Nahar Industrial Enterprises Ltd Directors Report.

Dear Members,

Your directors have pleasure in presenting their 35th Annual Report together with the audited financial statements for the financial year ended 31st March, 2019.


The Companys financial performance, for the year ended 31st March, 2019 is summarized below:

(Rs. in lacs)
Particulars Current Year Previous Year
Revenue from operations 1,86,616.24 1,76,274.88
Profits Before Depreciation, Finance Cost and Tax 13,482.81 15,430.85
Less: Depreciation 7,858.34 6,576.90
Less: Finance Cost 6,711.84 7,073.14
Profits/ (Loss) Before Exceptional Item and Tax (1,087.37) 1,780.81
Exceptional Item 665.01 --
Profit / (Loss) Before Tax (1,752.38) 1,780.81
Less Tax Expense:
1) Current Tax -- 413.00
Less: Mat Credit Entitlement -- (413.00)
2) Deferred Tax 405.14 58.67
Profit / (Loss) After Tax for the period (2,157.52) 1,722.14
Other Comprehensive Income
Items that will not be reclassified to profit or loss
i) Re-measurement gains/(losses) on defined benefit plans 385.97 238.59
Income tax effect on the above (134.87) --
ii) Net gain / (loss) on FVOCI equity instruments (484.67) (949.71)
Income tax effect on the above (195.08) 195.08
Total Comprehensive Income for the period (2,586.17) 1,206.10


The Company operates in two Business segments i.e. Textile and Sugar as per Indian Accounting Standard (AS)-108 (Operating Segment).

i) Textile: The textile division accounts for 92.20% (including inter-segment) of the total turnover of the company for the year ended 31st March, 2019.

The Business wise performance of this segment is as under:

a. Yarn: The Company has produced 67,224 MTs of yarn as against 64,350 MTs in the previous year.

b. Fabric: The Company has produced 804.70 lacs meters of fabrics (both grey and processed) as against 705.29 lacs meters in the previous year.

The total turnover of this segment (Yarns and Fabrics) has Increased to Rs. 1,720.56 crores as against Rs. 1,540.37 crores in the previous year showing a Increase of 11.70%.

ii) Sugar: The Company has produced 5,04,725

Qtls. of sugar as against 5,63,310 Qtls. in the previous year at a Recovery rate of 10.65% (previous year 10.70%).

The total turnover of this segment has decreased to Rs. 145.14 crores as against Rs. 224.00 crores in the previous year showing a decrease of 35.21%.

Overall Performance

The year under review was tough for the textile industry. The company has achieved operational income of Rs. 1866.16 crores as against Rs. 1762.74 crores showing an increase of 5.87% over the previous year. The company has earned Profit before depreciation, finance cost and tax of Rs. 134.83 crores as against Rs. 154.31 crores in the previous year. After providing for Depreciation of Rs. 78.58 crores (previous year Rs. 65.77 crores), finance cost of Rs. 67.12 crores (previous year Rs. 70.73 crores) and Tax Expenses of Rs. 4.05 crores (previous year Rs. 0.59 crores) (inclusive of Deferred Tax) the Loss for the year comes to Rs. 21.58 crores as against Profit of Rs. 17.22 crores in the previous year.

We would also like to share with you the prevailing scenario in the Textile industry. The Textile industry is passing through a difficult phase of uncertainties. The demand for textile products has fallen because of global slowdown. The Cotton price remained firm. The high cotton prices coupled with lower global demand are affecting the fortunes of the textile industry. This further compounded by the US-China trade disputes. Spinning mills have already cut down their production even some mills have closed their operations because of prevailing adverse scenario. Uncertainties prevailing and future are still not clear. With the right Government policies, we believe that the India Textile industry is well poised to benefit from the large opportunities offered in the domestic and export market.


Your company has transferred Rs.(26.96) lakhs (previous year Rs. 6.53 crores) from the General Reserves.


The Rating Committee of ICRA has revised the long term and short term rating for Bank facilities of the Company to [ICRA] A- (pronounced ICRA A minus) and [ICRA] A2+ (pronounced ICRA A two plus) from [ICRA] A (pronounced ICRA A) and [ICRA]A1 (pronounced ICRA A one) respectiely. The outlook on the long term rating is stable.


Due to loss suffered by the Company, your directors express their inability to recommend dividend for the financial year ended on 31st March, 2019.


Pursuant to the applicable provisions of the Companies Act 2013 and rules framed there under, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid account is required to be transferred to Investor Education and Protection Fund (IEPF) of the Central Government. Accordingly, the Company has transferred Rs. 18,36,179/- being the amount of unclaimed dividend for the year 2010-11 to the IEPF. Members who have not yet en-cashed or claimed the dividends, that are yet to be transferred to the IEPF, are requested to contact the Company at the earliest.

In terms of the requirements of Section 124 (6) of the Companies Act, 2013 read with Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit,

Transfer and Refund) Rules, 2016, as amended (the Rules) the Company is required to transmit the Shares in respect of which the dividend has remained unpaid or unclaimed for a period of seven consecutive years to the IEFP Account. Members are requested to take note of the same and claim their unclaimed dividend immediately to avoid transmission of the underlying shares to IEPF Account. The shares transmitted to the IEPF Account can be claimed back by the concerned members from the IEPF authority after complying with the procedure prescribed under the rules. During the Financial year 2018-19, the Company has transmitted 1,39,490 Shares to IEPF Account. The list of members whose shares have been transmitted to IEPF Authority is displayed on the website of the company at web-link: /transfer-of-equity-shares.php.


During the year 2018-19, the company has allotted 67,20,000 - 5.5% Non-Convertible Non-Cumulative Redeemable Preference Shares (NCNCRPS) of Rs. 100/- each aggregating to Rs. 67,20,00,000/- to Cotton County Retail Ltd., one of promoter group entities. The company has utilized the amount for the purposes it was raised. As on 31st March, 2019 the paid up Share Capital of the Company is Rs. 107,03,51,410/- consisting of Equity Share Capital of Rs. 39,83,51,410/- and Preference Share Capital of Rs. 67,20,00,000/-. During the year under review, the Company has not granted any stock options or sweat equity. As on 31st March, 2019 none of the Promoters / Directors of the Company hold instruments convertible into equity shares of the Company.


During the year, the Company has not accepted any deposit from the public. As such there are no outstanding deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.


Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements.


No changes and commitments affecting the financial position of the company have occurred during the year under review as well as the period between the end of financial year till the date of this report.


Re-appointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association Sh. Jawahar Lal Oswal (DIN: 00463866) and Sh. Dinesh Oswal (DIN: 00607290), Directors of the Company will be retiring by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. Accordingly, the requisite resolution(s) are proposed at the ensuing Annual General Meeting for approval.

Declaration by Independent Directors

Necessary declaration has been obtained from all Independent Directors under sub-section (6) of Section 149 of the Companies Act, 2013.

Number of Meetings of the Board

During the year seven Board Meetings were convened and held on 30.5.2018, 14.8.2018, 14.11.2018, 15.1.2019, 14.2.2019, 15.3.2019 and 27.3.2019. The detail thereof is given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has devised a policy for performance evaluation of the board, its committees and all the Directors individually as per the criteria laid down by the Nomination & Remuneration Committee of the Company. The manner of evaluation is stated in the Corporate Governance Report forming an integral part of this report.

Independent Directors Meeting

During the financial year 2018-19, the Independent Directors met on 8th December, 2018, inter-alia, to discuss: (i) The performance of Non-Independent Directors and the Board as a whole; (ii) The performance of the Chairman of the Company taking into account the views of Executive and Non Executive Directors and (iii) To assess the quality, quantity and timeliness of flow of information between the company management and the board that is necessary for the board to effectively and reasonably perform their duties.


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) and (5) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended on 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) that the directors had 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 as at 31st March, 2019 and of the profit of the Company for the year ended on that date;

iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) that annual accounts have been prepared on a going concern basis.

v) that the Directors had 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) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure-A and forms an integral part of this Report.


During the financial year under review, all transactions entered into with Related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were in the ordinary course of business and are at arms length basis.

The company has not entered into any contract or arrangement with Related parties / Group companies other than in ordinary course of business. The details of Related Party Transactions are placed before the Audit Committee for its review and approval on quarterly basis. These transactions were entered into as per the Companys policy on Related Party Transactions and are approved by the Audit Committee, Board and also by Shareholders. The companys policy on Related Party Transactions is available at the nahar_ie/pdf/RPT_Policy.pdf. The details of Related Parties transactions are given in Note No. 40 of the Notes to Financial Statements. Pursuant to the provisions of section 134(3) Form AOC-2 is annexed herewith in



The Company has constituted an Audit Committee pursuant to Section 177(8) read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Presently, the Audit Committee consists of Sh. Dinesh Gogna and Dr. (Mrs) Harbhajan Kaur Bal as Members and Dr. Vijay Asdhir is the Chairman of the Audit Committee. The detailed information regarding Audit Committee and its terms of reference is given in Corporate Governance Report forming an integral part of the Directors Report.


The Company has laid down a Risk Management Policy and identified threat of such events which if occurs will adversely affect the ability of the company to achieve its objectives. Evaluation of business risk and managing the risk has always been an ongoing process in your company. The Audit Committee has also been delegated the responsibility for assessment, mitigation, monitoring and review of all elements of risks which the Company may be exposed to. The Board also reviews the risk management and minimization procedures.


The Board adopted a Vigil Mechanism/ Whistle Blower Policy as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 177 of the Companies Act, 2013 to report genuine concerns or grievances about unethical behavior of employees, actual or suspected fraud or violation of the Companys Code of Conduct. The Companys Vigil mechanism/ Whistle Blower

Policy are available at the Companys website i.e.


The Indian Accounting Standard (Ind AS) became applicable on the Company w.e.f. 1st April, 2016. Accordingly, the Financial Statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016.

The Company is having adequate internal financial control systems and procedures which commensurate with the size of the Company. The Company is having Internal Audit Department which ensures optimal utilization and protection of Companys resources. The Internal Auditor monitors and evaluates the efficiency and adequacy of internal control systems in the company, its compliance with operating systems, accounting procedures and also ensures that the internal control systems are properly followed by all concerned departments of the company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. The company had engaged an independent agency to access the adequacy of the existing internal financial controls and suggest means for further strengthening the same.


During the year, the Company has complied with the applicable Secretarial Standards as prescribed under section 118 of the Companies Act, 2013.


There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.


The company has constituted a Corporate Social Responsibility (CSR) Committee of the board in accordance with section 135 of the Companies Act, 2013.The Company has adopted a CSR Policy and undertaking CSR programmes /projects along with group companies under one umbrella through Oswal Foundation (OSF) which is a registered society formed in 2006 having its charitable objects in various fields. The Company is working proactively with the OSF to finalize the projects and identify the new projects for fulfilling its CSR obligations.

Pursuant to the provisions of section 135 of the Companies Act, 2013, an expenditure of Rs. 1,10,25,100/- is to be spent by the Company during the financial Year 2018-19 for its CSR Activities.

The CSR policy of the company has been placed on the Companys website at weblink: nahar_ie/pdf/CSR_Policy_NIEL.pdf. The report on CSR activities as required under the Companies (Corporate Social Responsibility) Rules, 2014 including brief outline of the Companys CSR policy is annexed herewith marked as



The Board has, on the recommendation of Nomination and Remuneration Committee, framed a policy for appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down criteria for determining qualifications, positive attributes, independence of directors and other matters provided under section 178 of the Companies Act, 2013. The Nomination and Remuneration policy of the company is elaborated in the Corporate Governance Report forming an integral part of this report.


i) Statutory Audit & Auditors Report

The shareholders at their 33rd Annual General Meeting (AGM) held on 26th September, 2017 had approved the appointment of M/s. K.R.Aggarwal & Associates, Chartered Accountants, (Firm Registration No.030088N) as statutory auditors of the Company, to hold office from the conclusion of 33rd AGM up to the conclusion of 38th AGM to be held in the year 2022.

ii) Cost Auditor & Cost Audit Report

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its textiles and sugar segments are required to be audited. The Company has maintained accounts and cost records with respect to Textile and Sugar business as specified by the Government under Section 148(1) of the Companies Act, 2013. The cost audit report for the financial year 2017-18 was filed with the Ministry of Corporate Affairs on 26.10.2018. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. R.R. & Co., Cost Accountants, Ludhiana to audit the cost accounts of the Company for the financial year 2019-20. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s. R.R. & Co., Cost Accountants, is included in the Notice convening the Annual General Meeting.

iii) Secretarial Audit & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company had appointed M/s. P.S.Bathla & Associates, a firm of Company Secretaries in Practice (C.P. No. 2585) to undertake the Secretarial Audit of the Company.The Secretarial Audit Report is attached as Annexure-D and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.


As per the provisions of Section 203 of the Companies Act, 2013 Sh. Kamal Oswal, Vice Chairman-cum-Managing Director; Sh. Bharat Bhushan Gupta, Chief Financial Officer and Sh. Mukesh Sood, Company Secretary are the Key Managerial Personnel of the Company.


The information required pursuant to Section 197 read with Rule 5(1), 5(2) and 5(3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (as amended up to date) in respect of employees of the Company, forming part of the Directors Report for the year ended 31st March, 2019 is given in Annexure-E to this Report.


The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-F.


Your Company continues to follow the principles of good corporate governance. The corporate governance report along with Auditors certificate regarding compliance of the conditions of corporate governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming compliance is attached herewith as Annexure-G and forms part of this Report.



As on 31st March, 2019 the company had four Associate Companies i.e. Cotton County Retail Limited, Atam Vallabh Financiers Limited, Vardhman Investment Limited and J L Growth Fund Limited, the accounts of which have been consolidated in accordance with the applicable Accounting Standards (Ind AS) and pursuant to Section 129(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The audited consolidated financial statements are provided in the Annual Report. A statement containing salient features of financial statements of associate companies in Form AOC-1 is annexed with the financial statements. The financials of the associate companies is given below:-

i) Cotton County Retail Limited (CCRL)

The company holds 47.66% equity shares of CCRL. During the year, the revenue from operations of the company was Rs. 4669.22 lacs as compared to Rs. 4409.16 lacs in the previous year. The company has incurred a net loss of Rs. 78.67 lacs as against a net loss of Rs. 2.82 lacs in the previous year.

ii) Atam Vallabh Financiers Limited (AVFL)

The company holds 36.85% equity shares of AVFL. During the year, the revenue from operations of the company was Rs. 34.54 lacs as compared to Rs. 56.45 lacs in the previous year. The company has earned a net profit of Rs. 26.44 lacs as against Rs. 46.29 lacs in the previous year.

iii) Vardhman Investment Limited (VIL)

The company holds 47.17% equity shares of VIL. During the year, the revenue from operations of the company was Rs. 32.89 lacs as compared to Rs. 60.58 lacs in the previous year. The company has earned a net profit of Rs. 23.50 lacs as against Rs. 50.39 lacs in the previous year.

iv) J L Growth Fund Limited (JLGF)

The company holds 41.10% equity shares of JLGF. During the year, the revenue from operations of the company was Rs. 42.29 lacs as compared to Rs. 86.13 lacs in the previous year. The company has incurred a net loss of Rs. 0.63 lacs as against a net profit of Rs. 79.45 lacs in the previous year.


The company is committed to create and maintain an atmosphere in which employees can work together, without any fear of exploitation. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2018-19 the company has not received any complaint on sexual harassment and hence no complaint remains pending as on 31st March, 2019.


Industrial relations throughout the year continued to be very cordial and satisfactory.


Your directors would like to express their appreciation for the assistance and co-operation received from financial institutions, banks and shareholders. They also place on record their appreciation for the co-operation of employees at all levels.

For and on behalf of the Board of Directors
Jawahar Lal Oswal
Place : Ludhiana (DIN: 00463866)
Date : 14th August, 2019 Chairman