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Ambika Cotton Mills Ltd.

BSE: 531978 Sector: Industrials
NSE: AMBIKCO ISIN Code: INE540G01014
BSE 00:00 | 30 Jul 1574.00 49.30
(3.23%)
OPEN

1530.00

HIGH

1615.00

LOW

1529.20

NSE 00:00 | 30 Jul 1571.05 47.05
(3.09%)
OPEN

1556.05

HIGH

1616.00

LOW

1530.15

OPEN 1530.00
PREVIOUS CLOSE 1524.70
VOLUME 18684
52-Week high 1615.00
52-Week low 603.05
P/E 13.26
Mkt Cap.(Rs cr) 902
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1530.00
CLOSE 1524.70
VOLUME 18684
52-Week high 1615.00
52-Week low 603.05
P/E 13.26
Mkt Cap.(Rs cr) 902
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ambika Cotton Mills Ltd. (AMBIKCO) - Director Report

Company director report

Your directors have great pleasure in submitting the Thirty Second Annual Reporttogether with the audited accounts for

the year ended 31st March 2020

FINANCIAL RESULTS

The Financial results for the year ended 31st March 2020 are furnished below:

(Rs. in Lakhs)

CURRENT YEAR PREVIOUS YEAR
2019-20 2018-19
Sales & Other Income 62385.33 65699.79
Profit Before Finance Cost and Depreciation 10606.76 12509.85
Less: Finance Cost 934.79 942.42
Gross Profit For the Year 9671.97 11567.43
Less : Depreciation 2758.49 2884.76
Profit before Tax 6913.48 8682.67
Less : Tax Expense 1687.78 2364.37
Profit after Tax 5225.70 6318.30
Other Comprehensive income -10.39 -10.91
Total Comprehensive income for the year 5215.31 6307.39
Add:Opening Balance of retained earnings 28833.66 25251.72
Amount available for appropriation 34048.97 31559.11
Less: Appropriations
Transfer to General Reserve 1000.00 1000.00
Dividend on Equity Shares 1717.50 1431.25
Dividend Tax 353.03 294.20
Closing Balance of retained earnings 30978.44 28833.66

PERFORMANCE AND STATE OF AFFAIRS

The Company's Total Income and Gross profit amounted to Rs. 62385.33Lakhs (Previousyear Rs. 65699.79 Lakhs) and Rs.9671.97 Lakhs (Previous year Rs. 11567.43 Lakhs). Thisrepresents decline of 5.04 % in total income as compared to 12.17% growth in the previousyear and decline of 16.39% in Gross Profit as against growth of 6.62% in the previousyear.

For the year Company's Direct Export Turnover amounted to Rs.43733.86 Lakhs as comparedto Rs. 44503.20 Lakhs in the previous year representing a decline of 1.73% (Previous Yeargrowth of 35.98%)

In terms of percentage the export turnover constituted 71.97% of the total turnover asagainst 69.05% in the previous year.

The company has sustained its business operations and financial performance despitethe general slowdown in demand across the globe by prudently placing and orienting itsemphasis on its core strength of making speciality yarn made up of superior cottonoffering products to the specific needs of the reputed customers coupled with productinnovation.

During the year the Company has invested Rs.1842.24 Lakhs out of internal accruals inFactory Building and Plant & Machinery

The Company is not carrying any long term debt.

THE COVID-19 THE PANDEMIC AND ITS IMPACT

The COVID-19 the pandemic across the world has caused wider disruption to thebusiness supply chain the impact of which was felt beginning March 2020 leading tocomplete shutdown and loss of operations for 10 days in March 2020. The operations arerestored partially in the month of May 2020 after lifting of curbs and are subject tostrict compliance of Government directives including restricting the strength ofworkforce. Though operations are restored partially the impact continues with lot ofuncertainty especially in the matter of undisturbed supply chain and the company isputting in place and directing its efforts to make use of the best available opportunityto sustain the business and its operations. The company has not availed/opted for anymoratorium/rollover in respect of bank working capital commitments. The company hassufficient 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 final dividend for FY 2019-20 asunder

Rate of Dividend Dividend per equity share Amount of Dividend
(Rs.) (Rs.in Lakhs)
150% 15 858.75

If approved by the members at the Annual General Meeting (AGM) to be held on29.09.2020 the proposed Final Dividend would result in cash outflow of dividend Rs.858.75 Lakhs for FY 2019-20 .The payout ratio of dividend works out to16.43%.

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 Sri.K.N.Sreedharan Dr.K.Venkatachalam Sri. E.M. Nagasivamand Mrs. Kalpana Arjunan

Mrs. Kalpana Arjunan (DIN 08770525) was co-opted as an independent director of theCompany by the Board Directors of Company at the meeting held on 27.06.2020 on therecommendation of Nomination and Remuneration Committee.

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 2020 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 2019- 20 namely May 28 2019August 10 2019 November 08 2019 and February 06 2020.

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

M/s.SRIKISHEN& Co. Chartered Accountants ICAI Firm Registration No.004009S wasappointed as the Statutory auditors for a continues period of five years from theconclusion of 29th AGM (2017) till the conclusion of 34th AGM (2022).

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) the validity of which was duly extended by 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 year ended March 31 2020 is annexedherewith marked as Annexure A to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

COST AUDITOR & COST AUDIT REPORT

Pursuant to Section 148 of the Companies Act2013 read with the Companies (Cost Recordsand Audit ) Amendment Rules 2014 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 2020 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 Mrs .VidyaJyothish Pillai and Sri. E.M.Nagasivam.

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.

BUSINESS RESPONSIBILITY REPORT

The company is placed among the top 1000 listed entities based on marketcapitalization as per NSE data for FY 2019.SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 requires such companies to furnish Business ResponsibilityReport (BRR) as part of the Annual Report. Accordingly the BRR is enclosed as Annexure Vand forms part of the Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.

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 312020 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(5)(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 and the same is made available in the company's websitewww.acmills.in.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO

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 IIto this report.

CSR EXPENDITURE

The requirement to spend in this regard is Rs. 159.01 Lakhs( Previous year Rs.140.43Lakhs) @ 2% of 3 years average net profit of the Company and the Company has spentRs161.70Lakhs(Previous year Rs. 143.55 Lakhs) on various CSR activities which are into (i)Rural Development (ii) Education (iii)Animal Protection (iv) Health Care (MedicalSupport) (v) Relief to Poor and the details of expenditure are furnished in Annexure IIIto 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 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)
Chairman and Managing Director
(DIN : 00628479)
Place : Coimbatore
Date : 08/08/2020