Your Directors take pleasure in presenting the Thirty Ninth Annual Report of yourCompany together with Audited Financial Statements (including Audited ConsolidatedFinancial Statements) for the year ended on March 31 2022.
1. FINANCIAL RESULTS
Your Company's performance during the above year is summarized below:
| || || || ||(Rs in lacs) |
|Particulars ||Standalone ||Consolidated |
| ||March ||March ||March ||March |
| ||31 2022 ||31 2021 ||31 2022 ||31 2021 |
|Total Income ||20999 ||11444 ||20999 ||11444 |
|Profit / (Loss) before Finance Costs Depreciation and Amortization Expenses Exceptional Items & Tax Expenses ||(453) ||773 ||(453) ||773 |
|Less: Finance Costs ||229 ||198 ||229 ||198 |
|Profit/(Loss) before Depreciation and Amortization ||(682) ||575 ||(682) ||575 |
|Expenses Exceptional Items & Tax Expenses || || || || |
|Less: Depreciation and Amortization ||311 ||335 ||311 ||335 |
|Profit / (Loss) before Exceptional Items & Tax ||(994) ||240 ||(994) ||240 |
|Expenses before share of profit in associate || || || || |
|Share of profit in associate ||- ||- ||- ||29 |
|Profit/(loss) before Exceptional Items & Tax Expenses ||(994) ||240 ||(994) ||269 |
|Add: Exceptional Item (Income) ||3579 ||- ||3579 ||- |
|Profit Before Tax ||2585 ||240 ||2585 ||269 |
|Less: Tax Expenses ||0 ||17 ||0 ||17 |
|Profit After Tax ||2585 ||223 ||2585 ||252 |
|Profit/(Loss) from Discontinued operations || || || || |
|Profit/(Loss) from Discontinued operations ||(477) ||(1399) ||(477) ||(1399) |
|Exceptional Items from Discontinued operations ||(316) ||- ||(316) ||- |
|Profit/(Loss) from Discontinued operations ||(793) ||(1399) ||(793) ||(1399) |
|Profit/(Loss) After Tax ||1792 ||(1176) ||1792 ||(1147) |
|Other Comprehensive Income ||(90) ||(25) ||(90) ||(25) |
|Total Comprehensive Income ||1702 ||(1201) ||1702 ||(1172) |
Your Directors do not recommend any dividend on the equity shares as well as preferenceshares.
During the year under review no amount has been transferred to any reserve.
4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
The company has reported a profit of Rs 1792 lacs for the year as compared to a lossof Rs 1176 lacs in the preceding year. Profit for the year includes exceptional items ofRs 3579 lacs towards profit on sale of land and a loss of
Rs 316 lacs related to discontinued operations.
The Company has almost doubled its operational revenue driven by volume growth acrossall its textile divisions and mainly from domestic segment. The textile operations havealso been able to improve its contribution levels. However certain factors such as severesecond wave of Covid disrupting business activities during first quarter and stoppage ofwet processing operations from end November 2021 on account of disconnection of effluentdischarge facility by the Ahmedabad Municipal Corporation as per directions of the Hon'bleGujarat High Court in a Suo moto public interest litigation had adversely affected thebottom line.
Denim Division: The division achieved significant growth in production and salesvolumes during the year despite taking a hit during the first quarter due to Covid wave.However with the easing of Covid situation and the opening up of the economy divisionwas able to regain its markets. Larger part of the growth is from the domestic markets andexport business has not been able to recover as yet. On the other hand the input costs ofall the materials including yarn dyes chemicals and fuel have seen unprecedented riseduring the year hampering all the gains realized by adding substantial volumes. Thedivision also suffered on account of stoppage of its dyeing and finishing activitiesduring the latter half of the year resulting into additional outsourcing costs.
Spinfab Division: The division suffered heavily during the Covid-19 pandemictimes. After careful consideration of various technical and commercial factors thecompany decided to close down the Spinfab Division effective from the end of the financialyear 2021-22. The Division was able to realise most of its inventory and trade receivableswithout any losses.
Dyecot Division: During the year under review the volumes across various marketsegments have moved up considerably and improved demand from brands large format storesupon opening up of the retail sector as well as higher demand from garment exporters havehelped the division achieve higher volumes. However the division suffered due to adverseimpacts caused by Covid second wave during the first half and by the plant shutdown duringthe second half of the year. The division has further strengthened its product developmentcapabilities and continues working on new and value-added products on a continuous basis. GarmentDivision: The division has reported improved financials in terms of growth in volumesand profitability. The demand recovery during the year helped the division attain bettervolumes which went up by more than 50%. The division has been able to focus on a few keycustomers where volume and consistency have been quite favourable. The export marketsstill pose many challenges and efforts are underway to achieve improved performance.
Brand business and others: Profitability of brand and other businesses hasimproved as compared to previous year on account of impressive volume growth.
The operations and the profitability of the company are likely to remain under stressdue to the impact of the ongoing Russia-Ukraine war and the effluents discharge matter.The company has decided to go for Zero Liquid Discharge (ZLD) facility which will takeabout six months to get operationalised. The Real Estate activities of the company is alsolikely to pick up pace and add to the revenues and profitability of the company during thelatter part of the current year. A detailed discussion on performance and outlook appearsas part of Management Discussion and Analysis attached to this report.
5. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Indian Accounting Standards issued by the Institute of Chartered Accountants ofIndia and form part of this Annual Report.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFOUR COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT
The disconnection of effluent discharge connection as mentioned hereinbefore continuesto involve additional costs and impact the profitability.
7. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has one Associate Company namely Shardul Garments Private Limited as onMarch 31 2022. Except this no company has become or ceased to be Company's subsidiaryJoint Venture. Pursuant to the provisions of the Section 129(3) of the Companies Act 2013and rules made there under a statement containing salient features of financialstatements of Associate Company in Form AOC-1 is attached at
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 31 2022.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
Pursuant to Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 information on conservation of energy technologyabsorption and foreign exchange earnings and outgo forms part of this Report and annexedat Annexure-2.
10. RISK MANAGEMENT
The Company has framed and adopted a "Risk Management Policy" to identifymonitor minimize and mitigate risks and determine the responses to various risks tominimize their adverse impact on the organization. The Company is exposed to variousfinancial risks viz. credit risk liquidity risk foreign currency risk interest raterisk etc. The executive management oversees the risk management framework and the AuditCommittee evaluates internal financial controls and risk management systems. However thedetails of risk management objectives and policies made by the Company under the saidprovision is given in the notes to the Financial Statements. In the opinion of Boardthere are no risk which may threaten the existence of the Company. The Risk ManagementPolicy is available on the website of the Company and weblink of the same ishttps://ashima.in/wp-content/uploads/2018/08/Risk-Management-Policy.pdf.
11. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE
In terms of requirements of Section 135(1) of the Companies Act 2013 the Board ofDirectors at its meeting held on August 11 2017 has constituted a Corporate SocialResponsibility (CSR) Committee. The CSR Committee consists of 3 (Three) Directors viz.Mr. Chintan N. Parikh-Chairman & Managing Director Dr. Bakul Dholakia- IndependentDirector and Mrs. Koushlya Melwani- Independent Director as on March 31 2022.
During the financial year the said Committee met on October 26 2021 forconsideration review and recommendation to the Board of Directors of the Company for CSRexpenditure. The Committee has noted that no amount was required to be spent towards CSRexpenditure for the FY 2021-22 in terms of Section 135(5) of the Companies Act 2013.Necessary amendments were carried out in CSR Policy and the amended policy is placed onthe website of the Company is available on the website of the Company and weblink of thesame is https://ashima.in/wp-content/uploads/2021/10/CSR-Policy.pdf.
12. CHANGE IN NATURE OF BUSINESS
The Company operates in the textile Industry since a long time. Recently the companyhas started activities in the real estate business and has also started investmentactivities with long-term focus. The revenue or assets of both these activities have notyet exceeded the prescribed threshold and do not necessitate segment reporting.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF COMPANIESACT 2013
During the year under review the Company has made investments. However there were noloans or advances granted or guarantees given or security provided under Section 186 ofthe Companies Act 2013 during the year. The details of loans or advances granted andinvestments made as on March 31 2022 are given in the Notes to the Financial Statementsforming part of the 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 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) is available on the website of the Company and weblink of the same ishttps://ashima.in/wp-content/uploads/2022/05/Related-Party-Transactions-Effective-from-April-1-2022.pdf.
All the related party transactions were on arm's length basis and hence disclosure inForm AOC-2 is not required. There were no materially significant transactions with any ofthe related parties that may have potential conflict with the interest of the Company atlarge.
Transactions with related parties as per requirements of IND-AS are disclosed in thenotes to the Financial Statements.
15. NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for appointment of Directors Key Managerial Personnel and SeniorManagement and their remuneration. The same is available on the website of the Company andweblink of the same ishttps://ashima.in/wp-content/uploads/2019/02/Nomination-and-Remuneration-Policy-Effective-from-April-1-2019.pdf.
16. ANNUAL EVALUATION OF BOARD'S PERFORMANCE
The Nomination and Remuneration Committee have laid down the manner in which formalevaluation of the performance of the Board its Committees and individual Directors has tobe made which is broadly in compliance with the Guidance Note on Board Evaluation issuedthe by SEBI vide its Circular dated January 5 2017. The Board has carried out the annualperformance evaluation of its own performance Board Committees and Individual Directorspursuant to the requirements of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
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 out has been explained in theCorporate Governance Report.
17. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013the Annual Return as on March 31 2022 is available on the website of the Company andweblink of the same ishttps://ashima.in/wp-content/uploads/2022/07/Form-MGT-7-for-the-year-2021-22.pdf.
18. WEBSITE OF YOUR COMPANY
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 has 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 2021-22have 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 Appointment/Re-appointment during the year:
The shareholders at the 38th Annual General Meeting held on August 17 2021 approvedappointment of Directors as follows: i. Appointment of Mr. Shrikant Pareek (DIN: 02139143)as Director retiring by rotation. ii. Appointment of Mr. Krishnachintan C. Parikh (DIN:07208067) as Whole-Time Director and designated as Executive Director of the Company for aperiod of three (3) years effective from June 5 2021. iii. Re-Appointment of Mr. NeerajGolas (DIN: 06566069) as an Independent Director of the Company for a second term of five(5) consecutive years effective from August 12 2021.
Retirement by Rotation:
In accordance with the Articles of Association and the relevant provisions of theCompanies Act 2013 Mr. Chintan Parikh Director retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible seeks re-appointment. Your Boardrecommends his re-appointment.
Except as stated above there was no change in the composition of the Board ofDirectors and Key Managerial Personnel.
21. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act 2013the Board of Directors confirms that to the best of its knowledge and belief: a. in thepreparation of the annual accounts the applicable accounting standards had been followedalong with proper explanation relating to material departures; b. the directors hadselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the financial year and of the profit of thecompany for that period; c. the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; d. the directors had prepared the annualaccounts on a going concern basis; and e. the directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively; f. the directors had devised proper system toensure compliance with the provisions of all applicable laws and that such systems wereadequate 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 Regulation 16(1) (b) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015. They have further declaredthat they are not debarred or disqualified from being appointed or continuing as directorsof companies by the SEBI /Ministry of Corporate Affairs or any such Statutory authority.In the opinion of Board all the Independent Directors are person of integrity and possessrelevant expertise and experience including the proficiency.
The terms and conditions of the appointment of Independent Directors have beendisclosed on the website of the Company and weblink of the same ishttps://ashima.in/wp-content/uploads/2019/07/Terms-and-Conditions-of-Appointment-of-Independent-Directors.pdf.
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 Programfor the 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 same is available on the website of the Company and weblink of thesame ishttps://ashima.in/wp-content/uploads/2022/05/Details-of-Familiarisation-Programmes-imparted-to-Independent-Directors-under-SEBI-_LODR_-Regulations-2015-2022.pdf.
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 a. Disclosures pertaining to remuneration and otherdetails 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 areforming part of this report and is annexed as Annexure-3 to this Report. b. Thestatement containing particulars of employees as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(2) and Rule 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this report. However thesaid statement is not being sent along with this Annual Report to the members in line withthe provisions of Section 136 of the Companies Act 2013. The same is open for inspectionat the Registered Office of the Company. Copies of this statement may be obtained by themembers 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 for a period of five years atthe 34th Annual General Meeting (AGM) held on August 11 2017 to hold office from theconclusion of the said meeting till the conclusion of the 39th AGM to be held in the year2022. The term of office of the said Statutory Auditors will come to an end from the closeof the forthcoming AGM of the Company. The Board of Directors of the Company at itsmeeting held on May 14 2022 appointed M/s. Mukesh M. Shah & Co. CharteredAccountants Ahmedabad (Firm Registration No. 106625W) as the Statutory Auditor of theCompany for a second term of five (5) consecutive years to hold office from the conclusionof the 39th AGM till the conclusion of the 44th AGM to be held in the year 2027 based onthe recommendation of the Audit Committee and subject to the approval of the shareholdersat the ensuing 39th AGM. The Statutory Auditors have confirmed their independent statusand eligibility for the said appointment. The remuneration payable to the StatutoryAuditor shall be determined by the Board of Directors based on the recommendation of theAudit Committee.
The Auditors' Report for FY 2021-22 forms part of this Annual Report and do not containany 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 Accountants (Firm Registration No: 102785) as Cost Auditor ofthe Company for the financial year 2022-23 under Section 148 of the Companies Act 2013read with the Companies (Cost Records and Audit) Rules 2014 on a remuneration asmentioned in the Notice convening the 39th Annual General Meeting for conducting the auditof the cost records maintained by the Company.
M/s. Ankit Sheth & Co. Cost Accountants have confirmed that they are free from anydisqualification specified under section 141 and 148 of the Companies Act 2013 and Rulesframed thereunder. The Company has filed the Cost Audit Report for the financial year2020-21 within the stipulated timeline prescribed under the Companies (Cost Records andAudit) Rules 2014.
c. SECRETARIAL AUDITOR
Pursuant to provisions of Section 204 read with Rule 9 of the Companies (Appointmentand 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 undertake the Secretarial Audit ofthe Company for the financial year ended March 31 2022. The Secretarial Audit Report isannexed herewith as Annexure-4. The Secretarial Audit Report for the year ended onMarch 31 2022 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 theCompanies Act 2013 and rules framed thereunder either to the Company or to the CentralGovernment.
28. VIGIL MECHANISM
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 is available on the website of theCompany 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 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 except the GujaratHigh Court Order in effluent discharge matter as reported at Sr. 4 of this Report whichaffected the Company's wet processing operations but does not affect the going concernstatus.
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 thereunder and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The details of composition of Audit Committee and otherdetails relating to the same are given in the Report of Corporate Governance forming partof this Report. During the Financial Year 2021-22 there has been no instance where theBoard 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 (ListingObligations & Disclosure Requirements) Regulations 2015 a report on CorporateGovernance along with certificate of compliance from M/s. Mukesh M. Shah & Co.Chartered Accountants Statutory Auditors and Management Discussion and Analysis Reportforms part of this report as Annexure 5 & 6 respectively.
34. SHARE CAPITAL
There has been no change in the Authorised Share Capital or Paid up Share Capitalduring the year under review. Your Directors state that no disclosure or reporting isrequired in respect of the following items as there were no transactions on these itemsduring the year under review: a. Issue of equity shares with differential rights as todividend voting or otherwise. b. Issue of shares (including sweat equity shares) toemployees 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 trusteesfor the benefit of employees.
35. COST RECORDS
The Company is required to maintain cost records as specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 for the reporting year and accordinglysuch accounts and records are made and maintained.
36. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has constituted an Internal Complaints Committee (ICC) in due compliancewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 to redress complaints received regarding sexual harassment.
Your Directors state that during the year under review no complaints relating tosexual harassment were received nor any cases filed pursuant to the said Act.
37. GENERAL a. There was no application made or proceeding pending under theInsolvency and Bankruptcy Code 2016 (31 of 2016) during the year. b. There has been noinstance of valuation for settlement or for taking loan from the Banks or FinancialInstitutions
Your Directors express their gratitude for the dedicated services put in by all theemployees of the Company.
Your Directors place 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 14 2022 ||(DIN: 00155225) |