Nitin Spinners Ltd

To

The Members

Your Directors have pleasure to present the 32nd Annual Report on the business and operations of your Company along with the Audited Financial Statements for the year ended 31st March, 2024.

The Financial Results of the Company's performance for the year under review and those of the previous year are as follows: -(H in crores)

Your Company has registered highest ever Revenue during the year under review as the Revenue from Operations has increased from H 2406.71 crores in the previous year to H 2905.65 crores during the current year registering an increase of 20.73%. The revenue of Yarn increased by 26.74% during current year from H 1593.59 crores to Rs

2019.76 crores. The revenue from Yarn constitutes 69.51% of the total revenue. Revenue of Fabric has increased from H 654.42 crores in the previous year to H 716.67 crores during year under review and registered growth of 9.51%. The Fabric revenue constitutes 24.66% of the total revenue from operations. The completion of expansion project resulted increase in turnover.

There is significant increase in Exports of the Company as it has increase to H 1704.29 crores in the current year from H 1356.33 crores in the previous year registering an increase of 25.65%. The Exports constituted 58.65% of the total revenue during the year.

The Operating Profit (EBIDTA) of your Company has increased by 26.28%, from H 300.37 crores in the previous year to H 379.30 crores in current year. As percentage to revenue from operations, the Operating Profits (EBIDTA) marginally increased from 12.48% in previous year to 13.05% in current year. However, due to significant increase in Interest & Depreciation cost on account of implementation of expansion project the Company has reported Net Profit of H 131.52 crores in the current year against H 164.81 crores in the previous year.

Your Directors are pleased to recommend final Dividend of 25% i.e. H 2.50 per Equity Shares on the fully paid-up Equity Share of H 10/- each for the financial year 2023-24 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 H 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 recommended dividend in accordance with the Dividend Distribution Policy of the Company which is available on website of the Company at https://nitinspinners.com/wp-content/ uploads/2024/02/Dividend-Distribution-Policy.pdf

The Board of Directors has decided to retain the entire amount of profits for FY 2023-24 in the profit and loss account and no amount is proposed to be transferred to reserves.

During the year your Company has successfully implemented expansion project for installation of 94848 Compact Spindles and 3312 Rotors at Hamirgarh Plant (Bhilwara District) & 32640 Compact Spindles and 264 Airjet Spinning positions at Bhanwaria Kalan (Chittorgarh District) Plant. The commercial production was commenced on 28.09.2023 & 30.11.2023 respectively. The expansion projects of Weaving & Knitting capacity were completed during the FY 2022-23. The total cost of expansion projects was H 859.53 crores.

The Company's 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. The CSR policy is available at the website of the Company under the link https://nitinspinners.com/wp-content/uploads/2024/02/CSR-Policy.pdf

During the current year, the Company has incurred expenditure of H 237.31 lakhs on CSR activities during the F.Y. 2023-24 against obligation of H522.21 lakhs (after setting of excess expenditure of H 2.46 lakhs during the F.Y. 2022-23). The Company has under taken ongoing project for construction of school and pursuant to section 135(6) of the Companies Act, 2013 the unspent amount of H 284.90 lakhs towards CSR obligation for the F.Y. 2023-24 was transferred to "Nitin Spinners Limited - Unspent CSR Account 2023-24" on 29.04.2024. 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.

Shri Ratan Lal Nolkha (DIN:00060746) ceased to be Non-Executive Chairman of the Company w.e.f. 12.08.2023 due to his sad demise. The Board place on record the valuable contributions made by him in growth of the Company and pray to almighty God for peace of his holy soul.

Sh. Nitin Nolakha (DIN : 00054707), Jt. Managing Director, retired by rotation & re-appointed at the 31st Annual General Meeting held on 18.09.2023.

Shri Rishabh Chand Lodha (DIN : 07177605), was appointed as an Additional Director (Independent) at the Board Meeting held on 09.11.2023 with immediate effect and he was appointed as Non- Executive Independent Director for first consecutive term of five years w.e.f. 09.11.2023 at the Extra-Ordinary General Meeting held on 27.12.2023.

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

Further, Shri Dinesh Nolkha (DIN : 00054658), Managing 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. It is also proposed to re-designate him as Chairman & Managing Director with effect from 01.10.2024 till the end his current tenure of appointment upto 30.09.2027 without any change in other terms and conditions of his appointment as approved at the 30th Annual General Meeting of the Company held on 15th September, 2022 and at the Extra-Ordinary General Meeting held on 27.12.2023. On recommendation of Nomination and Remuneration Committee, the Board recommends his redesignation for consideration of members of the Company at the ensuing Annual General Meeting.

Tenure of Shri Nitin Nolakha, Jt. Managing Director is expiring on 30.09.2024. Based on performance evaluation and recommendation of Nomination and Remuneration Committee, the Board recommends for the approval of the Members elevating his designation and appointing him as Managing Director for a period of five years with effect from 01.10.2024 at the ensuing Annual General Meeting.

Smt. Vibha Aren (DIN : 07028020) on recommendation of Nomination and Remuneration Committee (NRC) was appointed as an Additional Director (Independent) by the Board of Directors at its Meeting held on 22.07.2024 with immediate effect for first consecutive term of five years subject to approval of shareholders at the ensuing AGM. The Board recommends for the approval of the Members, the appointment of Smt. Vibha Aren as a Non-Executive Independent Director of the Company for a term of five consecutive years with effect from 22.07.2024. She has the required integrity, expertise, experience and proficiency for appointment as a Non-Executive Independent Director of your Company.

Sh. Pratyush Nolakha (DIN : 10704970), on recommendation of Nomination and Remuneration Committee (NRC), was appointed as an Additional Director (Executive) by the Board of Directors at its Meeting held on 22.07.2024 with immediate effect subject to approval of shareholders at the ensuing AGM. The Board recommends for the approval of the Members, the appointment of Sh. Pratyush Nolakha as Executive Director of your Company for a period from 22.07.2024 to 30.09.2027.

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 under Section 149(6) of the Companies Act, 2013 and Regulations 16(1) (b) of the Listing Regulations. 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 in the Companies Act, 2013 and are Independent of the Management. The names of Independent Directors are included in Independent Director's 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 and also passed the online proficiency test conducted by the Indian Institute of Corporate Affairs, wherever required.

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 and disqualified or debarred from being appointed or continuing Director of the Company by virtue of any SEBI order or any other authority.

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.

M/s Kalani & Co., Chartered Accountants (Firm Registration No. 000722C) were re-appointed as Statutory Auditors at the 30th Annual General Meeting held on 15th September, 2022 for second term of consecutive five years from conclusion of 30th Annual General Meeting 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. 2023-24 and shall continue to be Statutory Auditors for the Financial Year 2024-25. They have confirmed their eligibility to continue as Statutory Auditors of the Company for the F.Y. 2024-25 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, 2024, issued by M/s Kalani & Co., Chartered Accountants, is unmodified and do not contain any qualifications, reservations or adverse remarks. The information referred in Auditor's Report are self explanatory and hence do not require any further clarification.

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 2023-24 under the provisions of Section 204 of the Companies Act, 2013. Accordingly, they have conducted Secretarial Audit for the Financial Year 2023-24 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. 2023-24. Both the reports do not contain any qualification, reservation or adverse remark.

The Board of Directors, on recommendation of Audit Committee, at their meeting held on 09.05.2024 has re-appointed M/s V. M. & Associates, Company Secretaries (Firm Registration No. P1984RJ039200) to conduct Secretarial Audit for the Financial Year 2024-25 under the provisions of Section 204 of the Companies Act, 2013. They have confirmed their eligibility for the said re-appointment and Regulation 24A of Listing Regulations.

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 2023-24. Accordingly, they have conducted Cost Audit for the Financial Year 2023-24 and their report does not contain any qualification, reservation or adverse remark.

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors, on recommendation of Audit Committee, at their Meeting held on 09.05.2024 have re-appointed M/s. Vivek Laddha & Associates, Cost Accountants (Firm Registration No. 103465) as Cost Auditors to conduct Cost Audit of the Cost Records of the Company for the Financial Year 2024-2025. They have given their consent and 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.

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014, Mr. Ankit Jain, Manager (Internal Audit) of the Company has conducted internal audit of your Company for the financial year 2023-24.

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.

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 Board's Report. A Certificate from Statutory Auditors confirming compliance to conditions of Corporate Governance as stipulated under Listing Regulations forms part of this Annual Report.

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

(A) The Cotton Textiles Export Promotion Council (TEXPROCIL) has conferred following awards to the Company :-

1. Year 2021-22 : - Silver Trophy for second Highest Exports of Cotton Yarn of Counts 50s and below in Category -III

2. Year 2022-23 : -

Gold Trophy for Highest Exports of Cotton Yarn of Counts 50s and below in Category – III

Gold Plaque for Highest Exports of Cotton Yarn of Counts 51s and above in Category – I

Gold Trophy for Highest Employment Generation (Overall)

(B) Safety Award by Government of Rajasthan: Third position for safety, health & welfare of workers in the category of Large Industries.

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.

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.

During the year 2023-24, the Board of Directors met four times on 06.05.2023, 05.08.2023, 09.11.2023 and 29.01.2024. The details of number of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of the Board's 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 the Institute of Company Secretaries of India (ICSI).

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 Board's Report. All the recommendations of the Audit Committee were accepted by the Board. No employee was denied access to the Chairperson of Audit Committee.

The details of Related Party Transactions during FY are provided in note no. 32 of financial statements. All the related party transactions entered during the FY are entered on arm's length basis and in the ordinary course of business. 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 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.

ThePolicyonRelatedPartytransactionsisavailableatthewebsite of the Company under the link https://nitinspinners.com/wp-content/uploads/2024/02/Related-Party-Transaction-Policy.pdf

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.

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.

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 Company's 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/2024/02/Vigil-Mechanism-Whistle-Blowed-Policy.pdf

During the year under review, there was no instance of fraud and no whistle blower event was reported.

Pursuant to provisions of Section 178 of the Companies Act, 2013 and Regulation 19 read with Schedule II Part D of the Listing Regulations the Board of Directors have approved Nomination, Remuneration & Evaluation Policy inter-alia containing the criteria for appointment, remuneration & evaluation of the Directors, Key Managerial Personnel & Senior Management Personnel. During the year, the Nomination and Remuneration Committee reviewed the performance of Individual Directors. The Board reviewed the performance of Individual Directors, Committees and Board itself and expressed its satisfaction on the same. 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 manner in which evaluation has been carried out is explained in the Corporate Governance Report which is integral part of this report. The Nomination, Remuneration & Evaluation Policy is available under the link https://nitinspinners. com/wp-content/uploads/2024/02/Nomination-Remuneration-and-Evaluation-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 in Corporate Governance Report which is integral part of the Annual Report.

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 which is integral part of the Annual Report. The Policy is available under the link https://nitinspinners.com/wp-content/ uploads/2024/02/Risk-Management-Policy.pdf

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

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Company's website under the link https://nitinspinners.com/wp-content/uploads/2024/06/MGT-7-2023-24.pdf

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 Company's 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 internal control systems are given in the Management Discussion and Analysis which forms part of this Annual Report.

The Company has in place a Policy on sexual harassment of women at workplace and constituted an internal complaints committee in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints regarding sexual harassment of women 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.

Pursuant to Regulation 34(2)(f) of the Listing Regulations the Business Responsibility and Sustainability Report for the financial year ended 31st March, 2024 is attached herewith and forms part of the report.

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 Company's 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 authorized share capital of the Company is H 60 crores and paid-up Equity Share Capital as on March 31, 2024 was H 56.22 crore and there was no change in the Share Capital of the Company during the Financial Year 2023-24.

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.

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 maintenanceofadequateaccountingrecordsinaccordance 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.

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.