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Ambika Cotton Mills Ltd.

BSE: 531978 Sector: Industrials
NSE: AMBIKCO ISIN Code: INE540G01014
BSE LIVE 10:46 | 12 Dec 1293.50 12.50
(0.98%)
OPEN

1281.00

HIGH

1301.00

LOW

1275.00

NSE 11:08 | 12 Dec 1287.85 -0.10
(-0.01%)
OPEN

1282.35

HIGH

1288.95

LOW

1275.00

OPEN 1281.00
PREVIOUS CLOSE 1281.00
VOLUME 94
52-Week high 1430.00
52-Week low 1000.05
P/E 12.87
Mkt Cap.(Rs cr) 741
Buy Price 1277.15
Buy Qty 2.00
Sell Price 1293.00
Sell Qty 20.00
OPEN 1281.00
CLOSE 1281.00
VOLUME 94
52-Week high 1430.00
52-Week low 1000.05
P/E 12.87
Mkt Cap.(Rs cr) 741
Buy Price 1277.15
Buy Qty 2.00
Sell Price 1293.00
Sell Qty 20.00

Ambika Cotton Mills Ltd. (AMBIKCO) - Director Report

Company director report

Your directors have great pleasure in submitting the Twenty Ninth Annual Reporttogether with the audited accounts for the year ended 31st March 2017.

FINANCIAL RESULTS

The Financial results for the year ended 31st March 2017 are furnished below:

(Rs. in Lakhs)
CURRENT YEAR PREVIOUS YEAR
2016-17 2015-16
Sales & Other Income 52939.73 49408.24
Profit Before Finance Cost and Depreciation 10512.87 9409.20
Less: Finance Cost 383.95 521.53
Gross Profit For the Year 10128.92 8887.67
Less : Depreciation 2934.86 2991.96
Profit before Tax 7194.06 5895.71
Less : Tax Expense 1629.03 1450.19
Profit after Tax 5565.03 4445.52
Add: Surplus in Statement of Profit and Loss 16264.68 13881.02
21829.71 18326.54
Less: Appropriation
Transfer to General Reserve 1000.00 1000.00
Interim Dividend 0.00 881.25
Dividend Tax on Interim Dividend 0.00 179.40
Proposed Dividend on Equity Shares 0.00 0.00
Dividend Tax 0.00 0.00
Prior Period Dividend & Dividend Tax 0.00 1.21
Surplus Carried over in Statement of Profit and Loss 20829.71 16264.68

PERFORMANCE AND STATE OF AFFAIRS

The Company's Total Income and Gross profit amounted to Rs. 52939.73 Lakhs (Previousyear Rs. 49408.24 Lakhs) and Rs. 10128.92 Lakhs (Previous year Rs. 8887.67 Lakhs). Thisrepresents growth of 7.15% in total income as compared to 0.35% decline in the previousyear and growth of 13.97% in Gross Profit as against decline of 4.53% in the previousyear.

For the year Company's Direct Export Turnover amounted to Rs. 24965.35 Lakhs ascompared to Rs. 25960.52 Lakhs in the previous year representing a decline of 3.83%(Previous Year decline of 9.01 %). In terms of percentage the export turnover constituted48.39% of the net sales as against 53.71% in the previous year.

The improved financial performance for the year was on account of continuedstrengthening of core production process better generation and evacuation of wind powercoupled with outsourced power at favorable prices. The Company is continuously working onstrategies into product innovation and enhanced productivity. The strong financialperformance of the Company demonstrates the varied customer base and product diversity .

During the year the Company has invested Rs.1752 Lakhs towards strengthening of itsmanufacturing operations of spinning segment and has invested Rs.1007 Lakhs in Knittingsegment. This knitting facility would knit fabrics upto 8000 kgs per day as of now and90% of the output is exported. This total investment of Rs.2759 Lakhs was fully met out ofinternal accruals.

The Company is not carrying any long term debt.

The implementation of spinning phase is still pending on account of uncertainty of useof land and appropriate clearance from authorities. However the Company has planed toinvest further an estimated amount of Rs. 2000 Lakhs in Knitting segment to augment theknitting capacity further 16000 Kgs per day. The investment will be made out of internalaccruals.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.10.00 Crores to the General Reserve out of theamount available for appropriation.

DIVIDEND

The Company has not recommended any dividend in view of transit to IND AS as dividenddeclared is not recognized as a liability until approved by the shareholders. However theCompany would consider and pay interim dividend in such a way that the stream of cash flowin the form of dividend to the share holders would be protected.

BUYBACK OF SHARES

The Board of Directors at their meeting held on 11th November 2016 approved thebuyback of equity shares of the Company in accordance with Section 68 of the CompaniesAct2013 and SEBI ( Buyback of Securities ) Regulations 1998 and the buyback announcementwas made on 22nd November2016. The Company as proposed has bought back through StockExchanges 150000 Equity Shares of Rs. 10/- each which have been extinguishedsubsequently.

The aggregate amount spent on buyback amounted to Rs. 1611.52 Lakhs consisting of (i)Consideration paid towards buyback Rs.1573.22 Lakhs and (ii) Other transaction costRs.38.30 Lakhs.

In terms of Section 69 of the Companies Act2013 Rs.15.00 Lakhs being the nominalvalue of Equity Shares bought back was transferred to Capital Redemption Reserve Accountfrom Share Premium account and the balance cost of buyback Rs.1596.52 Lakhs was also metout of Share Premium Reserve .

DIRECTORS

In terms of requirement of Section 149 of the Companies Act 2013 the IndependentDirectors of the company are Sri.K.N.Sreedharan Dr.K.Venkatachalam and Sri.E.M.Nagasivam.

Sri R. Soundararaja Perumal resigned from the Board with effect from 27.03.2017 and theBoard wishes to place on record its appreciation for services rendered during his tenureof office.

Sri.E.M.Nagasivam was co-opted as an independent director of the Company by the BoardDirectors of Company at the meeting held on 12.08.2017 on the recommendation of Nominationand Remuneration Committee.

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mrs.Bhavyachandran (DIN 02080649) Director who retires by rotation and being eligible offersherself for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (3) (c) of the Companies Act 2013 your directors state that: -

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

ii. Accounting policies selected have been applied consistently. Reasonable and prudentjudgments have been made so as to give a true and fair view of the state of affairs of theCompany as at the end of 31st March 2017 and of the profit of the Company for the yearended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities;

iv. The annual accounts have been prepared on a going concern basis;

v. Internal financial controls have been laid down to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

vi. Systems to ensure compliance with the provisions of all applicable laws are inplace and were adequate and operating effectively.

MEETINGS OF THE BOARD

The Board held four meetings during the Financial Year 2016- 17 namely May 28 2016August 6 2016 November 11 2016 and February 1 2017 .

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149(7) of the Companies Act2013 stating that they meet the criteriaof independence as provided in sub-section(6).

DEPOSITS

The Company has not accepted any deposits from the public and therefore furnishing ofdetails in terms of Rule 8(v) &(vi) of Companies (Accounts) Rules 2014 does notarise.

AUDITORS

The Statutory Auditor M/s L.Venkatasubbu & Co. Chartered Accountants havealready completed more than ten years as statutory Auditors of the Company. Accordinglyas per section 139 of the Companies Act 2013 M/s. L.Venkatasubbu & Co. will ceaseto be the Statutory Auditors of the Company from the conclusion of the ensuing AnnualGeneral Meeting . Hence the Board based on the recommendation of the Audit Committeeproposes the appointment of Sri Kishen & Co. Chartered Accountants ICAI RegistrationNo.004009S as the Statutory auditors for a continues period of five years from theconclusion of 29th AGM till the conclusion of 34th AGM subject to approval of shareholders .

Certificate from the Auditors has been received to the effect that they are eligible toact as auditors of the Company under Section 141 of the Companies Act 2013 and furthersubmitted the Peer Review Certificate dt:04.08.2016 issued to them by Institute ofChartered Accountants of India (ICAI).

AUDITORS' REPORT

The Auditors' Report to the Shareholders does not contain any reservationqualification or adverse remark.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies( Appointment and Remuneration of Managerial Personnel ) Rules 2014 the Company hasappointed Sri.S.R.BalaajiPractising Company Secretary to undertake the Secretarial Auditof the Company. The Secretarial Audit Report for the financial year ended March 31 2017is annexed herewith marked as Annexure A to this Report. The Secretarial Audit Report doesnot contain any qualification reservation or adverse remark.

COST AUDITOR AND COST AUDIT REPORT

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 cost audit records are maintained by theCompany. As required under Companies Act2013 a resolution seeking approval of themembers in this regard is included in the Notice convening the Annual General Meeting.

Cost Audit Report for the year ended 31st March 2017 will be submitted in due course .

INTERNAL FINANCIAL CONTROLS

The Company has in place internal financial controls systems commensurate with thesize and nature of its operations to ensure proper recording of financial and operationalinformation and compliance of various internal controls and other regulatory and statutorycompliances.

AUDIT COMMITTEE

The Audit Committee was constituted by the Board at its meeting held on 31.01.2001. TheCommittee now comprises of Directors Sri. K.N.Sreedharan Dr .K.Venkatachalam and Mrs.Vidya Jyothish Pillai . The Audit Committee was reconstituted and Mrs .Vidya JyothishPillai was co-opted as a member of Audit Committee in the place caused by resignation ofDirector.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has in place a vigil mechanism /Whistle Blower Policy for Directors andEmployees to report genuine concerns about any wrongful conduct with respect to theCompany of its business or affairs. The details of the Vigil Mechanism / whistle BlowerPolicy are available on the Company's website www.acmills.in

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Corporate Social Responsibility Committee consists of Directors Sri. P.V.ChandranDr.K.Venkatachalam and Mrs.Bhavya Chandran as members of the committee. The Committee hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company as specified in ScheduleVII of the Companies Act 2013 which has been approved by the Board the details of thesame are made available on the Company's website www.acmills.in.

NOMINATION AND REMUNERATION COMMITTEE

Nomination and Remuneration Committee presently consists of DirectorsSri.K.N.Sreedharan Dr. K.Venkatachalam and Mrs. Bhavya Chandran.

The Company has formulated the policy in this regard prescribing the criteria fordetermining qualifications positive attributes and independence of a director and the mainattribute focused on is positive value creation and contribution in respect of ongoingactivities of the Company and its value enhancement with adequate qualifications andindependence. Details of the policy are made available in the Corporate Governance Reportand on the Company's website www.acmills.in.

RISK MANAGEMENT POLICY

The Risk Management Committee consists of Directors Sri.P.V.ChandranDr.K.Venkatachalam and Mrs. Vidya Jyothish Pillai. The company has developed and adopted adetailed Enterprise Risk Management Policy to sustain the operations of the Company andthe same is disclosed in the website of the Company www.acmills.in.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders relationship committee consists of Directors Dr.K.Venkatachalam Mrs.Vidya Jyothish Pillai and Mrs. Bhavya Chandran. The Company has formulated policy forearly resolution of stakeholders' grievances and the same is made available in thecompany's website www.acmills.in.

APPOINTMENT OF KEY MANAGERIAL PERSONNEL

There is no appointment of Key Managerial personnel during the year.

SUBSIDIARIES

The company does not have any subsidiaries.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no Significant Material Orders passed by the Regulators /Courts which wouldimpact the going concern status of the Company and its future operations.

LOANS GUARANTEES AND INVESTMENTS

The Company has not made any investments or given any loans or guarantees or providedany security in connection with a loan to any person or body corporate as defined underSection 186 of the Companies Act 2013.

RELATED PARTY TRANSACTIONS

The Company does not have any related party transactions as defined in Section 188 ofthe Companies Act 2013 hence Form AOC-2 is not enclosed.

MATERIAL CHANGES AND COMMITMENTS

There were no Material changes and Commitments affecting the financial position of theCompany that have occurred between the end of the financial year March 312017 to whichthe financial statements relate and the date of this report.

CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the year under review asprescribed in Rule 8(ii) of the Companies (Accounts) Rules 2014.

BOARD EVALUATION

The Board has carried out an annual Performance evaluation of its own performance andthat of its Committees and individual Directors .Further the independent Directors havecarried out review of performance of non- independent directors and the Board as a wholeperformance of the Chairperson and further made an assessment of quality quantity andtimelines of flow of information between the Company management and the Board foreffective and reasonable performance of its duties.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure – I.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUT GO

Particulars relating to Conservation of Energy Technology absorption Foreign ExchangeEarning and outgo as required to be disclosed under the Act are set out in Annexure– II to this report.

CSR EXPENDITURE

The requirement to spend in this regard is Rs.121.59 Lakhs( Previous year Rs. 109.38Lakhs) @ 2% of 3 years average net profit of the Company and the Company has spentRs.123.02 Lakhs(Previous year Rs. 116.55 Lakhs) on various CSR activities which are into(i) Rural Development (ii) Education (iii)Animal Protection (iv) Medical Support (v)Relief to Poor and the details of expenditure are furnished in Annexure –III to thisreport.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is enclosed in Annexure IV to this report.

ADDITIONAL DISCLOSURES PURSUANT TO SEBI REGULATIONS

The additional disclosures pursuant to Regulation 34 (3) and 53 (f) of the SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 in respect (i)Management Discussion and Analysis (ii) Corporate Governance Report (iii) Related PartyDisclosures for the year under review are given as a separate statement in the AnnualReport.

By order of the Board
Sd/-
(P.V.CHANDRAN)
DATE : 12/08/2017 Chairman and Managing Director
PLACE : Coimbatore (DIN : 00628479)