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Axita Cotton Ltd.

BSE: 542285 Sector: Industrials
NSE: AXITA ISIN Code: INE02EZ01014
BSE 00:00 | 16 Aug 315.80 19.65
(6.64%)
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296.70

HIGH

319.15

LOW

290.65

NSE 00:00 | 16 Aug 316.30 19.85
(6.70%)
OPEN

296.75

HIGH

319.35

LOW

290.05

OPEN 296.70
PREVIOUS CLOSE 296.15
VOLUME 31945
52-Week high 319.15
52-Week low 35.40
P/E 42.68
Mkt Cap.(Rs cr) 621
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 296.70
CLOSE 296.15
VOLUME 31945
52-Week high 319.15
52-Week low 35.40
P/E 42.68
Mkt Cap.(Rs cr) 621
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Axita Cotton Ltd. (AXITA) - Director Report

Company director report

Dear Members

The Board of Directors have pleasure in presenting the 8th Annual Report of the Companytogether with the Audited Financial Statements for the year ended on 31st March 2021.

FINANCIAL HIGHLIGHTS

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

(Rs. in Lakhs)

PARTICULARS YEAR ENDED 31.03.2021 YEAR ENDED 31.03.2020
Revenue from Operations 61879.29 48441.38
Other Income 14.79 13.25
Total Income from Operations (Net) 61894.09 48454.63
Earnings Before Interest Taxes Depreciation and Amortization Expense 917.37 401.93
Less: Finance Cost 329.09 295.29
Less: Depreciation and Amortization Expense 44.23 52.87
Profit Before Tax 544.05 53.77
Less: Tax Expenses
Current Tax 140.52 20.87
Deferred Tax 30.16 (2.42)
Profit After Taxation 373.36 35.32

Note: Previous year's figures have been regrouped / reclassified wherever necessary tocorrespond with the current year's classification / disclosure and may not be comparablewith the figures reported earlier.

OPERATIONAL PERFORMANCE

During the year under review the Company recorded Revenue from Operations of k61879.29 Lakhs for the F.Y. 2020-21 as compared to k 48441.38 Lakhs during the previousF.Y. 2019-20.

During the year under review the Company achieved Earnings before Interest TaxesDepreciation and Amortization Expense of k 917.37 Lakhs for the F.Y. 2020-21 as comparedto k 401.93 Lakhs during the previous F.Y. 2019-20.

During the year under review the Company achieved Profit after Taxation of k 373.36Lakhs for the F.Y. 2020-21 as compared to k 35.32 Lakhs during the previous F.Y. 2019-20.

Export Sales for the F.Y. 2020-2021 was k 41333.57 Lakhs as compared to k 23633.36Lakhs for the F.Y. 2019-2020 mainly due to demand in international market.

DIVIDEND

With a view to conserve and save the resources for future prospect of the Company yourDirectors regret to declare dividend for the financial year 2020-21.

TRANSFER TO RESERVES

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

SHARE CAPITAL Authorized Capital:

The authorised share capital of the Company as on 31st March 2021 was Rs. 140000000divided into 14000000 equity shares of Rs. 10/- each.

Issued Subscribed & Paid-up Capital:

As on 31st March 2021 the issued subscribed and fully paid up capital of the Companystood at Rs. 131040000/- comprising of 13104000 equity shares of Rs. 10/- each.

The Equity Shares of the Company are listed on the BSE Limited in SME Segment. Thescrip code for Equity Share is 542285. The Company confirms that the annual listing feesto the stock exchange for the financial year 2021-22 have been paid.

CHANGES IN CAPITAL STRUCTURE

There is no change in the capital structure of the Company during the year underreview.

SUBSIDIARIES/ASSOCIATES/ JOINT VENTURES

The Company does not have subsidiaries associates and joint ventures companies in theperiod under review.

PUBLIC DEPOSITS

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

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

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

Name of Director Category Cum Designation Date of Appointment at current Term & designation Total Directorship2 No. of Committee1 No. of Shares held as on March 312021
in which Director is Members in which Director is Chairman
Mr. Nitinbhai Patel Chairman cum Managing Director October 16 2018 5 - - 3571000 Equity Shares
Mr. Kushal Patel Managing Director October 16 2018 5 2 - 3997048 Equity Shares
Mrs. Gitaben Patel4 Additional Whole-Time Director June 22 2021 1 - - 452352 Equity Shares
Mr. Dhruven Patel Independent Director October 18 2018 1 2 2 -
Mr. Rakesh Patel Independent Director October 18 2018 1 2 - -
Mrs. Pinaben Patel Independent Director September 28 2020 1 - - -

1 Committee includes Audit Committee and Shareholders' Grievances Committee across allPublic Companies.

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

3 Mr. Amitkumar Patel had resigned from the post of Whole-Time Director w.e.f June 212021 in the Company.

4 Mrs. Gitaben Patel is appointed as an Additional Whole-Time Director w.e.f. June 222021.

5 The Board Meeting held on June 30 2020 appointed Mrs. Pinaben Patel as an AdditionalDirector (Non-Executive Independent) of the Company w.e.f. June 30 2020. The members attheir 7th Annual General Meeting (AGM) held on September 28 2020 approvedappointment of Mrs. Pinaben Patel as an Independent Director of the Company for a periodof 5 (Five) consecutive years upto September 27 2025.

Pursuant to the provisions of the Companies Act 2013 and Articles of Association ofthe Company Mr. Nitinbhai Govindbhai Patel Chairman Cum Managing Director of the Companyliable to retire by rotation and being eligible has offered himself for re-appointment.

Brief resume nature of expertise details of directorships held in other Companies ofthe above Director proposed to be reappointed along with his shareholding in the Companyas stipulated under Secretarial Standard 2 and Regulation 36 of the Listing Regulationsis appended as annexure to the Notice of the Annual General Meeting (AGM).

The composition of Board complies with the requirements of the Companies Act 2013("Act"). Further in pursuance of Regulation 15(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("Listing Regulations") theCompany is exempted from requirement of having composition of Board as per Regulation 17of Listing Regulations.

The Company has received declarations of independence as stipulated under section149(6) and 149(7) of the Act and regulation 16(1)(b) and 25 of the Listing Regulationsfrom Independent Directors confirming that they are not disqualified for continuing as anIndependent Director. There has been no change in the circumstances affecting their statusas an Independent Director of the Company.

None of the Directors of Board is a member of more than ten Committees or Chairman ofmore than five committees across all the Public companies in which they are Director. Thenecessary disclosures regarding Committee positions have been made by all the Directors.

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

Key Managerial Personnel:

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

Sr. No. Name Designation
1. Mr. Nitinbhai Govindbhai Patel Chairman Cum Managing Director
2. Mr. Kushal Nitinbhai Patel Managing Director
3. Mr. Deepakkumar Kushalchandra Chaubisa Company Secretary and Compliance Officer
4. Mr. Jayesabhai Chandubhai Thakor * (w.e.f. June 30 2020) Chief Financial Officer

* The Board of Director of the Company at its meeting held on June 30 2020 hasapproved the appointment of Mr. Jayesabhai Chandubhai Thakor as Chief Financial Officer(CFO) of the Company w.e.f. June 30 2020 based on the recommendation of the member ofthe Nomination and Remuneration Committee.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act 2013("Act") in relationto financial statements of the Company for the year ended 31st March 2021 the Board ofDirectors states that:

a. in the preparation of the annual accounts the applicable accounting standards readwith requirements set out under Schedule III to the Act have been followed and there areno material departures from the same;

b. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2021 and of the profitof the Company for the year ended 31st March 2021;

c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts / financial statements have been prepared on a ‘goingconcern' basis;

e. proper internal financial controls are in place and are operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 (as amended from time to time) is set out herewithas Annexure-D to this report.

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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed tothis Report as Annexure - C.

The particulars of employees as required under Section 197(12) of the Act read withRule 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 thereport and the accounts are being sent to the Members excluding the aforesaid annexure. Interms of Section 136 of the Act the said annexure is open for inspection at theRegistered Office of the Company. Any Member interested in obtaining a copy of the samemay write to the Company Secretary.

MATERIAL CHANGES AND COMMITMENTS IF ANY BETWEEN BALANCE SHEET DATE AND DATE OFDIRECTORS' REPORT

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

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the Financial Statements.

RELATED PARTY TRANSACTIONS

During the F.Y. 2020-2021 the Company has entered into transactions with relatedparties 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 ordinarycourse of business and on arm's length basis and in accordance with the provisions of theCompanies 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.

AUDITORS

a) Statutory Auditors and Auditor's 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) AnnualGeneral Meeting held on September 27 2019 to hold office as such from the conclusion ofthe 6th (Sixth) Annual General Meeting till the conclusion of 11th (Eleventh) AnnualGeneral Meeting of the Company.

The Statutory Auditors' report does not contain any qualification reservation oradverse remark and is selfexplanatory and unmodified and thus does not require any furtherclarifications / comments. The Statutory Auditors have not reported any incident of fraudto the Audit Committee of the Company during the year under review.

b) Cost Auditors

Cost Audit is not applicable to our Company. Hence there is no need to appoint a CostAuditor.

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 hadappointed M/s. SCS And CO. LLP Practicing Company Secretaries Ahmedabad as SecretarialAuditors of the Company for the F.Y. 2020-2021 to conduct Secretarial Audit and theSecretarial Audit Report in Form MR-3. The Secretarial Audit Report for the financial year2020-21 is annexed to this report as an Annexure - E. The Secretarial Auditors' reportdoes not contain any qualification reservation or adverse remark and is self-explanatoryand 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 ofthe Companies (Accounts) Rules 2014 and other applicable provisions if any of theCompanies Act 2013 Mr. Harsh Shah Chartered Accountant (Membership No 189228) werere-appointed as Internal Auditor of the Company for F.Y. 2020-21.

The Company continued to implement his suggestions and recommendations to improve thecontrol systems. Their scope of work includes review of processes for safeguarding theassets of the Company review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. Internal Auditor'sfindings are discussed with the process owners and suitable corrective actions taken asper the directions of Audit Committee on an ongoing basis to improve efficiency inoperations.

REPORTING OF FRAUD

During the year under review the Auditors of the Company have not reported any fraudas specified under Section 143(12) of the Companies Act 2013.

INSURANCE

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

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. Thewebsite of the Company is containing information like Policies Shareholding PatternFinancial and information of the designated officials of the Company who are responsiblefor assisting and handling investor grievances for the benefit of all stakeholders of theCompany etc.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted Vigil Mechanism / Whistle Blower Policy which was approved andadopted by the Board of Directors of the Company. The policy enables the employees toreport to the management instances of unethical behavior actual or suspected fraud orviolation of Company's Code of Conduct. This provides for adequate safeguards againstvictimization of employees and Directors who wish to use the vigil mechanism to bring anywrong deed(s) to the notice of the Company.

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

CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

Pursuant to Section 135(1) of the Companies Act 2013 every company having net worth ofrupees five hundred crore or more or turnover of rupees one thousand crore or more or anet profit of rupees five crore or more during the immediately preceding financial yearhall constitute a Corporate Social Responsibility Committee of the Board consisting ofthree or more Directors out of which at least one director shall be an independentdirector.

Your Company's Net Profit (Profit before Tax) of Rs. 54404673/- during theimmediately preceding financial year (i.e. F.Y. 2020-21) which is exceeding the abovementioned threshold limit.

Pursuant to Section 135(1) of the Companies Act 2013 the Board of Directors of theCompany has constituted Corporate Social Responsibility Committee in their Board Meetingheld on June 21 2021.

The Constitution of Corporate Social Responsibility Committee are as follow:

Name of the Director Category Designation
Mr.Kushal Patel Managing Director Chairperson
Mr. Nitin Patel Chairman Cum Managing Director Member
Mrs. Pinaben Patel Independent Director Member

The Corporate Social Responsibility Committee shall formulate & recommend aCorporate Social Responsibility Policy in their meeting within due course of time to theBoard of Directors of the Company and recommend the amount of expenditure to be incurredon the activities referred to in Section 135 (3) (b) of the Companies Act 2013.

MEETINGS OF THE BOARD AGM & EGM/POSTAL BALLOT & INDEPENDENT DIRECTORS MEETING

Regular meetings of the Board are held at least once in a quarter. Additional Boardmeetings are convened as and when require to discuss and decide on various businesspolicies strategies and other businesses. The Board meetings are generally held atregistered office of the Company. The gap between two consecutive meetings was not morethan one hundred and twenty days as provided in section 173 of the Act.

During the year under review the Board of Directors of the Company duly met 9 (Nine)times. The applicable details of these Board meetings including the attendance of theDirectors at those meetings are given below:

Board Meeting held during the year:

Number of Board Meeting Date of Board Meeting
Board Meeting No. 01/2020-21 16-05-2020
Board Meeting No. 02/2020-21 30-06-2020
Board Meeting No. 03/2020-21 28-07-2020
Board Meeting No. 04/2020-21 27-08-2020
Board Meeting No. 05/2020-21 16-09-2020
Board Meeting No. 06/2020-21 13-11-2020
Board Meeting No. 07/2020-21 09-12-2020
Board Meeting No. 08/2020-21 25-03-2021
Board Meeting No. 09/2020-21 30-03-2021

Attendance of Directors in Board Meeting held during the year and Previous AnnualGeneral Meeting (AGM) of the Company:

Name of Director Mr. Nitinbhai Patel Mr. Kushal Patel Mr. Amitkumar Patel1 Mr. Dhruven Patel Mr. Rakesh Patel Mrs. Pinaben Patel Mrs. Gitaben Patel2
Number of Board Meeting held 9 9 9 9 9 9 N.A.
Number of Board Meetings Eligible to attend 9 9 9 9 9 7 N.A.
Number of Board Meeting attended 9 9 9 9 9 7 N.A.
Presence at the previous AGM Yes Yes Yes Yes No No N.A.

 

1 Mr. Amitkumar Patel had resigned from the post of Whole-Time Director w.e.f.June 21 2021.

 

2 Mrs. Gitaben Patel is appointed as an Additional Whole-Time Director w.e.f.June 22 2021.

General Meetings/Postal Ballot held during the year:

During the year under review only one meeting of members was held and that was AnnualGeneral Meetings on 28th September 2020.

During the year under review 1 (One) Postal Ballot conducted details of which are asfollows:

Type Resolutions Resolution Passed Date
Postal Ballot Migration of Company's Present Listing From SME Platform of BSE Limited to the Main Board of BSE Limited Thursday January 14 2021

The Board of Directors of the Company at their meeting held on December 09 2020approved the proposal to conduct a Postal Ballot pursuant to Section 110 of the CompaniesAct 2013 and Rule 20 and Rule 22 of the Companies (Management and Administration) Rules2014 read with the General Circulars No. 14/2020 dated April 08 2020 the GeneralCircular No. 17/2020 dated April 13 2020 the General Circular No. 22/2020 dated June 152020 and the General Circular N. 33/2020 dated September 28 2020 issued by the Ministryof Corporate Affairs ("MCA Circulars") to seek approval of the Members forMigration of Company's Present Listing From SME Platform of BSE Limited to the Main Boardof BSE Limited. The Shareholder of the Company have passed a special resolution on January14 2021 for Migration of Company's Present Listing From SME Platform of BSE Limited tothe Main Board of BSE Limited.

Independent Directors Meeting:

As per Schedule IV of the Companies Act 2013 a separate meeting of IndependentDirectors without the attendance of Non Independent Directors was held on March 30 2021to discuss the agenda items as required under the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Independent Directorsreviewed the performance of non-independent directors and the Board as whole reviewed theperformance of the Chairperson of the Company taking into account the views of executiveand non-executive directors and assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties. The Independent Directors expressedtheir satisfaction with overall functioning and implementations of their suggestions.

The Company has received necessary declaration from each independent director underSection 149 (7) of the act that they meet the criteria of independence laid down inSection 149 (6) of the act.

COMMITTEE OF BOARDS

The Board of Directors in line with the requirement of the act has formed variouscommittees details of which are given hereunder.

Audit Committee:

Audit Committee meeting is generally held for the purpose of recommending the halfyearly and yearly financial result. Additional meeting is held for the purpose ofreviewing the specific item included in terms of reference of the Committee.

The composition of the Audit Committee:

Name of the Director Category Designation
Mr. Dhruven Patel Independent Director Chairperson
Mr. Amitkumar Patel1 (Upto June 21 2021) Whole Time Director Member
Mr. Kushal Patel2 (W.e.f. June 21 2021) Managing Director Member
Mr. Rakesh Patel Independent Director Member

1 Mr. Amitkumar Patel had resigned from the post of Whole-Time Director w.e.f June 212021 in the Company.

2 Due to resignation of Mr. Amitkumar Govindbhai Patel the Board of Directors of theCompany reconstituted Audit Committee in their Board Meeting held on June 21 2021 andappointed Mr. Kushal Patel Managing Director of the Company as a Member of the AuditCommittee in place of Mr. Amitkumar Patel.

Details of the Audit Committee Meetings held during the year:

Number of Audit Committee Meeting Date of Audit Committee Meeting
Audit Committee Meeting No. 01/2020-21 28-07-2020
Audit Committee Meeting No. 02/2020-21 27-08-2020
Audit Committee Meeting No. 03/2020-21 13-11-2020
Audit Committee Meeting No. 04/2020-21 30-03-2021

Attendance of the Audit Committee members are given below:

Name of the Directors Category Designation Number of Audit Committee Meetings held during the financial year 2020-21
Held Eligible to attend Attended
Mr. Dhruven Patel Independent Director Chairperson 4 4 4
Mr. Amitkumar Patel Whole Time Director Member 4 4 4
Mr. Rakesh Patel Independent Director Member 4 4 4

Chief Financial Officer of the Company is a regular invitee at the Meeting. Furtherthe Company Secretary of the Company is acting as Secretary to the Audit Committee.

Recommendations of Audit Committee wherever/whenever given have been accepted by theBoard.

Stakeholder's Grievance & Relationship Committee:

The Board of Directors has formed Stakeholder's Grievance & Relationship Committeemainly to focus on the redressal of Shareholders' / Investors' Grievances if any likeTransfer / Transmission / Demat of Shares; Loss of Share Certificates;

Non-receipt of Annual Report; Dividend Warrants; etc. The Stakeholders RelationshipCommittee shall report to the Board on a quarterly basis regarding the status of redressalof complaints received from the shareholders of the Company.

The composition of the Stakeholder's Grievance & Relationship Committee are givenbelow:

Name of the Director Category Designation
Mr. Dhruven Patel Independent Director Chairperson
Mr. Amitkumar Patel1 (Upto June 21 2021) Whole Time Director Member
Mr. Kushal Patel2 (W.e.f. June 21 2021) Managing Director Member
Mr. Rakesh Patel Independent Director Member

 

1 Mr. Amitkumar Patel had resigned from the post of Whole-Time Director w.e.fJune 21 2021 in the Company.

 

2 Due to resignation of Mr. Amitkumar Patel the Board of Directors of theCompany reconstituted in their Board Meeting held on June 21 2021 and appointed Mr.Kushal Patel Managing Director of the Company as a Member of the Stakeholder's Grievance& Relationship Committee in place of Mr. Amitkumar Patel.

Details of the Stakeholder's Grievance & Relationship Committee Meetings heldduring the year:

Number of Stakeholder's Grievance & Relationship Committee Meeting Date of Stakeholder's Grievance & Relationship Meeting
Stakeholder's Grievance & Relationship Committee Meeting No. 01/2020-21 30-06-2020
Stakeholder's Grievance & Relationship Committee Meeting No. 02/2020-21 27-08-2020
Stakeholder's Grievance & Relationship Committee Meeting No. 03/2020-21 13-11-2020
Stakeholder's Grievance & Relationship Committee Meeting No. 04/2020-21 25-03-2021

Attendance of the Stakeholder's Grievance & Relationship Committee members aregiven below:

Name of the Directors Category Designation Number of Audit Committee Meetings held during the financial year 2020-21
Held Eligible to attend Attended
Mr. Dhruven Patel Independent Director Chairperson 4 4 4
Mr. Amitkumar Patel Whole Time Director Member 4 4 4
Mr. Rakesh Patel Independent Director Member 4 4 4

Nomination and Remuneration Committee:

The Board of Directors has formed Nomination and Remuneration committee in line withthe provisions of Section 178 of the Companies Act 2013. Nomination and RemunerationCommittee meetings are generally held for identifying the persons who are qualified tobecome Directors and may be appointed in senior management and recommending theirappointments and removal. Further the committee shall also meet as and when the needarises for review of Managerial Remuneration.

The composition of the Nomination and Remuneration committee are given below:

Name of the Director Category Designation
Mr. Dhruven Patel Independent Director Chairperson

 

1Mrs. Diptiben Patel resigned from the post of Independent Director of theCompany w.e.f. from February 28 2020 consequently the Nomination and RemunerationCommittee was reconstituted in the Board Meeting held on June 30 2020 and appointed Mrs.Pinaben Patel as a member of Nomination and Remuneration Committee in place of Mrs.Diptiben Patel.

Details of the Nomination and Remuneration committee Meetings held during the year:

Number Nomination and Remuneration Committee Meeting Date of Nomination and Remuneration Committee Meeting
Nomination and Remuneration Committee Meeting No. 01/2020-21 30-06-2020
Nomination and Remuneration Committee Meeting No. 02/2020-21 27-08-2020

Attendance of the Nomination and Remuneration committee members are given below:

Name of the Directors Category Designation Number of Audit Committee Meetings held during the financial year 2020-21
Held Eligible to attend Attended
Mr. Dhruven Patel Independent Director Chairperson 2 2 2
Mr. Rakesh Patel Independent Director Member 2 2 2
Mrs. Pinaben Patel Independent Director Member 2 1 1

RISK MANAGEMENT

The company has been exempted under regulation 21 of SEBI (Listing Obligation andDisclosure requirements) Regulations 2015 from reporting of risk management. The board isfully aware of Risk Factor and is taking preventive measures wherever required.

The Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Efficient risk management is thekey to achieving short term goals and sustained value creation over the long term. Awell-defined risk management mechanism covering the risk mapping and trend analysis riskexposure potential impact and risk mitigation process is in place. The objective of themechanism is to minimize the impact of risks identified and taking advance actions tomitigate it. The mechanism works on the principles of probability of occurrence and impactif triggered. A detailed exercise is being carried out to identify evaluate monitor andmanage both business and non-business risks.

There are no risks which in the opinion of the Board threaten the existence of theCompany. Discussion on risks and concerns are covered in the MDA which forms a part ofthis Annual Report.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS

During the Financial Year 2020-21 The Company has not issued any Equity Shares withdifferential rights.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES

The Company has not issued sweat Equity shares during the Financial Year 2020-21.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company has not issued Employee Stock Options during the Financial Year 2020-21.

REDEMPTION OF SHARES/DEBENTURES

The Company has not redeemed any shares during the Financial Year 2020-21.

DISCLOSURE RELATION TO REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The details of remuneration paid during the financial year 2020-21 to Directors of theCompany is provided in Form MGT- 9 which is uploaded on the website of the Company athttps://axitacotton.com/

NOMINATION AND REMUNERATION POLICY

The Company has in place a policy on remuneration of Directors Key ManagerialPersonnel ("KMP") and Other Employees which appears at "Annexure - A"to this report. Nomination and Remuneration Policy in the Company is designed to create ahigh performance culture. It enables the Company to attract motivated and retainedmanpower in competitive market and to harmonize the aspirations of human resourcesconsistent with the goals of the Company.

The Nomination and Remuneration Policy as adopted by the Board of Directors is placedon the website of the Company at www.axitacotton.com and is annexed to this Report asAnnexure - A.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES ANDINDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its own performanceboard 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 allthe directors on the basis of the criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

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

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

LISTING

The Equity Shares of the Company continue to remain listed on BSE Limited (SMEPlatform). The Annual listing fees for the F.Y. 2021-2022 has been paid to BSE Limited.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

To foster a positive workplace environment free from harassment of any nature we haveinstitutionalized the Anti-Sexual Harassment Initiative (ASHI) framework through which weaddress complaints of sexual harassment at the all workplaces of the Company. Our policyassures discretion and guarantees non-retaliation to complainants. We follow agender-neutral approach in handling complaints of sexual harassment and we are compliantwith 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 InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

DECLARATION OF INDEPENDENCE

The Company has received necessary declarations from each of the Independent Directorsto the effect that they respectively meet the criteria of independence as stipulated underSection 149 (6) of the Companies Act 2013. The Board has assessed the veracity of thesame to their satisfaction. The Board of Directors have satisfied themselves about theintegrity expertise and experience (including the proficiency) of the independentdirectors of the Company.

ANNUAL RETURN

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

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control system which ensures that all the assetsof the Company are safeguarded and protected against any loss from unauthorized use ordisposition. The Company has an Internal Audit Department with adequate experience andexpertise in internal controls operating system and procedures.

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

Your Company has also put in place adequate internal financial controls with referenceto the financial statements commensurate with the size and nature of operations of theCompany.

During the year such controls were tested and no material discrepancy or weakness inthe Company's internal controls over financial reporting was observed.

CORPORATE GOVERNANCE

Your Company strives to incorporate the appropriate standards for corporate governance.However pursuant to Regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company is not required to mandatorily comply with theprovisions of certain regulations of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and therefore the Company has not provided a separatereport on Corporate Governance although few of the information are provided in thisreport under relevant heading.

However Company is complying with few of the exempted regulations voluntarily anddetails of same are provided in this report under the respective heading.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a review of the performance of the Company for the yearunder review Management Discussion and Analysis Report is presented in a separate sectionforming part of this Annual Report as Annexure-F.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

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

MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013.

BUSINESS RESPONSIBILITY REPORT

The Company has been exempted from reporting on Business Responsibility Report as perRegulation 34(2)(f) of SEBI (Listing Obligation and Disclosure Requirements) Regulations2015.

SECRETARIAL STANDARDS

Secretarial Standards as applicable to the Company were followed and complied withduring the F.Y. 2020-2021.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Board Directors and the designated employees haveconfirmed compliance with the Code.

HEALTH SAFETY AND ENVIRONMENT

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

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human Resources are vital and most valuable assets for the Company. The Companybelieves that Human Resources shape the success of its business vision. Your Companyrecognizes its employees as its greatest asset and constantly strives to create a friendlysystem 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 theCompany had taken several measures to ensure their well-being.

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

ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are its most important stakeholders. The Companyaccords top priority for creating and enhancing shareholders value. All the Company'soperations are guided and aligned towards maximizing shareholders value. Your Company isalso committed to creating value for its other stakeholders by ensuring that its corporateactions positively impact the socioeconomic and environmental dimensions and contribute tosustainable growth and development.

APPRECIATION & ACKNOWLEDGEMENTS

Your Directors would like to record their appreciation for the enormous personalefforts as well as the collective contribution of all the employees to the Company'sperformance. The Board expresses its sincere thanks to all the employees customerssuppliers investors lenders regulatory and government authorities and stock exchangesfor their cooperation and support and look forward to their continued support in future.

The Directors express their regret at the loss of human life due to COVID-19 pandemicand have immense respect and gratitude for every person who has risked their life andsafety to fight this pandemic.

Registered office: Servey No. 324 357 358 Kadi Thol Road Borisana Kadi Mahesana - 382715 Gujarat For and on behalf of Board of Directors Axita Cotton Limited CIN: L17200GJ2013PLC076059
Date: September 02 2021 Place: Kadi Mahesana Nitinbhai Govindbhai Patel Chairman Cum Managing Director DIN: 06626646 Kushal Nitinbhai Patel Managing Director DIN: 06626639

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