Nahar Spinning Mills Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the Forty-Fifth Annual Report on the affairs of the Company for

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the financial year ended 31 March, 2025.

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)	3318.91	3065.57
Less: Total Expenses	3292.54	3121.09
Profit/(Loss) before tax and	26.37	(55.52)
Exceptional Items
Less: CSR Expenses	5.24	5.86
Profit /(Loss) before tax	21.13	(61.38)
Less: Tax expenses (including deferred tax)	8.78	10.30
Net Profit/(Loss) from continuing operations	12.35	(51.08)

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.

MODERNIZATION OF COMPANYS SPINNING UNITS

Before reviewing the Operational performance, we are pleased to inform you that Company is going in for modernization of its spinning units at various locations, by adding ultra-modern machineries at a capital outlay of Rs. 325 Crores (approx.).The company is also putting up 11 M.W. Solar PV System at a capital outlay of Rs. 25 Crores, for its own consumption. The modernization plan will be financed through internal accruals as well term loan from the companys bankers. The said modernization will be completed by Financial Year 2027-28.This will help the company in improving quality as well as operational efficiencies and will enable the company to diversify and increase its exports to quality conscious markets of U.S. and European Union.

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.

Inspite of prevailing Geo-Political situations and Global Challenges, your Company has been able to improve its performance during the year under review. The Company achieved a total income from operations of Rs. 3318.91 Crores showing an increase of 8.26% over the previous year. Likewise, the export at Rs. 1634.53 Crores has also shown an increase of 0.58% when compared with the previous year. The profitability of the Company has substantially improved and it earned EBITDA of Rs. 195.79 Crores as against Rs. 99.11 Crores in the previous year. After providing depreciation of Rs. 95.22 Crores and finance cost of Rs. 74.20 Crores, company earned a profit of Rs. 26.37 Crores as against a loss in the previous year. After providing tax expense (including deferred tax charge) of Rs. 8.78 Crores and CSR expenses of Rs.5.24 Crores, the net profit comes to Rs. 12.35 Crores.

During the current year, the company is performing well but the prevailing Geo-Political situation, U.S. Trade Tariff and slowdown in Global Demand are still posing challenges to Textile Industry. Your management is looking at the future with optimism and expects that the company will be able to perform reasonably good in the coming period.

TRANSFER TO RESERVES

During the year the company has not transferred any amount to Reserves and has kept the net profit of Rs. 12.35 Crores in the retained earning in the financial statements of the company. Thus, the Companys Reserves (other equity) stands at Rs. 1471.31Crores as on 31st March, 2025.

CHANGES IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year under review.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY (DDP)

We are pleased to inform you that your Board in its meeting held on 28 May, 2025 has recommended a dividend of Rs. 1.00/- per equity shares of Rs. 5/- each (i.e. @ 20%) for the year ended 31 March, 2025, out of the profits of the company. The proposal is subject to the approval of the shareholders at the ensuing Annual General Meeting scheduled to be held on 25 September, 2025.

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 5th September, 2025 or Register of beneficial Owners, maintained by the Depositories as at the close of 5th September, 2025. 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.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), 2015 as amended, a Dividend Distribution Policy setting 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, is available on the website of the Company at http://www.owmnahar.com/spinning/pdf/dividend_distributi on.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 by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Accordingly, the Company has transferred an amount of Rs.15,75,827.00/- (Rupees Fifteen Lakhs Seventy Five Thousand Eight Hundred Twenty Seven only) being the amount of unclaimed dividend for the year 2016-17 to the Investor Education and Protection Fund in November, 2024. The shareholders whose dividends have been transferred to IEPF Authority can claim their dividend from the Authority. Further, pursuant to Section 124 of the Companies Act, 2013, unpaid or unclaimed dividend for the year 2017-18 will have to be transferred to the Investor Education and Protection Fund in November,2025.The Company has already sent emails/notices in the month of May, 2025 to the members informing them to claim the Unclaimed Dividend before such transfer of dividend to the Investor Education and Protection Fund.

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, 37695 (Thirty Seven Thousand Six Hundred Ninety Five 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 transferred to the Demat account of IEPF Authority are available on Companys website https://www.owmnahar.com/spinning/pdf/pertaining-to-fy-(2016-17).pdf

Further, shares in respect of unclaimed/unpaid dividend for seven consecutive years from the financial year 2017-18 shall be transferred to Investor Education and Protection Fund pursuant to IEPF Rules in November,2025. The Company has sent letter to the shareholders and published the Notice in the Newspaper informing them to claim the unclaimed dividend from the Company at the earliest. The list containing the details of shares alongwith unclaimed/unpaid dividend for seven consecutive years to be transferred to the IEPF Authority are available on Companys website at https://www. owmnahar.com/spinning/pdf/pertaining_to_fy_2017-18.txt.

The shares as well as unclaimed dividends transferred to IEPF Authority can be claimed back by making an application to the IEPF Authority in e-Form IEPF-5 as per procedure provided under Rule 7 of the IEPF Rules. Concerned members/investors are advised to access the web link: https://www.mca.gov.in/content/mca/global/en/ foportal/fologin.html for filling e-Form IEPF-5 for refund of shares and/or dividend from the IEPF Authority.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (LODR) Regulations, 2015.

The Board has taken on record the declarations and confirmations submitted by the Independent Directors. In the opinion of the Board, all Independent Directors hold high standards of integrity and possess requisite qualifications, experience and expertise as required to discharge their duties as Independent Directors with an objective independent judgment and without any external influence. All the Independent Directors have confirmed that they are in compliance with Rules 6 of the Companies (Appointment and Qualification of Directors) Rules 2014, with respect to registration with the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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, Sh. Dinesh Gogna (DIN: 00498670) and Sh. Kamal Oswal (DIN: 00493213), Non-Executive Directors of the company, will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The resolutions seeking shareholders approval for their reappointment alongwith the other required detail form part of the notice. The Board recommended their reappointment to the members of the Company at the ensuing Annual General Meeting.

Further, the first term of office of Dr. Roshan Lal Behl (DIN: 06443747), as an Independent Director of the Company, will expire on September 29, 2025. The

Board, on the recommendation of Nomination and Remuneration Committee and on the basis of report of performance evaluation, has decided to re-appoint Dr. Roshan Lal Behl (DIN: 06443747), as an Independent Director for a second term of five consecutive years w.e.f. September 30, 2025 upto September 29, 2030. The necessary resolution for his re-appointment has been proposed in the accompanying Notice for your approval

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Sh. Dinesh Oswal (DIN: 00607290), Managing Director, Sh. Anil Garg, Chief Financial Officer and Sh. 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 Evaluation is to be made by Board of its own performance and that of its Committee 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 2025 was discussed by the Nomination and remuneration Committee in its meeting held on 28 May, 2025 and the Board in its meeting held on 28 May, 2025.

The Board was satisfied with the evaluation process and the 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 Obligations and Disclosure Requirements) Regulations, 2015, the Board 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/ NSMLAPPOINTMENTANDREMUNERA TIONPOLICY.pdf
Corporate Social Responsibility	Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, 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, rural development 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_25.pdf
Policy on Materiality of Related Parties Transactions and Dealing with Related Party	Pursuant to the requirements of regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has approved a policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions.
Transactions Insider Trading Policy	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-2025.pdf 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.owmnahar.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 Obligations and Disclosure Requirements) Regulations, 2015, the Board has approved and adopted the Archival Policy in its Meeting held on 10th February, 2016. The policy ensures protection, maintenance and archival of Companys disclosures, documents and records that are placed on Companys website i.e. www.owmnahar.com
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 Obligations 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	The Board of Directors has formulated and adopted Risk Management Policy as required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company. The policy has been uploaded on Companys website and can be accessed at 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 (DIN: 00463866) is a Non-Executive Director/Chairman. Sh. Dinesh Oswal (DIN: 00607290) is a Managing Director. There are four Non-Executive Directors and five are Independent Directors out of which one Director namely; Dr.Manisha Gupta (DIN: 06910242) is a Woman 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://www.owmnahar.com/spinning/pdf/NSMLAPPOIN TMENTANDREMUNERATIONPOLICY.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

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on 11 November, 2024 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 the 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: https://www.owmnahar.com/spinning/pdf/familiarization-program-2024-25.pdf

NO. OF BOARD MEETINGS

During the year under review, the Board of Directors of

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the Company met four times i.e. 29 May, 2024, 12

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August, 2024, 12 November, 2024 and 3 February, 2025 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, Key Managerial Personnel or other designated persons 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(3)(h) of the Companies Act, 2013. However, the transactions entered into with the Group Companies/Related Parties, 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, 2025. 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

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31 March, 2025 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

The Directorate General of GST Intelligence has passed orders u/s 74 of CGST Act, imposing a penalty of Rs. 5 Crores on the Company, for which the Company has gone in for appeal before the Commissioner Appeal and the case is pending as on date.

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)

The Company adopted CSR Policy and decided to undertake CSR activities in collaboration with Group Companies under one umbrella i.e. through Oswal Foundation which is a Registered Society formed in 2006 with vide Registration No. CSR0000145, having its charitable objects in various fields. The details of the CSR policy are available on the Companys website i.e. www.owmnahar.com

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, companys CSR obligation for the financial year 2024-25 was Rs.524.00 Lakhs (being the 2% of the average net profits made during the three immediate preceding financial years. During the year under review, the company has contributed an amount of Rs. 501.51 Lakhs to the Oswal Foundation, for undertaking Rural Development Project, which is covered under Schedule VII of the Companies Act, 2013.The Foundation undertook construction of community hall, kitchen and rooms at main G.T. Road between Doraha and Khanna, Distt. Ludhiana.

Further, to support Healthcare Initiatives i.e. to facilitate transportation of patients for healthcare-related tasks, Board on the recommendation of CSR Committee donated a vehicle to SSP Mohali, Punjab.The approximate value of the vehicle was Rs. 17.49 Lakhs. This activity falls under the Schedule VII of the Companies Act, 2013.Likewise, the Company has also paid an amount of Rs. 5 Lakhs to the Punjabi University, Patiala under the CSR activities for organizing 83rd Session of Indian History Congress by Department of History and Punjab Historical Studies, Punjabi University, Patiala.

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 (DIN: 06671174), Sh. Dinesh Gogna (DIN: 00498670) and Dr. Roshan Lal Behl (DIN: 06443747) as members as

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on 31 March, 2025. Mr. Brij Sharma is the Secretary of the Committee. The Committee held four meetings during the year under review. 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, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 https://www.owmnahar.com/ spinning/pdf/vigil_mechanism_25.pdf

The Audit Committee regularly reviews the working of the Mechanism. No complaint was received during the year under review.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANY

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

CREDIT RATING

We would like to informyou that Credit Rating Information Services of India Ltd. (CRISIL) vide its letter no. RL/NAHSPIN/351154/BLR/0824/96450 dated August 27, 2024 has intimated companys rating outlook on the long term bank facilities CRISIL A/Negative (Reaffirmed). The rating on short-term bank facility has been reaffirmed at CRISIL A1.

GREEN INITIATIVE

To save environment and to comply with the provisions of Companies Act, 2013, SEBI (LODR), Regulations, 2015 as amended from time to time, Company is sending documents such as notices 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 Em a i l a t : - s e c n s m @ o w m n a h a r. c o m o r 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, Bandra Kurla Complex, Bandra (E), Mumbai- 400051.

The Company has paid listing fee to both the Stock Exchanges for the financial year 2025-26.

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, 2025, 98.70% 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 Limited (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.

SPECIAL WINDOW FOR RE-LODGEMENT OF TRANSFER REQUESTS

SEBI vide its Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/97 dated July 02, 2025, opened a onetime special window from July 07, 2025 to January 06, 2026 for physical shareholders, where the original share transfer requests were lodged prior to April 01, 2019 and were returned or rejected due to deficiencies in documentation, process or any other reason, to submit re-lodgement requests. The shares re-lodged for transfer will be processed only in dematerialized form during this window. Eligible shareholders may submit their transfer requests alongwith the requisite documents to the Companys Registrar and Share Transfer Agent within the stipulated period.

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

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General Meeting held on 24 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

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the office from the conclusion of 42 Annual General

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Meeting upto the conclusion of 47 Annual General Meeting of the company to be held in the year 2027.

M/s. Gupta Vigg & Co., Chartered Accountants, have given declaration to the effect that they have not incurred any disqualification as mentioned under Section 141(3) of the Companies Act, 2013 after their appointment as Statutory Auditors of the Company and they are eligible to continue their above said appointment for the financial year 2025-26.

Audit Report: The Statutory Auditors have submitted the Audit Report on the Financial Statements of the

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Company for the accounting year ended 31 March, 2025.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 Financial Statements are self-explanatory and require no comments.

Cost Auditors: In compliance with the provisions of Section 148 (1) of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, Cost Audit is applicable to the Company. 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., Cost Accountants (Firm Registration No. 000019), as Cost Auditors of the Company for financial year 2024-25.Accordingly, they have conducted Cost Audit for the Financial Year 2024-25.The report does not contain any qualification, reservation or adverse remark and requires no comments.

The Board has re-appointed M/s.RamanathIyer& Co., Cost Accountants (Firm Registration No. 000019), to conduct Cost Audit of the Company for the Financial Year 2025-26. They have confirmed their eligibility for the said re-appointment. The remuneration of Rs.2.05 Lakhs (Rupees Two Lakhs Five 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 and Rules 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: In compliance with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 204 of the Companies Act, 2013 the Board, based on recommendation of the Audit Committee, has approved the appointment of Mr. P.S. Bathla, proprietor of M/s. P.S. Bathla and Associates, Peer Reviewed Company Secretary in Practice, Ludhiana having Certificate of Practice Number 2585, as Secretarial Auditor of the Company for a term of five consecutive years commencing from FY 2025-26 till FY 2029-30, subject to approval of the shareholders of the Company at the ensuing AGM. He has expressed his willingness for appointment as Secretarial Auditor of the Company and has given a written consent and confirmed that he is not disqualified and is eligible to be appointed as Secretarial Auditor in terms of Regulation 24A of the Listing Regulations read with SEBI circular no. SEBI/HO/CFD/ CFD-PoD-2/CIR/P/2024/185 dated December 31, 2024. The Resolution for his appointment has been proposed for your approval in the accompanying Notice.

Mr. P.S. Bathla, proprietor of M/s. P.S. Bathla and

Associates, Peer Reviewed Company Secretary in Practice, has carried out the Secretarial Audit for the financial year ended March 31, 2025 and submitted their Secretarial Audit Report in Form No. MR-3 which is annexed herewith as Annexure II and form part of this Report.

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

REPORTING OF FRAUDS BY AUDITORS

During the year under review, No frauds were reported by the Statutory Auditors and the Secretarial Auditor under Section 143(12) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

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 Sh. Dinesh Oswal (DIN: 00607290), Managing Director of the Company. Dr. Anchal Kumar Jain (DIN: 09546925) and Dr. Roshan Lal Behl (DIN: 06443747), Independent Directors of the Company, are the other two members of the Committee. 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

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year under review i.e. on 5 April, 2024 and 28 October, 2024.

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 Obligations 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.owmnahar .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.

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Company has also appointed M/s. Raj Gupta & Co., Chartered Accountants as Internal Auditor of the Company. The company is 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 ("POSH Act") 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 2024-25, the Company has not received any complaints on sexual harassment and

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hence no compliant remains pending as of 31 March, 2025.

To build awareness regarding sexual harassment, rights of the women under the POSH Act and reporting of complaints as per Companys policy, the Company has conducted seminars under POSH Act during the year under review.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 during the year under review.

INFORMATION OF ONE-TIME SETTLEMENT FOR LOANS TAKEN FROM THE BANKS OR FINANCIAL INSTITUTIONS

There is no instance of one-time settlement with any Bank or Financial Institution during the financial year 2024-25, so the requirement to disclose the details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable to the Company.

COMPLIANCE TO THE PROVISIONS RELATING TO THE MATERNITY BENEFITS ACT, 1961

The Company is in compliance with the provisions of Maternity Benefits Act, 1961 during the year under review.

ANNUAL RETURN

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 2024-25, the Form MGT-7 has been uploaded on Companys website at: https://www.owmnahar.com/spinning/pdf/Annual-Return-2024-25.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 of the Companies Act, 2013 read with Schedule V and other applicable provisions, the Company got shareholders approval vide Special Resolution dated 29th September, 2021 and 25th September, 2024 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 (DIN: 00607290), Managing Director of the Company. A remuneration of Rs. 15,86,44,004.00/-(Rupees Fifteen Crore Eighty Six Lakhs Forty Four Thousand Four only) has been paid to Sh. Dinesh Oswal, Managing Director of the Company for financial year 2024-25.Sh. Dinesh Oswal is 60 years of age. He is a Commerce Graduate and has business experience of more than 40 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 Sh. Jawahar Lal Oswal, Non- Executive Director/Chairman, Sh. Kamal Oswal, Director, Mrs.Ritu Oswal, Export Advisor and Ms.Tanvi Oswal, President of the Company.

Sh. Jawahar Lal Oswal (DIN: 00463866), Non- Executive Director/Chairman of the Company has been paid sitting fee and payment @ 0.50% of companys exports sale as per the approval of the shareholders vide their special resolution dated September 25, 2024. Sh. JawaharLal Oswal is 81 years of age. He is a Commerce Graduate and has business experience of more than 61 years in Textile and Woollen Industry. He is employed on contractual basis for three years w.e.f 1st October, 2024. He is employed with M/s. Monte Carlo Fashions Limited as Managing Director. His shareholding in the Company is 90374 equity shares of Rs. 5/- each. He is related to Sh. Dinesh Oswal, Managing Director, Sh. Kamal Oswal, Director, Mrs. Ritu Oswal, Export Advisor and Ms. Tanvi Oswal, President of the Company.

Detail of remuneration drawn by Ms. Tanvi Oswal under rule 5(2)(i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been given in Annexure-III of the Directors Report.

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 AND OUTGO

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 V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 stipulated under Regulation

34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as per Annexure-VI and form part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report for the year ended 31st March, 2025 mentioning therein the initiatives taken by the company from an Environmental, Social and Governance (ESG) perspective in the format as specified by the SEBI under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,has been uploaded on Companys website at: https://www.owmnahar.com/spinning/pdf/BRSR-2024-25.pdf

HUMAN RESOURCE/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 co-operation 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, co-operation and confidence in the Management of the Company.

For and on behalf of the Board of Directors
	Jawahar Lal Oswal
Place: Ludhiana	(Chairman)
Dated: 31 July, 2025	Din: 00463866