Your Directors have immense pleasure in presenting the FIFTEENTHANNUAL REPORT on the affairs of the Company for the financial year ended 31stMarch 2020.
Your Company's financial performance during the year is summarizedbelow:
|Particulars || |
|Current Year ||Previous Year ||Current Year ||Previous Year |
|Total Income ||2059.84 ||2516.77 ||1837.26 ||2405.05 |
|Less: Total Expenses ||740.45 ||1022.70 ||740.45 ||1022.71 |
|Profit before Tax ||1319.39 ||1494.07 ||1096.81 ||1382.34 |
|Less: Tax (including deferred tax charge /credit) ||(143.38) ||313.92 ||(11.90) ||572.99 |
|Share of Profit/(loss) from Associates || || ||(739.19) ||1689.43 |
|Net Profit from continuing operations ||1462.77 ||1180.15 ||369.52 ||2498.78 |
|Other Comprehensive Income/(loss) ||(13196.73) ||(1374.10) ||(15741.78) ||(1770.30) |
|Profit/(Loss) for the period ||(11733.96) ||(193.95) ||(15372.26) ||728.48 |
IMPACT OF COVID-19 PANDEMIC
As you are aware that the outbreak of COVID-19 pandemic globally and inIndia has caused huge disturbance and slowdown of economic activities. The COVID-19pandemic followed by the nationwide lockdown announced by the Government of India hassignificantly impacted businesses around the globe and also resulted in a sudden fall inthe valuation of securities traded in stock markets. However Stock Exchanges and otherFinancial Markets remain operational and in compliance with the lockdown instructionsissued by the Centre and State Governments the company has adjusted its investmentactivity in digital mode as permitted by Financial Institutions. Company is mainly doingInvestment business with long term perspective and hence temporary volatility in thefinancial markets will have little impact. However the Company's lease business isslightly affected due to COVID-19. Company has given discount to some lessees' andalso there are delays in receipt of lease rentals for which company is taking appropriateactions. Pursuant to the relaxed guidelines the stock markets Globally including Indiahave recovered substantially. The company has evaluated the
possible effects that may result from the COVID-19 pandemic on thecompany's operations capital and financial resources profitability liquidityability to service debt and other financial arrangements assets. The Company does notforesee any significant incremental risk to the recoverability of its assets or in itsability to meet its financial obligations over the foreseeable future given early andrequired steps taken to contain protect and mitigate the exposure. Your management ishopeful to sustain normal growth without any significant capex.
The future impact of the COVID-19 on the company's business isstill uncertain as several countries and many parts of India are under varying phases oflockdown and impacting the global economic activities.
INDIAN ACCOUNTING STANDARD
The financial statements have been prepared in accordance with theIndian Accounting Standards (Ind-AS) as notified by Ministry of Corporate Affairs (MCA)under Section 133 of the Companies Act 2013 read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other relevant provisions of the Act and applicableguidelines issued by the Reserve Bank of India (RBI). The financial statements have beenprepared in accordance with the format prescribed for a NonBanking Financial Company(NBFC) in compliance of the Companies (Indian Accounting Standards) Rules 2015 inDivision III of Notification No. GSR 1022 (E) dated October 11 2018 issued by theMinistry of Corporate Affairs.
FINANCIAL PERFORMANCE REVIEW AND STATE OF AFFAIRS
We would like to inform you that as per Ind-AS 108 OperatingSegments' Company's activities can be classified under two segments namely;Investment/Financial Activities and Real Estate Segment. The Company has given the detailsof both the segments i.e. Investment/Financial Activities and Real Estate Activities inthe financial statements for the year ended 31st March 2020.
Before reviewing overall performance of the company we would like tobrief you regarding the working performance of each segment which is as under:-
The Company's primary business activities areInvestment/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 which is mainly known to Business Associates and GroupCompanies. The Company makes investments in Primary and Secondary Market directly as wellas through Mutual Funds and Portfolio Management Services etc. During the year underreview the Company achieved net revenue of Rs. 1625.79 Lakhs and earned a Profit (beforetax and finance cost) of Rs. 1325.85 Lakhs from investment/financial activities.
REAL ESTATE SEGMENT We would like to inform you that the realestate segment achieved net revenue of Rs. 434.05 Lakhs and earned a Profit (before taxand interest cost) of 342.76 Lakhs during the year under review.
OVERALL PERFORMANCE We would brief you regarding the financialperformance of the Company on standalone as well as consolidated basis which is asunder:-
STANDALONE FINANCIAL PERFORMANCE
The Company performed reasonably during the year under review. Highvolatility in equity markets in FY 2019-20 due to COVID-19 pandemic outbreak liquiditycrisis macroeconomic policies declining interest rates and lower global growth hasaffected the Company's profitability during the year under review. NeverthelessCompany is investing with long term prospective and the effects on current yearprofitability are due to temporary conditions only. Hence company is quite hopeful thatthe effect of COVID 19 pandemic will be over soon and your Company's profitabilitywill be much better due to management's balanced approach to portfolio management andits continuous review has enabled it to get early warning signals and implement itscorrective measures from time to time.
On Standalone basis the Company earned operating/other income of Rs.2059.84 Lakhs in the current year as against Rs. 2516.77 Lakhs in the previous year. Itearned a profit before tax of Rs. 1319.39 Lakhs as against Rs. 1494.07 Lakhs in theprevious year. After providing for tax expenses of Rs. (143.38) Lakhs (including deferredtax charge /(credit)) it earned a net profit of Rs. 1462.77 Lakhs for the year ended31.03.2020 as compared to Rs. 1180.15 Lakhs in the previous year ended 31.03.2019. TheCompany's Reserve (Other equity) stands to Rs. 627.01 Crores as on 31stMarch 2020.
CONSOLIDATED FINANCIAL PERFORMANCE
Pursuant to the requirements of Section 129(3) of the Companies Act2013 the Company has consolidated the Financial Statements for the year ended 31st March2020 in respect of its Associate Companies namely; M/s. Nahar Spinning Mills Ltd. and M/s.Nahar Poly Films Ltd. In September 2019 Company has transferred/sold the entire holdingof the Associate Company Nahar Industrial Enterprises Limited at market rate. HenceNahar Industrial Enterprises Limited is ceased to be Company's Associate.
On Consolidated basis the Company earned operating/other income of Rs.1837.26 Lakhs during the year under review as against Rs. 2405.05 Lakhs in the previousyear. It earned a profit (including profit/(loss) of associates) before tax of Rs. 357.63Lakhs as against Rs. 3071.77 Lakhs in the previous year. After providing for tax expensesof Rs. (11.90) Lakhs (including deferred tax charge/(credit)) it earned a net profit ofRs. 369.53 Lakhs for the year ended 31.03.2020 as against Rs. 2498.78 Lakhs in theprevious year ended 31.03.2019.
The Board in its meeting held on 26th June 2020 hasrecommended a dividend @ 10% (i.e. Rs.0.50/- per equity shares of Rs.5/- each) on paid upshare capital for the year ended 31st March 2020. The proposal is subject tothe approval of the shareholders at the ensuing Annual General Meeting to be held on 29thSeptember 2020. The total dividend declared for the current year is Rs. 83.73Lakhs.
The dividend if approved at the forthcoming Annual General Meetingwill be paid out of reserves of the Company for the year under reference to all thoseshareholders whose names shall appear in the Register of Members on 18thSeptember 2020 or Register of Beneficial Owners maintained by the Depositories as at theclose of 18th September 2020.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 124(5) of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 all dividends which remain unpaid/ unclaimed for a period of seven yearsshall 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. 420495/-(Rupees Four Lakhs Twenty Thousand Four Hundred and Ninety Five only) being the amount ofunclaimed dividend for the year 2011-12 to the Investor Education and Protection Fund inNovember 2019. Further unpaid dividend for the year 2012-13 shall be transferred toInvestor Education and Protection Fund pursuant to Section 124 of the Companies Act 2013in November 2020. The Company has also sent letter/notice to the shareholders informingthem to 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 CompaniesAct 2013 read with Rule 6 of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended from time to time theshares on which dividend has not been paid or claimed by the shareholders for sevenconsecutive years or more is required to be transferred to the demat account of the IEPFAuthority. Accordingly during the year under review the Company has transferred 20106(Twenty Thousand One Hundred Six) equity shares of Rs. 5/- each to the demat account ofIEPF Authority having DPID/Client ID: IN300708/10656671. Details of shares transferred tothe IEPF Authority are available on the website of the Company and the same can beaccessed through 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 Authorityand the same can be accessed through the link: www.iepf.gov.in. The shares as well asunclaimed dividends transferred to IEPF Authority can be claimed back by making anapplication to the IEPF Authority in e-Form IEPF-5 as per procedure provided under Rule 7of the IEPF Rules. Concerned members/investors are advised to visit the weblink:http://iepf.gov.in/IEPF/ refund.html for refund of shares and/or dividend from the IEPFAuthority.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 and Regulation 25 of the SEBI (LODR) Regulations 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Inductions / Retirement of Directors
The second term of appointment of Prof. Kanwar Sain Maini (DIN00454686) as Independent Director of the Company will complete w.e.f. September 25 2020.The Board places on record its appreciation for the valuable services rendered by Prof.Kanwar Sain Maini during his tenure as an Independent Director of the Company.
Accordingly the Company has received a notice in writing from a memberunder Section 160 of the Companies Act 2013 proposing the candidature of Dr. Roshan LalBehl (DIN: 06443747) as Independent Director of the Company. The Nomination andRemuneration Committee after verifying his profile and suitability has recommended hisappointment to the Board. Accordingly the Board having regard to their skills experienceand knowledge has proposed the appointment of Dr. Roshan Lal Behl (DIN: 06443747) asIndependent Director of the Company to hold office for five consecutive years for a termi.e. upto 29th September 2025. The necessary resolution for his appointmenthas been proposed in the accompanying Notice for your approval.
Re-appointment of Director
Pursuant to the provisions of Section 152(6) of the Companies Act 2013and Article 117 of the Articles of Association of the Company Mr. Jawahar Lal Oswal (DIN:00463866) and Mr. Kamal Oswal (DIN: 00493213) Non-executive Directors of the Companywill be retiring by rotation at the ensuing Annual General Meeting and being eligibleoffered themselves for re-appointment. The Board has recommended their re-appointment tothe members of the Company at the ensuing Annual General Meeting.
Pursuant to the provisions of Section 203 of the Companies Act 2013Mr. Dinesh Oswal Managing Director Mr. H.R. Kapoor Chief Financial Officer and Mrs.Anjali Modgil Company Secretary are the Key Managerial Personnel (hereinafter referredas KMP) of the Company. There has been no change in the KMP since the last fiscal year.
FIT AND PROPER POLICY The Directors have also adopted a Fitand Proper' Policy for ascertaining the fit and proper' criteria to beadopted at the time of appointment of directors and on a continuing basis pursuant to theNon Banking Financial Companies - Corporate Governance (Reserve Bank) Directions 2015issued by the
Reserve Bank of India.
The provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 mandate that a FormalAnnual Evaluation is to be made by Board of its own performance and that of its Committeeand individual 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 2020 was discussed by the Nomination andRemuneration Committee at the Meeting held on 25th June 2020 and the Board atits Meeting held on 26th June 2020.
The Board was satisfied with the evaluation process and approved theevaluation results thereof.
The Securities and Exchange Board of India (SEBI) on September 22015 issued SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015. Asper said Regulations the listed companies are required to formulate certain policies. Asa good corporate the Company has already formulated several corporate governance policiesand the same are available on the company's website i.e. www.owmnahar.com. The saidpolicies are reviewed periodically by the Board to make them compliant with the newRegulations/requirements.
The company has adopted certain policies the details of which aregiven hereunder:
|Name of the Policy ||Brief Description |
|Appointment and 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 behaviour 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 |
| ||ii. Code of conduct to regulate monitor and report trading by insiders |
| ||The Codes help to regulate trading in securities by the designated persons. The Code requires preclearance for dealing in the Company's 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. |
|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 Company's disclosures documents and records that are placed on Company's 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 Company's Board in respect of age knowledge experience and expertise. |
APPOINTMENT AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and RemunerationCommittee has framed a policy for Appointment and Remuneration of Directors SeniorManagement and other employees as provided under Section 178(3) of the Companies Act2013. The objective of the Policy is to have an appropriate mix of ExecutiveNon-Executive and Independent Directors to meet independence of Directors. The presentBoard consists of ten members. Mr. Jawahar Lal Oswal is Non-Executive Chairman. Mr. DineshOswal is a Managing Director. There are four Non Executive Directors and five areIndependent Directors out of which one Director namely; Dr. Manisha Gupta is a womandirector on the Board.
The Company's Policy of Appointment and Remuneration includescriteria for determining qualification positive attributes independence of directors andother matters as required under subsection 3 of Section 178 of the Companies Act 2013.The Policy also laid down the criteria for determining the remuneration of directors keymanagerial
personnel and other employees. The Nomination & Remuneration Policyof the Company is available on the Company's website and can be accessed athttp://owmnahar.com/nahar_cf/pdf/NAHARCAPAPP OINTMENTANDREMUNERATIONPOLICY.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 metfour times i.e. 30th May 2019 13th August 2019 11thNovember 2019 and 12th February 2020 with a predefined agenda circulated wellin advance. The intervening gap between the Meetings was within the period prescribedunder the Companies Act 2013.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Company's Independent Directors met on 12th December2019 without the attendance of NonIndependent Directors and members of Management. Allthe Independent Directors were present at the meeting. At the Meeting they -
i. Reviewed the performance of nonindependent directors and the Boardas a whole;
ii. Reviewed the performance of the Chairperson of the Company takinginto account the views of Executive Director and Non-Executive Directors;
iii. Assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board which is necessary for the Boardto effectively and reasonably perform their duties.
FAMILIARISATION PROGRAMS FOR BOARD MEMBERS
The Company at the time of appointing a Director issues a formalletter of appointment which inter alia explains the role functions duties andresponsibilities expected from him/her as a Director of the Company. All the IndependentDirectors are provided with all the Policies/Guidelines as framed by the Company undervarious statutes and SEBI Regulations to familiarize them with Company's proceduresand practices. Further to update them on a regular basis the Company provides copies ofall the amendments in Corporate Laws Corporate Governance Rules and SEBI Regulations. Thedetails of Company's Policy on Familiarization
Programs for Independent Directors are posted on the website of theCompany and can be accessed at: http://www.owmnahar.com/nahar_cf/pdf/Familiarization-Program2020.pdf
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
During the year under review transactions entered into with RelatedParties/Group Companies- /Associate Companies are given in the Notes to the FinancialStatements which were in the ordinary course of business at arm's length basis and incompliance with the applicable provisions of the Companies Act 2013 and the SEBI (LODR)Regulations 2015. No any contract or arrangement was entered into with the RelatedParties as per Section 188(1) of the Companies Act 2013 read with Regulation 23 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 during the financialyear ended 31st March 2020. Thus the requirement for disclosure of particularsof contracts or arrangement with related parties referred to in Section 188(1) is notapplicable to the Company. However as per Company's policy all the transactionswith the Group Companies/Related Parties are placed before the Audit Committee as well asthe Board for their information and approval.
We would like to inform you that during the year no material relatedparty transactions made by the Company with Promoters Directors Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of theCompany at large or which warrants the approval of the shareholders.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THISFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year to which this financialstatements relate and the date of this Report.
The paid up Equity Share Capital of the Company as on 31stMarch 2020 is Rs. 837.31 Lakhs. During the year under review the Company has neitherissued shares with differential voting rights as to dividend voting or otherwise norgranted stock options or sweat equity under any scheme.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture.
PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186 OF THECOMPANIES ACT 2013
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the Notes to FinancialStatements. The Company being a Non Banking Financial Company registered under ChapterIIIB of the Reserve Bank of India Act 1934 thus the provisions of Section 186 (exceptSub Section 1) of the Companies Act 2013 in respect of lending and investment activitiesare not applicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY
As reported in our last reports the Company adopted CSR Policy anddecided to undertake CSR activities in collaboration with Group Companies under oneumbrella i.e. through Oswal Foundation which is a Registered Society formed in 2006having its charitable objects in various fields. The details of the CSR Policy areavailable on the company's website i.e.www.owmnahar.com.
The disclosure relating to the CSR activities pursuant to section134(3) of the Companies Act 2013 read with Rule 9 of the Companies (Accounts) Rules 2014and 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 hasalready constituted an Audit Committee consisting of three Non-executive Directors underthe Chairmanship 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 meetingsduring the year under review.
Pursuant to the provisions of Section 177(9) of the Companies Act 2013read with Companies (Meetings of Board and its Powers) Rules 2013 the Companyestablished a Vigil Mechanism process as an extension of Company's Code of Conductwhereby any employee directors customers vendors etc. can report the genuine concernsor grievances to the Compliance Officer or members of the Audit Committee about unethicalbehaviour actual or suspected fraud or violation of Company's Code of Conduct sothat appropriate action can be taken to safeguard the interest of the Company. TheMechanism also provides for adequate safeguards against victimisation of persons who usessuch mechanism. The mechanism provides direct access to the chairperson of the AuditCommittee in appropriate or exceptional cases. The Company has a dedicated e-mail addressi.e. whistleblowerncfs @owmnahar.com for reporting the genuine concerns. The WhistleBlower Policy/Vigil Mechanism is also posted on Company's Website and can be accessedat http://owmnahar.com/nahar_cf/ pdf/vigil_mechanism.pdf.
The Audit Committee regularly reviews the working of the Mechanism. Nocomplaint was received during the year under review.
Your Directors are pleased to inform that M/s. ICRA Limited vide theirReport dated May 21 2019 has reaffirmed the rating "[ICRA] A1+" (pronouncedICRA A one plus+) assigned to the proposed Short Term Debt / Commercial Paper Programme ofthe Company for Rs. 25 Crores. This rating is considered to have very strong degree ofsafety regarding timely payment of financial obligations. Such instruments carry lowestcredit risk. This is the highest credit quality rating by the ICRA to the Short Term Debt/ Commercial Paper and it reflects the company's sound financial discipline andprudence. SUSIDIARIES JOINT VENTURE OR ASSOCIATE COMPANIES
The Company does not have any subsidiary and joint venture company. TheCompany has two Associate Companies viz. M/ s. Nahar Spinning Mills Ltd. and M/s. NaharPoly Films Ltd. M/s. Nahar Industrial Enterprises Ltd. has ceased to be the AssociateCompany of the Company during the year under review.
CONSOLIDATED FINANCIAL STATEMENT
As per Companies Act 2013 the Company has two Associate Companiesviz. M/s. Nahar Spinning Mills Ltd. and M/s. Nahar Poly Films Ltd. M/s. Nahar
Industrial Enterprises Ltd. ceased to be Company's AssociateCompany during the year 2019-20. Pursuant to the requirements of Section 129(3) of theCompanies Act 2013 the Company has consolidated the financial statements in respect ofabove said two Associate Companies for the financial year ended 31st March2020.
Further a report on the performance and financial position of each ofthe Associate Companies as per the Companies Act 2013 in the Form AOC-1 is annexed to theFinancial Statements for the year ended 31.03.2020.
The Ministry of Corporate Affairs (MCA) has taken a "GreenInitiative in the Corporate Governance" by allowing paperless compliances by thecompanies. Further as per the provisions of Companies Act 2013 the Company may sendfinancial statements and other documents by electronic mode to its members. Your Companyhas decided to join the MCA in its environmental friendly initiative. Accordinglyhenceforth Company propose to send documents such as Notice of the General MeetingsAnnual Report and other communication to its shareholders via electronic mode to theregistered email 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 email@example.com or firstname.lastname@example.org. We solicit your valuable cooperation and support in our endeavor tocontribute 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 DalalStreet Mumbai-400001.
2. The National Stock Exchange of India Ltd. Exchange Plaza PlotNo.C/1 G-Block Bandra Kurla Complex Bandra (E) Mumbai-400051.
The Company has paid listing fee to both the Stock Exchanges for thefinancial year 2020-21. DEMATERIALISATION OF SHARES Your Company has establishedconnectivity 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 securitiesin electronic form. As on 31st March 2020 98.47% of the total Equity ShareCapital of the Company has been dematerialized.
The SEBI vide its Gazette Notification dated June 08 2018 amended theRegulation 40 (1) (b) of SEBI (LODR) Regulations 2015 whereby it has been provided thatexcept in case of transmission or transposition of securities requests for effectingtransfer of securities shall not be processed unless the securities are held indematerialized form with the Depository. Hence members are hereby informed that requestsfor effecting transfer of securities shall not be processed unless the securities are heldin the dematerialized form with a Depository. Hence all members who are holding equityshares in 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 dated27th December 2002; Company has appointed M/s Alankit Assignments Ltd. asRegistrar for Share Transfer and Electronic connectivity. Accordingly all theshareholders Investors Members of the Stock Exchanges Depository Participants and allother concerned are requested to send all communication in respect of share transferdemat/remat change of address etc. to our registrar at below mentioned address:
M/s. Alankit Assignments Ltd
(Unit Nahar Capital and Financial Services Ltd)
4E/2 Jhandewalan Extension NEW DELHI-110055
|Telephone No ||: (011)23541234 |
|Fax No. ||: (011)41540064 |
|E-mail Address ||: email@example.com |
In case any query/complaint remains unresolved with our Registrarplease write to Company Secretary at the registered office of the Company.
The Company being essentially an Investment Company its main sourcesof income are dividend/income receivable on investments in EquityShares/Debentures/Bonds/deposits made and held by it in other companies and Mutual Funds.The financial business is always prone to risks of capital market fluctuations andeconomic cycle.
To monitor and manage the risk associated with the investment businessthe Company has developed and implemented a Risk Management Policy for the Companyincluding therein identification and risk mitigation measures. The Policy is also postedon Company's website i.e. www.owmnahar.com. Further the Company has also constitutedRisk Management Committee pursuant to the RBI Circular No. DNBS (PD) CC No. 156 /03.10.001 / 2009-10 dated July 1 2009. The Committee comprises of three non-executivedirectors under the Chairmanship of Prof. K. S. Maini Mr. Dinesh Gogna and Dr. S.K.Singla as members. The main term of reference of the Committee is to review and monitorthe risk associated with Company's business and suggest measures for mitigation ofthe same as per Company's Risk Management Policy. The Risk Management Committee metfour times during the financial year under review.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors would like to assure the Members that the financialstatements for the year under review confirm in their entirely requirements of theCompanies Act 2013.
The Directors confirm:
i) that in preparation of the Annual Accounts the applicableAccounting Standards had been followed alongwith proper explanations relating to materialdepartures if any;
ii) that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the Profit and Loss of the Company for that period;
iii) that they had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting any fraud andother irregularities;
iv) that they have prepared the Annual Accounts on a going concernbasis;
v) that they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and
vi) that they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
AUDITORS AND AUDITORS' INDEPENDENT REPORT
Statutory Auditors: The members at the Annual General Meeting heldon 26th September 2017 appointed M/s. YAPL and Co. Chartered Accountants (FirmRegistration No. 017800N) as Statutory Auditors of the Company for a term of fiveconsecutive years starting from the conclusion of the 12th Annual General Meeting upto theconclusion of 17th Annual General Meeting of the Company to be held in the year 2022.
Audit Report: M/s. YAPL and Co. Chartered Accountants theStatutory Auditors have submitted the Audit Report on the Financial Statements of theCompany for the accounting year ended 31st March 2020. There were noqualifications reservations adverse remarks or disclaimers in the Report. Theobservations and comments given by Auditors in their Report read together with the Notesto the Financial Statements are self explanatory and require no comments.
No frauds were reported by the Auditors under Section 143(12) of theCompanies Act 2013.
The Board pursuant to the provisions of Section 204 of the CompaniesAct 2013 read with Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 has appointed M/s. P.S. Bathla and Associates a PracticingCompany Secretaries having Certificate of Practice No. 2585 to conduct the SecretarialAudit of the Company for the financial year 2020-21.
M/s. P.S. Bathla and Associates Practising Company Secretaries havecarried out the Secretarial Audit for the financial year ended March 31 2020 andsubmitted their Secretarial Audit Report in the Form No. MR-3 which is annexed herewith asAnnexure II and form 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 ofInternal Financial Control for the facilitation of speedy and accurate compilation offinancial statements. The Company's internal control system is designed to ensureoperational efficiency protection and conservation of resources accuracy and promptnessin financial reporting and compliance with laws and regulations and procedures. Furtherthe statutory auditors of the Company have verified the systems and processes andconfirmed that the internal financial controls system over financial reporting isoperating effectively.
Pursuant to the provisions of Section 138 of the Companies Act 2013read with Companies (Accounts) Rules 2014 the Company has also appointed M/s. PiyushSingla & Associates Chartered Accountant as Internal Auditor of the Company to testthe adequacy and effectiveness of Internal Control Systems laid down by the management andto suggest improvement in the systems. The Internal Audit Reports are discussed with theManagement and are reviewed by the Audit Committee of the Board which also reviews theadequacy and effectiveness of the internal controls in the Company. During the yearCompany's Internal Controls were tested and no reportable weakness in the system wasobserved.
The company's Internal Financial Control System commensurate withthe nature of its business and the size of its operations. In order to further strengthenthe Internal control system and to automate the various processes of the business companyis making use of Enterprises Resource Planning (ERP). The Asset Liability Management (ALM)concerned with the effective risk management in various Portfolios is also framed by theCompany.
Apart from this an Audit Committee consisting of three non executivedirectors has been constituted. All the significant audit observation and follow up actionthereon are taken care of by the Audit Committee. The Committee oversee the adequacy ofInternal Control. The Audit Committee met four times during the financial year underreview. The Company has also established a Vigil Mechanism as per Section 177(9) ofCompanies Act 2013 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 Section92 of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 for the financial year 2019-20 in the Form MGT-9 has beenavailable on the Company's website at: http://www.owmnahar.com/nahar_cf/pdf/MGT-9_2020.pdf as the requirement of attaching the extract of annualreturn with Board's Report has been done away by Section 36 of Companies (Amendment)Act 2017 as notified by Ministry of Corporate Affairs vide its Notification dated 31stJuly 2018.
The Company is registered as Non-deposit taking Non-Banking FinancialCompany with RBI. The Company has not accepted any Public Deposit within the meaning ofSection 73 of the Companies Act 2013 and the Rules made there under. There is nooutstanding/unclaimed deposit from the public. However the information as required underRule 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 incompliance with the Requirements of Chapter V of the Companies Act 2013: N.A.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company is annexed as Annexure IIIand form part of this Report.
In terms of Section 197(14) of the Companies Act 2013 the Companydoes not have any Holding Company. However the details regarding remuneration received byManaging Director is also given in ANNEXURE III annexed hereto and form part of thisReport.
During the year under review Mr. Dinesh Oswal Managing Director ofthe Company has been paid remuneration of Rs. 29400000/- (Rupees Two Crores NinetyFour Lakhs only) for the financial year 2019-20 as approved by shareholders vide theirSpecial Resolution dated 30th September 2019. Mr. Dinesh Oswal is 55 years ofage. He is a Commerce Graduate and has business experience of more than 35 years intextile industry and financial expertise. He is employed on contractual basis for fiveyears w.e.f 1st January 2017 to 31st December 2021. Before joiningthe Company he was employed with M/s. Oswal Woollen Mills Ltd. as Commercial Manager.
His shareholding in the Company as on 31.03.2020 is 21649 equity sharesof Rs. 5/- each. He is related to Mr. Jawahar Lal Oswal Chairman and Mr. Kamal OswalDirector of the Company.
No other employee was in receipt of remuneration exceeding the limitsas provided under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
MAINTENANCE OF COST RECORDS The maintenance of cost records asspecified by the Central Government under sub section (1) of Section 148 of the CompaniesAct 2013 is not applicable to the Company as the Company is a Non Banking FinancialCompany.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment for women atworkplace and has adopted a policy against sexual harassment in line with SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules framed thereunder.
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. During the financial year 2019-20 theCompany has not received any complaint on sexual harassment and hence no complaint remainspending as of 31st March 2020.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGANDOUTGO
Particulars with respect to the Conservation of Energy TechnologyAbsorption and Foreign Exchange Earning and Outgo as required under Section 134(3)(m) ofthe Companies Act 2013 read with Companies (Accounts) Rules 2014 are not applicable asthe company is a Non-Banking Financial Company.
REPORT ON THE CORPORATE GOVERNANCE
Your Company continues to follow the principles of good CorporateGovernance. The Company has constituted several committees of directors to assist theBoard in good Corporate Governance. The Corporate Governance Report for the year ended 31stMarch 2020 along with Auditors Certificate regarding compliance of the conditionsof the Corporate Governance as stipulated in Part C of Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached herewith asAnnexure IV and form part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year ended 31stMarch 2020 as stipulated under the Regulation 34(2)(e) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is enclosed as per Annexure V and formpart of this Report.
The Industrial Relations remained cordial throughout the year and theexcellent results were achieved with the whole hearted co-operation of employees at alllevels.
The Board of Directors of the Company wish to place on record theirgratitude and appreciation to all workers staff members and executives for theircontribution to the operations of the Company. The Directors also place on record theirsincere thanks to the shareholders for their continued support cooperation and confidencein the management of the Company.
|FOR AND ON BEHALF OF THE BOARD |
|PLACE:LUDHIANA ||JAWAHAR LAL OSWAL |
|DATED:12TH AUGUST 2020 ||(CHAIRMAN) |
| ||(DIN:00463866) |