Your Directors have immense pleasure in presenting the THIRTEENTH ANNUAL REPORT on theaffairs of the Company for the financial year ended 31st March 2018.
Your Company's financial performance during the year is summarized below:
(Rs. in Lakhs)
|PARTICULARS || |
|Current Year ||Previous Year ||Current Year ||Previous Year |
|Profit before Tax ||3404.75 ||3001.76 ||564.52 ||6766.05 |
|Less: Tax Expenses (including previous year tax adjustment) ||549.66 ||471.67 ||549.66 ||471.67 |
|Profit after Tax ||2855.09 ||2530.09 ||14.86 ||6294.38 |
|Add: Surplus of last year brought forward ||2033.10 ||51.76 ||8544.52 ||2861.53 |
| ||4888.19 ||2581 85 ||8559.38 ||91 55 91 |
|APPROPRIATION || || || || |
|Dividend ||251.19 ||0.00 ||251.19 ||0.00 |
|Tax on Distributed Profits ||51.14 ||0.00 ||51.14 ||0.00 |
|Statutory Reserve Fund ||581.00 ||506.36 ||581.00 ||506.36 |
|Transfer to CSR Expenditure Reserve ||43.63 ||42.39 ||43.63 ||42.39 |
|Share of CDT Paid by Associates ||0.00 ||0.00 ||62.64 ||62.64 |
|Transfer to General Reserve ||0.00 ||0.00 ||0.00 ||0.00 |
|Surplus carried to Balance Sheet ||3961.23 ||2033.10 ||7569.78 ||8544.52 |
| ||4888.19 ||2581 85 ||8559.38 ||9155 91 |
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 which is below the threshold limit as prescribed under AccountingStandards. Though the disclosure requirement under Accounting Standard AS-17 is notapplicable to the Company but for better understanding of the financials the Company hasgiven the details of both the segments i.e. Investment/Financial
Activities and Real Estate Activities in the financial statements for the year ended31st March 2018.
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. 3962.55 Lakhs and earned aProfit before tax of Rs. 3625.47 Lakhs from investment/financial activities.
REAL ESTATE SEGMENT
During the year under review the Company leased out total area in Gurgaon Property.The Company also undertaken Joint Development of Property at Chennai alongwith a localdeveloper wherein land has been acquired and requisite permissions are in process. Wewould like to inform you that the real estate segment achieved net revenue of Rs.130.36Lakhs and earned a Profit before tax of Rs. 91.29 Lakhs.
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 2018 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
From the above it is apparent that the Company's overall performance has beenremarkable during the year ended 31st March 2018. On standalone basis the Company earnedoperating/other income of Rs. 4092.91 Lakhs in the current year as against Rs. 3341.98Lakhs in the previous year showing an increase of 22%. It earned a profit before tax ofRs. 3404.75 Lakhs as against Rs. 3001.76 Lakhs in the previous year. After providing fortax expenses of Rs. 549.66 Lakhs (including previous year tax adjustment) it earned a netprofit of Rs. 2855.09 Lakhs for the year ended 31.03.2018 as compared to Rs. 2530.09 Lakhsin the previous year ended 31.03.2017.
CONSOLIDATED FINANCIAL PERFORMANCE
On consolidated basis the Company earned operating/ other income of Rs. 3785.24 Lakhsduring the year under review as against Rs. 3034.31 Lakhs in the previous year. It earneda profit (including profit/loss of Associates) before tax of Rs. 564.52 Lakhs as againstRs. 6766.05 Lakhs in the previous year due to the lesser profitability of AssociateCompanies. After providing for tax expenses of Rs. 549.66 Lakhs (including previous yeartax adjustment) it earned a net profit of Rs. 14.86 Lakhs for the year ended 31.03.2018as against Rs. 6294.38 Lakhs in the previous year.
TRANSFER TO RESERVE
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 2018. However after makingadjustment of Statutory Reserve Fund CSR Expenditure Reserve dividend (including tax ondividend) and adjustment of income tax an amount of Rs. 19.28 Crores has been Retained inthe Surplus Account and thus Retained Earnings/Surplus Account stand increased to Rs.39.61 Crores as on 31st March 2018.
The Board in its meeting held on 30th May 2018 has recommended a dividend @ 30%(i.e. Rs.1.50/- per equity shares of Rs.5/- each) on paid up share capital for the yearended 31st March 2018. The proposal is subject to the approval of the shareholders at theensuing Annual General Meeting to be held on 28th September 2018. The total dividenddeclared (excluding dividend distribution tax) for the current year 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 11th September 2018 or Register ofBeneficial Owners maintained by the Depositories as at the close of 11th September 2018.
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. 314137/- (Rupees ThreeLakhs Fourteen Thousand One Hundred and Thirty Seven only) being the amount of unclaimeddividend for the year 2009-10 to the Investor Education and Protection Fund in November2017. Further unpaid dividend for the year 2010-11 shall be transferred to InvestorEducation and Protection Fund pursuant to Section 124 of the Companies Act 2013 inNovember 2018. The Company has already 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 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 the Company has transferred 85490 (Eighty Five Thousand Four Hundred Ninety)equity shares of Rs. 5/- each to the demat account of IEPF Authority having DPID/ClientID: IN300708/10656671. Details of shares transferred to the IEPF Authority are availableon the website of the Company and the same can be accessed through the link:http://www.owmnahar.com/ nahar_cf/pdf/ListofShareholders2008-09.pdf. The said details havealso been uploaded on the website of the IEPF Authority and the same can be accessedthrough 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
During the year under review Dr. (Mrs.) H. K. Bal and Dr. Y.P. Sachdeva were relievedfrom the office of Independent Directors on the expiry of their terms of office on 26thSeptember 2017. Dr. Vijay Asdhir (DIN: 006671174) and Dr. Manisha Gupta (DIN: 06910242)were appointed as Independent Directors of the Company w.e.f. 26th September 2017 to holdoffice for five (5) consecutive years for a term upto 25th September 2022. We would alsolike to inform you that pursuant to the provisions of Section 152(6) of the Companies Act2013 and Article 117 of the Articles of Association of the Company Mr. Jawahar Lal Oswal(DIN: 00463866) and Mr. Kamal Oswal (DIN: 00493213) will be retiring by rotation at theensuing Annual General Meeting and being eligible offered themselves for re-appointment.The Board has recommended their re-appointment to the members of the Company at theensuing Annual General Meeting.
Further as per Regulation 17 (1A) of SEBI (LODR) (Amendment) Regulations 2018notified on 9th May 2018 and which will be applicable w.e.f 1st April 2019 no listedentity shall appoint a person or continue directorship of any person as a non-executivedirector who has attained the age of seventy five years unless a Special Resolution ispassed to that effect. We would like to inform you that Mr. Jawahar Lal Oswal who is aNon-Executive Chairman is going to attain the age of seventy five years on 1st October2018. Likewise Prof K.S. Maini who is a Non-Executive Independent Director to holdoffice upto 25th September 2020 and has already attained the age of seventy five years.Accordingly in compliance of Regulation 17 (1A) of SEBI (LODR) (Amendment) Regulations2018 Company has proposed the Special Resolutions in the accompanying Notice of 13thAnnual General Meeting for shareholders approval so that they can continue to beDirectors of the Company even after the age of seventy five years.
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 thefit and proper' criteria to be adopted at the time of appointment of directors andon a continuing basis pursuant to the Non Banking Financial Companies - CorporateGovernance (Reserve Bank) 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 of the performance of Board its Committees and individual Directors has to bemade. Schedule IV of the Companies Act 2013 states that performance evaluation of theIndependent Director shall be done by Directors excluding the Director being evaluated.The Board carried out a formal annual performance evaluation as per the criteria/frameworklaid down by the Nomination and Remuneration Committee of the Company and adopted by theBoard. The evaluation was carried out through structured evaluation process to evaluatethe performance of individual Directors including the Chairman of the Board. They wereevaluated on parameters such as their education knowledge experience expertise skillsbehaviour leadership qualities level of engagement and contribution independence ofjudgement decision making ability for safeguarding the interest of the Companystakeholders and its shareholders. The performance evaluation of the Independent Directorswas carried out by the entire Board. The performance evaluation of the Chairman and theNon Independent Directors was carried out by the Independent Directors. The outcome of theBoard Evaluation for the Fiscal 2018 was discussed by the Nomination and RemunerationCommittee at the Meeting held on 29th May 2018 and the Board at its Meeting held on 30thMay 2018.
The Board was satisfied with the evaluation process and approved the 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 andthe same are available on the company's website i.e. www.owmnahar.com. The said policiesare reviewed 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 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 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 ||To provide the framework for dealing in the Securities of company by the Insiders the Board has approved and adopted the following Codes in its Meeting held on 30.05.2015 under SEBI (Prohibition of Insider Trading) Regulations 2015: 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 Directors and designated employees of the Company. The Codes require pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees 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 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 NonExecutive 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 also laid down the criteria for determining theremuneration of directors key managerial personnel and other employees. The Nomination& Remuneration Policy of the Company is available on the Company's website and can beaccessed at http://owmnahar.com/nahar_cf/pdf/NAHARCAPAPPOINTMENTANDREMUNERATIONPOLICY.pdf. There has been no change in the Policy since the lastfiscal year. We affirm that the remuneration paid to the directors is as per the termslaid out in the Nomination and Remuneration Policy of the Company.
During the year under review the Board of Directors of the Company met four times i.e.30th May 2017 12th August 2017 14th November 2017 and 10th February 2018 with apredefined agenda circulated well in advance. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Company's Independent Directors met on 22nd December 2017 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 Director and 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
All new Independent Directors inducted into the Board attend an orientation programme.The Company at the time of appointing a Director issues a formal letter of appointmentwhich inter alia explains the role functions duties and responsibilities expected fromhim/her as a Director of the Company. All the Independent Directors are provided with allthe Policies/Guidelines as framed by the Company under various statutes and SEBIRegulations to familiarize them with Company's procedures and practices. Further toupdate them on a regular basis the Company provides copies of all the amendments inCorporate Laws
Corporate Governance Rules and SEBI Regulations. The details of Company's Policy onFamiliarization Programs for Independent Directors are posted on the website of theCompany and can be accessed at: http://www.owmnahar. com/nahar_cf/pdf/NCFS-Familiarization-Program.pdf.
We would like to inform that the Securities and Exchange Board of India vide itsNotification dated 9th May 2018 issued Regulations known as SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018. Likewise the Ministry ofCorporate Affairs New Delhi also notified Companies (Amendment) Act 2017 on 7th May2018 whereby some provisions of Companies Act 2013 were changed/amended. The Companyprovided copies of said Regulations as well as Companies (Amendment) Act 2017 to all theDirectors so that they can update their Knowledge in Corporate/SEBI laws. Besidesinteractive sessions were also conducted by Mr. P.S. Bathla a Practicing CompanySecretary with all the Directors to apprise them with the salient features of the SEBIRegulations and Companies (Amendment) Act 2017.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH 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 Companies Act 2013 read with Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 during the financial year ended 31st March2018. 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 the year no material related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother 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 FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OFTHE REPORT
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 2018 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 report the Company adopted CSR Policy and decided to undertakeCSR 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.
During the year under review the Company donated Rs.0.81 Lakhs towards HDFC CancerCure Fund under the head Preventive Health Care as per Schedule VII of theCompanies Act 2013. The Company could not spend its remaining CSR amount of Rs. 43.63Lakhs till March 31 2018 due to the deferrement of project for setting up the Eye CareCenter in a charitable hospital by the said charitable medical institution. The Companyalso made efforts to identify projects in other areas. However it was not able toidentify meaningful projects finalize implementation agencies and the targetbeneficiaries which would have created a visible impact on the society. The Companyremains committed towards the noble cause of social development and has accordinglydecided to transfer an amount of Rs. 43.63 Lakhs for the Financial Year 2017-18 to the CSRExpenditure Reserve thereby increasing the CSR Expenditure Reserve to Rs. 86.02 Lakhs ason March 31 2018. M/s. Oswal Foundation has already begun helping to run the charitablehospital for the purpose of diagnosis & treatment besides other charitable activitiesunder CSR already approved. However in July 2018 the Company has issued a chequeamounting to Rs. 86.02 Lakhs (which includes the amount of Rs. 42.39 Lakhs CSR liabilityfor financial year 2016-17 and Rs. 43.63 Lakhs for the financial year 2017-18) favoringM/s. Oswal Foundation for undertaking CSR activities including promotion of charitablehospital being run by Mohan Dai Oswal Cancer Treatment & Research Foundation. Thuswith the said transfer of amount CSR Expenditure Reserve created in the books of accountsstands fully utilized for the purpose of CSR activities.
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 Iand 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 duringthe year 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 employee directors customers vendors etc. canreport the genuine concerns or grievances to the Compliance Officer or members of theAudit Committee about unethical behaviour actual or suspected fraud or violation ofCompany's Code of Conduct so that appropriate action can be taken to safeguard theinterest of the Company. The Mechanism also provides for adequate safeguards againstvictimisation of persons who uses such mechanism. The mechanism provides direct access tothe chairperson of the Audit Committee in appropriate or exceptional cases. The Companyhas a dedicated e-mail address i.e. email@example.com for reporting thegenuine concerns. The Whistle Blower Policy/Vigil Mechanism is also posted on Company'sWebsite and can be accessed at http://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 28 2018 has reaffirmed the rating [ICRA] A1+ (pronounced ICRA A oneplus) assigned to the proposed Short Term Debt / Commercial Paper Programme of the Companyfor 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 financial discipline and 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 2018.
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 31.03.2018.
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 orgredressalncfsl@owmnahar. com. We solicit your valuable co-operation and support in ourendeavor to contribute our bit to the environment.
LISTING OF SECURITIES
The securities of the Company are listed on the following Stock Exchanges:
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 Exchanges for the financial year2018-19.
DEMATERIALIZATION 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 March2018 97.96% of the total Equity Share Capital of the Company has been dematerialized.
The SEBI vide its Gazetted Notification dated June 08 2018 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. The said amendment shall come into force on the one hundred andeightieth day from the date of publication in the Official Gazette.
In view of the above members are hereby informed that effective from 5th December2018 requests for effecting transfer of securities shall not be processed unless thesecurities are held in the dematerialized form with a Depository. Hence all members whoare holding equity shares in physical form are requested to go in for dematerializationof securities at the earliest.
Further as per SEBI circular no. D & CC/FITTC/CIR-15/2002 dated 27th December2002; Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transferand Electronic Connectivity. Accordingly all the shareholders Investors Members of theStock Exchanges 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)
2E/21 Jhandelwalan 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 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 hasalready developed and implemented a Risk Management Policy for the Company includingtherein identification and risk mitigation measures. The Policy is also posted onCompany's website i.e. www.owmnahar.com. Further the Company has also constituted RiskManagement Committee pursuant to the RBI Circular No. DNBS (PD) CC No. 156 / 03.10.001 /200910 dated July 1 2009. The Committee comprises of three non-executive directors underthe 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 monitor the risk associatedwith Company's business and suggest measures for mitigation of the same as per Company'sRisk Management Policy. The Risk Management Committee met four times during the financialyear under 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;
ii) that they had 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 for that 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 had prepared the Annual Accounts on a going concern basis;
v) that they had laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively;
vi) That they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND AUDITORS' INDEPENDENT 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 12th Annual General Meeting upto the conclusion of 17th Annual GeneralMeeting of the Company to be held in the year 2022.
As per the proviso of Section 139 (1) of the Companies Act 2013 the matter relatingto appointment of the Auditors was to be ratified by the Members at every Annual GeneralMeeting of the Company. The Ministry of Corporate Affairs vide its Notification dated 7thMay 2018 has brought into effect certain provisions of the Companies (Amendment) Act2017 whereby the first proviso of Section 139 (1) of the Companies Act 2013 regardingrequirement for ratification of appointment of statutory auditors at every subsequent AGMhas been omitted. Accordingly the Board has not proposed the resolution for ratificationof appointment of Auditors by the Shareholders.
Audit Report: M/s. YAPL and Co. Chartered Accountants the Statutory Auditors havesubmitted the Audit Report on the Financial Statements of the Company for the accountingyear ended 31st March 2018. The observations and comments given by Auditors in theirReport read together with the Notes to the Financial Statements are self explanatory andrequire no comments.
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 201819.
M/s. P.S. Bathla and Associates Practising Company Secretaries have carried out theSecretarial Audit for the financial year ended March 31 2018 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.
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 by the 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 in the 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 the Company ismaking 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.
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 the Company hasappointed M/s. Grant Thornton India LLP Noida a leading consultancy firm in theAccounting / Financial matters to advice the Company on convergence 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 oversee the 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 Act 2013 read with Rule 7 of the Companies (Meeting of Board andits Powers) Rules 2014.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return of the Company pursuant to Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014for the financial year 2017-18 in the Form MGT-9 has been uploaded 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 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 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 hasbeen paid remuneration of Rs. 24600000/- (Rupees Two Crores Forty Six Lakhs only) forthe financial year 2017-18 as per the approval of the Central Government vide its letterno. SRN G41287038/1/2017-
CL-VII dated 26th December; 2017. He has also been paid arrears of salary amounting toRs. 3000000/- (Rupees Thirty Lakhs only) for the year 2016-17 during the year underreview. Mr. Dinesh Oswal is 53 years of age. He is a Commerce Graduate and has businessexperience of more than 33 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 in receipt of remuneration exceeding the limits as provided underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
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 is a 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 2017-18 the Company hasnot received any complaint on sexual harassment and hence no complaint remains pending ason 31st March 2018.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Particulars with respect to the Conservation of Energy Technology Absorption andForeign Exchange Earning and Outgo as required under Section 134(3)(m) of the
Companies Act 2013 read with Companies (Accounts) Rules 2014 are not applicable asthe company is a 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 goodCorporate Governance. The Corporate Governance Report for the year ended 31st March 2018along with Auditors Certificate regarding compliance of the conditions of the CorporateGovernance as stipulated in Part C of Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached herewith as Annexure IV and formpart of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulated underthe Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is enclosed as per Annexure-V and form part of this Report.
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 staff members and executives for their contribution to the operationsof the Company. The Directors also place on record their sincere thanks to theshareholders for their continued support cooperation and confidence in the management ofthe Company.
|FOR AND ON BEHALF OF THE BOARD |
|PLACE: LUDHIANA ||JAWAHAR LAL OSWAL |
|DATED: 29TH AUGUST 2018 ||(CHAIRMAN) |
| ||(DIN: 00463866) |