Your Directors have immense pleasure in presenting the FOURTEENTH ANNUAL REPORT on theaffairs of the Company forthefinancial year ended 31st March 2019.
Your Company's financial performance during the year is summarized below:
(Rs. in Lakhs)
|Particular || |
| ||Current Year ||Previous Year ||Current Year ||Previous Year |
|Total Income ||2516.77 ||3022.14 ||2405.05 ||2714.46 |
|Less: Total Expenses ||1022.70 ||679.16 ||1022.70 ||679.16 |
|Profit before Tax ||1494.07 ||2342.98 ||1382.35 ||2035.30 |
|Less: Tax (including deferred tax charge and adjustment of previous year) ||313.92 ||425.07 ||572.99 ||(103.51) |
|Share of Profit/loss from Associates || || ||1689.42 ||(261.15) |
|Net Profit from continuing operations ||1180.15 ||1917.91 ||2498.78 ||1877.66 |
|Other Comprehensive Income/(loss) ||(1374.09) ||1278.55 ||(1770.30) ||(992.79) |
|Profit/(Loss) for the period ||(193.94) ||3196.46 ||728.48 ||884.87 |
INDIAN ACCOUNTING STANDARDS
As per the road map notified by the Ministry of Corporate Affairs (MCA) the Companyhas adopted Indian Accounting Standards (lnd-AS) w.e.f. financial year 201819 andaccordingly the transition date is 1st April 2017. The financial statements have beenprepared in accordance with the Indian Accounting Standards (Ind-AS) as notified byMinistry of Corporate Affairs (MCA) under Section 133 of the Companies Act 2013 read withthe Companies (Indian Accounting Standards) Rules 2015 as amended and other relevantprovisions of the Act and applicable guidelines issued by the Reserve Bank of India (RBI).The financial statements have been prepared in accordance with the format prescribed for aNon-Banking Financial Company (NBFC) in compliance of the Companies (Indian AccountingStandards) Rules 2015 in Division III of Notification No. GSR 1022 (E) dated October 112018 issued by the Ministry of Corporate Affairs.
The Reconciliation and the effect of the transition as per GAAP vis a vis Ind AS hasbeen provided in Note No. 46 of notes to the Financial Statements.
FINANCIAL PERFORMANCE REVIEW AND STATE OF AFFAIRS
We would like to inform you that the Company's activities can be classified under onesegment namely; Investment/Financial Activities. However the Company is also dealing inReal Estate Segment. Though the Company is not required to report Real Estate Segmentbeing below quantitative thresholds specified as per Ind-AS 108 'Operating Segments' butfor better understanding of the financials the Company has given the details of both thesegments i.e. Investment/Financial Activities and Real Estate Activities in the financialstatements for the year ended 31st March 2019.
Before reviewing overall performance of the company we would like to brief youregarding the working performance of each segment which is as under:
The Company's primary business activities are 'Investment/Financial Activities'comprising of Long Term investment & Strategic Investments and Short Term Investmentactivities i.e. Trading Investment. Besides the Company's business activities alsoinclude lending activities. The Company makes investments in Primary and Secondary Marketdirectly as well as through Mutual Funds and Portfolio Management Services etc. During theyear under review the Company achieved net revenue of Rs. 2353.60 Lakhs and earned aProfit (before tax and finance cost) of Rs. 1695.88 Lakhs from investment/financialactivities.
REAL ESTATE SEGMENT
We would like to inform you that the real estate segment achieved net revenue of Rs.163.17 Lakhs and earned a Profit (before tax and interest cost) of Rs. 112.17 Lakhs duringtheyear under review.
Further pursuant to the requirements of Section 129(3) of the Companies Act 2013 theCompany has consolidated the Financial Statements for the year ended 31st March 2019 inrespect of its Associate Companies. We would brief you regarding the financial performanceof the Company on standalone as well as consolidated basis which is as under:-
STANDALONE FINANCIAL PERFORMANCE
As you are aware that your Company being an Investment Company makes investments inPrimary and Secondary Markets directly as well as through Mutual Funds and PortfolioManagement Services etc. High volatility in equity market in FY 2018-19 amidstgeo-political risks such as trade wars and Brexit etc. adverse Banking scenario slowingglobal growth and liquidity crisis in NBFCs coupled with lower corporate profitabilityaffected the profitability of the Company during theyear under review. Profitability alsoaffected due to long term Strategic investments made by the company during the year.
On standalone basis the Company earned operating/other income of Rs. 2516.77 Lakhs inthe current year as against Rs. 3022.14 Lakhs in the previous year. It earned a profitbefore tax of Rs. 1494.07 Lakhs as against Rs. 2342.98 Lakhs in the previous year. Afterproviding fortax expenses of Rs. 313.92 Lakhs (including deferred tax charge) it earned anet profit of Rs. 1180.15 Lakhs for the year ended 31.03.2019 as compared to Rs.1917.91Lakhs in the previous year ended 31.03.2018.
CONSOLIDATED FINANCIAL PERFORMANCE
On consolidated basis the Company earned operating/ other income of Rs. 2405.05 Lakhsduring the year under review as against Rs. 2714.46 Lakhs in the previous year. It earneda profit (including profit/loss of associates) before tax of Rs. 3071.77 Lakhs as againstRs. 1774.15 Lakhs in the previous year. After providing for tax expenses of Rs. 572.99Lakhs (including deferred tax charge) it earned a net profit of Rs. 2498.78 Lakhs for theyear ended 31.03.2019 as against Rs. 1877.66 Lakhs in the previous year ended 31.03.2018.
The Company has not transferred any amount to the General Reserve and thus Company'sGeneral Reserve stands to Rs. 333.21 Crores as on 31st March 2019. However after makingadjustment of Dividend paid including dividend distribution tax Statutory Reserve FundCSR Reserve and adding comprehensive income for the year an amount of Rs. 6.59 Crores hasbeen Retained in the Surplus Account during the year and thus Retained Earnings/SurplusAccount stand increased to Rs. 64.94 Crores as on 31st March 2019.
The Board in its meeting held on 30th May 2019 has recommended a dividend @ 30% (i.e.Rs.1.50/- per equity shares of Rs.5/- each) on paid up share capital for the year ended31st March 2019. The proposal is subject to the approval of the shareholders at theensuing Annual General Meeting to be held on 30th September 2019. The total dividenddeclared (excluding dividend distribution tax) for the currentyear is Rs. 2.51 Crores.
The dividend if approved at the forthcoming Annual General Meeting will be paid outof profits of the Company for the year under reference to all those shareholders whosename shall appear in the Register of Members 13th September 2019 or Register ofBeneficial Owners maintained by the Depositories as at the close of 13th September2019.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 124(5) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 alldividends which remains unpaid/ unclaimed for a period of seven years shall be transferredby the Company to the Investor Education and Protection Fund (IEPF) established by theCentral Government.
Accordingly the Company has transferred an amount of Rs. 346386/- (Rupees ThreeLakhs Forty Six Thousand Three Hundred and Eighty Six only) being the amount of unclaimeddividend for the year 2010-11 to the Investor Education and Protection Fund in November2018. Further unpaid dividend for the year 2011-12 shall be transferred to InvestorEducation and Protection Fund pursuant to Section 124 of the Companies Act 2013 inNovember 2019. The Company has also sent letter/notice to the shareholders informing themto claim the unclaimed dividend from the Company before transferring the same to theInvestor Education and Protection Fund.
Further pursuant to the provisions of Section 124(6) of the Companies Act 2013 readwith Rule 6 of Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 as amended from time to time the shares on whichdividend has not been paid or claimed by the shareholders for seven consecutive years ormore is required to be transferred to the Demat Account of the IEPF Authority.Accordingly during the year under review the Company has transferred 12640 (TwelveThousand Six Hundred Forty) equity shares of Rs. 5/- each to the demat account of IEPFAuthority having DPID/Client ID: IN300708/10656671. Details of shares transferred to theIEPF Authority are available on the website of the Company and the same can be accessedthrough the link: http://www.owmnahar.com/nahar_cf/transfer-of-equity- shares-to-IEPF.php.The said details have also been uploaded on the website of the IEPF Authority and the samecan be accessed through the link: www.iepf.gov.in.
The shares as well as unclaimed dividends transferred to IEPF Authority can be claimedback by making an application to the IEPF Authority in e-Form IEPF-5 as per procedureprovided under Rule 7 of the IEPF Rules. Concerned members/investors are advised to visitthe weblink: http://iepf.gov.in/IEPFA/refund.html for refund of shares and/or dividendfrom the IEPF Authority.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013and Regulation 25 of the SEBI (LODR) Regulations 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 152(6) of the Companies Act 2013 and Article 117of the Articles of Association of the Company Mr. Dinesh Gogna (DIN: 00498670) and Mr.Satish Kumar Sharma (DIN: 00402712) will be retiring by rotation at the ensuing AnnualGeneral Meeting and being eligible offered themselves for re-appointment. The Board hasrecommended their re-appointment to the members of the Company atthe ensuing AnnualGeneral Meeting.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. Dinesh OswalManaging Director Mr. H.R. Kapoor Chief Financial Officer and Mrs. Anjali ModgilCompany Secretary are the Key Managerial Personnel (hereinafter referred as KMP) of theCompany. There has been no change in the KMP since the last fiscal year.
FIT AND PROPER POLICY
The Directors have also adopted a 'Fit and Proper' Policy for ascertaining the 'fit andproper' criteria to be adopted at the time of appointment of directors and on a continuingbasis pursuant to the Non Banking Financial Companies - Corporate Governance (ReserveBank) Directions 2015 issued by the Reserve Bank of India
The provisions of the Companies Act 2013 and Regulation 17 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 mandate that a Formal AnnualEvaluation is to be made by Board of its own performance and that of its Committee andindividual Directors. Schedule IV of the Companies Act 2013 states that performanceevaluation of the Independent Director shall be done by Directors excluding the Directorbeing evaluated.
The Board carried out a formal annual performance evaluation as per thecriteria/framework laid down by the Nomination and Remuneration Committee of the Companyand adopted by the Board. The evaluation was carried out through structured evaluationprocess to evaluate the performance of individual Directors including the Chairman of theBoard. They were evaluated on parameters such as their education knowledge experienceexpertise skills behaviour leadership qualities level of engagement and contributionindependence of judgement decision making ability for safeguarding the interest of theCompany stakeholders and its shareholders. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors. Theoutcome of the Board Evaluation for the Fiscal 2019 was discussed by the Nomination andRemuneration Committee at the Meeting held on 29th May 2019 and the Board at its Meetingheld on 30th May 2019.
The Board was satisfied with the evaluation process and approvedthe evaluation resultsthereof.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015. As per saidRegulations the listed companies are required to formulate certain policies. As a goodcorporate the Company has already formulated several corporate governance policies and thesame are available on the company's website i.e. www.owmnahar.com. The said policies arereviewed periodically by the Board to make them compliant with the newRegulations/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 of Directors in their meeting held on 3rd February 2015 approved the Policy for Appointment and Remuneration of Directors Key Managerial Personnel and other employees as recommended by Nomination and Remuneration Committee. |
|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 the Corporate Social Responsibility Policy was formulated by CSR Committee and adopted by the Board. The Company's CSR Policy outlines the various projects/programmes / 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. |
|Whistle Blower Policy ||Pursuant to the provisions of Section 177 of the Companies Act 2013 the 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 for policy. |
|Policy for determining the Material Related Party Transactions and dealing with the related party transactions ||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 Party Transactions and Dealing with Related Party Transactions. The policy regulates the transactions between the Company and its group companies and related parties. The Policy has been uploaded on the Company's website and can be accessed at http://owmnahar.com/nahar_ cf/pdf/RPT-NAHAR-CAPITAL. pdf. |
|Insider Trading Policy ||Pursuant to the SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 and the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations 2019 the Board in its Meeting held on 11.02.2019 revised 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 |
| ||The Codes help to regulate trading in securities by the designated persons. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys 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. |
|Preservation of documents Policy ||The Board of Directors in their meeting held on 10th November 2015 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 8 years as per the requirements of applicable laws. |
|Archival Policy ||Pursuant to the requirements of Regulations 30(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has approved and adopted the Archival Policy in its Meeting held on 10th November 2015. 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 3rd February 2015 has approved and adopted the Board Diversity Policy as per the recommendations of Nomination and Remuneration Committee. The policy envisages of diversification of Companys Board in respect of age knowledge experience and expertise. |
APPOINTMENT AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and Remuneration Committee has frameda policy for Appointment and Remuneration of Directors Senior Management and otheremployees as provided under Section 178(3) of the Companies Act 2013. The objective ofthe Policy is to have an appropriate mix of Executive Non-Executive and IndependentDirectors to meet independence of Directors. The present Board consists of ten members.Mr. Jawahar Lal Oswal is Non-Executive Chairman. Mr. Dinesh Oswal is a Managing Director.There are four Non Executive Directors and five are Independent Directors out of which oneDirector namely; Dr. Manisha Gupta is a woman director on the Board.
The Company's Policy of Appointment and Remuneration includes criteria for determiningqualification positive attributes independence of directors and other matters asrequired under sub-section 3 of Section 178 of the Companies Act 2013. The Policy alsolaid down the criteria for determining the remuneration of directors key managerialpersonnel and other employees. The Nomination & Remuneration Policy of the Company isavailable on the Company's website and can be accessed athttp://owmnahar.com/nahar_cf/pdf/NAHARCAPAPPOINT MENTANDREMUNERATIONPOLICY.pdf There hasbeen no change in the Policy since the last fiscal year. We affirm that the remunerationpaid to the directors is as per the terms laid out in the Nomination and RemunerationPolicy of the Company.
During the year under review the Board of Directors of the Company met four times i.e.30th May 201829th August 201830th November 2018 and 11th February 2019 with apredefined agenda circulated well in advance. The intervening gap between the Meetings waswithin the period prescribed underthe CompaniesAct 2013.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Company's Independent Directors met on 30th November 2018 without the attendanceof NonIndependent Directors and members of Management. All the Independent Directors werepresent at the meeting. At the Meeting they-
i. Reviewed the performance of non-independent directors and the Board as a whole;
ii. Reviewed the performance of the Chairperson of the Company taking into account theviews of Executive Directorand Non-Executive Directors;
iii. Assessed the quality quantity and timeliness of flow of information between theCompany Management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
FAMILIARISATION PROGRAMS FOR BOARD MEMBERS
The Company at the time of appointing a Director issues a formal letter ofappointment which inter alia explains the role functions duties and responsibilitiesexpected from him/her as a Director of the Company. All the Independent Directors areprovided with all the Policies/Guidelines as framed by the Company under various statutesand SEBI Regulations to familiarize them with Company's procedures and practices.Further to update them on a regular basis the Company provides copies of all theamendments in Corporate Laws Corporate Governance Rules and SEBI Regulations. The detailsof Company's Policy on Familiarization Programs for Independent Directors are posted onthe website of the Company and can be accessed at: http://www.owmnahar. com/nahar_cf/pdf/Familiarization-Program-2019.pdf.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWITH RELATED PARTIES
During the year under review transactions entered into with Related Parties/GroupCompanies/Associate Companies are given in the Notes to the Financial Statements whichwere in the ordinary course of business at arm's length basis and in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. Noany contract or arrangement was entered into with the Related Parties as per Section188(1) of the CompaniesAct 2013 read with Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 during the financial year ended 31st March2019. Thus the requirement for disclosure of particulars of contracts or arrangement withrelated parties referred to in Section 188(1) is not applicable to the Company. Howeveras per Company's policy all the transactions with the Group Companies/Related Parties areplaced before the Audit Committee as well as the Board for their information andapproval.
We would like to inform you that during theyear no material related party transactionsmade by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge or which warrants the approval of the shareholders.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THEDATEOFTHEREPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relateand the date of this Report.
The paid up Equity Share Capital of the Company as on 31st March 2019 is Rs. 837.31Lakhs. During the year under review the Company has neither issued shares withdifferential voting rights as to dividend voting or otherwise nor granted stock optionsor 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 Tribunalswhich impact the going concern status and Company's operations in future.
PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements. The Companybeing a Non Banking Financial Company registered under Chapter IIIB of the Reserve Bank ofIndia Act 1934 thus the provisions of Section 186 (except Sub Section 1) of theCompanies Act 2013 in respect of lending and investment activities are not applicable tothe Company.
CORPORATE SOCIAL RESPONSIBILITY
As reported in our last reports the Company adopted CSR Policy and decided toundertake CSR activities in collaboration with Group Companies under one umbrella i.e.through Oswal Foundation which is a Registered Society formed in 2006 having itscharitable objects in various fields. The details of the CSR Policy are available on thecompany's website i.e. www.owmnahar.com.
The disclosure relating to the CSR activities pursuant to Section 134(3) of theCompanies 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.
As required under Section 177 of the Companies Act 2013 Company has alreadyconstituted an Audit Committee consisting of three Non-executive Directors under theChairmanship of Prof. K.S. Maini Dr. S. K. Singla and Mr. S.K. Sharma as members. Mrs.Anjali Modgil is the Secretary of the Committee. The Committee held four meetings duringtheyear under review.
Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2013 the Company established a VigilMechanism process as an extension of Company's Code of Conduct whereby any employeedirectors customers vendors etc. can report the genuine concerns or grievances to theCompliance Officer or members of the Audit Committee about unethical behaviour actual orsuspected fraud or violation of Company's Code of Conduct so that appropriate action canbe taken to safeguard the interest of the Company. The Mechanism also provides foradequate safeguards against victimisation of persons who uses such mechanism. Themechanism provides direct access to the chairperson of the Audit Committee in appropriateor exceptional cases. The Company has a dedicated e-mail address email@example.com for reporting the genuine concerns. The Whistle BlowerPolicy/Vigil Mechanism is also posted on Company's Website and can be accessed athttp://owmnahar.com/nahar_ cf / pdf / vigil _ mechanism.pdf.
The Audit Committee regularly reviews the working of the Mechanism. No complaint wasreceived during the year under review.
Your Directors are pleased to inform that M/s. ICRA Limited vide their Report datedMarch 212019 has reaffirmed the rating "[ICRA] A1+" (pronounced ICRA A oneplus+) assigned to the proposed Short Term Debt / Commercial Paper Programme of theCompany for Rs. 25 Crores. This rating is considered to have very strong degree of safetyregarding timely payment of financial obligations. Such instruments carry lowest creditrisk. This is the highest credit quality rating by the ICRA to the Short Term Debt /Commercial Paper and it reflects the company's sound financialdisciplineand prudence.
SUSIDIARIES JOINT VENTURE OR ASSOCIATE COMPANIES
The Company does not have any subsidiary and joint venture company. The Company hasthree Associate Companies viz. M/ s. Nahar Spinning Mills Ltd. M/s. Nahar IndustrialEnterprises Ltd. and M/s. Nahar Poly Films Ltd. No Company has become or ceased to be theAssociate Company of the Company during the year under review.
CONSOLIDATED FINANCIAL STATEMENT
As per Companies Act 2013 the Company has three Associate Companies viz. M/s. NaharSpinning Mills Ltd. M/s. Nahar Industrial Enterprises Ltd. and M/s. Nahar Poly Films Ltd.Pursuant to the requirements of Section 129(3) of the Companies Act 2013 the Companyhas consolidated the financial statements in respect of above said Associate Companies forthe financial year ended 31st March 2019.
Further a report on the performance and financial position of each of the AssociateCompanies as per the Companies Act 2013 in the Form AOC-1 is annexed to the FinancialStatements for the year ended 31.03.2019.
The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in theCorporate Governance" by allowing paperless compliances by the companies. Further asper the provisions of Companies Act 2013 the Company may send financial statements andother documents by electronic mode to its members. Your Company has decided to join theMCA in its environmental friendly initiative.
Accordingly henceforth Company propose to send documents such as Notice of the GeneralMeetings Annual Report and other communication to its shareholders via electronic mode tothe registered e-mail addresses of shareholders. To support this Green Initiative of theGovernment in full measure shareholders are requested to register/update their lateste-mail addresses with their Depository Participant (D.P.) with whom they are having DematA/c. or send the same to the Company via e-mail at firstname.lastname@example.org email@example.com. We solicit your valuable co-operation and support in ourendeavorto contribute our bit to the environment.
LISTING OF SECURITIES
The securities of the Company are listed on the following StockExchanges:
1. The BSE Ltd. 25th Floor Phiroze Jeejeebhoy Towers Dalal Street Mumbai-400001.
2. The National Stock Exchange of India Ltd. Exchange Plaza Plot No.C/1 G-BlockBandra Kurla Complex Bandra(E) Mumbai-400051.
The Company has paid listing fee to both the Stock Exchangesforthefinancial year2019-20.
DEMATERIALISATION OF SHARES
Your Company has established connectivity with both the Depositories i.e. NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Ltd (CDSL) tofacilitate the holding and trading of securities in electronic form. As on 31st March2019 98.27% of the total Equity Share Capital of the Company has been dematerialized.
The SEBI vide its Gazetted Notification dated June 082018 amended the Regulation 40(1) (b) of SEBI (LODR) Regulations 2015 whereby it has been provided that except in caseof transmission or transposition of securities requests for effecting transfer ofsecurities shall not be processed unless the securities are held in dematerialized formwith the Depository. Hence members are hereby informed that requests for effectingtransfer of securities shall not be processed unless the securities are held in thedematerialized form with a Depository. Hence all members who are holding equity sharesin physical form are requested to go in for dematerialization of securities at theearliest.
Further as per SEBI circular no. D &CC/FITTC/CIR-15/2002 dated 27th December 2002;Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer andElectronic connectivity. Accordingly all the shareholders Investors Members of the StockExchanges Depository Participants and all other concerned are requested to send allcommunication in respect of share transfer demat/remat change of address etc. to ourregistrar at below mentioned address:
M/s. Alankit Assignments Ltd
(Unit Nahar Capital and Financial Services Ltd)
3E/7 Jhandewalan Extension
Telephone No : (011)23541234
Fax No. : (011)23552001
E-mail Address : firstname.lastname@example.org
In case any query/complaint remains unresolved with our Registrar please write toCompany Secretary at the registered office of the Company.
The Company being essentially an Investment Company its main sources of income aredividend/income receivable on investments in Equity Shares/Debentures/Bonds/deposits madeand held by it in other companies and Mutual Funds. The financial business is always proneto risks of capital market fluctuations and economic cycle.
To monitor and manage the risk associated with the investment business the Company hasdeveloped and implemented a Risk Management Policy for the Company including thereinidentification and risk mitigation measures. The Policy is also posted on Company'swebsite i.e. www.owmnahar.com. Further the Company has also constituted Risk ManagementCommittee pursuant to the RBI CircularNo. DNBS (PD) CC No. 156/03.10.001 /2009- 10 datedJuly 1 2009. The Committee comprises of three non-executive directors undertheChairmanship of Prof. K. S. Maini Mr. Dinesh Gogna and Dr. S.K. Singla as members. Themain term of reference of the Committee is to review and monitor the risk associated withCompany's business and suggest measures for mitigation of the same as per Company's RiskManagement Policy. The Risk Management Committee met fourtimes during the financial yearunder review.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors would like to assure the Members that the financial statements for theyear under review confirm in their entirely requirements of the Companies Act 2013.
The Directors confirm:
i) that in preparation of the Annual Accounts the applicable Accounting Standards hadbeen followed alongwith proper explanations relating to material departures if any;
ii) that they have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe Profit and Loss of the Company forthat period;
iii) that they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting any fraud andother irregularities;
iv) that they have prepared the Annual Accounts on a goingconcern basis;
v) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and
vi) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively
AUDITORS AND AUDITORSINDEPENDENT REPORT
Statutory Auditors: The members at the Annual General Meeting held on 26th September2017 appointed M/s. YAPL and Co. Chartered Accountants (Firm Registration No. 017800N)as Statutory Auditors of the Company for a term of five consecutive years starting fromthe conclusion of the 12th Annual General Meeting upto the conclusion of 17th AnnualGeneral Meeting of the Company to be held in theyear2022.
Audit Report: M/s. YAPL and Co. Chartered Accountants the Statutory Auditors havesubmitted the Audit Report on the Financial Statements of the Company forthe accountingyear ended 31st March 2019. There were no qualifications reservations adverse remarksor disclaimers in the Report. The observations and comments given by Auditors in theirReport read together with the Notes to the Financial Statements are self explanatory andrequire no comments. No frauds were reported by the Auditors under Section 143(12) of theCompanies Act 2013.
Secretarial Auditor: The Board pursuant to the provisions of Section 204 of theCompanies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 has appointed M/s.P.S. Bathla and Associates aPracticing Company Secretaries having Certificate of Practice No. 2585 to conduct theSecretarial Audit of the Company for the financial year 2019-20.
M/s. P.S. Bathla and Associates Practising Company Secretaries have carried out theSecretarial Audit for the financial year ended March 31 2019 and submitted theirSecretarial Audit Report in the Form No. MR-3 which is annexed herewith as Annexure II andform part of this Report.
The Report is self explanatory and requires no comments.
INTERNAL FINANCIAL CONTROL AND SYSTEM
The Company is maintaining an efficient and effective system of Internal FinancialControl for the facilitation of speedy and accurate compilation of financial statements.The Company's internal control system is designed to ensure operational efficiencyprotection and conservation of resources accuracy and promptness in financial reportingand compliance with laws and regulations and procedures. Further the statutory auditorsof the Company have verified the systems and processes and confirmed that the internalfinancial controls system over financial reporting is operating effectively.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the Company has also appointed M/s. Piyush Singla &Associates Chartered Accountant as Internal Auditor of the Company. The Company is alsohaving an Internal Audit Department to test the adequacy and effectiveness of InternalControl Systems laid down bythe management and to suggest improvement in the systems. TheInternal Audit Reports are discussed with the Management and are reviewed by the AuditCommittee of the Board which also reviews the adequacy and effectiveness of the internalcontrols in the Company. During the year Company's Internal Controls were tested and noreportable weakness inthe system was observed.
The company's Internal Financial Control System commensurate with the nature of itsbusiness and the size of its operations. In order to further strengthen the Internalcontrol system and to automate the various processes of the business company is makinguse of Enterprises Resource Planning (ERP). The Asset Liability Management (ALM) concernedwith the effective risk management in various Portfolios is also framed bythe Company.
The Indian Accounting Standards (Ind AS) have become applicable to the Company w.e.f.1st April 2018 (transition date being 1st April 2017). Accordingly financial statementshave been prepared in accordance with the Companies (India Accounting Standards) Rules2016. The Company also appointed M/s. Grant Thornton India LLP Noida a leadingconsultancy firm in the Accounting / Financial matters to advice the Company onconvergence of Ind AS.
Apart from this an Audit Committee consisting of three non executive directors hasbeen constituted. All the significant audit observation and follow up action thereon aretaken care of by the Audit Committee. The Committee overseethe adequacy of InternalControl. The Audit Committee met four times during the financial year under review. TheCompany has also established a Vigil Mechanism as per Section 177(9) of Companies Act2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules 2014.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return of the Company pursuant to Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules2014forthefinancial year 2018-19 in the Form MGT- 9 has been available on the Company'swebsite at: http://www.owmnahar.com/nahar_cf/pdf/MGT-9.pdf as the requirement of attachingthe extract of annual return with Board's Report has been done away by Section 36 ofCompanies (Amendment) Act 2017 as notified by Ministry of Corporate Affairs vide itsNotification dated 31st July 2018.
The Company is registered as Non-deposit taking NonBanking Financial Company with RBI.The Company has not accepted any Public Deposit within the meaning of Section 73 of theCompanies Act 2013 and the Rules made there under. There is no outstanding/unclaimeddeposit from the public. However the information as required under Rule 8 of theCompanies (Accounts) Rules 2014 is given hereunder:-
(i) Deposits accepted during theyear: Nil
(ii) Deposits remained unpaid or unclaimed as at the end oftheyear: Nil
(iii) Default in repayment of deposits and deposits which are not in compliance withthe Requirements of Chapter V of the Companies Act 2013: N.A.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of employees of the Company is annexed as Annexure III and form part ofthis Report.
In terms of Section 197(14) of the Companies Act 2013 the Company does not have anyHolding Company. However the details regarding remuneration received by Managing Directoris also given in ANNEXURE III annexed hereto and form part of this Report.
During the year under review Mr. Dinesh Oswal Managing
Director of the Company has been paid remuneration of Rs. 27000000/- (Rupees TwoCrores Seventy Lakhs only) for the financial year 2018-19 as per the approval of theCentral Government vide its letter no. SRN G41287038/1/2017-CL-VII dated 26th December;2017. Mr. Dinesh Oswal is 54 years of age. He is a Commerce Graduate and has businessexperience of more than 34 years in textile industry and financial expertise. He isemployed on contractual basis for five years w.e.f 1st January 2017 to 31st December2021. Before joining the Company he was employed with M/s. Oswal Woollen Mills Ltd. asCommercial Manager. His shareholding in the Company is Nil. He is related to Mr. JawaharLal Oswal Chairman and Mr. Kamal Oswal Director of the Company. No other employee was inreceipt of remuneration exceeding the limits as provided under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
MAINTENANCE OF COST RECORDS
The maintenance of cost records as specified by the Central Government under subsection (1) of Section 148 of the Companies Act 2013 is not applicable to the Company asthe Company isa Non Banking Financial Company.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment for women at workplace and hasadopted a policy against sexual harassment in line with Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules framedthereunder.
The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. During the financial year 2018-19 the Company hasnot received any complaint on sexual harassment and hence no complaint remains pending asof 31 March 2019.
CONSERVATION OF ENERGY TECHNOLOGY ABS ORPTION FOREIGN EXCHANGEEARNINGANDOUTGO
Particulars with respect to the Conservation of Energy Technology Absorption andForeign Exchange Earning and Outgo as required under Section 134(3)(m) of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 are not applicable as the company isa NonBanking Financial Company.
REPORT ON THE CORPORATE GOVERNANCE
Your Company continues to follow the principles of good Corporate Governance. TheCompany has constituted several committees of directors to assist the Board in good
Corporate Governance. The Corporate Governance Report for the year ended 31st March2019 along with Auditors Certificate regarding compliance of the conditions of theCorporate Governance as stipulated in Part C of Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached herewith asAnnexureIVandform part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunderthe Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is enclosed as per Annexure-VandformpartofthisReport.
The Industrial Relations remained cordial throughout the year and the excellent resultswere achieved with the whole hearted co-operation of employees at all levels.
The Board of Directors of the Company wish to place on record their gratitude andappreciation to all workers staff members and executives for their contribution to theoperations of the Company. The Directors also place on record their sincere thanks to theshareholders for their continued support co-operation and confidence in the management ofthe Company.
FOR AND ON BEHALF OF THE BOARD
|PLACE : LUDHIANA ||JAWAHAR LAL OSWAL |
|DATED : 13TH AUGUST 2019 ||(CHAIRMAN) |
| ||(DIN: 00463866) |