Nitin Spinners Ltd Directors Report.

To

The Members

Your Directors have pleasure to present the 29th Annual Report on the business and operations of your Company along with the Audited Financial Statements for the year ended 31st March, 2021.

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
2020-21 2019-20
Revenue From Operations 1624.41 1438.06
Gross Profit Before Finance Cost, Depreciation & Exceptional item 259.16 171.90
Finance Cost 61.61 55.56
Profit before Depreciation, Exceptional items and Tax 197.55 116.34
Depreciation 91.03 80.69
Exceptional items - -
Profit before Taxation 106.52 35.65
Provision for Taxation - Current Tax (Net of MAT Credit) - -
- Earlier Year - (0.44)
- Deferred Tax 37.65 12.27
Profit after Tax 68.87 23.82
Other Comprehensive Income/(Loss) net of Income Tax 3.82 (3.85)
Total Comprehensive Income for the period 72.69 19.97

OPERATIONAL PERFORMANCE REVENUE FROM OPERATIONS

In spite of challenges posed by COVID-19 pandemic, your Company has registered highest ever Revenue and Profit. The Revenue from Operations during the year under review is Rs.1624.41 Crores against Rs.1438.06 Crores in the previous year, registering an increase of 12.96%. The revenue of Yarn increased by 3.86% during current year from Rs.1054.51 Crores to Rs.1095.23 Crores. The revenue from Yarn constitutes 67.42% of the total revenue. Revenue of Fabric has increased from Rs.277.84 Crores in the previous year to Rs.423.71 Crores during year under review and registered growth of 52.50%. The Fabric revenue constitutes 26.09% of the total revenue from operations.

EXPORTS

Exports registered remarkable increase of 29.80% as it has increased to Rs.1016.57 Crores in the current year from

Rs.783.17 Crores in the previous year. Exports constituted 62.58% of the total revenue during the year. The Companys focus of increasing export of value added products resulted in significant growth of 92% in Fabrics Exports which has increased to Rs.126.89 Crores during this year from Rs.65.97 Crores in the last year.

PROFITABILITY

The Company has registered significant increase in Operating Profit (EBIDTA) as it has increased from Rs.171.90 Crores in the previous year to Rs.259.16 Crores in current year. As percentage to revenue from operations the Operating Profits (EBIDTA) increased from 11.95% in previous year to 15.95% in current year. The Company has reported Net Profit of Rs.68.87 Crores in the current year against Rs.23.82 Crores in the previous year.

DIVIDEND

Your Directors are pleased to recommend Dividend of 15% i.e.

Rs.1.50 per Equity Shares on the fully paid-up Equity Share of

Rs.10/- each for the financial year 2020-21 subject to approval of shareholders at the ensuing Annual General Meeting. No interim dividend declared during the reporting period. If the dividend, as recommended above, is declared by the Shareholders at the ensuing Annual General Meeting (‘AGM), the total outflow towards dividend on Equity Shares for the year would be Rs.8.43 Crores.

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits for 2020-21 in the profit and loss account.

COMBATING COVID-19

With the wholehearted support from all our employees, suppliers and channel partners, we managed to serve our domestic as well as international customers and ensured growth in our business. Measures on continuous engagement with our employees facilitated us in safeguarding our workforce and their family members from the Covid-19 impact. We, at the Board level, are very appreciative of the support offered by the team and their family members. Without their commitment and support, we would not have been able to successfully adapt to the newer ways of working during the year. We are intensifying our efforts in managing the Covid-19 situation in view of the intensity of the ongoing second wave. We are cautious and yet hopeful, that our efforts in this direction will help us in managing the safety of all our relevant stakeholders and serve our customers with limited disruption.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Your Company is committed to make a positive contribution to communities where it operates. Pursuant to Section 135 of the Companies Act, 2013, the Company constituted CSR committee and formulated CSR Policy as guiding principle for undertaking CSR activities. 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.

During the current year, the Company has incurred expenditure of Rs.143.16 Lacs on CSR activities against obligation of Rs.136.25 Lacs. The disclosures of CSR activities pursuant to Section 134(3) 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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Ratan Lal Nolkha, Director of the Company who retired and being eligible, was re-appointed at the Annual General Meeting of the Company held on 16th September, 2020. Shri Nitin Nolakha, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends his re-appointment for consideration of members of the Company at the ensuing Annual General Meeting.

Tenure of Shri Ratan Lal Nolkha, Executive Chairman and Shri Nitin Nolakha, Joint Managing Director is expiring on 31st August, 2021 and 30th September, 2021 respectively. Based on performance evaluation and the recommendation of the Nomination and Remuneration Committee, the Board recommends their re-appointment for another term of three years.

No other changes have taken place in composition of Board of Directors and Key Managerial Personnel of the Company during the year under review.

All the Independent Directors have given declaration and confirmation of their independence and inclusion of their names in Independent Directors data bank maintained with the Indian Institute of Corporate Affairs (‘IICA) in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended. They are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. All the Directors, Key Managerial Personnel and Senior Managerial 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 (FRN 000722C) were appointed Statutory Auditors at the 25th Annual General Meeting held on 4th September, 2017 for five years till the conclusion of 30th Annual General Meeting to be held in the calendar year 2022. Accordingly, they have conducted Statutory Audit for the 2020-21 and shall continue to be Statutory Auditors for the Financial Year 2021-22. They have confirmed their eligibility to continue as Statutory Auditors of the Company for the 2021-22 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, 2021, issued by M/s Kalani & Co., Chartered Accountants, 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 2020-21 under the provisions of Section 204 of the Companies Act, 2013. Accordingly, they have conducted Secretarial Audit for the Financial Year 2020-21 and Secretarial Audit Report in Form MR-3 is enclosed herewith. The report does not contain any qualification, reservation or adverse remark.

The Board of Directors has re-appointed M/s V. M. & Associates, Company Secretaries (Firm Registration No. P1984RJ039200), being eligible, to conduct Secretarial Audit for the Financial Year 2021-22 under the provisions of Section 204 of the Companies Act, 2013.

COST RECORDS AND COST AUDITORS

The Company is required to maintain cost records as specified by the Central Government as per Section 148(1) of the Act and the rules framed there under, and accordingly, the Company has made and maintained such cost accounts and records. The Board of Directors has appointed M/s. Vivek Laddha & Associates, Cost Accountants (FRN 103465) to conduct Cost Audit of the Cost Records maintained by the Company for the Financial Year 2020-21. Accordingly, they have conducted Cost Audit for the 2020-21 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 (FRN 103465), being eligible, to conduct Cost Audit of the Cost Records maintained by the Company for the Financial Year 2021-2022.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, Cost 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. Your Directors adhere to the requirements set out in Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have implemented all the prescribed requirements. Pursuant to regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

AWARDS AND RECOGNITION

Your Company has been conferred with the following awards and recognition during the year under review :-

1. Texprocils Gold Trophy for highest export performance in cotton yarn – 51 & above counts under category -1 for the Financial Year 2019-20.

2. Texprocils Silver Trophy for second highest export performance in cotton yarn – 50 & below counts under Category III for the Financial Year 2019-20.

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 detail 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 2020-21, the Board of Directors met four times on 19th June, 2020, 8th August, 2020, 31st October, 2020 and 28th January, 2021. 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, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards-1 issued by Institute of Company Secretaries of India (ICSI) on Board Meetings read with General Circular 11/2020 dtd. 24th March, 2020 of Ministry of Corporate Affairs and Circular SEBI/ HO/CFD/CMD1/CIR/P/2020/38 dtd. 19th March, 2020 of SEBI issued in view of COVID-19 Pandemic.

COMMITTEES

The Company has constituted Audit Committee, Nomination

& Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee of Directors. The details of these committees have been given in the Corporate Governance Report which is integral part of the Boards Report.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in this regard. There is no materially significant related party transaction with Promoters, Directors or Key Management Personnel and any other related party which may have potential conflict with the interest of the Company at large. During the year, the Company has not entered into any related party transactions under the Section 188 of the Companies Act, 2013 and the particulars of contracts or arrangements with related parties are Nil.

LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any Loan, Guarantee or provided security in connection with a loan nor has made any Investments under the 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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/2018/06/ VIGIL-MECHANISM.pdf During the year under review, there was no instance of fraud reported and all the recommendation of the Audit Committee were accepted by the Board. No employee was denied access to the Audit Committee.

NOMINATION, REMUNERATION & EVALUATION POLICY AND EVALUATION

PursuanttoprovisionsofSection178oftheCompaniesAct,2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have approved Nomination, Remuneration & Evaluation Policy prescribing inter-alia the criteria for appointment, remuneration & evaluation of the Directors. The Nomination 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 http://nitinspinners.com/wp-content/ uploads/2019/06/Nomination-Remuneration-Policy.pdf

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.

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 31st March, 2021 is available on the Companys website at https://nitinspinners.com/wp-content/ uploads/2021/06/MGT-7-2020-21.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.

Further, details of the internal control systems are given in the Management Discussion and Analysis which forms part of this Annual Report.

COMPLIANCE WITH THE PROVISIONS OF SEXUAL HARSSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has duly 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 Act, no complaint was pending at the beginning of the year and no complaint was pending at the end of year under review.

BUSINESS RESPONSIBILTY REPORT (BRR)

The Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) requires top 1000 listed entities based on Market Capitalisation to include BRR in its Boards Report. In compliance of the same Business Responsibility Report has been annexed as Annexure - IV with Boards Report forming part of this Annual Report.

OTHER DISCLOSURES

There is 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. 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 paid-up Equity Share Capital as on 31st March, 2021 was Rs.56.22 crore and there was no change in the Share Capital of the Company during the Financial Year 2020-21.

The certain disclosures are common under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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

Pursuant to sub-section 3 (c) of Section 134 of the Companies 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 preventing and detecting frauds and other irregularities, (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

YourDirectorstakethisopportunitytothankMembers,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
Place : Hamirgarh, Bhilwara R. L. NOLKHA
Date : 3rd August, 2021 Chairman
(DIN – 00060746)