Ambika Cotton Mills Ltd Directors Report

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Your directors have great pleasure in submitting the Thirty Seventh (37 ) Annual Report together with the audited accounts for the year ended 31st March 2025

FINANCIAL RESULTS

The Financial results for the year ended 31st March 2025 are furnished below:

(Rs. in Lakhs)

	CURRENT YEAR	PREVIOUS YEAR
	2024-25	2023-24
Revenue from Operations & Other Income	72857.81	84621.31
Profit Before Finance Cost and Depreciation	12982.56	13202.03
Less: Finance Cost	1619.73	1907.05
Gross Profit For the Year	11362.83	11294.98
Less : Depreciation	2244.14	2770.33
Profit before Tax	9118.69	8524.65
Less : Tax Expense	2544.53	2227.29
Profit after Tax	6574.16	6297.36
Other Comprehensive income	-54.21	-65.76
Total Comprehensive income for the year	6519.95	6231.60
Add: Opening Balance of retained earnings	62261.02	59033.17
Amount available for appropriation	68780.97	65264.77
Less: Appropriations
Transfer to General Reserve	1000.00	1000.00
Dividend on Equity Shares	2003.75	2003.75
Closing Balance of retained earnings	65777.22	62261.02

PERFORMANCE AND STATE OF AFFAIRS

Company Overview and Operational Highlights

The Company is engaged in the manufacture of cotton yarn and knitted fabrics (i.e) core textile products that serve as essential inputs to the global apparel and textile industry. Our primary raw material, raw cotton, is an agricultural commodity that is both abundantly available and sustainably sourced, domestically and through imports. Given the nature of our inputs and manufacturing processes, our operations present minimal environmental or social risk.

Importantly, the production of cotton yarn and knitted fabrics is a non water intensive process, significantly reducing our ecological footprint. Subsequent processing by downstream users also would require minimum resources depending upon the production activities carried out by the customer, further reinforcing the sustainable nature of our value chain.

Our manufacturing activities fall under the ‘Orange category, as classified by the Tamil Nadu Pollution Control Board, indicating moderate environmental impact. To under score our commitment to sustainable practices, we have obtained several globally recognized certifications, including:

Global Organic Textile Standard (GOTS)

Better Cotton Platform

U.S. Cotton Trust Protocol (USCTP)

OEKO-TEX (Fabric, Recycled Polyester Cotton, Yarn)

Recycled Claim Standard V2.0 (RCS)

Cotton Made in Africa (CMIA)

Forest Stewardship Council (FSC)

Global Recycled Standard V4.0 (GRS)

Organic Content Standard V3.0 (OCS)

Regenagri Content Standard

Sedex

The Company continues to implement initiatives that enhance operational efficiency and resource optimization. Our strategic priorities remain firmly aligned with customer satisfaction, high quality production which serves as a base for attracting niche customers who are aligned with our principles.

RAW MATERIAL SOURCING AND CUSTOMER RELATIONS

The Company sources high quality raw cotton from reputed suppliers across India, USA , Australia , Africa and Egypt ensuring consistency in the quality of our end products. We have earned a strong reputation in the industry for our ethical procurement practices and our steadfast adherence to contract terms and this facilitates us to accept customers tailormade requests for product and delivery schedule with utmost ease , fostering long- standing relationships with clients across geographies.

Owing to our meticulous raw material selection process and proprietary in-house technology, we are able to deliver products which offer a low fall rate in the hands of the downstream garment manufacturers. This quality advantage enhances our customers production efficiency fostering long term business relationships with our Company.

BRAND ENGAGEMENT AND TRACEABILITY INITIATIVES

In response to the growing industry emphasis on traceability, particularly among global brands, the Company has witnessed increased direct engagement from end customers. Leading brands are now extending their sourcing traceability up to the spinner level. In alignment with this trend, the Company is proud to have been approved as a certified spinner by reputed international brands during the year. Furthermore, we are in advanced discussions to sign Memorandums of Understanding (MoUs) for future order commitments, further strengthening our position in the premium textile supply chain.

BUSINESS PERFORMANCE AND MARKET DYNAMICS

Despite prevailing geopolitical uncertainties and fluctuating global demand, the Company sustained a stable performance, underpinned by:

Continued innovation in product development

Consistent adherence to quality standards

Timely fulfilment of committed orders

While the Company continues to uphold exceptional quality standards across its product range, the actual growth achieved during the year fell short of internal projections. This was primarily due to ongoing geopolitical disruptions and global market uncertainties, which impacted demand patterns and supply chain dynamics across key regions.

RENEWABLE ENERGY INITIATIVES

As part of our enduring commitment to sustainability, the Company has made substantial investments in renewable energy infrastructure, comprising Wind power installations with a capacity of 27.4 MW and Rooftop solar installations totalling 8.33 MW.

Together, the Companys renewable energy currently meet approximately 82- 84 % of its total energy requirements. By maximizing the captive use of clean energy, the Company actively contributes to the Clean Development Mechanism (CDM) and supports broader efforts toward global climate change mitigation.

During the financial year, rooftop solar installations generated 8,673,734 kWh, while wind energy exported to the grid totalled 41,010,872.05 kWh. As a result of these renewable energy initiatives, the Company successfully reduced CO emissions by an estimated 35,723.23 tonnes, underscoring its commitment to environmental sustainability.

FINANCIAL HIGHLIGHTS

Particulars	FY 2024 25	FY 2023 24	Change in
	(Rs. in Lakhs)	(Rs. in Lakhs)	(%)
Total Revenue	72,857.81	84,621.31	- 13.90%
Gross Pro t	11,362.83	11,294.98	+ 0.60%

While total revenue saw a year on year decline of 13.90%, the Company recorded a modest 0.60% increase in gross profit, marking a notable recovery from the 38.04% decline recorded in the previous fiscal year. This improvement is a direct result of enhanced operational efficiency and cost control measures.

EXPORT PERFORMANCE

Export turnover during the year stood at Rs.49,545.39 Lakhs, as against Rs.59,330.84 Lakhs in the previous year reflecting a marginal decline of 0.16%, as compared to 0.79% in FY 2023 24. Exports accounted for 72.43% of total turnover, slightly lower than 74.02% in the prior year, reinforcing the Companys strong global market presence.

CAPITAL INVESTMENT AND EXPANSION

In FY 2024 25 the Company invested Rs.2609.78 Lakhs from internal accruals towards enhancing its capacity and infrastructure. The investment was allocated as follows:

Plant and Machinery: Rs.1635.86 Lakhs

Factory Building: Rs.518.75 Lakhs

Capital Work in Progress: Rs.455.17 Lakhs

In addition, the Company is currently executing a project involving the installation of 6048 spindles along with integrated solar power capacity. The estimated project cost of Rs.40.00 Crores is fully funded through internal accruals. The project, expected to be commissioned by September 2025, will specialize in the production of specialty yarns, thereby diversifying our product offering and enhancing value addition as per the changing market scenario.

FINANCIAL STABILITY

The Company remains debt free, with no long term liabilities on its balance sheet. A robust cash position and prudent financial management ensure the availability of adequate liquidity to support both current operations and planned future expansions.

TRANSFER TO RESERVES

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

DIVIDEND

The Board of Directors has recommended payment of dividend for FY 2024-25 as under

Rate of Dividend	Dividend per equity share	Amount of Dividend
	(Rs.)	(Rs.in Lakhs)
370%	37	2118.25

If approved by the members at the Annual General Meeting (AGM) to be held on 27.09.2025, the proposed dividend would result in cash outflow of dividend Rs. 2118.25 Lakhs for FY 2024-25 .The payout ratio of dividend works out to 32.22% (Previous year dividend payout ratio 31.82%)

The Dividend Distribution Policy is placed on the Companys weblinkhttp://www.acmills.in/2021/08/dividend-distribution-policy/ in terms 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.Bhavya Chandran (DIN 02080649) Director, who retires by rotation and being eligible, offers herself for reappointment.

As required in terms of Regulation 17(1A) of SEBI (LODR) Regulations, 2015, a special resolution seeking approval of the members is included in the Notice convening the Annual General Meeting for the continued holding of office by Dr. K. Venkatachalam (DIN 01062171) as non executive director liable to retire by rotation as he would be attaining the age of 75 years.

Mr. N. Subramaniam was appointed as Independent Director by the Board of Directors at the Board Meeting held on 11.02.2025, and the approval of the Shareholders was obtained by way of Special Resolution by means of Postal Ballot on 04.04.2025. However Mr. N.Subramaniam has resigned his directorship w.e.f 18.06.2025 on account of personal reasons and there were no other material reason for his resignation.

The Board wishes to place on record its appreciation for the services rendered by him during his tenure of office

The Board of Directors appointed Dr. T. Bina and Mrs. T.R. Seethalakshmi , Women Independent Directors at the Board Meeting held on 26.03.2025 and special resolution approval by the shareholders was passed through postal ballot on 23.05.2025. In the opinion of the Board both Independent Women Directors carries requisite integrity, expertise and experience.

In terms of Section 149 of the Companies Act, 2013, the Independent Directors of the Company are Sri.E.M. Nagasivam, Mrs. Vijayalakshmi Narendra, Dr. T. Bina and Mrs. T.R. Seethalakshmi.

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

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 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, 2025 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.

MEETINGS OF THE BOARD

The Board held five meetings during the Financial Year 2024- 25 namely, May 25, 2024, August 09, 2024, November 08, 2024, February 11, 2025 and March 26,2025.

DECLARATION BY INDEPENDENT DIRECTORS

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) Further, none of the Independent directors have any pecuniary relationship or transaction with the Company which may affect their independence. The Independent Directors have registered themselves with the Indian Institute of Corporate Affairs (‘IICA). Familiarisation programme of Independent Directors was carried out at Board Meetings. .

MEETING OF INDEPENDENT DIRECTORS:

Independent directors have carried out a separate meeting in accordance with Para VII of Schedule IV of the Companies Act, 2013 and Regulation 25(3) of Listing Regulations,2015.

DEPOSITS:

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.

AUDITORS

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 34thAGM (2022) till the conclusion of 39thAGM (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.

AUDITORS REPORT

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

SECRETARIAL AUDIT

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, 2025 is annexed herewith marked as Annexure V to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark

SECRETARIAL STANDARDS

The Company is in compliance with the Secretarial Standards on Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

COST AUDITOR & COST AUDIT REPORT

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

INTERNAL FINANCIAL CONTROLS

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.

AUDIT COMMITTEE

The Committee now comprises of Directors Mrs. Vijayalakshmi Narendra, Sri.E.M. Nagasivam and Mrs .Vidya Jyothish Pillai.

PROHIBITION OF INSIDER TRADING

In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has, inter-alia, adopted a Code of Conduct for Prohibition of Insider Trading, Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (Code) duly approved by the Board of Directors of the Company. The Code of conduct are posted on the Companys website under web link at https://www.acmills.in/wp-content/uploads/2016/07/insiderpol.pdf and https://www.acmills.in/wp-content/uploads/2016/08/Code.pdf

VIGIL MECHANISM /WHISTLE BLOWER POLICY

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 Companys website www.acmills.in & under web-link https://www.acmills.in/2015/03/whistle-blower/

CORPORATE SOCIAL RESPONSIBILITY POLICY

The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) in compliance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, 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 Companys website www.acmills.in & under web- link https://www.acmills.in/2016/08/csr-policy/ The Corporate Social Responsibility Committee consists of Directors Sri. P.V. Chandran, Dr.K. Venkatachalam, Mrs. Bhavya Chandran and Sri. E.M.Nagasivam as members of the committee. The Committee held two meetings during the financial year 2024-25 namely May 25, 2024 and August 09, 2024 .

CSR EXPENDITURE

The requirement to spend in this regard is Rs. 321.14 Lakhs ( Previous year Rs. 324.57 Lakhs) @ 2% of 3 years average net profit of the Company and the Company has spent Rs. 325.52 Lakhs (Previous year Rs. 330.84 Lakhs). The CSR expenditure are into (i) Public Library, (ii) Restoration of Noyyal River (iii) Animal Protection (iv) Medical Support, (v) Relief to Poor (vi) Rural Development and Works (vii) Education (viii) Cultural Activity and the details of expenditure are furnished in Annexure II to this report.

NOMINATION AND REMUNERATION POLICY

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 Companys website www.acmills.in under web-link https://www.acmills.in/2025/04/nomination-and-remuneration-policy/

Nomination and Remuneration Committee presently consists of Directors, Sri. E.M.Nagasivam, Mrs. Vijayalakshmi Narendra and Mrs. Bhavya Chandran.

RISK MANAGEMENT POLICY

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 https://www.acmills.in/2016/07/risk-management-policy/. The Risk Management Committee consists of Directors Sri.P.V.Chandran, Dr.K.Venkatachalam, Mrs. Vidya Jyothish Pillai and Sri. E.M. Nagasivam.

STAKEHOLDERS RELATIONSHIP POLICY

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

CHANGE IN APPOINTMENT OF KEY MANAGERIAL PERSONNEL

There is no change in 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 would impact 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 provided any security in connection with a loan to any person or body corporate, as defined under Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

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.

MATERIAL CHANGES AND COMMITMENTS

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

st

the end of the financial year 31 March, 2025 to which the 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 as prescribed in Rule 8(ii) of the Companies (Accounts) Rules, 2014.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

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 Internal Committee has been setup to redress the complaints received on the sexual harassment. All employees of the Company are covered under this policy. The details of complaints received and disposed off during the financial year 2024-25 are as follows:

Sl.No	Particulars	Remarks
a.	Number of complaints of sexual harassment received in the year	Nil
b.	Number of complaints disposed off during the year	Nil
c.	Number of cases pending for more than ninety days	Nil

MATERNITY BENEFIT COMPLIANCE STATEMENT

Pursuant to Rule 8(5)(xiii) of the Companies (Accounts) Rules, 2014 (as amended), the Company confirms compliance with the provisions of the Maternity Benefit Act, 1961.

All eligible women employees are provided paid maternity leave, nursing breaks, and applicable creche facilities. The Company ensures protection against termination during maternity leave and updates relevant policies regularly. There were no complaints or violations reported during the year under review.

BOARD EVALUATION

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 time lines of flow of information between the Company management and the Board for effective and reasonable performance of its duties.

ANNUAL RETURN

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

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNING AND OUTGO

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.

PARTICULARS OF EMPLOYEES:

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.

ADDITIONAL DISCLOSURES PURSUANT TO SEBI REGULATIONS

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

	By order of the Board
	Sd/-
	(P.V.CHANDRAN)
Place : Coimbatore	Chairman and Managing Director
Date : 08.08.2025	(DIN : 00628479)