Axita Cotton Director Discussions


DEAR MEMBERS,

The Board of Directors have pleasure in presenting the 10th (Tenth) Annual Report of the Company together with the Audited Financial Statements for the year ended on March 31, 2023.

1. FINANCIAL HIGHLIGHTS:

The summary of the financial results for the year and appropriation of divisible profits is given below:

( in Lakh except EPS)

PARTICULARS

F.Y. 2022-2023 F.Y. 2021-2022

Revenue form Operation

55,260.28 81,767.49

Other Income

501.51 1,278.57

Total Income (Total Revenue)

55,761.79 83,046.06

Total Expenditure (Excluding Depreciation)

53,336.61 80,802.44

Profit before Financial costs, Depreciation and amortization expenses and Taxation

2,425.17 2,243.62

Less: Finance Costs

33.57 162.47

Operating profit before Depreciation and amortization expenses and Taxation

2,391.60 2,081.15

Less: Depreciation and amortisation

105.63 49.60

Profit before Tax

2,285.96 2,031.55

Less: (1) Current Income Tax

604.71 513.21

Less: (2) Income Tax (Prior Period)

0.00 0.00

Less: (3) Deferred Tax

-22.28 -22.87

4Profit after tax

1,708.74 1,541.21

EPS (Basic)

0.87 0.78

EPS (Diluted)

0.87 0.78

Note: Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure and may not be comparable with the figures reported earlier.

2. OPERATIONAL PERFORMANCE:

During the year under review, the Company recorded Revenue from Operations of 55,761.78 Lakhs for the F.Y. 2022-2023 as compared to 83,046.06 Lakhs during the previous F.Y. 2021-2022.

During the year under review, the Company achieved Earnings before Interest, Taxes, Depreciation and Amortization Expense of 2285.96 Lakhs for the F.Y. 2022-2023 as compared to 2031.55 Lakhs during the previous F.Y. 2021-2022.

During the year under review, the Company achieved Profit after Taxation of 1708.74 Lakhs for the F.Y. 2022-2023 as compared to 1541.21 Lakhs during the previous F.Y. 2021-2022. Export Sales for the F.Y. 2022-2023 was 8,155.29 Lakhs as compared to 25,389.69 Lakhs for the F.Y. 2021-2022.

3. TRANSFER TO RESERVES:

During the year, the Company has not apportioned any amount to other reserve. The profit earned during the year has been carried to the balance sheet of the Company.

4. DIVIDEND:

The Board of Directors, recommended final dividend of 0.50/- per Equity Share of 10/- each for the previous financial year 2021-2022 amounting to 98.28 Lakhs and same was approved by the Members at their Annual General Meeting (AGM) of the Company. Out of above declared Dividend Rs. 3,206/-, which was remained unpaid was transferred within 30 days from the date of declaration of Dividend, to the Unpaid Dividend Account as per the sub-section (3) of section 124 of the Companies Act, 2013.

In the financial year 2022-2023, the Board of Directors of your Company, after considering holistically the relevant circumstances, has decided that it would be prudent, has not recommended any Dividend for the year under review.

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (‘SEBI Listing Regulations) the Board of Directors of the Company (the ‘Board) formulated and adopted the Dividend Distribution Policy (the ‘Policy). The Policy is available on our website at www.axitacotton.com.

5. TRANSFER OF SHARES AND UNPAID/UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

There is no money lying to unpaid / unclaimed dividend account pertaining to any of the previous years with the Company. As such the Company is not required to transfer such amount to the Investor Education and Protection Fund established by the Central Government in pursuant to the provisions of Sections 124 and 125 of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

Further, the provisions related to the shares in respect of which dividend has not been paid/claimed for the consecutive period of seven (7) years or more which are required to be transferred to the demat account of the IEPF Authority, are not applicable to the Company.

6. SHARE CAPITAL:

Authorized Capital:

The Authorised Share Capital of the Company as on March 31, 2023 was 30,00,00,000 (Rupees Thirty Crores Only) divided into 300000000 (Thirty Crores) equity shares of 1/- each.

Issued, Subscribed & Paid-up Capital:

As on March 31, 2023 the Issued, Subscribed and fully Paid-up Capital of the Company stood at 19,65,60,000/- (Rupees Nineteen Crores Sixty Five Lakh Sixty Thousand Only) divided into 19,65,60,000 (Nineteen Crores Sixty Five Lakh Sixty Thousand) Equity Shares of 1/- each.

7. CHANGES IN CAPITAL STRUCTURE:

As on April 01, 2022 the issued, subscribed and fully paid up capital of the Company stood at 19,65,60,000 /- (Rupees Nineteen Crores Sixty Five Lakh Sixty Thousand Only) divided into 19,65,60,000 (One Crores Ninety Six Lakh Fifty Six Thousand) Equity Shares of 10/- each.

During the year under review there was change in the Capital Structure of the Company due to Sub-division of Equity Shares of the Company. The brief details of the same are as follows:

Sub-division of Ordinary Shares of the Company

On Friday, August 12, 2022, the Board of Directors of the Company, considered and approved the proposal for sub-division of 1 (one) equity share of the Company having face value of 10/- each into 10 (Ten) equity shares of the Company having face value of 1/- each (‘sub-division) and consequential amendments in the Capital Clause of the Memorandum of Association of the Company and Articles of Association of the Company, subject to the approval of the Shareholders of the Company and other necessary approvals. The said proposal was approved by the Shareholders of the Company at the 9th Annual General Meeting held on September 27, 2022. The Record Date for the sub-division was set as October 21, 2022 and consequently, the face value of the equity shares of the Company (fully paid-up and partly paid-up) was sub-divided to 1/- each from 10/- each.

Accordingly, As on March 31, 2023 the Issued, Subscribed and fully Paid-up Capital of the Company stood at 19,65,60,000 /- (Rupees Nineteen Crores Sixty Five Lakh Sixty Thousand Only) divided into 19,65,60,000 (Nineteen Crores Sixty Five Lakh Sixty Thousand) Equity Shares of 1/- each.

CHANGES IN CAPITAL STRUCTURE POST REPORTING PERIOD

On May 23, 2023, the Board of Directors of the Company, considered and approved the proposal for buyback of 900000 (Rupees Nine Lakh Only) fully paid-up Equity Shares having a face value of 1/-

(Rupees One Only) each ("Equity Shares") of Axita Cotton Limited (hereinafter referred as "the Company") at a price of 56/- (Rupees Fifty Six Only) per Equity Share for an aggregate amount not exceeding 5,04,00,000/- (Rupees Five Crore Four Lakh Only) ("Buyback Size"), on a proportionate basis through tender offer route ("Buyback"), pursuant to the applicable provisions under the Companies Act,

2013 (including the rules and regulations framed thereunder), Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended ("Buyback Regulations")

The Record Date for the Buyback was set as June 02, 2023 and consequently, as on June 30, 2023, the Issued, Subscribed and fully Paid-up Capital of the Company stood at 19,56,60,000/- (Rupees Nineteen Crores Fifty Six Lakh Sixty Thousand Only) divided into 195660000 (Nineteen Crores Fifty Six Lakh Sixty Thousand) Equity Shares of 1/- each, due to bought back of 900000 fully paid-up Equity Shares of the Company.

During the year under review, the following no. issue have been made through following procedure in the Company:

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS

During the Financial Year 2022-2023, the Company has not issued any Equity Shares with differential rights during the year.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES ISSUED

During the Financial Year 2022-2023, the Company has not issued any Sweat Equity Shares during the year.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTION

During the Financial Year 2022-2023, the Company has not issued any Employee Stock Option Scheme during the year.

DISCLOSURE REGARDING SHARES HELD IN TRUST FOR THE BENEFIT OF EMPLOYEES WHERE THE VOTING RIGHTS ARE NOT EXERCISED DIRECTLY BY THE EMPLOYEES

During the Financial Year 2022-2023, the Company does not hold any shares in any trust for the benefit of employees.

DISCLOSURE REGARDING ISSUE / REDEMPTIONS OF DEBENTURES, BONDS OR ANY NON-CONVERTIBLE SECURITIES

During the Financial Year 2022-2023, the Company has neither issued nor redeem any Non-Convertible Debentures through private placement.

DISCLOSURE REGARDING ISSUE OF WARRANT

During the Financial Year 2022-2023, the Company has not issued any warrants for any issue by way of preferential allotment, private placement, public issue.

8. CHANGE IN NATURE OF BUSINESS:

During the Financial Year 2022-2023, your Company has managed the affairs in a fair and transparent manner and there was no change in the business of the Company.

The Company is in Manufacturing sector, it is engaged in Cotton Bales Manufacturing. The Company is also involved in Trading and Export of Raw Cotton Bales and Cotton Seeds.

To carry on in India or elsewhere the business of manufacturing, processing, producing, washing, dyeing, ginning, pressing, spinning, weaving, crimping, texturising, carding, bleaching, combing, doubling, finishing, calendering, sizing, colouring, printing, mercerizing, reeling, winding, throwing, embroidering, blending, sorting, garneting, stretching, drying, drawing, cutting, improving buying, selling, reselling, importing, exporting, transporting, storing, fabricating, developing, marketing, or supplying, and to act as broker, trader, agent, C & F agent, distributor, representaitive, consultant, collaborator, adatia, stockiest, liasioner, job worker, export house or otherwise to deal in all types of textile goods dress materials, fabrics, cloths, yarns, such as nets, matting, hosiery, plastic clothes, water proof fabrics, paviiners, americal clothes, limitation leather and rubber cloths, tenis, durries, newar, ropes, rugs, furnishing cloths, tapestries, curtain cloths, blankets, carpets, carpet backing, gloves, laces, terry fabrics, velvet, georgette, gabardine, pashminas, floor cloths, twid, patto, canvas, khaddar, denim, stone wash, suitings, shirting, sarees and other similar items made on powerloom, handloom or oil mills by man made or natural materials like cotton, flax, hemp, linen, wool, nylon, viscose, ramie, polyester, silk, artsiik, rayon, jute, staple fibres, cashmilon, filaments, terecotton, monofilaments, multifilaments, acrylics, polynosic, polypropylene, polymide, polymethane, cellulose, dropping, spun or other fibrous substances or any combination thereof available at present and as may be invented in future.

9. CHANGE IN THE REGISTERED OFFICE:

During the year, there was no change in address of registered office of the Company. The Registered office of the Company is situated at Servey No. 324, 357, 358, Kadi - Thol Road, Borisana, Kadi, Mahesana - 382715, Gujarat, India.

However, on January 06, 2023, the Board of Directors of the Company at their Meeting, considered and approved the proposal of shifting & maintenance of books of accounts at place other than its registered office to Rannade House, First Floor, Opp. Sankalp Grace 3, Near Ishan Bunglows, Shilaj, Ahmedabad - 380059, Gujarat, India, where all or any books of account and papers are maintained.

10. SUBSIDIARIES/ASSOCIATES/ JOINT VENTURES:

The Company does not have subsidiaries, associates and joint ventures companies in the period under review.

11. PUBLIC DEPOSITS:

During the period under report, the Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 (as amended from time to time).

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

The Company is well supported by the knowledge and experience of its Directors and Executives.

The composition of the Board of Directors as on the date of this report set out below:

Name of

Category

Date of

Total

No. of Committee1

No. of

Director

Cum Designation

Appointment at current Term & designation

Directorship2 in which Director is Members in which Director is Chairman Shares held as on March 31, 2023

Mr. Nitinbhai Patel

Chairman cum Managing Director

October 16, 2018

4 - - 7,00,51,487

Mr. Kushal Patel

Managing Director

October 16, 2018

4 - - 5,70,61,087

Mr. Kunjal Soni

Independent Director

February 22, 2022

3 4 2 0

Mr. Vinod Rana

Independent Director

February 22, 2022

1 2 1 0

Ms. Apeksha

Independent

June 30,

4 7 1 0

Vyas 3

Director

2022

Mr. Dixit Shah4 & 5

Independent Director

August 22, 2022

1 0 0 0

Mr. Utsav Trivedi 6

Additional Independent Director

June 30, 2023

1 0 0 0

1. Committee includes Audit Committee and Shareholders Grievances Committee across all Public Companies including Axita Cotton Limited.

2. Excluding LLPs, Section 8 Company & struck of Companies. Total Directorship includes Axita Cotton Limited also.

3. Ms. Apeksha Vyas was appointed by Board of Directors as an Additional Director (Independent Non-Executive) of the Company with effect from i.e., from June 30, 2022. The Members at their 9th Annual General Meeting (AGM) held on Tuesday, September 27, 2022, approved regularisation of Ms. Apeksha Vyas as an Independent Non-Executive Director of the Company for a period of 5 (Five) years w.e.f. June 30, 2022.

4. Mr. Dixit Shah was appointed as an Additional Director (Independent Non-Executive) w.e.f August 22, 2022. The Members of the Company has been regularisation as an Independent Director for a term of 5 (five) consecutive years with effect from August 22, 2022, and hold office for a term up to August 21, 2027. The Members at their 9th Annual General Meeting (AGM) held on Tuesday, September 27, 2022, approved regularisation of Mr. Dixit Shah as an Independent Non-Executive Director of the Company for a period of 5 (Five) years w.e.f. August 22, 2022.

5. Mr. Dixit Shah was resigned from the post of Independent Non-Executive Director w.e.f. June 30, 2023.

6. Mr. Mr. Utsav Trivedi was appointed as an Additional Director (Independent Non Executive) w.e.f June 30, 2023 for a term of 5 (five) consecutive years with effect from June 30, 2023 and hold office for a term up to June 29, 2028.

The composition of Board complies with the requirements of the Companies Act, 2013 ("Act"). Further, in pursuance of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

During F.Y. 2022-2023, the Board of Directors of the Company comprised of:

6 (Six) Directors upto March 31, 2023

6 (Six) Directors from April 01, 2022

Out of 6 (Six) Directors on the Board, 2 (Two) were Executive Directors and remaining 4 (Four) were Independent Directors.

Total Directors upto March 31, 2023:

Executive Directors:

1. Nitinbhai Govindbhai Patel

Total Percentage (%)

(Chairman Cum Managing Director)

2 33.33%

2. Kushal Nitinbhai Patel

(Managing Director)

Non-Executive Directors:

1. Kunjal Jayantkumar Soni

Total Percentage (%)

(Independent Director)

4 66.67%

2. Vinod Kanubhai Rana

(Independent Director)

3. Ms. Apeksha Vyas

(Independent Director)

4. Mr. Dixit Shah

(Independent Director)

6 100.00%

Thus, composition of the Board is in conformity with Regulation 17 of the Listing Regulations

The Company has received declarations of independence as stipulated under section 149(6) and 149(7) of the Act and regulation 16(1)(b) and 25 of the Listing Regulations from Independent Directors confirming that they are not disqualified for continuing as an Independent Director. There has been no change in the circumstances affecting their status as an Independent Director of the Company.

The number of Directorship(s), Committee Membership(s)/Chairmanship(s) of all Directors is within respective limits prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 as amended from time to time

The necessary disclosures regarding Committee positions have been made by all the Directors.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013 and not debarred or disqualified by the SEBI/Ministry of Corporate Affairs or any such statutory authority from being appointed or continuing as Director of the Company or any other Company where such Director holds such positing in terms of Regulation (10)(i) of Part C of Schedule V of Listing Regulations.

Key Managerial Personnel:

Pursuant to the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time), the following are the Key Managerial Personnel of the Company:

Key Managerial Personnel List as on that of this report set out below:

Sr. Name No.

Designation

1. Mr. Nitinbhai Govindbhai Patel

Chairman Cum Managing Director

2. Mr. Kushal Nitinbhai Patel

Managing Director

3. Mr. Harsh Kalpeshbhai Shah

Chief Financial Officer

4. Mr. Deepakkumar Kushalchandra Chaubisa * (Upto March 31, 2023)

Company Secretary & Compliance Officer

Mr. Shyamsunder Kiranbhai Panchal ** (W.e.f. March 31, 2023)

Company Secretary & Compliance Officer

* Mr. Deepakkumar Kushalchandra Chaubisa has resigned from the post of a Company Secretary & Compliance Officer of the Company and there upto March 31, 2023. ** Mr. Shyamsunder Kiranbhai Panchal has been appointed as a Company Secretary & Compliance Officer with effect from April 01, 2023.

13. DIRECTORS RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance system established and maintained by the Company, work performed by the internal, statutory, cost, and secretarial auditors and external agencies including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during financial year 2022-2023.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013 ("Act"), in relation to financial statements of the Company for the year ended March 31, 2023, the Board of Directors, to the best of its knowledge and ability confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were in place, are adequate and operating effectively.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN

EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 (as amended from time to time), is set out herewith as Annexure - C to this report.

15. PARTICULAR OF EMPLOYEES:

The ratio of the remuneration of each whole-time director to the median of employees remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure - D.

The particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

16. MATERIAL CHANGES AND COMMITMENTS, IF ANY, BETWEEN

BALANCE SHEET DATE AND DATE OF DIRECTORS REPORT

There were no material changes and commitments between the end of the financial year of the Company to which the Financial Statements relates and date of Directors Report affecting the financial position of the Company.

17. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the Financial Statements which is a part of this Annual Report.

18. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Companys Procedures and practices. The Company has through presentations at regular intervals, familiarized and updated the Independent Directors with the strategy, operations and functions of the Company and Agricultural Industry as a Whole and business model. The details of such familiarization programmes imparted to Independent Directors can be accessed on the website of the Company at www.axitacotton.com.

19. RELATED PARTY TRANSACTIONS:

During the F.Y. 2022-23, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arms length basis and in accordance with the provisions of the Companies Act, 2013 read with the Rules issued thereunder and as per Listing Regulations. The information on transactions with related parties, compiled in Form AOC-2, appears at Annexure - B to this report.

20. AUDITORS:

a. Statutory Auditors and Auditors Report

M/s. Mistry & Shah LLP, Chartered Accountants Ahmedabad (Firm registration number: 122702W) were appointed as Statutory Auditor of your Company at the 6th (Sixth) Annual General Meeting held on September 27, 2019 to hold office as such from the conclusion of the 6th (Sixth) Annual General Meeting till the conclusion of 11th (Eleventh) Annual General Meeting of the Company.

The Statutory Auditors report does not contain any qualification, reservation or adverse remark and is self-explanatory and unmodified and thus does not require any further clarifications / comments. The Statutory Auditors have not reported any incident of fraud committed against the Company by its officers or employees, the details of which would be required to be mentioned in the Directors

Report under Section 143 (12) of the Companies Act, 2013, to the Audit Committee of the Company during the year under review.

b. Cost Auditors and Cost Audit

In the financial year 2022-23, the requirement of Cost Audit was not applicable to our Company. Hence, the Company did not appoint a Cost Auditor.

However, post Financial Year 2022-2023, on basis of the Accounts of the Company, it requires to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly the Board of Directors at their meeting held on August 08, 2023, as recommended by Audit Committee, had approved the appointment of Ms. Reena K. Patadiya (ACMA and M.Com.), Proprietor of a Proprietorship firm (PAN BJFPP1420A and Firm Registration No. 004346) as a Cost Auditor of the Company to audit the Companys Cost Records relating to manufacture of Cotton Yarn and other Products for the year 2023-2024 at a remuneration of 35,000/- (Rupees thirty Five thousand only) exclusive of GST and out of pocket expenses.

The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter relating to their remuneration had been included in the Notice convening the 10th Annual General Meeting scheduled to be held on September 30, 2023, for ratification by the Members.

c. Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. SCS And CO. LLP, Practicing Company Secretaries, Ahmedabad as Secretarial Auditors of the Company for the F.Y. 2022-2023 to conduct Secretarial Audit and the Secretarial Audit Report in Form MR-3. The Secretarial Audit Report for the financial year 2022-2023 is annexed to this report as an Annexure - E. The Secretarial Auditors report does not contain any qualification, reservation or adverse remark and is self-explanatory and thus does not require any further clarifications / comments.

d. Internal Auditors

Pursuant to provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions if any of the Companies Act, 2013 Mr. Harsh Alpeshkumar Desai, Chartered Accountant (Membership No: 600252) was appointed as an Internal Auditor of the Company for Internal Audit of the Company for F.Y. 2022-2023.

The Company continued to implement his suggestions and recommendations to improve the control systems. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

Further, as the Company migrated to main board and listed on both BSE and NSE, the Board recommended an independent agency R J and Associates, Cost Accountants, a Partnership firm (PAN ABCFR2322R and Firm Registration No. 004690) as an Internal Auditor of the Company for Internal Audit of the Company for F.Y. 2023-2024.

21. INSURANCE:

All assets of the Company including Building Plant & Machinery Stocks etc. wherever necessary and to the extent required have been adequately insured.

22. WEBSITE:

As per Regulation 46 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 the

Company has maintained a functional website namely "www.axitacotton.com" containing basic information about the Company. The website of the Company is containing information like Policies Shareholding Pattern Financial and information of the designated officials of the Company who are responsible for assisting and handling investor grievances for the benefit of all stakeholders of the Company etc.

23. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted Vigil Mechanism / Whistle Blower Policy, which was approved and adopted by the Board of Directors of the Company. The policy enables the employees to report to the management instances of unethical behaviour actual or suspected fraud or violation of Companys Code of Conduct.

This provides for adequate safeguards against victimization of employees and Directors who wish to use the vigil mechanism to bring any wrong deed(s) to the notice of the Company.

During the year under review, the implementation of the vigil mechanism has been properly and regularly monitored by the Audit Committee. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company at www.axitacotton.com.

24. CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE SOCIAL

RESPONSIBILITY COMMITTEE:

Pursuant to Section 135(3)(b) of the Companies Act, 2013, The Corporate Social Responsibility

Committee recommended total CSR expenditure of 16,94,899/- for F.Y. 2022-2023 to the Board of Directors of the Company. Your Company had spent total amount of 16,94,899/- for F.Y. 2022-2023.

Total Actual Amount to be spent in F.Y. 2022-2023 (as per requirement of the Act)

16,94,899/-

Total Amount had spent in F.Y. 2022-2023

16,00,000/-

Amount Adjusted from Excess Amount Spent in previous financial year 2021-2022

1,00,000/-

The Companys CSR Policy Statement and Annual Report on the aforesaid CSR activities undertaken during the financial year ended March 31, 2023, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in Annexure - I to this report.

25. MEETINGS OF THE COMPANY:

Regular meetings of the Board are held at least once in a quarter. Additional Board meetings are convened, as and when require, to discuss and decide on various business policies, strategies and other businesses. The Board meetings are generally held at registered office of the Company. The gap between two consecutive meetings was not more than one hundred and twenty days as provided in section 173 of the Companies Act, 2013.

Eleven Board Meetings were held during the year under review. The dates and notices were xed/issued well in advance in compliance with the Secretarial Standards. Meetings were held on 1) Monday, April 25, 2022, 2) Thursday, June 16, 2022, 3) Thursday, June 30, 2022, 4) Friday, August 12, 2022, 5) Monday, August 22, 2022, 6) Monday, November 14, 2022, 7) Wednesday, December 28, 2022, 8) Friday, January 06, 2023, 9) Saturday, January 28, 2023, 10) Monday, February 27, 2023 and 11) Friday, March 31, 2023 at the registered office of the Company i.e. Survey No. 324, 357, 358, Kadi - Thol Road, Borisana, Kadi, Mahesana - 382715, Gujarat, India. The Composition of Board, procedure, venue, dates, time and other details are included in the Corporate Governance Report that forms part of this Report.

26. COMMITTEE OF BOARDS:

As required by the provisions of the Act and Listing Regulations, the Company has already formed the following Committees, the details of which are disclosed in the Report on Corporate Governance forming part of this Report.

The Board of Directors has constituted 5 Committees of the Board viz.

Audit Committee

Nomination and Remuneration Committee

Stakeholders Relationship Committee

Corporate Social Responsibility Committee

Risk Management Committee (w.e.f 28-04-2023 as applicable in FY 2023-2024)

27. RISK MANAGEMENT POLICY

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented the Risk Management Policy. The policy envisages identification of risk and procedures for assessment and strategies to mitigate / minimisation of risk thereof. The Risk Management Policy of the Company is available at the Companys website www.axitacotton.com and same is annexed to this Report as Annexure - A.

28. RISK MANAGEMENT:

During the Financial Year 2022-2023, the Company was exempted under regulation 21 of SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015 from reporting of risk management. board is fully aware of Risk Factor and is taking preventive measures wherever required.

However, in the basis of annual report as on March 31, 2023, the regulation is now applied to the Company and accordingly the Company has formulated the Risk Management Policy which indicates Companys standards for risk taking while conducting business and to provide an easy-to-access guide any time you have a question. The Risk Management Committee will currently cover Market Risk, Credit Risk, Process Risk and other risks as detailed in these documents. Each risk is covered within this Policy. This Policy will apply across all products, throughout the Organisation.

The composition of the Risk Management Committee:

Name of Director / Member

Category Designation

Mr. Kushal Nitinbhai Patel

Independent Director Chairperson

(W.e.f. April 28, 2023)

Mr. Nitinbhai Govindbhai Patel

Managing Director Member

(W.e.f. April 28, 2023)

Mr. Kunjal Jayantkumar Soni

Independent Director Member

(W.e.f. April 28, 2023)

Ms. Vinod Kanubhai Rana

Independent Director Member

(W.e.f. April 28, 2023)

The Companys risk management system is designed to identify the potential risks that can impact the business and device a framework for its mitigation along with periodical reviews to reflect changes in market conditions and the companys activities. The Companys Board of Directors has the overall responsibility of the establishment and oversight of risk management framework. The Audit Committee and Risk management committee periodically review the execution of risk management plan and advice the management wherever necessary

There are no risks which in the opinion of the Board threaten the existence of the Company. Discussion on risks and concerns are covered in the Management Discussion and Analysis Report (MDA), which forms a part of this Annual Report.

29. DISCLOSURE RELATION TO REMUNERATION OF DIRECTORS AND KEY

MANAGERIAL PERSONNEL:

The details of remuneration paid during the financial year 2022-2023 to Directors and Key Managerial Personnel of the Company is provided in Form MGT- 7 which is uploaded on the website of the Company at www.axitacotton.com

30. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE

AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure effectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and inputs in meetings etc. In addition, the chairman was also evaluated on the key aspects of his role.

31. LISTING:

The Equity Shares of the Company listed at BSE Limited (Main Board) and National Stock Exchange of India Limited (Main Board). The Annual Listing Fees for the Financial Year 2022-23 has been paid to BSE Limited and National Stock Exchange of India Limited.

32. MIGRATION:

Pursuant to Regulation 280(2) read with Regulation 277 under Chapter IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements), Regulations, 2018 and the SEBI (LODR) Regulations, 2015, the members of the Company, passed Special Resolution through Postal Ballot process on March 25, 2022 and approved for migration of Securities of the Company from SME Platform of BSE Limited to the Main Board of BSE and NSE. The Company received In Principle Approval for migration of securities from SME to Main Board of BSE on June 08, 2022 and on NSE on June 15, 2022 and approval for listing of equity shares on Capital Market Segment (Main Board) of BSE and on NSE on June 17, 2022. The equity shares of the Company got listed and admitted to dealings on the BSE and NSE (Capital Market Segment) with effect from June 21, 2022.

33. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

To foster a positive workplace environment free from harassment of any nature we have institutionalized the Anti-Sexual Harassment Initiative (ASHI) framework through which we address complaints of sexual harassment at the all workplaces of the Company. Our policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land where we operate.

During the year under review there were no incidences of sexual harassment reported. Further the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

34. DECLARATION OF INDEPENDENCE:

The Company has received necessary declarations from each of the Independent Directors to the effect that they respectively meet the criteria of independence as stipulated under Section 149 (6) of the Companies Act, 2013 alongwith in compliance in Rule 6(1) and (3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 as amended from time to time and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and there has been no change in the circumstances which may affect their status as independent director during the year. The Board has assessed the veracity of the same to their satisfaction.

The Board of Directors have satisfied themselves about the integrity, expertise and experience (including the proficiency) of the independent directors of the Company.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

35. ANNUAL RETURN:

As required under the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, (including any statutory modification(s) or re-enactment thereof, for the time being in force), the Annual Return in Form No. MGT-7 is displayed on the website of the Company at www.axitacotton.com

36. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has an effective internal control system which ensures that all the assets of the Company are safeguarded and protected against any loss from unauthorized use or disposition. The Company has an Internal Audit Department with adequate experience and expertise in internal controls, operating system and procedures.

The Internal Auditors of the Company carry out review of the internal control systems and procedures. The internal audit reports are reviewed by Audit Committee.

Your Company has also put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of operations of the Company. During the year such controls were tested and no material discrepancy or weakness in the Companys internal controls over financial reporting was observed.

37. CORPORATE GOVERNANCE:

Your Company strives to incorporate the appropriate standards for corporate governance. During the Financial Year 2022-2023, pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V (C) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance being followed by the Company is attached as Annexure - F.

No complaints had been received pertaining to sexual harassment, during the year under review. The relevant statutory disclosure pertaining to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are available at Point No: 10(l) of Corporate Governance Report.

As required under Schedule V (E) of LODR, a Certificate from the Secretarial Auditor of the Company confirming the compliance of conditions of Corporate Governance is attached as Annexure - 1.

As required under Regulation 34(3) read with Schedule V Para C (10)(i) of LODR, Certificate from the

Secretarial Auditor that none of the Companys Directors have been debarred or disqualified from being appointed or continuing as Directors of Companies, is enclosed as Annexure - 2.

As required under Regulation 17(8) read with as specified in Part B of Schedule II of LODR, Compliance Certificate furnished by Managing Director and Chief Financial Officer regarding the reviewed of financial statements and the cash flow statement for the year and certified that to the best of their knowledge there are no transactions entered into by the listed entity during the year which are fraudulent, illegal or violative of the listed entitys code of conduct. They also confirm and accept responsibility for establishing and maintaining internal controls for financial reporting and that they have evaluated the effectiveness of internal control systems of the listed entity and same have been indicated to the auditors and the Audit committee. The said Compliance Certificate is attached as Annexure - 3.

38. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In terms of Regulation 34 and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a review of the performance of the Company for the year under review Management

Discussion and Analysis Report is presented in a separate section forming part of this Annual Report as Annexure - H.

39. SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS:

There were no significant / material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

40. BUSINESS RESPONSIBILITY AND SUSTAINIBILITY REPORT:

During the Financial Year 2022-2023, the Company has been exempted from reporting on Business Responsibility and Sustainability Report as per Regulation 34(2)(f) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. However, pursuant to the Stock exchange report dated March 31, 2023, your Company is entered into the club of top 1000 Listed Company and accordingly Business Responsibility and Sustainability Report applicable to your Company and same is annexed with this Director Report as Annexure G.

41. SECRETARIAL STANDARDS:

Secretarial Standards as applicable to the Company were followed and complied with during the Financial Year 2022-2023.

42. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

43. HEALTH, SAFETY AND ENVIRONMENT:

The safety excellence journey is a continuing process of the Company. The Company provide safety environment to the employees & workers of the Company. The Company also gives safety tips to workers. The Company has given all the safety equipment to the workers. The Company also takes care of the health of the workers during their work. The Company has maintained a friendly environment so that if any employee or worker faces any problem, he can directly talk to the concerned person. The Company also checking the workers during their works.

44. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Human Resources are vital and most valuable assets for the Company. The Company believes that Human Resources shape the success of its business vision. Your Company recognizes its employees as its greatest asset and constantly strives to create a friendly system of continuous learning to help our workforce be future ready.

Amidst the pandemic, the safety of our employees has been our top-most priority and the Company had taken several measures to ensure their well-being.

High-quality leadership talent has also been infused across all functions to build a robust talent pipeline. The Industrial Relations scenario continued to be positive across all our manufacturing locations.

45. ENHANCING SHAREHOLDERS VALUE:

Your Company believes that its Members are its most important stakeholders. The Company accords top priority for creating and enhancing shareholders value. All the Companys operations are guided and aligned towards maximizing shareholders value. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socioeconomic and environmental dimensions and contribute to sustainable growth and development.

46. OTHER DISCLOSURES:

1. The Company had not accepted any deposits as per Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

2. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companys operations in future.

3. There was no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.

4. There was no one time settlement entered into with the Banks or Financial Institutions.

47. APPRECIATION & ACKNOWLEDGEMENTS:

Your Board takes this opportunity to thank Companys employees for their dedicated service and firm commitment to the goals & vision of the Company. Your Directors take this opportunity to thank our customers for their continued loyalty with our products which has resulted in the Companys extraordinary success in industry even in this unprecedented times. The Board also wishes to place on record its sincere appreciation for the wholehearted support received from the shareholders, investors and bankers. Further we would also like to acknowledge the support and assistance extended by the Regulatory Authorities such as SEBI, Stock Exchanges and other Central & State Government authorities and agencies, Auditors, Registrars, Legal Advisors and other consultants. We look forward to continued support of all them in future as well.