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13th Annual Report FY 2025-2026
About Us Voice of Leadership Vision - Mission Farmers Training Awards & Recognition Corporate Information STATUTORY REPORT BOARDS’ REPORT Annexure A- Axita Employee Stock Option Plan 2023 Annexure B- Form No. AOC-2 - Particulars of Contracts/Arrangements Annexure C-Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Out go Annexure D- Particulars of Employees Annexure E- Secretarial Audit Report Annexure F- Corporate Governance Report Annexure 1-Certificate of compliance of Corporate Governance Annexure 2-Certificate of Non - Disqualification of Directors Annexure 3-CEO / CFO Certificate Annexure G- Business Responsibility & Sustainability Report Annexure H- Management Discussion & Analysis Report Annexure I- Corporate Social Responsibility Activities 5 6 9 10 13 17 21 41 43 45 47 49 53 82 83 84 85 129 141 FINANCIAL STATEMENT Independent Auditor‘s Report Financial Statements Notes on Financial Statements 147 159 168 NOTICE OF 13TH ANNUAL GENERAL MEETING The Instructions for Members for Remote E-Voting and Joining AGM 203 214 13th Annual Report FY 2025-2026 3
13th Annual Report FY 2025-2026
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Axita Cotton Limited completed thirteen years of operations during the year under review. Since 2013, the Company has grown from a single ginning unit into an established participant in India's cotton manufacturing and export trade, and it is a privilege to present the results of the year to you. The financial year 2025-26 was a challenging period for the cotton and textile industry. Cotton prices remained volatile through much of the year, international demand was subdued, and trading conditions across the sector were difficult. In this environment, your Company adopted a selective approach to trading, prioritising the quality of each transaction over the volume of business written. Revenue from operations for the year stood at Rs. 370.40 crore, as against Rs. 652.72 crore in the previous year. Profit before tax improved to Rs. 2.84 crore from Rs. 1.55 crore, and profit after tax rose to Rs. 1.90 crore from Rs. 1.09 crore, an increase of approximately 74 per cent. The improvement in profitability, achieved on a lower revenue base, reflects better margins and more disciplined management of working capital. Return Mr. Nitinbhai Govindbhai Patel Chairman & Managing Director on capital employed improved from 3.23 per cent to 5.55 per cent, and cash and bank balances increased from Rs. 10.56 crore to Rs. 15.98 crore. During the year, the Board issued bonus shares in the ratio of one equity share for every ten shares held, and has recommended a dividend of Rs. 0.05 per equity share for the year under review, subject to your approval. Your Company enters the new financial year with a stronger balance sheet, a wider product range and a significantly larger export business. While near-term conditions in the cotton trade may remain uncertain, the medium and long-term outlook for cotton and textiles continues to be encouraging. On behalf of the Board, I place on record my sincere appreciation to our shareholders, employees, customers, farmers, bankers and business partners for their continued trust and support. Warm regards, Mr. Nitinbhai Govindbhai Patel Chairman & Managing Director 6 13th Annual Report FY 2025-2026
2025-26 was a year of consolidation, in which we focused on strengthening the operating discipline of the business rather than on expanding its scale. Your Company reported total income of Rs. 374.65 crore for the year, with profit after tax of Rs. 1.90 crore. Net worth stood at Rs. 64.91 crore as at 31 March 2026, and earnings per share were Rs. 0.05. A significant part of the year's work went into improving how capital moves through the business. Inventory turnover rose from 63 times to 283 times, reflecting a shift to a largely back-to-back trading model with minimal stock carried at period ends. Trade receivables reduced from Rs. 31.96 crore to Rs. 17.48 crore, and cash and bank balances increased by approximately 51 per cent. During the year your Company availed working capital facilities from State Bank of India, and consequently the debt-to-equity ratio stood at 0.28 as against a negligible level in the previous year. This was a considered decision to support trading operations with secured, competitively priced working capital. The ratio remains conservative and the borrowing is fully covered by current assets. The Company also broadened its product base during the year. In addition to cotton bales and yarn, your Company traded in sesame seeds, groundnut oil, cotton seed, gold and copper. Cotton continues to account for over 85 per cent of turnover and will remain the core of the business, while the wider portfolio reduces dependence on a single commodity Mr. Kushal Nitinbhai Patel cycle. Managing Director During the year, the Nomination and Remuneration Committee granted stock options to eligible employees under the Axita Employee Stock Option Plan, aligning the interests of our people with the long-term growth of the Company. Our strategy remains centred on operational efficiency, diversification and measured expansion of our international business. I thank you for your continued confidence in the Company. Warm regards, Mr. Kushal Nitinbhai Patel Managing Director 13th Annual Report FY 2025-2026 7
documentation. The financial year 2025-26 was a defining year for this function, and I am pleased to place its outcome before you. Exports for the year grew to Rs. 30.57 crore from Rs. 8.94 crore in the previous year, an increase of more than three and a half times. Exports now contribute 8.29 per cent of turnover, as against approximately one per cent in the preceding year. Equally important is the change in composition. In the previous year, exports comprised a single product line. During the year under review, your Company exported cotton bales for the first time, amounting to Rs. 19.36 crore, added groundnut oil exports of Rs. 2.96 crore, and continued its sesame seed exports at Rs. 8.25 crore. The Company now serves a wider customer base across a greater number of international markets. Export business depends as much on documentation and compliance as on commercial terms. An overseas buyer places reliance on processes he cannot observe directly, and the credibility of those processes determines whether he returns. Mr. Nilesh Hasmukhbhai Kothari Executive Director Your Company has built a consistent record in this area. Our documentation and compliance processes are reviewed regularly and are aligned to the requirements of each destination market, which has enabled us to retain customers across successive seasons and to add new ones. This reliability remains, in my view, our most valuable asset in international markets. Looking ahead, your Company intends to deepen its presence in the markets it has entered during the year and to widen its agri-commodity exports alongside the core cotton business. Broadening both the product range and the customer base will, over time, reduce dependence on any single market or season. My focus continues to be on ensuring that export operations remain robust, compliant and capable of supporting growth. I record my thanks to our employees, shareholders, partners and customers for their continued support. Warm regards, Mr. Nilesh Hasmukhbhai Kothari Executive Director 8 13th Annual Report FY 2025-2026
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