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Nahar Spinning Mills Ltd.

BSE: 500296 Sector: Industrials
NSE: NAHARSPING ISIN Code: INE290A01027
BSE 00:00 | 05 Jul 310.00 5.45
(1.79%)
OPEN

309.00

HIGH

319.75

LOW

304.50

NSE 00:00 | 05 Jul 310.60 6.15
(2.02%)
OPEN

311.90

HIGH

319.65

LOW

304.05

OPEN 309.00
PREVIOUS CLOSE 304.55
VOLUME 26844
52-Week high 692.00
52-Week low 241.45
P/E 2.23
Mkt Cap.(Rs cr) 1,118
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 309.00
CLOSE 304.55
VOLUME 26844
52-Week high 692.00
52-Week low 241.45
P/E 2.23
Mkt Cap.(Rs cr) 1,118
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nahar Spinning Mills Ltd. (NAHARSPING) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Forty- first AnnualReport on the affairs of the Company for the financial year ended 31st March 2021.

FINANCIAL PERFORMANCE

Your Company's Financial Performance during the year is summarizedbelow:

(Rs. in Crores)

PARTICULARS CURRENT YEAR PREVIOUS YEAR
Total Income (Operational and Other Income) 2118.83 2089.98
Less: Total Expenses 2065.30 2167.21
Profit/Loss before tax and Exceptional Items 53.53 -77.22
Less: CSR Expenses 0.00 0.83
Profit/Loss before tax 53.53 -78.06
Less: Tax expenses (including deferred tax) 12.12 -25.00
Net Profit/Loss from continuing operations 41.41 -53.06
Other Comprehensive Income 37.92 -1.50
Profit/Loss for the Period 79.33 -54.56

INDIAN ACCOUNTING STANDARD

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

OPERATIONAL REVIEW AND STATE OF AFFAIR

We would like to inform you that Company operates in a single segmenti.e. “TEXTILE” as such disclosure requirements as per Indian Accounting Standard(Ind AS) 108 issued by the Institute of Chartered Accountants of India New Delhi are notapplicable.

Before reviewing the operational performance we would like to informyou that your Company has been awarded Gold Trophies for the Highest Exports of CottonYarn in “Counts 50s and below” and “Processed Yarns” by TEXPROCIL forthe year 2019-20.

As the members are aware that the outbreak of Covid-19 a GlobalPandemic in March 2020 impacted the business environment all over the world. Thesubsequent lockdown and opening of lockdown in stages significantly affected thecompany's performance in the first half of the Financial Year under review. Thecompany's top line as well as bottom line was severally impacted during the saidperiod and it suffered losses. However with the opening of Global economies andimprovement in the Global demand the company's performance started improving fromOctober 2020 onwards and the company has been able to put up a reasonably goodperformance during the year under review. The company achieved a total income fromoperations of Rs. 2118.83 crores as against Rs. 2089.98 crores showing an increase of1.38% over the previous year. Likewise the exports at Rs. 1146.34 crores have also shownan increase of 3.55 % over the previous year. On profitability front the companysubstantially improved its performance and earned a profit before tax of Rs. 53.53 croresas against loss of Rs. 78.06 crores in the previous year. After providing tax of Rs. 12.12crores Company earned a net profit of Rs. 41.41 crores as against loss of 53.06 crores.The Company's Reserves (other equity) stands at Rs. 879.86 crores as on 31st March2021.

Your management is quite hopeful that with the opening of majoreconomies of the world and recovery in global demand company will be able to achievedecent growth in coming period after taking care of the safety and the well being of itsworkers/employees.

COVID-19 PANDEMIC

We would like to share with you the prevailing COVID- 19 situation. Thesecond wave of Covid-19 a Global pandemic in April-May 2021 again impacted the economicactivities. However the Government efforts to vaccinate its citizens in a big way hasresulted reduction in the Covid cases. Your management also arranged Vaccination camps atthe factories and offices of the company so that each and every employee/staff getsvaccinated.

The Company has also made assessment of its liquidity position and therecoverability and carrying value of its assets. The Company has considered internal andexternal sources of information for making said assessment. On the basis of saidassessment the Company expects to recover the carrying amount of these assets and nomaterial adjustments are required in the financial statements. Given the uncertaintiesassociated with nature condition and duration of COVID-19 the Company will closelymonitor any material changes arising out of the future economic conditions and its impacton the business of the company.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY (DDP)

We are pleased to inform you that your Board in its meeting held on31st May 2021 has recommended a dividend @ Rs. 1.50/-per equity shares of Rs. 5/- eachfor the year ended 31st March 2021 out of the profits of the company. The proposal issubject to the approval of the shareholders at the ensuing Annual General Meetingscheduled to be held on 29th September 2021. The total dividend payout for the dividendshall be Rs. 5.41 crores.

The dividend if approved at the forthcoming Annual General Meetingwill be paid out of the Profits of the Company for the year under reference to all thoseshareholders whose names shall appear in the Register of Members on 17th September 2021or Register of beneficial Owners maintained by the Depositories as at the close of 17thSeptember 2021. Further as per the Finance Act 2020 dividend income is taxable in thehands of members w.e.f. April 1 2020 and the Company is required to deduct tax at source(TDS) from the dividend payable to the members at the prescribed rates as per the IncomeTax Act 1961.

As per Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) (Second Amendment) Regulations 2021 the top 1000 listed companies arerequired to formulate a Dividend Distribution Policy. Accordingly a Dividend DistributionPolicy was adopted to set out the parameters and circumstances that will be taken intoaccount by the Board in determining the distribution of dividend to its shareholdersand/or retaining profits earned by the Company. The policy is available on theCompany's website at the link: http://www.owmnahar.com/spinning/pdf/dividend_distribution.pdf

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions Section 124(5) of the Companies Act 2013read with IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 all dividendremaining unpaid or unclaimed for period of seven consecutive years is required to betransferred to the Investor Education Protection Fund (IEPF) established by the CentralGovernment. Accordingly the Company has transferred an amount of Rs. 942466/- (RupeesNine Lakhs Forty Two Thousand Four Hundred and Sixty Six only) being the amount ofunclaimed dividend for the year 2012-13 to the Investor Education and Protection Fund inNovember 2020.Further unpaid or unclaimed dividend for the year 2013-14 will have to betransferred to the Investor Education and Protection Fund in November 2021 .The Companyhas already sent emails / notices in the month of June 2021 to the members informing themto claim the Unclaimed Dividend before such transfer of dividend to the IEPF Authority.Besides as per the provisions of Section 124 (6) of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 the equity shares on which dividend remains unpaid or unclaimed by theshareholders for seven consecutive years or more is required to be transferred to theDemat Account of the IEPF Authority. Accordingly in compliance of the provisions of theAct 117571 (One Lakh Seventeen Thousand Five Hundred and Seventy One) equity shares of Rs5/- each were transferred to the DP/Client ID IN300708/10656671 opened in the name of theInvestor Education and Protection Fund Authority. The details of the shareholders whoseshares are proposed to be transferred to the Demat account of IEPF Authority in November2021 is available on company's websitehttp://www.owmnahar.com/spinning/transfer-of-equity- shares-to-IEPF.php and the same canbe accessed through the link: www.iepf.gov.in. The Company has already sent notices toshareholders to claim the dividend if any.

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

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 Listing Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

• Appointment/Re-appointment/Retirement of Directors

During the year under review Prof. Kanwar Sain Maini (DIN 00454686)was relieved from the office of Independent Director on the expiry of his second term ofoffice on September 25 2020. Dr. Roshan Lal Behl (DIN: 06443747) was appointed asIndependent Directors of the Company w.e.f. 29th September 2020 to hold office for fiveconsecutive years for a term i.e. upto 29th September 2025.

Pursuant to the provisions of Section 152(6) of the Companies Act 2013and Article 117 of Article of Association of the Company Sh. Dinesh Gogna (DIN 00498670)and Sh. Kamal Oswal (DIN 00493213) will be retiring by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment. The Boardrecommend their re-appointment to the members of the Company at the ensuring AnnualGeneral Meeting.

Further Regulation 17 (1A) of SEBI (LODR) (Amendment) Regulations2018 prescribes that no listed entity shall appoint a person or continue directorship ofany person as a non-executive director who has attained the age of seventy five yearsunless a Special Resolution is passed to that effect. We would like to inform you that Dr.Vijay Asdhir who is a Non-Executive Independent Director who holds office upto 25thSeptember 2022 is going to reach the age of Seventy Five Years on 27th July 2022.Likewise Dr. Amrik Singh Sohi who is Non-Executive Independent Director who holds officeupto 25th September 2022 is going to reach the age of Seventy Five years on 1st August2022. Accordingly in compliance of Regulation 17 (1A) of SEBI (LODR) (Amendment)Regulations 2018 Company has proposed two Special Resolutions in the accompanying thNotice of 41st Annual General Meeting for shareholders' approval so that they cancontinue to be Directors of the Company even after the age of seventy five years.

• Reappointment of Managing Director

The period of office of Sh. Dinesh Oswal

Managing Director of the Company who was appointed for a period offive years is expiring on 31st December 2021. The Board having regard to the overallgrowth of the Company under his able and dynamic leadership and on the recommendation ofNomination and Remuneration Committee has decided to reappoint him (subject to approval ofshareholders) as Managing Director for a further period of five years commencing from 1stJanuary 2022. The resolution for the same is being proposed for your approval in theaccompanying Notice of ensuing Annual General Meeting.

• Key Managerial Personnel

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

BOARD EVALUATION

The provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 mandate that a formalannual performance evaluation is to be made by Board of its own performance and that ofits Committee and individual Directors Schedule IV of the Companies Act 2013 states thatperformance evaluation of the Independent Director shall be done by Directors excludingthe Director being 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 a 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 behavior leadership qualities level of engagement and contributionindependence of judgment 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 2021 was discussed by the Nomination andremuneration Committee at the meeting held on 31st May 2021 and the Board atthe meeting held on 31st May 2021.

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

CORPORATE POLICIES:

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

The Company has adopted certain policies the details of which aregiven hereunder:

Name of the Policy Brief Description
Appointment & Remuneration Policy Pursuant to the provisions of Section 178 of the Companies Act 2013 read with SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 the Board of Directors 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. The policy formulates the principle and criteria for determining qualification competence positive attributes integrity and independence etc. for Directors Senior Management Personnel including its Key Managerial Personnel (KMP) and employees of the Company. The Policy also laid down the criteria for determining the remuneration of directors key managerial personnel and other employees.
Corporate Social Responsibility policy Pursuant to the provisions of Section 135 of the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014 as amended the CSR Committee formulated the CSR Policy which was adopted by the Board. The CSR policy outlines the various programmes/ projects/Activities to be undertaken by the Company as laid down in schedule VII of the Companies Act 2013.
Whistle Blower Policy Pursuant to the provisions of Section 177 of the Companies Act 2013 Company has formulated and adopted Vigil Mechanism/Whistle Blower Policy for its Directors and employees. The aim of the policy is to provide a channel to the Directors and employees to report their genuine concerns about unethical behavior Actual or suspected fraud or violation of the code of conduct.
Policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions Pursuant to the requirements of regulation 23 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 the Board has approved a policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions. The Policy regulates the transaction between the Company and its Group Companies and related parties. The policy has been uploaded on Company's website and can be access at http://www.owmnahar.com/spinning/pdf/ RPT-NAHAR-SPINNING.pdf
Insider Trading Policy To provide the framework for dealing in securities of the Company by the insiders the Board has approved and adopted the following codes in its meeting held on 30th May 2015 under SEBI (Prohibition of Insider Trading Regulation 2015). Further in terms of Regulation 3(2A) of SEBI (Prohibition of Insider Trading) Regulations 2015 as amended by 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 of Directors of a Listed Company are required to make a policy for determination of “Legitimate Purposes” as a part of Code of Fair Disclosures and Conduct formulated under Regulation 8 of the Regulations. Accordingly the Board of Directors in their meeting held on 11th February 2019 amended the Code of Practices and Procedures for fair disclosure of unpublished price sensitive information to include therein the policy for Determination of Legitimate Purpose. The Policy Provides for:
1. Code of practice and procedures for fair disclosure of unpublished price sensitive information.
2. Policy for Determination of Legitimate Purpose
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 share and prohibit the purchase and sale of Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to Company and during the period when Trading Window is closed. The policy has been uploaded on Company's website and can be accessed at http: //www.owmnahar.com/spinning/pdf/Co de-of-fair-disclossure.pdf
Policy for Preservation of documents Board of directors in their meeting held on 10th February 2016 has approved and adopted the policy for Preservation of documents. The policy segregates the documents to be preserved permanently and documents to be preserved at least for a period of eight years as per requirements of applicable laws.
Archival Policy Pursuant to the requirements of Regulation 30(8) of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 the Board has approved and adopted the Archival Policy in its Meeting held on 10th February 2016. The policy ensure protection maintenance and archival of Company's disclosures documents and records that are placed on Company's website i.e. http://www.owmnahar.com.
Board Diversity Policy The Board of Directors in their Meeting held on 12th November 2014 has approved and adopted the Board Diversity Policy as per the recommendation of Nomination and Remuneration Committee. The policy envisages diversification of Company's Board in respect of age knowledge experience and expertise.
Dividend Distribution Policy Pursuant to the requirements of regulation 43A of SEBI (Listing Obligation and Disclosure Requirements) (Second Amendment) Regulations 2021the Board of Directors in their Meeting held on 31st May 2021 has approved and adopted the Dividend Distribution Policy. The policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The policy has been uploaded on Company's website and can be accessed at http://www.owmnahar.com/spinning/ pdf/dividend_distribution.pdf

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 maintain the independence of the Board andseparate its functions of governance and management. The present Board consists of tenmembers Sh. Jawahar Lal Oswal is non-executive Chairman. Sh. Dinesh Oswal is a ManagingDirector. There are four Non Executive Directors and five are Independent Directors out ofwhich one Director namely; Dr. (Mrs.) Manisha Gupta is Women Director 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 sub Section 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 Appointment and Remuneration Policy of theCompany is available on the Company's website and can be accessed atwww.owmnahar.com/spinning/pdf/NSML APPOINTMENTANDREMUNERATIONPOLICY.pdf. There has been nochange in the Policy since the last fiscal year. We affirm the remuneration paid to thedirectors is as per the terms laid out in the Nomination and Remuneration policy of theCompany.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Company's Independent Directors held their meeting on 9thNovember 2020 without the attendance of Non Independent Directors and members of themanagement. All Independent Directors were present at the meeting. They:

1. Reviewed the performance of non-Independent directors and the Boardas a whole.

2. Reviewed the performance of the Chairperson of the Company takinginto account the views of Executive Directors and Non- Executive Directors.

3. Assessed the quality and timeliness of the flow of informationbetween the Company's management and the Board which is necessary for the Board toeffectively and reasonably perform their duties.

FAMILIARISATION PROGRAMS FOR BOARD MEMBERS

At the time of appointing a Director the Company 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 IndependentDirectors are provided with all policies/Guidelines as framed by the Company under variousstatutes and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 tofamiliarize with Company's procedure and practices. Further to update them on theregular basis the Company provides copies of all amendments in Corporate Laws CorporateGovernance Rules and SEBI (Listing Obligations and Disclosure Requirements) Regulations.The details of the Company's policy on Familiarization Programs conducted during theyear under review for Independent Directors are posted on the Company's website andcan be assessed at: http://www. owmnahar.com/spinning/pdf/familiarization.pdf

NO. OF BOARD MEETINGS

During the year under review the Board of Directors met four timesi.e. 26th June 2020 12th August 2020 10th November 2020 and 3rd February 2021 with apredefined agenda circulated well in advance. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.

RELATED PARTY TRANSACTIONS

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

The Company has not entered into any contract or arrangement with therelated parties as referred in Section 188(1) of the Companies Act 2013. Thus therequirement for disclosure of particulars of contracts or arrangement with related partiesreferred to in Section 188(1) is not applicable. However as per Company's policyall the Group Companies transactions regarding sales/purchase etc. are placed before theAudit Committee as well as the Board for their information and approval.

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

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

SHARE CAPITAL

The Paid up equity share capital of the Company as on 31st March 2021is Rs. 1803.27 Lakhs. During the year under review Company has neither issued any shareswith differential rights as to dividend voting or otherwise nor granted any 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 orCourts or T ribunals which impact the going concern status and Company's operationsin future.

PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186 OF THECOMPANIES ACT 2013

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As reported in our earlier reports Company adopted

CSR Policy and decided to undertake CSR Activity in collaboration withGroup Companies under one umbrella i.e. through Oswal Foundation which is a RegisteredSociety formed in 2006 having its charitable objects in various fields. The details ofthe CSR policy are available on the Company's website i.e. www.owmnahar.com.

As per the provisions under Section 134(3) of the Companies Act 2013read with Rule 9 of the Companies (Accounts) Rules 2014 and Companies (Corporate SocialResponsibility) Rules 2014 the company is required to contribute 2% of the Average netprofits made during the three immediate preceding financial years on CSR activities.

We would like to inform you that because of the losses in the years2017-18 & 2019-20 there was average net loss as such the company was not required tospend any amount to CSR activities.

The disclosure in respect of the existing CSR Activities pursuant toSection 134(3) of the Companies Act 2013 read with Rule 9 of the Companies (Accounts)Rules 2014 and Companies (Corporate Social Responsibility) Rules 2014 is annexed heretoas “Annexure I” and forms part of this Report.

AUDIT COMMITTEE

As required under Section 177 of the Companies Act 2013 the Board ofDirectors have already constituted Audit Committee consisting of three Non-ExecutiveDirectors namely; Dr. Vijay Asdhir as Chairman Sh. Dinesh Gogna and Dr. S.K. Singla asmembers. Dr. Vijay Asdhir became the Chairman of the committee effective from 25thSeptember 2020 in place of Prof. K.S. Maini. Mr. Brij Sharma is the Secretary of theCommittee. The Committee held four meeting during the year. During the year under reviewthe Board has accepted all the recommendations of the Audit Committee.

VIGIL MECHANISM

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 members of the Audit Committee about unethical behavior actual orsuspected fraud or violation of

Company's Code of Conduct so that appropriate action can be takento safeguard the interest of the Company. The Mechanism also provides for adequatesafeguards against victimization of persons who uses such mechanism. The mechanismprovides direct access to the chairperson of the Audit Committee in appropriate orexceptional cases. The Whistle Blower Policy/Vigil Mechanism is also posted onCompany's Website. The Company has a dedicated e-mail address i.e. whistleblowernsml@owmnahar.com for reporting the genuine concerns. The Audit Committee regularly reviews theworking of the Mechanism. No complaint was received during the year under review.

SUBSIDIARY JOINT VENTURE OR ASSOCIATES COMPANY

The Company does not have any subsidiaries joint venture andassociates Company during the year under review.

CREDIT RATING

We would like to inform that the Credit Rating Information Services ofIndia Ltd. (CRISIL) has intimated the revision in Company's rating outlook throughcredit rating report in May 2021 that on the long term bank facilities has been revisedto 'Stable' from 'Negative' while reaffirming the rating at'CRISIL A-'. The rating on the short-term bank facility has been reaffirmed at'CRISIL A2+'.

GREEN INITIATIVE

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 read with Companies(Management and Administration) Rules 2014 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 asnotices of General Meetings Annual Report and other communications to its shareholdersvia electronic mode to the registered Email addresses of the shareholders. To support thisgreen initiative of the Government in full measure shareholders are requested toregister/update their latest E-mail addresses with their depository Participant (D.P.)with whom they are having Demat Account or send the same to the Company via E-mail at:-secnsm@owmnahar.com or gredressalnsml@ owmnahar.com. We solicit your valuable co-operationand support in our endeavor to contribute our bit to the Environment.

LISTING OF SECURITIES

The securities of the Company are presently listed on the followingStock Exchanges:

i. The BSE Ltd. 25th Floor Phiroze Jeejeebhoy Towers Dalal StreetMumbai.

ii. The National Stock Exchange of India Ltd. Exchange Plaza 5thFloor Plot No. C/1 G- Block Bandra Kurla Complex Bandra (E) Mumbai.

The Company has paid listing fee to both the Stock Exchanges for thefinancial year 2021-22

DEMATERIALISATION OF SECURITIES

As per SEBI circular no. D&CC/FITTC/CIR-15/2002 dated 27thDecember 2002 Company has appointed M/s Alankit Assignments Ltd. as Registrar for ShareTransfer and Electronic Connectivity. Accordingly all the shareholders Investors Membersof the Stock Exchanges Depository Participants and all other concerned are requested tosend all communication in respect of Share Transfer/Transmission Demat/ Remat Change ofAddress etc. to our Registrar at below mentioned address:

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

Alankit House 4E/2 Jhandewalan Extension

New Delhi - 110 055

Telephone No. : (011) 42541234

Fax No. : (011) 23552001

E-mail address: rta@alankit.com

Besides SEBI vide its Gazetted notification dated June 08 2018amended the Regulation 40 (1) (b) of SEBI (LODR) Regulations 2015 whereby it has beenprovided that except in case of transmission or transposition of securities requests foreffecting transfer of securities shall not be processed unless the securities are held inDematerialized form with the Depository.

In view of the above members are hereby informed that requests foreffecting transfer of securities in physical form 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 dematerialization ofsecurities at the earliest.

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

DIRECTORS RESPONSIBILITY STATEMENT

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

i. in preparation of the Annual Accounts the applicable AccountingStandards had been followed along with proper explanations relating to materialdepartures;

ii. they had selected such accounting policies and applied themconsistently and made judgments 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 or loss of the Company for that period;

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

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

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

vi. they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

AUDITORS & AUDITOR'S INDEPENDENT REPORT STATUTORY AUDITORS

We wish to inform you that M/s YAPL & Co Chartered AccountantsFirm Registration no (017800N) were appointed as Statutory Auditors by the Members of theCompany for a term of five consecutive years starting from the conclusion of the 37thAnnual General Meeting upto the conclusion of the 42nd Annual General Meeting of theCompany in the calendar year 2022.

AUDIT REPORT

The Statutory Auditors have submitted Audit Report on the FinancialStatements of the Company for the Accounting year ended 31st March 2021. 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 Accounts are self explanatory and require no comments.

No frauds were reported by the Auditors under Section 143(12) of theCompanies Act 2013.

COST AUDITORS

We would like to inform you that the Ministry of Corporate Affairs videNotification dated 31st December 2014 amended Companies (Cost Records and Audit) Rules2014 pursuant to which the Company's business Activities have been included withinthe purview of Cost Audit requirement. Accordingly the company is maintaining Accountsand Costing Records. Further the Board of Directors on the recommendation of AuditCommittee has also appointed M/s Ramanath Iyer & Co. (Firm Registration No. 000019)Cost Accountant as Cost Auditors of the Company for financial year 2021-22.

The remuneration of Rs.1.75 Lakhs (Rupees One Lakh Seventy FiveThousand Only) plus applicable taxes and reimbursement of out of Pocket expenses incurredpayable to the Cost Auditors is required to be ratified by the members as per theprovision of Section 148(3) of the Companies Act 2013 and Rules 14 of the Companies(Audit and Auditors) Rules 2014. Accordingly a resolution for the ratification of theremuneration of the Cost Auditors by the members at the ensuing Annual General Meeting isbeing proposed for their approval.

SECRETARIAL STANDARDS

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

SECRETARIAL AUDITOR

The Board pursuant to the provision 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 & Associates PracticingCompany Secretaries having Certificate of Practice No. 2585 as Secretarial Auditor toconduct Secretarial Audit for the financial year 2021-22.

M/s. P.S. Bathla & Associates Practicing Company Secretaries havecarried out the Secretarial Audit for the financial year ended March 31 2021 and theirSecretarial Audit Report in Form No. MR-3 is annexed hereto as Annexure II and from partof this Report.

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

BUSINESS RISK MANAGEMENT

Your Board has formulated a Risk Management Policy. The Policy aims toidentify evaluate manage and monitor all types of risks associated with the business ofthe Company. The Board as well as Audit Committee regularly overseas the risk managementprocess in the Company as required under 134(3)(n) of the Companies Act 2013 and SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015. Your Company isoperating in Textile segment and has identified certain risks which may affect theperformance of the Company. These are Operational risks such as fluctuation in cottonprices fluctuation in foreign exchange rates Labour problems and Regulatory risks suchas change in Government Policy with respect to Textile Industry etc. The Company'sRisk Management Policy aims to suggest the steps to be taken to control and mitigate therisk associated with the Company's Textile Business. We are of opinion that none ofidentified risk is such that which may threaten the existence of the Company.

In compliance with the provisions of Regulation 21 of SEBI (LODR)(Second Amendment) Regulations 2021 the company has also formed a Risk ManagementCommittee to frame implement and monitor the risk management plans for the Company. TheRisk Management Committee comprises of three Directors under the chairmanship of Mr.Dinesh Oswal Managing Director of the Company. Dr. S.K. Singla and Dr. Rohan Lal Behl areother two members of the Committee. The Committee is responsible for monitoring andreviewing the risk management policies and ensuring its effectiveness.

INTERNAL FINANCIAL CONTROL The Company is maintaining an efficientand effective system of Internal Financial Control for facilitation of speedy and accuratecompilations of financial statements. The Company's Internal Financial Control Systemis designed to ensure operational efficiency protection and conservation of resourcesaccuracy and promptness in financial reporting and compliances with procedures laws andregulations. The Company's Internal Control System commensurate with the nature ofits business and size of its operations. In order to further strength the Internal ControlSystem and to automate the various process of the business Company is making use ofEnterprise Resource Planning (ERP).

The Company has also appointed M/S Piyush Singla & AssociatesChartered Accountants as Internal Auditors of the Company. The company is also havinginternal audit department to test the adequacy and effectiveness of Internal ControlSystems laid down by the Management and suggests improvement in the systems. InternalAudit Reports are discussed with the Management and are reviewed by the Audit Committee ofthe Board. During the year Company's Internal Controls were tested and no reportableweakness in the system was observed.

Apart from the above an Audit Committee consisting of three NonExecutive Directors has been constituted. All the significant audit observations andfollow up Actions thereon are taken care of by the Audit Committee. The Audit Committeealso oversees and reviews the adequacy and effectiveness of Internal Control in thecompany. 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.

PUBLIC DEPOSITS

During the year under review the Company has not accepted any PublicDeposit within the meaning of Section 73 of the Companies Act 2013 and the Rules madethere under. There is no outstanding/unclaimed deposit from the public. However theinformation as required under Rule 8 of the Companies (Accounts) Rules 2014 is givenhereunder:-

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.

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 the provisions relating to theconstitution of Internal Complaint Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. During the financial year2020-21 the Company has not received any complaints on sexual harassment and hence nocompliant remains pending as of 31st March 2021.

ANNUALRETURN

The Annual Return of the Company pursuant to the provisions of Section92 with Rule 12 of the Companies (Management and Administration) Rules 2014 for thefinancial year 2020-21 in the Form MGT-7 has been uploaded on Company's website athttp://www.owmnahar.com/spinning/pdf/Annual- Return-20-21.pdf

STATEMENT UNDER SECTION 197 OF THE COMPANIES ACT 2013

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 “AnnexureIII” and 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 ANNEXURE III annexed hereto and form part of this report.

Pursuant to the provisions of Section 197 (1) of the Companies Act2013 as amended by Companies (Amendment) Act 2017 read with schedule V and otherapplicable provisions the Company got approval of the shareholders vide SpecialResolution dated 30th September 2019 for the payment of remuneration as mentioned in theresolution as minimum remuneration for two years from 1st January 2020 upto 31stDecember 2021. Mr. Dinesh Oswal Managing Director of the Company has been paid aremuneration of Rs. 94292950/- (Rupees Nine Crores Forty Two Lakhs Ninety Two ThousandNine Hundred and Fifty Only) for financial year 202021. Mr. Dinesh Oswal is 56 years ofage. He is a Commerce Graduate and has business experience of more than 36 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 joining the Company he wasemployed with M/s. Oswal Woollen Mills Ltd. as Commercial Manager. His shareholding in theCompany is 123766 equity shares of Rs. 5/- each. He is related to Mr. Jawahar Lal OswalChairman Mr. Kamal Oswal Director Mrs. Ritu Oswal Export Advisor and Ms. Tanvi OswalVice President 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.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS ANDOUTGO

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

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good CorporateGovernance. The Company has already constituted several committees of directors to assistthe Board in good Corporate Governance. The Corporate Governance Report alongwith theAuditors Certificate regarding compliance of the conditions of the Corporate Governance asstipulated in part C of Schedule VI of the SEBI (Listing Obligation and disclosureRequirements) Regulations 2015 is attached herewith as Annexure-V from part of thisreport.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

BUSINESS RESPONSIBILITY REPORT (BRR)

As stipulated under Regulation 34(2)(f) of the SEBI ListingRegulations 2015 Business Responsibility Report (“BRR”) is to be submitted bytop 1000 listed entities based on their market capitalization as on March 31 2021 in theformat as specified by SEBI from time to time. Accordingly the company has attached theBusiness Responsibility Report as per Annexure VII and forms part of this Annual Report. INDUSTRIALRELATIONS

The industrial relations remained cordial throughout the year and theexcellent results were achieved with the whole hearted co-operation of employees at alllevels.

We would also like to inform you that during the challenging period ofCOVID-19 pandemic Company has taken all possible steps to take care of the safetysecurity and health of the workers/ employees. The Company provided masks hand sanitizerregular body temperature checkup facility at the factory as well as office premises. TheCompany has also ensured that Company's factories and offices are sanitized atregular interval to safeguard its worker/ employees.

ACKNOWLEDGEMENT

The Board of Directors of the Company wish to place on record theirthanks and appreciation to all workers staff members and executives for theircontribution to the operations of the Company. The Directors are thankful to the BankersFinancial Institutions for their continued support to the Company. The Directors alsoplace on record their sincere thanks to the shareholders for their continued supportco-operation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD
PLACE: LUDHIANA JAWAHAR LAL OSWAL
DATED: 2nd AUGUST 2021 (CHAIRMAN)
DIN: 00463866

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