To
The Members
Your Directors have pleasure to present the 31st Annual Report on the
business and operations of your Company along with the Audited Financial Statements for
the year ended 31st March, 2023.
FINANCIAL RESULTS
The Financial Results of the Companys performance for the year
under review and those of the previous year are as follows: -
| Particulars |
Current Year |
Previous Year |
|
2022-23 |
2021-22 |
| Revenue From Operations |
2406.71 |
2692.32 |
| Gross Profit Before Finance Cost, Depreciation &
Exceptional item |
300.37 |
653.45 |
| Finance Cost |
37.68 |
55.34 |
| Profit before Depreciation, Exceptional items and Tax |
262.69 |
598.11 |
| Depreciation |
86.81 |
87.40 |
| Exceptional items |
- |
4.54 |
| Profit before Taxation |
175.88 |
506.17 |
| Provision for Taxation - Current Tax |
43.33 |
167.74 |
| - Deferred Tax |
(32.27) |
12.29 |
| Profit after Tax |
164.81 |
326.14 |
| Other Comprehensive Income/(Loss) net of Income Tax |
2.34 |
3.19 |
| Total Comprehensive Income for the period |
167.15 |
329.33 |
OPERATIONAL PERFORMANCE
REVENUE FROM OPERATIONS
The year under review was very difficult year for the Indian Cotton
Textiles Industry as it faced multiple challenges during the year: (1) Very high price
volatility and higher absolute prices of Raw Materials (2) relative domestic price
difference compared to international prices resulting in competitive disadvantage in
International Markets and (3) demand slowdown due to geopolitical tensions, inflation in
European and US economies. Due to all these factors, the Spinning Mills in India have to
cut down capacity utilization. Your company has also cut production by about 14% of annual
capacity during second and third quarters of the year to avoid heavy losses amid extreme
volatility.
Despite above factors, your company achieved Revenue from Operations of
Rs. 2406.71 Crores against Rs. 2692.32 Crores in the previous year, registering reduction
of 10.60%, which was mainly due to reduction in production. The revenue of Yarn reduced by
15.16% during current year from Rs. 1878.43 Crores in previous year to Rs. 1593.59 Crores.
The revenue from Yarn constitutes 66.21% of the total revenue. Revenue of Fabric has
reduced from Rs. 679.52 Crores in the previous year to Rs. 654.42 Crores during year under
review and registered reduction of 3.69%. The Fabric revenue constitutes 27.19% of the
total revenue from operations.
EXPORTS
The volatility in cotton prices and subdued demand of cotton yarn in
overseas market also affected exports of the Company and it decreased to Rs. 1356.33
Crores in the current year from Rs. 1953.63 Crores in the previous year registering
reduction of 30.57%. The Exports constituted 56.36% of the total revenue during the year.
PROFITABILITY
As a result of lower capacity utilization; the profitability of the
Company has also been adversely affected and Operating Profit (EBIDTA) and it has
substantially reduced from Rs. 653.45 Crores in the previous year to Rs. 300.37 Crores in
current year. The Company has reported Net Profit of Rs. 164.81 Crores in the current year
against Rs. 326.14 Crores in the previous year.
DIVIDEND
. Your Directors are pleased to recommend final Dividend of 25% i.e.
Rs. 2.50 per Equity Shares on the fully paid-up Equity Share of Rs. 10/- each for the
financial year 2022-23 subject to approval of shareholders at the ensuing Annual General
Meeting. Accordingly, total outflow towards dividend on Equity Shares for the year under
review would be Rs. 14.06 crores. In terms of provisions of Income Tax Act, 1961, payment
of Dividend shall be subject to deduction of Tax at source.
The Board continues to support a steady dividend policy and the
recommended dividend in accordance with the Dividend Distribution Policy of the Company
which is available on website of the Company at link:https://
nitinspinners.com/wp-content/uploads/2021/10/ Dividend-Distribution-Policy.pdf
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of
profits for FY 2022-23 in the profit and loss account and no amount is proposed to be
transferred to reserves.
EXPANSION PROJECTS
The Company has undertaken expansion projects at estimated project cost
of Rs. 955 Crores at both the Plants located at Hamirgarh (Bhilwara District) and
Bhanwaria Kalan (Chittorgarh District). The commercial production of Weaving &
Knitting capacity was commenced w.e.f. 31.03.2023. The implementation of expansion of
Spinning
& Finishing capacity is under process and commercial production is
expected to be commenced during current financial year.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
The Companys vision on CSR is that the Company being a
responsible Corporate Citizen would continue to make a serious endeavor for improvement in
quality of life and betterment of society through its CSR related initiatives in the local
areas where it operate.
During the current year, the Company has incurred expenditure of Rs.
434.08 Lakhs on CSR activities against obligation of Rs. 431.62 Lakhs. The excess spending
of Rs 2.46 Lakhs shall be carried forward for set off in the next F.Y. 2023-24. The Annual
Report on CSR Activities pursuant to Section 135 of the Companies Act, 2013 read with Rule
8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure
– I hereto and form part of this report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Ratan Lal Nolkha, Director of the Company who retired and being
eligible, was re-appointed and his designation was changed from Executive Chairman to
Non-Executive Chairman w.e.f. 01.10.2022.
Shri Dinesh Nolkha was re-appointed as Managing Director for five years
w.e.f. 01.10.2022.
Shri Rohit Swadheen Mehta, was appointed as Independent Director for
five years w.e.f. 30.12.2021 at the Annual General Meeting held on 15.09.2022.
No other changes have taken place in composition of Board of Directors
and Key Managerial Personnel of the Company during the year under review.
Shri Nitin Nolakha, Director of the Company retires by rotation at the
ensuing Annual General Meeting and being eligible, offer himself for re-appointment. On
recommendation of Nomination and Remuneration Committee, the Board recommends his
re-appointment for consideration of members of the Company at the ensuing Annual General
Meeting.
The Company has received declarations from all the Independent
Directors under Section 149(7) of the Companies Act, 2013 and Regulations 25(8) of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (hereinafter referred to as ‘Listing Regulations) confirming
that they meet the criteria of independence as prescribed thereunder. The Independent
Directors have complied with the Code for Independent Directors prescribed under Schedule
IV of the Companies Act, 2013 and the Listing Regulations. The Board is of the opinion
that the Independent Directors of the Company possess requisite qualifications, experience
(including proficiency) and expertise and they hold highest standards of integrity.
Further, Independent Directors fulfill the conditions of appointment as specified in the
Listing Regulations and are Independent of the Management. The names of Independent
Directors are included in Independent Directors data bank maintained with the Indian
Institute of Corporate Affairs (‘IICA) in terms of Section 150 of the Companies
Act, 2013 read with Rule 6 of the Companies (Appointment & Qualification of Directors)
Rules, 2014, as amended.
None of the Directors are disqualified for being appointed as Director
as specified in Section 164(1) & (2) of the Act and Rule 14(1) of the Companies
(Appointment and Qualification of Directors) Rules, 2014.
All the Directors, Key Managerial Personnel and Senior Management
Personnel have confirmed compliance of "Code of Conduct for Directors and Senior
Management Personnel". A declaration by the Managing Director in this regard is
enclosed to this Report.
AUDITORS
STATUTORY AUDITORS
M/s Kalani & Co., Chartered Accountants (Firm Registration No.
000722C) were appointed Statutory Auditors at the 30th
Annual General Meeting held on 15th September, 2022 for five years till
the conclusion of 35th Annual General Meeting to be held in the calendar year 2027.
Accordingly, they have conducted Statutory Audit for the F.Y. 2022-23 and shall continue
to be Statutory Auditors for the Financial Year 2023-24. They have confirmed their
eligibility to continue as Statutory Auditors of the Company for the F.Y. 2023-24 under
section 141 of the Companies Act, 2013 and rules framed there under.
The Audit Report on the Financial Statements for the Financial Year
ended on 31st March, 2023, issued by M/s Kalani & Co., Chartered Accountants, is
unmodified and do not contain any qualifications, reservations or adverse remarks. The
information referred in Auditors Report are self explanatory and hence do not
require any further clarification.
SECRETARIAL AUDITORS
The Board of Directors has appointed M/s. V. M. & Associates,
Company Secretaries (Firm Registration No. P1984RJ039200), to conduct Secretarial Audit
for the Financial Year 2022-23 under the provisions of Section 204 of the Companies Act,
2013. Accordingly, they have conducted Secretarial Audit for the Financial Year 2022-23
and Secretarial Audit Report in Form MR-3 is enclosed herewith. Pursuant to provisions of
Regulation 24A of Listing Regulations the Secretarial Auditors have also issued Annual
Secretarial Compliance Report for the F.Y. 2022-23. Both the reports do not contain any
qualification, reservation or adverse remark.
The Board of Directors on recommendation of Audit Committee has
re-appointed M/s V. M. & Associates, Company Secretaries (Firm Registration No.
P1984RJ039200) to conduct Secretarial Audit for the Financial Year 2023-24 under the
provisions of Section 204 of the Companies Act, 2013. They have confirmed their
eligibility for the said re-appointment.
COST RECORDS AND COST AUDITORS
The Company is required to maintain cost records, as specified by the
Central Government, in terms of Section 148(1) of the Companies Act, 2013 and the rules
framed there under, accordingly, the Company has maintained such cost records.
The Board of Directors on recommendation of Audit Committee has
appointed M/s. Vivek Laddha & Associates, Cost Accountants (Firm Registration No.
103465) to conduct Cost Audit of the Cost Records maintained by the Company for the
Financial Year 2022-23. Accordingly, they have conducted Cost Audit for the Financial Year
2022-23 and their report does not contain any qualification, reservation or adverse
remark.
Pursuant to Section 148 of the Companies Act, 2013, your Directors have
re-appointed M/s. Vivek Laddha
& Associates, Cost Accountants (Firm Registration No. 103465) to
conduct Cost Audit of Cost Records of the Company for the Financial Year 2023-2024. They
have confirmed their eligibility for the said re-appointment. The remuneration of Cost
Auditors is proposed to be ratified by the Shareholders at the ensuing Annual General
Meeting.
INTERNAL AUDIT
Pursuant to the provisions of Section 138 of the Companies Act, 2013
and The Companies (Accounts) Rules, 2014, Mr. Ankit Jain, Manager (Internal
Auditor) of the Company has conducted internal audit of your Company for the financial
year 2022-23.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors,
Internal Auditors and Secretarial Auditors have not reported any instances of frauds
committed in the Company by its officers or employees under Section 143(12) of the
Companies Act, 2013.
CORPORATE GOVERNANCE
The Company is committed to maintain the high standards of Corporate
Governance and adhere to the requirements set out in Companies Act, 2013 and Listing
Regulations. Pursuant to regulation 34(3) of the Listing Regulations, the Reports on
Corporate Governance and Management Discussions & Analysis have been incorporated in
the Annual Report and form an integral part of the Boards Report. A Certificate from
Statutory Auditors confirming compliance to conditions of Corporate Governance as
stipulated under Listing Regulations forms part of this Annual Report.
AWARDS AND RECOGNITION
Your Company has been conferred with the following awards and
recognition during the year under review:-
1. Award by the Government of Rajasthan for Highest Exports and highest
growth in exports during FY 2020-21
2. Rajasthan Energy Conservation Award 2022- "1st Award" for
the efforts in Energy conservation, under the Textile (Spinning) Category.
HUMAN RESOURCE DEVELOPMENT
Industrial relations continued to be cordial during the period under
review. Your Company firmly believes that a dedicated work force constitutes the primary
source of sustainable competitive advantage. Accordingly, human resource development
received focused attention. The Company has in house skill training centre and imparts on
the job training to its manpower on continuous basis.
Your Directors wish to place on record their appreciation for the
dedicated services rendered by the work force during the year under review.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Your Directors inform the members that the Company continuously looks
out for energy conservation measures in all areas of operations across its both the Units.
Similarly, your Company endeavors to lookout for up-gradation and absorption of
technology. Your Company also spends continuously on research and development. Your
Directors are glad to inform the members that your Company is a net foreign exchange
earner. The relevant details as required to be disclosed with respect to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to
Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies
(Accounts) Rules, 2014 are given in Annexure – II and forms integral part of
this Report.
NUMBER OF BOARD MEETINGS
During the year 2022-23, the Board of Directors met four times on
12.05.2022, 06.08.2022, 08.11.2022 and 02.02.2023. The details of number of Board Meetings
and the attendance of the Directors are provided in the Corporate Governance Report
forming part of the Boards Report. The frequency and intervening gap between the
meetings was within the period prescribed under the Companies Act, 2013, Listing
Regulations and Secretarial Standards-1 issued by Institute of Company Secretaries of
India (ICSI).
COMMITTEES
The Company has constituted Audit Committee, Nomination &
Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and
Corporate Social Responsibility Committee. The details of the committees have been given
in the Corporate Governance Report which is integral part of the Boards Report. All
the recommendation of the Audit Committee was accepted by the Board. No employee was
denied access to the Audit Committee.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arms length
basis and in the ordinary course of business. The
Company has complied with all the applicable provisions of the
Companies Act, 2013 and Listing Regulations in this regard. There were no transactions
requiring disclosure under Section 134(3)(h) of the Act. Hence, the prescribed Form
AOC–2 does not form a part of this Annual Report.
During the period under review, the Company had not entered into any
contract / arrangement / transaction with related parties which could be considered
material in accordance with the Policy on Materiality of and Dealing with Related Party
Transactions. The related party disclosures are provided in the notes to financial
statements. The Policy on Related Party transactions is available at the website of the
Company under the link https://nitinspinners.com/wp-content/uploads/2022/01/
Related-Party-Policy.pdf
LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the Company has neither given any Loan,
Guarantee or provided security in connection with a loan nor has made any Investments
under Section 186 of the Companies Act, 2013.
PUBLIC DEPOSITS
During the period under review, your Company has not accepted any
public deposit within the meaning of provisions of section 73 of the Companies Act, 2013
read with the Companies (Acceptance of Deposits) Rules, 2014 and there is no outstanding
deposit due for re-payment.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
In pursuance of Section 177 (9) of the Companies Act, 2013 and the
regulation 22 of the Listing Regulations and with the objective of pursuing the business
in a fair and transparent manner by adopting the highest standards of professionalism,
honesty, integrity and ethical behavior and to encourage and protect the employees who
wish to raise and report their genuine concerns about any unethical behavior, actual or
suspected fraud or violation of Companys Code of Conduct, the Company has adopted a
Whistle Blower Policy. The policy has been disclosed on the website of the Company under
the link https:// nitinspinners.com/wp-content/uploads/2023/02/Vigil-Mechanism.pdf
During the year under review, there was no instance of fraud and no
whistle blower event was reported.
NOMINATION, REMUNERATION & EVALUATION POLICY AND EVALUATION
Pursuant to provisions of Section 178 of the Companies Act, 2013 and
Listing Regulations the Board of Directors have approved Nomination, Remuneration &
Evaluation Policy prescribing inter-alia the criteria for appointment,
remuneration&evaluationoftheDirectors.TheNomination and Remuneration Committee and
Board reviewed the performance of Board, its committee and all Individual Directors of the
Company and expressed its satisfaction over the performance of them. The Independent
Directors in their separate meeting have reviewed the performance of non-independent
directors, Chairperson and Board as a whole along with review of quality, quantity and
timeliness of flow of information between Board and management and expressed their
satisfaction over the same. The Nomination, Remuneration & Evaluation Policy is
available under the link https://nitinspinners.com/wp-content/
uploads/2021/07/Nomination-Remuneration-Policy.pdf During the year no amendment was made
in the Policy.
In terms of provisions of section 178(4) of the Companies Act, 2013 the
Salient features of the Policy are given Corporate Governance Report.
RISK MANAGEMENT POLICY
The Company has adopted a Risk Management Policy with the objective of
ensuring sustainable business growth with stability and to promote a pro-active approach
in reporting, evaluating and resolving risks associated with the business. The detailed
Risk Management framework has been provided in the Management Discussion and Analysis
Report of the Company. The Policy is available under the link
https://nitinspinners.com/wp-content/ uploads/2021/10/Risk-Management-Policy.pdf
PARTICULARS OF EMPLOYEES & ANALYSIS OF REMUNERATION
The information about employees and analysis of remuneration as
required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure
- III
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on March 31, 2023 is available on the Companys website
https://nitinspinners.com/wp-content/uploads/2023/07/MGT-7-2022-23.pdf
INTERNAL FINANCIAL CONTROL
The Company has laid down Internal Financial Controls that include a
risk-based framework to ensure orderly and efficient conduct of its business, safeguarding
of its assets, accuracy and completeness of the accounting records and assurance on
reliability of financial information. The
Company maintains adequate and effective internal control systems
commensurate with its size and complexity. An independent internal audit function is an
important element of the Companys internal control systems. This is executed through
an extensive internal audit programme and periodic review by the management and the Audit
Committee.
The Audit Committee has satisfied itself on the adequacy and
effectiveness of the internal financial control systems laid down by the management. The
Statutory Auditors have confirmed the adequacy of the internal financial control systems
over financial reporting.
COMPLIANCE WITH THE PROVISIONS OF SEXUAL HARSSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a Policy for prevention of sexual harassment
and constituted internal complaints committee in line with the requirements of the Sexual
Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to
redress complaints regarding sexual harassment at workplace. The committee has informed
that during the year it has not received any complaint under the said Act, no complaint
was pending at the beginning of the year and no complaint was pending at the end of year
under review.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations the Business
Responsibility and Sustainability Report for the financial year ended 31st March, 2023 is
attached herewith and forms part of the report.
OTHER DISCLOSURES
There are no material changes and commitments affecting the financial
position of the Company which has occurred between the end of the financial year and the
date of the report.
There is no change in the nature of business of the Company during the
year under review.
The Company has complied with all the applicable Secretarial standards
issued by the Institute of Company Secretaries of India.
The Company does not have any subsidiary, joint venture & associate
company.
No significant and material order has been passed during the year by
the regulators or courts or tribunals which can impact the going concern status and
Companys operations in future.
No unclaimed dividend or shares are due for transfer to Investor
Education & Protection Fund (IPEF) in terms of provisions of Companies Act, 2013. The
year wise details of Unclaimed/Unpaid Dividend are available at the website of the Company
under link https://nitinspinners.com/ unclaimed-and-unpaid-amounts/
The paid-up Equity Share Capital as on March 31, 2023 was Rs. 56.22
crore and there was no change in the Share Capital of the Company during the Financial
Year 2022-23.
The detail of Credit Rating and Familiarization Programs has been given
in Corporate Governance Report.
No application is made and no proceeding is pending against the Company
under the Insolvency and Bankruptcy Code, 2016 (IBC Code) and there is no instance of
one-time settlement of the Company with any bank or financial institution.
Certain disclosures are common under Companies Act, 2013 and Listing
Regulations and the same are disclosed in the Corporate Governance Report forming part of
this Report.
The disclosures other than made above are either nil or not applicable
on the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuanttosub-section3(c)ofSection134oftheCompanies Act, 2013, the
Board of Directors of the Company hereby state and confirm that:
(i) in the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures;
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventinganddetectingfraudsandotherirregularities,
(iv) they have prepared the Annual Accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively; and
(vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank all stakeholders
including Members, Bankers, Business Partners/Associates, Central and State Governments
for their consistent support and co-operation extended to the Company. We also acknowledge
the significant contribution made by the employees by their dedication and hard work and
trust reposed on us. We look forward to have the same support in our endeavor to help the
Company to grow faster.
|
For and on Behalf of the
Board of Directors |
|
Dinesh Nolkha |
Nitin Nolakha |
| Place: Hamirgarh, Bhilwara |
Managing Director |
Joint Managing Director |
| Date: 05th August, 2023 |
(DIN – 00054658) |
(DIN – 00054707) |
| Registered Office : |
|
|
| 16-17 KM Stone, Chittor Road, |
|
|
| Hamirgarh, Bhilwara - 311025 |
|
|
+91-9892691696
