Ambika Cotton Mills Ltd

Your directors have great pleasure in submitting the Thirty Sixth Annual Report together with the audited accounts for the year ended 31st March 2024

The Financial results for the year ended 31st March 2024 are furnished below: (Rs. in Lakhs)

The Company is engaged in manufacturing Cotton Yarn and Knitted Fabrics, which are generic products, the main input raw material is raw cotton, an agricultural produce, and as such there are no social or environmental concerns or risks involved. Raw cotton is widely available, in a sustainable manner, both from domestic and imported. There is no requirement of water for manufacture of cotton yarn and knitted fabrics. The upstream manufacturing of products out of cotton yarn would require minimum resources depending upon the production activities carried out by the consumer.

Operations of the Company manufacturing Cotton Yarn and Knitted Fabrics, prima facie, falls under Orange category duly certified by Tamil Nadu Pollution Control Board. Besides the Company has obtained the following certificates,

i. OEKO-TEX,

ii. Global Organic Textile Standard (GOTS),

iii. SUPIMA,

iv. Cotton USA,

v. Better Cotton Initiative,

vi. Organic Content Standard (OCS),

vii. Global Recycled Standard(GRS),

viii. FSC Chain of Custody (COC),

ix. Cotton made in Africa (CMIA),

x. US Cotton Trust Protocol Member ,

xi. SEDEX ,

xii. Recycled Claim Standards (RCS).

Continuous and consistent efforts are made to optimise the resources throughout the entire production process. The Company?s key area of strategic focus is on customer satisfaction, and attracting new customers through commitment to production of high quality products which serves as a strong base in this regard.

The Company imports raw cotton from reputed farmers/intermediaries from USA/EGYPT/AUSTRALIA and carries strong goodwill among them in terms of honouring such contracts without re-negotiating and on the other hand accepts customer?s requests from for deferment of deliveries to suit their convenience.

The Company?s track record of product innovation, consistency in quality and timely delivery of committed orders has substantially contributed to repeat orders and its overall financial performance despite the demand scenario for cotton yarn and knitted fabrics has substantially impacted during the current year operations.

The company has during the year duly commissioned Roof Top Solar Power Project 6.49 MW as envisaged with due approvals. The company has already installed windmills of 27.4 MW. The energy generated both by the Windmills and Solar are meant for captive consumption renewable and clean energy and contributes towards clean development mechanism for reduction of CO2 and to that extent reduction of Global warming and climate change. Presently 80% of the power requirement is met through Renewable Energy.

The Company's Total Revenue and Gross Profit amounted to Rs. 84621.31 Lakhs (Previous year Rs. 86134.97 Lakhs) and Rs. 11294.98 Lakhs (Previous year Rs. 18229.94 Lakhs). This represents decline of 1.76 % in Total Revenue as compared to decline of 6.93 % in the previous year and decline of 38.04% in Gross Profit as against decline of 33.32% in the previous year.

For the year Company's Direct & SEZ Export Turnover under USD amounted to Rs. 59330.84 Lakhs as compared to Rs. 59802.38 Lakhs in the previous year representing decline of 0.79% (Previous Year decline of 4.55%) In terms of percentage the Exports Turnover constituted 74.02% of the total turnover as against 73.20% in the previous year.

During the year the Company has invested in Roof Top Solar Project Rs.3654.14 Lakhs, Plant & Machinery Rs. 1030.60 Lakhs and Factory Building Rs. 44.16 Lakhs, out of internal accruals, totally aggregating to Rs.4728.90 Lakhs.

The Company is not carrying any long term debt

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

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

The Board of Directors has recommended payment of dividend for FY 2023-24 as under

If approved by the members at the Annual General Meeting (AGM) to be held on 27.09.2024, the proposed dividend would result in cash outflow of dividend Rs. 2003.75 Lakhs for FY 2023-24 .The payout ratio of dividend works out to 31.82% (Previous year dividend payout ratio 17.91%)

The Dividend Distribution Policy is placed on the Company?s weblink http://www.acmills.in/2021/08/dividend-distribution-policy/ in terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mrs. Vidya Jyothish Pillai (DIN 05215930) Director, who retires by rotation and being eligible, offers herself for reappointment.

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

Dr.K.Venkatachalam holds office as Independent Director upto the date of conclusion of 36th AGM. By virtue of Section 149(10), no independent director shall hold office for more than two consecutive terms and consequently upon the date of conclusion of this AGM Dr. K. Venkatachalam vacates office as Independent Director. However the Board upon considering his expertise and upon recommendation of nomination and remuneration committee appoints him as Non executive director liable to retire by rotation.

In the opinion of the Board, all the Independent Directors fulfil the conditions specified in the Companies Act, 2013 and Rules made there under and SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 and are independent of the Management

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 have been followed and there are no material departures;

ii. Accounting policies selected have been applied consistently. Reasonable and prudent judgments have been made so as to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2024 and of the profit of the Company for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

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 and such internal financial controls are adequate and were operating effectively;

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

The Board held four meetings during the Financial Year 2023 - 24 namely, May 26, 2023, August 10, 2023, November 09, 2023 and February 08, 2024.

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149(7) of the Companies Act,2013, stating that they meet the criteria of independence as provided in sub-section(6).

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

M/s. S.Krishnamoorthy & Co, Chartered Accountants (ICAI Firm Registration No.001496S) was appointed as Statutory Auditors for a continues period of five years from the conclusion of 34th AGM (2022) till the conclusion of 39th AGM (2027). Certificate from the Auditors has been received to the effect that they are eligible to act as Statutory Auditors of the Company under Section 141 of the Companies Act, 2013 and further submitted the Peer Review Certificate dt. 31.03.2023 issued to them by Institute of Chartered Accountants of India (ICAI) valid upto 31.03.2026

The Auditors? Report to the Shareholders does not contain any reservation, qualification or adverse remark. There were no instances of fraud reported by the Auditor to the Central Government or to the Audit Committee of the Company as indicated under the provisions of Section 143 (12) of the Companies Act, 2013

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies ( Appointment and Remuneration of Managerial Personnel ) Rules 2014, the Company has appointed Sri.Sundararajan Baalaji, Practising Company Secretary to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report for the financial year ended March 31, 2024 is annexed herewith marked as Annexure V to this

Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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

The Company has in place internal financial controls systems, commensurate with the size and nature of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances.

The Committee now comprises of Directors Dr.K.Venkatachalam, Mrs .Vidya Jyothish Pillai, Sri.E.M.Nagasivam and Mrs.

Vijayalakshmi Narendra.

The Company has in place a vigil mechanism /Whistle Blower Policy for Directors and Employees to report genuine concerns about any wrongful conduct with respect to the Company of its business or affairs. The details of the Vigil Mechanism / whistle Blower Policy are available on the Company?s website www.acmills.in & under web- link http://www.acmills.in/2015/03/whistle-blower/

The Corporate Social Responsibility Committee consists of Directors Sri. P.V.Chandran, Dr.K.Venkatachalam and Mrs. Bhavya Chandran as members of the committee. The Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, which has been approved by the Board, the details of the same are made available on the Company?s website www.acmills.in & under web-link http://www.acmills.in/2016/08/csrpolicy/

Nomination and Remuneration Committee presently consists of Directors, Dr.K.Venkatachalam, Mrs. Bhavya Chandran and Sri. E.M.Nagasivam. The Company has formulated the policy in this regard prescribing the criteria for determining qualifications positive attributes and independence of a director and the main attribute focused on is positive value creation and contribution in respect of ongoing activities of the Company and its value enhancement with adequate qualifications and independence. Details of the policy are made available in the Corporate Governance Report and on the Company?s website www.acmills.in under web-link http://www.acmills.in/2016/07/nomination-and-renumeration-policy/

The Risk Management Committee consists of Directors Sri.P.V.Chandran, Dr.K.Venkatachalam and Mrs. Vidya Jyothish Pillai. The Company has developed and adopted a detailed Enterprise Risk Management Policy to sustain the operations of the Company and the same is disclosed in the website of the Company, www.acmills.in under web-link http://www.acmills.in/ 2016/07/risk-management-policy/

The Stakeholders relationship committee consists of Directors Dr.K.Venkatachalam , Mrs. Vidya Jyothish Pillai and Mrs. Bhavya Chandran. The Company has formulated policy for early resolution of stakeholders? grievances and the same is made available in the Company?s website www.acmills.in under web-link https://www.acmills.in /2016/07/stakeholders-grievance-resolution/

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

The Company does not have any subsidiaries.

There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the

Company and its future operations.

The Company has not made any investments or given any loans or guarantees or provided any security in connection with a

loan to any person or body corporate, as defined under Section 186 of the Companies Act, 2013.

The Company does not have any related party transactions as defined in Section 188 of the Companies Act, 2013 hence Form

AOC-2 is not enclosed.

There were no Material changes and Commitments affecting the financial position of the Company that have occurred between

the end of the financial year March 31, 2024 to which the financial statements relate and the date of this report.

There were no changes in the nature of business during the year under review as prescribed in Rule 8(ii) of the Companies

(Accounts) Rules, 2014.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Information regarding the same is also provided in the Corporate Governance Report forming part of Directors? Report.

The Board has carried out an annual Performance evaluation of its own performance and that of its Committees and individual Directors. Further the independent Directors have carried out review of performance of non- independent directors and the Board as a whole, performance of the Chairperson and further made an assessment of quality, quantity and timelines of flow of information between the Company management and the Board for effective and reasonable performance of its duties.

Pursuant to Section 92 (3) copy of Annual Return is made available in the Company?s website www.acmills.in under web link

https://www.acmills.in/?s=mgt-7

Particulars relating to Conservation of Energy, Technology absorption, Foreign Exchange Earning and outgo, as required to be

disclosed under the Act, are set out in Annexure I to this report.

The requirement to spend in this regard is Rs. 324.57 Lakhs ( Previous year Rs. 269.00 Lakhs) @ 2% of 3 years average net profit of the Company and the Company has spent Rs. 330.84 Lakhs (Previous year Rs. 236.95 Lakhs and set off the to the extent of Rs. 32.05 Lakhs out of surplus Rs. 35.00 Lakhs carried forward). The CSR expenditure are into (i) Police Public Park (ii) Animal Protection (iii) Medical Support, (iv) Relief to Poor (v) Rural Development and Works (vi) Education (vii) Cultural Activity and the details of expenditure are furnished in Annexure II to this report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed in Annexure III to this report.

Business Responsibility and Sustainability Report is furnished in Annexure IV and 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 Party Disclosures for the year under review are given as a separate statement in the Annual Report