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Ashima Ltd.

BSE: 514286 Sector: Industrials
NSE: ASHIMASYN ISIN Code: INE440A01010
BSE 00:00 | 17 Jun 8.77 -0.82
(-8.55%)
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9.50

HIGH

9.50

LOW

8.65

NSE 00:00 | 17 Jun 8.75 -0.85
(-8.85%)
OPEN

9.30

HIGH

9.60

LOW

8.60

OPEN 9.50
PREVIOUS CLOSE 9.59
VOLUME 11253
52-Week high 27.70
52-Week low 8.65
P/E
Mkt Cap.(Rs cr) 113
Buy Price 8.77
Buy Qty 1.00
Sell Price 9.24
Sell Qty 25.00
OPEN 9.50
CLOSE 9.59
VOLUME 11253
52-Week high 27.70
52-Week low 8.65
P/E
Mkt Cap.(Rs cr) 113
Buy Price 8.77
Buy Qty 1.00
Sell Price 9.24
Sell Qty 25.00

Ashima Ltd. (ASHIMASYN) - Director Report

Company director report

Your Directors take pleasure in presenting the Thirty Fifth Annual Report of yourCompany together with audited Financial Statements for the year ended on March 312018.

1. FINANCIAL RESULTS

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

(Rs in Lacs)

Particulars March 31 2018 March 312017
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 preferenceshare.

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 of' 12648 lacs for theyear at PBT level compared to Rs2764 lacs in the preceding year. It may be noted that theperformance for the year includes ' 14540 lacs (last year Rs5255 lacs) being anexceptional and extraordinary item in terms of gain on account of sale of a major part ofsurplus asset by the company. The operational performance is marginally down and the lossat PBT level stands at' 1849 lacs (arrived at after adjusting reported PBT fornon-recurring expenses (net) of' 42.51 lacs) compared to loss ofRs 1759 lacs in y ear2016-17 (adjusted for non-recurring expenses (net) of Rs733.46 lacs). The proceeds fromthe said sale helped the company in repaying its secured debts.

Hardened yarn prices stiff competition and the resultant pricing pressures adverselyaffected the performance of the Denim Division. There was a reduction in overall marginsdespite double-digit growth in volumes. Introduction of new looms and other equipmentduring the year enabled the denim division to achieve higher business volumes from brandsand garment exporters thereby reducing its dependence on low value-added distributorbusiness channel.

Higher business volumes from garment exporters and large format stores helped theSpinfab Division register significant increase in volumes. However margins remained tighton account of a number of

factors related to market as well as stressed operating cycle. Division's capability tooffer better products newer designs and speed of product development strengthened onaccount of installation of new looms and few other machines.

The Company's focused investments into plant and machinery over last two years hasgiven a boost to manufacturing set up and strengthened its technical competence in termsof product offerings and enable it to operate in a high value-added market segment. Sincethe Company had been passing through difficult times for past several years it isexpected that the trend reversal would require some time. The management is confident oftaking appropriate steps to achieve an operational turnaround as the stage is set rightfor the same.

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

5. INDIAN ACCOUNTING STANDARDS (IND AS)

Indian Accounting Standards (IND AS) have become applicable toyour Company with effectfrom 1st April 2017 pursuant to Rule 4 (1) (iii) (a) of Companies (IndianAccounting Standards) Rules 2015. Accordingly your Company has prepared FinancialStatements for the year ended on March 31 2018 in accordance with IND AS prescribedunder section 133 of the Companies Act 2013 read with relevant rules issued there underand 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 Associationwith a view to aligning the same with the provisions of the Companies Act 2013 asapproved by the members at the 34th Annual General Meeting held on August112017.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF OURCOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

There are no material changes and commitments which affect the financial position ofthe company occurring between the end of financial year and the date of this Reportexcept 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 theyear ended on March 312018.

9. DEPOSITS

The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014. Therewere no unpaid or unclaimed deposits as on March 312018.

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

Information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 forms part of this Report and annexedat Annexure -1.

11. RISKMANAGEMENT

The Company has set up a risk management framework to identify monitor minimizemitigate and report and also to identify business opportunities. The company exposed tovarious financial risks viz. credit risk liquidity risk foreign currency risk interestrate risk etc. The executive management oversees the risk management framework and t he Audit Committee evaluates internal fi nancial controls and risk management systems.However the details of risk management objectives and policies made by the Company underthe said provision is given in the notes to the Financial Statements. In the opinion ofBoard 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 heldon 11th August 2017 has constituted a Corporate Social Responsibility (CSR) Committee.The CSR Committee consists of 3 (Three) Directors viz. Mr. Chintan N. Parikh-ChairmanDr. Bakul Dholakia- Independent Director and Mr. Atulkumar Singh- Independent Director.

During the Financial Year the said Committee met on November 112017 to recommend theCSR Policy to the Board and the Board of Directors approved the said CSR Policy in itsmeeting 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 thefact that it does not have any average net profit during the three immediately precedingfinancial years.

13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF COMPANIESACT 2013

There are no loans granted or guarantees given or security provided or investment madeunder 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 itsapproval and at the Board of Directors for information. Prior omnibus approval of theAudit Committee is obtained for the transactions which are of a foreseeable and repetitivenature. The transactions entered into pursuant to omnibus approval are placed before AuditCommittee and Board of Directors on quarterly basis. The policy on Related PartyTransaction (RPT) as adopted by the Board of Directors is available at the Company'swebsite at the web link HREF="http://www.ashima.in/Policy_Related_Party_Transactions.pdf">http://www.ashima.in/Policy_Related_Party_Transactions.pdf.

The members may note that all transactions entered into by the Company with the RelatedParties were on arm's length basis and in the ordinary course of business and thereforeprovisions of Section 188 of the Companies Act 2013 are not attracted. Thus disclosurein Form AOC-2 is not required. Transactions with related parties as per requirements ofIND-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 ofSection 178 and other applicable provisions of the Companies Act 2013 and Rules theretostating therein the Company's policy on nomination and remuneration of Directors KeyManagerial Personnel and Senior Management and approved by the Board of Directors at itsmeeting held on March 7 2015. The said policy may be referred to at the Company'swebsite at HREF="http://www.ashima.in/">http://www.ashima.in

16. ANNUAL EVALUATION OF BOARD'S PERFORMANCE

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

In a separate meeting of Independent Directors performance of Non IndependentDirectors 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 outhas 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 requiredunder 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 theCompany and specified details in terms of the Companies Act 2013 and SEBI (ListingObligations & 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 requiredunder the Companies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. The details of Board meetings held during the financial year 2017-18have been furnished in the Corporate Governance Report forming part of this Annual Report.

During the year your Company has complied with applicable Secretarial Standards issuedby 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 theBoard w.e.f. June 12017 and his appointment and remuneration was approved by the membersat the 34th Annual General Meeting of the Company held on August 112017.

Further in accordance with the Articles of Association and the relevant provisions ofthe Companies Act 2013 Mrs. Koushlya Melwani retires by rotation and being eligibleseeks re-appointment.

21. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134(3) (c) and 134 (5) of the Act that:

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

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

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively;

(f) the directors had devised proper system to ensure compliance with the provisions ofall 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 theirindependence pursuant to Section 149(6) and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The terms and conditions of the appointment ofIndependent 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 & DisclosureRequirements) Regulations 2015 the Company has put in place a Familiarization Program forthe Independent Directors to familiarize them with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model etc. The details of the Familiarization Program are available on thewebsite of the Company at www.ashima.in .

24. INSURANCE

The Company's plant property equipments and stocks are adequately insured againstmajor risks. The Company has also taken Directors' and Officers' Liability InsurancePolicy 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'sremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report and is annexed as Annexure - 3 tothis Report.

(ii) The statement containing particulars of employees as required under Section197(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 thisreport. However the said statement is not being sent along with this Annual Report to themembers in line with the provisions of Section 136 of the Companies Act 2013. The same isopen for inspection at the Registered Office of the Company. Copies of this statement maybe 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 GeneralMeeting held on August 112017 for a term of five (5) consecutive financial years i.e.commencing from FY 2017-18 subject to their appointment being ratified by theshareholders in every AGM.

The Companies Amendment Act 2017 has with effect from May 7 2018 omitted therequirement of ratification of appointment of Statutory Auditors at every interveningAnnual General Meeting and accordingly the same is not required to be placed before theMembers at the Annual General Meeting. Pursuant to the amendment the Board recommends tothe shareholders for their approval that the requirement of seeking ratification ofappointment of Statutory Auditors at every Annual General Meeting (referred to in theresolution 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 notcontain any qualification reservation or adverse remark.

(b) COSTAUDITOR

The Board of Directors on the recommendation of the Audit Committee have appointedM/s. Ankit Sheth & Co. Cost Accountant (Membership No: M/ 34404) as Cost Auditor ofthe Company for the financial year 2018-19 on a remuneration as mentioned in the Noticeconvening the 35th Annual General Meeting for conducting the audit of the costrecords maintained by the Company.

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

(c) SECRETARIAL AUDITOR

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

The Secretarial Audit Report for the year ended on 31st March 2018 does notcontain 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 theCompanies Act 2013 and rules framed thereunder either to the company or to the CentralGovernment.

28. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM.

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

Your Company has established Vigil Mechanism (whistle blower policy) for Directors andemployees to report their genuine concerns details of which have been given in theCorporate Governance Report annexed to this Report and displayed on the website of theCompany at www.ashima.in .

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

There has been no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and Company's operations. All orders receivedby 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 theManagement 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 Act2013 read with the rules framed there under and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The details relating to the same are given in the Reportof Corporate Governance forming part of this Report. During the Financial Year 2017-18there has been no instance where the Board has not accepted the recommendations of theAudit Committee.

33. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 (3) read with Schedule V (C) of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 a report on CorporateGovernance along with Certificate of compliance from M/s. Mukesh M. Shah & CoChartered Accountants and Management Discussion and Analysis Report forms part of thisreport as Annexure 5&6 respectively.

34. GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 underany scheme including Employee Stock Option Scheme.

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

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

Your Directors state that during the year under review there were no cases filedpursuant to Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

36. APPRECIATION

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

37. ACKNOWLEDGEMENTS

Your Directors places on record their sincere thanks to the customers vendorsinvestors and banks for their continued support. Your Directors are also thankful to theGovernment of India State Government and other authorities for their support and solicitsimilar support and guidance in future.

For and on behalf of the Board
Chintan N. Parikh
Place: Ahmedabad Chairman and Managing Director
Date : May 19 2018 (DIN:00155225)