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Directors Report of Nahar Spinning Mills Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the THIRTY FIFTH ANNUAL REPORT on the affairs of the Company for the year ended 31st March, 2015.

FINANCIAL PERFORMANCE

Your Company's Financial Performance during the year is summarised below:

(Rs. In crores) PARTICULARS CURRENT PREVIOUS YEAR YEAR

Profit for the year before 145.40 292.66

TAX & DEPRECIATION

Less: Depreciation 130.56 88.16

Provision for Taxation 3.35 43.25

Provision for Deferred Tax -8.88 15.50

125.03 146.91

Profit/Loss after tax 20.37 145.75

Adjustment of Income Tax 0.16 0.45

of Earlier years

Amount available for appropriation 20.21 145.30

APPROPRIATION

Proposed Dividend 3.61 3.61

Tax on Distributed profits 0.73 0.61

Transfer to General Reserve 15.00 90.00

Balance at the end 0.87 51.08

20.21 145.30

OPERATIONAL REVIEW AND STATE OF AFFAIR

We would like to inform you that Company operates in a single segment i.e."TEXTILE" as such disclosure requirements as per Accounting Standard AS 17 issued by the Institute of Chartered Accountants of India, New Delhi, are not applicable.

First of all we would like to inform you that Company's expansion cum modernization project has been completed during the year. After the said expansion, Company's spindlage capacity stands increased to 5 Lakh(Approx.) spindles and 1080 Rotors. Thus your Company has positioned itself as one of the leading integrated Textile player to reap the benefits of economies of scale.

During the year under review, your Company performed reasonably well, in spite of a challenging year for the Textile Industry. The Company achieved a total income of Rs. 2160.91 crores as against Rs. 2211.15 crores showing a marginal fall. The company achieved an export turnover of 1393.20 crores which constitutes 64.81% of the revenue of the Company. The Company's excellent export performance has also been recognised by the TEXPROCIL by awarding Silver Trophy for highest export of Yarns (50s & below) for the year 2013-14. However the Company's financial performance was severely affected because of lack lustre global demand, volatility in the exchange rates and very thin margins and the Company could earn a Profit (before tax and depreciation) of Rs.145.40 crores as against Rs. 292.66 crores in the previous year. The depreciation for the year has also risen to Rs. 130.56 crores as against Rs. 88.16 crores in the previous year because of change in the method of depreciation which is on the basis of useful life of the assets as specified under Schedule II of the Act. The said change in depreciation, affected company's profitability during the year. The company earned a Profit before tax of Rs.14.84 Crores. After providing for taxation of Rs. 3.35 crores and adjustment of deferred tax of Rs. -8.88 crores, the Company earned a net profit of Rs. 20.37 crores during the year.

TRANSFER TO RESERVE

After appropriations of profit as per the detail hereinabove, an amount of Rs. 15.00 crores has been transferred to General Reserve thereby increasing Company's Reserves to Rs. 465.58 crores as on 31st March, 2015.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 20% (i.e. Re. 1 per equity shares of Rs. 5/- each) on paid up share capital for the year ended 31st March 2015. The dividend, if approved at the forthcoming Annual General Meeting, will be paid out of the profits of the company to all those shareholders whose names shall appear in the Register of Members on 11th September, 2015 or Register of Beneficial Owners, maintained by the Depositories as at the close of 11th September, 2015.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205C of the Companies Act, 1956 the Company has transferred an amount of Rs. 2672519.00 (Rupees Twenty Six Lakh Seventy Two Thousand Five Hundred Nineteen only) being the amount of unclaimed dividend for the year 2006-2007 to the Investor Education and Protection Fund. Further, unpaid dividend for the year 2007-08 shall be transferred to Investor Education and Protection Fund pursuant to section 205C of the Companies Act, 1956 in November, 2015.

DECLARATION UNDER SECTION 149(6)

The Independent Directors have submitted their declaration to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the rules made thereunder.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to section 152(6) of the Companies Act, 2013 and Article 117 of Article of Association of the Company, Sh. Dinesh Gogna (00498670) and Sh. Kamal Oswal (DIN 00493213) will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The board has recommended their re-appointment to the members of the Company at the ensuing Annual General Meeting. During the year, the members approved the appointment of Dr. (Mrs.) H.K. Bal, Dr. Y.P. Sachdeva, Dr. A.S. Sohi, Prof. K.S. Maini and Dr. S.K. Singla as Independent Directors not liable to retire by rotation. Further the Board appointed Mr. Anil Kumar Garg, who is a qualified Chartered Accountant, having Membership No. 83312 of the Institute of Chartered Accountants of India, as Chief Financial Officer of the Company under the category of Key Managerial Personnel. The Board also approved the inclusion of Sh. Dinesh Oswal, Managing Director and Sh. Brij Sharma, Company Secretary of the Company under the category of Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carried out a formal Annual performance evaluation of its own, Board Committees and individual Directors as per the criteria laid down by the Nomination and Remuneration Committee of the Company. The Board evaluation was carried out through a structured evaluation process to evaluate the performance of individual Directors including the Chairman of the Board. They were evaluated on parameters such as their education, knowledge, experience, expertise, skills, behaviour, leadership qualities, level of engagement and contribution, independence of judgement, decision making ability for safeguarding the interest of the Company, stakeholders and its shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Board was satisfied with the evaluation process and the results thereof.

APPOINTMENT AND REMUNERATION POLICY

The Board, on the recommendation of the Nomination & Remuneration Committee has framed a policy for Appointment and Remuneration of Directors, Senior Management and other employees as provided under Section 178(3) of the Companies Act, 2013. The Appointment and Remuneration Policy of the Company is annexed hereto as Annexure – I and form part of this report.

SEPARATE MEETING OF INDEPENDENT DIREC- TORS

The Company's Independent Directors held their meeting on 15th December, 2014, without the attendance of Non Independent Directors and members of the management. All Independent Directors were present 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 the views of Executive Directors and Non-Executive Directors;

iii. Assessed the quality and timeliness of flow of information between the Company management and the Board which is necessary for the Board to effectively and reasonably perform their duties.

FAMILIARISATION PROGRAMME FOR BOARD MEMBERS

The Company at the time of appointing a Director, issues a formal letter of appointment which inter alia, explains the role, functions, duties and responsibilities expected from him/her as a Director of the Company. All Independent Directors are provided with copies of all policies/Guidelines as framed by the Company under various statutes and Listing Agreement to familiarize with Company's procedure and practices. Further, to update them on the regular basis, the Company provide copies of all amendments in Corporate Laws, Corporate Governance Rules and Listing Agreement. The details of the Company's policy on Familiarisation Programme for Independent Directors is posted on the website of the Company and can be assessed at: http://www.owmnahar.com/nsml/

BOARD MEETINGS

During the year under review, the Board of Directors met four times i.e. 29th May, 2014, 11th August, 2014, 12th November, 2014 and 3rd February, 2015 with a predefined agenda circulated well in advance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGE- MENTS MADE WITH RELATED PARTIES

Your company is engaged in the Manufacture & Exports of Yarns and knitted garments. Because of nature of Industry, sometimes sale/ purchase/ fabrication job transactions takes place between the Group Companies (which are public limited companies), in the ordinary course of business at Arm's length basis. The Company has not entered into any contract or arrangement with the related parties as referred in Section 188(1) of the Companies Act, 2013. Thus the requirement for disclosure of particulars of contracts or arrangement with related parties referred to in Section 188(1) is not applicable. However, as per Company's policy, all the transactions with the Group Companies are placed before the Audit Committee as well as the Board, for their information and approval.

We also wish to inform you that there are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large.

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

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

SHARE CAPITAL

The Paid up equity share capital of the Company as on 31st March, 2015 is Rs.1803.27 Lacs. During the year under review Company has neither issued any shares with differential rights as to dividend, voting or otherwise nor granted any stock options or sweat equity under any scheme.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 10, 11, 12, 16(A), 25(a)&(f) to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to provisions of Section 135 of the Companies Act, 2013, the Board in their meeting held on 29th May 2014, constituted Corporate Social Responsibility Committee(herein after referred to as CSR Committee) comprising of three Directors namely Sh. Dinesh Oswal, as Chairman, Dr. S.K. Singla and Sh. Dinesh Gogna, as members. The term of reference of CSR Committee are:- 1. To formulate and recommend to the Board CSR Policy specifying therein the activities to be undertaken by the Company as laid down in Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

2. To Recommend the amount of expenditure to be incurred on the CSR activities.

3. To Monitor the Company's CSR Policy and implementation of CSR projects from time to time.

The CSR Committee formulated CSR Policy and recommended to the Board to undertake CSR activities in collaboration with Group Companies under one umbrella i.e. through Oswal Foundation, which is a

Registered Society formed in 2006, having its charitable objects in various fields. The Company has started contributing the sum for the expenditure to be incurred by Oswal Foundation for CSR activities. The Oswal Foundation is undertaking the project to 'maintain the quality of soil and water' on Sidhwan Canal, Ludhiana. Besides, the said foundation has also adopted two Government Schools situated in Ludhiana district. for 'promoting education'. The Company's CSR Policy is available on its website i.e. www.owmnahar.com. The disclosure relating to the CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto as "Annexure II" and form part of this Report.

AUDIT COMMITTEE

As required under Section 177 of the Companies Act, 2013, the Board of Directors have already constituted Audit Committee consisting of Prof. K.S. Maini as Chairman, Sh. Dinesh Gogna and Dr. S.K. Singla, Directors as members. Mr. Brij Sharma is the Secretary of the Committee. The Committee held four meetings during the year under review.

VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the Company established a Vigil Mechanism process as an extension of Company's Code of Conduct whereby any employee, directors, customers, vendors etc., can report the genuine concerns or grievances to the members of the Committee about unethical behaviour, actual or suspected, fraud or violation of Company's Code of Conduct so that appropriate action can be taken to safeguard the interest of the Company. The Mechanism also provides for adequate safeguards against victimisation of persons who uses such mechanism. The mechanism provide direct access to the chairperson/ chairman of the Audit Committee in appropriate or exceptional cases. The Vigil Mechanism/Whistle Blower Policy is also posted on Company's Website. The Company has a dedicated e-mail address i.e. whistleblowernsml@owmnahar.com for reporting the genuine concerns.

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

CREDIT RATING

We are pleased to inform that the Credit Rating Information Services of India Ltd. (CRISIL) has re- affirmed the credit rating "A" for long term debt instruments/ facilities and "A1" for the short term debt instruments/ facilities of the Company. The rating "A" indicates stable and rating "A1" indicates very strong degree of safety regarding timely payment of the financial obligations.

GREEN INITIATIVE

The Ministry of Corporate Affairs (MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies. Further, as per the provisions of Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the Company may send financial statements and other documents by electronic mode to its members. Your Company has decided to join the MCA in its environment friendly initiative.

Accordingly, henceforth Company propose to send documents such as notices of General Meetings, Annual Report and other communications to its shareholders via electronic mode to the registered E-mail addresses of the shareholders. To support this green initiative of the Government in full measure shareholders are requested to register/update their latest E-mail addresses with their Depository Participant(D.P.) with whom they are having Demat Account or send the same to the Company via E-ma il a t:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co-operation and support in our endeavour to contribute our bit to the Environment.

LISTING OF SECURITIES

The securities of the company are presently listed on the

following Stock Exchanges: I. The Bombay Stock Exchange Ltd., 25th Floor,

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. ii. The National Stock Exchange of India Ltd.,

Exchange Plaza, 5th Floor, Plot No.C/1, G- Block, Bandra Kurla Complex, Bandra (E), Mumbai

The Company has paid listing fee to both the Stock

Exchanges for the financial year 2015-16.

DEMATERIALISATION OF SECURITIES

As the members must be aware that company's securities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository services (India) Limited (CDSL) to facilitate the holding and trading of securities in electronic form. As on date 95.17% of the total Equity Share Capital of the Company has been dematerialised. The shareholders who have not gone in for dematerialisation of shares till date, are requested to opt for dematerialisation of the shares at the earliest. Further as per SEBI circular no. D&CC/FITTC/CIR- 15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Accordingly all the shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communication in respect of Share Transfer, Demat/Remat, Change of Address etc. to our Registrar at below mentioned address:

M/s Alankit Assignments Limited

(Unit: Nahar Spinning Mills Limited)

Alankit House, 2E/21, Jhandewalan Extension

New Delhi – 110 055

Telephone No. : (011) 23541234

Fax No. : (011) 41540064

E-mail address : rta@alankit.com

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

ENVIRONMENT FRIENDLY CORPORATE ENTITY

As a responsible corporate entity, your company is sensitive to environment also and is contributing a bit to improve the ecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarns certified by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Executives Board and United Nations Framework Conventions on Climate Change (UNFCCC) Secretariat, Bonn, Germany.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review, conform in their entirely to the requirements of Companies Act, 2013.

The Directors confirm :

I) that in preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) 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 company and that such internal financial controls are adequate and were operating effectively; vi) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS & AUDITOR'S INDEPENDENT REPORT STATUTORY AUDITORS

The members at the Annual General Meeting held on 30th September, 2014, appointed M/s Gupta Vigg and Co., Chartered Accountants (Registration No. 001393N) as Statutory Auditors of the Company to hold the office till the conclusion of 35th Annual General Meeting of the Company. Their period of office will expire at the ensuing Annual General Meeting. They have expressed their willingness for re-appointment as Auditors of the Company and has given a written consent/certificate regarding eligibility for their reappointment as Statutory Auditors in accordance with the Rule 4 of the Companies(Audit and Auditors) Rule, 2014 read with the provisions of section 139(2) of the Companies Act, 2013. The Board of Directors based on the recommendation of the Audit Committee has proposed the appointment of M/s. Gupta Vigg & Co., as the Statutory Auditors of the Company for a period of one year to hold the office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

AUDIT REPORT

The Statutory Auditors have submitted Audit Report on the Accounts of the Company for the Accounting year ended 31st March, 2015. The observations and comments given by Auditors in their Report read together with the Notes to the Accounts are self explanatory and require no comments.

COST AUDITORS

We would like to inform you that the Ministry of Corporate Affairs vide Notification dated 31st December, 2014 amended Companies (Cost Records and Audit) Rules, 2014, pursuant to which, the Company's business activities have been included with in the purview of Cost Audit requirement. Accordingly, the Board of Directors on the recommendation of Audit Committee appointed M/s Ramanathan & Iyer, Cost Accountant, as Cost Auditors of the Company for financial year 2015-16 and has fixed a remuneration of Rs. 1.50 Lacs subject to the ratification of the members as per the provision of Section 148(3) of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014. A resolution for the ratification of the remuneration of the Cost Auditors by the members at the ensuing Annual General Meeting is being proposed.

SECRETARIAL AUDITOR

The Board, pursuant to the provision of Section 204 of the Companies Act, 2013 read with rule 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed M/s. P.S. Bathla & Associates, Practising Company Secretaries, having Membership No. 2585 to conduct Secretarial Audit for the financial year 2014-15.

M/s. P.S. Bathla & Associates, Practising Company Secretaries have carried out the Secretarial Audit for the financial year ended March 31, 2015 and their Secretarial Audit Report in Form No. MR-3 is annexed hereto as Annexure III and from part of the report.

The Report is self explanatory and require no comments.

BUSINESS RISK MANAGEMENT

The Company has laid down Risk Management Policy to identify, evaluate manage and monitor all types of risks which are associated with the business of the Company. The Board as well as Audit Committee regularly overseas the risk management process in the Company, as required under 134(3)(n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement and suggests steps to be taken to control and mitigate the risks associated with Company's business. The Company is operating in Textile segment and has identified certain risks which may affects the performance of the Company. These includes operational risks such as fluctuation in cotton prices, fluctuation in foreign exchange rates, Labour problems, regulatory risks, Government Policy with respect to textile etc. We are of the opinion that none of identified risk is such that which may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL AND SYSTEMS

The Company has an adequate system and Internal Financial Control to ensure that all the assets of the company are safeguarded and protected. The Company's Internal Financial Control System commensurate with the nature of its business and size of its operations. In order to further strength the Internal Control System and to automate the various process of the business, company is making use of Enterprise Resource Planning(ERP).

Pursuant to the provisions of section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Company has also appointed a Chartered Accountant as Internal Auditor for the financial year 2015-16. The Company's Internal Audit Department test the adequacy and effectiveness of Internal Control Systems laid down by the management and suggest improvement in the systems. During the year, Company's Internal Controls were tested and no reportable weakness in the system was observed. Apart from this, an Audit Committee consisting of three non executive directors has been constituted. All the significant audit observation and follow up action thereon are taken care of by the Audit Committee. The Committee oversee the adequacy of Internal Control. The Audit Committee met four times during the financial year under review. The Company has also established a Vigil Mechanism as per Section 177(9) of Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014.

WHOLLY OWNED SUBSIDIARY

The Company formed a 100% Wholly Owned Subsidiary in the name of Nahar Spinning Mills (FZE) in Sharjah Airport Free Zone, Sharjah, UAE on 09th December, 2013. The Company did not carry any commercial activity and accordingly the Board in their meeting held on 11th August, 2014 decided to close its 100% Wholly Owned Subsidiary Nahar Spinning Mills (FZE). The Company has already been closed. Accordingly, no Financial Statement of the said Company as required pursuant to the proviso of section 129(3) of the Companies Act, 2013 is attached.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any Public Deposit within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under. There is no outstanding/unclaimed deposit from the public. However, the information as required under Rule 8 of the Companies (Accounts) Rules, 2014 is given hereunder:-

(i) Deposits accepted during the year : Nil

(ii) Deposits remained unpaid or : Nil unclaimed as at the end of the year

(iii) Default in repayment of deposits : Not and deposits which are not in applicable compliance with the requirements of Chapter V of the Companies Act, 2013

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment for women at workplace and has adopted a policy against sexual harassment in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2014-15, the Company has not received any complaints on sexual harassment and hence no compliant remains pending as of 31 March, 2015.

ANNUAL RETURN

Extract of Annual Return, pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the Financial year 2014-15 in the Form MGT-9 of the Company is annexed herewith as Annexure IV and form part of this report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as "Annexure V" and form part of this report.

Further during the year under review, no employee of the Company was in receipt of remuneration exceeding the limits as provided under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration received by Managing Director is also given in point VI of the ANNEXURE IV annexed hereto and form part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 134(3) of the Companies Act, 2013 read with sub-rule 3 of the Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed as per Annexure-VI and forms part of this report.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report along with the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-VII and forms part of this Report

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under the clause 49 of the Listing Agreement with the Stock Exchanges in India is enclosed as per annexure-VIII and forms part of this Report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD

PLACE: LUDHIANA JAWAHAR LAL OSWAL

DATED: 5th August, 2015 (Chairman)

DIN: 00463866


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the THIRTY FOURTH ANNUAL REPORT on the affairs of the Company for the year ended 31st March, 2014.

FINANCIAL PERFORMANCE

Your Company''s Financial Performance during the year is summarised below:

(Rs. In crores)

PARTICULARS CURRENT PREVIOUS YEAR YEAR

Profit for the year before 292.66 221.60

TAX & DEPRECIATION

Less: Depreciation 88.16 87.55

Provision for Taxation 43.25 9.96

Provision for Deferred Tax 15.50 146.91 45.70 143.21

Profit/Loss after tax 145.75 78.39

Adjustment of Income Tax 0.45 0.53

of Earlier years

Amount available for appropriation 145.30 77.86

APPROPRIATION

Proposed Dividend 3.61 3.61

Tax on Distributed profits 0.61 0.61

Transfer to General Reserve 90.00 73.64

Balance at the end 51.08 _

145.30 77.86

PERFORMANCE REVIEW

As the members are aware that company is engaged in the manufacturing of Yarns and Garments. These business activities fall under the ''Textile'' segment. However for the purpose of working performance review, we would like to brief you company''s performance under two units namely Yarns and Garments:

YARN UNIT

We are pleased to inform you that Company''s expansion cum modernisation plan of 60,000 spindlage is progressing as per schedule. The Company has already installed 52848 spindles. The machineries for remaining spindles have already arrived at the plant site and it is expected that the same will be installed by end September, 2014. On completion of the abovesaid expansion, Company''s spindlage capacity will stand increased to five lakh spindles (approx.) and 1080 rotors.

Yarn Segment performed exceedingly well during the year under review. The recovery in U.S., European Union and Asian economies coupled with higher export realization enabled the segment to achieve a net revenue of Rs. 1927.12 crores showing an impressive increase of 12.63% over the previous year. The financial performance too improved significantly and it earned a profit before interest and tax of Rs. 228.78 crores showing an impressive increase of 10.10% over the previous year.

GARMENT UNIT

Likewise, Garment Segment also, improved its performance during the year under review. The segment achieved a net revenue of Rs. 272.95 crores showing an impressive increase of 11.26% over previous year. It also improved its financial performance significantly and earned a profit before interest and tax of Rs. 43.20 crores showing an impressive increase of 74.64% over the previous year.

OVERALL PERFORMANCE

From the above, it is apparent that Company''s overall performance has been excellent on all parameters during the year ended 31st March, 2014. The Company earned a net revenue of Rs. 2204.19 crores showing an impressive increase of 12.39 % over the previous year. The exports at Rs.1427.99 crores has also shown increase of 9.87% over the previous year.

On profitability front too, the Company substantially improved its performance and earned a profit before tax and depreciation of Rs. 292.66 crores as against profit of Rs. 221.60 crores in the previous year. After providing depreciation of Rs. 88.16 crores and provision for taxation/deferred taxation of Rs. 58.75 crores, it earned a net profit of Rs. 145.75 crores. After the adjustment of Income tax of Rs. 0.45 crores (earlier years) the amount available for appropriations comes to Rs. 145.30 crores. After appropriations of profit as per the detail hereinabove, an amount of Rs. 90.00 crores has been transferred to General Reserve thereby increasing Company''s reserve to Rs. 469.62 crores as on 31st March, 2014.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 20% (i.e. Rs. 1 per equity shares of Rs. 5/- each) on paid up share capital for the year ended 31st March 2014.

The dividend, if approved at the forthcoming Annual General Meeting, will be paid out of the profits of the company to all those shareholders whose names shall appear in the Register of Members on 15th September, 2014 or Register of Beneficial Owners, maintained by the Depositories as at the close of 13th September, 2014.

DIRECTORS

Pursuant to section 149 of the Companies Act, 2013, Sh. Jawahar Lal Oswal and Sh. Satish Kumar Sharma, will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themeselves for re- appointment.

Pursuant to section 149, 152 read with Schedule IV of the Companies Act, 2013 and clause 49 of the Listing Agreement, Dr. (Mrs.) H.K. Bal, Prof. K.S. Maini, Dr. Suresh Kumar Singla, Dr. Amrik Singh Sohi, Dr. Yash Paul Sachdeva, Directors of the Company, who were appointed as directors liable to retire by rotation, are proposed to be appointed as Independent Directors for the fixed term of three years upto the conclusion of 37th Annual General Meeting in the calendar year 2017. The resolutions for their appointment have been proposed in the accompanying Notice.

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, the details of Directors to be appointed/re-appointed are contained in the accompanying Notice of the forthcoming Annual General Meeting.

CREDIT RATING

We are pleased to inform that the Credit Rating Information Services of India Ltd. (CRISIL) has re-affirmed the credit rating "A" for long term debt instruments/ facilities and "A1" for the short term debt instruments/ facilities of the Company. The rating "A" indicates stable and rating "A1" indicates very strong degree of safety regarding timely payment of the financial obligations.

GREEN INITIATIVE

The Ministry of Corporate Affairs (MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies. Further, as per the provisions of Companies Act, 2013, the Company may send financial statements and other documents by electronic mode to its members. Your Company has decided to join the MCA in its enviornmental friendly initiative.

Accordingly, henceforth company propose to send documents such as notices of General Meetings, Annual Report and other communication to its shareholders via electronic mode to the registered E-mail addresses of the shareholders. To support this green initiative of the Government in full measure shareholders are requested to register/update their latest E- mail addresses with their Depository Participant(D.P.) with whom they are having Demat Account or send the same to the Company via E-mail at:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co- operation and support in our endeavor to contribute our bit to the Enviornment.

LISTING OF SECURITIES

The securities of the company are presently listed on the following Stock Exchanges:

i. The Bombay Stock Exchange Ltd., 25th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai.

ii. The National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No.C/1, G- Block, Bandra Kurla Complex, Bandra (E), Mumbai The Company has paid listing fee to both the Stock Exchanges for the financial year 2014-15.

DEMATERIALISATION OF SECURITIES

As the members must be aware that company''s securities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository services (India) Limited (CDSL) to facilitate the holding and trading of securities in electronic form. As on date 94.96% of the total Equity Share Capital of the Company has been dematerialised. The shareholders who have not gone in for dematerialisation of shares till date, are requested to opt for dematerialisation of the shares at the earliest.

Further as per SEBI circular no. D&CC/FITTC/CIR- 15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Accordingly all the Shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communication in respect of Share Transfer, Demat/Remat, Change of Address etc. to our Registrar at below mentioned address:

M/s Alankit Assignments Limited (Unit: Nahar Spinning Mills Limited) Alankit House 2E/21, Jhandewalan Extension New Delhi - 110 055 Telephone No. : (011) 23541234 Fax No. : (011) 41540064

E-mail address : rta@alankit.com

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

AUDIT COMMITTEE

As required under Section 177 of the Companies Act, 2013, the Board of Directors have already constituted Audit Committee consisting of Prof. K.S. Maini as Chairman, Sh. Dinesh Gogna and Dr. S.K. Singla, as members. The Committee held four meeting during the year under review.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Pursuant to Section 135 of the Companies Act, 2013, your Board in its meeting held on 29th May, 2014 has constituted Corporate Social Responsibility Committee consisting of Sh. Dinesh Oswal, Managing Director as Chairman, Dr. S.K. Singla and Sh. Dinesh Gogna, as members. The Committee has been constituted to:-

1. Formulate and recommend the Board a CSR Policy which shall indicate the activities to be undertaken by the Company as laid down in Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

2. Recommend the amount of expenditure to be incurred on the CSR activities.

3. Monitor the Company''s CSR Policy and implementation of CSR projects from time to time.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report alongwith the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-III.

ENVIRONMENT FRIENDLY CORPORATE ENTITY

As a responsible corporate entity, your company is sensitive to environment also and is contributing a bit to improve the ecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarns certified by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Executives Board and United Nations Framework Conventions on Climate Change (UNFCCC) Secretariat, Bonn, Germany. DIRECTORS RESPONSIBILITY STATEMENT The Directors would like to assure the Members that the financial statements for the year under review, conform in their entirely to the requirements of Companies Act, 1956.

The Directors confirm :

i) that in preparation of the Annual Accounts, the applicable accounting standards had been followed alongwith proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

COST AUDITORS

The Company appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors for the year 2013-2014. The Government of India, Ministry of Corporate Affairs, Cost Audit Branch, New Delhi have approved their appointment. The Cost Audit Report for the Yarn as well as Garments for the year ended 31st March, 2014 would be submitted to the Ministry of Corporate Affairs, Cost Audit Branch, in accordance with the requirements of Law.

We would like to inform you that the Ministry of Corporate Affairs vide Notification dated 30th June, 2014 notified Companies (Cost Records and Audit) Rules, 2014, pursuant to which, the Company''s business activities has been excluded from the preview of Cost Audit requirement.

AUDITORS & AUDITOR''S INDEPENDENT REPORT

The Statutory Auditors, M/s. Gupta Vigg & Co., Chartered Accountants (Registration No. 001393N), has been working as the Statutory Auditors of the Company since 1981. As per the provisions of Section 139 of the Companies Act, 2013, no listed company shall appoint or re-appoint an audit firm as Auditor for more than two terms of five consecutive years. The proviso to Section 139(2) of the Companies Act, 2013 provides that every company existing on or before the commencement of this Act, which is required to comply with the provisions of above said section shall comply with the requirements of abovesaid section within three years from the date of commencement of the Companies Act, 2013.

M/s. Gupta Vigg & Co., being eligible offered themselves for re-appointment. The Board of Directors based on the recommendation of the Audit Committee has proposed the appointment of M/s. Gupta Vigg & Co., as the Statutory Auditors of the Company for a period of one year to hold the office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

The Company has obtained from Auditors a written consent and a certificate as required under Section 139 of the Companies Act, 2013 to the effect that their re- appointment, if made, would be within the limits and in accordance with the conditions specified under section 141(3)(g) of the Companies Act, 2013.

The observations and comments given by Auditors in their Report read together with the Notes to the Accounts are self explanatory hence do not call for any further comments.

WHOLLY OWNED SUBSIDIARY

Your Company being Export Oriented Company always endeavours to explore new export markets for its products so that it can achieve desired growth. In this process it is Management desire to have better presence in the Middle East countries and also in the Gulf markets. Keeping in view the future growth strategy, your Management has taken an initial step by establishing a 100% Wholly Owned Subsidiary in the name of Nahar Spinning Mills (FZE) in Sharjah Airport Free Zone, Sharjah, UAE on 9th December, 2013. After the incorporation it has not carried out any operations till date. Since, it is the first year of operations, it has not closed its Books of Accounts as yet. Accordingly, no financial statement of the said Company as required pursuant to the proviso of Section 129(3) of the Companies Act, 2013 is attached.

PUBLIC DEPOSITS

During the year the company has neither accepted nor intend to accept any Public deposit. There are no outstanding/unclaimed deposit from the public.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205-C of the Companies Act, 1956 the company has transferred an amount of Rs. 1,168,180.00 (Rupees Eleven Lakh Sixty Eight Thousand One Hundred and Eighty only) being the amount of unclaimed dividend for the year 2005-2006 to the Investor Education and Protection Fund. Further, unpaid dividend for the year 2006-07 shall be transferred to Investor Education and Protection Fund pursuant to section 205C of the Companies Act, 1956 in November, 2014.

PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (particulars of employees) Rules 1975 is enclosed as per Annexure - I.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 217(1)(e) of the companies Act, 1956 read with Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, is enclosed as per Annexure-II and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under the clause 49 of the listing agreement with the Stock Exchanges in India is enclosed as per annexure-IV and forms the part of this Report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD

PLACE: LUDHIANA JAWAHAR LAL OSWAL DATED: 11th August, 2014 (Chairman)


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the THIRTY THIRD ANNUAL REPORT on the affairs of the company for the year ended 31st March, 2013.

FINANCIAL PERFORMANCE

Your Company''s Financial Performance during the year is summarised below:

(Rs. In crores)

PARTICULARS CURRENT PREVIOUS YEAR YEAR

Profit for the year before 221.60 (173.45)

TAX & DEPRECIATION

Less: Depreciation 87.55 -

Provision for Taxation 9.96 0.06

Provision for Deferred Tax 45.70 143.21 (56.15) 56.09

Profit/Loss after tax 78.39 (117.36)

Adjustment of Income Tax 0.53 -0.16 of Earlier years

Amount available for appropriation 77.86 (117.20)

APPROPRIATION

Proposed Dividend 3.61 -

Tax on Distributed profits 0.61 -

Transfer to General Reserve 73.64 -

77.86 (117.20)

PERFORMANCE REVIEW

We would like to inform you as per the disclosure requirements of Accounting Standard AS17 issued by the Institute of Chartered Accountants of India, company''s activities can be classified under two segments namely "Yarn Segment" and "Garment Segment". Before reviewing overall performance of the company we would like to brief you regarding the working performance of each Segment which is as under:-

YARNSEGMENT

We are pleased to inform you that Company''s expansion cum modernization plans of 60,000 spindlage are progressing as per schedule. The company expects to fully implement the said plans by July, 2014. On completion of the said expansion the company''s spindlage capacity will increase to five lakhs spindlages. Yarn Segment performed exceedingly well during the year under review. The recovery in the U.S., Europe and Asian economies coupled with higher export realization enabled the Segment to achieve net revenue of Rs.1711.04 lakhs showing an increase of 13.94% over the previous year. The financial performance too, improved significantly and it earned a profit before interest and tax of Rs. 207.79 crores as against loss of Rs. 86.26 Crores.

GARMENTSEGMENT

We are glad to inform you that Garment Segment too, improved its performance during the year under review. The recovery in the U.S. and European Economies enabled the segment to achieve net revenue of Rs. 245.34 crores showing an impressive increase of 29.28% over previous year. It also improved its financial performance and earned a profit before interest and tax of Rs.24.74 crores showing an impressive increase of 45.88% over the previous year.

OVERALL PERFORMANCE

From the above, it is apparent that company''s performance has been excellent on all parameters. The company''s net revenue from operations Rs.1961.28 crores has shown an increase of 15.63% over the previous year. Likewise the export at Rs.1299.76 crores has also shown an impressive increase of 15.78%. Because of its excellent export performance, your company has been awarded Gold Trophy for achieving Highest Exports of yarn (50s & Below) by The Cotton Textile Export Promotion Council (TExpROCIL).The company has also been awarded Bronze Trophy for achieving Third Highest Export of Processed Yarn by (TExPROCIL).

On profitability front, company substantially improved its performance and earned a profit before tax and depreciation of Rs. 221.60 crores as against loss of Rs.173.45 crores in the previous year. After providing depreciation of Rs. 87.55 crores and provision for taxation/deferred taxation of Rs. 55.66 crores the company earned a net profit of Rs.78.39 crores. After adjustment of income tax of Rs. 0.53 crores (earlier year) the amount available for appropriations comes to Rs. 77.86 crores. After appropriations of profits as per detail hereinabove, an amount of Rs.73.64 crores has been transferred to General Reserve thereby increasing Company''s Reserves to Rs.379.62 crores as on 31st March, 2013.

DIVIDEND

Your Directors are pleased to recommend a dividend @20% (i.e. Rs.1.00 per equity share of Rs.5/- each) on paid up equity share capital for the year ended 31st March, 2013.

The dividend, if approved at the forthcoming Annual General Meeting, will be paid out of the profits of the company for the year under reference to all those shareholders whose names shall appear in the Register of Members on 30th September, 2013 or Register of beneficial owners, maintained by the Depositories as at the close of 20th September, 2013.

DIRECTORS

Dr. Om Prakash Sahni who was an independent Director, left for heaven abode on 24.10.2012. The board pray to the Almighty to give peace and solace to the departed soul.

Pursuant to article 91 of the Articles of Association of the company Sh. Kamal Oswal, Dr. Amrik Singh Sohi, Dr. Yash Paul Sachdevaand Dr. Suresh Kumar Singla will be retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re- appointment.

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, the details of Directors to be appointed/re-appointed are contained in the accompanying Notice of the forthcoming Annual General Meeting.

CREDIT RATING

The Credit Rating Information Services of India Ltd. (CRISIL) has re-confirmed the credit rating ''A1''. The said rating indicates very strong degree of safety regarding timely payment of financial obligation. Such instruments carry lowest credit risk.

GREEN INITIATIVE

The Ministry of Corporate Affairs(MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies. Your Company has decided to join the MCA as in its environmental friendly initiative.

Accordingly, henceforth company propose to send documents such as notices of the General Meetings, Annual Report and other communication to its shareholders via electronic mode to the registered e- mail addresses of shareholders. To support this green initiative of the Government in full measure, shareholders are requested to register/update their latest e-mail addresses with their Depository Participant (D.P.) with whom they are having Demat A/c. or send the same to the Company via e-mail at:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co-operation and support in our endeavor to contribute our bit to the environment.

LISTING OF SECURITIES

The securities of the company are presently listed on the following Stock Exchanges:

i. The Bombay Stock Exchange Ltd., 25th Floor Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai.

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

The Company has paid listing fee to both the Stock Exchanges for the financial year 2013-2014.

DEMATERIALISATION OF SECURITIES

As the members must be aware that company''s securities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository services (India) Limited (CDSL) to facilitate the holding and trading of securities in electronic form. As on date 94.79% of the share capital of the company has been dematerialised. The shareholders who have not gone in for dematerialisation of shares till date, are requested to opt for dematerialisation of the shares at the earliest.

Further as per SEBI circular no. D&CC/FITTC/CIR- 15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Accordingly all the shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communications in respect of Share Transfer, Demat/Remat, Change of Address etc. to our Registrar at below mentioned address:

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

Alankit House

2E/21, Jhandewalan Extension New Delhi-110055 Telephone No. : (011)23541234 Fax No. : (011)41540064

E-mail address : rta@alankit.com In case any query/complaint remains unresolved with our Registrar please write to Company Secretary at the Registered Office of the Company.

AUDITCOMMITTEE

Pursuant to Section 292A(1) of the Companies Act, 1956, the company had already constituted Audit Committee consisting of Sh. K.S. Maini as Chairman, Sh. Dinesh Gogna and Dr. O.P. Sahni as members. Because of the sad demise of Dr. O.P. Sahni on 24.10.2012, Sh. S.K. Singla was appointed as Member of Audit Committee. The committee held four meeting during the year under review.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The company had already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report alongwith the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith asAnnexure-II.

ENVIRONMENT FRIENDLY CORPORATEENTITY

As a responsible corporate entity, your company is sensitive to environment also and is contributing a bit to improve the ecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarns certified by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Executives Board and United Nations Framework Conventions on Climate Change (UNFCCC) Secretariat, Bonn, Germany.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review, conform in their entirety to the requirements of the Companies Act, 1956.

The Directors confirm:

I) that in preparation of the Annual Accounts, the applicable accounting standards had been followed alongwith proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

COST AUDITORS

The Company appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors for the year 2012-2013. The Government of India, Ministry of Corporate Affairs, Cost Audit Branch, New Delhi have approved their appointment. The Cost Audit Report for yarn as well as garments, for the year ended 31st March, 2013 would be submitted to the Ministry of Corporate Affairs, Cost Audit Branch, in accordance with the requirements of Law.

The Ministry of Corporate Affairs issued a Notification dated 3rd June, 2011 whereby company''s activities relating to garment business have also comes under the preview of Companies (Cost Accounting Records) Rules, 2011. Accordingly the company is required to file Cost audit report with the Ministry of Corporate Affairs, New Delhi in respect of garments too.

AUDITORS & INDEPENDENT AUDITOR''S REPORT

M/s Gupta Vigg & Co., the Auditors of your Company shall be retiring at the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. The company has obtained from auditors, a certificate as required under Section 224(1-B) of the Companies Act, 1956 to the effect that their reappointment, if made, would be within the limits specified in the said section.

The Audit Committee has recommended their re- appointment.

The observations and comments given by Auditors in their independent auditor''s report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

PUBLIC DEPOSITS

During the year the company has neither accepted nor intend to accept any Public deposit within the meaning of Section 58-A of the Companies Act, 1956 and the rules made there under. There are no outstanding/unclaimed deposit from the public.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205C of the Companies Act, 1956 the company has transferred an amount of Rs.12,99,335/- (Rupees Twelve lacs ninety nine thousand three hundred thirty five only) being the amount of unclaimed Dividend for the year 2004-2005 to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

None of the employee is in receipt of emoluments in excess of the limits prescribed under section 217(2A) the Companies (particulars of employees) Rules 1975.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 217(1)(e) of the companies Act, 1956 read with Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, is enclosed as per Annexure-I and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agreement with the Stock Exchanges in India is enclosed as per Annexure III and forms part of this Report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers and Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD

PLACE: LUDHIANA JAWAHAR LALOSWAL

DATED: 30th July, 2013 (Chairman)


Mar 31, 2012

The Directors have pleasure in presenting the THIRTY SECOND ANNUAL REPORT on the affairs of the company for the year ended 31st March, 2012. FINANCIAL PERFORMANCE

Your Company's Financial Performance during the year is summarized below:

(Rs. In crores)

PARTICULARS CURRENT PREVIOUS YEAR YEAR

Profit/Loss before tax (-) 173.45 177.93

Tax expenses/Adjustment

i) Current Tax 0.06 55.25

ii) Deferred Tax (-) 56.15 1.22 iii) Adjustment 0.16 1.73

Profit/Loss for the period (-) 117.20 119.73

PERFORMANCE REVIEW

We would like to inform you as per the disclosure requirements of Accounting Standard AS17 issued by the Institute of Chartered Accountants of India, company's activities can be classified under two segments namely "Yarn Segment" and "Garment Segment". Before reviewing overall performance of the company, we would like to brief you regarding the working performance of each Segment which is as under :-

YARN SEGMENT

We are pleased to inform you that during the year under review the company fully implemented expansion plans and thus increased its spindlage capacity to 432256 spindles and 1080 Rotors.

Yarn Segment though achieved a Revenue of 1583.11 crores as against 1273.20 crores showing an increase of 24.34 % over the previous year but it suffered a heavy loss of 86.25 crores as against profit (before Tax and Interest) of 222.05 crores in the previous year. The sudden crash of Raw cotton prices in the first quarter of the Financial year 2011-2012 coupled with decline in the prices of finished goods in the domestic and overseas markets severely affected the financial performance of the segment. Moreover untimely restrictions by the Government, in the last few months of the immediate preceding year affected the circle of demand and supply and thus resulted piling up of finished stocks at Mills level. Though this embargo on export was lifted after a short span of time but it had the turbulences in the Textile industry. The accumulated stock of finished goods at Mill's level, when entered into the markets caused a crash of cotton yarn prices by more than 30% within a span of month. In order to remain in the Global markets and to clear piling of finished goods inventory, company had to sell its products at prevailing cheap prices resulting heavy losses to the company.

However in the Current Financial Year things have started moving in the right direction and it is expected that the segment will improve its performance in the current year.

GARMENTSEGMENT

During the year, the segment went through a challenging phase due to volatility in the prices of raw material and economic slowdown in the US and European Union. But inspire of the above, the segment improved its performance and achieved a revenue of Rs.191.28 crores with a profit (before interest and tax) of Rs.16.95 crores.

We are pleased to inform you that the company has been awarded Golden Trophy by the Apparel Export Promotion Council for the highest export of Cotton Garments for the year 2009-2010. Sh. Anand Sharma, Hon'ble Union Minister of Commerce, Industry and Textile awarded the Golden Trophy on 14th November, 2011 at a function organized by AEPC at New Delhi.

OVERALL PERFORMANCE

From the above it is evident that the year by gone was the worst year for the spinning industry and your company's performance was also affected in the year under review. Though company's operating income increased to Rs.1691.42 crores from Rs.1388.75 crores showing an impressive increase of 17.89% over the previous year but it suffered a heavy loss of Rs.117.20 crores during the year under review. As the members are aware that cotton being a seasonable crop is purchased by the spinning mills for its full year requirements, during the cotton season but the cotton prices went up steeply during the season 2010-2011 due to export of huge quantity of cotton during the peak cotton season. Thus the Spinning Mills were forced to buy good quality cotton at abnormally higher prices during the season. However in April, 2011 the sudden crash of raw cotton prices coupled with decline in the prices of finished goods in the domestic as well as overseas markets severely affected the financial performance of the company. The mounting pressure of piling up of finished goods at Mills level pushed the companies to sell its yarn at cheaper prices which in turn affected company's financial performance. To add problems for the spinning industry, Reserve Bank of India also tightened the monitory policy resulting increase in the lending and borrowing rates. This measure of Reserve Bank of India resulted into a higher outgo of Rs.110.12 crores towards Finance Cost as against 48.62 crores in the previous year and thus affected company's financial performance during the year.

However in the current year, things have started moving in the right direction. It is expected that revival of economy in U.S. and European Union will propel the growth of the Textile industry. Your Management is putting whole heartedly all its efforts in cost reduction, quality management, better product mix etc. so as to improve the efficiencies which in turn will help the company in meeting the challenges ahead. Beside your Management also expect that the Government will also lend its helping hand through its policies initiatives so that the spinning industry could survive in this difficult period.

DIVIDEND

Due to the heavy loss of Rs. 117.20 crores suffered by the company, the Board of Director do not recommend any dividend for the year ended 31st March, 2012.

DIRECTORS

Pursuant to article 91 of the Articles of Association of the company Sh. Dinesh Gogna, Dr. O.P. Sahni, Prof. K.S. Maini and Dr.(Mrs.) H.K. Bal will be retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, the details of Directors to be appointed/re-appointed are contained in the accompanying Notice of the forthcoming Annual General Meeting.

CREDIT RATING

The Credit Rating Information Services of India Ltd. (CRISIL) has re-confirmed the credit rating "A1". The said rating indicates very strong degree of safety regarding timely payment of financial obligation. Such instruments carry lowest credit risk.

GREENINITIATIVE

The Ministry of Corporate Affairs(MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies. Your Company has decided to join the MCA as in its environmental friendly initiative.

Accordingly, henceforth company propose to send documents such as notices of the General Meetings, Annual Report and other communication to its shareholders via electronic mode to the registered e- mail addresses of shareholders. To support this green initiative of the Government in full measure, shareholders are requested to register/update their latest e-mail addresses with their Depository Participant (D.P.) with whom they are having Demat A/c. or send the same to the Company via e-mail at:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co-operation and support in our endeavor to contribute our bit to the environment.

LISTING OF SECURITIES

The securities of the company are presently listed on the following Stock Exchanges:

i. The Bombay Stock Exchange Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai.

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

The Company has paid listing fee to both the Stock Exchanges forthe financial year 2012-2013.

DEMATERIALISATION OF SECURITIES

As the members must be aware that company's securities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository services (India) Limited (CDSL) to facilitate the holding and trading of securities in electronic form. As on date 94.61% of the share capital of the company has been dematerialized. The shareholders who have not gone in for dematerialization of shares till date, are requested to opt for dematerialization of the shares at the earliest.

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

M/s Alankit Assignments Limited

(Unit: Nahar Spinning Mills Limited)

Alankit House

2E/21, Jhandewalan Extension

New Delhi-110 055

TelephoneNo. : (011)23541234

FaxNo. : (011)41540064

E-mail address : rta@alankit.com

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

AUDITCOMMITTEE

Pursuant to Section 292A(1) of the Companies Act, 1956, Company constituted Audit Committee consisting of Sh. K.S. Maini as Chairman, Sh. Dinesh Gogna and Dr.

O.P. Sahni as members. The committee held four meeting during the year under review.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report along with the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-III.

ENVIRONMENT FRIENDLY CORPORATEENTITY

As a responsible corporate entity, your company is sensitive to environment also and is contributing a bit to improve the ecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarns certified by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Executives Board and United Nations Framework Conventions on climate change (UNFCCC) Secretariat, Bonn, Germany.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review, conform in their entirety to the requirements of the Companies Act, 1956.

The Directors confirm:

i) that in preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

COST AUDITORS

The Company appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors for the year 2011-2012. The Government of India, Ministry of Corporate Affairs, Cost Audit Branch, New Delhi have approved their appointment. The Cost Audit Report of the year ended 31st March, 2012 would be submitted to the Ministry of Corporate Affairs, Cost Audit Branch, in accordance with the requirements of Law.

AUDITORS AND AUDITORS' REPORT

M/s Gupta Vigg & Co., the Auditors of your Company shall be retiring at the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. The company has obtained from auditors, a certificate as required under Section 224(1-B) of the Companies Act, 1956 to the effect that their reappointment, if made, would be within the limits specified in the said section.

The Audit Committee has recommended their re- appointment.

The observations and comments given by Auditors in their Report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

PUBLIC DEPOSITS

During the year the company has neither accepted nor intend to accept any Public deposit within the meaning of Section 58-A of the Companies Act, 1956 and the rules made there under. There are no outstanding/unclaimed deposit from the public.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205C of the Companies Act, 1956 the company has transferred an amount of Rs.18,34,211/- (Rupees Eighteen lacs thirty four thousand two hundred eleven only) being the amount of unclaimed Dividend for the year 2003-2004 to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

None of the employee is in receipt of emoluments in excess of the limits prescribed under the Companies (Particulars of employees) Rules, 1975.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 217(1)(e) of the companies Act, 1956 read with Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, is enclosed as per Annexure-I and forms part of this report.

MANAGEMENT DISCUSSION ANDANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agreement with the Stock Exchanges in India is enclosed as per Annexure III and forms part of this Report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company.

FOR ANDON BEHALF OF THE BOARD

PLACE: LUDHIANA JAWAHAR LALOSWAL

DATED: 28th July, 2012 (Chairman)


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the THIRTY FIRST ANNUAL REPORT on the affairs of the company for the year ended 31st March, 2011.

FINANCIAL PERFORMANCE

Your Company's Financial Performance during the year is summarised below:

(Rs. in Lac)

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Profit for the year 24771.08 15046.62

before tax & Dep.

Less: Depreciation 6977.94 - 6986.11 -

Provision for Taxation 5525.00 - 1685.00 -

Provision for Deferred Tax 122.50 12625.44 1016.50 9687.61

Profit after tax - 12145.64 - 5359.01

Adjustment of Income Tax of - -172.94 - - 9.79 Earlier years

Amount available - 11972.70 - 5349.22 for appropriation Appropriation

Proposed Dividend - 721.31 - 540.98

Tax on Distributed profits - 117.01 - 89.85

Transfer to General - 12207.28 - 4569.12

Reserve Foreign Exchange contingent liability - - - -

Reserve - - - 149.27

Transfer from Foreign Exchange

Liability Reserves - -1072.90 - -

- 11972.70 - 5349.22

PERFORMANCE REVIEW

We would like to inform you that as per the disclosure requirements of Accounting Standard AS17 issued by the Institute of Chartered Accoun- tants of India, company's activities can be classified under two segments namely "Yarn Segment" and "Garment Segment". Before reviewing over- all performance of the company we would like to brief you regarding the working performance of each Segment which is as under:-

YARN SEGMENT

We are pleased to inform you that during the year under review, company has installed 37200 spindles and 360 rotors and thus company's spindlage capacity stand increased to 383296 spindles and 1080 rotors. The company's expansion plans of balance spindles is being implemented as per schedule and is likely to be completed by Dec., 2011. On its comple- tion, company's spindlage capacity will increase to 4.36 lacs spindles and 1080 Rotors.

Yarn Segment performed exceedingly well during the year under review. The recovery in the U.S., Europe and Asian economies coupled with higher export realization enabled the Segment to achieve a revenue of Rs.1275.28 crores showing an increase of 29.03% over the previous year. The financial performance too, improved significantly and it earned a profit before interest and tax of Rs.221.74 crores as against Rs. 95.88 Crores showing an impressive increase of 131.27% over the previous year.

The segment could have further improved its performance had the Gov- ernment not imposed a cap on the export of cotton yarn to 720 Millions Kg. on 30th Nov., 2010, for the financial year ending 31st March, 2011. Thus the Government put the Cotton Yarn export under 'licence category' and because of restrictions company could not export anything from 15th Jan., 2011 to mid March, with the result the stocks of finished goods got piled up in the Mills.

Though the Indian Government lifted the restrictions and put the Cotton Yarn under 'Free list' category w.e.f. 1st April, 2011 but the export orders needs to be registered with the Directorate General. This is hampering the free export of Cotton Yarn. Besides lowering of demand in the Interna- tional markets has further added to the problems of the spinning industry which in turn will affect the segment performance in the current year significantly.

GARMENT SEGMENT

During the year, the segment went through a tough phase due to unprec- edented price hike and volatility in the raw material prices. Inspite of the above, segment improved its performance and achieved a revenue of Rs.210.47 crores showing an impressive increase of 10.08% over previ- ous year. However the higher cotton prices, stiff competition in the global markets and ever increasing labour and power cost affected the realiza- tion and thus the company could earn only Rs.14.64 crores as against Rs. 22.43 Crores in the previous year.

The Union Budget 2011-2012 levied 10% Excise duty on all branded clothing which inturn may affect the performance of the garment industry in the coming periods.

OVERALL PERFORMANCE

To begin with, company's performance has been excellent in the first nine months as is evident from the excellent results achieved by the company during the said period. The company achieved an operating income of Rs.1043.74 crores with a net profit of Rs.105.40 crores. However the Government changed its view to monitor the workings of textile industry and for that reason, as has been witnessed in the past, this year too, certain measures were taken to have the balance in trade of the textile industry in India. Out of these measures, one particular measure i.e. imposition of cap on export, resulted a severe blow to the Industry having a long term ramifi- cations. Because of export restrictions, company could not export its prod- ucts from 15th Jan., 2011 to mid March, 2011 which severely affected its performance in the last quarter of the year under reference.

However looking at yearly performance, we would like to inform you that company put up a splendid performance during the year under review. The company achieved an operating income of Rs.1391.52 crores (net) showing an increase of 25.31% over the previous year. Likewise the exports at Rs.975.09 crores has also shown an impressive increase of Rs.33.36% over the previous year. On profitability front, company substantially improved its performance and earned a pre-tax profit of Rs.177.93 crores showing an impressive increase of 120.28%. After providing for Income tax and de- ferred tax, the company earned a net profit of Rs.119.72 crores showing an impressive increase of 123.82% over the previous year. After appropriation of profits as per detail hereinabove, an amount of Rs.122.07 crores has been transferred to General Reserve thereby increasing Company's Reserves to Rs.647.91 crores as on 31st March, 2011.

To keep you update, we would also like to share with you the prevailing textile scenario. Though the performance of the textile industry was excellent during the last year but things are not moving in the right direction in the current year. The consequential effects of negative threats of yester year are still continuing and its effects has already been witnessed in the financial results of the first quarter of the current year. The company suffered a heavy loss of Rs.133.57 crores because of the sudden crash in the prices of raw cotton from Rs.63,000/- per candy in September, 2010 to Rs.34,000/- per candy in June, 2011 because of pure speculative activity in cotton at the commodity markets. The cotton being a seasonable crop is purchased by the spinning mills for its requirement in the cotton season. The company pur- chased the cotton at the high prices during the season and is currently stuck with the high cost cotton. Besides sharp decline in the yarn prices coupled with lack of demand in US and European countries has put additional pressure on the inventory intensive industry. In case things do not move for better- ment the performance of the textile industry will be adversely affected in the coming periods.

Your Management is putting whole heartedly all its efforts in cost reduction, quality management, better product mix etc. so as to improve the efficien- cies which in turn will help the company in meeting the challenges ahead. Besides your Management also expect that the Government through its policies will take some urgent initiatives in the form of some relief packages so that the industry could survive in this challenging period.

DIVIDEND

Your Directors are pleased to recommend a dividend @40% (i.e. Rs.2.00 per equity share of Rs.5/- each) on paid up equity share capital for the year ended 31st March, 2011.

The dividend, if approved at the forthcoming Annual General Meeting, will be paid out of the profits of the company for the year under reference to all those shareholders whose names shall appear in the Register of Members on 20th September, 2011 or Register of beneficial owners, maintained by the Depositories as at the close of 9th September, 2011.

DIRECTORS

Sh. Amarjeet Singh, Director who has been associated with the company since 2001 left for heavenly abode on 30.05.2011. The Board pray to the Almighty to give peace and solace to the departed soul.

Pursuant to article 91 of the Articles of Association of the company Dr. S.K. Singla, Sh. S.K. Sharma and Sh. J.L. Oswal will be retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re- appointment.

Besides, D r. Amrik Singh Sohi and Dr. Yash Paul Sachdeva who were appointed as Additional Directors w.e.f. 10th Aug., 2011, will hold office upto the ensuing Annual General Meeting. The company has received notices U/ s 257 of the Companies Act, 1956 from a member proposing their candida- ture for the office of Director subject to your approval. The necessary resolutions are being proposed for your approval in the accompanying notice of the forthcoming Annual General Meeting.

Further the period of Sh. Dinesh Oswal as Managing Director shall be expiring on 31st Dec., 2011. The Board at the recommendation of the Remuneration Committee has approved (subject to your approval) the re- appointment of Sh. Dinesh Oswal as Managing Director for a further period of 5 years commencing from 1st January, 2012. The necessary resolution is being proposed for your approval in the accompanying Notice of the forthcoming Annual General Meeting.

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, the details of Directors to be appointed/re-appointed are contained in the accom- panying Notice of the forthcoming Annual General Meeting.

CREDIT RATING

The Credit Rating Information Services of India Ltd. (CRISIL) has re-con- firmed the credit rating "P1 " (Pronounced "P one plus") to the Company for short term loan upto Rs.23.50 Crores. This indicate that the degree of safety with regard to timely payment of interest and principal on the instrument is very strong.

GREEN INITIATIVE

The Ministry of Corporate Affairs (MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compli- ances by the companies. Your Company has decided to join the MCA in its environment friendly initiative.

Accordingly, company propose to send documents such as notices of the General Meetings, Annual Report and other communication to its share- holders via electronic mode to the registered e- mail addresses of share- holders. To support this green initiative of the Government in full mea- sure, shareholders are requested to register/update their latest e-mail addresses with their Depository Participant (D.P.) with whom they are having Demat A/c. or send the same to the Company via e-mail at:- secnsm@owmnahar.com or gredressalnsml@owmnahar.com. We solicit your valuable co-operation and support in our endeavour to contribute our bit to the environment.

OPEN OFFER FOR NAHAR POLY FILMS LIMITED

During the year, your company made an Open Offer under the provision of regulation 11(2A) of the Securities and Exchange Board of India (Sub- stantial Acquisition of Shares and Takeover) Regulation, 1997 and subse- quent amendments thereto for the acquisition of 2437251 fully paid up equity shares of Rs.5/- each of Nahar Poly Films Limited representing 9.91% of the total paid up equity share capital of Nahar Poly Films Limited. The company could get only 685094 equity shares representing 2.79% of the equity capital of Nahar Poly Films Limited under the said Offer. The required disclosure/compliances has already been made to the SEBI as well as Stock Exchanges, in this regard.

LISTING OF SECURITIES

The securities of the company are presently listed on the following Stock Exchanges:

i. The Bombay Stock Exchange Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai.

ii. The National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No.C/1, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai The Company has paid listing fee to both the Stock Exchanges for the financial year 2011-2012.

DEMATERIALISATION OF SECURITIES

As the members must be aware that company's securities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. Na- tional Securities Depository Limited (NSDL) and Central Depository Ser- vices (India) Limited (CDSL) to facilitate the holding and trading of secu- rities in electronic form. As on date 94.37% of the share capital of the company has been dematerialised. The shareholders who have not gone in for dematerialisation of shares till date, are requested to opt for dematerialisation of the shares at the earliest.

Further as per SEBI circular no. D&CC/FITTC/CIR-15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Accordingly all the shareholders, Investors, Members of the Stock Exchanges, De- pository Participants and all other concerned are requested to send all communication in respect of Share Transfer, Demat/Remat, Change of Address etc. to our Registrar at below mentioned address:

M/s Alankit Assignments Limited (Unit: Nahar Spinning Mills Limited) Alankit House 2E/21, Jhandewalan Extension New Delhi - 110 055 Telephone No. (011) 23541234 Fax No. (011) 41540064 E-mail address rta@alankit.com

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

AUDIT COMMITTEE

Pursuant to Section 292A(1) of the Companies Act, 1956, Company constituted Audit Committee consisting of Sh. Amarjeet Singh as Chair- man, Sh. Dinesh Gogna and Dr. O.P. Sahni as members. Because of the sad demise of Sh. Amarjeet Singh on 30th May, 2011, Sh. K.S. Maini was appointed as Member as well as Chairman of Audit Committee on the same day itself. The committee held four meeting during the year under review.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Gov- ernance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corpo- rate Governance Report alongwith the Auditors Certificate regarding com- pliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-III.

ENVIRONMENT FRIENDLY CORPORATE ENTITY

As a responsible corporate entity, your company is sensitive to environ- ment also and is contributing a bit to improve the ecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarns certified by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Ex- ecutives Board and United Nations Framework Conventions on Climate Change (UNFCCC) Secretariat, Bonn, Germany.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial state- ments for the year under review, conform in their entirety to the require- ments of the Companies Act, 1956.

The Directors confirm :

i) that in preparation of the Annual Accounts, the applicable accounting standards had been followed alongwith proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

COST AUDITORS

The Company appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors for the year 2010-2011. The Government of India, Ministry of Corporate Affairs, Cost Audit Branch, New Delhi have approved their appointment. The Cost Audit Report of the year ended 31st March, 2011 would be submitted to the Ministry of Corporate Affairs, Cost Audit Branch, in accordance with the requirements of Law.

AUDITORS

M/s Gupta Vigg & Co., the Auditors of your Company shall be retiring at the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. The company has obtained from auditors, a certificate as required under Section 224(1-B) of the Companies Act, 1956 to the effect that their reappointment, if made, would be within the limits specified in the said section.

The Audit Committee has recommended their re-appointment.

PUBLIC DEPOSITS

During the year the company has neither accepted nor intend to accept any Public deposit within the meaning of Section 58-A of the Companies Act, 1956 and the rules made there under. There are no outstanding/ unclaimed deposit from the public.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205C of the Companies Act, 1956 the company has transferred an amount of Rs.16,40,854/- (Rupees Sixteen lacs forty thousand eight hundred fifty four only) being the amount of unclaimed Dividend for the year 2002-2003 to the Investor Education and Protection Fund.

PARTICULARS OF EMPLOYEES

Information regarding employees in accordance with Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Em- ployees) Rules 1975 is given in Annexure - I and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 217(1)(e) of the compa- nies Act, 1956 read with Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, is enclosed as per Annexure-II and forms part of this report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company.

FOR AND ON BEHALF OF THE BOARD

JAWAHAR LAL OSWAL (Chairman)

PLACE : LUDHIANA

DATED: 10th Aug, 2011


Mar 31, 2010

The Directors have pleasure in presenting the THIRTIETH ANNUAL REPORT on the affairs of the company for the year ended 31st March, 2010.

FINANCIAL PERFORMANCE

Your Companys Financial Performance during the year is summarised below:

(Rs. In lacs)

Particulars Current Year Previous Year

PROFIT FOR THE YEAR BEFORE 15046.62 5103.64

TAX & DEPRECIATION

Less: Depreciation 6986.11 7611.30

Provision for Taxation 1685.00 40.00

Provision for Deferred Tax 1016.50 9687.61 (826.00) 6825.30

Profit/Loss after tax 5359.01 -1721.66

Adjustment of Income Tax of - 9.79 58.59

Earlier years

Amount available for appropriation 5349.22 - 1663.07

Transfer from General Reserve - 2797.67

5349.22 1134.60

APPROPRIATION

Proposed Dividend 540.98 180.33

Tax on Distributed profits 89.85 30.65

Transfer to General Reserve 4569.12 -

Foreign Exchange contingent

liability

Reserve 149.27 923.62

5349.22 1134.60

PERFORMANCE REVIEW

We would like to inform you that as per the disclo- sure requirements of Accounting Standard AS17 is- sued by the Institute of Chartered Accountants of In- dia, companys activities can be classified under two segments namely "Yarn Segment" and "Garment Seg- ment". Before reviewing overall performance of the company we would like to brief you regarding the working performance of each Segment which is as under:-

YARN SEGMENT

During the year under review, Yarn Segment performed reasonably well. The recovery in the U.S., Europe and Asian economies enabled the Segment to achieve a revenue of Rs.988.35 crores showing an increase of 10.56% over the previous year. The export at Rs. 584.97 crores has also shown an impressive increase of 11.31% over previous year. The financial performance too, improved significantly and it earned a profit be- fore interest and tax of Rs.95.88 crores as against 5.5 crores, showing an impressive increase of 1627.57% over the previous year.

Having regard to the good prospects for the Yarn In- dustry, your Management has decided to expand its spindlage capacity by installing 90000 spindles at a capital outlay of Rs.350 crores (approx.). The said expansion is to be financed through Term Loan from the Banks under the TUFF Scheme and the Internal accruals of the company. The Civil construction work has already started and the orders for the machineries have also been placed. The said expansion is likely to be completed by July, 2011. On its completion, the companys spindlage capacity will stand increased to 4.36 lacs spindles.

GARMENT SEGMENT

We are pleased to inform you that Garment Segment too, improved its performance during the year under review. The recovery in the U.S. and European Econo- mies enabled the segment to achieve a revenue of Rs.191.20 crores showing an impressive increase of 18.92% over previous year. Likewise the exports at Rs.146.20 crores has also shown an impressive in- crease of 20.95%. The Company has been awarded Golden Trophy by the Apparel Export Promotion Coun- cil for achieving highest Export of Cotton Garments for the year 2007-2008. It also improved its financial performance and earned a profit before interest and tax of Rs.22.44 crores, showing an impressive increase of 173.87% over the previous year.

OVERALL PERFORMANCE

From the above, it is apparent that companys perfor- mance has been excellent on all parameters. The companys net operating income at Rs.1110.47 crores has shown an increase of 11% over the previous year. Likewise the exports at Rs.731.17 crores has also shown an impressive increase of Rs.11.69%. The companys continued excellent export performance has been recognised by the Ministry of Commerce and Industry by conferring the status of STAR TRADING HOUSE and Gold Trophy by The Cotton Textiles Export Promo- tion Council (TEXTROCIL) for Highest Exports of Cot- ton Yarn (Counts 50s and below) for the year 2008- 2009 respectively.

On profitability front too, the company substantially im- proved its performance and earned a pre-tax profit of Rs.80.61 crores as against a loss of 25.08 crores in the previous year. After providing for Income tax and deferred tax, the company earned a net profit of Rs.53.49 crores as against loss of 16.63 crores in the previous year. After appropriation of profits as per detail hereinabove, an amount of Rs.45.69 crores has been transferred to General Reserve thereby increasing Companys Reserves to Rs.536.57 crores as on 31st March, 2010.

DIVIDEND

Your Directors are pleased to recommend a dividend @30% (i.e. Rs.1.50 per equity share of Rs.5/- each) on paid up equity share capital for the year ended 31st March, 2010.

The dividend, if approved at the forthcoming Annual Gen- eral Meeting, will be paid out of the profits of the com- pany for the year under reference to all those sharehold- ers whose names shall appear in the Register of Mem- bers on 30th September, 2010 or Register of beneficial owners, maintained by the Depositories as at the close of 17th September, 2010.

DIRECTORS

Pursuant to article 91 of the Articles of Association of the company Dr. O.P. Sahni, Prof. K.S. Maini, Dr.(Mrs.) H.K. Bal and Sh. Kamal Oswal will be retiring by rota- tion at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

In terms of clause 49 of the Listing Agreement with the Stock Exchanges, the details of Directors to be ap- pointed/re-appointed are contained in the accompany- ing Notice of the forthcoming Annual General Meeting.

CREDIT RATING

The Credit Rating Information Services of India Ltd. (CRISIL) has re-confirmed the credit rating "P1+" (Pro- nounced "P one plus") to the Company for short term loan upto Rs.23.50 Crores. This indicate that the de- gree of safety with regard to timely payment of interest and principal on the instrument is very strong.

LISTING OF SECURITIES

The securities of the company are presently listed on the following Stock Exchanges:

i. The Bombay Stock Exchange Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai.

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

The Company has paid listing fee to both the Stock Exchanges for the financial year 2010-2011.

DEMATERIALISATION OF SECURITIES

As the members must be aware that companys se- curities are tradable compulsorily in electronic form w.e.f. 21st March, 2000. Your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository services (India) Limited (CDSL) to facilitate the holding and trading of securities in elec- tronic form. As on date 94% of the share capital of the company has been dematerialised. The shareholders who have not gone in for dematerialisation of shares till date, are requested to opt for dematerialisation of the shares at the earliest.

Further as per SEBI circular no. D&CC/FITTC/CIR- 15/2002 dated 27th December, 2002, Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer and Electronic Connectivity. Ac- cordingly all the shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all commu- nication in respect of Share Transfer, Demat/Remat, Change of Address etc. to our Registrar at below mentioned address:

M/s Alankit Assignments Limited

(Unit: Nahar Spinning Mills Limited)

Alankit House

2E/21, Jhandewalan Extension

New Delhi - 110 055

Telephone No. : (011) 23541234

Fax No. : (011) 41540064

E-mail address : rta@alankit.com

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

AUDIT COMMITTEE

Pursuant to Section 292A(1) of the Companies Act, 1956, Company has already constituted Audit Com- mittee consisting of Sh. Amarjeet Singh as Chairman, Sh. Dinesh Gogna and Dr. O.P. Sahni as members. The committee held four meeting during the year un- der review.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report alongwith the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-III.

ENVIRONMENT FRIENDLY CORPORATE ENTITY

As a responsible corporate entity, your company is sensitive to environment also and is contributing a bit to improve the ecological balance by introducing Or- ganic Cotton yarns & Fair Trade Cotton Yarns certi- fied by Control Union Certificate of Netherlands & F.L.O. of Germany. The company is Registered with Clean Development Mechanism (CDM) Executives Board and United Nations Framework Conventions on climate change (UNFCCC) Secretariat, Bonn, Germany.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review, conform in their entirety to the requirements of the Companies Act, 1956.

The Directors confirm :

i) that in preparation of the Annual Accounts, the applicable Accounting Standards had been followed alongwith proper explanations relating to material departures;

ii) that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of this Act, for safe- guarding the assets of the company and for pre- venting and detecting fraud and other irregularities;

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

COST AUDITORS

The Company appointed M/s Ramanath Iyer & Co., Cost Accountants, New Delhi as Cost Auditors for the year 2009-2010. The Government of India, Minis- try of Corporate Affairs, Cost Audit Branch, New Delhi have approved their appointment. The Cost Audit Re- port of the year ended 31st March, 2010 would be submitted to the Ministry of Corporate Affairs, Cost Audit Branch, in accordance with the requirements of Law.

AUDITORS

M/s Gupta Vigg & Co., the Auditors of your Company shall be retiring at the conclusion of the forthcoming Annual General Meeting and being eligible offer them- selves for re-appointment. The company has obtained from auditors, a certificate as required under Section 224(1-B) of the Companies Act, 1956 to the effect that their reappointment, if made, would be within the limits specified in the said section.

The Audit Committee has recommended their re-ap- pointment.

PUBLIC DEPOSITS

During the year the company has neither accepted nor intend to accept any Public deposit within the meaning of Section 58-A of the Companies Act, 1956 and the rules made there under. There are no out- standing/unclaimed deposit from the public.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 205-C of the Companies Act, 1956 the company has transferred an amount of Rs.9,64,886.74 (Rupees Nine lacs sixty four thou- sand eight hundred eighty six and paise seventy four only) being the amount of unclaimed Dividend for the year 2001-2002 to the Investor Education and Protec- tion Fund.

PARTICULARS OF EMPLOYEES

Information regarding employees in accordance with Section 217(2A) of the Companies Act, 1956 read with the Companies (particulars of employees) Rules 1975 is given in Annexure - I and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY AB- SORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The detailed information as required under section 217(1)(e) of the companies Act, 1956 read with Com- panies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, is enclosed as per Annex- ure-II and forms part of this report.

INDUSTRIAL RELATIONS

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

ACKNOWLEDGEMENT

The Board of Directors of the company wish to place on record their thanks and appreciation to all work- ers, staff members and executives for their contribu- tion to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Direc- tors also place on record their sincere thanks to the shareholders for their continued support, co-opera- tion and confidence in the Management of the Com- pany.



FOR AND ON BEHALF OF THE BOARD

PLACE : LUDHIANA JAWAHAR LAL OSWAL

DATED : 28th July, 2010 (Chairman)

 
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