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Nitin Spinners Ltd.

BSE: 532698 Sector: Industrials
NSE: NITINSPIN ISIN Code: INE229H01012
BSE 00:00 | 05 Mar 85.45 -1.85
(-2.12%)
OPEN

87.95

HIGH

88.80

LOW

84.45

NSE 00:00 | 05 Mar 85.70 -1.40
(-1.61%)
OPEN

87.35

HIGH

89.70

LOW

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OPEN 87.95
PREVIOUS CLOSE 87.30
VOLUME 21474
52-Week high 96.00
52-Week low 24.70
P/E 14.76
Mkt Cap.(Rs cr) 480
Buy Price 84.60
Buy Qty 198.00
Sell Price 85.50
Sell Qty 10.00
OPEN 87.95
CLOSE 87.30
VOLUME 21474
52-Week high 96.00
52-Week low 24.70
P/E 14.76
Mkt Cap.(Rs cr) 480
Buy Price 84.60
Buy Qty 198.00
Sell Price 85.50
Sell Qty 10.00

Nitin Spinners Ltd. (NITINSPIN) - Director Report

Company director report

To

The Members

Your Directors have pleasure to present the 28th Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the year ended31st March 2020.

FINANCIAL RESULTS

The Financial Results of the Company's performance for the year under review and thoseof the previous year are as follows: -

Particulars Current Year 2019-20 Previous Year 2018-19
Revenue from operations 1438.06 1242.51
Gross Profit Before Finance Cost Depreciation & Exceptional item 171.90 180.84
Finance Cost 55.56 28.90
Profit before Depreciation Exceptional items and Tax 116.34 151.94
Depreciation 80.69 54.64
Exceptional items - -
Profit before Taxation 35.65 97.30
Provision for Taxation- Current Tax (Net of Mat Credit) - 36.41
- Earlier Year (0.44) (1.50)
- Deferred Tax 12.27 (1.72)
Profit after Tax 23.82 64.11
Other Comprehensive Income/(Loss) net of Income Tax (3.85) 1.67
Total Comprehensive Income for the period 19.97 65.78
Transfer to General Reserves - 10.00

OPERATIONAL PERFORMANCE REVENUE FROM OPERATIONS

The revenue from operations during the year under review is at ' 1438.06 Croresagainst ' 1242.51 Crores in the previous year registering an increase of 15.74%.The revenue of Yarn increased by 7.14% during current year from ' 984.19 Crores to '1054.51 Crores. The revenue from Yarn constitutes 73.33% of the total Sales. Revenue ofFabric has increased from ' 178.06 Crores in the previous year to ' 277.84Crores during year under review and registered growth of 56.04%. The Fabric revenueconstitutes 19.32% of the total revenue from operations. Commencement of commercialproduction at new unit at Bhanwaria Kalan Begun resulted into increased turnover and withthis the Company has also added new products like Blended yarn Woven Greige and FinishedFabrics.

EXPORTS

Exports Sales was reduced from ' 844.06 Crores in the previous year to '783.17 Crores in the current year. Exports constitute 54.46% of the total revenue. Due tolower cotton crop in India during the cotton year 2018-19; cotton prices were very high indomestic market in comparison to international market in the first half of the year underreview and consequently exports of yarn became uncompetitive. In the second half of theyear the situation improved but due to lock down in view of COVID-19 pandemic across theworld in the last quarter of the year exports were further affected.

PROFITABILITY

The Operating Profit (EBIDTA) of the Company has decreased from ' 180.84 Croresin the previous year to ' 171.90 Crores in current year in spite of increase inturnover. As percentage to revenue from operations the Operating Profits (EBIDTA) reducedfrom 14.55% in previous year to 11.95% in current year. Due to lower exports from Indiathere was selling pressure in domestic market as a result of which margins contracted.Further lower capacity utilisation of Weaving & Processing division of new unit atBegun resulted in higher operating cost. Moreover lockdown of the operations of theCompany from 22nd March 2020 further affected sales & profitability.

The finance cost for the year under review increased due to borrowings for new unit assuch Cash Profit (PBDT) was also reduced from ' 151.94 Crores in the previous yearto ' 116.34 Crores in current year. The Company has reported Net Profit of '23.82 Crores in the current year against ' 64.11 Crores in the previous year.

DIVIDEND

Your Directors are pleased to recommend Dividend of 6% i.e. ' 0.60 per EquityShares on the fully paid-up Equity Share of ' 10/- each for the financial year2019-20 subject to approval of shareholders at the ensuing Annual General Meeting. Nointerim dividend declared during the reporting period.

IMPACT OF COVID-19 PANDEMIC

The outbreak of COVID-19 globally and resultant lockdown in many countries includingin India has had impact on the business of the Company. Operations of the Company werecompletely closed from 22nd March 2020 to 19th April 2020 due to lockdown. Theoperations were partially resumed from 20th April and capacity utilisation is beinggradually increased. Due to the lockdown there was reduction in sales and profitabilityfor the quarter ended on 31st March 2020. The lockdown is partially continuing in 2020-21and the Company is continuing its operations with current lower demand. Management isexpecting that demand will improve once markets stabilize after effect of COVID-19 andlockdown is over.

INSTALLATION OF INTEGRATED TEXTILE UNIT

Your directors in their previous report had informed the members about installation ofIntegrated Textile Unit at Bhanwaria Kalan Tehsil Begun in the District of ChittorgarhRajasthan. Your Directors are pleased to inform you that the Company has successfullyinstalled the same and commercial production on Spinning & Weaving Unit was commencedwith effect from 01st July 2019 and that on Processing Unit with effect from 01stJanuary 2020.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Your Company is committed to make a positive contribution to communities where itoperates. Pursuant to Section 135 of the Companies Act 2013 the Company constituted CSRcommittee and formulated CSR Policy as guiding principle for undertaking CSR activities.The Company's vision on CSR is that the Company being a responsible Corporate Citizenwould continue to make a serious endeavor for improvement in quality of life andbetterment of society through its CSR related initiatives.

During the current year the Company has incurred expenditure of ' 161.36 Lacson CSR activities against obligation of ' 159.52 Lacs. Accordingly during the yearthere is no shortfall on CSR expenditure. The disclosures of CSR activities pursuant toSection 134(3) of the Companies Act 2013 read with Rule 9 of Companies (Corporate SocialResponsibility) Rules 2014 is annexed as Annexure - I hereto and form part of thisreport.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Nitin Nolakha Director of the Company who retired and being eligible wasre-appointed at the Annual General Meeting of the Company held on 20th September 2019.

Shri Dinesh Nolkha Managing Director of the Company was re-appointed for a furtherperiod of three years at the Annual General Meeting of the Company held on 20th September2019.

Shri Y. R Shah Smt. Aditi Mehta and Sh. R. Chattopadhyay Independent Directors wereappointed for second term at the Annual General Meeting held on 20th September 2019through Special Resolution.

Shri R.L. Nolkha Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offer himself for re-appointment. The Board recommendshis re-appointment for consideration of members of the Company at the ensuing AnnualGeneral Meeting.

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

All Independent Directors of the Company have confirmed that they meet criteria ofindependence as per requirement of Section 149(6) of the Companies Act 2013 andregulation 16(b) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015.

All the Directors Key Managerial Personnel and Senior Managerial Personnel haveconfirmed compliance of “Code of Conduct for Directors and Senior ManagementPersonnel”. A declaration by Managing Director confirming the receipt of declarationin this regard is enclosed to this Report.

AUDITORS :- STATUTORY AUDITORS

M/s Kalani & Co. Chartered Accountants (FRN 000722C) were appointed StatutoryAuditors at the 25th Annual General Meeting held on 04th September 2017 for five yearstill the conclusion of 30th Annual General Meeting to be held in the calendar year 2022.Accordingly they have conducted Statutory Audit for the 2019-20 and shall continue to beStatutory Auditors for the Financial Year 2020-21. They have confirmed their eligibilityto continue as Statutory Auditors of the Company for the 2020-21 under section 141 of theCompanies Act 2013 and rules framed there under.

The Audit Report on the Financial Statements for the Financial Year ended on 31stMarch 2020 issued by M/s Kalani & Co. Chartered Accountants do not contain anyqualifications reservations or adverse remarks. The information referred in Auditor'sReport 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 Year2019-20 under the provisions of Section 204 of the Companies Act 2013. Accordingly theyhave conducted Secretarial Audit for the Financial Year 2019-20 and Secretarial AuditReport in Form MR-3 is enclosed herewith. The report does not contain any qualificationreservation 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 forthe Financial Year 2020-21 under the provisions of Section 204 of the Companies Act 2013.

COST AUDITORS

The Board of Directors has appointed M/s. Vivek Laddha & Associates CostAccountants (FRN 103465) to conduct Cost Audit of the Cost Records maintained by theCompany for the Financial Year 2019-20. The Cost Audit Report for the Financial Year ended31st March 2020 is under finalisation.

Pursuant to Section 148 of the Companies Act 2013 your Directors have re-appointedM/s. Vivek Laddha & Associates Cost Accountants (FRN 103465) being eligible toconduct Cost Audit of the Cost Records maintained by the Company for the Financial Year2020-2021.

Further the Statutory Secretarial and Cost Auditors have not reported any fraudsunder section 143(12) of the Companies Act 2013.

CORPORATE GOVERNANCE

The Company is committed to maintain the high standards of Corporate Governance. YourDirectors adhere to the requirements set out in Companies Act 2013 and the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 and have implemented all theprescribed requirements. Pursuant to regulation 34(3) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Reports on Corporate Governance andManagement Discussions & Analysis have been incorporated in the Annual Report and forman integral part of the Board Report. A Certificate from Statutory Auditors confirmingcompliance to conditions of Corporate Governance as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.

AWARDS RECOGNITION & CERTIFICATIONS

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

1. Texprocil's Silver Plaque for second highest exports of cotton yarn above 50 countsfor the Financial Year 201819.

2. Certifications:

Your Company continued to hold following certifications from British StandardsInstitution (BSI): -

(a) Quality Management System - ISO 9001:2015

(b) Environmental Management System - ISO 14001:2015

(c) Energy Management System - ISO 50001:2011

(d) Occupational Health & Safety Management System - OHSAS 18001:2007

(e) Social Accountability System - SA 8000:2014

HUMAN RESOURCE DEVELOPMENT

Industrial relations continued to be cordial during the period under review. YourCompany firmly believes that a dedicated work force constitutes the primary source ofsustainable competitive advantage. Accordingly human resource development receivedfocused attention. The Company has in house skill training centre and imparts on the jobtraining to its manpower on continuous basis.

Your Directors wish to place on record their appreciation for the dedicated servicesrendered 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 your Company continuously looks out for energyconservation measures in all areas of operations across its both the Units. Similarlyyour Company endeavors to lookout for up-gradation and absorption of technology. YourCompany also spends continuously on research and development. Your Directors are glad toinform the members that your Company is a net foreign exchange earner. The relevant detailas required to be disclosed with respect to Energy Conservation Technology Absorption andForeign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act2013 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 2019-20 the Board of Directors met four times on 25.05.201910.08.2019 13.11.2019 and 07.02.2020. The details of number of Board Meetings and theattendance of the Directors are provided in the Corporate Governance Report forming partof the Board's Report. The frequency and intervening gap between the meetings was withinthe period prescribed under the Companies Act 2013 SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 and Secretarial Standards-1 issued by Instituteof Company Secretaries of India (ICSI) on Board meetings

COMMITTEES

The Company has constituted Audit Committee Nomination & Remuneration CommitteeStakeholders Relationship Committee and Corporate Social Responsibility Committee ofDirectors. The details of these committees have been given in the Corporate GovernanceReport form integral part of the Board's Report

RELATED PARTY TRANSACTIONS

All the related party transactions are entered on arm's length basis and in theordinary course of business. The Company has complied with all the applicable provisionsof the Companies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 in this regard. There is no materially significant related partytransaction with Promoters Directors or Key Management Personnel and any other relatedparty which may have potential conflict with the interest of the Company at large. Duringthe year the Company has not entered into any related party transactions under theSection 188 of the Companies Act 2013 and the particulars of contracts or arrangementswith related parties are Nil.

LOANS GUARATEES OR INVESTMENTS

During the year under review the Company has not given any Loan Guarantee or providedsecurity in connection with a loan nor has made any Investments under the Section 186 ofthe Companies Act 2013.

PUBLIC DEPOSITS

During the period under review your Company has not accepted any public deposit withinthe 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 forre-payment.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance of Section 177 (9) of the Companies Act 2013 and the regulation 22 of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and with theobjective of pursuing the business in a fair and transparent manner by adopting thehighest standards of professionalism honesty integrity and ethical behavior and toencourage and protect the employees who wish to raise and report their genuine concernsabout any unethical behavior actual or suspected fraud or violation of Company's Code ofConduct the Company has adopted a Whistle Blower Policy. The policy has been disclosed onthe website of the Company under the linkhttps://nitinspinners.com/wp-content/uploads/2018/06/ VIGIL-MECHANISM.pdf

During the year under review there was no instance of fraud reported and all therecommendation of the Audit Committee were accepted by the Board. No employee was deniedaccess to the Audit Committee.

NOMINATION REMUNERATION & EVALUATION POLICY AND EVALUATION

Pursuant to provisions of Section 178 of the Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Board of Directors haveapproved Nomination Remuneration & Evaluation Policy prescribing interalia thecriteria for appointment remuneration & evaluation of the Directors. The Boardreviewed the performance of Board its committee and all Individual Directors of theCompany and expressed its satisfaction over the performance of them. The IndependentDirectors in their separate meeting have reviewed the performance of non-independentdirectors Chairperson and Board as a whole along with review of quality quantity andtimeliness of flow of information between Board and management and expressed theirsatisfaction over the same. The Nomination Remuneration & Evaluation Policy isavailable under the link http://nitinspinners.com/wp-content/uploads/2018/06/Nomination-Remuneration-Policy.pdf

RISK MANAGEMENT POLICY

The Company has adopted a Risk Management Policy with the objective of ensuringsustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving risks associated with the business. The detailed RiskManagement framework has been provided in the Management Discussion and Analysis Report ofthe Company.

PARTICULARS OF EMPLOYEES & ANALYSIS OF REMUNERATION

The information about employees and analysis of remuneration as required under Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are enclosed as Annexure - III.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 as required under section 92(3) of theCompanies Act 2013 read with the Companies (Management and Administration Rules) 2014 isenclosed as Annexure - IV. The same is available on the website of the Company atwww.nitinspinners.com.

INTERNAL CONTROL SYSTEM

Your Directors inform the members that your Company has put in place strong internalcontrol systems commensurate with the size of the Company. Further your Directors takeutmost care to ensure that all assets are properly safeguarded and reliable information isprovided to the management. Your Directors endeavor to inform the members that all theobligations of the Company are properly adhered to. Your Directors endeavor tocontinuously improve and monitor the internal control systems.

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

The Company has duly constituted internal complaints committee in line with therequirements of the Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013 to redress complaints regarding sexual harassment at workplace. Thecommittee has informed that during the year it has not received any complaint under theAct no complaint was pending at the beginning of the year and no complaint was pending atthe end of year under review.

BUSINESS RESPONSIBILTY REPORT

The Regulation 34(2)(f) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 (as amended) requires for top 1000 listed entities based on MarketCapitalisation (calculated as on 31st March of every financial) shall contain BusinessResponsibility Report in its Annual Report. As per list of National Stock Exchange ofIndia Limited for top 1000 listed entities based on Market Capitalisation your companymeets this criterion as on 31st March 2020. Accordingly the Business ResponsibilityStatement shall be included in the Annual Report 2020-21.

OTHER DISCLOSURES

There is no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year and the date of thereport.

The Company has complied with all the applicable Secretarial standards issued by theInstitute 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 orcourts or tribunals which can impact the going concern status and Company's operations infuture.

No unclaimed dividend or shares are due for transfer to Investor Education &Protection Fund (IPEF) in terms of provisions of Companies Act 2013.

The certain disclosures are common under Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 and the same are disclosed inthe Corporate Governance Report forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section 3 (c) of Section 134 of the Companies Act 2013 the Board ofDirectors of the Company hereby state and confirm that:

(i) in the preparation of Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities

(iv) they have prepared the Annual Accounts on a going concern basis; and

(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank Customers Members Suppliers BankersBusiness Partners/Associates Central and State Governments for their consistent supportand co-operation extended to the Company. We also acknowledge the significant contributionmade by the employees by their dedication and hard work and trust reposed on us. We lookforward to have the same support in our endeavor to help the Company to grow faster.

For and on Behalf of the Board of Directors
R. L. NOLKHA
Place : Hamirgarh Bhilwara Chairman
Date : 19th June 2020 (DIN - 00060746)

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