ASAHI INDUSTRIES LIMITED (Formerly Asahi Fibres … · Shri Jaikumar Vishwanath Mishra was re-appointed as a Managing Director by the Board of Directors of the Company on 5th February,

18th ANNUAL GENERAL MEETING to be held on Saturday, 2nd July, 2011 at 10.00 a.m.,at the Registered Office of the Company at Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312, Maharashtra

BOARD OF DIRECTORS

Shri Saurabh Kumar Tayal – Chairman

Shri Jaikumar Vishwanath Mishra – Managing Director

Shri Subhash Chandra Bhargava

Shri Mahesh Prasad Mehrotra

Ms. Mrinal Tayal

Shri Jodharam Dhaka

Shri Shivprasad Shrivastav

COMPANY SECRETARY

Ms. Supriya Baldi

AUDITORS

M/s. A. F. Khasgiwala & Co.Chartered Accountants

REGISTERED OFFICE

Ecomax, Musrane, Taluka Wada,Dist. Thane – 421 312,Maharashtra.

CORPORATE OFFICE

Raghuvanshi Mills Compound,11/12, Senapati Bapat Marg,Lower Parel (W),Mumbai- 400 013,Maharashtra.

REGISTRAR & SHARE TRANSFER AGENT

Universal Capital Securities Private Limited(Formerly known as Mondkar Computers Pvt. Ltd.)21, Shakil Nivas, Opp Satya Sai Baba Temple,Mahakali Caves Road, Andheri (East),Mumbai – 400 093.Email: [email protected]

PLANT

Valsad, Gujarat

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ANNUAL REPORT 2009–2010ASAHI INDUSTRIES LIMITED

(Formerly Asahi Fibres Limited)ANNUAL REPORT 2010-11

CONTENTS

Notice ................................................................ 2

Directors' Report ................................................ 4

Corporate Governance Report ........................... 9

Management Discussion and Analysis Report ... 16

Auditors' Report ................................................. 19

Balance Sheet ................................................... 22

Profit & Loss Account ........................................ 23

Schedules .......................................................... 24

Notes to Accounts ............................................. 27

Cash Flow Statement ........................................ 30

Balance Sheet Abstract andGeneral Business Profile ................................... 31

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ASAHI INDUSTRIES LIMITED

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NOTICENotice is hereby given that 18th Annual General Meeting of the Members of ASAHI INDUSTRIES LIMITED (Formerly known asAsahi Fibres Limited) will be held on Saturday, 2nd July, 2011, at the Registered Office of the Company at Ecomax, Musrane, TalukaWada, Dist. Thane – 421 312, Maharashtra, at 10.00 a.m. to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Profit and Loss Account for the year ended 31st March, 2011 and the BalanceSheet as on that date together with the Reports of Directors and Auditors thereon.

2. To appoint a Director in place of Shri Saurabh Kumar Tayal, who retires by rotation, and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Shri Mahesh Prasad Mehrotra, who retires by rotation, and being eligible, offers himself forre-appointment.

4. To re-appoint M/s. A. F. Khasgiwala & Co., Chartered Accountants, as the Statutory Auditors of the Company and to authorizethe Board of Directors to fix their remuneration and to pass, with or without modification(s), the following Resolution asOrdinary Resolution:

“RESOLVED THAT M/s A. F. Khasgiwala & Co, Chartered Accountants (Membership No. 006491, Firm Registration No.105114W), be and is hereby appointed as Statutory Auditors of the Company to hold office from the conclusion of this AnnualGeneral Meeting until the conclusion of next Annual General Meeting of the Company, on such remuneration as shall be fixedby the Board of Directors of the Company.”

SPECIAL BUSINESS

To consider and, if thought fit, to pass with or without modification(s) the following Resolutions:

AS ORDINARY RESOLUTION.

5. “RESOLVED THAT in accordance with the provisions of Section 257 and other applicable provisions, if any, of the CompaniesAct, 1956, or any statutory modification(s) or re-enactment thereof, Ms. Mrinal Tayal, who was appointed by the Board ofDirectors on 14th December, 2010, as an Additional Director of the Company pursuant to Section 260 of the Companies Act,1956, and whose tenure of office comes to an end at this Annual General Meeting, be and is hereby appointed as a Directorof the Company, who shall be liable to retire by rotation.”

AS SPECIAL RESOLUTION

6. “RESOLVED that the re-appointment of Shri Jaikumar Vishwanath Mishra as the Managing Director of the Company, madeby the Board of Directors of the Company in their Meeting held on 5th February, 2011, pursuant to the provisions of Sections198, 269, 309, 310, 311, Schedule XIII and other applicable provisions of the Companies Act, 1956, be and is herebyapproved by the shareholders of the Company on the following terms:

Particulars Terms

Tenure 15th January, 2011 till 14th January, 2016

Salary ` 50,000/- per month or ` 6,00,000/- per annum

Commission on Net Profit 1% of the Net Profits as calculated u/s 349/350 of the Companies Act, 1956

Maximum ` 12,00,000 per annum

RESOLVED FURTHER that Shri Saurabh Kumar Tayal, Chairman or Shri Jodharam Dhaka, Director of the Company, be andis hereby authorised to file the relevant e-forms with Registrar of Companies and to do all such acts, deeds and things as maybe necessary to give effect to the above Resolution.”

NOTES:1. The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, relating to the Special Business to be

transacted at the Meeting is annexed hereto.2. A SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ANOTHER PERSON

AS HIS/HER PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED NOT BE AMEMBER. A PROXY SO APPOINTED SHALL NOT HAVE ANY RIGHT TO SPEAK AT THE MEETING AND SHALL BEENTITLED TO VOTE ONLY UPON A POLL.

3. The instrument(s) appointing the Proxy shall be delivered to the Registered Office of the Company not less than forty eight(48) hours before the commencement of the Meeting and the instrument of proxy shall be treated as invalid in case of default.

4. Corporate Members intending to send their Authorized Representatives to attend the Meeting are requested to send to theCompany a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at theMeeting.

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ANNUAL REPORT 2010–2011

5. The Register of Members and Share Transfer Register of the Company will remain closed from Thursday, 30th June, 2011 toSaturday, 2nd July, 2011 (both days inclusive) to comply with Annual Book Closure requirements.

6. All documents and agreements referred to in the Notice and Explanatory Statement are open for inspection at the RegisteredOffice of the Company on all working days, except public holidays, between 10.00 a.m. and 1.00 p.m., up to the date of AnnualGeneral Meeting.

7. Members desiring any information on the Annual Accounts of the Company for the year ended 31st March, 2011, are requestedto write to the Company at its Corporate Office Address atleast 7 days in advance of the Annual General Meeting, so as toenable the Management to keep the information ready at the Meeting.

8. Members holding shares under multiple folios in the identical order of names are requested to consolidate their holdings intoone folio. Members are requested to immediately notify any change in their Registered Address specifying full address withPin Code Number and quoting their Registered Folio Number to the Company.

9. Green Initiatives in the Corporate Governance: The Government of India-Ministry of Corporate Affairs has, vide theCircular No. 17/2011 dated 21st April, 2011, allowed service of documents to the shareholders in the electronic mode. Thus,having regard to the said Circular read with the Information Technology Act, 2000 and Section 53 of the Companies Act,1956, the Company hereby requests all its Members to register their E-mail Address (and any change therein from time totime) with Universal Capital Securities Private Limited (Formerly known as Mondkar Computers Pvt. Ltd), the Registrar andShare Transfer Agents of the Company. The Company proposes to send all the future correspondences in electronic form tothe Members whose E-mail Address is registered with the Registrar and Share Transfer Agents of the Company. Any Memberdesiring to receive the said correspondences in the physical form are requested to write to the Company at its CorporateOffice Address.

For and on behalf of the Board of Directors

Place: Mumbai Sd/-Date: 28th April, 2011 Company Secretary

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

Item No. 5Ms. Mrinal Tayal was appointed as an Additional Director by the Board of Directors on 14th December, 2010. Pursuant to theprovisions of Section 260 of the Companies Act, 1956, her tenure as an Additional Director expires at the ensuing Annual GeneralMeeting.Ms. Mrinal Tayal has done M.B.A. in Finance & Marketing and B. Tech in Computer Science. She has rich experience of working inBanking Sector. Ms. Mrinal Tayal was Corporate Relationship Manager in CITI BANK. Further, she worked with ICRA to profilecredit ratings for SME’s. She has also worked with Barclays Capital for the project on Syndicated INR Loans.Ms. Mrinal Tayal is not disqualified from being appointed as Director in terms of Section 274(1)(g) of the Act. The Company hasreceived the requisite Form ‘DD-A’ from Ms. Mrinal Tayal in terms of the Companies (Disqualification of Directors under Section274(1)(g) of the Companies Act,1956) Rules 2003, confirming her eligibility for such appointment. Ms. Mrinal Tayal do not hold anyshares in the Company.The Company has received a Notice alongwith requisite deposit amount from a Member pursuant to Section 257 of the CompaniesAct, 1956, signifying his intention to propose the candidature of Ms. Mrinal Tayal for the Office of the Director of the Company.The Board recommends the passing of this Resolution. Except Ms. Mrinal Tayal, none of the Directors are interested in thisResolution.

Item No. 6:Shri Jaikumar Vishwanath Mishra was re-appointed as a Managing Director by the Board of Directors of the Company on 5th

February, 2011, in accordance with the provisions of Sections 198, 269, 309, 310, 311, Schedule XIII and other applicable provisionsof the Companies Act, 1956.Shri Jaikumar Vishwanath Mishra has done his Graduation in Commerce and M.B.A. in Finance. He has more than 16 years ofexperience of working in the Textile Industry.Shri Jaikumar Vishwanath is not disqualified from being re-appointed as Managing Director in terms of Section 274(1)(g) of the Act.The Company has received the requisite Form ‘DD-A’ from Shri Jaikumar Vishwanath Mishra in terms of the Companies(Disqualification of Directors under Section 274 (1)(g) of the Companies Act, 1956) Rules, 2003, confirming his eligibility for suchre-appointment. Shri Jaikumar Vishwanath Mishra do not hold any shares in the Company.

The Board recommends the passing of this Resolution. Except Shri Jaikumar Vishwanath Mishra, none of the Directors areinterested in this Resolution.


Place: Mumbai Sd/-Date: 28th April, 2011 Company Secretary

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DIRECTORS’ REPORTDear Members,

The Board of Directors hereby presents the 18th Annual Report on the business and operations of your Company along withthe Audited Statements of Accounts for the Financial Year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS

2010-2011 2009-2010(` in Lacs) (` in Lacs)

Sales 12443.91 8701.09

Profit before Depreciation, Interest and Tax 1294.59 1201.41

Depreciation 1277.99 1188.12

Provision for Tax 3.31 2.26

Deferred Tax Assets 89.67 112.46

Profit for the year 102.96 123.49

Profit/(Loss) brought forward from Previous Year (795.40) (918.89)

Profit/(Loss) carried to Balance Sheet (692.43) (795.40)

Note: Previous year figures have been regrouped/rearranged wherever necessary.

DIVIDEND

Due to inadequacy of profits during the year under report, your Directors do not recommend dividend on the Equity Sharesof the Company.

REVIEW OF PERFORMANCE

During the year, the Turnover of Company has substantially increased to ` 12443.91 Lacs as against ` 8701.09 Lacs inrespect of the previous Financial Year ended 31st March, 2010, registering a growth of around 43% over the previousFinancial Year. The Profit before Depreciation, Interest and Tax is ` 1294.59 Lacs in the Financial Year ended31st March, 2011 as against ` 1201.41 Lacs in the previous Financial year ended 31st March, 2010. The profit after tax is` 102.96 Lacs during the year under Report after making provision for taxation of ̀ 3.31 Lacs and after considering Deferredtax Assets of ` 89.67 Lacs as against profit after tax of Rs 123.49 Lacs in the previous Financial Year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri SaurabhKumar Tayal, Non-Executive Chairman and Shri Mahesh Prasad Mehrotra, Director of the Company, retire by rotation atthe ensuing Annual General Meeting and are eligible for re-appointment.

During the year under Report, Shri Mahendrabhai Patel, Shri Harinder Kumar and Dr. Pritam Singh Pritam have resignedfrom the Directorship of the Company w.e.f. 5th October, 2010, 16th October, 2010 and 6th December, 2010, respectively.The Board places on record, the appreciation of the services rendered by Shri Mahendrabhai Patel, Shri Harinder Kumarand Dr. Pritam Singh Pritam during their tenure as the Directors, towards the growth of the Company.

Further, the Board of Directors of the Company had appointed Ms. Mrinal Tayal as an Additional Director w.e.f.14th December, 2011. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Ms. Mrinal Tayal shall holdoffice upto the date of ensuing Annual General Meeting. The Notice pursuant to Section 257 of the Companies Act, 1956,has been received from the Member proposing the candidature of Ms. Mrinal Tayal for being appointed as a Director ofthe Company.

Further the tenure of Shri Jaikumar Vishwanath Mishra as the Managing Director of the Company had expired on15th January, 2011. The Board of Directors of the Company had, in their Meeting held on 5th February, 2011, given theirapproval for the re-appointment of Shri Jaikumar Vishwanath Mishra as the Managing Director of the Company on theterms and conditions as mentioned in the Notice of AGM.

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DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Director’s ResponsibilitiesStatement, it is hereby confirmed:

(i) that in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2011, the applicable AccountingStandards had been followed alongwith proper explanation relating to material departures.

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments andestimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the Financial Year and of the Profit or Loss of the Company for the year under review;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities;

(iv) that the Directors had prepared the accounts for the Financial Year ended 31st March 2011, on a ‘going concern’ basis.

CHANGE OF NAME OF THE COMPANYThe name of the Company has been changed from M/s. Asahi Fibres Limited to “ASAHI INDUSTRIES LIMITED” in accordancewith the provisions of Section 21 of the Companies Act, 1956. In this regard, the Company has received Fresh Certificateof Incorporation consequent upon Change of name of the Company dated 21st October, 2010, from the Government ofIndia-Ministry of Corporate Affairs, Registrar of Companies, Mumbai, Maharashtra.

RESUMPTION IN TRADING AT THE BOMBAY STOCK EXCHANGE LIMITEDYour Directors have pleasure in appraising that Bombay Stock Exchange Limited had, vide Notice No. 20101025-13 dated25th October, 2010, granted permission for resumption in the trading of the Equity shares of the Company w.e.f. 29th

October, 2010, in ‘T’ group under the Scrip code 514482.

ADMISSION OF THE EQUITY SHARES OF THE COMPANY AT NSDL

Your Directors have pleasure in appraising that the National Securities Depository Limited (NSDL) has admitted the EquityShares of the Company on their depository system under the ISIN INE745I01015 vide Circular No. NSDL/PI/2010/2697dated1st December, 2010.

DELISTING OF EQUITY SHARES

Your Directors hereby informs that the Equity shares of the Company have been automatically de-listed from the SaurashtraKutch Stock Exchange Limited vide Letter No. SKSE/10-11/154 dated 13th October, 2010, on account of withdrawal of therecognition of the said Stock Exchange by SEBI.

Further, the Company is in the process of applying for the delisting of the Equity shares from the Ahmedabad StockExchange Limited under the Scrip Code 05153.

AUDIT COMMITTEEThe composition of Audit Committee is given in the Report on Corporate Governance.

SHARE TRANSFER AND INVESTORS’ GRIEVANCE COMMITTEEThe composition of Share Transfer and Investors’ Grievance Committee is given in the Report on Corporate Governance.

REPORT ON CORPORATE GOVERNANCEThe Company has complied with Corporate Governance Code as stipulated under Clause 49 of the Listing Agreement. Aseparate section on Corporate Governance alongwith a certificate from M/s. A. F. Khasgiwala & Co., Statutory Auditors andShri Jaikumar Vishwanath Mishra, Managing Director, confirming the compliance with the said Clause, forms part of thisreport.

SAFETY, HEALTH AND ENVIRONMENTA sustained and meticulous effort continues to be exercised by the Company at the plant of the Company towards greenerproduction and Environment Conservation. The Company perseveres its efforts to indoctrinate safe and environmentallyaccountable behavior in every Employee as well as Vendors by compulsory annual training and refresher courses andfrequent awareness programs. Mock drills of emergency preparedness are regularly conducted at the plant showingCompany’s commitment towards safety, not only of its own men and plant, but also of the society at large. Involvement ofworkers in all safety matters has been encouraged by their participation in shop floor safety meetings.

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The health of employees and the environment in and around the plant area have been given due care and attention. TheCompany continues to comply with the prescribed Industrial Safety Environment Protection and Pollution Control Regulationsat its production plant through periodic checks of the system involved and constant monitoring to meet the standards set bythe Pollution Control Authorities, etc.

The Plant of the Company is eco-friendly and do not generate any harmful effluents. Safety devices have been installedwherever necessary.

INDUSTRIAL RELATIONS & HUMAN RESOURCES MANAGEMENT

The Company recognizes that in a people-intensive business, major gains can be scored in the area of productivitymanagement. In view of this, the Company has strengthened its people management through performance-linked incentives,amenities, training, multi-skilling and career path identification.

The Company is of firm belief that good Human Resource (HR) Management would ensure success through high performance.HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance themanpower productivity, the goal is set to increase the production capacity of the plant and rationalize the manpowerthrough scientific study. All the operational goals of the top management emanate from the business plan. The goals of MDare shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits byHR team is being made to the plant to meet the employees and also interaction meetings are conducted to get theirfeedback, based on which HR policies are improved continuously. The process has resulted in better employer-employeerelationship.

The Company lays due emphasis on all-round development of its human resource. Hence, training of the employees isaimed at systemic development of knowledge, skills, aptitude and team work. Training is designed for the development ofpersonal skills necessary for the performance of the present job and to prepare them for future growth. Individual developmentis given top priority to groom high caliber manpower.

CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules 1988, regarding conservation of energy, technology absorption andforeign exchange earnings and outgo are given in the Annexure forming part of this Report.

PARTICULARS OF EMPLOYEES

There were no employees drawing remuneration of `60,00,000/- or more per annum employed throughout the year or`5,00,000/- or more per month employed for a part of the year. This information is furnished pursuant to Section 217(2A) ofthe Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

FIXED DEPOSITS

During the year under report the Company has not accepted any fixed deposits.

INSURANCE

The properties/assets of your Company are adequately insured.

AUDITORS

M/s. A. F. Khasgiwala & Co., Statutory Auditors of the Company, holds office until the conclusion of the ensuing AnnualGeneral Meeting and are eligible for re-appointment. The Company has received a letter from M/s. A. F. Khasgiwala & Co.to the effect that their re-appointment as Auditors, if made, would be within the limits under Section 224(1B) of the CompaniesAct, 1956.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the assistance and support extended by Banks, Consultants, Solicitors,Shareholders and Employees of the Company.


Sd/-Place: Mumbai Saurabh Kumar TayalDate: 28th April, 2011 Chairman

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ANNEXURE TO THE DIRECTORS’ REPORT:

Information as per Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in theReport of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the year 2010-2011.

1. CONSERVATION OF ENERGY

a) Energy conservation measures taken:

The Company has been making concerted efforts for enhancement in capacity utilization, cost competitivenessand better quality through systematic process, monitoring and adherence to technological norms. Sophisticatedinstruments are used for regulation and adjustment as per parameters. Efforts are also made for upgradation ofthe quality of the plant operation. Utilities are being combined for effective energy conservation.

b) Proposals being implemented for reduction of consumption of energy:

Studies are being made to reduce energy consumption and make suitable investments in this area, if necessary.

c) Impact of the measures (a) & (b) above for reduction of energy consumption and consequential impacton the cost of production of goods:

The Company is constantly exploring avenues for cost saving as an on-going process.

d) Total energy consumption and energy consumption per unit of production in accordance with Form ‘A’ ofthe Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect ofIndustries specified in the Schedule thereof:

Year ended Year ended31.03.2011 31.03.2010

A. Power and Fuel Consumption in respect of :

1. Electricity

(a) Purchased

1. Units (KWH in Lacs) 141.02 117.52

2. Total amount (` in Lacs) 826.38 688.66

3. Rate per unit (Rs/unit) 5.86 5.86

(b) Own Generation

(Through Diesel Generator/Furnace Oil

1. Units (KWH in Lacs) 332.65 354.72

2. Units per litre of fuel 3.63 3.30

3. Cost per unit (Rs/unit) 6.25 6.85

2. Coal — —

3. Furnace Oil

1. Furnace Oil (Ltr. In Lacs) — —

2. Total Amt (` In Lacs) — —

3. Cost `/ltr. — —

4. Others/Internal Generation — —

B. Consumption per unit of production(Product : Yarn & Fabric)

1. Electricity (KWH/Tonne) 2641.67 2401.52

2. Coal (Kgs.) — —

3. Furnace Oil (Ltrs.) — —

4. Steam (Tonnes) — —

Note: Since the Company manufactures different qualities of yarn/fabrics with product-mix changing significantly,there are no specific norms for per unit of production.

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2. TECHNOLOGY ABSORPTION

Disclosure of particulars with respect to technology absorption in prescribed Form ‘B’ of the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988:

a) Research and Development:

i) Specified areas in which R&D activities R&D activities are being carried out continuously toare carried out by the Company. produce better quality of yarn and fabrics.

ii) Benefits derived as a result of the above As a result of R&D activities, the Company has been ableto produce quality fabrics.

iii) Future Plan of Action Efforts aimed at cost reduction, improvement in quality ofproducts and development of new process will continue.

iv) Expenditure on R & D Expenditure on R&D is being booked under the respectiveheads in the Profit & Loss Account as no separate accountis maintained for this purpose.

b) Technology Absorption, Adaptation The Company has not utilized any imported technology.and Innovation:

3. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Year ended Year ended31.03.2011 31.03.2010

a) Activities relating to export markets forproducts and services and export plan — —

b) Foreign Exchange Outgo (` in Lacs) — —

c) Foreign Exchange Earnings (` in Lacs) — —


Sd/-Place: Mumbai Saurabh Kumar TayalDate: 28th April, 2011 Chairman

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CORPORATE GOVERNANCE REPORT

Report on matters required to be stated on Corporate Governance pursuant to Clause 49 of the Listing Agreement isas under:

1. COMPANY’S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE

ASAHI INDUSTRIES LIMITED, the concept of Corporate Governance hinges on total transparency, integrity andaccountability of the Management team. The main goal of Corporate Governance is maximization of shareholder’svalue and protection of the interests of all the stakeholders. It includes the policies and procedures adopted by theCompany in achieving its objective in relation to its shareholders, employees, customers, suppliers, regulatory authoritiesand society at large.

The Company has ensured that the Directors of the Company are conscious to their duties, obligations andresponsibilities to the best interest of the Company, to give direction and remain accountable to their shareholders andother beneficiaries for their actions. The responsibilities of the Board includes setting out the Company’s strategicaims, providing the leadership to put them into effect, supervision of the management of the business and reporting tothe shareholders on their stewardship.

It is a recognized philosophy of the Company that effective and good Corporate Governance is a must, not only inorder to gain credibility and trust, but also as a part of strategic management for the survival, consolidation and growth.

2. BOARD OF DIRECTORS

2.1 The Board of Directors of the Company comprises of 7 Directors. During the Financial year 2010-2011, the Board met4 times on the following dates namely 20th May 2010, 4th August 2010, 16th October 2010 and 5th February, 2011. Therewas no time gap of more than four months between any two Meetings of the Board of Directors.

The names and categories of the Directors on the Board, their attendance at the Board Meetings during the year andat the 17th Annual General Meeting, and also the number of Directorships and Committee Memberships held by themin various Companies are given below: -

Name of the Director Category Attendance Number of Directorships inParticulars other Public Companies and

total Committee Memberships/Chairmanships as on 31st March, 2011

Board 17th Directorships Total TotalMeetings AGM in other Committee Committee

during Public Membership Chairmanship2010-11 Companies

Shri Saurabh Kumar Tayal NEC 4 Yes 9 6 2

Shri Jaikumar Vishwanath Mishra MD 4 Yes 2 1 Nil

Ms. Mrinal Tayal * NED 1 N.A. 4 Nil Nil

Shri Mahesh Prasad Mehrotra ID 3 No 14 5 5

Shri Subhash Chandra Bhargava ID 3 No 10 4 2

Shri Jodharam Dhaka ID 4 Yes Nil 1 1

Shri Shivprasad Shrivastav ID 4 Yes Nil 2 Nil

Shri Mahendrabhai Patel ** ID Nil No N.A. N.A. N.A.

Shri Harinder Kumar *** ID Nil No N.A. N.A. N.A.

Dr. Pritam Singh Pritam **** ID 3 No N.A. N.A. N.A.

*Appointed as an Additional Director w.e.f. 14th December, 2010** Resigned from Directorship w.e.f. 5th October, 2010*** Resigned from Directorship w.e.f. 16th October, 2010**** Resigned from Directorship w.e.f. 6th December, 2010“NEC” = Non Executive Chairman, “MD” = Managing Director,“NED” = Non-Executive Director and “ID” = Independent Director.

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2.2 Appointment/Re-appointment of DirectorsAs required under Clause 49(VI) of the Listing Agreement, the brief profile of the Directors seeking appointment/re-appointment at the ensuing Annual General Meeting are furnished hereunder: -

Sr. Name of Director Brief Resume Area of Other Total TotalNo. Expertise Director- Committee Committee

ships Memberships Chairmanshipas on as on

31.03.2011 31.03.2011

1. Shri Saurabh B. Com, Textile and 9 6 2Kumar Tayal M.B.A. (Finance) Real Estate

2. Shri Mahesh Prasad B. Com, L.L.B., Accounts & Audit, 14 5 5Mehrotra F.C.A. Legal, Taxation

and Finance

3. Ms. Mrinal Tayal M.B.A. (Finance & Finance, 4 Nil NilMarketing) AdministrationB. Tech (Computer and BankingScience) sector

4. Shri Jaikumar B. Com, M.B.A. Textile 2 1 NilVishwanath Mishra (Finance)

2.3 Non-Executive Directors Compensation DisclosuresDetails of Sitting Fees paid to Non-Executive and Independent Directors of the Company during the Financial Year2010-2011, for attending the Board Meetings, Audit Committee Meetings and Share Transfer and Investors’ GrievancesCommittee Meetings, is as follows:

Name of Director Category Sitting Fees (in `)

For Board Meetings For CommitteeMeetings

Ms. Mrinal Tayal NED 10,000 Nil

Shri Mahesh Prasad Mehrotra ID 30,000 10,000

Shri Subhash Chandra Bhargava ID 30,000 Nil

Shri Jodharam Dhaka ID 40,000 49,000

Shri Shivprasad Shrivastav ID 40,000 49,000

Dr. Pritam Singh Pritam ID 30,000 Nil

Shri Mahendrabhai Patel ID Nil Nil

Shri Harinder Kumar ID Nil Nil

Total 1,80,000 1,08,000

3. BOARD COMMITTEES

The requirement that a Director shall not be a Member of more than 10 committees and Chairman of more than 5committees has been complied with while constituting the Committees of the Directors.

3.1 Audit Committee

The Audit Committee of the Company has been re-constituted twice during the year ended 31st March, 2011. In theMeeting of the Board of Directors held on 16th October, 2010, the Audit Committee was re-constituted and comprisedof Shri Mahesh Prasad Mehrotra, Chairman, Shri Shivprasad Shrivastav, Member and Shri Jodharam Dhaka, Member.

However, due to pre-occupation of Shri Mahesh Prasad Mehrotra, the Audit Committee was re-constituted again inthe Board Meeting of the Company held on 5th February, 2011. The Audit Committee now comprises of:Shri Subhash Chandra Bhargava … ChairmanShri Shivprasad Shrivastav … MemberShri Jodharam Dhaka … Member

The constitution of Audit Committee meets with the requirements of Section 292A of the Companies Act, 1956 andClause 49(II)(A) of the Listing Agreement as introduced by the Companies (Amendment) Act, 2000.

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The scope of the activities of the Audit Committee is as set out in Clause 49 of the Listing Agreement read with theSection 292A of the Companies Act, 1956. The terms of reference of the Audit committee are as follows:1. Overview of the Company’s financial reporting process and the disclosure of its financial information to ensure that

the financial statement is correct, sufficient and credible.2. Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment

for any other services.3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.4. Reviewing with Management the Annual Financial Statements before submission to the Board, focusing primarily

on (i) any changes in accounting policies and practices (ii) major accounting entries based on exercise of judgmentby management (iii) qualifications in draft audit report (iv) significant adjustments arising out of audit (v) the goingconcern assumption (vi) compliance with accounting standards (vii) compliance with stock exchange and legalrequirements concerning financial statements and (viii) any related party transactions i.e. transactions of the Companyof material nature, with Promoters or the Management, their subsidiaries or relatives etc. that may have potentialconflict with the interests of company at large.

5. Reviewing with the Management, the quarterly financial statements before submission to the Board for approval.6. Reviewing, with the Management, the statement of uses/application of funds raised through an issue (public issue,

rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offerdocument/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceedsof a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

7. Reviewing with the Management, external and internal auditors, the adequacy of internal control systems.8. Reviewing the adequacy of internal audit functions.9. Discussion with internal auditors of any significant findings and follow up thereon.

10. Reviewing the findings of any internal investigations by the internal auditors into the matters where there is suspectedfraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

11. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

12. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders(in case of non payment of declared dividends) and creditors.

13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

During the year 2010-11, the Audit Committee met 4 times on the following dates namely 19th May, 2010, 3rd August,2010, 15th October, 2010 and 4th February, 2011. The composition of the Audit Committee and the details of AuditCommittee Meetings attended by the Members are given hereunder:

Name of Member Designation AttendanceShri Subhash Chandra Bhargava * Chairman N.A.Shri Shivprasad Shrivastav** Member 4Shri Jodharam Dhaka Member 4Shri Mahesh Prasad Mehrotra *** Chairman 1Shri Harinder Kumar**** Member Nil

* Appointed as Chairman and Member of the Committee w.e.f. 5th February, 2011** Chairman of the Committee upto 16th October, 2010*** Chairman of the Committee from 16th October, 2010 to 5th February, 2011**** Resigned from the Membership of the Committee w.e.f. 16th October, 2010

3.2 Remuneration CommitteeThe Company does not have a Remuneration Committee. The remuneration payable to the Managing Director, asapproved by the Board of Directors, is within the limits prescribed in the Companies Act, 1956, and is subject to theapproval of the Members in the Annual General Meeting. Further, the sitting fees paid to the Non-Executive Directorsis also within the limits prescribed in the Companies Act, 1956.Remuneration to Managing Director and Non-Executive Directors of the Company for the year 2010-11 is givenhereunder:

Name Salary Commission Sitting Fees Total

Shri Jaikumar Vishwanath Mishra,Managing Director 1,50,000 — — 1,50,000

Non-Executive Directors(As elaborated in Pt. 2.3 above) — — 2,88,000 2,88,000

Total 1,50,000 — 2,88,000 4,38,000

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3.3 Share Transfer and Investors’ Grievance CommitteeThe Committee, inter alia, looks into redressing of shareholders’/investors’ complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividend, etc. The Committee oversees the performance of the Company andrecommends measures for overall improvement of the quality of investor services.The Share Transfer and Investors’ Grievance Committee of the Company has been re-constituted in the Meeting ofthe Board of Directors held on 16th October, 2010. The Committee now comprises of:Shri Jodharam Dhaka … ChairmanShri Saurabh Kumar Tayal … MemberShri Shivprasad Shrivastav … MemberDuring the year 2010-11, the Share Transfer and Investors’ Grievance Committee met 4 times on the following datesnamely 19th May, 2010, 3rd August, 2010, 15th October, 2010 and 4th February, 2011. The composition of the ShareTransfer and Investors’ Grievance Committee and the details of the Meetings attended by the Members are givenhereunder:

Name of Member Designation AttendanceShri Jodharam Dhaka Chairman 4

Shri Shivprasad Shrivastav Member 4

Shri Saurabh Kumar Tayal* Member 1

Shri Harinder Kumar** Member Nil

* Appointed as Member of the Committee w.e.f. 16th October, 2010** Resigned from the Membership of the Committee w.e.f. 16th October, 2010

Name & Designation of Compliance Officer : Ms. Supriya Baldi, Company SecretaryNumber of complaints pending as on 1st April, 2010 : NilNumber of Shareholder’s Complaints received in F.Y. 2010-11 : 63Number of complaints solved to the satisfaction of shareholders : 63Number of pending complaints : Nil

4. GENERAL BODY MEETINGSThe last three Annual General Meetings of the Company were held as under: -

Year Location Date Time

2009-10 Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312. 3rd July, 2010 11.00 a. m.

2008-09 Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312. 8th August, 2009 11.30 a. m.

2007-08 Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312. 12th August, 2008 10.00 a. m.

Note:1) No Extra-ordinary General Meeting of the shareholders was held during the year ended 31st March, 2011.2) No Postal ballot was conducted during the year ended 31st March, 2011.3) There was no Special Resolution passed in the previous 3 Annual General Meetings.4) The Company, in accordance with Section 192A of the Companies Act, 1956 and Companies (Passing of the

Resolution by Postal ballot) Rules, 2001, proposes to avail the approval of the Members through the Postal Ballotpursuant to Section 372A of the Companies Act, 1956.

5. DISCLOSURES(a) Disclosures on materially significant related party transactions i.e. transactions of the Company of material

nature, with its Promoters, the Directors of the management, their subsidiaries or relatives etc. that mayhave potential conflict with the interests of the Company at large.None of the transactions with any of the related parties were in conflict with the interests of the Company.

(b) Details of non-compliance by the Company, penalties, strictures imposed on the Company by StockExchange or SEBI or any statutory authority, on any matter related to capital markets, during the lastthree years.There were no instances of non-compliance of any matter related to the capital markets during the last three years.

6. MEANS OF COMMUNICATION(a) The Company has published its Notice of the Board Meetings, Notice of the Annual General Meeting and Book

Closure, Quarterly Financial Results, Half yearly Statement of Assets and Liabilities in the following newspapers:Free Press Journal – English; Navshakti – Marathi (Regional Newspaper).

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(b) Management Discussion and Analysis forms integral part of this Annual Report. All matters pertaining to industrystructure and developments, opportunities and threats, outlook, risks and concerns, etc., are discussed in thesaid report.

7. GENERAL SHAREHOLDER INFORMATION7.1 Annual General Meeting

Date and time : Saturday, 2nd July, 2011 at 10.00 a.m.Venue : Ecomax, Musrane, Taluka Wada, Dist. Thane-421312

7.2 Financial Year : 1st April to 31st MarchFinancial Calendar 2011-2012 (tentative)Annual General Meeting : July, 2012Board Meetings:-Results for the Quarter ending June 30, 2011 : Second week of August, 2011Results for the Quarter ending September 30, 2011 : Second week of November, 2011Results for the Quarter ending December 31, 2011 : Second week of February, 2012Results for the Year ending March 31, 2012 : Last Week of May, 2012

7.3 Book Closure date : 30th June, 2011 to 2nd July, 2011 (Both Days Inclusive)7.4 Dividend Payment Date : N. A.7.5 (a) Listing of Equity shares : Bombay Stock Exchange Ltd.

(b) Delisting of Equity shares : The Equity shares of the Company have beenautomatically de-listed from the Saurashtra Kutch StockExchange Limited vide Letter No. SKSE/10-11/154 dated13th October, 2010, on account of withdrawal of therecognition of the said Stock Exchange by SEBI.Further, the Company is in the process of applying for thedelisting of its Equity Shares from the Ahmedabad StockExchange Limited.

(c) ISIN Number : INE745I01015(d) Dematerialization in CDSL : Active(e) Dematerialization in NSDL : Active (w.e.f. 1st December, 2010)

7.6 Stock Code : 514482 (Bombay Stock Exchange Ltd.)05153 (Ahmedabad Stock Exchange Ltd)

(Note: The Annual Listing Fees for the year 2011-2012 has been duly paid to Bombay Stock Exchange Ltd. andAhmedabad Stock Exchange Limited)

7.7 Stock Market Data:The shares of the Company are listed with the Bombay Stock Exchange Limited and Ahmedabad Stock ExchangeLtd. However, the Company is in the process of applying for the delisting of its Equity shares from the AhmedabadStock Exchange Ltd. due to insignificant trading at the said Exchange.Further, the trading in the Equity shares of the Company has been resumed with the Bombay Stock Exchange w.e.f.29th October, 2010, in the ‘T’ group under the Scrip Code 514482. The details of the Market Price data i.e., high, low(based on the closing prices) and volume during each month since October, 2010, is given hereunder:

Month High Price Low Price No. of SharesOctober, 2010 50.00 15.00 5500

November, 2010 52.25 45.15 4200

December, 2010 42.90 42.90 100

January, 2010 40.80 40.80 100

February, 2010 38.80 38.80 100

March, 2010 — — —

7.8 Performance in comparison to broad–based indices such as BSE Sensex, CRISIL index etc.:The Stock Market Details of the Company with the Bombay Stock Exchange Ltd. is as given above.

7.9 Registrar & Transfer Agent : Universal Capital Securities Private Limited (Formerly known asMondkar Computers Pvt. Ltd.)21, Shakil Nivas, Opp Satya Sai Baba Temple, Mahakali Caves Road,Andheri (East), Mumbai – 400 093. Email: [email protected]

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7.10 Share Transfer System : The shares of the Company, being in the compulsory Demat list, aretransferable through the depository system. All transfers received areprocessed and approved by the Share Transfer Committee.M/s. Universal Capital Securities Private Limited (Formerly known asMondkar Computers Pvt. Ltd.), the Registrar and Transfer Agents,complete the formalities for providing Demat facility through NSDL/CDSL.They are the Common Agency both for Physical and Demat Shares.

7.11 a) Distribution of Shareholding as on 31st March, 2011:

Shareholding Number of Shareholders Number of Shares held

From To1 – 5000 9964 1497730

5001 – 10000 22 15290010001 – 20000 10 11990020001 – 30000 2 5380030001 – 40000 1 3480040001 – 50000 1 4080050001 – 100000 1 59800

100001 – Above 27 64482822Total 10028 66442552

b) Shareholding pattern as on 31st March, 2011:

Category No. of Percentage ofshares held shareholding

1. Promoter’s Holding 48225870 72.58

2. Mutual Funds, Banks, Financial Institutions, FIIs, NRIs & OCBs 1573652 02.37

3. Domestic Companies 14697500 22.12

4. Resident Individuals 1945530 02.93

Total 66442552 100.00

7.12 a) Dematerialization of Shares : Approximately 1.06% of the shares issued by the Company hasbeen dematerialized up to 31st March, 2011. The Company’sshares are compulsorily traded in dematerialized form and areavailable for demat on both the depositories viz., CDSL and NSDL(NSDL w.e.f. 1st December, 2010) under ISIN-INE745I01015.

b) Liquidity : The Company’s shares are traded at the Bombay Stock ExchangeLimited.

7.13 Outstanding GDR/ADR/ : The Company has not issued any such instrumentsWarrants or any otherconvertible instruments,Conversion date and likelyimpact on Equity

7.14 Plant Location : Valsad, Gujarat

7.15 (i) Address for Investors’ CorrespondenceFor transfer / dematerialization of : Universal Capital Securities Private Ltd.Shares, payment of dividend on (Formerly known as Mondkar Computers Pvt. Ltd.)shares, interest and redemption of 21, Shakil Nivas, Opp Satya Sai Baba Temple,debentures and any other query Mahakali Caves Road,relating to the shares of the Andheri (East), Mumbai - 400 093.Company Email: [email protected]

Note: Shareholders holding shares in electronic mode should address their correspondence relating to theirDemat Accounts to their respective Depository Participants.

(ii) Any query in Annual Report : Ecomax, Taluka Musrane, Wada, Dist. Thane - 421312.

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CERTIFICATE ON CORPORATE GOVERNANCETo the Members of ASAHI INDUSTRIES LIMITED (Formerly Known as Asahi Fibres Limited):

We have examined the compliance of the conditions of Corporate Governance by ASAHI INDUSTRIES LIMITED (Formerly Known asAsahi Fibres Limited) for the year ended 31st March 2011, as stipulated in Clause 49 of the Listing Agreement of the said Company with theStock Exchanges.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to theprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance.It is neither an audit nor an expression of an opinion on the Financial Statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Boardof Directors of the Company and Management, we certify that the Company has complied with the conditions of Corporate Governance asstipulated in the Listing Agreement with the Stock Exchanges.

We state that in respect of investors grievances received during the year ended 31st March 2011, no investor grievances are pendingagainst the Company as on 28th April, 2011, as per the records maintained by the Company and presented to the Share Transfer/Investors’Grievances Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectivenesswith which the Management has conducted the affairs of the Company.

For A. F. Khasgiwala & Co. Chartered Accountants

Sd/-Place: Mumbai A.F. KhasgiwalaDate: 28th April, 2011 Partner

Mem No. 006491Firm Regn No. 105114W

CERTIFICATION PURSUANT TO CLAUSE 49(V) OF THE LISTING AGREEMENT BY THEMANAGING DIRECTOR OF THE COMPANY

I, Jaikumar Vishwanath Mishra, Managing Director of the Asahi Industries Limited (Formerly known as M/s. Asahi Fibres Limited), to thebest of my knowledge and belief, certify that:

(a) I have reviewed financial statements and the cash flow statement for the year and that to the best of my knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might bemisleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing AccountingStandards, applicable laws and regulations.

(b) To the best of my knowledge and belief, there are no transactions entered into by the Company during the year which are fraudulent,illegal or violative of the Company’s Code of Conduct.

(c) I accept the responsibility for establishing and maintaining Internal Controls and that I have evaluated the effectiveness of the InternalControl System of the Company and have not found any deficiencies in the design or operation of the Internal Control System.

(d) I further certify that: -

(i) there have been no significant changes in Internal Control (except increase in scope of work of Internal auditor) during this year.

(ii) there have been no significant changes in accounting policies during this year.

(iii) there have been no instances of significant fraud of which we have become aware and the involvement therein, of Managementor an Employee having a significant role in the Company’s Internal Control System.

(e) I further declare that all Board Members and Senior Managerial Personnel have affirmed compliance with the Code of Conduct forthe Financial Year 2011-12.

For and on behalf of the Board of DirectorsSd/-

Place: Mumbai Jaikumar Vishwanath MishraDate: 28th April, 2011 Managing Director

DECLARATION PURSUANT TO CLAUSE 49(I)(D) REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY THEBOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL

I, Jaikumar Vishwanath Mishra, Managing Director of Asahi Industries Limited (Formerly known as Asahi Fibres Limited), hereby confirmthat the Company has adopted the Code of Conduct for its Board Members and Senior Management Personnel.

I confirm that the Company has, in respect of the Financial Year ended 31st March, 2011, received from the Senior Management Team ofthe Company and the Members of the Board, a Declaration of Compliance with the Code of Conduct as applicable to them.

For the purpose of this declaration, Senior Management Team means the Members of the Management one level below the ExecutiveDirectors as on 31st March, 2011.

For and on behalf of the Board of DirectorsSd/-

Place: Mumbai Jaikumar Vishwanath MishraDate: 28th April, 2011 Managing Director

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REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS 2010-11The Management of ASAHI INDUSTRIES LIMITED (Formerly known as Asahi Fibres Limited) presents its Analysis report coveringperformance and outlook of the Company. The Report has been prepared in compliance with the requirement of Corporate Governance aslaid down in the Listing Agreement. The Management accepts responsibility for the integrity and objectivity of the financial statements.However, investors and readers are cautioned that this discussion contains certain forward looking Statements that involve risk anduncertainties.

INDUSTRY STRUCTURE AND DEVELOPMENTS

TEXTILE INDUSTRY:

The Textile Industry occupies a unique place in our Country by contributing around 4% of India’s GDP, 14% of the Country’s IndustrialProduction, 18% of Industrial employment and 17% of the export earnings. It is the second largest provider of employment after agriculture.It provides direct employment to over 35 million people and indirect employment to around another 60 million people in the Country.

The Industry contributes around 25% share in the world trade of cotton yarn. India is the largest exporter of yarn in the international marketand has a share of 25% in world cotton yarn export market. India contributes for 12% of the world’s production of textile fibers and yarn.Indian textile industry is second largest after China in terms of spindlage, and has share of 23% of the world’s spindle capacity. India hasaround 6% of global rotor capacity.

The industry is expected to grow from the present US$ 70 billion to US$ 220 billion by 2020; India’s textile export is expected to reach US$25 billion by 2012.

India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5 per cent to 8 per cent and reachUS$ 80 billion by 2020.

- CottonIndia is the second largest producer of cotton in the world. According to Cotton Outlook, a cotton trade journal, cotton production in India forthe 2011-12 season is estimated to be 5.9 M.T. Cotton is the predominant fabric used in the Indian industry, accounting for nearly 60 percent of production. The average yield of cotton per hectare in Indian is about 400 kilograms which is considered low. During the year Indiaproduced total 32 million bales.

- SpinningThe Spinning Industry in India is on set to hit the global market with its enthusiasm and consistency in work. The spinning sector in India isglobally competitive in terms of variety, process and production quantity. It has already reached a phenomenal status in India by beating theobstacles that caused a downfall since past few years and is now on its way to cover a wider area in the spinning sector. India has about 40million spindles (23 per cent of the world).

- KnittingWeaving and knitting converts cotton, manmade, or blended yarns into woven or knitted fabrics. India’s weaving and knitting sector remainshighly fragmented, small-scale, and labour intensive.

This sector consists of about 3.9 million handlooms, 380,000 power loom enterprises that operate about 1.7 million looms, and just 137,000looms in the various composite mills. Power looms are small firms, with an average loom capacity of four to five owned by independententrepreneurs or weavers. Modern shuttleless looms account for less than 1 percent of loom capacity.

Knitting units are successful in export channels. Some of the prominent weaving / knitting clusters include Tirupur in Tamil Nadu andLudhiana in Punjab.

i) OPPORTUNITY AND THREATSThe textile industry is undergoing a major reorientation towards non-clothing applications of textiles, known as technical textiles, whichare growing roughly at twice rate of textiles for clothing applications and now account for more than half of total textile production.Technical textiles segment is expected to employ over 3,00,000 additional workers increasing the total employment to 1.2 million by2012. The Government of India has set up 4 Centres of Excellence for Meditech, Agrotech, Geotech and Protech group of technicaltextile providing one-stop facility for testing, human resource development and research and development.

The present global economic scenario provides ample opportunities for strong integrated textile companies such as like your company.Over the years the Company has built up capacities of scale by installing state-of-art production facilities. By reinforcing its positionacross the value change and presenting customers with diversified range of products, the Company has developed sustainablebusiness model with strength and resilience to combat any down turn in demand.

Strengths:

● Self reliant industry producing the entire supply-chain i.e., cotton and fibres.

● Highly competitive spinning sector.

● Large and growing domestic market.

● Second-largest textile producer in the World.

● Abundant Raw Material availability that helps industry to control costs and reduces the lead-time across the operation;

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● Low labour cost and availability of skilled and technical labour force.

● Excellence in fabric and garment designing.

● Vast textile production capacity and efficient multi-fiber raw material manufacturing capacity.

● Availability of large varieties of cotton fiber and has a fast growing synthetic fiber industry;

● Promising export potential

Weaknesses:

● Small size and technologically outdated plants result in lack of economies of scale, low productivity and weak quality control.

● Cotton availability is vulnerable to erratic monsoon and low per hectare yield.

● With the exception of spinning, other sectors are fragmented. Sectors such as knitted garments still remains in SSI domain

● Labour laws and policies lack reforms.

● Infrastructure bottlenecks for handling large volumes.

● India lacks in trade pact memberships, which leads to restricted access to the other major markets.

● Huge unorganized and decentralized sector.

Opportunities:

● End of quota system and full integration of the textile industry.

● Low per-capita consumption of textile indicating significant potential growth.

● Increased use of CAD to develop designing capabilities and for developing greater options.

● Shift in domestic market towards readymade garments.

● Cheaper production and marketing costs and enormous opportunities have tempted Taiwanese Companies to work on JointVentures with the Indian Companies specially for the manufacture of manmade fabrics.

● Increase in domestic textile consumption with growing disposable income.

Threats:

● Survival of the fittest-in term of quality, size delivery and cost. There is an increased global competition in the post 2005 traderegime under WTO.

● Pricing pressures.

● Stiff competition from other Asian countries.

● Increase in regional trade could reduce share of market opened for India, China and other countries.

● High production cost with respect to other Asian competitors

ii) GOVERNMENT INITIATIVES

In an effort to increase India’s share in the world textile market, the government has introduced a number of progressive steps.

● 100 per cent FDI allowed through the automatic route.

● De-reservation of readymade garments, hosiery and knitwear from the small-scale industries sector in end-2000.

● Technology Mission on Cotton was launched in February 2000 to make quality raw material available at competitive prices.

● Technology Upgradation Fund Scheme (TUFS), which was launched to facilitate the modernisation and upgradation of thetextiles industry in 1999, has been given further extension till 2011-12. During 2010-11 (upto June 2010, provision figures), 256applications have been sanctioned at a project cost of US$ 89.2 million. The cumulative progress as on June 30, 2010, includes28,302 applications sanctioned at a project cost of US$ 46.71 billion. The Ministry of Textile has sanctioned a total of US$ 133million under TUFS during September 2010. The TUFS subsidy has been suspended for the new loans w.e.f. 29th June, 2010.

● The Scheme for Integrated Textile Park (SITP) was approved in July 2005 to facilitate setting up of textiles parks with world classinfrastructure facilities. Forty parks have been sanctioned till December 31, 2010, in nine states with total project cost of aboutUS$ 931.1 million with Government contribution of US$ 320 million. When fully functional the parks would have an investment ofUS$ 4.3 billion.

● The government extended 10 per cent capital subsidy and 4 per cent interest subsidy on installation of Spinning Machines and5% interest subsidy on installation of Knitting Machines under the TUFs.

● The government has set to launch US$ 44.21 million mission for promotion of technical Textiles.

● The Government has launched the Integrated Skill Development Scheme for the Textiles & Apparel Sector, with an objective ofcapacity building of Institutions providing skill development & training in Textiles Sector. Under this Scheme, the Governmenthas envisaged skill development of 2.7 million persons with an overall cost of US$ 530 million over the next five years.

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iii) AREA OF CONCERNS

The major areas of concerns are however as follows:

1. Certain Regional trade blocks and trade agreements can change competitive parameters.

2. Enhancement of Preferential Access Programme for select countries. For instance, under the new GSP scheme, formulated bythe EU, India’s textile sector has been graduated while those from Pakistan and other countries (excluding China) have beenincluded.

3. Evolution of Non Tariff Barriers in the form of packaging/labeling requirements, customs and other formalities; environmentalsafeguards, sanitary and phyto-sanitary measures.

4. The developed countries continue to seek quantitative restrictions on textiles and clothing. Their imports show that quotas arestill being used as an instrument of restraining growth. The recent settlement arrived at by the European Commission underintense domestic pressure undermines the free play of market forces.

iv) OUTLOOK

As the industrial and economic growth of the Country is showing steady improvement, the Company has drawn out and is implementingan action plan which comprises thrust on high margin products, reduction in raw material costs, rationalization of operations and over-heads, optimizing inventory level, selective credit policy to customers and liquidation of slow-moving inventories and overdue receivables.

The Company with its superior product mix and higher value-addition, coupled with the change in industry scenario like more fiscalincentives as announced by Government of India for textile industry, change in consumer preferences from woven to knitted clothesetc., has benefitted significantly during the financial year 2010-2011 and is expected to do the same in the years to come.

v) RISK AND CONCERN

There are no major risk and concern to the Company’s operation except from the competitive pricing pressure from cheaper imports,unethical competitions from sick units, free market policies and removal of quantitative restrictions.

vi) INTERNAL CONTROL SYSTEM

The Company has been marinating a well-established procedure for internal control system. For the purpose financial control, Companyis adequately staffed with experienced and qualified personnel at all levels and play an important role in implementing and monitoringthe statutory and Internal policy control environment. There has been a review conducted by M/s. B. James & Co., the Internal Auditor,about the financial and operating controls. The Audit Committee of the Company reviews the adequacy of internal audit functions.

vii) FINANCIAL PERFORMANCE VS. OPERATIONAL PERFORMANCE

The Company has achieved a Sales Turnover of ` 12443.91 Lacs as against ` 8701.09 Lacs in respect of the previous Financial Yearended 31st March, 2010, registering a growth of around 43% over the previous Financial Year. The Company has registered profit aftertax was ` 102.96 Lacs during the year as against profit after tax of Rs 123.49 Lacs in the previous Financial Year. The Profit beforeDepreciation, Interest and Tax is ` 1294.59 Lacs in the Financial Year ended 31st March, 2011 as against ` 1201.41 Lacs in theprevious Financial year ended 31st March, 2010.

viii) DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATION FRONT

As part of HR-initiatives, thrust is given for Leadership Development to meet the aspirations and long-term goals of the Company. TheCompany has also laid qualitative objectives to maximize overall growth. Emphasis was placed on building a cohesive workforce tomaximize returns to all stakeholders. Focused attention is given for knowledge updating and application of new technologies availableto reduce costs and to meet the business challenges.

The focus of Human resource is on building and developing intellectual capital through innovative ideas. The industrial relation climateof the Company continues to remain harmonious with focus on quality and safety.

ix) RESEARCH AND DEVELOPMENT

Increased globalization has made the marketing of products and retention of customers highly competitive. The need of the hour istotal customer satisfaction and value for money from the products marketed. Keeping this objective as paramount, the research anddevelopment activities were focused into prompt attention to major customer complaints/ suggestions in order to retain/enhancecustomer satisfaction. The Company has started launching products of better quality and new look as per customer requirements.

x) CAUTIONARY STATEMENT

Statements made in this Report may be “forward looking statements” within the meaning of applicable securities laws and regulations.These statements are based on certain assumptions and expectations of the future events that are subject to risks and uncertainties.Actual future results and trend may differ materially from historical results, depending on variety of factors like changes in economicconditions affecting demand/supply, price conditions in which the Company operates, Government regulations, tax laws and otherstatutes and incidental factors.

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AUDITORS’ REPORTTo,The Members ofASAHI INDUSTRIES LTD (Formerly known as Asahi Fibres Limited)

We have audited the attached Balance Sheet of ASAHI INDUSTRIES LTD (Formerly known as Asahi Fibres Limited)as at 31st March, 2011, and also the Profit and Loss Account of the Company for the year ended on that date and the CashFlow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of theCompany’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by Management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) and the Companies (Auditor’s Report)(Amendment) Order, 2004, issued by the Central Government in terms of section 227(4A) of the Companies Act,1956, and on the basis of such checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us, we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that : -

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, werenecessary for the purposes of our audit.

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as appearsfrom our examination of the books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report are in agreementwith the books of account.

d) On the basis of the written representations received from the Directors as on 31st March, 2011 and taken onrecord by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 frombeing appointed as a Director of the Company in terms of Section 274(1)(g) of the Companies Act, 1956.

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this reportcomply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accountsgive the information required by the Act in the manner so required and give a true and fair view in conformity withaccounting principles generally accepted in India :

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011,

ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date and ;

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For A.F. KHASGIWALA & CO.,Chartered Accountants

Sd/-A.F. Khasgiwala

PartnerPlace : Mumbai Mem. No 006491Date : 28.04.2011 Firm Regn. No.105114W

20


ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS’ REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2011 OF ASAHI INDUSTRIES LTD (FORMERLY KNOWN ASASAHI FIBRES LIMITED)

On the basis of such checks as we considered appropriate and according to the information and explanation given to usduring the course of audit, we state that:

1. In respect of fixed assets: -

a) The Company has maintained proper records to show full particulars, including quantitative details and situationof the Fixed Assets.

b) The fixed assets of the Company have been physically verified by the Management during the year and nomaterial discrepancies between the book records and the physical inventory have been noticed. In our opinion,the frequency of verification is reasonable.

c) The company has not disposed off any fixed assets during the year and therefore the question of reporting underclause 4(1)(C) of the Companies (Auditor’s Report) Order, 2003, does not arise.

2. In respect of Inventories:-

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have beenphysically verified by the Management at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of stocks followed by the Management are reasonable andadequate in relation to the size of the Company and nature of its business.

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book recordswere not material and have been properly dealt with in the books of accounts.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principlesand is on the same basis as in the preceeding year

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firm or other partiescovered in the register maintained under 301 of the Companies Act,1956:

a) The Company has taken unsecured loans from companies listed in the register maintained under Section 301 ofthe Act and / or Companies under the same management as defined under sub section (6) of section 370 of theCompanies Act, 1956.

b) The Company has not granted any loans, secured or unsecured, during the year, to companies, firms or partieslisted in the register maintained under 301 of the Companies Act, 1956. On the basis of the information andexplanations given to us, there are no companies under the same management within the meaning of subsection (6) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation thatcertain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparativequotations, there are adequate internal control procedures commensurate with the size of the Company and thenature of its business with regard to the purchase of stores, raw materials including components, plant & machinery,equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examinationof the books and records of the Company, and according to the information and explanations given to us, we haveneither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaidinternal control system.

5. In respect of transactions covered under Section 301 of the Companies Act,1956:

According to the information and explanations given to us, the Company has not entered into any contract for the sale,purchase or supply of goods, materials or services which is required to be entered in the Register maintained underSection 301 of the Companies Act 1956.

6. In our opinion, and according to the information and explanations given to us, the Company does have an internalaudit system commensurate with the size of the Company and nature of its business.

7. The Company has not accepted any deposits from the public during the year and consequently the provision of Section 58Aand 58AA or any other relevant provision of the Companies Act, 1956 and the Rules made thereunder are not applicable.

21


8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of Indiaunder Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination ofsuch accounts and records.

9. a) According to the records of the Company, the provident fund and employees state Insurance, Income-tax, WealthTax, cess and other statutory dues have been regularly deposited during the year with appropriate authorities.

b) According to the information and explanations given to us, the disputed dues outstanding in respect of Sales taxis as follows:-

Nature of Liability Nature of Dues Amount Period Remarks

Sales Tax Dispute on account of ` 49.14 Lacs 1996-97 Appellate Tribunal of SalesSales Tax Exemption 1997-98 Tax Dept. at Ahmedabadgranted to the Company 1998-99 (Refer Note 6 of Schedule 14)

10. According to the records of the Company examined by us and the information and explanations given to us, theCompany has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has notgranted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / societies are not applicable to theCompany.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities,debentures and other investments. All shares, debentures and other securities held as investments by the Companyhave been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate Guarantee of ` 90 Cr. infavour of Bank of India for securing Term Loan granted to Realtime Properties Ltd., an Associated Company beingsubsidiary of Jaybharat Textiles and Real Estate Ltd., which is a Promoter of the Company. The Company has executedCorporate Gurantees aggregating ` 33.40 Cr.in favour of Indian Overseas Bank, Nariman Point Branch, Mumbai, forsecuring the loan granted to KSL and Industries Ltd, Jaybharat Textiles and Real Estate Ltd, Eskay K’n’it (India) Ltd.and Krishna Knitwear Technology Ltd.

15. The Company has not made any preferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Companies Act, 1956.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of theCompany, we report that no funds raised on short-term basis have been used for long term investment by the Company.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has not incurred cash losses for the financial year ended 31st March, 2011

21. During the year the Company has not made any payment to parties or companies covered in the register maintainedu/s 301 of the Companies Act, 1956.

22. During the course of our examination of the books and records of the Company, carried out in accordance with thegenerally accepted auditing practices in India and according to the information and explanations given to us, we haveneither come across any instance of frauds on or by the Company, noticed or reported during the year, nor have beeninformed of such case by the Management.

For A.F. KHASGIWALA & CO.,Chartered Accountants

Sd/-A.F. Khasgiwala

PartnerPlace : Mumbai Mem. No 006491Date : 28.04.2011 Firm Regn. No.105114W

22


SCHEDULES REFERRED TO ABOVE FORMS AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

As per our report of even date attached For and on behalf of the Board of Directors

For A. F. KHASGIWALA & CO.Chartered Accountants

Sd/-A. F. Khasgiwala Sd/- Sd/-

Partner Chairman Managing DirectorMembership No. 006491Firm Regn. No. 105114W

Place: Mumbai Sd/-Date: 28.04.2011 Company Secretary

BALANCE SHEET AS AT 31ST MARCH, 2011Schedules As at As at

31.03.2011 31.03.2010(` in lacs) (` in lacs)

SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital - Equity 1 664.43 664.43Reserves & Surplus 2 800.25 800.25

1464.68 1464.68Deferred Tax Liability (Net) 233.43 323.10LOAN FUNDSUnseured Loans 3 12700.00 12700.00

TOTAL 14398.11 14487.78

APPLICATION OF FUNDSFIXED ASSETS 4Gross Block 16276.81 15359.82Less: Depreciation 3603.13 2325.14

Net Block 12673.67 13034.67Capital Work in Progess 0.00 15.24

12673.67 13049.91CURRENT ASSETS, LOANS AND ADVANCESInventories 5 673.57 687.56Sundry Debtors 6 714.33 690.76Cash and Bank Balances 7 5.65 39.19Loans and Advances 8 1112.65 101.55

TOTAL (A) 2506.20 1519.06

Less: CURRENT LIABILITIES & PROVISIONSCurrent Liabilities 9 1474.20 876.58

TOTAL (B) 1474.20 876.58

NET CURRENT ASSETS (A-B) 1032.00 642.48PROFIT & LOSS ACCOUNT 692.43 795.40

TOTAL 14398.11 14487.78

SIGNIFICANT ACCOUNTING POLICIES &NOTES TO ACCOUNTS 14

23


PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED ON 31ST MARCH, 2011

Schedules For the For theyear ended year ended31.03.2011 31.03.2010(` in lacs) (` in lacs)

INCOME

Sales & Income From Operations 10 12443.91 8701.09

Increase of Finished Goods/(Decrease) in Stock (1.59) (0.26)

Total 12442.32 8700.83

EXPENDITURE

Material and Goods Consumption 11 8881.29 5852.40

Manufacturing Expenses 12 1899.44 1396.48

Selling & Administrative Expenses 13 367.00 250.54

Depreciation 1277.99 1188.12

Total 12425.72 8687.54

PROFIT BEFORE TAX 16.60 13.29

Less :Provision for Taxation 3.31 2.26

add/Less: Defferred tax assets\Liabilities 89.67 112.46

PROFIT/(LOSS)FOR THE YEAR 102.96 123.49

Add.: Balance brought forward from Last Year (795.40) (918.89)

Balance Carried to Balance Sheet (692.43) (795.40)

Basic / Diluted Earning Per Share 0.15 0.19

NOTES TO ACCOUNTS 14

SCHEDULES REFERRED TO ABOVE FORMS AN INTEGRAL PART OF THE FINANCIAL STATEMENTS






24


SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31st MARCH, 2011As at As at

31.03.2011 31.03.2010(` in lacs) (` in lacs)

SCHEDULE ‘1’SHARE CAPITALAuthorised99,00,00,000 Equity Shares of ` 1/- each 9900.00 9900.001,00,000 Preference Shares of ` 100/- each 100.00 100.00

10000.00 10000.00

Issued, Subscribed and Paid-Up6,64,42,552 Equity Shares of ` 1/- each 664.43 664.43

664.43 664.43

SCHEDULE ‘2’RESERVES & SURPLUSGeneral Reserve 800.25 800.25

Total 800.25 800.25

SCHEDULE ‘3’UNSECURED LOANSLong Term

From Corporates 12700.00 12700.00

12700.00 12700.00

SCHEDULE ‘4’FIXED ASSETS

(` In Lacs )

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS At Cost As on As on Written For the Upto As on As on01.04.2010 Additions Deductions 31.03.2011 01.04.2010 Back Year 31.03.2011 31.03.2011 31.03.2010

Land 217.06 0.00 0.00 217.06 0.00 0.00 0.00 0.00 217.06 217.06Building 3983.15 10.81 0.00 3993.96 295.86 0.00 133.13 428.98 3564.98 3687.29Plant &Machinery 10508.70 899.54 0.00 11408.24 1928.48 0.00 1109.85 3038.34 8369.90 8580.21LaboratoryEquipment 13.71 0.00 0.00 13.71 10.08 0.00 0.65 10.73 2.98 3.63Computer 23.82 0.00 0.00 23.82 7.76 0.00 3.86 11.62 12.19 16.05ElectricInstallation 554.96 3.63 0.00 558.59 69.65 0.00 26.46 96.11 462.48 485.32Furniture &Fixtures 27.33 3.00 0.00 30.33 5.12 0.00 1.83 6.96 23.37 22.20Air Conditioner 10.58 0.00 0.00 10.58 3.55 0.00 0.50 4.05 6.53 7.04OfficeEquipment 7.85 0.00 0.00 7.85 2.83 0.00 0.50 3.33 4.52 5.01Vehicle 12.67 0.00 0.00 12.67 1.80 0.00 1.20 3.01 9.66 10.87Total 15359.83 916.98 0.00 16276.81 2325.14 0.00 1277.99 3603.13 12673.67 13034.67Capital Workin Progress 15.24 901.75 916.99 0.00 0.00 0.00 0.00 0.00 0.00 15.24Total 15375.07 1818.73 916.99 16276.81 2325.14 0.00 1277.99 3603.13 12673.67 13049.91Previous year 13876.23 1498.83 0.00 15375.06 1137.03 0.00 1188.12 2325.14 13049.91 12739.20

25


SCHEDULE ‘6’SUNDRY DEBTORS(Unsecured but considered good)Over six months 18.45 20.88Other Debts 695.88 669.88

714.33 690.76

SCHEDULE ‘7’CASH AND BANK BALANCESCash in Hand 2.52 1.23Balances with Scheduled Banks :In Current Accounts 3.13 37.96

5.65 39.19

SCHEDULE ‘8’LOANS AND ADVANCES

(Unsecured and considered good unlessStated otherwise)Advances recoverable in cash or in kind 1112.65 101.55or for value to be received

1112.65 101.55

SCHEDULE ‘9’CURRENT LIABILITIES & PROVISIONSCreditors for Capital Goods 146.44 163.54Creditors for Goods & Services 229.98 317.83Other Liabilities 1094.47 370.23

1470.89 851.60Provision for Taxation 3.31 24.98

1474.20 876.58

As at As at31.03.2011 31.03.2010(` in lacs) (` in lacs)

SCHEDULE ‘5’INVENTORIES (At Cost)(As Inventory taken, valued and certifiedby the Management)Raw Material 565.43 578.26Work in Progress 22.15 24.63Finished Goods 57.75 59.34Packing Materials 6.75 5.68Stores & Spares 21.49 19.65

673.57 687.56

26


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2011

For the For theyear ended year ended31.03.2011 31.03.2010(` in lacs) (` in lacs)

SCHEDULE ‘10’SALES & INCOME FROM OPERATIONSales 12443.91 8701.09

12443.91 8701.09

SCHEDULE ‘11’MATERIALS AND GOODS CONSUMPTIONOpening stock- Raw Material 578.26 49.59Opening stock- Work in process 24.63 14.13Add - Purchases 8865.97 6391.57

9468.86 6455.29Less - Closing stock- Raw Material 565.43 578.26Less - Closing stock- Work in process 22.15 24.63

Raw Material Consumed 8881.29 5852.40Increase/(decrease) in finished goodsClosing Stock 57.75 59.34Opening Stock 59.34 59.60

(1.59) (0.26)

SCHEDULE ‘12’MANUFACTURING EXPENSESPower & fuel 1062.10 891.15Packing Materials 108.76 91.84Consumables Stores & Spares 106.64 67.26Wages & processing charges 621.94 346.23

1899.44 1396.48

SCHEDULE ‘13’SELLING & ADMINISTRATIVE EXPENSESAGM Expenses 1.54 1.32Bank Charges 0.19 0.21Professional Charges 15.78 13.26General & Miscellaneous Expenses 32.45 23.32Auditors’ Remuneration 0.94 0.06Travelling Expenses 18.41 17.85Conveyance 21.12 18.63Director Remuneration 1.50 0.00Director Sitting Fees 2.88 2.10Telephone & Telex Charges 21.42 15.24Printing & Stationery 32.40 19.45Repairs & Maintenance - Others 21.80 13.53Rates & Taxes 11.15 3.86Postage & Telegram 18.24 14.23Salary & Staff Welfare 142.31 49.95Annual Listing Fee 0.17 0.17Advertisement Expenses 2.15 1.96Registration & Filing Fees 16.29 49.92Security Charges 6.24 5.48

367.00 250.54

27


SCHEDULE – 14NOTES ANNEXED TO AND FORMING PART OF ACCOUNTS FOR THE YEAR ENDED ON 31st MARCH, 2011

A) SIGNIFICANT ACCOUNTING POLICIES

a) General :-

The Company maintains its accounts on accrual basis following the historical cost convention in accordance withGenerally Accepted Accounting Principles (“GAAP”) and in compliance with the Accounting Standards referredto in section 211 (3C) and other requirements of the Companies Act, 1956.

The preparation of financial statements in conformity with GAAP requires that the Management of the Companymakes estimates and assumptions that affect the reported amounts of income and expenses of the period, thereported balances of assets and liabilities and the disclosures relating to contingent liabilities as on the date of thefinancial statements. Examples of such estimates include the useful lives of fixed assets, etc. Actual results coulddiffer from these estimates.

b) Fixed Assets :-

Fixed Assets are stated at cost less accumulated depreciation.Cost includes all identifiable expenditure to bringthe assets to its present location and condition.

c) Inventories:-

Inventories are valued at cost or net realizable value, whichever is lower.

d) Depreciation:-

Depreciation on Fixed Assets has been provided at Straight Line Method and at the rates prescribed in scheduleXIV of the companies Act, 1956.

e) Revenue Recognition :-

Revenue on sale of products is recognized when the products are dispatched to customers.

f) Expenses Recognition:-

Expenses are charged to revenue on accrual basis.

B) NOTES FORMING PART OF ACCOUNTS:

1. Contingent Liabilities:

a) No provision for gratuity has been made as no employee has put in the qualifying period of service forentitlement of this benefit.

b) No provision for non fulfillment of Export obligation with Kandla Free Trade Zone has been made in thebooks of accounts as Jaybharat Textiles and Real Estate Ltd, a Promoter Company, has given an undertakingto Kandla Free Trade Zone for meeting export obligations worth ` 5.55 Crores undertaken by the Company.

c) The Company has given Corporate Guarantee of ` 90 Crore in favour of Bank of India for securing TermLoan granted to Realtime Properties Ltd, an Associated Company, being subsidiary of Jaybharat Textilesand Real Estate Ltd, which is a Promoter of the Company.

d) The Company has executed Corporate Gurantees aggregating ` 33.40 Cr. in favour of Indian OverseasBank, Nariman Point Branch, Mumbai, for securing the loan granted to KSL and Industries Ltd., JaybharatTextiles and Real Estate Ltd., Eskay K’n’it (India) Ltd. and Krishna Knitwear Technology Ltd.

28


2. Auditors Remuneration 31-03-11 31-03-10 ` `

i) As Auditors 93755.00 5951.00

ii) In other capacity other matter Nil Nil

Total 93755.00 5951.00

3. Managing Director’s Remuneration 1.50 Lacs NIL

4. Provision for current tax is made on the basis of estimated taxable income for the current accounting year inaccordance with the Income Tax Act, 1961.

5. There is no payment due to small scale industries.

6. Sales Tax Department has raised a demand (including interest) of ̀ 49,14,000 (Rupees Forty Nine Lacs FourteenThousand Only) in respect of Sales Tax exemption granted to the Company for the years 1996-97, 1997-98 and1998-99. No provision for the said liability is made in the books of accounts and the Company has preferred anAppeal against the said Order which is pending. The Company has made an Application to the Government ofGujarat for granting reliefs as per directions of Hon’ble BIFR which is pending before High Power Committee ofGovernment of Gujarat.

7. Deferred tax Assets/ Liabilities has been provided in accordance with the Accounting Standard-22 – “Accountingfor taxes on income” issued by the ICAI applicable with effect from 1st April 2001.The Deferred tax Assets as on31st March, 2011 amounting to ` 89.67 Lacs is the tax on the difference between the book depreciation and taxdepreciation.

8. Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course ofbusiness.

9. The figures of the previous year are regrouped /rearranged whenever necessary to correspond with current yearfigure.

10. 1. AS-18 Related Party Disclosure: Nil

2. Other parties with whom the Company has entered into transaction during the year:

i) Associates where Key Management Personnel and their relatives have significant influence;- Nil

ii) Key Management Personnel: a. Jaikumar Mishra – Managing Director

iii) Relative of Key Management Personnel:- Nil

11. Additional information pursuant to the provisions of Paragraphs 3 and 4 in Para II of Schedule VI to the CompaniesAct, 1956.

A. Licensed & Installed Capacity and Production:

As at As at31.03.2011 31.03.2010(In tonnes (In tonnes

per annum) per annum)

I. Licensed Capacity N.A. N.A.

II. Installed Capacity

a) Spinning Division 13600 13600

b) Knitting fabrics 7000 2000

29


Quantitative information in respect of Opening Stock, Purchases Sales and Consumption of Raw Materials.

2010 – 2011 2009 – 2010

Description Quantity Value Quantity Value(Tonnes) (` In Lacs) (Tonnes) (` In Lacs)

Opening Stock

Finished Goods 54.35 59.34 47.59 59.60

Stock in Process 31.59 24.63 17.87 14.13

Raw Material 771.30 578.26 82.49 49.59

Closing Stock

Finished Goods 24.06 57.75 54.35 59.34

Stock in Process 13.84 22.15 31.59 24.63

Raw Material 357.86 565.43 771.30 578.26

Purchases 5659.73 8865.97 8522.09 6391.57

Raw Material Consumed 6090.92 8881.29 7819.56 5852.4

Sales 5656.32 12443.91 7159.27 8701.09

Production 5686.61 6124.45

B Value of Imports of CIF basis in respect of: 2010-2011 2009-2010

Capital Goods Nil Nil

Stores & Spares Nil Nil

C Expenditure in Foreign Currency on Account Of:

Interest in rupee on foreign Currency Nil NilLoans payable Nil Nil

D F.O.B. Value of Exports Nil Nil

12. EARNING PER SHARE:

Basic and Diluted Earnings per Share is calculated as under:

31.03.2011 31.03.2010

a. Net Profit as per Profit & Loss A/c (` in lacs) 102.96 123.49

b. Weighted average Number of equity shares 66442552 66442552

c. Earning per share (`) (Face value ` 1 each)(Basics, not annualised )

After Deferred Tax 0.15 0.19






30


CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 20112010–2011 2009–2010(` In lacs) (` In lacs)

CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and extraordinary activities 16.60 13.29Adjustments for :Depreciation & amortisation 1277.99 1188.12Interest (net) 0 0Dividend received 0 0OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1294.59 1201.41Adjustments for :Trade & other receivables (1034.67) (465.16)Inventories 13.99 (547.42)Current Liabilities & Provisions 597.62 687.89

CASH GENERATED FROM OPERATIONS 871.52 876.73Direct taxes(Income Tax for earlier years received) 3.31 2.25

CASH FLOW BEFORE EXTRAORDINARY ITEMS 868.21 874.48

NET CASH FROM OPERATING ACTIVITIES 868.21 874.48CASH FLOW FROM INVESTING ACTIVITIES(Increase) / Decrease in Fixed Assets (Net) (901.75) (1498.84)(Increase) / Decrease in Investments 0.00 0.00Interest Received 0.00 0.00Increase/ Decrease in Miscellaneous Expenditure 0.00 0.00Dividend and Income from units received 0.00 0.00

NET CASH USED IN INVESTING ACTIVITIES (901.75) (1498.84)CASH FLOW FROM FINANCING ACTIVITIESProceeds From Issue Of Share Capital Including Share Premium 0.00 0Total Proceedings From Borrowings (Net of Repayment) 0.00 646.88Dividend Paid 0.00 0NET CASH USED IN FINANCING ACTIVITIES 0.00 646.88

NET DECREASE /INCREASE IN CASH AND CASH EQUIVALENTS (33.54) 22.52CASH AND CASH EQUIVALENTS (Opening Balance) 39.19 16.67CASH AND CASH EQUIVALENTS (Closing Balance) 5.65 39.19

Auditors’ CertificateWe have examined the attached Cash Flow Statement of ASAHI INDUSTRIES LTD. (Formerly known as Asahi FibresLimited) for the year ended on 31st March, 2011. The Statement has been prepared by the Company in accordance with therequirements of and is based on and is in agreement with the corresponding Profit and Loss account and Balance Sheetof the Company by our report to the Member of the Company.


Sd/-A. F. Khasgiwala

PartnerMembership No. 6491Firm Regn. No. 105114WPlace: MumbaiDate: 28-04-2011






31


ADDITIONAL INFORMATION UNDER PART IV OF THE SCHEDULE VI TO THE COMPANIES ACT, 1956

I. REGISTRATION DETAILS

Registration No L17120MH1993PLC073267 State Code 11

Balance sheet Date 31.03.2011

II. CAPITAL RAISED DURING THE YEAR

Public Issue Nil Right Issue Nil

Bonus Issue Nil Private Placement Nil

III. POSITION OF THE MOBILISATION AND DEPLOYMENT OF FUNDS (` In Lacs)

Total Liabilities 14398.11 Total Assets 14398.11

SOURCE OF FUNDS

Paid-up Capital 664.43 Reserves & Surplus 800.25

Secured Loans 0.00 Unsecured Loans 12700.00

Deferred tax liabilities 233.43

APPLICATION OF FUNDS

Net Fixed AssetsIncluding capital WIP 12673.67 Accumulated Losses 692.43

Net Current Asets 1032.00

IV. PERFORMANCE OF COMPANY (` In Lacs)

Turnover & Other Income 12442.32 Total Expenditure 12425.72

Profit before Tax 16.60 Profit/(Loss) after Tax 102.96

Earning Per Share (In Rupee) 0.15 Dividend Rate % Nil

V. GENERIC NAMES OF PRINCIPLES PRODUCT/SERVICES OF COMPANY (AS PER MONETARY TERMS)

Item Code No.(ITC Code) :

Product description : Knitted Fabrics

Item Code No.(ITC Code) : —

Product description : —






32


33


ATTENDANCE SLIPASAHI INDUSTRIES LIMITED

(Formerly known as Asahi Fibres Limited)Registered Office: Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312.

(Please complete this slip and hand it over at the entrance of the Meeting Hall)

18TH ANNUAL GENERAL MEETING

Member’s Name (in capital letters) ……………………………………................................……………………........................

Regd. Folio No. …………………………….................................……..……No. of Shares held ………...……………………..

DP. ID*

Client ID*

I hereby record my presence at the 18th Annual General Meeting of the Members of the Company, being held on Saturday,2nd July, 2011, at 10.00 a.m. at Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312.

Signature of the Shareholder or Proxy* Applicable for investors holding shares in electronic form.

PROXY FORMASAHI INDUSTRIES LIMITED

(Formerly known as Asahi Fibres Limited)Registered Office: Ecomax, Musrane, Taluka Wada, Dist. Thane – 421 312.

DP. ID* Regd. Folio No.

Client ID*

I/We ……….………………………………..........................…………… of .…………………...………… in the district of

……………………………………..............................………… being a Member/Members of the Company, hereby appoint

…………………………………...........................................…………………………...… of …………………..……… in the District

of ……………………..........................................….. or failing him……………..……………………………………………………

of ……………………….........……………... in the District of………………............................…………….… as my/our Proxy

to vote for me/us on my/our behalf at the 18th Annual General Meeting of the Members of the Company to be held onSaturday, 2nd July, 2011, at 10.00 a.m. or at any adjournment thereof.

Signed this …………………………........................... Day of ………...…………. 2011.* Applicable for investors holding shares in electronic form.

Note: The Proxy form duly completed and signed must be deposited at the Registered Office of the Company, not less than48 hours before the meeting.

AffixRe. 1/-

RevenueStamp

CUT HERE

Documents

ASAHI INDUSTRIES LIMITED (Formerly Asahi Fibres … · Shri Jaikumar Vishwanath Mishra was re-appointed as a Managing Director by the Board of Directors of the Company on 5th February,