MIRA INFORM REPORT

Report Date :

02.07.2011

IDENTIFICATION DETAILS

Name :	ASHIMA LIMITED
Registered Office :	Texcellence Complex, Khokhra Mehmedabad, Ahmedabad - 380021, Gujarat
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	17.06.1982
Com. Reg. No.:	04-005253
Capital Investment / Paid-up Capital :	Rs. 538.688 Millions
CIN No.: [Company Identification No.]	L99999GJ1982PLC005253
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturing of fabrics, denims and cotton yarns.
No. of Employees :	Information not divulged by the management

RATING & COMMENTS

MIRA’s Rating :

Ca (14)

RATING		STATUS	PROPOSED CREDIT LINE
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an old and established company having moderate track. Profitability of the company is under severe pressure. There appears huge accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow and delayed. The company can be considered for business dealings on a safe and secured trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

INFORMATION DECLINED BY

Name :	Mr. Mahol
Designation :	HR Department
Date :	30.06.2011

LOCATIONS

Registered Office :	Texcellence Complex, Khokhra Mehmedabad, Ahmedabad - 380021, Gujarat, India
Tel. No.:	91-79-2773513 / 2727222
Fax No.:	91-79-2773061 / 996
E-Mail :	texcellence@ashimagroup.com nitin.parekh@ashimagroup.com ashima2007@rediffmail.com shrikant.pareek@ashimagroup.com [For Shirting, Bottomweight] rakesh.shrivastav@ashimagroup.com [For  Garments] atulkumar.singh@ashimagroup.com [For Denims] sonal.mehrotra@ashimagroup.com [For Icon and Frank Jefferson]
Website :	www.ashimagroup.com
Factory 1 :	1B, Ashima Complex, Kalol - Kadi Highway, Village Karannagar, Taluka Kadi, District Mehsana, North Gujarat
Factory 2 :	Texcellence Complex, Near Anupam Cinema, Khokhara Mehmedabad, Ahmedabad - 380 008, Gujarat.

DIRECTORS

(AS ON 30.06.2010)

Name :	Mr. Chintan Navnitlal Parikh
Designation :	Chairman and Managing Director
Address :	“Shakuntal”, Dr. V. S. Road, Polytechnic, Ahmedabad – 380015, Gujarat, India
Date of Birth/Age :	25.05.1947
Date of Appointment :	17.06.1982
DIN No. :	00155225
Name :	Mr. Saurabh Vikram Shah
Designation :	Director
Address :	9, Akaashneem Bungalows, Opposite Nehru Foundation, Outside Vastrapur, Thaltej, Ahmedabad – 380054, Gujarat, India
Date of Birth/Age :	29.09.1957
Date of Appointment :	30.03.2002
DIN No. :	00155604
Name :	Mr. Bihari Bhogilal Shah
Designation :	Director
Address :	10, Gurusandipani Society, Near Vijay Char, Rasta, Drive in Road, Ahmedabad – 380015, Gujarat, India
Date of Birth/Age :	29.01.1939
Date of Appointment :	05.01.2006
DIN No. :	00155461
Name :	Mr. Jaykant Ramprasad Baxi
Designation :	Director
Address :	F-5, Sulabh Apartment, Rang Nilam Co-operative Housing Society, Near Ankur Society, Naranpura, Ahmedabad – 380013, Gujarat, India
Date of Birth/Age :	22.01.1939
Date of Appointment :	28.03.2003
DIN No. :	00155658
Name :	Dr. Bakul Harshadrai Dholakia
Designation :	Director
Address :	Adani House, Near Mithakhali Circle, Ahmedabad – 380006, Gujarat, India
Date of Birth/Age :	15.07.1947
Date of Appointment :	28.04.2006
DIN No. :	00005754
Name :	Mr. Atulkumar Vidyaswarup Singh
Designation :	Director
Address :	803, Samprat Towers, Bodakdev, Ahmedabad – 380054, Gujarat, India
Date of Birth/Age :	30.01.2009
Date of Appointment :	30.01.2009
DIN No. :	00156228

KEY EXECUTIVES

Name :	Mr. Hiren Mahadevia
Designation :	Chief Financial Officer and Company Secretary
Address :	B – 31/24, Aryaman Bunglows, Opposite Anandniketan School, Thaltej – Shilaj Road, Shilaj, Ahmedabad – 380059, Gujarat, India
Date of Birth/Age :	23006.1963
Date of Appointment :	30.03.2007
PAN No. :	AEQPM6649R
Name :	Mr. Shrikant Pareek
Designation :	Chief Executive Officer
Name :	Mr. AtulKumar Singh
Designation :	Director (Technology & Business Development )

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 31.03.2011)

Names of Shareholders	No. of Shares	Percentage
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	265,201	0.79
Bodies Corporate	10,872,092	32.58
Sub Total	11,137,293	33.38
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	11,137,293	33.38
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	3,300	0.01
Financial Institutions / Banks	180,254	0.54
Sub Total	183,554	0.55
(2) Non-Institutions
Bodies Corporate	4,919,512	14.74
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	10,648,879	31.91
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	5,145,172	15.42
Any Others (Specify)	1,334,377	4.00
Overseas Corporate Bodies	1,092,465	3.27
Non Resident Indians	241,912	0.72
Sub Total	22,047,940	66.07
Total Public shareholding (B)	22,231,494	66.62
Total (A)+(B)	33,368,787	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	33,368,787	-

BUSINESS DETAILS

Line of Business :

Manufacturing of fabrics, denims and cotton yarns.

Products :

Product Description	ITC Code No.
Fabrics	5209
Denims	5209
Cotton Yarns	5205
Shirting fabrics	5208
Special shirting	5210
Special denims	5211

PRODUCTION STATUS (AS ON31.03.2010)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Cotton Fabrics	(in Mtrs.)	--	--	217.48
Textiles division:
Spindles		174647**	2760	--
Rotors		2800	1080	--
Looms		1872***	235	--
Cloth processing	(in lac meters)	170.05	--	--
Yarn/Fabric processing	(in metric tones)	2139.05	1960	--

*As certified by the management and not verified by the auditors, being a technical matter.

**Includes licensed capacity of 45,244 spindles of erstwhile The Ahmedabad New Cotton Mills Company Limited

***Includes licensed capacity of 764 looms of erstwhile The Ahmedabad New Cotton Mills Company Limited

GENERAL INFORMATION

No. of Employees :

Information no divulged by the management

Bankers :

· Axis Bank Limited

· HDFC Bank

Facilities :

Rs in Millions

SECURED LOANS	31.03.2010	31.03.2009
(A) NON CONVERTIBLE DEBENTURES	406.053	406.053
(B) TERM LOANS AND WORKING CAPITAL FACILITIES
[1] FROM BANKS
Working capital facilities	196.832	173.302
Term loans	6.375	16.789
Interest accrued and due on term loans	10.414	0.000
[2] FROM OTHERS
Working capital facilities	654.061	677.591
Loans	3234.987	3231.487
TOTAL	4508.722	4505.222

Notes:

1 All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the company situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated Mouje Rajpur- Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai - 400 021.

The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.

(i) (a) 15,00,000 16% secured non convertible debentures of Rs. 100/- each fully paid-up, redeemable in three equal installments at the end of 5th, 6th and 7th year from the date of allotment of debentures and

(b) 3,00,000 16% secured non convertible debentures of Rs. 100/- each fully paid-up, redeemable in three equal installments at the end of 4th, 5th and 6th year, pursuant to debenture trust deed dated March 24,1995 executed between the company and IDBI Trusteeship Services Ltd. (‘The Trustee’), and subsequent sanctions/modifications by subscribers.

(ii) 24,00,000 16% secured non convertible debentures of Rs. 100/- each fully paid-up, redeemable at a premium of 2% from the date on which debentures are fully paid-up in three equal annual installments starting from October 2000, pursuant to the debenture trust deed dated September 12,1996 between the company and IFCI Ltd. (‘ The Trustee’ ) and further to such modifications as done by IFCI Ltd. in terms of their letter no. ARD/TEX 333 /2002/1418 dated March 24, 2002.

(iii) 5,00,000 17% secured non convertible debentures of Rs. 100/- each fully paid-up, redeemable at par in five equal installments after expiry of first year in terms of debenture trust deed dated October 14, 1998, executed between the company and IDBI Trusteeship Services Ltd. (‘ The Trustee’ ).

(iv) 5,00,000 14.50% secured non convertible debentures of Rs. 100/- each fully paid-up, redeemable in three equal installments after expiry of third year from the date on which debentures are allotted, pursuant to debenture trust deed dated October 1, 2001 executed between the company and Axis Bank Ltd. (‘The Trustee’)

(v) 10,00,000 14% secured non convertible debentures of Rs. 100/- each fully paid up redeemable at par in three equal yearly installments after the expiry of 4th, 5th and 6th year.

The first and second installments of redemption of debentures in (i)(a) and (b) and also the third installments in certain debentures and the first, second and third installments of redemption of debentures in (iii) have already been made. The first installment of redemption of debentures in (ii) has also been made. Thus the charge is subsisting on the balance amounts.

2 Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, colour chemicals and book debts and second charge on movable and immovable assets of the company.

UNSECURED LOANS	31.03.2010	31.03.2009
Fixed deposits	0.000	0.333
From companies and others	154.364	184.364
Other advances and deposits	44.271	44.575
Total	198.635	229.272

Banking Relations :	--
Auditors :
Name :	Dhirubhai Shah and Company Chartered Accountants
Address :	401/408, Aditya, Abhijeet – III, Near Mithakhlai Circle, Ellis Bridge, Ahmedabad – 380006, Gujarat, India
PAN No. :	AABFD1936H
Associates :	Ashima Dyecot Limited
Subsidiaries :	· Ashima Cottons Private Limited (CIN No. : U17299GJ2000PTC038340) · Ashima Textiles Inc. USA
Other related parties where control exists:	· Atrium Exports Private Limited · N.C.P. Enterprises Limited · Elephants Enterprises Limited · Lahar Trading and Investments Limited · Nachmo Trading Company Limited · Amrakadamb Investments Private Limited · Amrashagun Investments Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
60,000,000	Equity Share	Rs. 10/- each	Rs. 600.000 Millions
4,000,000	Preference Shares	Rs. 100/- each	Rs. 400.000 Millions
	Total		Rs. 1000.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
34,073,360	Equity Share	Rs. 10/- each	Rs. 340.734 Millions
4,50,000	13% redeemable cumulative preference shares	Rs. 100/- each	Rs. 45.000 Millions
16,00,000	11% redeemable cumulative preference shares		Rs. 160.000 Millions
	Total		Rs. 545.734 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
33,368,787	Equity Share (Out of the above, 22,500 and 31,500 equity shares of the face value of Rs. 100/- each were issued as fully paid-up bonus shares in the year 1987-88 and 1989-91 respectively by way of capitalisation of reserves and 16,971 equity shares of Rs. 10/- each were allotted to the share holders of erstwhile The Ahmedabad New Cotton Mills Company Limited pursuant to scheme of amalgamation without payment being received in cash) (Previous year 3,33,68,787 equity shares of Rs. 10/- each fully paid)	Rs. 10/- each	Rs. 333.688 Millions
4,50,000	13% redeemable cumulative preference shares (Previous year 4,50,000) to be redeemed in three equal installments at the end of 3^rd, 4^th and 5^th year from the date of allotment	Rs. 100/- each	Rs. 45.000 Millions
16,00,000	11% redeemable cumulative preference shares (Previous year 16,00,000) to be redeemed at the end of 24 months from the date of allotment	Rs. 100/- each	Rs. 160.000 Millions
	Total		Rs. 538.688 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		538.688	538.688	538.688
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		2134.280	2143.874	2143.874
4] (Accumulated Losses)		(4797.171)	(4360.943)	(4078.611)
NETWORTH		(2124.203)	(1678.381)	(1396.049)
LOAN FUNDS
1] Secured Loans		4508.723	4505.222	4476.616
2] Unsecured Loans		198.635	229.272	234.909
TOTAL BORROWING		4707.358	4734.494	4711.525
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		2583.155	3056.113	3315.476
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2134.524	2279.986	2502.705
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.003	330.003	368.399
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	354.077	391.779	442.928
	Sundry Debtors	205.018	182.408	142.011
	Cash & Bank Balances	77.369	46.127	70.308
	Other Current Assets	16.125	23.955	33.223
	Loans & Advances	67.679	85.527	71.377
Total Current Assets		720.268	729.796	759.847
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	170.690	205.839	248.761
	Other Current Liabilities	104.422	92.145	105.019
	Provisions	18.876	30.947	27.195
Total Current Liabilities		293.988	328.931	380.975
Net Current Assets		426.280	400.865	378.872
MISCELLANEOUS EXPENSES		22.348	45.259	65.500
TOTAL		2583.155	3056.113	3315.476

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	2247.697	2081.997	2232.088
		Other Income	20.797	6.742	26.047
		TOTAL (A)	2268.494	2088.739	2258.135
Less	EXPENSES
		Raw material consumed	943.967	922.579	1040.868
		Manufacturing and other expenses	845.499	700.114	749.195
		Employees’ emoluments	265.398	257.677	285.541
		Administrative and other expenses	124.332	152.415	131.885
		Decrease in stock	18.795	44.824	50.568
		TOTAL (B)	2197.991	2077.609	2258.057
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		70.503	11.130	0.078
Less	FINANCIAL EXPENSES (D)		9.452	42.558	22.783
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		61.051	(31.428)	(22.705)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		159.086	160.288	171.722
	Loss before tax, exceptional and extraordinary items (Net) (E-F) (G)		(98.035)	(191.716)	(194.427)
Less	TAX (I)		0.061	1.608	1.657
	Loss before exceptional and extraordinary items ( Net) (G-I) (J)		(98.096)	(193.324)	(196.084)
Less	Exceptional and extraordinary items Income)/Expenditure ( Net)		334.632	89.006	234.965
Less	Prior period adjustment (Net)		3.500	0.002	(2.163)
	Total Loss		(436.228)	(282.332)	(428.886)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(4360.943)	(4078.611)	(3649.725)
	BALANCE CARRIED TO THE B/S		(4797.171)	(4360.943)	(4078.611)
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	333.038	320.095	445.372
	IMPORTS
		Raw Materials	0.000	0.011	1.136
		Stores & Spares	22.943	24.915	27.382
		Capital Goods	0.000	0.000	6.140
		Fabrics Purchased	0.000	0.000	1.305
	TOTAL IMPORTS		22.943	24.926	35.963
	Earnings Per Share (Rs.)		(13.78)	(9.16)	(13.56)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(4.32)	(9.18)	(8.61)
Net Profit Margin (PBT/Sales)	(%)	(4.36)	(9.29)	(8.78)
Return on Total Assets (PBT/Total Assets}	(%)	(3.44)	(6.37)	(5.96)
Return on Investment (ROI) (PBT/Networth)		(0.05)	(0.11)	(0.14)
Debt Equity Ratio (Total Liability/Networth)		(2.35)	(3.02)	(3.65)
Current Ratio (Current Asset/Current Liability)		2.45	2.22	1.99

LOCAL AGENCY FURTHER INFORMATION

SUBSIDIARY COMPANIES:

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

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.70.503 Millions as compared to Rs.11.130 Millions in previous year.

OVERVIEW

The impact of financial turmoil in most developed countries resulted into negative growth rate for those economies. Central Governments and central banks around the world took unprecedented actions and flooded the market with liquidity to ride over the turmoil. These radical measures have helped recovery across the globe. While the developed countries have been able to restrict the fall in their economies, many emerging markets have returned to their pre-crisis growth path. Although the global economy remains in slow mode, the positive indications of increase in consumer confidence and consumer demand in developed economies is a good sign.

The task before the governments and central banks of developed economies is now to nurture the recovery. Continued accommodative fiscal and monetary policies in India is expected to be positive for Indian consumer and business sentiment, FII and FDI flows and equity markets. On account of this the recovery in domestic economy is expected to gain momentum. The growth rate in India has been far better than most other emerging economies primarily due to higher reliance on domestic demand for growth. Indian economy is expected to continue its growth trajectory on the back of strong domestic demand and huge outlay planned by the Government on infrastructure, after experiencing stagnation that followed the economic melt down of the earlier year.

Rising inflation and appreciating Rupee are the two major challenges faced by the Indian economy. Any monetary measures that the Government may take to restrict inflation growth may have dampening impact on the economy due to resultant credit crunch. Appreciating Rupee has dealt a blow to the exporters as their sales realisations and margins have been affected significantly. The Government allowed cotton export last year which led to rise in price of cotton as overall availability of cotton went down in domestic market. The recently imposed ban on cotton export will now help in moderating the price of cotton. Similarly, large volume of export of cotton yarn saw its price rise significantly, which affected the profitability of the cotton textile manufacturers. But now with the reduction in export incentives, the yarn export has come down and prices have stabilized.

The company has been able to ride the partial recovery in textile market and has achieved an improvement in its overall operational performance and profitability. This is despite the adverse factors like significant rise in prices of raw materials and appreciation of Rupee. Improved performance helped the company manage its operational and statutory obligations smoothly. However, substantial efforts are required to put the company on recovery path. At present, the company is facing stagnation as funds constraint has prevented it from making any investment in upgradation of manufacturing set up which is required for servicing the changing customer needs.

SEGMENT ANALYSIS AND REVIEW

The company has continued to operate only in one segment i.e. Textiles. The different products within textiles in which company has its presence are discussed below:

Denim:

During the year , on account of recovery in Denim market, there is significant improvement in the performance of Denim division and losses have come down substantially as compared to the previous year. Capacity utilization has been higher and export sales volumes have also gone up. However, on account of Rupee appreciation against US Dollar, the export realizations have suffered. Although domestic sales volumes have remained more or less stable, the realizations have shown improvement.

The continued high prices of cotton makes it very difficult for Denim division to turn profitable. Overall demand outlook still appears stable in near future. Appreciation of Rupee is another adverse factor that may continue affecting profitability of the division. The division is unable to achieve breakeven despite recovery in market, since it is not in a position to offer new products offering higher value addition. This is because the company cannot undertake upgradation in manufacturing facility due to non-availability of funds.

Attires:

The company has a reputation as a major player in the ready-to-stitch fabric product in the Indian market. It maintains its prominent position in the market by constantly innovating and adding value to its products. During the year , the Attires division has achieved higher volumes with better value addition backed by brand promotion. PBDIT margin has improved on a moderate scale.

Grey Fabric:

Capacity utilisation of grey fabrics division during the year has gone down compared to the previous year. Due to poor market conditions of piece dyed fabrics the volumes were down, however, the division tried to protect its profitability by undertaking piece dyed fabric trading business during the year. As a result, the division has been able to maintain its topline to a large extent and has also sustained profitability.

Spinfab:

During the year , there is marginal reduction in profitability of spinfab division as compared to previous year. Capacity utilisation has slightly increased. Export sales volume as well as realisations have gone down significantly due to lower order book position and appreciation of Rupee against US dollar. Further, cost of yarn prices have gone up significantly during the year due to higher demand, which had an adverse impact on profitability of the division. Cost of utilities also went up during the year due to hike in tariff by the power company. The company has managed to control administrative costs to sustain overall profitability.

The company operates in high value added yarn dyed cotton fabrics, where fashion and trends keep changing in a short span of time. In order to service customer requirement in such a market segment, product range has to be updated from time to time. This requires investment in product development capabilities, which the company has not been able to make due to funds constraints.

FINANCIAL RESULTS AND OUTLOOK:

Financial performance

While there was a major positive factor on the profitability front in the form of recovery of denim market, therewere several adverse factors which the company had to face. These include appreciation of the Rupee and rise in price of cotton and cotton yarn. However, 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.

The sales and other income for the year were Rs.2268.500 Millions as compared to Rs.2088.700 Millions in the previous year. The export sales have marginally gone up from Rs. 322.800 Millions to Rs.346.200 Millions. The operational profitability of the company has gone up to Rs.70.503 Millions as compared to Rs. 11.130 Millions in previous year on account of overall improvement in the performance of the company, but the same is not enough for sustaining the growth of the company in a highly competitive environment.

Raw material:

The cotton prices continued to remain high during the year on account of higher exports. However, with the recent move of the Government to ban cotton exports, the prices may stabilize to some extent. Yarn prices have gone up substantially during the year based on large export volumes and strong demand. Rising raw materials cost puts pressure on profitability of the company. The company is unable to stock up cotton when prices are moderate due to liquidity constraints.

Other manufacturing expenses:

Cost of dyes and chemicals and utilities has increased during the year due to inflationary trend. Overall cost of jobwork has gone up due to higher jobwork production volumes.

Interest:

Interest cost is lower during the year compared to previous year as previous year figures included the effect of conversion of FCNR (B) loan into rupee loan by the bank. In view of the ongoing comprehensive debt restructuring, provision for unpaid interest on secured debt and certain unsecured debt has not been made. The company is making best possible efforts to get its debt restructured.

Outlook:

The outlook for the Indian Textile Industry is expected to be better as most of the developed markets which were facing recession have slowly and steadily started showing signs of improved business sentiment. While denim market recovery looks promising for the industry, the Indian textile market scenario is faced with twin problems of rising raw materials prices and appreciation of Rupee. The company is working on market development and efficient cost management to build on the improved profitability of the year.

INFORMATION RELATING TO SUBSIDIARY COMPANIES

Rs in Millions

Name of Subsidiary Company	Ashima Cottons Private Limited	Ashima Textiles Inc. (ATI) *
A) Paid-up capital	1.600	0.000
B) Reserves and surplus(adjusted for debit balance in P & L account , where applicable)	(385.907)	(0.199)
C) Total assets (Fixed assets +current assets)	0.112	0.611
D) Total liabilities (Debts+current liabilities)	384.444	0.810
E) Investments	0.025	0.000
F) Turnover	0.000	8.699
G) Profit/ (Loss) before tax	(0.011)	(0.539)
H) Provision for taxation	--	--
I) Profit / (Loss) after tax	(0.011)	(0.539)

* The financial statements of ATI are in US $ which are converted into Indian

Rupees on the basis of appropriate exchange rate.

CONTINGENT LIABILITIES NOT PROVIDED FOR:

Rs in Millions

PARTICULARS	AS ON 31.03.2010
(i) In respect of bills of exchange discounted	3.588
(ii) In respect of guarantee given by the company to lenders on behalf of Ashima Dyecot Limited	2462.514
(iii) In respect of disputed income-tax demand not acknowledged by the company	71.915
(iv) In respect of disputed demand of central excise not acknowledged by the company	27.374
(v) In respect of disputed custom duty not acknowledged by the company	4.689
(vi) In respect of disputed demand of service tax not acknowledged by the company	14.801
(vii) In respect of disputed demand of Sales tax not acknowledged by the company	190.602
(viii) In respect of employees who have yet not opted for VRS.	47.003
(ix) Arrears of fixed cumulative dividend (including dividend tax) on cumulative preference shares for the following period. • 11% cumulative preference shares for the period from March 26, 2001 to Mar. 31, 2010 Rs. 185.771 Millions. • 13% cumulative preference shares for the period from July 1, 2000 to Mar. 31, 2010 Rs. 66.774 Millions.	252.545

Bankers Charges Report as per Registry

Corporate identity number of the company	L99999GJ1982PLC005253
Name of the company	ASHIMA LIMITED
Address of the registered office or of the principal place of business in India of the company	Texcellence Complex, Khokhara Mehmedabad, Ahmedabad -380021, Gujarat, India ashima2007@rediffmail.com
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	80002112
Type of charge	Immovable property Movable property
Particular of charge holder	SOLE PROPRIETOR ARIHANT SALES K-13, Suvas Apartments, Gulab Tower Road, Thaltej, Ahmedabad -380054, Gujarat, India
Nature of instrument creating charge	The working capital facilities to the tune of Rs.653 Millions, sanctioned by SBI consortium with SBS, BOB,UTI Bank Ltd & was later joined by Citibank and UBI as consortium banks. The said working capital limits was increased from time to time by granting of additional limits by above said Consortium of Banks, together with interest, additional interest, liquidated damages, premia on prepayment or on redemption, costs, charges, expense / amount owing security of the charge.
Date of instrument Creating the charge	30.03.2011
Amount secured by the charge	Rs. 957.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest The above fund and non fund based limits of SBI consortium comprises of EPC/PCFC/FBD,IB/BD, WCDL, Cash Credit, Inland / Foreign Letter of Credit, Bank Guarantee etc. Terms of repayment The above fund and non fund based limits of SBI consortium comprises of EPC/PCFC/FBD,IB/BD, WCDL, Cash Credit, Inland / Foreign Letter of Credit, Bank Guarantee etc. The above fund and non fund based limits of SBI consortium comprises of EPC/PCFC/FBD,IB/BD, WCDL, Cash Credit, Inland / Foreign Letter of Credit, Bank Guarantee etc. Margin The above fund and non fund based limits of SBI consortium comprises of EPC/PCFC/FBD,IB/BD, WCDL, Cash Credit, Inland / Foreign Letter of Credit, Bank Guarantee etc. Extent and operation of the charge The above fund and non fund based limits of SBI consortium comprises of EPC/PCFC/FBD,IB/BD, WCDL, Cash Credit, Inland / Foreign Letter of Credit, Bank Guarantee etc.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Indenture of Mortgage dt.15.6.98, was created for following properties to secure working capital consortium limits to the tune of Rs.653 Millions. a) Immovable properties situated at Texcellence complex, Khokhara Mehmedabad, Ahmedabad 380021 and also at Ashima Complex, Village Karannagar, Tal. Kadi, Dist. Mehsana (North Gujarat). b) Movable plant and machinery and other Memorandum of Entry dt.15.03.2000 was executed for giving additional properties of the company to secure working capital consortium limits of banks, Additional properties are mentioned below: a) Immovable properties situated at Texcellence complex, Khokhara Mehmedabad, Ahmedabad 380021 and also at Ashima complex, Village Karannagar, Tal. Kadi, Dist. Mehsana (North Gujarat).
Date of instrument modifying the charge	05.05.2010
Particulars of the present modification	This charge is further modified by deed dt. 30.03.2011 executed between Chunilal Keshavlal Shah (CKS) and Arihant Sales (ARIHANT) in regard to assignment of debts of Rs. 0.850 Million alongwith Underlying Security. The said debt along with Underlying Security was earlier assigned by Niagara Distributors Limited to CKS vide deed of assignment dated 30.03.2011. Arihant Sales has expressed its desire to purchase the said debt along with Underlying Security.

FIXED ASSETS

· Freehold land

· Leasehold land

· Buildings

· Plant and machinery

· Electrical installation and equipments

· Furniture, fixtures and electric fittings

· Office equipments

· Vehicles

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.58
UK Pound	1	Rs.71.75
Euro	1	Rs.64.80

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	2
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	1
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	1
--RESERVES	1~10	2
--CREDIT LINES	1~10	1
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		14

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.