active clothing co ltd Directors report

To

The Members,

Your Directors have great pleasure in presenting the 21^st Annual Report and the Audited Accounts of your Company for the year ended 31^st March 2023.

FINANCIAL HIGHLIGHTS

(Amount in Lakhs)

Particulars	Year ended 31st March, 2023	Year ended 31st March, 2022
(a)Turnover	20048.80	11508.06
(b)other income	35.76	35.76
(c) Gross Profit/(Loss) (before depreciation and tax)	655.89	410.69
Less : Depreciation	353.26	339.60
(d) Net Profit/(Loss) before tax	302.63	71.09
Less : Provision for Tax (including for deferred tax)	76.64	19.10
(e) Net Profit/(Loss) After Tax	225.99	52.00

DIVIDEND

In view of continuous expansion activities, Directors do not recommend any dividend. TRANSFER TO RESERVES:

The Company has transferred the profit to the reserves during the financial year.

SHARE CAPITAL

There was no change in the Authorized and Paid up share capital of the Company during the year. Further equity shares of the company have Migrated from SME Platform of BSE Limited to Main Board of BSE Limited w.e.f 4th July, 2022.

PUBLIC DEPOSITS

During the financial year 2022-23 your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES

Your Company does not have any Subsidiary, Joint Ventures or Associate Company PARTICULARS OF LOANS. GUARANTEE OR INVESTMENTS

During the year under review, the Company has not made any Loans, Guarantees or Investments within the meaning of the provisions of Section 186 of the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company. Therefore Company has not constituted a Corporate Social Responsibility Committee. The provisions of a Corporate Social Responsibility shall be complied by the Company as and when applicable.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED DURING THE YEAR

The Company has received final approval for migration to Main Board of BSE Limited and consequently The shares are listed & traded on Main Board of BSE Limited w.e.f. 04th July 2022

COMMITTEES OF THE BOARD

The Company has constituted the following committees in compliance with the Companies Act, 2013 and the Listing Regulations.

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee and

All these Committees have been established as a part of the best corporate governance practices. There have been no instances where the Board has not accepted any recommendation of the aforesaid Committees. The details in respect to the Compositions, Powers, Roles, and Terms of Reference etc. are provided in the Corporate Governance Report forming part of this Report.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL

As per Annexure attached.

PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES

The information required Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors Report for the year ended 31st March, 2023.

Disclosure relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as provided in the Annual Report.

Having regard to the provision of the first proviso to section 136 (1) of the Act and as advised the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection by the Members at the Registered Office of the Company during business hours and any Member interested in obtaining such information may write to the Company Secretary and same will be furnished.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors presently consists of 4 (Four) Directors including a 1 (One) Chairman & Managing Director, 1 (One) Non-Executive Director, 2 (Two) Independent Directors

During the year under review Mr. Rajesh Kumar Mehra, Managing Director and Mrs. Renu Mehra , Non Executive Director are re-appointment for next five Year in last Annual General Meeting.

PENALTIES/PUNISHMENTS/COMPOUNDING OF OFFENCES

During the year, there were no penalties/punishments/compounding offences under the Companies Act, 2013

DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS

All the Independent Directors have confirmed to the Board that they meet the criteria of independence as specified under Section 149(6) of the Act and that they qualify to be independent Directors pursuant to the Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014. They have also confirmed that they meet the requirements of ‘Independent Director as mentioned under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The confirmations were placed before and noted by the Board.

ANNUAL EVALUATION OF BOARDS PERFORMANCE

Pursuant to the provisions of companies Act, 2013 and in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration, and Stakeholder Relationship Committee.

The Directors expressed their satisfaction with the evaluation process.

A CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE THAT NONE OF THE DIRECTORS ON THE BOARD OF THE COMPANY HAVE BEEN DEBARRED OR DISQUIFIFIED FROM BEING APPOINTED OR CONTINUTING AS DIRECTOR OF THE COMPANY BY THE BOARD/MINISTRY OF CORPORATE AFFAIR OR ANY SUCH STATUFORY AUTHORITY.

The Certificate of the Company Secretary in practice is annexed herewith as a part of the report. BUSINESS RISK MANAGEMENT

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adhered to the principles of sound risk management and has a Risk Management Policy in Place.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate system of internal control to safeguard and prefect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Company has a whistle blower policy in place for its Directors and Employees to report concern about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. None of the Directors or employees have been denied access to the Audit Committee of the Board. During the year, under review, the Company did not receive any compliant under the said Mechanism.

BOARD MEETINGS

During the year 5 (Five) Board Meetings were held. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between the two meetings

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULAFORS OR COURTS.

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys future operations

ENVIRONMENT & SAFETY:

The Company is very conscious of the need to prefect environment. The company is taking all possible steps for safeguarding the environment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section on 134(3)(c) read with Section 134(5) of the Companies Act, 2013, your Directors confirm:

a) that in the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the Profits of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons, which may have potential conflict with interest of the company at large.

All Related Party Transactions were placed before the Audit Committee & Board for their approval.

SECRETARIAL AUDIFOR

The company had appointed Sethi Poonam & Associates to conduct its secretarial Audit for the financial year March31st, 2023. The Secretarial Auditor has Submitted their report, confirming Compliance by the Company of all the provisions of applicable Corporate laws. The report doesnt contain any qualification, reservation, disclaim or adverse remark. The Secretarial Audit Report (in Form No. MR. 3) is attached as "Annexure- A" to this Report. The board has reappointed Sethi Poonam and Associates, as Secretarial Auditors of the Company for financial year 2022-23.

COST AUDIFOR

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit.

AUDIFORS

The Board recommends the appointment of Swarn K Jain & Co, Chartered Accountants, (Firm Registration No: 032917N) as statutory auditors of the Company , to hold office for a period of 5 years from the conclusion of the twenty first Annual General Meeting (AGM) of the Company till the conclusion of the 26^th Annual General Meeting in place of Jiwan Goyal & Co , the retiring auditors whose appointment comes to an end in 21^st Annual General Meeting.

AUDIFORS REPORT

The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self-explanatory.

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS

The Company is committed to follow the best Corporate Governance practices, including the requirements under the SEBI Listing Regulations and the Board is responsible to ensure the same, from time to time. The Company has duly complied with the Corporate Governance requirements. Further a separate section on Corporate Governance in compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V of the said regulations along with a Certificate from a Practicing Company Secretary confirming that the Company is and has been compliant with the conditions stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Annual Report.

LISTING OF EQUITY SHARES

The Equity Shares of the Company are listed on Main Board BSE Limited (BSE), Mumbai and the listing fees for the Financial Year have been duly paid to the Stock Exchanges

DISCLOSURE FOR FRAUD AGAINST THE COMPANY

In term of provision of section 134(3) (a) of the Companies Act, 2013, there were no instances of fraud, which are reported by auditors of the company under section 143(12) of the companies act, 2013, to the Audit Committee.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

ENERGY CONSERVATION

The prescribed particulars of conservation of energy, technology absorption as stipulated under Section

134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The Company plays a proactive role in the area of energy conservation and significant improvement by continuously improving operating practices and energy conservation.

TECHNOLOGICAL ABSORPTION

Having installed the latest, state-of-art machinery imported from different parts of the world, the research and development department is continuously on a lookout for adapting to latest technology innovation and absorption

FOREIGN EXCHANGE OUTGO AND EARNINGS

FOREIGN OUTGO: Nil

FOREIGN EARNINGS: Rs. 3094.32 Lakhs

ANNUAL RETURN

The Draft of annual Return of the Company has been placed at the website(www.activesourcing.org) of the company pursuant to the provision of section 92 read with rule 12 of the Companies (Management and administration) Rules, 2014

INSURANCE

All the properties of the Company are adequately insured. The Company is also adequately insured for its activities as stock & currency brokers and depository participant.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has zero tolerance for sexual harassment at work place and has adopted a policy on prevention, prohibition and redressed of sexual harassment at workplace in line with the provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013 and the rules framed there under.

Your Directors further state that as on date there is no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act 2013

ACKNOWLEDGEMENTS

Your Directors wish to place on record their thanks and gratitude to the Companys Bankers, Customers and other Authorities for their support, co-operation, guidance and assistance. The Board is also grateful to the shareholders for their continued confidence. The Board of Directors takes this opportunity to express their appreciation of the sincere efforts put in by the staff and executives at all the levels and hopes that they would continue their dedicated efforts in the future too.

For and on behalf of the Board

Place: Mohali Date: 26.08.2023

Sd/-

(Rajesh Kumar Mehra) Managing Director

Sd/-

( Renu Mehra) Director

ANNEXURE TO THE BOARD REPORT

I) Disclosure u/s 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

\

1	The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2022-23	Name of Director/ KMP and Designation	increase in Remuneration in the Financial Year 2022-23
		Mr. Rajesh Kumar Mehra (Managing Director)	NIL
		Mrs. Renu mehra (Non Executive Director & Non executive Chairman)	NIL
		Mr. Naval Kishore Gupta (Independent Director)	NIL
		Mr. Kishore Kumar Bajaj (Independent Director)	NIL
		Mr. Mandeep Singh (CFO)	40%
		Mrs. Avneet Kaur Bedi Company Secretary	NIL
2	The median remuneration of employees of the Company during the financial year The % increase in the median remuneration of employees in the financial year-	1135884 11.36%
3	The number of permanent employees on the rolls of Company.	1590
4.	Average percentile increase already made in the salaries of employees* other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial Remuneration.	N.A
5.	Affirmation that the remuneration is as per the remuneration policy of the Company.	YES

A. DETAILS OF THE PERSONS EMPLOYED THROUGHOUT THEYEAR, WHO WERE IN RECEIPT OF REMUNERATION WHICH IN AGGREGATE WAS NOT LESS THAT 102 LAKHS PER ANNUM AND 8.50 LAKHS PERMONTHISASFOLLOWS:- Not Applicable

Name of Employees

Age

Designation

Qualification

Nature of Employment

Experience

Date of Joining

Remuneration

B: STATEMENT SHOWING NAMES OF TOP TEN EMPLOYEES IN TERMS OF REMUNERATION DRAWN DURING THE YEAR IS AS FOLLOWS

Name of Employees	Age	Designation	Qualification	Nature of Employment	Experience	Date of Joining	Remuneration Per annum
Vijay	44	Manager	Mechanical Engineer	Knitting Division	19 years	06.07.2018	18,00,000
Hitesh Manuja	44	CEO of Sweater unit	B.Tech	Sweater Business	20 Years	05.01.2017	18,00,000
Hans Kumar	50	GM	Graduate	GM	30 years	05.04.2018	15,00,000
Shivam <p ALIGN=LEFT>khurana	50	GM	BE	Sweater division	22 years	18.10.2019	12,00,000
Devindra	51	Manager	Graduate	Distribution Business	25 years	01.10.2002	1137696
Sandeep	49	Manager	Graduate	Distribution business	20 Years	01.08.2009	1134072
Surinder Singh	52	HR, head	MBA	Compliance head	15 year	01.04.2019	1020000
Harpreet Kaur	48	Manager	BSC	Knitting Merchant	27 years	27.11.2018	1080000
Mandeep Singh	59	CFO	B. COM	Account and Finance	30 Years	01.06.2010	840000
R.K Aggarwal	49	Manager	Graduate	Distribution business	15 years	01.03.2017	7,20,000

NOTES:

1. The remuneration as shown above includes, inter-alia, House Rent Allowance, Companys contribution to Provident Fund, incentives and other perquisites as per the Companys policy.

2. There is no change in professional fee paid to managing Director, Non-Executive Director and Sitting Fees to Independent Directors.

By Order of the Board

Sd/-

Rajesh Kumar Mehra Managing Director

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arms length basis

SL. No. Particulars	Details
a) Name (s) of the related party & nature of relationship
b) Nature of contracts/arrangements/transaction
c) Duration of the contracts/arrangements/transaction
d) Salient terms of the contracts or arrangements or transaction including the value, if any
e) Justification for entering into such contracts or arrangements or transactions
f) Date of approval by the Board
g) Amount paid as advances, if any
h) Date on which the special resolution was passed in General meeting as required under first proviso to section 188

2. Details of contracts or arrangements or transactions at Arms length basis.

SL. No. Particulars	Details
a) Name (s) of the related party & nature of relationship
b) Nature of contracts/arrangements/transaction
c) Duration of the contracts/arrangements/transaction
d) Salient terms of the contracts or arrangements or transaction including the value, if any
e) Date of approval by the Board
f) Amount paid as advances, if any

Note:

1. Professional fee paid to Mrs. Renu Mehra, Non-executive Director (Wife of Mr Rajesh Kumar Mehra Managing Director) is in Ordinary Course of business of the company and is at arm length basis. According to Regulation 23(1) of LODR it is not a material transaction and is as per remuneration policy of the company.

2. Fee paid to Mrs Kalika Mehra (Daughter of Mr. Rajesh Kumar Mehra and Mrs. Renu Mehra Directors) for availing professional services. The Service rendered is of professional nature and In the opinion of nomination and Remuneration Committee and is approved by special resolution approved by requisite shareholders of the companies in 20^th AGM.

For and on behalf of the Board

Sd/- Sd/

(Rajesh Kumar Mehra ( Renu Mehra) Managing Director Director

To

The Board of Directors,

Active Clothing Co Private Limited

Regt Office: Plot No. E-225, Phase-VIII B, Industrial Area, Focal Point,

Mohali

Sub: Declaration of independence and sub-section (6) of section 149 of the companies Act, 2013

I, Naval Kishore Gupta, S/o Sh. Gujjar Mal House No. 56, Sector 10, Panchkula Director Identification Number 07362996 hereby certify that:

1. I possess relevant expertise and experience to be an independent Director of the company.

2. I am/was not a promoter of the company or its holding, subsidiary or associate company;

3. I am not related to promoters or Directors in the company, its holding, subsidiary or associate company

4. None of my relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or Directors.

5. neither myself nor any of my relatives—

(a) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company.

(b) or has been an employee or proprietor or a partner.

(c) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company.

(d) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm;

(e) holds together with his relatives two per cent. or more of the Total voting power of the company; or

(f) is a Chief Executive or Director, by whatever name called, of any non-profit organisation that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, Directors or its holding, subsidiary or associate company or that holds two per cent. or more of the Total voting power of the company;

6. I am not the material supplier, service provider or customer or lessor or lessee of the company.

7. I am not less than 21 years of age.

I undertake that I shall seek prior approval of the Board if and when I have any such relationship/transactions, whether material or non-material. If I fail to do so I shall cease to be an independent Director from the date of entering in to such relationship/transactions.

Further, I do hereby declare and confirm that the above said informations are true and correct to the best of my knowledge as on the date of this declaration of independence and I shall take responsibility for its correctness and shall be liable for fine, if any, imposed on the Company, its Directors, if the same found wrong or incorrect in the future.

I further undertake to intimate immediately upon changes, if any, to the Company for updating of the same.

Thanking You,

Yours faithfully,

Sd/-

Naval Kishore Gupta

To

The Board of Directors,

Active Clothing Co Private Limited

Regt Office: Plot No. E-225, Phase-VIII B, Industrial Area, Focal Point,

Mohali

Sub: Declaration of independence and sub-section (6) of section 149 of the companies Act, 2013

I, Kishore Kumar Bajaj, S/o Mr. Ved Parkash Bajaj, D-3/3385, Vasant Kunj, South West Delhi having Director Identification Number 06946343 hereby certify that:

1. I possess relevant expertise and experience to be an independent Director of the company.

2. I am/was not a promoter of the company or its holding, subsidiary or associate company;

3. I am not related to promoters or Directors in the company, its holding, subsidiary or associate company

4. None of my relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or Directors.

5. neither myself nor any of my relatives:

(a) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company.

(b) or has been an employee or proprietor or a partner.

(c) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company.

(d) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm;

(e) holds together with his relatives two per cent. or more of the Total voting power of the company; or

(f) is a Chief Executive or Director, by whatever name called, of any non-profit organisation that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, Directors or its holding, subsidiary or associate company or that holds two per cent. or more of the Total voting power of the company;

7. I am not the material supplier, service provider or customer or lessor or lessee of the company.

8. I am not less than 21 years of age.

I undertake that I shall seek prior approval of the Board if and when I have any such relationship/transactions, whether material or non-material. If I fail to do so I shall cease to be an independent Director from the date of entering in to such relationship/transactions.

Further, I do hereby declare and confirm that the above said informations are true and correct to the best of my knowledge as on the date of this declaration of independence and I shall take responsibility for its correctness and shall be liable for fine, if any, imposed on the Company, its Directors, if the same found wrong or incorrect in the future.

I further undertake to intimate immediately upon changes, if any, to the Company for updating of the same.

Thanking You, Yours faithfully,

Sd/-

Kishore Kumar Bajaj

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31.03.2023

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and

Remuneration Personnel) Rules, 2014]

To,

The Board of Directors Active Clothing Co Limited

Regd Office: Plot No. E-225, Phase-VIII B, Industrial Area, Focal Point,

Mohali-160055

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Active Clothing Co Limited (the Company). The secretarial audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the Active Clothing Co Limited books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2023 complied with the statutory provisions listed hereunder and also that the Company has proper Board- processes and compliance-mechanism in place to the extent and in the manner reported hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by Active Clothing Co Limited ("the Company") for the financial year ended on 31^st March, 2023 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (External Commercial Borrowings are not applicable to the Company

(i) during the Audit Period);

(ii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board o India Act, 1992 (‘SEBI Act):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; Company has made the general compliances under the said Act.

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; Company has made the general compliances under the said Act.

The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (not applicable to the Company during the audit period)

a) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; Not applicable during the period under review

b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Company has not issued any debt security. Hence, Not applicable during the period under review

c) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; Company has made the all compliances under the said Act.

d) The Securities and Exchange Board of India (Desisting of Equity Shares) Regulations, 2009; Not applicable during the period under review and

e) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not applicable during the period under review

I have relied on the representation made by the Company and its officers for systems and mechanism formed by the company for compliance under other applicable acts, Laws and Regulations of the Company and records in pursuit there to, on test check basis, we report that the company has generally complied with the following laws applicable to the company.

1. The Factories Act, 1948;

2. The Payment of Wages Act, 1936 and The Payment of Wages (Amendment) Act, 2017;

3. The Payment of Bonus Act, 1965 and The Payment of Bonus (Amendment) Act, 2015;

4. The Payment of Gratuity Act, 1972;

5. The Industrial Employment (Standing Orders) Act, 1946;

6. The Industrial Disputes Act, 1947;

7. The Employees State Insurance Act, 1948;

8. The Employees Provident Funds and Miscellaneous Provisions Act, 1952;

9. The Environment (Protection) Act, 1986;

10. The Hazardous Wastes (Management, Handling and Tran boundary Movement) Rules, 2008;

11. The Water (Prevention And Control of Pollution) Act, 1974;

12. The Air (Prevention And Control of Pollution) Act, 1981;

13. The Indian Boilers Act, 1923 and The Indian Boilers (Amendment) Act, 2007 I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange(s), During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Nonexclusive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act and Listing Regulation.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members views are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that the Company was listed on Bombay Stock exchange on SME segment as on .01.04.2022 and Migrated to Main Board of BSE dated: 15.07.2022.The Company is Listed on Bombay Stock Exchange as on 31.03.2023.

For Sethi Poonam & Associates Practicing Company Secretary

Sd/-

Poonam Sethi (Prop.

Certificate of Practice No. 21751 UDIN: A033856E000849770 PR: 2340/2022

Date: 26.08.2023 Place: Ludhiana

*This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

To

The Board of Directors Active Clothing Co Limited

Regd Offc: Plot No. E-225, Phase-VIII B, Industrial Area, Focal Point,

Mohali-160055

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

For Sethi Poonam & Associates Practicing Company Secretary

Sd/-

Poonam Sethi (Prop.)

Certificate of Practice No: 21751 UDIN: A033856E000849770 PR: 2340/2022

Date: 26.08.2023 Place: Ludhiana

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015).

Based on our verification of the books, Paper, minute books, forms and returns filed and other records maintained by ACTIVE Clothing CO LIMITED, having its Registered office at Plot no.E-225, Phase-VIII B, industrial Area, Focal Point, Mohali-160055 and also the information provided by the Company, its officers, agents and authorized representatives, we hereby report that during the financial Year ended on March 31, 2023, in our opinion, none of the Director on the Board of the Company have been debarred or disqualified from being appointed or continuing as Director of the Company by the Board/Ministry of Corporate Affair or any such Statutory Authority.

POONAM SETHI SETHI POONAM & ASSOCIATES Company Secretaries

Sd/-

C.P. No: 21751 UDIN: A033856E000417085