AMBIKA COTTON MILLS LIMITED

ANNUAL REPORT
2016 - 2017
 AMBIKA COTTON MILLS LIMITED
CIN No.L17115TZ1988PLC002269
website – www.acmills.in, Email –id – [email protected]

ANNUAL REPORT 2016 - 2017

BOARD OF DIRECTORS Sri. P.V. Chandran (DIN : 00628479)

Sri. K.N. Sreedharan (DIN : 00321585)
Dr. K. Venkatachalam (DIN : 01062171)
Sri. R. Soundararaja Perumal (DIN : 02087219)
(Upto 26.03.2017)
Sri.E.M. Nagasivam (DIN : 07894618)
(From 12.08.2017)
Mrs. Bhavya Chandran (DIN : 02080649)
Mrs. Vidya Jyothish Pillai (DIN : 05215930)

REGISTERED OFFICE 9A, Valluvar Street

Sivanandha Colony
Coimbatore - 641 012.

PLANT Kanniyapuram
Dindigul - 624 308.

AUDITORS L. Venkatasubbu & Co., (Upto conclusion of 29th AGM)

Chartered Accountants,
Coimbatore - 641 001.

Srikishen & Co., (From conclusion of 29th AGM)

Chartered Accountants,
Coimbatore-641 006.

BANKERS IDBI Bank Ltd.

Axis Bank Ltd.
HDFC Bank Ltd.
Kotak Mahindra Bank Ltd.
ICICI Bank Ltd.
State Bank of India
AMBIKA COTTON MILLS LIMITED
Registered Office : No.9 A , Valluvar Street, Sivanandha Colony, Coimbatore - 641 012.
CIN No.L17115TZ1988PLC002269
website – www.acmills.in, Email –id – [email protected]

DIRECTORS’ REPORT

Your directors have great pleasure in submitting the Twenty Ninth Annual Report together 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 (Previous year Rs. 49408.24 Lakhs) and Rs.
10128.92 Lakhs (Previous year Rs. 8887.67 Lakhs). This represents growth of 7.15% in total income as compared to 0.35%
decline in the previous year and growth of 13.97% in Gross Profit as against decline of 4.53% in the previous year.

For the year Company's Direct Export Turnover amounted to Rs. 24965.35 Lakhs as compared 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
constituted 48.39% of the net sales as against 53.71% in the previous year.

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

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AMBIKA COTTON MILLS LIMITED
DIRECTORS’ REPORT (Contd...)

During the year the Company has invested Rs.1752 Lakhs towards strengthening of its manufacturing operations of spinning
segment and has invested Rs.1007 Lakhs in Knitting segment. This knitting facility would knit fabrics upto 8,000 kgs per day as
of now and 90% of the output is exported. This total investment of Rs.2759 Lakhs was fully met out of internal accruals.
The Company is not carrying any long term debt.
The implementation of spinning phase is still pending on account of uncertainty of use of land and appropriate clearance from
authorities. However, the Company has planed to invest further an estimated amount of Rs. 2000 Lakhs in Knitting segment, to
augment the knitting capacity further 16,000 Kgs per day. The investment will be made out of internal accruals.

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 Company has not recommended any dividend in view of transit to IND AS as dividend declared is not recognized as a
liability until approved by the shareholders. However, the Company would consider and pay interim dividend in such a way
that the stream of cash flow in 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 the buyback of equity shares of the Company in
accordance with Section 68 of the Companies Act,2013 and SEBI ( Buyback of Securities ) Regulations ,1998 and the buyback
announcement was made on 22nd November,2016. The Company, as proposed , has bought back through Stock Exchanges,
150000 Equity Shares of Rs. 10/- each ,which have been extinguished subsequently.

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 cost Rs.38.30 Lakhs.

In terms of Section 69 of the Companies Act,2013, Rs.15.00 Lakhs being the nominal value of Equity Shares bought back was
transferred to Capital Redemption Reserve Account from Share Premium account and the balance cost of buyback Rs.1596.52
Lakhs was also met out of Share Premium Reserve .

DIRECTORS
In terms of requirement of Section 149 of the Companies Act, 2013, the Independent Directors 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 the Board wishes to place on record its
appreciation for services rendered during his tenure of office.
Sri.E.M.Nagasivam was co-opted as an independent director of the Company by the Board Directors of Company at the meeting
held on 12.08.2017 on the recommendation of Nomination and Remuneration Committee.
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.

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, 2017 and of the profit of the
Company for the year ended on that date;
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AMBIKA COTTON MILLS LIMITED
DIRECTORS’ REPORT (Contd...)

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

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).

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
The Statutory Auditor, M/s L.Venkatasubbu & Co., Chartered Accountants, have already completed more than ten years as
statutory Auditors of the Company. Accordingly, as per section 139 of the Companies Act, 2013, M/s. L.Venkatasubbu & Co.,
will cease to be the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting . Hence, the
Board, based on the recommendation of the Audit Committee, proposes the appointment of Sri Kishen & Co., Chartered
Accountants, ICAI Registration No.004009S as the Statutory auditors for a continues period of five years from the conclusion of
29th AGM till the conclusion of 34th AGM subject to approval of share holders .

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

AUDITORS' REPORT
The Auditors' Report to the Shareholders does not contain any reservation, qualification or adverse remark.

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.S.R.Balaaji,Practising Company Secretary to undertake the
Secretarial Audit of the Company.

The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as Annexure A to this
Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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AMBIKA COTTON MILLS LIMITED
DIRECTORS’ REPORT (Contd...)

COST AUDITOR AND 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.

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

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 Company's website www.acmills.in

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

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.

NOMINATION AND REMUNERATION COMMITTEE

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

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.

RISK MANAGEMENT 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.

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AMBIKA COTTON MILLS LIMITED
DIRECTORS’ REPORT (Contd...)

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 for early resolution of stakeholders' grievances and the same is made
available in the company'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 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
the end of the financial year March 31,2017 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.

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 timelines of flow of
information between the Company management and the Board for effective 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 annexed herewith as Annexure – I.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNING AND OUT GO
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 – II to this report.

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AMBIKA COTTON MILLS LIMITED
DIRECTORS’ REPORT (Contd...)

CSR EXPENDITURE
The requirement to spend in this regard is Rs.121.59 Lakhs( Previous year Rs. 109.38 Lakhs) @ 2% of 3 years average net profit of
the Company and the Company has spent Rs.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 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 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 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)
DATE : 12/08/2017 Chairman and Managing Director
PLACE : Coimbatore (DIN : 00628479)

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT

ANNEXURE -I

FORM NO. MGT - 9

Extract of Annual Return

As on the financial year ended on 31.03.2017

[ Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the
Companies (Management and Administration) Rules, 2014 ]

I. Registration and other details :

(i) CIN L17115TZ1988PLC002269

(ii) Registration Date 06.10.1988

(iii) Name of the Company Ambika Cotton Mills Limited

(iv) Category/Sub-Category of the Company Public Company limited by shares

(v) Address of the Registered office and contact details No.9A, Valluvar Street,
Sivanandha Colony, Coimbatore - 641012
Phone : +91 422 2491504,
E-mail : [email protected]

(vi) Whether listed company Yes

(vii) Name, Address and Contact details M/s. S.K.D.C. Consultants Limited,
of Registrar and Transfer Agent, if any Kanapathy Towers, 3rd Floor,
1391/A-1, Sathy Road, Ganapathy Post,
Coimbatore - 641 006.
Phone: +91 422 4958995, 2539835
Email: [email protected]

II. Principal business activities of the company

All the business activities contributing 10% or more of the total turnover of the company shall be stated:

S.No Name and Description of NIC Code of the % to total turnover

main products/services Product/service of the company

1 Cotton Yarn 5205 88.58

III. Particulars of holding, subsidiary and associate companies

S.No Name and CIN/GLN Holding /

Address of Subsidiary / % of shares Applicable
the Company Associate held Section

——NA—-

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE -I (Contd...)
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category- wise Share holding
No. of Shares held at the No. of Shares held at the % Change
Category of
end of the year during
Shareholders Beginning of the year
the year*
Demat Phy- Total % of Demat Phy- Total % of
sical Total sical Total
shares shares
A.Promoters
(1) Indian
a) Individuals/Hindu
Undivided Family 2857100 0 2857100 48.631 2857100 0 2857100 49.906 1.275
b) Central Government/
State Government(s) - - - - - - - - -
c) Bodies Corporate - - - - - - - - -
d) Financial
Institutions/Banks - - - - - - - - -
e) Any Others(Specify) - - - - - - - -
Trusts - - - - - - - - -
Sub Total(A)(1) 2857100 0 2857100 48.631 2857100 0 2857100 49.906 1.275
(2)Foreign
a) Individuals
(Non-Residents
Individuals/
Foreign Individuals) - - - - - - - - -
b) Bodies Corporate - - - - - - - - -
c) Institutions - - - - - - - - -
d) Qualified Foreign
Investor - - - - - - - - -
e) Any Others(Specify) - - - - - - - - -
Sub Total(A)(2) - - - - - - - - -
Total Shareholding
of Promoter and
Promoter Group
(A)= (A)(1)+(A)(2) 2857100 0 2857100 48.631 2857100 0 2857100 49.906 1.275
* - Consequent to reduction of capital by way of buyback of shares
B. Public
shareholding
(1)Institutions
a) Mutual Funds/UTI 1529 0 1529 0.026 1738 0 1738 0.030 0.004
b) Financial
Institutions /Banks 972 0 972 0.017 3109 0 3109 0.054 0.037
c) Central Government/
State Government(s) - - - - - - - - -
d) Venture Capital
Funds - - - - - - - - -
e) Insurance Companies - - - - - - - - -
f) Foreign Institutional
Investors 81505 0 81505 1.387 19736 0 19736 0.345 -1.042

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)

Category of No. of Shares held at the No. of Shares held at the % Change
Shareholders Beginning of the year end of the year during
the year
Demat Phy- Total % of Demat Phy- Total % of
sical Total sical Total
shares shares
g) Foreign Venture
Capital Investors
h) Qualified Foreign
Investor
i) Any Other (specify)
Foreign
Portfolio
Investment -
Corporate 152991 0 152991 2.604 228916 0 228916 3.999 1.395
Sub-Total (B)(1) 236997 0 236997 4.034 253499 0 253499 4.428 0.394
(2)Non-institutions
a) Bodies Corporate
i) Indian 939227 20033 959260 16.328 859347 20033 879380 15.360 -0.968
ii) Overseas
b) Individuals
i) Individual share-
holders holding
nominal share
capital upto
Rs 1 lakh 1093673 44583 1138256 19.375 1090701 41843 1132544 19.782 0.407
ii) Individual share-
holders holding
nominal share
capital in excess
of Rs. 1 lakh 516826 0 516826 8.797 432625 0 432625 7.557 -1.240
c) Others (specify)
Directors & their
relatives 0 100 100 0.002 0 100 100 0.002 0.000
Non resident Indians 79441 0 79441 1.352 93500 0 93500 1.633 0.281
Clearing members 15699 0 15699 0.267 16910 0 16910 0.295 0.028
Hindu Undivided
family 70921 0 70921 1.207 59341 0 59341 1.037 -0.170
Trust 400 0 400 0.007 1 0 1 0.000 -0.007

Sub-Total (B)(2) 2716187 64716 2780903 47.335 2552425 61976 2614401 45.666 -1.669
Total Public
Shareholding
(B)= (B)(1)+(B)(2) 2953184 64716 3017900 51.369 2805924 61976 2867900 50.094 -1.275

C.Shares held by
Custodian for GDRs &
ADRs (C)
GRAND TOTAL
(A)+(B)+(C) 5810284 64716 5875000 100.000 5663024 61976 5725000 100.000 0.000

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
(ii) Shareholding of Promoters
% Change in
S. Shareholder’s Shareholding at the Shareholding
share holding
No Name beginning of the year at the end of the year
during the year
No of % of %of No of % of % of
Shares total Shares Shares total Shares
shares Pledged/ shares Pledged/
of the encum- of the encumber
Company bered Company -ed to
to total total
shares shares

1 Mrs.C.Bhavani (Spouse
of Sri.P.V.Chandran) 2272566 38.681 0 2272566 39.695 0 1.014

2 Sri.P.V.Chandran 584534 9.950 0 584534 10.210 0 0.260

Total 2857100 48.631 0 2857100 49.905 0 1.274

(iii) Change in Promoters’ Shareholding (please specify, if there is no change).

Shareholding at the Cumulative Shareholding

beginning of the year during the year

S. % of total % of total
No No of shares of the No of shares of the
Shares Company Shares Company

At the beginning of the year 2857100 48.631 - -

Date wise Increase /Decrease in

Promoters Share holding during
There is no change in the promoters share
the year specifying the reasons for
increase /decrease (e.g. allotment / holding during the year
transfer /bonus/ sweat equity etc):

At the end of the year 2857100 48.631 2857100 49.905

Note : The year end increase in % of Share holding is on account of reduction in no of equity shares on consequent
to buyback

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs
and ADRs):

Shareholding at the Shareholding at the

beginning of the year end of the year
S. For Each of the
No Top 10 Shareholders % of total % of total
No of shares of the No of shares of the
Shares Company Shares Company*

1 Catamaran Advisors LLP (Previous Catamaran

Management Services Private Limited ) 240305 4.090 240305 4.197

2 Value Quest India Moat Fund Limited 142801 2.431 221150 3.863

3 Apple Finance Limited 180233 3.068 180233 3.148

4 Karvansarai Travel & Lifestyle Private limited 0 0 132052 2.307

5 VLS Finance Limited 100000 1.702 100000 1.747

6 Ajai Hari Dalmia 81325 1.384 76941 1.344

7 Saffron Agencies Limited 98598 1.678 66497 1.162

8 Kishan Gopal Motha 4500 0.079 31200 0.544

9 Narendra D Lodaya 35206 0.600 22745 0.397

10 Angel Holdings Pvt Ltd 34325 0.584 34325 0.584

11 Eicher Good earth Private Limited 130093 2.214 0 0

12 Morgan Stanley Asia(Singapore) PTE 57923 0.986 0 0

* No of equity shares for calculation of above % 5875000 5725000

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
(v) Shareholding of Directors and Key Managerial Personnel :
Shareholding at the Cumulative Shareholding %
beginning of the year during the year Change
S. in share
No For each of the Directors and KMP
No of % of total No of % of total holding
Shares shares of the Shares shares of the during
Company Company the year
1 Sri P.V.Chandran (Chairman
and Managing Director / Promoter
Executive )
At the beginning of the year 584534 9.950 - - 0.260
Date wise Increase / Decrease in Share
holding during the year specifying the
reasons for increase / decrease
(e.g. allotment / transfer / bonus/
sweat equity etc): - - - - -

At the end of the year 584534 9.950 584534 10.210 0.260

2 Dr. K. Venkatachalam
(Independent Director/Non- Executive)
At the beginning of the year 100 0.002 - - -
Date wise Increase / Decrease in
Share holding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus/
sweat equity etc): - - - - -

At the end of the year 100 0.002 100 0.002 0.000

3 Sri. Radhe Shyam Padia

(Company Secretary)
At the beginning of the year 31500 0.536 - - -
Date wise Increase / Decrease in
Share holding during the year specifying
the reasons for increase / decrease
(e.g. allotment / transfer / bonus/
sweat equity etc): - - - - -

At the end of the year 31500 0.536 31500 0.550 0.014

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
(V) Indebtedness
Indebtedness of the Company including interest outstanding /accrued but not due for payment
(Rs. in Lakhs)
Secured Loans Unsecured Total
excluding Loans Deposits Indebtedness

Indebtedness at the
beginning of the
financial
year
(i) Principal
Amount 1970.86 0 0 1970.86
(ii) Interest due but
not paid 0 0 0 0
(iii) Interest
accrued
but not due 0 0 0 0
Total( i+ii+iii) 1970.86 0 0 1970.86
Change in
Indebtedness during
the financial year
Addition 0 0 0 0
Reduction 1222.21 0 0 1222.21
Net Change (-) 1222.21 0 0 (-) 1222.21
Indebtedness at the
end of the
financial year
(i) Principal
Amount 748.65 0 0 748.65
(ii) Interest due but
not paid 0 0 0 0
(iii) Interest accrued
but not due 0 0 0 0

Total (i+ii+iii) 748.65 0 0 748.65

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AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
(VI) Remuneration of Directors and Key Managerial Personnel:
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(Rs. in Lakhs)

S. Name of MD / WTD /
Particulars of remuneration Manager Total Amount
No
P.V.Chandran
1 Gross salary
(a) Salary as per provisions
contained in section 17(1)
of the Income Tax Act, 1961. 24.00 24.00
(b) Value of perquisites under
section 17(2) Income Tax Act, 1961 0 0
(c) Profits in lieu of salary under section 17(3)
Income Tax Act, 1961 0 0
2 Stock Option 0 0

3 Sweat Equity 0 0
4 Commission
- as % of profit 0 0
- others, specify 0 0
5 Others, please specify 0 0
Sitting Fees 0.60 0.60
Total (A) 24.60 24.60
Ceiling as per the Act 360.90 360.90

14
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
B. Remuneration to other Directors (Rs. in Lakhs)

Name of Directors
S. Particulars of Sri.R. Mrs.Vidya Total
No Sri.K.N. Dr.K. Soundararaja Mrs.Bhavya Jyothish
remuneration Amount
Sreedharan Venkatachalam perumal Chandran
Pillai
1 Independent Directors
Fee for attending board
committee meetings 1.20 1.20 0.90 -- -- 3.30
Commission 0 0 0 -- -- 0
Others,please specify 0 0 0 -- -- 0
Total (1) 1.20 1.20 0.90 3.30
2 Other Non-Executive
Directors -- -- -- -- -- --
Fee for attending board
committee meetings -- -- -- 0.60 0.60 1.20
Commission -- -- -- -- -- --
3 Others, please specify -- -- -- -- -- --
Total (2) -- --- --- 0.60 0.60 1.20
Total (B)=(1+2) 1.20 1.20 0.90 0.60 0.60 4.50
Total Managerial
Remuneration 29.10
Overall Ceiling
as per the Act 793.99

C. Remuneration to key managerial personnel other than MD/Manager/WTD (Rs. in Lakhs)

S. Particulars of Key Managerial Personnel

No remuneration
CEO CS CFO Total
1. Gross Salary
(a) Salary as per provisions contained in
section 17(1) of the Income Tax Act, 1961 0 6.00 5.53 11.53
(b) Value of perquisites under section 17(2)
Income Tax Act, 1961 - - - -
(c) Profits in lieu of salary under
section 17(3) Income Tax Act, 1961 - - - -
Others please specify
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission - - - -
as % of profit - - - -
others, specify
5 others, Please specify 0 6.00 5.53 11.53

15
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE -I (Contd...)
VII. Penalties / Punishment / Compounding of Offences :
Details of Penalty
Section Authority Appeal
Brief / Punishment/
Type of the [RD/NCLT made, if any
Description Compounding
Companies Act /COURT] ( Give Details )
fees imposed

A. COMPANY
Penalty
Punishment Nil
Compounding
B. DIRECTORS
Penalty
Punishment Nil
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment Nil
Compounding

ANNEXURE - II
Information as required under Rule 8(3) of the Companies (Accounts) Rules,2014.
A. CONSERVATION OF ENERGY
i) the steps taken or impact on conservation of energy:-
Usage of Energy is constantly monitored and the need to conserve the same is emphasized.
ii) the steps taken by the Company for utilizing alternative sources of energy:-
The Company has installed 27.4 MW of wind energy capacity for captive consumption. This would meet
100% power requirement of the spinning segment.
iii) the capital investment on energy conservation equipments. :- Nil
B. TECHNOLOGY ABSORPTION
i) the efforts made towards technology absorption :- Indigenous Technology alone is used.
ii) the benefits derived like product improvement , cost reduction , product development or import substitution -
Certain plant & machinery such as auto corner and compact systems are imported to facilitate for product
improvement & development which has facilitated exports of products.
iii) In case of imported technology ( imported during the last three years reckoned from the beginning of the
financial year):-
a) the details of technology imported : Nil

b) the year of import : NA

c) Whether the technology been fully absorbed : NA

16
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)

ANNEXURE - II (Contd...)
d) if not fully absorbed , areas where absorption has
not taken place and the reasons there of ; and : NA
iv) the expenditure incurred on Research and Development : Not quantified

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign Exchange earned in terms of actual inflows during the year and Foreign Exchange outgo during the
year in terms of actual outflows.
[Rs in Lakhs]
Foreign Exchange earned (inflow) 29831.24
Foreign Exchange used (outflow) 25184.49

ANNEXURE - III
Information as required under Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.

ANNUAL REPORT ON CSR ACTIVITIES

i. A brief outline of the company's CSR policy, including overview of projects or programs proposed to be undertaken and a
reference to the web-link to the CSR policy and projects or programs:
The CSR policy of the Company is to undertake and implement the projects /programs as specified in Schedule- VII of the
Companies Act, 2013.The details of the CSR policy of the Company are made available in the Company's website
www.acmills.in
ii. The composition of the CSR committee:
1. Sri. P.V.Chandran, Chairman and Managing Director
2. Dr. K. Venkatachalam, Independent Director
3. Sri. R. Soundararajaperumal, Independent Director (upto dt : 26.03.2017)
4. Mrs. Bhavya Chandran, (with effect from 27.05.2017)
iii. Average net profit of the company for last three financial years
(Amount Rs in Lakhs) : 6079.27
iv. Prescribed CSR Expenditure (two percent. of the amount as in item 3 above)
(Amount Rs in Lakhs) : 121.59
v. Details of CSR spent during the financial year.
(1) The amount to be spent for the F.Y 2016-17 (Amount Rs in Lakhs) : 121.59
(2) Amount unspent, if any (Amount Rs in Lakhs) : 0.00

17
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE - III (Contd...)
(3) Manner in which the amount spent during the financial year is detailed below (Rs. in Lakhs)
(1) (2) (3) (4) (5) (6) (7) (8)
S.No CSR Project Sector in Projects or Amount Amount Cumulative *Amount
or activity which the Programs outlay spent on expenditure Spent :
identified project is 1. Local Area (budget) projects or up to the Direct or
covered or Other project or programs reporting through
2. Specify programs sub-heads period implementing
The State wise 1. Direct agency
And District expenditure
Where Projects on projects
Or Programs or programs.
Were 2. Overheads
Undertaken
1. Childrens Education Local area
Traffic Park Coimbatore
Tamilnadu 45.18
2 Animal Animal Local area
Protection Protection Dindigul, 13.78
Tamilnadu
3 Water Supply Relief to Poor Local area
Dindigul, 14.11
Tamilnadu
Direct
4 Relief to Poor Relief to Poor Local area expenditure
121.59
Dindigul, 38.07 Direct
on projects /
Tamilnadu
overheads
5 Public Toilets Rural Local area
Development Dindigul, 10.13
Tamilnadu
6 School Education Local area
Upgradation Dindigul, 0.25
Tamilnadu
7 Relief to Poor Relief to Poor Local area Through Indian
Coimbatore 1.50 Red Cross Society
Tamilnadu
Total 121.59 123.02
*Details of implementing Agency
vi. In case the Company fails to spend the 2% of the Average Net Profit (INR) of the last 3 financial years, the reasons for not
spending the amount shall be stated in the Board report. - NA
vii. Responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy is in compliance
with CSR objectives and Policy of the Company duly signed by Director and Chairperson of the CSR Committee.
It is confirmed that the CSR projects are implemented in accordance with CSR objective and policy of the Company.

Sd/- Sd/-
P.V. Chandran Dr. K. Venkatachalam
Chairman and Managing Director Independent Director
(DIN : 00628479) (DIN : 01062171)

Date : 12/08/2017
Place : Coimbatore
18
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE - IV
Statement as per Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014
(i) The percentage increase in remuneration of each Director , Company Secretary and Chief Financial Officer ( CFO) , ratio of
the remuneration of each director to the median remuneration of the employees of the Company for the financial year
2016-2017

S.No Name of the Director/ KMP Remuneration of Director/ % increase in Ratio of Remuneration
and Designation KMP for financial year Remuneration in of each Director to
2016-17 the Financial year median remuneration
(Rs. in Lakhs) 2016-17 of employees
1 Sri.P.V.Chandran,
Chairman and Managing Director 24.60 -- 39.85:1
2 Sri. K.N.Sreedharan,
Non- Executive - Independent 1.20 -- 1.94:1
3 Dr.K.Venkatachalam,
Non- Executive - Independent 1.20 -- 1.94:1
4 Sri.R.Soundararajaperumal,
Non- Executive - Independent 0.90 -- 1.46:1
5 Mrs.Bhavya Chandran,
Non- Executive - Promoter group 0.60 -- 0.97:1
6 Mrs.Vidya Jyothish Pillai,
Non- Executive - Promoter group 0.60 -- 0.97:1
7 Sri. Radheshyam Padia,
Company Secretary 6.00 -- 9.72:1

8 Sri. M.Vijayakumar, CFO 5.53 NA 8.96:1

(ii) The percentage increase in the median remuneration of the employees in the financial year : -3.92 %
(iii) The number of permanent employees on the rolls of Company: 2149
(iv) The explanation on the relationship between average increase in remuneration and company performance: The Profit after
Tax for FY 2016-17 amounted to Rs.5565.03 Lakhs as compared to Rs. 4445.52 Lakhs for FY 2015-16, an increase of 25.18%
whereas increase in employees' remuneration is 2.87%
(v) Comparison of remuneration of the Key Managerial Personnel against the performance of the Company : The Profit after
Tax for FY 2016-17 increased 25.18% as compared to FY 2015-16, whereas increase in Key Managerial Personnel
remuneration is 2.73%.
(vi) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial
year and previous financial year :

Particulars 31.03.2017 31.03.2016

Market capitalization of the Company (Rs. in Crores) 746.97 471.47
Issued Capital ( in Nos) 57,25,000 58,75,000
Closing Price at NSE ( in Rs. ) 1,304.75 802.50
Price Earnings Ratio at the closing date 13.68 10.61

Note: Percentage Increase over decrease in market quotations of the shares of the company with the last public offer : The last
offer for sale of shares was made in the year 1996 and hence not comparable .

19
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE - IV (Contd...)
(vii) Percentage increase in the salaries of employees other than the Key Managerial Personnel ( KMP ) as compared to
percentage increase in the KMP remuneration in the last financial year i.e 2016-17 : The increase in remuneration is 2.87 %
for employees other than KMP while it is 2.73 % for KMP .

(viii) The Key parameters for any variable component of the remuneration availed by the Directors: There are no variable
component in the Managerial Remuneration.

(ix) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive
remuneration in excess of the highest paid director during the year :- None and

(x) Affirmation that the remuneration is as per the remuneration policy of the Company: Yes .

ANNEXURE - A

FORM NO. MR-3

SECRETARIAL AUDIT REPORT
st
For The Financial Year Ended 31 March, 2017
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,

The Members,

M/s. Ambika Cotton Mills Limited (CIN : L17115TZ1988PLC002269)

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by M/s. Ambika Cotton Mills Limited (hereinafter called the company). Secretarial Audit was conducted in a manner
that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion
thereon.

Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained
by the company and also the information provided by the Company, its officers, agents and authorized representatives during
the conduct of Secretarial Audit, I hereby report that in my opinion, the company has during the audit period covering the
Financial Year ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company
has proper Board- processes and compliances-mechanism in place to the extent, in the manner and subject to the reporting made
hereinafter: The members are requested to read this report along with my letter of even date annexed to this report.

20
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE - A - SECRETARIAL AUDIT REPORT (Contd...)
I have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s. Ambika Cotton
Mills Limited (the Company) for the Financial Year ended on 31st March, 2017 according to the applicable provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made there under;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct
Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
('SEBI Act'):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
Not applicable as the Company has not issued or allotted shares during the financial year under review.
d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
Not applicable as the Company has not issued or allotted shares to its employees during the financial year under review.
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
Not applicable as the Company has not issued Debt Securities during the financial year under review.
f. The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
Not applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial
year under review.
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and
Not applicable as the Company has not delisted its equity shares from any stock exchange during the financial year review

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

(vi). The management has identified and confirmed the following laws as specifically applicable to the company.

1. National Textile Policy, 2000

2. The Textiles Committee Act, 1963
3. Cotton Control Order, 1986
4. Cotton Control (Amendment) Orders, 1987
5. Cotton Control (Amendment) Orders, 1994
6. Indian Standard specification for Cotton Bales
7. Textiles (Development and Regulation) Order, 2001
8. Essential Commodities Act 1955, with reference to "Hank Yarn Packing Notification 2003"
(No.2/TDRO/8/2003 dated 17th April, 2003); and
9. The Electricity Act, 2003

I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards with regard to Meeting of Board of Directors (SS-1) and General Meetings (SS-2) issued by
The Institute of Company Secretaries of India.
(ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

21
AMBIKA COTTON MILLS LIMITED
ANNEXURE TO DIRECTORS’ REPORT (Contd...)
ANNEXURE - A - SECRETARIAL AUDIT REPORT (Contd...)
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,
Standards, etc. mentioned above.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executive Directors
and Independent Directors. The Board also has women directors.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least
seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items
before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views are captured and recorded as part of the minutes.
I further report that based on review of compliance mechanism established by the company and on the basis of the compliance
certificate(s) issued by the company secretary of the company and taken on record by the Board of Directors at their meeting(s), I
am of the opinion that there are adequate systems and processes in place in the company which is commensurate with the size
and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines;

Name of Company Secretary in Practice S.R. Baalaji

Date : 27/05/2017 FCS NO. 5966
Place : Coimbatore C P NO. 3514

ANNEXURE TO SECRETARIAL AUDIT REPORT OF EVEN DATE

To
The Members,
M/s. Ambika Cotton Mills Limited (CIN : L17115TZ1988PLC002269)
My Secretarial Audit Report of even date is to be read along with this letter.
Management's Responsibility
1. It is the responsibility of the management of the company to maintain secretarial records, device proper systems to ensure
compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and
operate effectively.
Auditor's Responsibility
2. My responsibility is to express an opinion on these secretarial records, standards and procedures followed by the company
with respect to secretarial compliances.
3. I believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us
to provide a basis of our opinion.
4. Wherever required, I have obtained the management's representation about the compliance of laws, rules and regulations
and happening of events etc.
5. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
Disclaimer
6. My Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.

Name of Company Secretary in Practice S.R. Baalaji

Date : 27/05/2017 FCS NO. 5966
Place : Coimbatore C P NO. 3514

22
AMBIKA COTTON MILLS LIMITED
ADDITIONAL DISCLOSURES PURSUANT TO SEBI REGULATIONS

Additional Disclosures pursuant to Regulations(34)(3) and 53(f) of SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015)
A. RELATED PARTY TRANSACTIONS
Disclosure in terms of Accounting Standard -18 (AS-18) for Related Party transactions.

Key Management Personnel Sri P.V.Chandran

Relatives of Key Management Personnel Mrs.Vidya Jyothish Pillai

(Daughter of Sri.P.V.Chandran)

Mrs. Bhavya Chandran

(Daughter of Sri.P.V.Chandran)

(Rs in Lakhs)
Nature of Transactions Salary Director Total Balance Payable
Sitting Fees as at 31.03.2017

Short term Employee benefits to

Sri.P.V.Chandran 24.00 0.60 24.60 1.98

Ms.Vidya Jyothish Pillai - 0.60 0.60 -

Ms. Bhavya Chandran - 0.60 0.60 -

Notes : 1. Remuneration to Sri.P.V.Chandran was approved by the shareholders at the 28th Annual General Meeting held
on 23.09.2016 pursuant to Section 197 of the Companies Act ,2013
2. The Sitting fees to Directors are approve by the Board of Directors at their Meeting held on 30.05.2011
3. The above transactions are not related party transactions as defined in Companies Act ,2013.

B. MANAGEMENT DISCUSSION AND ANALYSIS

1. Industry Structure and Developments
India's textiles sector is one of the oldest industries in Indian economy and one of the largest contributors to India's exports with
approximately 11 per cent of total exports. The textile industry has two broad segments. First, the unorganised sector consists of
handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The
second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and
techniques such as economies of scale. The Indian textiles industry is extremely varied, with the hand-spun and hand woven
textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum.

The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage
of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in
terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile
industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and
across the world. The textiles industry is also labour intensive and employs large number of persons.

The fundamental strength of the textile industry in India is its strong production base of wide range of fibre/yarns from natural
fibres like cotton, jute, silk and wool to synthetic /man-made fibres like polyester, viscose, nylon and acrylic

23
AMBIKA COTTON MILLS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS (Contd.)

2. Opportunities and Threats

Cotton yarn accounts for the largest share in total yarn production; India's growing population has been a key driver of textile
consumption growth in the country. It has been complemented by a young population which is growing and at the same time is
exposed to changing tastes and fashion. Rising incomes has been a key determinant of domestic demand for the sector; with
incomes rising in the rural economy as well, the upward push on demand from the income side is set to continue. The Indian
textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. Urbanization is
expected to support higher growth due to change in fashion and trends. Complementing this factor is rising female workforce
participation in the Country.

Ministry of Textiles is encouraging investments through increasing focus on schemes such as Technology Up-gradation Fund
Scheme (TUFS) and cluster development activities TUFS for the textile sector to continue in the 12th Five Year plan with an
investment target of USD24.8 billion.

3. Segment Wise Performance

The Contribution of Spinning segment and wind energy (captive power for spinning segment) are as under.

(Rs. in Lakhs)
Segment FY 2016-17 FY 2015-16
Spinning 5757 5657
Wind Energy 1743 583

The improved performance of wind energy and sustained performance of spinning segment has contributed to overall financial
performance of the Company .

4. Outlook
The Company, on account of manufacturing specialty cotton yarn, continues to have good demand for its products and has
created specific markets for its products. This ensures more sustained profitable operations. The company continues to
strengthen its production base by modernization and adding balancing equipments and improvising production process. The
Company has installed windmills for 100% of its captive requirements and installed EHT line (110 KVA Sub-Station) for smooth
flow of quality power. The Company has commenced its operations in Knitting during the year. This would supplement the
operation of spinning segment and a value proposition. These measures will continue to support the operations of the company.

5. Risks and Concerns

(i) Positive economic environment

(ii) Government policies.

(iii) Evacuation of 100% Wind energy generated to State Grid and favourable wind season.

(iv) Stability in Raw cotton prices.

6. Internal Control Systems and their Adequacy

The Company has put in place effective control systems in respect of all its operations and such systems are continuously
reviewed and upgraded.

24
AMBIKA COTTON MILLS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS (Contd.)

7. (i) Discussion on Financial Performance with respect to Operational Performance

The key financial data are furnished below for the current year as compared to the previous year.

S.No Particulars Current Year Previous Year

2017 2016
1 Increase in Net Sales ( Rs. in Lakh) 3258.05 -37.48
2 Increase in Net Sales (%) 6.74 -0.08
3 Increase in Exports ( Rs. in Lakh) -995.18 -2571.78
4 Increase in Exports (%) -3.83 -9.01
5 Operating Profit Margin before Tax(%) 20.38 19.47
6 Operating Profit Margin after Tax (%) 17.22 16.47
7 Cash Profit Margin before Tax (%) 19.63 18.39
8 Cash Profit Margin after Tax (%) 16.47 15.39
9 Net Profit Margin before Tax (%) 13.94 12.20
10 Net Profit Margin after Tax (%) 10.79 9.20
*Profit Margin calculations are on the basis of Net Sales

(ii) Operational performance in terms of Production and Sales quantities are given below.

FY 2016-17 FY 2015-16
Particulars Qty ( In Lakh Kgs) Qty ( In Lakh Kgs)
Production Sales Production Sales
Cotton Yarn 180.98 173.39 176.33 165.23
Cotton Fabrics (Knitted) 9.46 9.25 7.68 7.67
Waste Cotton 63.58 63.40 66.33 67.04
Wind units for captive consumption 483.72 Lakh Units 370.12 Lakh units

8. Material developments in Human resources / Industrial relations

The Company places its utmost value on the human resource and contribution from the employees is always fine-tuned towards
to achieve the overall organization performance by constant education, training and various incentive schemes, which are in
vogue. The company has cordial industrial relationship and have in total 2149 employees consisting of staff and workmen in its
roll. The Company ensures high safety and environmental standards in all its operations at all the units. Safety needs are
continuously monitored and preventive actions are initiated through departmental safety committees consisting of plant staff
and workmen.
9. Cautionary Statement
Certain Statements in this report on Management Discussion may be forward looking statements and which have been issued as
required by applicable Securities Laws and Regulations. There are several factors which would be beyond the control of
Management and as such, may affect the actual results which could be different from that envisaged.

25
AMBIKA COTTON MILLS LIMITED
C. CORPORATE GOVERNANCE REPORT

1. Brief statement on Company's philosophy on Code on Governance:

The Corporate Governance Policy of the Company is to ensure transparency, accountability and integrity in all its operations
and in respect of all matters concerned with shareholders, employees, the Government and the financial institutions / banks and
a consistent effort to broad base and improve upon these aspects on continuous basis.
2. Board of Directors
(A) Composition and Category of Directors

Name of the Director Promoter /Executive/ No. of Membership Chairmanship

Non Executive / outside held in held in
Independent Directorship Committee Committee
in Public of Directors of Directors
Limited
Companies
Sri. P.V. Chandran Chairman and
Managing Director
(Promoter & Executive) Nil Nil Nil
Sri. K.N. Sreedharan Director
(Independent -Non
Executive ) 1 1 1
Dr. K. Venkatachalam Director
(Independent -Non
Executive ) 1 1 Nil
Sri R.Soundararaja Perumal Director
(upto 26.03.2017) (Independent -Non
Executive ) Nil Nil Nil
Mrs. Bhavya Chandran Director (Promoter
Group-Non Executive) Nil Nil Nil
Mrs.Vidya Jyothish Pillai Director (Promoter
Group-Non Executive) Nil Nil Nil

This does not include Membership / Chairmanship of Committee of Directors of Ambika Cotton Mills Limited.

(B) Number of Board Meetings and Attendance Record of Directors :

Number of Board Meetings held during the year 2016 - 2017 : 4

S.No. Date of Board Meeting S.No. Date of Board Meeting

1 28.05.2016 2 06.08.2016
3 11.11.2016 4 01.02.2017

26
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)
(C) Attendance Record of Directors :
S.No Name of the Director Number of Number of Whether attended last
Meetings held Meetings AGM held on
attended 23rd September, 2016
1 Sri. P.V. Chandran, Chairman and
Managing Director 4 4 Yes
2 Sri. K.N. Sreedharan, Director 4 4 Yes
3 Dr.K.Venkatachalam, Director 4 4 Yes
4 Sri.R.Soundararaja Perumal, Director 4 3 Yes
5 Mrs. Bhavya Chandran, Director 4 4 Yes
6 Mrs.Vidya Jyothish Pillai, Director 4 4 Yes

(D) Disclosure of Directors inter- se Relationships

The Directors Mrs.Bhavya Chandran and Mrs. Vidya Jyothish Pillai are daughters of Sri.P.V.Chandran Chairman and
Managing Director of the Company.

(E) Shares of the company held by Non-Executive Directors : Nil

(F) Weblink of Familiarization Programmes imparted to independent Directors.

www.acmills.in

3. Audit Committee :
The role and terms of reference of the Audit Committee cover the matters specified for Audit Committees under Regulation 18 of
SEBI (Listing Obligations and Other Disclosure Requirements) Regulations,2015 as well as in Section 177 of the Companies Act,
2013.
The Composition of the Audit Committee was reconstituted and consists of Three Directors, Sri. K.N. Sreedharan, ,
Dr.K.Venkatachalam and Mrs. Vidya Jyothish Pillai. The reconstitution was necessitated on account of resignation of
Sri R.Soundararaja Perumal on 27.03.2017.
During the year, the Audit Committee held its meetings on 28.05.2016, 06.08.2016, 11.11.2016 and 01.02.2017.
Members' attendances at the meetings were as follows.

Name of the Directors Category No. of Meetings attended

during the year 2016-17

Sri. K.N. Sreedharan Independent / Non Executive 4

Dr.K.Venkatachalam Independent / Non Executive 4
Sri. R.Soundararaja Perumal Independent / Non Executive 3

4.Nomination & Remuneration Committee

Brief description of Terms of reference:
a. Formulation of the criteria for determining qualifications, positive attributes and independence of a director and to
recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other
employees;
b. Formulation of criteria for evaluation of Independent Directors and the Board;
c. Devising a policy on Board diversity;

27
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

d. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance
with the criteria laid down, and recommend to the Board their appointment and removal.
The Committee consisted of Directors, Chaired by, Dr.K.Venkatachalam, Mrs Bhavya Chandran and , Sri R. Soundararaja
Perumal until his resignation . Consequent to resignation of Sri R.Soundararaja Perumal on 27.03.2017 , Sri.K.N.Sreedharan was
co-optal in his place to the Nomination and Remuneration Committee.
During the year, the Nomination & Remuneration Committee held its meetings on 06.08.2016

Members’ attendances at the meetings were as follows.

Name of the Directors Category No. of Meetings attended

during the year 2016-17
Dr. K. Venkatachalam Independent Director 1
Sri. R. Soundararaja Perumal Independent Director 1
Mrs. Bhavya Chandran Non-Executive
Director-Promoter Group 1

Performance Evaluation Criteria for Independent Directors :

The main attribute to be 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.

5. Remuneration of Directors
(a) Non executive Directors

S.No. Name of the Director Sitting Fees (Rs.)

1 Mrs.Vidya Jyothish Pillai 60,000
2 Mrs.Bhavya Chandran 60,000
Total 1,20,000
(b) Independent Directors

S.No. Name of the Director Sitting Fees (Rs.)

1. Sri.K.N. Sreedharan 1,20,000
2. Dr.K. Venkatachalam 1,20,000
3. Sri.R. Soundararaja Perumal 90,000
Total 3,30,000
(c) Chairman and Managing Director

Name of the Director Salary Commission Sitting Fees Total

(Rs) (Rs) (Rs) (Rs)

Sri. P.V. Chandran 24,00,000 0 60,000 24,60,000

6. Stakeholders Relationship Committee

a. The Committee consists of Directors Mrs. Vidya Jyothish Pillai & Mrs .Bhavya Chandran. and Dr.K.Venkatachalam.
Consequent to resignation of Sri R.Soundararaja Perumal on 27.03.2017 , Dr.K.Venkatachalam was co-opted in his place to
the Stakeholders Relationship Committee
b. Number of shareholders Complaints received during the year: Nil
c. Number not solved to the satisfaction of the shareholders during the year: Nil

28
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

d. Number of pending complaints :Nil

e. Name & Designation of Compliance Officer : Sri.Radheyshyam Padia, Company Secretary
ii. The Committee held its meetings on 30.04.2016 , 17.09.2016 ,28.12.2016, 07.01.2017 and attendance of the members were as
follows:
Name of the Directors Category No. of Meetings attended
during the year 2016-17
Sri. R.Soundararaja Perumal Independent Director 3
Mrs. Vidya Jyothish Pillai Non-Executive Director-Promoter Group 4
Mrs.Bhavya Chandran Non-Executive Director-Promoter Group 4

7. General Body Meetings:

(i) Location, Date and time of the Annual General Meetings held during the last three years.

Year Location Date Time

2014 The Residency, 1076 Avinashi Road, Coimbatore - 641 018 24.09.2014 12 Noon
2015 The Residency, 1076 Avinashi Road, Coimbatore -641 018 23.09.2015 12 Noon
2016 The Residency, 1076 Avinashi Road, Coimbatore -641 018 23.09.2016 12 Noon
(ii) Special resolutions passed in previous three Annual General Meeting

Year Special Resolution for

2014 To accord consent of the Company to Board of Directors (i) to borrow money and (ii) mortgaging the assets
2015 Nil
2016 Nil
(iii) No special resolution was put through by Postal Ballot during FY 2016-17 and is proposed to be conducted through postal
ballot

8. Means of Communication:
Publications of Financial Results are generally made in dailies Business Line, Dinamani & Dinamalar and further are made
available in the company's website www.acmills.in

9. General Information to Shareholders :

Annual General Meeting (AGM) Wednesday 27th September 2017 at 12.00 Noon at
Date, Time and Venue Vivanta by Taj-Surya, 105, Race Course Road, Coimbatore - 641018.
Financial year 2016-17
Dividend Payment Date No Dividend is recommended for FY 2016-17 and hence furnishing of Dividend
Payment Date does not arise
Results for Quarter ending June 30, 2017 2nd Week of August, 2017
September 30, 2017 2nd Week of November, 2017
December 31, 2017 2nd Week of February, 2018
March 31, 2018 Last week of May 2018 (Audited).
AGM September 2018

29
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

Listing on Stock Exchanges Listed in National Stock Exchange, Bombay Stock Exchange,
Annual Listing Fee has been paid to the Stock Exchanges.
Stock Code 531978 (BSE) , AMBIKCO (NSE)
Date of Book Closure 30.08.2017 to 02.09.2017 (Both days inclusive)
Demat ISIN Number in NSDL & ISIN Number: INE540G01014.
CDSL for Equity Shares

Stock Market Data :

Bombay Stock Exchange National Stock Exchange
Month Mumbai (BSE) Mumbai (NSE)
High Low High Low
April-16 890.00 799.00 890.00 797.95
May-16 873.50 801.00 875.00 801.00
Jun-16 858.00 766.00 859.40 780.10
July-16 862.00 782.05 865.00 784.40
August-16 862.45 802.35 864.50 803.00
September-16 840.00 765.00 868.70 764.75
October-16 1094.60 805.00 1090.00 803.20
November-16 1092.35 933.00 1086.90 922.00
December-16 1075.00 1000.05 1065.00 1000.00
January-17 1245.00 1013.00 1247.10 1017.00
February-17 1295.00 1073.70 1298.00 1069.95
March-17 1346.00 1185.05 1349.10 1190.00

Registrar & Share M/s. SKDC Consultants Ltd.,

Transfer Agents Kanapathy Towers, 3rd Floor, 1391/A-1, Sathy Road, Ganapathy Post,
Coimbatore - 641 006.
Share Transfer System Presently, the share transfers which are received in physical form are processed and the Share
Certificates returned within a period of 7 days from the date of receipt, subject to the documents
being valid and complete in all respects. The Board of Directors of the Company have delegated
powers of approving transfer of securities to the Company's Registrars and Transfer Agents
subject to placing of summary statement of transfer/ transmission of securities etc. of the
Company at meetings of the Stakeholders Relationship Committee. The Company has obtained
and filed with the Stock Exchange(s) the half yearly certificates from a Company Secretary in
practice for due compliance with the share transfer formalities as required under Regulation
40(9) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015) .

30
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

Pattern of Share Holding as on 31.03.2017

S. No. Category No. of Shares % of
Share holding
1 Promoters 2857100 49.906
2 Banks, Financial Institutions, Mutual Funds 4847 0.084
3 Foreign Financial Institutions 19736 0.345
4 Foreign Portfolio investments - Corporate 228916 3.999
5 Corporate Bodies 879380 15.360
6 Public
1. Individuals
(holding nominal share capital upto Rs.2.00 Lakh) 1227000 21.432

2. Individuals
(Holding nominal share capital in excess of
Rs.2.00 Lakh) 338169 5.907

7 Any other (Specify)

a. Directors and their relatives 100 0.002
b. Non resident Indians 93500 1.633
c. Clearing Members 16910 0.295
d. Hindu Undivided Families 59341 1.037
e. Trust 1 0.000
Total 5725000 100.000

Distribution of Share Holding as on 31.03.2017

Value ( in Rs) No. of Shareholders % Amount %

Upto 5000 10201 95.43 6182940 10.80

5001 to 10,000 230 2.15 1770060 3.09
10,001 to 20,000 122 1.14 1766820 3.09
20,001 to 30,000 41 0.38 1029860 1.80
30,001to 40,000 24 0.22 826070 1.44
40,001 to 50,000 12 0.11 550110 0.96
50,001 to 1,00,000 30 0.28 2198380 3.84
1,00,001 and above 30 0.28 42925760 74.98
Total 10690 100.00 5725000 100.00
Dematerialisation of 98.92% of the Company's paid-up Equity Share Capital has been dematerialized
Shares up to March 31, 2017. Trading in Equity shares of the Company is permitted only in
dematerialized segment as per notification issued by the Securities & Exchange Board of
India (SEBI).

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AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

Liquidity The Shares are actively traded in Bombay Stock Exchange Limited (BSE) and
National Stock Exchange of India Limited ( NSE)
Outstanding GDR/ NIL
Warrants/Convertible
Instruments
Foreign exchange risk Foreign exchange risks are mitigated through forward exchange contracts besides natural
and hedging activities hedge of exports against imports.
Plant Locations The Company has four Units and its locations are given below:
Unit-I-Natham Main Road, Kanniyapuram, Dindigul-624 308
Unit - II - Kanniyapuram - Ellaipatty Road, Kanniyapuram, Dindigul - 624 308
Unit - III - Kanniyapuram - Ellaipatty Road, Kanniyapuram, Dindigul - 624 308.
(Adjacent to Unit - II).
Unit - IV - Kanniyapuram - Ellaipatty Road, Kanniyapuram, Dindigul - 624 308
(Adjacent to Unit - III)
Investor Correspondence/ Query Information :
For Transfer Shares M/s. SKDC Consultants Ltd.,
Kanapathy Towers, 3rd Floor, 1391/A-1, Sathy Road, Ganapathy Post, Coimbatore - 641 006.
Any other matter Regd.Office: 9-A, Valluvar Street, Sivanandha Colony, Coimbatore - 641 012

10. Other Disclosures

i. There are no materially significant related party transactions that have potential conflict with the company.
ii. No penalties or strictures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any
matter related to capital markets during the last three years.
iii. The Company has established a vigil mechanism / whistle blower policy for directors and employees and the same has been
disclosed on the website of the Company and no personnel has been denied access to the audit committee.
iv. The Company has duly complied with mandatory and adopted non mandatory requirements. The Company has adopted
the following discretionary requirements as prescribed in Schedule -II Part-E of the SEBI Listing Regulations:
a. The auditors' report on statutory financial statements of the Company are unqualified
b. The internal auditor directly report to the audit committee.
v. There are no subsidiary companies .
vi The policy on dealing with related party transactions is disclosed in weblink :
http://acmills.in/files/Others/Pol_RelatedTx.pdf
vii. Raw cotton, the main input raw material, is subject to commodity price risks but there are no commodity hedging activities
D. DECLARATION REGARDING COMPLIANCE BY BOARD OF DIRECTORS AND SENIOR
MANAGEMENT PERSONNEL AFFIRMING COMPLAINCE WITH COMPANY'S CODE OF CONDUCT
This is to confirm that the Company has adopted a Code of Conduct for its Board and Staff of the Company and a declaration
to the effect that the same have been complied with has been received from them in respect of the Financial Year Ended
31.03.2017.
By order of the Board
Sd/-
(P.V.CHANDRAN)
DATE : 12/08/2017 Chairman and Managing Director
PLACE : Coimbatore (DIN : 00628479)

32
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

E. AUDITOR'S CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE

GOVERNANCE

To
The Members of Ambika Cotton Mills Limited

We have examined the compliance of conditions of Corporate Governance by Ambika Cotton Mills Limited ("the Company") for
the year ended March 31, 2017, as per the relevant provisions of the Securities and Exchange Board of India (Listing Obligations
& Disclosure Requirements) Regulations, 2015 ("Listing Regulations") as referred to in Regulation 15(2) of the Listing
Regulations.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied in all material respects with the conditions of Corporate Governance as stipulated in the above mentioned Listing
Regulations.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.

For L. Venkatasubbu & Co

Chartered Accountants
Firm Regn. No. 004627s
Sd/-
(L. Venkatasubbu)
Date :12/08/2017 Partner
Place : Coimbatore Membership No. 019791

33
AMBIKA COTTON MILLS LIMITED
CORPORATE GOVERNANCE REPORT (Contd...)

ANNUAL CONFIRMATION PURSUANT TO REGULATION 17(8) OF SEBI (LISTING

OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
To
The Board of Directors
Ambika Cotton Mills Limited
Coimbatore
Dear Sirs,

We hereby certify that:

We have reviewed the financial statement read with the cash flow statement of the Company for the year ended March 31, 2017
and that to the best of our knowledge and belief, we state that :
a) i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
ii) these statements together present a true and fair view of the Company's affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
b) There are, to the best to our knowledge and belief, no transactions entered into by the Company during the year ended
March 31,2017 which are fraudulent, illegal or in violation of the Company's Code of Conduct.
c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated
the effectiveness of internal control systems pertaining to financial reporting of the Company and there were no
deficiencies in the design or operation of internal controls.
d) We have indicated to the auditors and the Audit Committee:
i) There are no significant changes in internal control over financial reporting during the year ended March 31,2017.
ii) There are no significant changes in accounting policies made during the year ended March 31,2017 and
iii) There have been no instances of significant fraud of which we have become aware.

Sd/- Sd/-
M. Vijayakumar P.V. Chandran
Chief Financial Officer Chairman and Managing Director
(DIN : 00628479)

Date : 12/08/2017
Place : Coimbatore

34
AMBIKA COTTON MILLS LIMITED
INDEPENDENT AUDITORS' REPORT

To
The Members of Ambika Cotton Mills Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Ambika Cotton Mills Limited ('the Company'), which comprise the
Balance Sheet as at 31st March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted
in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of
the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to
be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those
Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order
to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of
the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements
give the information required by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2017 and its profit and
its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the
paragraph 3 and 4 of the order.

35
AMBIKA COTTON MILLS LIMITED
INDEPENDENT AUDITORS' REPORT ( Contd.,)

2. As required by Section 143 (3) of the Act, we report that:

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit.
b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books;
c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement
with the books of account;
d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of the written representations received from the directors as on 31st March 2017 taken on record by the Board
of Directors, none of the directors is disqualified as on 31st March 2017 from being appointed as a director in terms of
Section 164 (2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in "Annexure B"; and
g) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer
Note. 25 (I)(i)(a) to the financial statements;
ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material
foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company.
iv. the Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in
Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance
with the books of accounts maintained by the Company. Refer Note.25 (III) to the financial statements.

For L. Venkatasubbu & Co

Chartered Accountants
Firm Regn No. 004627s
Sd/-
( L. Venkatasubbu )
Date : 27.05.2017 Partner
Place : Coimbatore Membership No. 019791

36
AMBIKA COTTON MILLS LIMITED
ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the Company on the financial statements for the
year ended 31st March 2017, we report that:

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of
its fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the Management during the year at reasonable
intervals, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No
material discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, the title deeds of immovable properties are held in the name of the Company.

(ii) As explained to us, the management has conducted the physical verification of inventory at reasonable intervals and
there were no material discrepancies noticed on physical verification of the inventory as compared to book records.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or
other parties covered in the Register maintained under section 189 of the Companies Act,2013. Accordingly, the provisions
of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) According to the information and explanations given to us, the Company has not made any loans, investments, gurantees
and security attracting the provisions of sections 185 and 186 of the Companies Act,2013. Accordingly, the provisions of
clause 3 (iv) of the Order are not applicable to the Company and hence not commented upon.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India
and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of
Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(vi) The Central Government has prescribed the maintenance of cost records under Section 148 (1) (d) of the Companies Act,
2013. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that
prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed
examination of the same.

(vii) a. According to the information and explanations given to us the Company is regular in depositing undisputed
statutory dues including provident fund, income-tax, sales-tax, service tax, duty of customs, duty of excise, value
added tax , cess and any other material statutory dues with the appropriate authorities. We are informed that the
provisions of Employees State Insurance Act,1948 are not applicable to the Company.

According to the information and explanations given to us no undisputed amounts payable in respect of provident
fund, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax , cess and other material
statutory dues were in arrears as at 31st March 2017 for a period of more than six months from the date they became
payable

37
AMBIKA COTTON MILLS LIMITED
ANNEXURE-A TO INDEPENDENT AUDITORS' REPORT ( Contd.,)

b. According to the information and explanations given to us the following dues of, sales-tax, service tax, duty of excise
have not been deposited by the Company on account of disputes.

Name of the Nature of Dues Amount Period to which Forum where dispute
Statute (Rs. in the amount is pending
Lakhs) relates

Service Tax Service Tax 4.80 From 16.11.1997 CESTAT, Chennai

to 01.06.1998

Central Excise Central excise 2.18 04.03.2005 (date CESTAT, Chennai

Act,1944 and Penalty of de-bonding)

Service Tax Service tax, Interest and penalty 2.95 From 18.04.2006 CESTAT, Chennai
to 29.02.2008

Central Excise Excise duty 11.33 From 20.05.1999 Madras High Court
Act,1944 to 06.08.1999

Central Excise Excise duty 33.80 From 07.12.2008 CESTAT, Chennai

Act,1944 to 06.07.2009

Service Tax Service tax 23.99 From 01.10.2005 Madras High Court
to 30.06.2006
TNGST Act,1959 Sales tax 3.72 Assessment year Deputy Commissioner of
1996-1997 Appeals, (CT) Madurai

Central Excise Interest and penalty 4.91 November 2008 to CESTAT, Chennai
Act,1944 December 2010

Central Excise Interest and penalty 0.84 November 2007 CESTAT, Chennai
Act,1944 to January 2011

Central Excise Central Excise 410.01 Assessment year Madurai Bench of

Act,1944 2005-06 Madras High Court

TNVAT,Act ,2006 VAT 3.81 Assessment year The Appellate Deputy

from 2011-2016 Commissioner(CT), Madurai
502.34

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the
repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the
Government and has not issued any debentures.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments)
and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its
officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company,
the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by
the provisions of section 197 read with Schedule V to the Act.

38
AMBIKA COTTON MILLS LIMITED
ANNEXURE-A TO INDEPENDENT AUDITORS' REPORT ( Contd.,)

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.
Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company,
there are no transactions which falls under related parties transaction in terms of sections 177 and 188 of the Companies
Act,2013 and details of transactions which are required to be disclosed, as required by the applicable accounting
standards in this regard, have been disclosed in the financial statements.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company,
the Company has not made any preferential allotment or private placement of shares or fully or partly convertible
debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company,
the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly,
paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For L. Venkatasubbu & Co

Chartered Accountants
Firm Regn. No. 004627s
Sd/-
(L. Venkatasubbu)
Date : 27.05.2017 Partner
Place : Coimbatore Membership No. 019791

ANNEXURE - B TO INDEPENDENT AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 ("the Act")
We have audited the internal financial controls over financial reporting of Ambika Cotton Mills limited ("the Company") as of
31st March 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered
Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including
adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.

Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial
Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section

39
AMBIKA COTTON MILLS LIMITED
ANNEXURE - B TO INDEPENDENT AUDITORS' REPORT (Contd.,)

143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit
of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the
Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorisations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition,
use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk
that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting
and such internal financial controls over financial reporting were operating effectively as at 31st March 2017, based on the
internal control over financial reporting criteria established by the Company considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.

For L. Venkatasubbu & Co

Chartered Accountants
Firm Regn No. 004627s
Sd/-
(L. Venkatasubbu)
Date : 27.05.2017 Partner
Place : Coimbatore Membership No. 019791

40
AMBIKA COTTON MILLS LIMITED
BALANCE SHEET AS AT 31ST MARCH 2017 (Rs. in Lakhs)

Note As at As at
Particulars No 31.03.2017 31.03.2016
I. EQUITY AND LIABILITIES
Shareholders' Funds
Share capital 3 572.50 587.50
Reserves and surplus 4 36885.58 32917.07
37458.08 33504.57
Non-Current Liabilities
Long term Borrowings 0 0
Deferred tax liabilities (Net) 5 3257.80 3723.30
3257.80 3723.30
Current Liabilities
Short- term borrowings 6 748.65 1970.86
Trade payables 7 4488.86 1879.29
Other current liabilities 8 1628.92 1286.51
Short-term provisions 9 18.07 41.63
6884.50 5178.29
TOTAL 47600.38 42406.16
II. ASSETS
Non-Current Assets
Fixed assets
(i) Tangible assets 10 A 25393.48 25513.54
(ii) Intangible assets 10 B 0.00 0.00
(iii) Capital work-in-progress 0.00 0.00
Long-term loans and advances 11 359.16 412.39
25752.64 25925.93
Current Assets
Current investments 12 11.09 10.50
Inventories 13 15149.51 12417.49
Trade receivables 14 4103.60 1850.07
Cash and cash equivalents 15 1347.44 478.12
Short Term Loans & Advances 16 1222.33 1723.53
Other current assets 17 13.77 0.52
21847.74 16480.23
TOTAL 47600.38 42406.16
Significant accounting policies 2
See accompanying notes forming part of the
Financial Statements
As per our report of even date attached For and on behalf of the Board
For L. VENKATASUBBU & CO
Chartered Accountants
Firm Reg. No. 004627s Sd/- Sd/-
(P.V. CHANDRAN) (Dr.K.VENKATACHALAM)
CHAIRMAN AND MANAGING DIRECTOR DIRECTOR
(DIN : 00628479) (DIN : 01062171)
Sd/- Sd/-
(L. VENKATASUBBU) (RADHEYSHYAM PADIA)
PARTNER COMPANY SECRETARY
MEMBERSHIP NO : 019791
Sd/-
DATE : 27/05/2017 (M.VIJAYAKUMAR)
PLACE : COIMBATORE CHIEF FINANCIAL OFFICER

41
AMBIKA COTTON MILLS LIMITED
STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31st MARCH 2017
(Rs. in Lakhs)
Note Year Ended Year Ended
Particulars No 31.03.2017 31.03.2016
I. Revenue from operations 18 52861.30 49230.78
II. Other income 19 78.43 177.46
III. Total Revenue ( I+II ) 52939.73 49408.24
IV. Expenses:
Cost of materials consumed 20 33610.37 30598.42
Purchases of Stock-in-Trade 0.00 0.00
Changes in inventories of finished goods
and work-in-progress 21 -426.16 -454.36
Employee benefits expense 22 2638.24 2510.82
Finance costs 23 383.95 521.53
Depreciation and amortization expense 2934.86 2991.96
Other expenses 24 6604.41 7344.16
Total expenses 45745.67 43512.53
V. Profit before exceptional and
extraordinary items and tax (III - IV) 7194.06 5895.71
VI. Exceptional Items 0.00 0.00
VII. Profit before extraordinary items and tax (V+VI) 7194.06 5895.71
VIII. Extraordinary items 0.00 0.00
IX. Profit before tax( VII -VIII ) 7194.06 5895.71
X Tax expense
(1) Current tax
(i) MAT 1675.75 1258.17
(ii) MAT credit reversed 200.00 551.28
(2) Deferred tax -465.50 -359.26
(3) Prior period Income tax 218.78 0.00
1629.03 1450.19
XI. Profit ( Loss) for the period from
continuing operations ( IX -X ) 5565.03 4445.52
XII. Profit / (Loss) from Discontinuing operations 0.00 0.00
XIII. Profit ( Loss) for the period (XI + XII) 5565.03 4445.52
XIV. Earnings per equity share (Face value of Rs.10/- each)
(1) Basic 95.39 75.67
(2) Diluted 95.39 75.67
Significant accounting policies 2
See accompanying notes forming part of the
Financial Statements
Weighted Average No of Shares 5833671 5875000
(for calculation of EPS)
As per our report of even date attached For and on behalf of the Board
For L. VENKATASUBBU & CO
Chartered Accountants
Firm Reg. No. 004627s Sd/- Sd/-
(P.V. CHANDRAN) (Dr.K.VENKATACHALAM)
CHAIRMAN AND MANAGING DIRECTOR DIRECTOR
(DIN : 00628479) (DIN : 01062171)
Sd/- Sd/-
(L. VENKATASUBBU) (RADHEYSHYAM PADIA)
PARTNER COMPANY SECRETARY
MEMBERSHIP NO : 019791
Sd/-
DATE : 27/05/2017 (M.VIJAYAKUMAR)
PLACE : COIMBATORE CHIEF FINANCIAL OFFICER

42
AMBIKA COTTON MILLS LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2017
(Rs. in Lakhs)
Year Ended Year Ended
Particulars 31.03.2017 31.03.2016

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax and Extraordinary Items 7194.06 5895.71
Adjustment for
Depreciation 2934.86 2991.96
Finance Cost 383.95 521.53
Sale of Assets -22.58 -129.05
Foreign Currency Fluctuation on revaluation -67.21 -84.09
Foreign Currency Fluctuation in cash and cash
Equivalents on Revaluation 4.88 2.14
Investments Income:
Interest/Dividend Received -53.19 -42.66
Operating Profit Before Working Capital Changes 10374.77 9155.54
Changes in Working capital
Adjustments for
Inventories -2732.02 2035.62
Trade and other receivables -1829.95 -706.48
Trade Payables 3159.28 -1670.50
Cash generated from operations 8972.08 8814.18
Direct Taxes paid -2118.09 -2115.87
Net Cash from operating activities 6853.99 6698.31
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets -2898.19 -2161.58
Capital work in progress 0.00 0.61
Sale of Fixed assets 105.97 781.70
Capital Advances -22.52 50.85
Purchase of Investments -0.59 -2.70
Interest Received 52.50 42.32
Dividend Received 0.69 0.34
Net cash used in Investing activities -2762.14 -1288.46
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 0 0.00
Payment towards Buy Back of Shares -1611.52 0.00
Proceeds from Long Term borrowings 0.00 0.00
Proceeds from Working Capital borrowings -1222.21 -2614.05
Foreign currency fluctuation on revaluation 0.03 0.28
Repayment of Long Term borrowings 0.00 -375.00
Repayment of Finance/ Lease Liabilities 0.00 0.00
Dividend Paid 0.00 -1703.75
Interest Paid -383.95 -521.53
Net Cash Used in Financing Activities -3217.65 -5214.05

43
AMBIKA COTTON MILLS LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2017
(Rs. in Lakhs)
Year Ended Year Ended
Particulars 31.03.2017 31.03.2016
Net increase in Cash and Cash Equivalents 874.20 195.80
Cash and Cash Equivalents as at 1st April 478.12 284.46
(Opening Balance)
Increase on account of foreign currency revaluation -4.88 -2.14
Cash and Cash Equivalents as at 31st March 1347.44 478.12
(Closing Balance)
Reconciliation of Cash and Cash Equivalents with the Balance sheet
Cash and Cash Equilvalents (Refer Note 15) 1347.44 478.12
Less : Bank Balances not considered as cash and cash equivalents
as defined in AS 3 Cash Flow Statement
- In Deposit accounts 144.76 72.76
- In Deposit accounts (more than 12 months maturity ) 210.70 56.54
- In Deposit accounts (for Guarantee) 4.68 4.68
- In earmarked accounts Unpaid dividend accounts 19.81 31.76
Net Cash and Cash equivalents (as defined in AS 3 Cash Flow
Statement) included in Note 15 967.49 312.38
Add : Current investments considered as part of Cash and cash equivalents 0.00 0.00
967.49 312.38
Closing Cash and Cash Equivalents comprises:
- Cash on Hand 27.04 28.15
- Balance with Banks
In Current Accounts 211.29 92.56
In EEFC Accounts 729.16 191.67
967.49 312.38

As per our report of even date attached For and on behalf of the Board
For L. VENKATASUBBU & CO
Chartered Accountants
Firm Reg. No. 004627s Sd/- Sd/-
(P.V. CHANDRAN) (Dr.K.VENKATACHALAM)
CHAIRMAN AND MANAGING DIRECTOR DIRECTOR
(DIN : 00628479) (DIN : 01062171)
Sd/- Sd/-
(L. VENKATASUBBU) (RADHEYSHYAM PADIA)
PARTNER COMPANY SECRETARY
MEMBERSHIP NO : 019791
Sd/-
DATE : 27/05/2017 (M.VIJAYAKUMAR)
PLACE : COIMBATORE CHIEF FINANCIAL OFFICER

44
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS

Note 1
Corporate Information
Ambika Cotton Mills Limited is engaged in manufacturing and selling speciality cotton yarn catering to the needs of
manufacturers of premium branded shirts and t-shirts. Exports constitute significant portion of the operations. The company
operates with total installed spindle capacity of 108288 (Previous Year 108288 Spindles) of compact facility housed in four units
and Knitting facility. The company has installed 27.4 MW wind power capacity for captive consumption of spinning segment.
The Spinning Plants are located at Kanniyapuram, Dindigul and Windmills are located in Tirunelveli, Dharapuram and Theni in
the State of Tamilnadu.

Note 2
Significant Accounting Policies
(a) Basis for preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of
accounting and generally accepted accounting principles and comply in all material respects with the Accounting Standards
specified under section 133 of the Companies Act , 2013 read with Rule 7 of Companies ( Accounts ) Rules, 2014 and other
relevant provisions of the Companies Act ,2013.

(b) Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets
and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting
period. Difference between the actual results and estimates are recognized in the period in which the results are
known/materialized.

(c) Fixed Assets (Tangible/Intangible)

Fixed Assets are carried at cost of acquisition including any attributable cost of bringing the assets to its working condition for its
intended use and net of Cenvat or any other claim receivable less accumulated depreciation.

(d) Depreciation and amortization

i. Depreciation has been provided on straight line method based on useful life of the assets as prescribed in Schedule II to the
Companies Act,2013 except in respect of the following categories of assets in whose case the life of the asset has been
assessed as under:

Description of Assets Useful Life of Assets (In Years)

Administrative & Office Building 40
Plant & Machinery** 18.94
Wind Mill** 13.33
Office Equipments 3
Furniture & Fittings 3
** Based on technical advice

ii. Intangible assets are amortized over the period of estimated useful life of 4 years.

45
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS

iii. The useful life of a fixed asset , at the time of the acquisition of the asset or of the remaining useful life, on a subsequent
review, if , is shorter than as envisaged, depreciation is provided at a higher rate based on the remaining useful life.

(e) Inventories

Inventories are valued at lower of cost and net realisable value after providing for obsolescence and other losses, where
considered necessary. The costs of inventories are ascertained on weighted average method. Finished goods and work in
progress include costs of conversion and other costs incurred in bring the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.

(f) Revenue Recognition

i. Sales revenue is recognized on transfer of significant risk and rewards of the ownership of the goods to the buyer which
coincides with despatch of goods.

ii. Dividend income on investments is accounted for when the right to receive the payment is established and interest income
is recognized on time proportionate basis.

(g) Foreign Currency Transactions

i. Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

ii. Foreign currency monetary items at the balance sheet date are reported using the closing rate.

iii. Exchange differences arising on the settlement of monetary items or on reporting of monetary items at rates different from
those at which they were initially recorded during the year or reported in previous financial statements are recognized as
income or expense in the year in which they arise.

(h) Government Grants

i. Government Grants are recognized when there is a reasonable assurance that the company would comply with the
conditions attached for such grant and further the grant would be received

ii. Revenue grants are recognized in the Statement of Profit and Loss.

iii. Interest reimbursement under Technology Upgradation Fund Scheme (TUFS) is directly credited to respective term loan
interest accounts, being reimbursement of expenditure incurred.

(i) Investments

The investments in equity shares and mutual fund units are of current investments and are carried at lower of cost and fair value.

(j) Employee benefits

Employee benefits consist of provident fund and gratuity. The company's contribution to provident fund is considered as
defined contribution plan and charged as an expense based on the amount of contribution required to be made. For defined
benefit plan the company contributes to group gratuity scheme formulated by Life Insurance Corporation of India as demanded
by the said corporation to discharge its liability on account of employee post employment benefits.

(k) Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing
costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible

46
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS

for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the
borrowing costs incurred.

(l) Segment reporting

The company is primarily engaged in manufacturing cotton yarn. The power generated from windmills is meant for captive
consumption for manufacturing of cotton yarn. One of the criteria for segment reporting is segment assets constituting 10% or
more of the total assets of all the segments and accordingly the Company has identified two reportable segments viz., Textiles
and Windmills as business segments and inter segment revenue is value of power adjusted by State Government Corporation
(TANGEDCO) in electricity bills of spinning segment.

(m) Earnings per Share

Earnings per share is calculated by dividing the profit after tax by weighted average number of equity shares outstanding
during the year.

(n) Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961 and inclusive of MAT credit reversed and exclusive of MAT credit carried forward.

(o) Deferred Tax Liability

Deferred tax liability is measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance sheet
date.

(p) MAT Credit Entitlement

Income-tax paid under section 115JB of the Income-tax Act, 1961 is entitled for due set- off in the subsequent 10 assessment years
against normal tax liability over and above the MAT liability of the concerned assessment year.

(q) Impairment

The carrying amounts of assets are reviewed at each Balance sheet date to ascertain if there is any indication of impairment,
wherein the carrying cost of asset exceeds its recoverable value, based on internal / external factors and such impairment loss is
charged to the Profit and Loss account in the year in which an asset is identified as impaired and reversed if there has been a
change in the estimate of recoverable amount.

(r) Derivative Contracts

The Company enters into derivative contracts in the nature of Foreign Currency Forward contracts with an intention to hedge its
existing assets & liabilities, Firm commitments and highly probable transactions in foreign currency.

(s) Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when
there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.
No provision is recognized or disclosure for contingent liability is made when there is possible obligation or a present obligation
and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial
statements.

47
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
As at 31.03.2017 As at 31.03.2016
Note 3
Share Capital Number of Rs. Number of Rs.
Shares (in Lakhs) Shares (in Lakhs)
a. Authorised
Equity Shares of Rs.10/ each with voting rights 10000000 1000.00 10000000 1000.00
b. Issued
Equity Shares of Rs.10/ each with voting rights 5725000 572.50 5875000 587.50
c. Subscribed and fully paid up
Equity Shares of Rs.10/ each with voting rights 5725000 572.50 5875000 587.50

Notes :
i. The company has only one type of share capital viz.. Equity Share Capital having a face value of Rs.10/-
per share.
ii. Reconcilation of Number of shares.
As at 31.03.2017 As at 31.03.2016
Particulars No. of Shares Rs in Lakhs No. of Shares Rs in Lakhs

At the beginning of the year 5875000 587.50 5875000 587.50

Less : Shares Bought back during the year 150000 15.00 0 0.00
At the end of the year 5725000 572.50 5875000 587.50
iii. The issued Equity Share Capital carries equal voting rights and entitlement to dividends
iv. No shares are held by a holding company or its ultimate holding company or its subsidiary or associates.
v. Shareholders holding more than 5% of Share Capital

As at 31.03.2017 As at 31.03.2016
Name of the Shareholder No. of Shares % of holding No. of Shares % of holding
1. C. Bhavani 2272566 39.70 2272566 38.68
2. P.V. Chandran 584534 10.21 584534 9.95
vi. No shares are reserved for issue under options and contracts / commitments for the sale of shares/
disinvestments
vii. For the period of five years immediately preceding the date as at which the Balance sheet is prepared, no shares
are (a) alloted as fully paid up pursuant to contract (s) without payment being received in cash, (b) allotted as
fully paid up way of bonus shares.
viii.Aggregate number of equity shares bought back during the year : 150000 .
ix. There are no securities convertible into equity / preference shares.
x. There are no calls unpaid & forfeited shares.

48
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 4 As at As at
Reserves & Surplus 31.03.2017 31.03.2016
(a) Capital Redemption Reserve
Transfer from Securities Premium Reserve 15.00 0.00
15.00 0.00
(b) Securities Premium Reserve
As per last Balance Sheet 1972.58 1972.58
Less : Transfer to Capital Redemption Reserve 15.00 0.00
Used towards Buyback of Equity shares 1596.52 0.00
361.06 1972.58
(c) General Reserve
Opening Balance 14679.81 13679.81
Add : Transfer from Surplus in Statement of Profit & Loss 1000.00 1000.00
Closing Balance 15679.81 14679.81

(d) Surplus in Statement of Profit & Loss

Opening Balance 16264.68 13881.02
Add : Profit after tax for the year 5565.03 4445.52
Less : Interim Dividend 0.00 -881.25
Tax on Interim Dividend 0.00 -179.40
Prior Period Dividend & Dividend Tax 0.00 -1.21
Transfer to General Reserve -1000.00 -1000.00
Closing Balance 20829.71 16264.68

Total(a+b+c+d) 36885.58 32917.07

Note 5
Deferred Tax Liability
Opening Balance 3723.30 4082.56
Add(+) /Less (-) : Transfer from Statement of Profit & Loss -465.50 -359.26
3257.80 3723.30

49
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 6 As at As at
Short term Borrowings 31.03.2017 31.03.2016
(i) Secured
Loans Repayable on Demand
From Banks 748.65 1970.86
748.65 1970.86
Nature of Security
Working Capital Loans from Banks are secured jointly by a first charge by way of Hypothecation of all stock of raw materials,
process stocks, finished goods, stores and spares and receivables including export receivables, present and future book debts,
outstanding moneys, receivables, claims, bills, contracts, engagements securities, and other rights and assets and are further
secured jointly by second charge by way of hypothecation over the movable fixed assets excluding windmills.
The Company has released the second charge of mortage by deposit of title deeds over the immovable properties of the
Company except from one Bank and the release of such charge is in progress.
Loans Guaranteed by Directors Nil Nil
Period and amount of continuing Default Nil Nil
(ii) Unsecured 0 0

Note 7
Trade Payables
Due to Micro, Small & Medium Enterprises 0.00 24.89
Others 4488.86 1854.40
4488.86 1879.29
Note 8
Other Current Liabilities
a. Current maturities of long-term debt 0.00 0.00
b. Interest accrued but not due on borrowings 21.35 0.00
c. Unpaid dividends 19.81 31.75
d. Other Payables
(i) Statutory remittances 64.87 58.49
(ii) Advances from Customers 243.09 135.17
(iii) Liability for Expenses 1279.80 1061.10
1628.92 1286.51
Note 9
Short Term Provisions
a. Provision for Income Tax (net of Advance tax & TDS 18.07 41.63
Rs.1657.68 Lakhs (Previous year Rs.1216.54 Lakhs ))
b. Provision for dividend 0.00 0.00
c. Provision for dividend tax 0.00 0.00
18.07 41.63

50
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 10
Fixed Assets : (Rs. in Lakhs)

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

PARTICULARS As At Additions Disposals As At As At For the Disposals Upto As At As At

01.04.2016 31.03.2017 01.04.2016 Year 31.03.2017 31.03.2017 31.03.2016

A. TANGIBLE ASSETS

LAND 379.15 10.66 81.73 308.08 0.00 0.00 0.00 0.00 308.08 379.15

BUILDING 6316.79 468.25 0.00 6785.04 1969.39 219.78 0.00 2189.17 4595.87 4347.40

PLANT & MACHINERY 43483.61 2354.13 32.88 45804.86 22826.79 2670.59 31.22 25466.16 20338.70 20656.82

ELECTRICAL FITTINGS 2.67 0.00 0.00 2.67 2.67 0.00 0.00 2.67 0.00 0.00

FURNITURE & FIXTURES 10.13 2.65 0.00 12.78 9.58 1.65 0.00 11.23 1.55 0.55

OFFICE EQUIPMENTS 69.61 6.22 0.00 75.83 67.01 4.16 0.00 71.17 4.66 2.60

VEHICLES 341.51 56.28 0.00 397.79 214.49 38.68 0.00 253.17 144.62 127.02

TOTAL AS AT 31.03.2017 50603.47 2898.19 114.61 53387.05 25089.93 2934.86 31.22 27993.57 25393.48 25513.54

TOTAL AS AT 31.03.2016 49270.22 2161.58 828.33 50603.47 22293.51 2972.10 175.68 25089.93 25513.54 26976.71

B. INTANGIBLE ASSETS

KNOWHOW 79.43 0.00 0.00 79.43 79.43 0.00 0.00 79.43 0.00 0.00

TOTAL AS AT 31.03.2017 79.43 0.00 0.00 79.43 79.43 0.00 0.00 79.43 0.00 0.00

TOTAL AS AT 31.03.2016 79.43 0.00 0.00 79.43 59.57 19.86 0.00 79.43 0.00 19.86

51
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 11 As at As at
Long Term Loans and Advances 31.03.2017 31.03.2016
Unsecured, considered good
a. Capital Advances 36.27 13.75
b. Security Deposits
i. Electricity Deposit 97.07 260.44
ii. Other Deposits 7.87 8.62
c. CENVAT Credit and VAT receivable 129.58 129.58
d. Interest Reimbursement Receivable (TUFS) 88.37 0.00
359.16 412.39
Note 12
Current Investments
a. Investments in Equity Instruments
i. Quoted
Cholamandalam Investment and Finance Company Ltd 0.65 0.65
(650 Equity Shares of Rs.10/- each)
(Previous year 650 equity shares of Rs.10/- each)
City Union Bank Ltd., ( 5000 Equity Shares of Rs.1/- each) 0.18 0.18
(Previous year 5000 equity shares of Rs.1/- each)
ii. Unquoted
Suryadev Alloys & Power Private Limited 3.80 3.80
(2600 Equity Shares of Rs. 10/- each)
(Previous year 2600 Equity Shares of Rs.10/- each)
b. Investments in Mutual Fund units
LIC Nomura MF Equity Fund- Dividend 6.46 5.87
Reinvestment Plan(58182.257 Units of Rs. 10 each)
(Previous Year 53691.972 Units of Rs.10 each)
11.09 10.50
Note :
Basis of valuation of Individual investments: Carried at lower of cost and fair value
Aggregate amount of quoted investments 0.83 0.83
Aggregate amount of market value of quoted investments 13.85 9.43
Aggregate amount of unquoted investments 3.80 3.80
Net asset value of Mutual Fund units 8.06 6.85
Aggregate provision made for diminution in value of investments 0 0

52
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 13 As at As at
Inventories 31.03.2017 31.03.2016
(At lower of cost and net realisable value)
a. Raw Materials 12291.45 9975.88
b. Work-in-progress 1352.29 726.41
c. Finished Goods 830.89 1059.30
d. Waste Cotton 84.87 56.18
e. Stores and Spares 436.53 466.71
f. Packing Materials 153.48 133.01
15149.51 12417.49

Details of Raw Materials

Raw Cotton 11736.84 9962.75
Modal 469.42 13.13
Lycra 85.19 0.00
12291.45 9975.88
Details of Work in progress
Cotton in process 1352.29 726.41
1352.29 726.41
Details of Finished goods
Cotton Yarn 792.64 1051.33
Knitted Fabrics 38.25 7.97
830.89 1059.30
Note 14
Trade Receivables
a. Trade receivables outstanding for a period exceeding six months
from the date they were due for payment
Unsecured and considered good 0.00 0.02
b. Other Trade Receivables
Unsecured and considered good 4103.60 1850.05
4103.60 1850.07

53
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 15 As at As at
Cash and Cash Equivalents 31.03.2017 31.03.2016
a. Cash on hand 27.04 28.15
b. Balances with Banks
(i) In Current accounts 211.29 92.56
(ii) In EEFC accounts 729.16 191.67
(iii)In Deposit accounts 144.76 72.76
(iv)In Deposit accounts (more than 12 months maturity) 210.70 56.54
(v) In Deposit accounts (for Guarantee) 4.68 4.68
(vi)In earmarked accounts - Unpaid dividend accounts 19.81 31.76
1347.44 478.12
(Of the above, the balances that meet the definition of cash and cash equivalents
as per AS 3 Cash Flow statement is Rs.967.49 Lakhs ( Previous year Rs.312.38 Lakhs))
Note 16
Short-Term Loans & Advances
Unsecured, considered good
a. Staff Advance 0.60 0.00
b. Advance for supply of materials 134.86 287.54
c. Interest reimbursement receivable (TUFS) 38.56 211.15
d. Electricity Deposit 180.00 189.23
e. Balances with Government authorities
(i) Duty drawback receivable 285.53 169.65
(ii) Cenvat & Service tax credit receivable 149.60 88.61
(iii)MAT credit carried forward 13.22 428.71
(iv)Income Tax refund Due 16.44 16.44
(v) VAT & Sales tax receivable 31.30 21.02
(vi)EB receivable ( for wind ) 79.84 0.00
f. Pre-paid Expenses 200.92 193.79
g. Others
i. Cotton Purchase Debit Note 19.96 0.59
ii. LC Opening charges for Import of cotton 30.17 25.40
iii. Forward cover receivable. 41.33 91.40
1222.33 1723.53
Note 17
Other Current Assets
Interest accrued on Deposits
Bank 13.68 0.41
Others 0.09 0.11
13.77 0.52

54
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 18 As at As at
Revenue from Operations 31.03.2017 31.03.2016
(i) Sale of Products (Refer Note (i) below) 51594.33 48336.28
(ii) Other Operating Revenue (Refer Note (ii) below) 1266.97 894.50
52861.30 49230.78
Less: Excise Duty 0.00 0.00
52861.30 49230.78
Note (i)
Sale of Products Comprises of
Cotton Yarn 45703.73 43170.60
Knitted Fabrics 1815.70 1567.81
Waste Cotton 4074.90 3597.87
51594.33 48336.28
Note (ii)
Other Operating Revenue
a. Export Benefits 920.45 885.98
b. Foreign Exchange Fluctuation 199.61 0.00
c. Profit on disposal of rawmaterial 67.07 8.52
d. Wind Energy 79.84 0.00
1266.97 894.50
Note 19
Other Income
a. Interest (Refer Note (i) below) 52.50 42.32
b. Dividend from Current Investments 0.69 0.34
c. Other non-operating income (Refer Note (ii) below) 25.24 134.80
78.43 177.46
Note (i)
Interest Income Comprises of
From banks on deposits 34.53 8.85
Other Interest 17.97 33.47
Total Interest Income 52.50 42.32
Note (ii)
Other non-operating income Comprises of
Rent 2.20 3.30
Sundry Parties Written Off 0.46 2.45
Profit on sale of Fixed Assets 22.58 129.05
Total Other non-operating income 25.24 134.80

55
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 20 As at As at
Cost of Materials Consumed 31.03.2017 31.03.2016
Opening Stock 9975.88 12469.35
Add : Purchases 36743.32 31280.33
46719.20 43749.68
Less: Cost of materials disposed 817.38 3175.38
45901.82 40574.30
Less : Closing Stock 12291.45 9975.88
Cost of Materials Consumed 33610.37 30598.42
Materials Consumed Comprises of
Raw Cotton 32990.89 30573.07
Modal 597.40 25.35
Lycra 22.08 0.00
33610.37 30598.42
Note 21
Changes in Inventories of Finished goods
and Work-in-Progress
Opening Stock Work in progress 726.41 766.78
Opening Stock Finished Goods 1059.30 529.30
Opening Stock of Waste Cotton 56.18 91.45
Total (A) 1841.89 1387.53
Closing Stock Work in progress 1352.29 726.41
Closing Stock Finished Goods 830.89 1059.30
Closing Stock of Waste Cotton 84.87 56.18
Total (B) 2268.05 1841.89
Increase / Decrease in Stock (A - B) (-)/(+) -426.16 -454.36

Note 22
Employee Benefits Expense
Salaries & Wages 1973.11 1914.93
Contribution to Provident Fund & Other Funds 140.06 139.31
Staff Welfare Expenses 525.07 456.58
2638.24 2510.82

56
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(Rs. in Lakhs)
Note 23 As at As at
Finance Costs 31.03.2017 31.03.2016
a. Interest Expense
(i) Fixed Term loans 0.00 60.06
(ii) Working Capital Loans 376.66 458.81
b. Other Borrowing Costs 7.29 2.66
c. Net Gain/Loss on Foreign Currency transactions 0.00 0.00
383.95 521.53
Note 24
Other Expenses
Stores Consumed 621.60 437.32
Power & Fuel 2368.82 3268.55
Materials Sizing & Fabrication 75.99 73.74
Freight Inwards 10.15 15.53
Machinery Maintenance 120.25 172.40
Building Maintenance 364.58 478.59
Vehicle Maintenance 121.86 100.02
Printing & Stationary 10.12 9.68
Postage & Telephone 32.01 35.19
Travelling Expenses 23.88 11.26
Insurance 107.25 121.29
Licence Fees & Taxes 164.11 60.65
Bank Charges 58.86 65.58
Professional & Legal Charges 46.68 37.96
Salary to Managing Director 24.00 24.00
Auditors Remuneration 3.45 3.44
Foreign Exchange Fluctuation 0.00 70.53
Freight Outwards 681.44 673.03
Packing Materials 759.03 751.29
Brokerage & Commission 757.52 714.21
Rate Discount 34.62 17.12
Advertisement 7.38 10.12
Security Service Charges 37.85 38.06
CSR Expenses 123.02 116.55
Miscellaneous Expenses 49.94 38.05
6604.41 7344.16

57
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25
Other Additional Information:

I. Contingent Liabilities and commitments (to the extent not provided for )
(i) Contingent Liabilities (Rs.in Lakhs)
a. Claims against the Company not acknowledged as debts: As at As at
31.03.2017 31.03.2016

Income Tax 0.00 26.12

Central Excise: Claim of Modvat / Cenvat credit not accepted 69.12 69.12
(refer note (A) below)

Central Excise: Demand relating to de-bonding of 100% EOU (refer 410.01 410.01
note (B) below)

Other Central Excise & Service Tax matters (refer note (C) below) 15.68 15.68

Sales Tax & VAT (refer note (D) below) 7.53 3.72

Total 502.34 524.65

b. Other money for which the company is liable :

Export Bills discounted /lodged with the Bank 1905.51 2735.97

(ii) Commitments: Estimated amount of contracts remaining to be executed on capital account and not
provided for Rs. 1038.17 Lakhs (Previous year Rs. 1385.72 Lakhs). (Advance and other expenditure incurred
Rs. 36.27 Lakhs).) (Previous year Rs. 13.75 Lakhs).

Notes :

A (a) The Central Excise department has not accepted claim of Cenvat Credit of Service Tax in respect of Windmills for the
reason that windmills are situated outside the factory and the matter is pending before Madras High Court. In the
company's own case, for a different year , the claim was allowed by Commissioner Central Excise ( Appeals ) ,
Madurai. Disputed amount Rs.23.99 Lakhs ( Previous Year Rs.23.99 Lakhs).

(b) The Central Excise department has not accepted claim of Modvat credit of in respect of its erstwhile 100% EOU unit
and the matter is pending before Madras High Court. Disputed amount Rs. 11.33 Lakhs (Previous year Rs.11.33
Lakhs).

(c) The Central Excise department has not accepted claim of Cenvat Credit of Excise duty in respect of capital goods for
the reason that during the impugned period cotton yarn was exempted and the matter is presently pending before
CESTAT Chennai. However in a similar matter the Gujarat High Court has allowed the claim of the assessee.
Disputed amount Rs.33.80 Lakhs ( Previous year Rs.33.80 Lakhs)
Total demand raised in respect of the above disputes ( a+b+c) Rs.69.12 Lakhs ( Previous year Rs.69.12 Lakhs)
B The Company has de-bonded one of its unit ( Unit - II ) from 100 % EOU after completion of initial period of 5 Years and
after fulfillment of export obligation by achieving Positive NFEP (Net Foreign Exchange ) in accordance with EXIM
policy. The de-bonding involved payment of duty under EPCG License ( for capital goods ) and Advance License ( For
Raw materials imported ) Schemes . The de-bonding was completed after obtaining " No Dues Certificate from the
Assistant Commissioner, Central Excise , Dindigul and final exit order from the Deputy Commissioner , MEPZ ,

58
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information:

Chennai .The Export Obligation , for duty discharge , fixed both under EPCG Scheme and advance License Scheme are
also fulfilled and the respective licenses are redeemed from JDGFT , Coimbatore . Subsequent to the above fulfillment,
the Central Excise Department has raised a Demand of Rs.410.01 Lakhs (Previous year Rs.410.01 Lakhs towards de-
bonding of Unit - II and the same is contested by way of writ before Hon'ble Madurai Bench of Madras High Court and
the matter is stayed by the High Court.
C (a) The Central Excise department has raised a demand towards service tax in respect of Freight charges paid by the
Company, which was earlier held unconstitutional by Hon'ble Apex Court. The matter is contested before CESTAT,
Chennai. Disputed amount Rs.4.80 Lakhs (Previous Year Rs.4.80 Lakhs).
(b) The Central Excise department has raised Service Tax demand including Interest and Penalty for payment of
commission to Foreign Agents and the matter is presently pending before CESTAT Chennai. Disputed amount
Rs.2.95 Lakhs ( Previous Year Rs.2.95 Lakhs)
(c) The Central Excise department has raised interest and penalty demand for late reversal of Cenvat credit and the
matter is presently pending before CESTAT, Chennai. Disputed amount Rs.0.84 Lakhs ( Previous Year Rs.0.84
Lakhs).
(d) The Central Excise department has raised Interest and penalty demand for non- reversal of Cenvat Credit on
account of its view that Cotton yarn is an exempted product during the period from November 2008 to December
2010.The matter is presently pending before CESTAT,Chennai. Disputed amount Rs.4.91 Lakhs ( Previous Year 4.91
Lakhs).
(e) The Central Excise department has raised duty demand and penalty proposing to levy the same in respect of used
spares on de-bonding of 100 % EOU and the matter is presently pending before CESTAT Chennai. Disputed amount
Rs. 2.18 Lakhs ( Previous Year Rs. 2.18 Lakhs ).
Total demand raised in respect of the above disputes ( a+b+c+d+e) Rs.15.68 Lakhs ( Previous year Rs. 15.68 Lakhs)
D (a) The Sales Tax Department for Assessment Year 1996-97 raised demand for non filing of certain forms and the
matter is contested before Appellate Deputy Commissioner (Commercial Taxes), Madurai. Disputed amount
Rs.3.72 Lakhs ( Previous year Rs.3.72 Lakhs).
(b) The Sales Tax Department for the Assessment Years from 2011-12 to 2014-15 has raised, in total, demand of Rs. 3.81
Lakhs (net of refund due) for the reason that TDS is deductable, on own Civil works and shortfall of Tax on the
value of Windmill AMC collected by the service provider and the matter is contested before Appellate Deputy
Commissioner (Commercial Taxes), Madurai. The Company has paid Rs.3.63 Lakhs towards the disputed
demand.(Previous year Nil )
Total demand raised in respect of the above disputes ( a+b) Rs. 7.53 Lakhs ( Previous year Rs.3.72 Lakhs).

II Earnings Per Share (EPS) FY 2017 FY 2016

Profit after Tax as per Statement of Profit and Loss (Rs in Lakhs) 5565.03 4445.52

Weighted average No. of Equity Shares outstanding for

Basic/Diluted EPS (Face Value Rs.10/- each) 5833671 5875000
Earning Per Share (EPS) (Basic) (Rs.) 95.39 75.67

Earning Per Share (EPS) (Diluted) (Rs.) 95.39 75.67

59
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS

Note 25 ( Contd…)
Other Additional Information:
III. Disclosure of the details of Specified Bank Notes (SBN) held and transacted during the period
08th November, 2016 to 30th December, 2016 : (Rs in Lakhs)

Other
Particulars SBNs Denomination Total
Notes
Closing cash in hand as on 08.11.2016 3.44 4.00 7.44
(+) Permitted receipts
i. Amount withdrawn from Bank 0 20.26 20.26
ii. Undisbursed salary & other recoveries from staff 1.56 4.08 5.64
Total 5.00 28.34 33.34
(-) Permitted payments 0 24.46 24.46
(-) Amount deposited in Banks 5.00 0 5.00
Closing Cash in hand as on 30.12.2016 0 3.88 3.88

IV Details of EPCG Authorization & Export obligations

Export obligation Duty
to be fulfilled [Rs. in Lakhs]
[ in USD*]
Opening Balance 1751271 191.25
Add : New Authorizations obtained during the year 5199561 589.70
Less : Obligation fulfilled during the year, pending redemption 4561275 509.56
Closing Balance 2389557 271.39

* Obligation in USD is computed at 6 times of the Duty saved amount , to be fulfilled within a period of 6 years from the date
of authorization. In the case of the company the above closing balance obligation in USD 2389557 is in respect of
authorizations obtained during the current financial year. The obligation fulfilled Authorizations are pending for
redemption.

V Details of TUFS Interest Reimbursement (Rs. in Lakhs)

Opening Receivable for Total Receivable Received during Amount Closing Balance
Balance the Year the year written off
(1) (2) (3) (1+2) (4) (5) 6 (3 - 4 - 5)
211.15 0.00 211.15 75.26 8.96 126.93
(200.78) (49.30) (250.08) (38.93) 0 (211.15)
(Figures in bracket relates to previous year)
(Rs in Lakhs)
VI Breakup of Trade Payables As at As at
31.03.2017 31.03.2016
Acceptances 3965.06 1435.96
Other than Acceptances 523.80 418.44
Total 4488.86 1854.40

60
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information:
VII. In terms of information available with the company there are no parties (Previous Year 3 (Three) parties) who are duly
registered under Micro, Small and Medium Enterprises Development Act 2006 and in respect of whom the amount
payable Outstanding as on 31.03.2017 is Nil (Previous year Rs. 24.89 Lakhs) .
VIII. Vehicle maintenance includes cost of expenditure exclusively incurred to provide transport to the employees from their
place to work spot Rs. 109.11 Lakhs (Previous year Rs. 91.82 Lakhs).
IX. Related Party Disclosures under Accounting Standard 18 (Rs in Lakhs)

Name of the Related Party Sri P.V. Chandran (Key Management Personnel)
Nature of Transactions For 2017 For 2016 Balance Payable Balance Payable
as at 31.03.2017 as at 31.03.2016
Remuneration of Sri P.V. Chandran 24.00 24.00 1.98 2.00
Relatives of Key Management Personnel
Mrs.Vidya Jyothish Pillai (Daughter of
Sri P.V.Chandran) - Director's Sitting fees 0.60 0.75 - -
Mrs. Bhavya Chandran ( Daughter of
Sri P.V.Chandran) - Director's Sitting fees 0.60 0.75 - -

X. Break up for Deferred Tax Liabilities / Assets (Rs in Lakhs)

Particulars As at 31.03.2017 As at 31.03.2016
Deferred Tax Liability on account of timing difference of depreciation 3257.80 3723.30
Less : Deferred Tax Assets 0.00 0.00
Deferred Tax Liability/Asset(net) 3257.80 3723.30

XI. a. The year-end Foreign Currency Exposures that have not been hedged by a derivative instrument or
otherwise are given below.
Particulars As at 31.03.2017 As at 31.03.2016
Assets Liabilities Assets Liabilities
(i) In USD 4914636.45 3362150.24 293448.26 190822.77
(ii) In INR(Lakh) 3186.65 2180.02 194.41 126.42

b. Outstanding Forward Exchange Contracts entered into by the company as on 31.03.2017.

Currency Amount Buy/ Sell Cross Currency
USD 1518000 Sell INR
(3814000)
USD 8527719 Buy INR
(2155231)
(Figures in bracket relates to the previous year)
(Rs. in Lakhs)
XII Auditors’ Remuneration FY 2017 FY 2016
Statutory Audit Fees 3.45 3.44
Total 3.45 3.44

61
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information :
XIII. Employee Benefits:
a. Company's Contribution to Provident Fund: Rs. 140.06 Lakhs (Previous Year Rs. 139.31 Lakhs)
b. Statement on Defined Benefit Plan - Gratuity (Covered under LIC Employees Cash Accumulation
Scheme) The Following table sets out the funded status of the gratuity plan and the amounts recognized in
the Company's financial statements as at 31st March 2017.

(i) Present value of obligations (Rs. in Lakhs)

Particulars As at 31.03.2017 As at 31.03.2016

Obligations at the beginning of the year 19.03 32.57
Interest Cost 1.52 2.61
Current Service Cost 1.82 4.21
Benefit paid (4.43) (0.39)
Actuarial (Gain) /loss on obligations 6.16 (19.97)
Obligations at the end of the year 24.10 19.03
(ii) Fair value of Plan Assets (Rs. in Lakhs)

Particulars As at 31.03.2017 As at 31.03.2016

Fair Value of the plan assets, beginning of the year 28.49 22.78
Expected return on plan assets 2.12 2.02
Contributions 1.26 4.08
Benefit paid (4.43) (0.39)
Actuarial (Gain) /loss on plan Assets 0 0
Fair Value of the plan assets, end of the year 27.44 28.49
Funded Status 3.34 9.46
(iii) Expenses to be recognized for the current year (Rs. in Lakhs)

Particulars For 31.03.2017 For 31.03.2016

Current Service Cost 1.82 4.21
Interest Cost 1.52 2.61
Expected return on plan assets (2.12) (2.02)
Actuarial (Gain)/ loss for the year 6.16 (19.97)
Expense to be recognized in statement of Profit and Loss 7.38 (15.17)

(iv) Actuarial Assumption

Particulars For 31.03.2017 For 31.03.2016
Discount Rate 8.00% 8.00%
Salary Escalation 5.00% 5.00%
The above figures are on the basis of actuarial valuations of Life Insurance Corporation of India.

62
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information :

XIV. Segment Reporting :

(i) Business segment (Rs. in Lakhs)
Particulars Textiles Windmills Total
31.03.2017 31.03.2016 31.03.2017 31.03.2016 31.03.2017 31.03.2016
Gross Segment Revenue 52861.30 49230.78 3256.78 2434.95 56118.08 51665.73
Less: Intersegment Revenue - - - 3256.78 2434.95
Total Revenue 52861.30 49230.78 3256.78 2434.95 52861.30 49230.78
Segment Result 5756.33 5656.90 1743.25 582.88 7499.58 6239.78
Less: Finance Cost - - - - 383.95 521.53
Add: Unallocable Other - - - - 78.43 177.46
Income net of Expenditure
Profit before Tax - - - - 7194.06 5895.71
Less : Tax Expense - - - - 1629.03 1450.19
Profit for the Year - - - - 5565.03 4445.52
Segment Assets 42925.13 36220.31 4645.59 5740.70 47570.72 41961.01
Unallocated Assets - - 29.66 445.15
Total Assets - - 47600.38 42406.16
Segment Liabilities 5707.65 2755.67 410.13 410.13 6117.78 3165.80
Unallocated Liabilities - - 4024.52 5735.79
Total Liabilities - - 10142.30 8901.59
Other information - - - - - -
Capital Expenditure 2898.19 2161.58 - 2898.19 2161.58
Unallocated Capital - - - -
Expenditure
Depreciation 1833.05 1787.85 1101.81 1204.11 2934.86 2991.96
Unallocated Depreciation - - - -
Non - Cash Expenses other - - - -
than depreciation

(ii) Geographic Segment (Rs. in Lakhs)

Particulars Europe Asia Others India Total

Sale of Goods 1681.74 23283.61 0 26628.98 51594.33
(1118.13) (24780.15) (62.24) (22375.76) (48336.28)
(Figures in bracket relates to previous year)

63
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information :
XV. Details of CSR Expenditure :
a. Gross amount required to be spent by the Company during the year Rs. 121.59 Lakhs (Previous
year Rs. 109.38 Lakhs)
b. Amount spent during the year FY 2016 - 17

(Rs in Lakhs)
S.No Particulars In Cash Yet to be paid in cash Total
i) Construction/acquisition of any asset - 52.69 0 52.69
Relates to construction of public toilets (35.10) (35.10)
ii) On purposes other than (i) above 70.33 0 70.33
(81.45) (81.45)
Total 123.02 123.02
(116.55) (116.55)
(Figures in bracket relates to previous year)

XVI. Buyback of Equity shares

The aggregate cost of buyback amounted to Rs. 1611.52 Lakhs consisting of (i) Consideration paid
towards buyback Rs.1573.22 Lakhs and (ii) Other transaction cost Rs.38.30 Lakhs.
In terms of Section 69 of the Companies Act,2013, Rs.15.00 Lakhs being the nominal value of Equity
Shares bought back was transferred to Capital Redemption Reserve Account from Share Premium
Account and the balance cost of buyback Rs.1596.52 Lakhs was also met out of Share Premium Reserve.

(Rs. in Lakhs)

XVII. Value of Imported and Indigenous

Raw Materials and Spare parts FY 2017 FY 2016
consumed and percentage thereof :
Value % to Total Value % to Total
i) Raw Materials
Imported 26180.57 77.89 19000.52 62.09
Indigenous 7429.80 22.11 11597.90 37.91
Total 33610.37 100.00 30598.42 100.00
ii) Spare Parts
Imported 142.82 22.98 47.85 10.94
Indigenous 478.78 77.02 389.47 89.06
Total 621.60 100.00 437.32 100.00

64
AMBIKA COTTON MILLS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Note 25 ( Contd…)
Other Additional Information :
(Rs. in Lakhs)
XVIII. Earnings in Foreign Exchange and Expenditure in Foreign Currency FY 2017 FY 2016
a. Earnings in Foreign Exchange 24965.35 25960.52
b. Expenditure in Foreign Currency
i) For Import of Capital Goods 1471.17 1036.68
ii) For Import of Raw Materials 26094.13 22207.54
iii) For Import of Spares 130.16 52.10
iv) For Interest & Bank Charges 192.89 196.18
v) For Commission 254.66 381.06
vi) For Other Matters 3.41 3.18
Total expenditure in foreign currency 28146.42 23876.74

XIX. Previous year figures have been re-grouped and re-classified wherever necessary.

For and on behalf of the Board

Sd/- Sd/-
(P.V.CHANDRAN) (Dr.K.VENKATACHALAM)
CHAIRMAN AND MANAGING DIRECTOR DIRECTOR
(DIN : 00628479) (DIN : 01062171)

Sd/- Sd/-
(RADHEYSHYAM PADIA) (M. VIJAYAKUMAR)
COMPANY SECRETARY (CHIEF FINANCIAL OFFICER

Date : 27.05.2017
Place : Coimbatore

65
 Book-post

To:

From
Regd.Office : AMBIKA COTTON MILLS LIMITED
9 A , Valluvar Street,
Sivanandha Colony,
Coimbatore - 641 012.