for any other member. The instrument of proxy, in order to be effective, should be deposited at the registered office of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A proxy form is annexed to this report.

2. Corporate Members intending to send their authorized representatives to attend the Annual General Meeting, pursuant to Section 113 of the Companies Act, 2013, are requested to send to the Company, a certified copy of the relevant Board Resolution together with the respective specimen signatures of those representative(s) authorized under the said resolution to attend and vote on their behalf at the meeting.

3. The relative Explanatory Statements, pursuant to Section 102 of the Companies Act, 2013, in respect of the businesses under Item no. 4 to 11 of the accompanying notice are annexed hereto.

4. In respect of resolution at Item no. 4 to 8 a statement giving additional information on the Directors seeking re-appointment is annexed herewith as required under Regulation no.36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

5. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Office of the Company during normal business hours (11.00 am to 12.00 pm) on all working days except Saturdays, up to and including the date of the Annual General Meeting (AGM) of the Company.

6. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday 5^th August, 2017 to Friday 11^th August, 2017 (both days inclusive).

7. Electronic copy of the Annual Report for the year 2016-17 is being sent to all the members whose email IDs are registered with the Company/depository participant(s) for communication purpose unless any member has requested for hard copy of the same. For members who have not registered their email address, physical copies of the Annual Report for the year 2016-17 is being sent in the permitted mode.

8. Members holding shares in physical form are requested to intimate any change of address and / or bank mandate to Link Intime India Pvt. Ltd or Secretarial Department of the Company immediately. In case shares held in dematerialized form, the information regarding change of address and bank particulars should be given to their respective Depository Participant.

9. Process and manner for voting through Electronic means -

i. In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014 and Regulation 44(1)&(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means and the business set out in the Notice above may be transacted through such electronic voting. The facility of voting through electronic means is provided through the e-voting platform of Central Depository Services (India) Limited (“remote e-voting”).

ii. The remote e-voting will commence on Tuesday, August 8, 2017 at 9.00 a.m. and will end on Thursday, August 10, 2017 at 5.00 p.m. During this period, the Members of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) i.e. Friday, August 4, 2017, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. Once the vote on the resolution is cast by the Member, he/she shall not be allowed to change it subsequently or cast vote again.

iii. The facility for voting through Poll Paper would be made available at the AGM and the members attending the meeting who have not already cast their votes by remote e-voting shall be able to exercise their right at the meeting through Poll Paper. The members who have already cast their vote by remote e-voting prior to the meeting, may also attend the meeting, but shall not be entitled to cast their vote again.

iv. Members whose names are recorded in the Register of Members or in the Register of Beneficial Owners maintained by the Depositories as on the Cut-off date i.e. Friday, August 4, 2017, shall be entitled to avail the facility of remote e-voting as well as voting at the AGM. Once the vote on a resolution is cast by the Member, he/she shall not be allowed to change it subsequently or cast the vote again. Any recipient of the Notice, who has no voting rights as on the Cut-off date, shall treat this Notice as intimation only.

v. A person who has acquired the shares and has become a member of the Company after the dispatch of the Notice of the AGM and prior to the Cut-off date i.e. Friday, August 4, 2017, shall be entitled to exercise his/her vote either electronically i.e. remote e-voting or through the Poll Paper at the AGM by following the procedure mentioned in this part.

vi. The voting rights of the shareholders shall be in proportion to their shares of the paid-up equity share capital of the Company as on the cut-off date i.e. Friday August 4, 2017.

vii. Mr. Tapan Shah, Practising Company Secretary (Membership No. FCS No.4476, CP No.2839) has been appointed as the Scrutinizer for conducting remote e-voting process in a fair and transparent manner and also voting by Poll Paper at the AGM.

viii. The procedure and instructions for remote e-voting are as under:-

ix) The results declared along with the Scrutinizer''s Report shall be placed on the Company''s website www. ashima.in and on the website of CDSL i.e. www.cdslindia.com within three days after the conclusion of 34^th AGM and shall also be communicated to Stock Exchanges where the shares of the Company are listed.

x) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [e-mail].

EXPLANATORY STATEMENT UNDER SECTION 102(1) OF THE COMPANIES ACT, 2013 Item no. 4:

Resolution under item no. 4 of the Notice relates to re-appointment and payment of remuneration to Mr. Chintan Parikh as Managing Director of the Company for the period of 3 years from 7^th February, 2017 to 6^th February, 2020.

On recommendation of Nomination & Remuneration Committee, the Board of Directors of the Company had at its meeting held on 11^th February, 2017 approved re-appointment of Mr. Chintan N. Parikh as Managing Director of the Company with payment of remuneration of Rs. 84 lacs (Rupees eighty four lacs only)and perquisites as per Schedule V of the Companies Act, 2013 for the above said period.

The remuneration as set out in the resolution is appropriate in terms of the size of the Company and as compared to persons of his qualifications, cadre, knowledge and experience in the industry.

The information pursuant to Schedule V is given hereunder:

I. General Information :

The Company operates in the textile industry and is in the business of manufacturing and sale of denim fabrics, and high value yarn dyed cotton fabrics. The Company was incorporated in the year 1982 and is already in commercial production since quite a long time. Based on last audited financial results for the year ended on 31.03.2017, the Turnover & other income were Rs.19510.02 lacs. The Company has reported a profit of Rs.2648.55 lacs for the year at PBT level compared to a loss of Rs.2355.77 lacs in previous year. The performance for the year includes Rs.5255.17 lacs being an exceptional and extraordinary item in terms of gain on account of sale of a part of surplus land by the Company in order to part-fund the settlement of secured debt. The Company has not made any foreign investments. The foreign holding including Nonresident Indians (NRIs) holding is 0.91% of the equity capital of the Company.

II. Information about the appointee:

Mr. Chintan N. Parikh is a graduate in Economics and got his MBA in the area of Finance. He was a doctoral student at Indian Institute of Management, Ahmedabad. He was also a Member of the Board of Governors of IIM, Ahmedabad during April 2007 to April 2016, for consecutive 3 terms, each term having a tenure of 3 years. He was also specially appointed as President of Gujarat Chamber of Commerce and Industry (GCCI) for the year 2010-11, by the Empowered Committee of GCCI, entrusted with the task of transforming functioning and operations of GCCI including its constitution, which task he successfully accomplished. He has about 35 years of experience in the field of textiles. He is also Chairman & Managing Director of Ashima Dyecot Private Limited (ADPL). He is also President of Ahmedabad Textiles Mills Association (ATMA). He also visualized and set up Asia''s most modern fabric processing facility in ADPL. It was his vision and foresight which saw the Company, having modest beginning, transform into a cotton textile unit having state of the art facilities for manufacturing denim fabrics and high value added yarn dyed shirting fabrics. Under his leadership, the Company established itself strongly in the domestic and international markets as a supplier of quality fabrics. In the recent years, the Company has been passing through difficult times due to various adverse factors. Under his able leadership, the Company successfully carried out the comprehensive secured debt settlement with the secured creditors of the Company by way of Scheme of Amalgamation & Reconstruction under section 391 of the Companies Act, 1956 which was sanctioned by the Honorable High Court of Gujarat. Further he has been steering the Company with focus on innovation and operational efficiency. His philosophy of “Texcellence” meaning thereby “Excellence in Textiles” has become a way of life at Group Ashima and it encompasses all aspect of business right from procurement of raw materials to final production. On account of his strenuous efforts, the Company has become almost debt-free and once again embarking upon the path of growth.

Mr. Chintan N. Parikh, Managing Director of the Company is responsible for day to day management and affairs of the Company, subject to overall superintendence, control and directions of the board of directors of the Company. Taking into qualification, consideration, dedication and his valuable contribution in the fields of textiles since long, Mr. Chintan N. Parikh is best suited for the responsibilities assigned to him as Managing Director of the Company. Mr. Chintan Parikh has been paid a total remuneration (including perquisites, encashment of leave as per rules of the Company for earlier tenure) to the tune of Rs.108.93 lacs for the year ended on 31^st March, 2017. The present remuneration and other perquisites as recommended by Nomination & Remuneration Committee and approved by the Board of Directors of the Company are fully set out herein above. Considering the size of the Company, the profile of Mr. Chintan N. Parikh, the responsibilities shouldered by him and the industry benchmarks, the remuneration proposed to be paid to him is commensurate with the remuneration packages paid to similar appointees in other companies.

III. Other Information:

Reasons for loss or inadequate profits:

The various reasons for the present performance have been highlighted in the Board''s Report and the Management Discussions and Analysis for the year ended 31.03.2017. The Company posted profit in terms of a gain on account of sale of a part of surplus land of the Company in order to part-finance the settlement of the secured debt of the Company in accordance with the Scheme of Arrangement. as sanctioned by the Hon''ble High Court of Gujarat. On the operational front, the performance is marginally down with loss at PBT level.

The performance of the Company has remained almost unchanged during the year as compared to the previous year. The rising competition and strengthening rupee hit the product volumes and the top-line of the Company adversely and resulted into strained margins and lower volumes. However, reduced interest burden on account of repayment of the loans offset the adverse impact of the above and the bottom-line remained almost at the same level of the last year.

The Company''s technological limitations in terms of offering wider product range or better product differentiation continue to add to the challenges faced by it. The rising competition and strengthening rupee hit the product volumes and the top-line of the Company adversely and resulted into strained margins and lower volumes.

IV. Steps taken or proposed to be taken for improvement:

The Company successfully completed its secured debt restructuring exercise through the Scheme of Arrangement as stated in the Board''s Report. The Company has now undertaken a comprehensive exercise for operational restructuring. An overhaul of the existing manufacturing setup along with introduction of newer machines is under implementation which will improve technical capabilities, reduce bottlenecks and enhance customer servicing setup. The changed scenario shall enable the Company to operate in a high value-added market segment and offer an improved product basket and it would be a challenge for the Company to translate the same into an improved operational performance going forward. The Government of India has approved several measures for textiles and apparels during the year. The growing Indian economy and rising disposable income will render a strong tailwind to the textile sector.

V. Disclosures

The details of remuneration and other information is given in the Corporate Governance part of the Board''s Report. The resolution sets out the entire terms and conditions of his re-appointment and remuneration.

The Board of Directors recommend this resolution as set out at Item no. 4 of the Notice, for the approval of the members.

Except, Mr. Chintan N. Parikh and Mr. Krishnachintan C. Parikh, none of the Directors, Key Managerial Personnel (KMP) and their relatives are anyway concerned or interested in the said resolution.

Item no. 5:

The Board of Directors had appointed Mr. Atul Kumar Singh as an Additional Director (Non- Executive & Independent) w.e.f. 15^th October, 2016. Mr. Atul Kumar Singh is a Bachelor of Textiles and having Graduate Diploma in Materials Management. He is having vast knowledge and experience of about 31 years in the field of textiles, garments etc.

In accordance with the provisions of Section 149 read with Schedule IV to the Act, appointment of Independent Director requires approval of members. The Company has received a notice pursuant to Section 160 of the Companies Act, 2013 along with the amount of requisite deposit of Rs.1,00,000/- (Rs. one lac) from a member signifying her intention to propose the appointment of Mr. Atul Kumar Singh as a Director.

Mr. Atul Kumar Singh is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. The Company has received a declaration from Mr. Atul Kumar Singh that he meets with the criteria of Independence as prescribed both under sub-section (6) of Section 149 of the Act and under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, Mr. Atul Kumar Singh fulfills the conditions of his appointment as an Independent Director as specified in the Act and the Regulations.

The Board has appointed Mr. Atul Kumar Singh as an Independent Director, subject to shareholders'' approval to hold office for a term up to 5 (five) consecutive years commencing from 15^th October, 2016 whose term of office shall not liable to be retirement by rotation. Keeping in view his vast expertise and knowledge in the textile industry, it will be in the interest of the Company that Mr. Atul Kumar Singh is appointed as an Independent Director. Copy of the draft letter for appointment of Mr. Atul Kumar Singh as an Independent Director, setting out the terms and conditions of appointment shall be open for inspection by the members at the Registered Office of the Company during normal business hours on all working days, excluding Sundays.

Accordingly, the Board recommends the resolution in relation to appointment of Mr. Atul Kumar Singh as an Independent Director, for the approval by the members of the Company.

Except Mr. Atul Kumar Singh, being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise, in this resolution.

Item no. 6:

The Board of Directors had appointed Mr. Neeraj Golas as an Additional Director (Non- Executive & Independent) w.e.f. 12^th August, 2016. Mr. Neeraj Golas aged 47 years was Nominee Director of Asset Reconstruction Company (India) Limited. He holds B.Sc. and LL.B degree and he is also Associate Member of Institute of Cost Accountants of India and Fellow Member of Institute of Chartered Accountants of India. He has completed courses of DISA and CISA. He has total experience of 24 years.

In accordance with the provisions of Section 149 read with Schedule IV to the Act, appointment of Independent Directors requires approval of members. The Company has received a notice pursuant to Section 160 of the Companies Act, 2013 along with the amount of requisite deposit of Rs.1,00,000/- (Rs. one lac) from a member signifying its intention to propose the appointment of Mr. Neeraj Golas as a Director.

Mr. Neeraj Golas is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. The Company has received a declaration from Mr. Neeraj Golas that he meets with the criteria of Independence as prescribed both under sub-section (6) of Section 149 of the Act and under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, Mr. Neeraj Golas fulfills the conditions for his appointment as an Independent Director as specified in the Act and the Regulations.

The Board has appointed Mr. Neeraj Golas as an Independent Director, subject to shareholders'' approval to hold office for a term upto 5 (five) consecutive years commencing from 12^th August, 2016, whose term of office shall not liable to retire by rotation. Keeping in view his vast expertise and knowledge in the areas of finance, accounts and audit, it will be in the interest of the Company that Mr. Neeraj Golas is appointed as an Independent Director. Copy of the draft letter for appointment of Mr. Neeraj Golas as an Independent Director, setting out the terms and conditions of appointment shall be open for inspection by the Members at the Registered Office of the Company during normal business hours on all working days, excluding Sundays.

Accordingly, the Board recommends the resolution in relation to appointment of Mr. Neeraj Golas as an Independent Director, for the approval by the members of the Company.

Except, Mr. Neeraj Golas being an appointee, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise, in this resolution.

Item No. 7 & 8: Appointment of Mr. Krishnachintan Parikh (DIN: 07208067) as an Executive Director of the Company

On recommendation of Nomination and Remuneration Committee, the Board of Directors at their meeting held on 6^th May, 2017 had appointed Mr. Krishanachintan Parikh as an Additional Director w.e.f. 1^st June, 2017 and also appointed / designated him as Executive Director of the Company w.e.f. 01^st June, 2017 for a period of 3 years at the remuneration Rs. 2,00,000/- per month and perquisites which are permissible under the Schedule V of the Companies Act, 2013 for the period from 1^st June, 2017 to 31^st May, 2020.

The material terms of remuneration of Mr. Krishnachintan Parikh effective from 1^st June, 2017 to 31^st May, 2020 as approved by both Nomination and Remuneration Committee and Board of Directors in their respective meetings held on 6^th May, 2017 have been set out in the resolution.

The remuneration proposed above is appropriate in terms of the size of the Company and as compared to persons of his qualifications, cadre, knowledge and experience in the industry.

The information pursuant to Schedule V is given hereunder:

I. General Information

The information as prescribed in Schedule V to the Companies Act, 2013 under the above head has already been given at Item 4 of the explanatory statement herein above.

II. Information about the appointee

Mr. Krishnachintan Parikh is a Bachelor in Electronic Engineering from University of Sheffield, UK and an MBA from Columbia University, USA. He has work experience of preparing financial reports for analysis, reporting progress of projects during 2009 to 2012. Mr. Krishnachintan Parikh has earlier worked with the Company initially as Management Analyst during July 2012 to December 2014 and as Vice President (Business Development) during the year 2015.

III. Other Information

Reasons for loss or inadequate profits:

The details of the same has been mentioned at the Item no. 4 of the explanatory statement herein above.

IV. Steps taken or proposed to be taken for improvement

The details of the same has been mentioned at the Item no. 4 of the explanatory statement herein above.

V. Disclosures

The details of remuneration and other information is given in the Corporate Governance part of the Board''s Report. The resolution sets out the entire terms and conditions of his appointment and remuneration.

The Company has received a notice pursuant to Section 160 of the Companies Act, 2013 along with the amount of requisite deposit of Rs.1,00,000/- (Rs. one lac) from a member signifying its intention to propose the appointment of Mr. Krishnachintan Parikh as a Director. Mr. Krishnachintan Parikh is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. In the opinion of the Board, Mr. Krishnachintan C. Parikh fulfills the conditions for his appointment as an Executive Director as specified in the Act and the Regulations. He is relative of Mr. Chintan N. Parikh, Chairman and Managing Director of the Company.

The Board of Directors recommend resolutions as set out at Item no. 7 & 8 for the approval of the members. Except, Mr. Chintan N. Parikh and Mr. Krishnachintan Parikh, none of the Directors, Key Managerial Personnel (KMP) and their relatives are anyway concerned or interested in the said resolution.

Item No. 9:

The Company is required to have its cost records audited by a Cost Accountant in practice. Accordingly, the Board of Directors of the Company on the recommendation of the Audit Committee, approved the appointment and remuneration of M/s. Ankit Sheth & Co., Cost Accountant, to conduct the audit of the cost records of the Company for the Financial Year 2017-18 on a remuneration of Rs.60,000/- exclusive of service tax and other applicable levies and re-imbursement of out-of-pocket expenses incurred by the Cost Auditors in connection with the said audit.

In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the cost auditor is required to be ratified by members of the Company. Accordingly, the members are requested to pass an Ordinary Resolution as set out at Item no. 9 of the Notice for ratification of the payment of remuneration to the Cost Auditor for the Financial Year 2017-18. The Board of Directors recommends the ordinary resolution set out at above Notice for approval of the members. None of the Directors or Key Managerial Personnel of the Company or their relatives are concerned or interested, financial or otherwise, in the said resolution.

Item no. 10:

Under Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Material related party transactions require shareholders'' approval by way of a Resolution. The said Regulation defines the term “material” as follows: “a transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.”

The Company has entered into following material related party transactions with a related party during the year ended 31^st March, 2017.

1. Name of related party: Ashima Dyecot Private Limited Nature of relationship: Other related party

As per Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, related parties of the Company shall abstain from voting on the said ordinary resolution.

The Board of Directors recommends the ordinary resolution set out in the above Notice for approval of the members.

Except Mr. Chintan N. Parikh, Mr Krishnachintan Parikh and their relatives, none of other Directors or Key Managerial Personnel or their relatives are in any way, concerned or interested, financial or otherwise, in the said Resolution.

Item No. 11:

The existing Articles of Association (“AOA”) of the Company are based on provisions of the Companies Act, 1956. Now, the several sections of the Companies Act, 2013 are notified, but, several regulations in the existing AOA contain references to specific sections of the Companies Act, 1956 and some regulations in the existing AOA are no longer in conformity with the Companies Act, 2013 (“the Act”). Importantly, the substantive sections of the Act which deal with the general working of the companies stand notified. With the coming into force of the Act several regulations of the existing AOA of the Company require alteration / amendments / deletions in several articles. In the given position, it is considered expedient to completely / wholly replace the existing AOA by new set of Articles. The new set AOA is to be substituted in place of the existing a O a which sets out the model Article of Association for a Company limited by shares.

In view of the above said, the Board of Directors at their meeting held on 6^th May, 2017 decided to alter the existing Articles of Association (AOA) in line of the provisions of the Companies Act, 2013. with the approval of the Shareholders of the Company.

It is therefore proposed to adopt new set of Articles of Association, a draft of which is available for inspection of the Members at the registered office of the Company between 10.00 a.m. to 5.00 pm on all working days (except Saturday, Sunday and Public Holiday) up to the date of the ensuing Annual General Meeting (AGM) and shall also be made available at the AGM.

Date: May 6, 2017 By order of the Board of Directors

Place: Ahmedabad For Ashima Limited

Regd. Office:

Texcellence Complex,

Khokhara-Mehmedabad, Hiren S. Mahadevia

Ahmedabad - 380 021. Company Secretary

BOARD’S REPORT

The Directors take pleasure in presenting the Thirty Fourth Annual Report of your Company together with audited Financial Statements for the year ended on 31^st March, 2017.

1. FINANCIAL RESULTS

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

(Rupees in Lacs)

Particulars	March 31, 2017	March 31, 2016
Profit / (Loss) before interest, depreciation, extraordinary item and tax	(1,375.66)	(752.43)
Less: Interest	(877.92)	(1,219.98)
Profit / (Loss) before depreciation, extraordinary item and tax	(2,253.58)	(1,972.41)
Less: Depreciation and amortization of expenses	(353.04)	(383.36)
Profit / (Loss) before extraordinary items and tax	(2,606.62)	(2,355.77)
Add: Extraordinary item (income)	5,255.17	-
Profit/(Loss) before tax	2,648.55	(2,355.77)
Less: Tax Expenses	41.04	-
Profit/(Loss) after tax	2607.52	(2355.77)

2. DIVIDEND

Your Directors regret their inability to recommend any dividend on the equity shares in view of the carried forward losses of earlier years. They are also unable to pay any dividend on preference shares.

3. RESERVES

In view of the accumulated losses of earlier years, no amount has been transferred to general reserve.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

For the year under review, the Company earned profit before tax of Rs. 2648.55 lacs, which included extraordinary income of Rs. 5255.17 lacs being profit on sale of part of surplus land to finance debt settlement. Excluding this income and non-recurring expenses of Rs. 733.46 lacs, loss before tax of Rs.1873.16 lacs reflects marginal decline over comparable figure of loss of Rs. 1813.33 lacs of previous year, after netting off non-recurring expense of Rs. 542.44 lacs. Operational performance could not match that of previous year. There was considerable fall in volumes of Denim Division as sales to certain segments fell. Spinfab Division profitability also declined as it could not sustain margins by protecting volumes in market segments like brands where margins are high. A combination of adverse factors like product offering limitations of the Company, adverse market conditions, upswing in yarn prices and substantial fall in saving in power cost through purchase of power from open access system led to deterioration in performance.

On the other hand, several positive factors offset the fall in performance. The slide in Denim Division performance was to some extent contained by undertaking more job work in Denim Division. Wage bill was lower upon closure of spinning activity and implementation of VRS. Interest cost was lower due to repayment of certain loans.

A detailed discussion on performance appears as part of Management Discussion and Analysis attached to this report.

It would be pertinent to note that the Company has been facing competitive disadvantage in the market due to its old machinery which restricts product portfolio and hampers cost efficiency. The Company has initiated modernization on a moderate scale, as permitted by its resources, to be in a better position to face the market and improve its performance.

5. SCHEME OF ARRANGEMENT

It was reported in the Board''s Report for the financial year ended on 31^st March, 2016 that the Hon''ble High Court of Gujarat vide its Order dated 24.09.2015 sanctioned the Scheme of Arrangement for reconstruction and compromise between the Company and its equity shareholders, preference shareholders and secured creditors (“the Scheme”) and the same became effective from 5.10.2015.

Your Directors are pleased to report that the Company has paid entire secured debt (including the deferred payments) as settled in terms of the Scheme.

6. SHARE CAPITAL

During the year under review, the paid-up Equity Share Capital increased to Rs.12845.39 lacs on account of allotment of 8,00,85,089 equity shares of Rs.10/- each made under Rights Issue to the Shareholders of the Company and 1,50,00,000 equity shares allotted to the Secured Creditor pursuant to Scheme of Arrangement u/s 391 to 394 of the Companies Act, 1956.

7. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF OUR 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 on 31^st March, 2017.

9. DEPOSITS

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. There were no unpaid or unclaimed deposits as on 31^st March, 2017.

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

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, 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 RESPONSIBILITY INITIATIVE

The requirements of corporate social responsibility in terms of Section 135 of the Companies Act, 2013 would be applicable to your Company considering the net profit for the year under review.

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

All transactions with Related Parties are placed before the Audit Committee for its approval and at the Board of Directors for information. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to omnibus approval are placed before Audit Committee and Board of Directors on quarterly basis. The policy on Related Party Transaction (RPT) as adopted by the Board of Directors is available at the Company''s website at the weblink, http://www.ashima.in/Policy_Related_Party_Transactions.pdf.

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. Transactions with related parties as per requirements of Accounting Standard 18 are disclosed in the notes to accounts annexed to financial statements.

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

Pursuant to the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with the policy laid down by the Nomination and Remuneration Committee (NRC), as approved by the Board of Directors, the Board has carried out an annual evaluation of its performance, its Committees and all individual directors.

In a separate meeting of Independent Directors, performance of Non Independent Directors, performance of the Board as a whole and performance of the Chairman & Managing Director was evaluated. 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 SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have been provided.

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

During the year, 4 (four) meetings of the Board of Directors were held, as required under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of Board meetings held during the financial year 2016-2017 have been furnished in the Corporate Governance Report forming part of this Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, following changes have occurred in the Board of Directors of the Company;

Mr. Jaykant Baxi resigned as an Independent Director of the Company w.e.f. 2^nd August, 2016. The Board of Directors places on record their appreciation for the contribution made by him during his tenure with the Company.

Mr. Neeraj Golas ceased to be Nominee Director of Asset Reconstruction Company (India) Ltd (ARCIL) due to withdrawal of nomination by ARCIL. The Board of Directors places on record their appreciation for the contribution made by him during his tenure with the Company.

Mr. Neeraj Golas was appointed as an Additional Director of the Company in the capacity of Independent Director for a term of five (5) years by the Board of Directors of the Company w.e.f. 12.08.2016, who holds office upto the date of 34^th 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 Mr. Neeraj Golas for the office of the Director. A brief profile of Mr. Neeraj Golas has been given in the Notice convening the 34^th Annual General Meeting.

Mr. Atul Kumar Singh was appointed as an Additional Director of the Company in the capacity of Independent Director, w.e.f. 15.10.2016 for a term of five (5) years, by the Board of Directors w.e.f. 15.10.2016. who holds office up to the date of 34^th 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 Mr. Atul Kumar Singh for the office of the Director. A brief profile of Mr. Atul Kumar Singh has been given in the Notice convening the 34^th Annual General Meeting.

Mr. Chintan N. Parikh, Chairman and Managing Director of the Company was re-appointed as Managing Director of the Company for period of three (3) years w.e.f. 07.02.2017 i.e. up to 06.02.2020, with payment of remuneration by the Board of Directors of the Company at its meeting held on 11.02.2017 on recommendation of Nomination & Remuneration Committee, subject to the approval of Shareholders at the 34^th Annual General Meeting of the Company. A brief profile of Mr. Chintan Parikh has been given in the Notice convening the 34^th Annual General Meeting.

Mr. Krishnachintan Parikh was appointed as an Additional Director by the Board of Directors of the Company and was further designated as Executive Director by the Board of Directors for the period of three (3) years w.e.f. 1^st June, 2017 with payment of remuneration, on recommendation of Nomination & Remuneration Committee. Mr. Krishnachintan Parikh hold office up to the date of 34^th Annual General Meeting of the Company and is eligible for appointment as Director, subject to the approval of Shareholders at the 34^th Annual General Meeting. The Company has received notice under Section 160 of the Companies Act, 2013 from a member signifying the intention to propose the candidature of Mr. Krishnachintan Parikh for the office of the Director. A brief profile of Mr. Parikh has been given in the Notice convening the 34^th Annual General Meeting.

In accordance with the Article of Association and the relevant provisions of the Companies Act, 2013, Mr. Chintan N. Parikh (DIN No. 00155225) retires by rotation and being eligible seeks re-appointment.

21. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) (c) and 134 (5) of the Act, 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 profit 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) and SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015. 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 DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements) Regulations,

2015 the Company has put in place a Familiarization Program for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarization Program is available on the website of the Company at www.ashima.in.

24. INSURANCE

The Company''s plant, property, equipments and stocks are adequately insured against major risks. The Company has also taken Directors'' and Officers’ Liability Insurance Policy to provide coverage against the liabilities arising on them.

25. PARTICULARS OF EMPLOYEES

(i) 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.

(ii) 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. However, the said statement is not being sent along with this Annual Report to the members in line with the provisions 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.

26. AUDITORS

(a) STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with applicable Rules, the term of office of M/s. Dhirubhai Shah & Doshi, Chartered Accountants (Firm Registration No. 102511W) as Statutory Auditors of the Company shall come to an end at the conclusion of the forthcoming Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the services rendered by M/s Dhirubhai Shah & Doshi, Chartered Accountants, Ahmedabad as Statutory Auditors of the Company.

Subject to the approval of the members, the Board of Directors has recommended the appointment of M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 106625W) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013.

The Company has received letter from them to the effect that their appointment, if made, would be within the limits prescribed under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified from appointment.

(b) COST AUDITORS

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Ankit Sheth & Co., Cost Accountants (Membership No: M/ 34404) as Cost Auditor of the Company, for the financial year 31^st March, 2018, on a remuneration as mentioned in the Notice convening the 34^th Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. Ankit Sheth & Co., Cost Accountants has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.

26. SECRETARIAL AUDIT REPORT

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr. Tapan Shah, Practicing Company Secretary, Ahmedabad (Certificate of Practice No. 2839) to undertake the Secretarial Audit of the Company for the financial year ended 31^st March, 2017. The Secretarial Audit Report is annexed herewith as Annexure - 4.

27. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Auditors u/s 143 (12) of the Companies Act, 2013 and rules framed there under either to the Company or to the Central Government.

28. EXPLANATIONS / COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTISING 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, Practicing Company Secretary was appointed to carry out the secretarial audit for the year ended 31^st March, 2017 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.

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. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations. All orders received by the Company during the year are of routine in nature which have no significant / material impact.

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details on Internal Control Systems and their adequacy are provided in the Managements Discussion and Analysis which forms part of this Report.

32. 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.

33. AUDIT COMMITTEE

The Company has an Audit Committee pursuant to the requirements of the Companies, Act, 2013 read with the rules framed there under and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in the Report of Corporate Governance forming part of this Report. During the financial year 2016-17, there has been no instance where the Board has not accepted the recommendations of the Audit Committee.

34. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 (3) read with Schedule V (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, a report on Corporate Governance along with Management Discussion and Analysis Report and Certificate of compliance from M/s. Dhirubhai Shah & Doshi, Chartered Accountants, forms part of this report.

35. 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.

36. 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.

37. APPRECIATION

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

38. 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: May 6, 2017 Chairman and Managing Director

(DIN: 00155225)

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Mar 31, 2016

The Directors take pleasure in presenting the Thirty Third Annual Report of your Company together with audited statement of accounts for the year ended on 31^st March, 2016.

1. FINANCIAL RESULTS

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

(Rupees in Lacs)

Particulars	March 31, 2016	March 31, 2015
Loss before Interest and Depreciation	752.43	677.23
Less : Interest	1219.98	487.69
Loss before Depreciation	1972.41	1164.92
Add : Depreciation and amortization of expenses	383.36	455.40
Loss before tax	2355.77	1620.33
Add : Provision for tax	-	-
Loss after tax	2355.77	1620.33

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

The operational performance of the company showed major decline, with the loss at PBT stage going up to Rs.1813.33 lacs (arrived at after adjusting reported PBT for non-recurring expenses (net) of Rs.542.44 lacs) compared to loss of Rs.523.60 lacs in year 2014-15 (adjusted for non-recurring expenses (net) of Rs.1096.73 lacs). (Figures for previous year have been adjusted to remove impact of change in depreciation during that year in compliance with provisions of Schedule II of the Companies Act, 2013). Increase in interest cost by Rs.732 lacs is one of the major reasons for change in performance. The company paid interest to the secured creditors as well as on unsecured loans brought in by promoters to part-finance debt settlement under the Scheme of Arrangement as per the Scheme provisions. On the operational front, the performance has suffered both in Denim and Spinfab divisions mainly on account of lower volumes.

Production and sales volumes have declined both in Denim as well as in Spinfab Division with Denim division suffering more on export front primarily due to sluggish European markets and stiff competition following increased capacities on a macro level. The Spinfab division on the other hand also saw lower volumes, but it could penetrate more into domestic brand segment that provides better margins and thereby offsetting the negative impact of lower volumes to some extent.

Both the company''s division continue to operate under severe limitations in terms of product offering, credit terms as well as product costing due to ageing machinery and working capital constraints. These factors have a severe adverse impact on the marketability of the products over and above the pricing and margin issues for the company. Competitors have considerable advantage when it comes to meeting the customer requirements in terms of changing fashion trends and product specifications as well as the operational efficiency affecting the product costs.

The reduced raw materials prices, especially on account of global slowdown, have helped the divisions maintain the product margins and have also helped ease the adverse impact of inflationary pressures on the prices of dyes/chemicals and other operational expenses.

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

5. SCHEME OF ARRANGEMENT

The Scheme of arrangement for reconstruction and compromise between the Company and its equity shareholders, preference shareholders and secured creditors (hereinafter referred to as “the Scheme”) under sections 391 to 394 of the Companies Act, 1956 read with Section 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 was sanctioned by the Hon''ble High Court of Gujarat vide Order dated 24.09.2015 and the same became effective on and from 5.10.2015 upon filing a certified copy of the High Court Order with the Registrar of Companies, Gujarat.

Accordingly, the Company has made payments to Secured Creditor in terms of the Scheme. However, allotment of Shares as part of secured debt settlement in terms of the Scheme to Asset Reconstruction Company (India) Ltd (ARCIL), one of the secured creditors, got delayed as the same were to be allotted simultaneously with the Rights Issue shares. Post Rights Issue formalities were delayed on account of litigation and Court order as detailed in the status on Rights Issue in this Report.

6. RIGHTS ISSUE

The Company came out with a Rights Issue of 8, 00, 85,089 equity shares of Rs. 10 each aggregating to Rs.8008.51 Lacs at par in the ratio of 24:10 to part-finance settlement of secured debt under Scheme of Arrangement u/s. 391 of the Companies Act, 1956. The issue closed on 2^nd December, 2015 and the basis of allotment was approved by BSE Limited, the designated Stock Exchange, on 11^th December, 2015. The process of refund, allotment and listing of shares was to be completed by 17^th December, 2015, but the company could not complete these processes due to a status-quo order passed by the Debt Recovery Tribunal (“DRT”), Mumbai, restraining Bankers to the Issue from release of any funds and the Company from withdrawing the funds collected in the Rights Issue, in a pending case which was filed by HDFC Bank against the Company.

Subsequently, several legal cases and processes followed at DRT the Debt Recovery Appellate Tribunal and Hon''ble Bombay High Court. As per various order of The Hon. Bombay High Court including final order dated 3^rd May 2016, which directed the Bankers to release the funds collected under Rights Issue towards refund and release allotment money which allowed company to complete the further processes of the Rights Issue, allotment was made on 5^th May, 2016 and refund amounts were processed on 7^th May, 2016. The shares of the company under the Rights Issue have been listed upon completion of formalities.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF YOUR COMPANY OCCURRED Between THE ENDS OF THE FINANCIAL YEAR TO which THIS FINANCIAL STATEMENT 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 31^st March, 2016.

9. DEPOSITS

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.There were no unpaid or unclaimed deposits as on 31^st March, 2016.

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 risks 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

All transactions with Related Parties are placed before the Audit Committee and also at the Board of Directors for approval. Prior omnibus approval of the Audit Committee and Board of Directors is obtained for the transactions which are of a for foreseeable and repetitive nature. The transactions entered into pursuant to omnibus approval are placed before Audit Committee and Board of Directors on quarterly basis. The policy on Related Party Transaction (RPT) as adopted by the Board of Directors is available at the Company''s website at the web link, http://www.ashima.in/Policy_Related_Party_Transactions.pdf.

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. Transactions with related parties as per requirements of Accounting Standard 18 are disclosed in the notes to accounts annexed to financial statements.

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

The Board of Directors has carried out an annual evaluation of its performance, its Committees of the Board of Directors and all individual Directors pursuant to the requirements of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and also in accordance with the policy laid down by the Nomination and Remuneration Committee (NRC) approved by the Board of Directors.

In a separate meeting of Independent Directors, performance of Non Independent Directors, performance of the Board as a whole and performance of the Chairman & Managing Director was evaluated. 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 SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have been provided.

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

During the year 4 meetings of the Board of Directors were held as required under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of Board meetings held during the financial year 2015-2016 have been furnished in the Corporate Governance Report forming part of this Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL

There was no change in the Board of Directors of the company.

In accordance with the Article of Association of the Company and the provision of the Companies Act, 2013, Mrs. Koushlya Melwani, Director (DIN: 01575110) retires by rotation and being eligible seeks reappointment.

21. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) (c) and 134 (5) of the Act, 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) of the Companies Act, 2013. 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 DIRECTORS

In compliance with the requirements of the SEBI (Listing Obligations & Disclosure Requirements) Regulations,

2015 the Company has put in place a Familiarization Program for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarization Program are available on the website of the Company www.ashima.in.

24. INSURANCE

The Company''s plant, property, equipments and stocks are adequately insured against major risks. The Company has also taken Directors'' and Officers'' Liability Insurance Policy to provide coverage against the liabilities arising on them.

25. 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.

26. 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.

27. COST AUDITOR

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Ankit Sheth &Co., Cost Accountant (Membership No: M/ 34404) as Cost Auditor of the Company, for the financial year ending on 31^st March, 2017, on a remuneration as mentioned in the Notice convening the 33^rd Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. Ankit Sheth & Co., Cost Accountant has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed there under.

28. SECRETARIAL AUDIT REPORT

Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company had appointed Mr. Tapan Shah, Practicing Company Secretary, Ahmedabad (Certificate of Practice No. 2839) to undertake the Secretarial Audit of the Company for the financial year ended 31^st March, 2016? The Secretarial Audit Report for the financial year ended 31^st March, 2016 is annexed herewith as Annexure - 4.

29. 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, Practicing Company Secretary was appointed to carry out the secretarial audit for the year ended 31^st March, 2016 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.

30. 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.

31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations.

32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details on Internal Control Systems and their adequacy are provided in the Management''s Discussion and Analysis which forms part of this Report.

33. 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.

34. 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.

35. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 (3) read with Schedule V (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 a report on Corporate Governance along with Management Discussion and Analysis Report and Certificate of compliance from M/s. Dhirubhai Shah & Doshi, Chartered Accountants, forms part of this report.

36. 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.

37. 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.

38. APPRECIATION

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

39. 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: 14^th May, 2016 Chairman and Managing Director

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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

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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

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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

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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

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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