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Ambika Cotton Mills Ltd.

BSE: 531978 Sector: Industrials
NSE: AMBIKCO ISIN Code: INE540G01014
BSE 13:06 | 30 Nov 1522.00 11.80
(0.78%)
OPEN

1500.00

HIGH

1528.50

LOW

1500.00

NSE 12:53 | 30 Nov 1524.80 14.45
(0.96%)
OPEN

1522.00

HIGH

1528.00

LOW

1511.80

OPEN 1500.00
PREVIOUS CLOSE 1510.20
VOLUME 1100
52-Week high 2829.00
52-Week low 1324.45
P/E 5.26
Mkt Cap.(Rs cr) 872
Buy Price 1521.05
Buy Qty 2.00
Sell Price 1522.95
Sell Qty 1.00
OPEN 1500.00
CLOSE 1510.20
VOLUME 1100
52-Week high 2829.00
52-Week low 1324.45
P/E 5.26
Mkt Cap.(Rs cr) 872
Buy Price 1521.05
Buy Qty 2.00
Sell Price 1522.95
Sell Qty 1.00

Ambika Cotton Mills Ltd. (AMBIKCO) - Director Report

Company director report

Your directors have great pleasure in submitting the Thirty Fourth Annual Reporttogether with the audited accounts for the year ended 31st March 2022

FINANCIAL RESULTS (Rs. in Lakhs)
The Financial results for the year ended 31st March 2022 are furnished below:
CURRENT YEAR PREVIOUS YEAR
2021-22 2020-21
Revenue from Operations & Other Income 92547.98 63369.56
Profit Before Finance Cost and Depreciation 27460.89 12514.13
Less: Finance Cost 123.09 581.40
Gross Profit For the Year 27337.80 11932.73
Less : Depreciation 2938.83 2893.79
Profit before Tax 24398.97 9038.94
Less : Tax Expense 6410.19 2244.25
Profit after Tax 17988.78 6794.69
Other Comprehensive income -19.08 -21.96
Total Comprehensive income for the year 17969.70 6772.73
Add:Opening Balance of retained earnings 35892.41 30978.43
Amount available for appropriation 53862.11 37751.16
Less: Appropriations
Transfer to General Reserve 1000.00 1000.00
Dividend on Equity Shares 2003.75 858.75
Closing Balance of retained earnings 50858.36 35892.41

PERFORMANCE AND STATE OF AFFAIRS

The Company is engaged in manufacturing Cotton Yarn and Knitted Fabrics which aregeneric products the main input raw material is raw cotton an agricultural produce andas such there are no social or environmental concerns or risks involved. Raw cotton iswidely available in a sustainable manner both from domestic and imported. There is norequirement of water for manufacture of cotton yarn. The energy needs are addressed byinstallation of windmills renewable and clean energy. Continuous and consistent effortsare made to optimise the resources throughout the entire production process. The upstreammanufacturing of products out of cotton yarn would require minimum resources dependingupon the production activities carried out by the consumer. Cotton Yarn manufacturing doesnot involve generation of waste which requires recycling.

Operations of the Company manufacturing Cotton Yarn and Knitted Fabrics prima faciefalls under Green category duly certified by Tamil Nadu Pollution Control Board. Inaddition the Company has installed windmills for captive consumption and generates powertowards clean development mechanism for reduction of CO2 and to that extent contributesreduction of Global warming and climate change. Besides the Company has obtained thefollowing certificates i. OKO-Tex Certificate ii. Global Organic Textile Standard(Gots) iii. SUPIMA License iv. Cotton USA Certificate v. Better Cotton Initiative

The Company's key area of strategic focus is on customer satisfaction and attractingnew customers through commitment to production of high quality products which serves as astrong base in this regard.

The Company imports raw cotton from reputed farmers/intermediaries fromUSA/EGYPT/Australia and carries strong goodwill among them in terms of honouring suchcontracts without re-negotiating even under adverse circumstances such as COVID-19 thepandemic and on the other hand accepted requests from Company's buyers for deferment ofdeliveries to suit their convenience.

The Company's track record of product innovation consistency in quality and timelydelivery of committed orders has substantially contributed to repeat orders and itsoverall financial performance. Further the demand scenario for cotton yarn and knittedfabrics has substantially improved during the current year coupled with price from thebeginning of 3rd quarter of the financial year 2020-21 and has largely contributed for theoverall strong financial performance.

The Company's Total Revenue and Gross profit amounted to Rs. 92547.98 Lakhs (Previousyear Rs. 63369.56 Lakhs) and Rs. 27337.80 Lakhs (Previous year Rs. 11932.73 Lakhs). Thisrepresents growth of 46.04 % in total Revenue as compared to 1.58 % growth in the previousyear and growth of 129.10% in Gross Profit as against growth of 23.37% in the previousyear.

For the year Company's Direct Export Turnover amounted to Rs. 58340.69 Lakhs ascompared to Rs.42087.33 Lakhs in the previous year representing a growth of 38.62%(Previous Year decline of 0.04%)

In terms of percentage the export turnover constituted 66.34% of the total turnover asagainst 68.45% in the previous year.

During the year the Company has invested Rs.1152.49 Lakhs out of internal accruals inFactory Building and Plant & Machinery

The Company is not carrying any long term debt.

The company has entered into contracts for import of cotton ensuring availability ofadequate cotton for smooth operations of the company until next season. By opening Letterof Credits for import contracts in advance the issue of the availability of containersfor transport of cotton is addressed. The exports to Sri Lanka are to reputed corporatesand in turn such corporates are primarily engaged in exporting their finished productswhich insulates the operations of the company.

The Company has sufficient liquidity in place for the continued operations.

TRANSFER TO RESERVES

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

DIVIDEND

The Board of Directors has recommended payment of dividend for FY 2021-22 as under

Rate of Dividend Dividend per equity share Amount of Dividend
(Rs.) (Rs.in Lakhs)
350% 35 2003.75

If approved by the members at the Annual General Meeting (AGM) to be held on29.09.2022 the proposed dividend would result in cash outflow of dividend Rs. 2003.75Lakhs for FY 2021-22 .The payout ratio of dividend works out to11.14% (Previous yeardividend payout ratio 29.49%).

The Dividend Distribution Policy is placed on the Company's website: www.acmills.in interms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

DIRECTORS

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mrs.VidyaJyothish Pillai (DIN 05215930) Director who retires by rotation and being eligibleoffers herself for reappointment.

In terms of requirement of Section 149 of the Companies Act 2013 the IndependentDirectors of the Company are Dr. K.Venkatachalam Sri. E.M.Nagasivam and Mrs.Vijayalakshmi Narendra.

Sri.K.N.Sreedharan Independent Director resigned from the Board with effect from24.03.2022 due to his advanced age after a long tenure of office for 29 years. The Boardwishes to place on record the valuable services rendered by him during his tenure ofoffice.

Mrs. Kalpana Arjunan Independent Women Director resigned from the Board with effectfrom 26.08.2021 and the Board wishes to place on record its appreciation for servicesrendered during her tenure of office.

In the opinion of the Board all the Independent Directors fulfil the conditionsspecified in the Companies Act 2013 and Rules made thereunder and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and are independent of theManagement.

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 2022 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 2021- 22 namely June 10 2021August 11 2021 November 06 2021 and February 03 2022.

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 Auditors M/s. Srikishen & Co. Chartered Accountants(ICAI FirmRegistration No.004009S) was appointed as Statutory Auditors for a continues period offive years from the conclusion of 29thAGM (2017) till the conclusion of 34 th AGM (2022).In terms of section 139 of the Companies Act 2013 M/s. Srikishen & Co CharteredAccountants will cease to hold the office of Statutory Auditors of the Company from theconclusion of the ensuing Annual General Meeting being an individual Audit firm . Hencethe Board based on the recommendation of the Audit Committee proposes the appointment ofM/s. S.Krishnamoorthy & Co Chartered Accountants (ICAI Firm Registration No.001496S)as the Statutory auditors for a continues period of five years from the conclusion of 34thAGM (2022) till the conclusion of 39th AGM (2027) subject to approval of shareholders.Certificate from the Auditors has been received to the effect that they are eligible toact as Statutory Auditors of the Company under Section 141 of the Companies Act 2013 andfurther submitted the Peer Review Certificate dt. 06.11.2020 issued to them by Instituteof Chartered 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.Sundararajan Baalaji Practising Company Secretary to undertake theSecretarial Audit of the Company. The Secretarial Audit Report for the financial yearended March 31 2022 is annexed herewith marked as Annexure V to this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

COST AUDITOR & COST AUDIT REPORT

Pursuant to Section 148 of the Companies Act2013 read with the Companies (Cost Recordsand Audit) Amendment Rules2014 cost audit records are maintained by the Company. Asrequired under Companies Act2013 a resolution seeking approval of the members in thisregard is included in the Notice convening the Annual General Meeting. Cost Audit Reportfor the year ended 31st March 2022 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 Committee now comprises of Directors Dr. K.Venkatachalam Mrs .Vidya JyothishPillai Sri.E.M.Nagasivam and

Mrs. Vijayalakshmi Narendra.

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 DirectorsDr.K.Venkatachalam Mrs. Bhavya Chandran and Sri. E.M.Nagasivam. The Company hasformulated the policy in this regard prescribing the criteria for determiningqualifications positive attributes and independence of a director and the main attributefocused on is positive value creation and contribution in respect of ongoing activities ofthe Company and its value enhancement with adequate qualifications and independence.Details of the policy are made available in the Corporate Governance Report and on theCompany'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 312022 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 andtime lines 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 madeavailable in the Company's website www.acmills.in.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to Conservation of Energy Technology absorption Foreign ExchangeEarnings and out go as required to be disclosed under Rule 8(3) of the Companies(Accounts) Rules 2014 are set out in Annexure I to this report.

CSR EXPENDITURE

The requirement to spend in this regard is 164.23 Lakhs( Previous year Rs.157.05 Lakhs)@ 2% of 3 years average net profit of the Company and the Company has spent Rs. 202.23Lakhs (Previous year Rs. 168.88 Lakhs) on various CSR activities which are into (i)Disaster Management (ii)Animal Protection (iii)Medical Support (iv) Relief to Poor(v)Rural Development and Works (vi) Education and the details of expenditure are furnished inAnnexure II to this report.

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 III to this report.

ADDITIONAL DISCLOSURES PURSUANT TO SEBI REGULATIONS

Business Responsibility Report is furnished in Annexure IV and the additionaldisclosures pursuant to Regulation 34 (3) and 53 (f) of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 in respect (i) Management Discussion andAnalysis (ii) Corporate Governance Report (iii) Related Party Disclosures for the yearunder review are given as a separate statement in the Annual Report.

By order of the Board
Sd/-
(P.V.CHANDRAN)
Date : 10/08/2022 Chairman and Managing Director
Place : Coimbatore (DIN : 00628479)

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