nahar spinning mills ltd share price Directors report


Dear Members,

Your Directors have pleasure in presenting the Forty- Third Annual Report on the affairs of the Company for the financial year ended 31st March, 2023.

FINANCIAL PERFORMANCE

Your Companys Financial Performance during the year is summarized below:

Rs. in Crores

PARTICULARS

CURRENT YEAR PREVIOUS YEAR

Total Income

(Operational and Other Income)

2841.22 3608.37
Less: Total Expenses 2686.54 2933.10

Profit before tax and Exceptional Items

154.68 675.27
Less: CSR Expenses 4.34 0.54

Profit before tax

150.34 674.73
Less: Tax expenses (including deferred tax) 39.55 172.54

Net Profit from continuing operations

110.79 502.19

INDIAN ACCOUNTING STANDARD

The Company has adopted Indian Accounting Standards (Ind AS) and the financial statements have been prepared as per the Indian Accounting standard Rules, 2015, as prescribed under Section (133) of the Companies Act, 2013 read with relevant Rules issued thereunder and the other Accounting Principles generally accepted in India.

EXPANSION CUM MODERNISATION

Before, reviewing the financial performance of the company, we are pleased to inform you that Companys expansion plans are going as per schedule. As regard, companys expansion plan of spinning unit at village Lalru, S.A.S Nagar, Building work has already been completed and the machineries has started arriving at site. Ten Ring frames of 1632 spindles each i.e. 16320 spindles has already been installed and the balance 14880 spindles are likely to be installed by November/ December, 2023. On completion of expansion plans, companys spindlage capacity will stand increase to 5,73,376 spindles and 1080 rotors.

We are also pleased to inform you that companys modernisation programme of spinning unit at Jitwal Kalan, Malerkotla, Distt. Sangrur has already been implemented. The companys has already installed 8 Vortex machines with 96 positions each and the same have become operational. This will lead to increase in production capacity by 40,000 tons p.a.

OPERATIONAL REVIEW AND STATE OF AFFAIR

We would like to inform you that Company operates in a single segment i.e. "TEXTILE" as such disclosure requirements as per Indian Accounting Standard (Ind AS) 108 issued by the Institute of Chartered Accountants of India, New Delhi, are not applicable.

Before reviewing the operational performance, we would like to inform you that ongoing conflict between Russia & Ukraine coupled with Global demand recession has impacted companys performance during the year. High cotton prices and drastic fall in the prices of the yarns during the year under review further aggravated the problems for the spinning industry.

Because of the reasons stated above, companys top line as well as bottom line was severally impacted. The company could achieve a total income of Rs. 2841.22 crores showing a downfall of 21.26% as compared to previous year. Likewise, the export at Rs. 1135.16 crores has also shown a decline of 47.82% when compared with the previous year. The company could earned a profit before tax of Rs.150.34 crores only as against profit of Rs. 674.73 crores showing a drastic fall of 77.72% from the previous year. After providing tax expense (including deffered tax charge) of Rs. 39.55 crores, Company earned a net profit of Rs.110.79 crores as against profit of Rs. 502.19 crores showing a fall of 77.94% from the previous year.

During the current year, uncertain Global situation and demand recession are causing a worrisome situation. Your management is hopeful that things will start improving in the second half of the year and company will be able to achieve reasonable growth in coming periods.

TRANSFER TO RESERVES

During the year the company has not transferred any amount to Reserves and has kept the net profit of Rs. 110.79 crores in the retained earning in the financial statements of the company. Thus, the Companys Reserves (other equity) stands at Rs. 1535.84 crores as on 31st March, 2023.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY (DDP)

We are pleased to inform you that your Board in its meeting held on 30th May, 2023 has recommended a dividend of Rs. 1.50/- per equity shares of Rs. 5/- each (i.e. @ 30%) for the year ended 31st March, 2023, out of the profits of the company. The proposal is subject to the approval of the shareholders at the ensuing Annual General Meeting.

The dividend, if approved at the forthcoming Annual

General Meeting, will be paid out of the Profits of the Company for the year under reference, to all those shareholders whose names shall appear in the Register of Members on 8th September, 2023 or Register of beneficial Owners, maintained by the Depositories as at the close of 8th September, 2023. Further, as per the Finance Act, 2020 dividend income is taxable in the hands of members w.e.f. April 1,2020 and the Company is required to deduct tax at source (TDS) from the dividend payable to the members at the prescribed rates as per the Income Tax Act, 1961.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, top 1000 listed companies determined on the basis of Market Capitalization as at the end of the immediate financial year are required to formulate a dividend distribution policy. The Board of Directors in their meeting held on 31st May, 2021 has already approved and adopted dividend distribution policy to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The policy is available on the website of the Company at http://www.owmnahar.com/spinning/ pdf/policy_for_determination_of_materiality.pdf

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions Section 124(5) of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 all dividend remaining unpaid or unclaimed for period of seven consecutive years is required to be transferred to the Investor Education Protection Fund (IEPF) established by the Central Government.

Accordingly, the Company has transferred an amount of Rs.1080420.00/- (Rupees Ten Lakhs Eighty Thousand Four Hundred Twenty only) being the amount of unclaimed dividend for the year 2014-15 to the Investor Education and Protection Fund in November, 2022. The shareholders whose dividends have been transferred to IEPF Authority can claim their dividend from the Authority. Further, unpaid or unclaimed dividend for the year 2015-16 will have to be transferred to the Investor Education and Protection Fund in November, 2023.The Company has already sent emails / notices in the month of May, 2023 to the members informing them to claim the Unclaimed Dividend before such transfer of dividend to the IEPF Authority.

Besides, as per the provisions of Section 124 (6) of the Companies Act, 2013 read with the Investor

Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the equity shares on which dividend remains unpaid or unclaimed by the shareholders for seven consecutive years or more is required to be transferred to the Demat Account of the IEPF Authority. Accordingly in compliance of the provisions of the Act, 46460(Forty Six Thousand Four Hundred Sixty only) equity shares of Rs. 5/- each were transferred to the DP/Client ID IN300708/10656671 opened in the name of the Investor Education and Protection Fund Authority. The details of the shareholders whose shares are proposed to be transferred to the Demat account of IEPF Authority in November, 2023 is available on companys website http://www.owmnahar.com/ spinning/transfer-of-equity-shares-to-IEPF.php and the same can be accessed through the link: www.iepf.gov.in. The Company has already sent notices to shareholders to claim the dividend if any.

We are pleased to inform that Shareholders can reclaim their subject shares/dividend by making an application to the IEPF Authority in e-Form IEPF-5 as per procedure provided under Rule 7 of the IEPF Rules. The Shareholders can also view the procedure at www.iepf.gov.in

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted their declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1 )(b) of the SEBI Listing Regulations. There have been no changes in the circumstances affecting their status as Independent Directors of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

• Appointment / Retirement of Directors

During the year under review, Dr. Suresh Kumar Singla (DIN: 00403423) and Dr. Amrik Singh Sohi (DIN: 03575022) were relieved from the office of Independent Director on the expiry of their second term of office w.e.f. September 26, 2022. The Board of Directors placed on record their appreciation for the valuable services rendered by Dr. Suresh Kumar Singla and Dr. Amrik Singh Sohi during their tenure. Dr.Yash Paul Sachdeva (DIN: 06443747) and Dr.Anchal Kumar Jain (DIN: 09546925) were appointed as Independent Directors of the Company w.e.f. August 24, 2022 to hold office for five consecutive years for a term i.e. upto August 23, 2027.

• Re-appointment of Directors

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013 and Article 117 of Article of Association of the Company, Mr. Dinesh Gogna (DIN: 00498670) and Mr. Kamal Oswal (DIN: 00493213) will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The resolutions seeking shareholders approval for their reappointment alongwith the other required detail form part of the notice. The Board recommend their re-appointment to the members of the Company at the ensuing Annual General Meeting.

• Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Dinesh Oswal Managing Director, Mr. Anil Garg, Chief Financial Officer and Mr. Brij Sharma, Company Secretary are the Key Managerial Personnel (hereinafter referred as KMP) of the Company and there has been no change in the KMP since the last fiscal year.

BOARD EVALUATION

The provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandate that a formal annual performance evaluation is to be made by Board of its own performance and that of its Committees and individual Directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of the Independent Director shall be done by Directors excluding the Director being evaluated.

The Board carried out a formal annual performance evaluation as per the criteria/framework laid down by the Nomination and Remuneration Committee of the Company and adopted by the Board. The evaluation was carried out through a structured evaluation process to evaluate the performance of individual directors including the Chairman of the Board. They were evaluated on parameters such as their education, knowledge, experience, expertise, skills, behavior, leadership qualities, level of engagement and contribution, independence of judgment, decision making ability for safeguarding the interest of the Company, stakeholders and its shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The outcome of the Board Evaluation for the Fiscal 2023 was discussed by the Nomination and remuneration Committee in its meeting held on 30thMay, 2023 and Board in its meeting held on 30th May, 2023.

The Board was satisfied with the evaluation process and approved the evaluation results thereof.

CORPORATE POLICIES:

As per SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the listed Companies are required to formulate certain policies. As a good corporate entity, the Company has already formulated several corporate governance policies and the same are available on the Companys website i.e. www.owmnahar.com. The said policies are reviewed periodically by the Board to make them in compliance with the new Regulations/requirements.

The Company has adopted certain policies, the details of which are given hereunder:

Name of the Policy

Brief Description

Appointment & Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board of Directors has approved and adopted the Policy for Appointment and Remuneration of Directors, Key Managerial Personnel and other employees as recommended by Nomination and Remuneration Committee. The policy formulates the principle and criteria for determining qualification, competence, positive attributes, integrity and independence etc. for Directors, Senior Management Personnel including its Key Managerial Personnel (KMP) and employees of the Company. The Policy also laid down the criteria for determining the remuneration of Directors, Key Managerial Personnel and other employees. The Policy has been uploaded on the Companys website and can be accessed at http://www.owmnahar.com/spinning/ pdf/NSMLAPPOINTMENTANDREM UNERATIONPOLICY.pdf

Corporate Social Responsibility Policy

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the CSR Committee formulated the CSR Policy which was adopted by the Board. The CSR policy
outlines the various programmes/ projects/activities to be undertaken by the Company as laid down in schedule VII of the Companies Act, 2013 relating to promoting education, healthcare, environment, hunger, poverty etc. The Policy has been uploaded on the Companys website and can be accessed at http://www. owmnahar. com/spinning/pdf/CSR- Policy-NSML-2023.pdf

Whistle Blower Policy

Pursuant to the provisions of Section 177 of the Companies Act, 2013 Company has formulated and adopted Vigil Mechanism/Whistle Blower Policy for its Directors and employees. The aim of the policy is to provide a channel to the Directors and employees to report their genuine concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct. The Policy has been uploaded on the Companys website and can be accessed at http://www.owmnahar. com/spinning/pdf/vigil mechanism. pdf

Policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions

Pursuant to the requirements of regulation 23 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, the Board has approved a policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions. The Policy regulates the transaction between the Company and its Group Companies and related parties. The policy has been uploaded on Companys website and can be accessed at http://www.owmnahar. com/spinning/pdf/RPT-NAHAR- SPINNING-2022.pdf

Insider Trading Policy

Pursuant to the SEBI (Prohibition of Trading Policy Insider Trading) Regulations, 2015 as amended from time to time, the Board has adopted the following Codes to provide framework for dealing in the Securities of the Company by the Insiders:
i. Code of practices and procedures for fair disclosure of unpublished price sensitive information
ii. Code of conduct to regulate, monitor and report trading by its designated persons and immediate relatives of designated persons
The Codes help to regulate trading in securities by the designated persons and immediate relatives of designated persons. The Code requires preclearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the designated persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.The Policy has been uploaded on the Companys website and can be accessed at http://www.owm nahar.com/spinning/pdf/code-of- practices.pdf

Policy for Preservation of documents

The Board of directors in their meeting held on 10th February, 2016 has approved and adopted the policy for Preservation of documents. The policy segregates the documents to be preserved permanently and documents to be preserved at least for a period of eight years as per requirements of applicable laws.

Archival Policy

Pursuant to the requirements of Regulation 30(8) of SEBI (Listing Obl ig ation an d D isclosu re Requirements) Regulations, 2015, the Board has approved and adopted the Archival Policy in its Meeting held on 10th February, 2016. The policy ensure protection, maintenance and archival of Companys disclosures, documents and records that are placed on Companys website i.e. http://www.owmnahar.com/spinning/ about.php

Board Diversity Policy

The Board of Directors in their Meeting held on 12th November, 2014 has approved and adopted the Board Diversity Policy as per the recommendation of Nomination and Remuneration Committee. The policy envisages diversification of Companys Board in respect of age, knowledge, experience and expertise.

Dividend Distribution Policy

Pursuant to the requirements of regulation 43A of SEBI (Listing Obligation and Disclosure Requirements) (Second Amendment) Regulations 2021,the Board of Directors in their Meeting held on 31st May, 2021 has approved and adopted the Dividend Distribution Policy. The policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The policy has been uploaded on Companys website and can be accessed at http://www. owmnahar.com/spinning/pdf/dividend _distribution.pdf

Risk Management Policy

As per the provisions of Regulation 21of Management SEBI (Listing Obligation Disclosure Policy Requirements) (Second Amendment) Regulations, 2015, the Company falls under the top 1000 list of listed entities determined on the basis of market capitalization as at the end of immediate financial year. The Companys ranking is 990 on the basis of the market capitalization as on 31st March, 2023 at NSE. Accordingly, in compliance of the said LODR Regulations, company has constituted a Risk Management Committee to frame, implement and monitor the Risk Management plans for the company. The policy has been uploaded on Companys website a n d c a n b e a c c e s s e d a t http://www.owmnahar.com/spinning/ pdf/risk-management-policy-22.pdf

APPOINTMENT AND REMUNERATION POLICY

The Board on the recommendation of the Nomination and Remuneration Committee has framed a policy for Appointment and Remuneration of Directors, Senior Management and other employees as provided under Section 178(3) of the Companies Act, 2013. The objective of the Policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its functions of Governance and Management. The present Board consists of ten members Sh. Jawahar Lal Oswal is Non-Executive

Chairman. Sh. Dinesh Oswal is a Managing Director. There are four Non Executive Directors and five are Independent Directors out of which one Director namely; Dr. (Mrs.) Manisha Gupta is Women Director on the Board.

The Companys Policy of Appointment and Remuneration includes criteria for determining Qualification, Positive Attributes, Independence of Directors and other matters, as required under sub Section 3 of Section 178 of the Companies Act, 2013. The policy also laid down the criteria for determining the remuneration of Directors, Key Managerial Personnel and other employees. The Appointment and Remuneration Policy of the Company is available on the Companys website and can be accessed at http://owmnahar.com/spinning/pdf/NSMLAPPOINTM ENTANDREMUNERATIONPOLICY.pdf.There has been no change in the Policy since the last fiscal year. We affirm the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Companys Independent Directors held their meeting on 9th November, 2022 without the attendance of Non Independent Directors and members of the management. All Independent Directors were present at the meeting. At the meeting they:

1. Reviewed the performance of Non-Independent Directors and the Board as a whole.

2. Reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

3. Assessed the quality, quantity and timeliness of the flow of information between the Companys Management and the Board which is necessary for the Board to effectively and reasonably perform their duties.

FAMILIARISATION PROGRAMS FOR BOARD MEMBERS

At the time of appointing a Director, the Company issues a formal letter of appointment which inter alia, explains the role, functions, duties and responsibilities expected from him/her as a Director of the Company. All Independent Directors are provided with all Policies/Guidelines as framed by the Company under various statutes and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to familiarize with Companys procedure and practices. Further, to update them on the regular basis, the

Company provides copies of all amendments in Corporate Laws, Corporate Governance Rules and SEBI (Listing Obligations and Disclosure Requirements) Regulations. The details of the Companys policy on Familiarization Programs conducted during the year under review for Independent Directors are posted on the Companys website and can be assessed at:

http://www.owm nahar.com/spinning/pdf/Familiarization-Program.pdf

NO. OF BOARD MEETINGS

During the year under review, the Board of Directors met four times i.e. 25th May, 2022, 23rdJuly, 2022, 10th November, 2022 and 4th February, 2023 with a predefined agenda circulated well in advance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

Your Company is engaged in the Manufacture & Exports of yarns and knitted garments. Likewise some Group Companies (which are public limited Companies) are also engaged in the Textile Industry. Because of nature of Industry, sometimes sale/purchase/fabrication jobs etc. transactions takes place between the Group Companies, in the ordinary course of business on Arms length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc which may have potential conflict of interest with the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with the Rule 8 of the Companies (Accounts) Rules, 2014. However, the transactions entered into with the Group Companies, during the year under review, has been given in Notes to the financial statements in accordance with the Accounting Standards.

The Company has not entered into any contract or arrangement with the related parties as referred in Section 188(1) of the Companies Act, 2013 read with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year ended 31st March, 2023. Thus the requirement for disclosure of particulars of contracts or arrangement with related parties referred to in Section 188(1) is not applicable. However, as per Companys policy, all the Group Companies transactions regarding sales/purchase etc. are placed before the Audit Committee as well as the Board, for their information and approval.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

SHARE CAPITAL

The Paid up equity share capital of the Company as on 31st March, 2023 is Rs. 1803.27 Lakhs. During the year under review, Company has neither issued any shares with differential rights as to dividend, voting or otherwise nor granted any stock options or sweat equity under any scheme.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not provided any Guarantee under Section 186 of the Companies Act, 2013. However, the details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Notes to the Financial Statements provided in the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

As reported in our earlier reports, Company adopted CSR Policy and decided to undertake CSR Activity in collaboration with Group Companies under one umbrella through Oswal Foundation which is a Registered Society formed in 2006, having its charitable objects in various fields. The details of the CSR policy are available on the Companys website i.e.http://www.owmnahar.com/spinning/pdf/CSR- Policy-NSML-2023.pdf.

During the year under review, to meet its obligation of CSR under Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy)Rules, 2014, the Company was required to spend an amount of Rs. 434 Lakhs (being the 2% of the average net profits made during the

three immediate preceding financial years on CSR activities. The Company paid an amount of Rs. 10 lakhs to Team Work Welfare Foundation, Bhopal, a registered society with the Ministry of Corporate Affairs under Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 with vide Registration No. CSR00009185 for undertaking sports activities. The said amount was paid for organizing Tennis Ball Cricket Tournament- (Khelo Jee Jaan Se).

Further, the company has contributed an amount of Rs. 500 Lakhs to Oswal Foundation, a registered society with vide Registration No. CSR0000145 for undertaking CSR activities. The Foundation has undertaken Health Care Project. The companys total CSR Obligation for the year 2022-23 is Rs. 434 Lakhs only and thus the excess amount of Rs. 76 Lakhs will be set off against companys next years CSR obligation.

The disclosure in respect of the existing CSR Activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014, is annexed hereto as "Annexure I" and forms part of this Report.

AUDIT COMMITTEE

As required under Section 177 of the Companies Act, 2013, the Board of Directors has already constituted Audit Committee consisting of three Non-Executive Directors under the chairmanship of Dr. Vijay Asdhir, Sh. Dinesh Gogna and Dr. Roshan Lal Behl are the two other members of the committee. During the year under review, Dr. S.K. Singla ceased to be the member of Audit Committee on the expiry of his term of office w.e.f. 26th September, 2022. Mr. Brij Sharma is the Secretary of the Committee. The Committee held four meeting during the year. During the year under review, the Board has accepted all the recommendations of the Audit Committee.

VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2013, the Company established a Vigil Mechanism process as an extension of Companys Code of Conduct whereby any employee, directors, customers, vendors etc., can report the genuine concerns or grievances to the members of the Audit Committee about unethical behavior, actual or suspected, fraud or violation of Companys Code of Conduct so that appropriate action can be taken to safeguard the interest of the

Company. The Mechanism also provides for adequate safeguards against victimization of persons who uses such mechanism. The mechanism provides direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy/Vigil Mechanism is also posted on Companys Website. The Company has a dedicated e-mail address i.e. whistleblowernsml@owmnahar.com for reporting the genuine concerns. The Whistle Blower Policy/Vigil Mechanism is also posted on Companys Website and can be accessed at http://www. owmnahar.com/spinning/pdf/vigil_mechanism.pdf. The Audit Committee regularly reviews the working of the Mechanism. No complaint was received during the year under review.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATES COMPANY

The Company does not have any subsidiaries, joint venture and Associates Company during the year under review.

CREDIT RATING

We would like to inform you that Credit Rating Information Services of India Ltd. (CRISIL) vide its letter no. RL/NAHSPIN/300986/CP/0922/42085 dated September 01,2022 has reaffirmed Companys rating outlook on the long term bank facilities CRISIL A/Stable. The rating on short-term bank facility has been reaffirmed at CRISIL A1.

GREEN INITIATIVE

The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the Companies. Further, as per the provisions of Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the Company may send financial statements and other documents by electronic mode to its members. Your Company has decided to join the MCA in its environmental friendly initiative.

Accordingly, Company propose to send documents such as Notice of General Meetings, Annual Report and other communications to its shareholders via electronic mode to the registered E-mail addresses of the shareholders. To support this green initiative of the Government in full measure, shareholders are requested to register/update their latest E-mail addresses with their depository Participant (D.P.) with whom they are having Demat Account or send the same to the Company via E-mail at:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co-operation and support in our endeavor to contribute our bit to the Environment.

LISTING OF SECURITIES

The securities of the Company are presently listed on the following Stock Exchanges:

i. The BSE Ltd., 25th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001.

ii. The National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No. C/1, G- Block, BandraKurla Complex, Bandra (E), Mumbai - 400051.

The Company has paid listing fee to both the Stock Exchanges for the financial year 2023-24. DEMATERIALISATION OF SECURITIES

Your Company has established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd (CDSL) to facilitate the holding and trading of securities in electronic form. As on 31st March, 2023, 98.31% of the total Equity Share Capital of the Company has been dematerialized.

Pursuant to Regulation 40 (1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities shall not be processed unless the securities are held in dematerialized form with the Depository. Hence, all members, who are holding equity shares in physical form, are requested to go in for dematerialization of securities at the earliest.

Further, the Company has appointed M/s Alankit Assignments Ltd., as Registrar for Share Transfer and Electronic connectivity. Accordingly all the shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communication in respect of share transfer/transmission, demat/remat, change of address etc. to our registrar at below mentioned address:

M/s Alankit Assignments Limit (Unit: Nahar Spinning Mills Limited)

Alankit House, 4E/2, Jhandewalan Extension

New Delhi - 110 055

Telephone No. : (011) 42541234

Fax No. : (011) 23552001

E-mail address: rta@alankit.com

In case any query/complaint remains unresolved with our Registrar please write to Company Secretary at the Registered Office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review, confirm in their entirely to the requirements of Companies Act, 2013.Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge & ability, confirm that:

i. In preparation of the Annual Accounts, the applicable Accounting Standards had been followed alongwith proper explanations relating to material departures;

ii. They 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 at the end of the financial year and of the profit or loss of the Company for that period;

iii. They had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They had prepared the Annual Accounts on a going concern basis.

v. That the directors, in the case of a listed Company, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

AUDITORS & AUDITORS INDEPENDENT REPORT

STATUTORY AUDITORS

The members at the Annual General Meeting held on 24th August, 2022 appointed M/s. Gupta & Vigg Co., Chartered Accountants (Firm Registration No. 001393N) as Statutory Auditors of the Company for a term of 5 (Five) consecutive years to hold the office from the conclusion of 42ndAnnual General Meeting upto the conclusion of 47thAnnual General Meeting of the company to be held in the year 2027.

AUDIT REPORT

The Statutory Auditors have submitted Audit Report on the Financial Statements of the Company for the financial year ended 31st March, 2023.There were no qualifications, reservations, adverse remarks or disclaimers in the Report. The observations and comments given by Auditors in their Report read together with the Notes to the Accounts are self explanatory and require no comments.

No frauds were reported by the Auditors under Section143(12) of the Companies Act, 2013.

COST AUDITORS

We would like to inform you that the Ministry of Corporate Affairs vide Notification dated 31st December, 2014 amended Companies (Cost Records and Audit) Rules, 2014, pursuant to which, the companys business activities have been included within the purview of Cost Audit requirement. Accordingly, the company is maintaining Accounts and Costing Records. Further, the Board of Directors on the recommendation of Audit Committee has appointed M/s RamanathIyer & Co. (Firm Registration No. 000019), Cost Accountant, as Cost Auditors of the Company for financial year 2023-24.

The remuneration of Rs.1.90 Lakhs (Rupees One Lakh Ninety Thousand Only) plus applicable taxes and reimbursement of out of pocket expenses incurred, payable to the Cost Auditors is required to be ratified by the members as per the provision of Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014. Accordingly, a resolution for ratification of the remuneration of the Cost Auditors has been proposed in the notice of the ensuing Annual General Meeting for your approval.

SECRETARIAL AUDITOR

The Board, pursuant to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed M/s. P.S. Bathla & Associates, Practicing Company Secretaries, having Certificate of Practice No. 2585 as Secretarial Auditor to conduct Secretarial Audit for the financial year 2023-24.

M/s. P.S. Bathla & Associates, Practicing Company Secretaries have carried out the Secretarial Audit for the financial year ended March 31, 2023 and their Secretarial Audit Report in Form No. MR-3 is annexed hereto as Annexure II and form part of this Report.

The Secretarial Audit Report does not contain any qualification, reservations or adverse remarks and requires no comments.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards (SS1 &SS2) relating to the meetings of Board of Directors and General meetings respectively issued by the Institute of Company Secretaries of India.

BUSINESS RISK MANAGEMENT

In compliance with the provisions of Regulation 21 of SEBI (lODR) (Second Amendment) Regulations, 2021 the company has formed a Risk Management Committee to frame, implement and monitor the risk management plans for the Company. The Risk Management Committee comprises of three Directors under the chairmanship of Mr.Dinesh Oswal, Managing Director of the Company. Dr. Anchal Kumar Jain and Dr. Roshan Lal Behl, Independent Directors of the company are the other two members of the Committee. During the year under review, Dr. S.K. Singla ceased to be the member of committee due to the expiry of his term w.e.f. 26th September, 2022. Accordingly, the Board of Directors in their meeting held on 23rd July, 2022 approved the appointment of Dr. Anchal Kumar Jain as a Member of committee w.e.f. 24th August, 2022.The Committee is responsible for monitoring and reviewing the risk management policies and ensuring its effectiveness. The Risk Management Committee met two times during the year under review i.e. on 2nd May, 2022 and 24th October, 2022.

Your Board has formulated a Risk Management Policy. The Policy aims to identify, evaluate manage and monitor all types of risks associated with the business of the Company. The Board as well as Audit Committee regularly overseas the risk management process in the Company, as required under 134(3)(n) of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Your Company is operating in Textile segment and has identified certain risks which may affect the performance of the Company. The risks associated with the textile industry are operational risks such as fluctuation in cotton prices, fluctuation in foreign exchange rates, Labour problems etc. There are also Regulatory risks, Global risks, Cyber Security risks. The Companys Risk Management Policy aims to suggest the steps to be taken to control and mitigate the risk associated with the Companys Textile Business. We are of opinion that none of identified risk is such that which may threaten the existence of the Company. The Policy is also posted on Companys website and can be accessed at http://www.owm nahar.com/spinning/pdf/risk-management-policy- 22.pdf

INTERNAL FINANCIAL CONTROL

The Company is maintaining an efficient and effective system of Internal Financial Control for facilitation of speedy and accurate compilations of financial statements. The Companys Internal Financial Control System is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliances with procedures, laws and regulations. The Companys Internal Control System commensurate with the nature of its business and size of its operations. In order to further strength the Internal Control System and to automate the various processes of the business, Company is making use of SAP S4 HANA application, which is based on SAP HANA database. It keeps all the data in memory which results in data processing that is magnitude faster than that of disk based system, allowing for advanced, real time analytics.

We wish to inform you that the period of the office of M/S Piyush Singla & Associates, Chartered Accountants, who were appointed as Internal Auditors of the Company for the FY 2022-23 has expired and because of their pre-occupation have expressed their inability to continue in the office for the next year. Accordingly, pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, Rules 2014, M/s Raj Gupta & Co., Chartered Accountants having Firm Registration No. 000203N appointed as Internal Auditors of the Company for the FY 2023-24.

The company is also having internal audit department to test the adequacy and effectiveness of Internal Control Systems laid down by the Management and suggests improvement in the systems. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board. During the year under review, companys Internal Controls were tested and no reportable weakness in the system was observed.

Apart from the above, an Audit Committee consisting of three Non Executive Directors has been constituted. All the significant audit observations and follow up actions thereon are taken care by the Audit Committee. The Audit Committee also oversees and reviews the adequacy and effectiveness of Internal Controls in the company. The Audit Committee met four times during the financial year under review. The company has also established a Vigil Mechanism as per Section 177(9) of Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any Public Deposit within the meaning of Section 73, of the Companies Act, 2013 and the Rules made there under. There is no outstanding/unclaimed deposit from the public. However, the information as required under Rule 8 of the Companies (Accounts) Rules, 2014 is given hereunder:-

i. Deposits accepted during the year: Nil

ii. Deposits remained unpaid or unclaimed as at the end of the year: Nil

iii. Default in repayment of deposits and deposits which are not in compliance with the Requirements of Chapter V of the Companies Act, 2013: N.A.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment for women at workplace and has adopted a policy against sexual harassment in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.

The Company has complied with the provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2022-23, the Company has not received any complaint on sexual harassment and hence no compliant remains pending as of 31st March, 2023.

ANNUALRETURN

The Annual Return of the Company, pursuant to the provisions of Section 92(3) read with the Section 134(3)(a)of the Companies Act, 2013 with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2022-23 in the Form MGT-7 has been uploaded on Companys website at http://www.owmnahar.com/spinning/pdf/Annual- Return-2022-2023.pdf.

STATEMENT UNDER SECTION 197 OF THE COMPANIES ACT, 2013

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as "Annexure III" and form part of this report.

In terms of Section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration received by Managing Director is also given in ANNEXURE III annexed hereto and form part of this report.

Pursuant to the provisions of Section 197 (1) of the Companies Act, 2013 as amended by Companies (Amendment) Act, 2017 read with schedule V and other applicable provisions, the Company got shareholders approval vide Special Resolution dated 29th September, 2021 for the payment of remuneration as mentioned in the resolution for five years from 1st January, 2022 upto 31st December, 2026 to Sh. Dinesh Oswal, Managing Director of the Company. A remuneration of Rs. 17,23,34,998/- (including commission and perks) (Rupees Seventeen Crore Twenty Three Lakh Thirty Four Thousand Nine Hundred Ninety Eight Only) has been paid to Mr. Dinesh Oswal, Managing Director of the Company for financial year 2022-23. Mr. Dinesh Oswal is 58 years of age. He is a Commerce Graduate and has business experience of more than 39 years in textile industry and financial expertise. He is employed on contractual basis for five years w.e.f 1st January, 2022 to 31st December, 2026. Before joining the Company, he was employed with M/s. Oswal Woollen Mills Ltd. as Commercial Manager. His shareholding in the Company is 123766 equity shares of Rs. 5/- each. He is related to Mr. Jawahar Lal Oswal, Chairman, Mr. Kamal Oswal, Director, Mrs.Ritu Oswal, Export Advisor and Ms.Tanvi Oswal, President of the Company.

Mr. Jawahar Lal Oswal, Chairman/Director of the Company has been paid sitting fee and payment @0.35% of companys exports sale as per the approval of the shareholders vide their special resolution dated September, 2021. Mr. Jawahar Lal Oswal is 79 years of age. He is a Commerce Graduate and has business experience of more than 59 years in Textile and Woollen Industry. He is providing Expert Services and acting as a mentor for the company w.e.f 1st October, 2021. Before joining the Company, he was employed with M/s. Oswal Woollen Mills Ltd. as Managing Director. His shareholding in the Company is 90374 equity shares of Rs. 5/- each. He is related to Mr. Dinesh Oswal, Managing Director, Mr. Kamal Oswal, Director, Mrs.Ritu Oswal, Export Advisor and Ms.Tanvi Oswal, Vice President of the Company.

No other employee was in receipt of remuneration exceeding the limits as provided under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

The detailed information as required under Section 134(3) of the Companies Act, 2013 read with Sub Rule 3 of the Rule 8 Companies (Accounts) Rules, 2014, is enclosed as per Annexure-IV and forms part of this report.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance.Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. The Company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report alongwith the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in part C of Schedule VI of the SEBI (Listing Obligation and disclosure Requirements) Regulations, 2015 is annexed hereto as Annexure-V and form part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 is enclosed as per Annexure-VI and form part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Securities and Exchange Board of India (SEBI) as per its Regulation 34(2)(f) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has mandated the inclusion of a Business Responsibility and Sustainability Report (herein after referred to as BRSR) as part of Companys Annual Report for top 1000 listed entities based on market capitalization which indicates Companys performance against the principles of the National Guidelines on Responsible Business Conduct, in the format as specified by SEBI from time to time. The Company has been ranked ranked at No. 990 on the basis of Market Capitalization, calculated on the basis of price of equity share as on March 31, 2023 at NSE. Accordingly, Business Responsibility and Sustainability Report is annexed hereto as "Annexure VII" and forms part of this Report.

HUMAN SOURCE/INDUSTRIAL RELATIONS

The Company recognizes human resource as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company is of firm belief that the Human Resources are the driving force that propels a Company towards progress and success. The Company has a team of able and experienced professionals to look after the affairs of the Company. The Companys employees at all levels have extended their whole hearted cooperation for the excellent performance of the Company.

ACKNOWLEDGEMENT

The Board of Directors of the Company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the Company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the Company. The Directors also place on record their sincere thanks to the shareholders for their continued support, cooperation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD

Place: Ludhiana

JAWAHAR LAL OSWAL

Dated: 9th August, 2023

(CHAIRMAN)
DIN: 00463866