Ashima Ltd

To the Members

Your 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.

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

(INR in Lacs)

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

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

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%.

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

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.

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.

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.

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.

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

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

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.

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.

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

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.

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

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.

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).

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.

(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.

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.

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:

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.

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

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-

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.