Mar 31, 2018
DIRECTORS REPORT
Dear Members,
The Directors have pleasure in presenting the Thirty Eighth Annual Report on the affairs of the company for the financial year ended 31st March, 2018.
FINANCIAL PERFORMANCE
Your Companyâs Financial Performance during the year is summarized below:
(Rs. In crores)
PARTICULARS |
CURRENT YEAR |
PREVIOUS YEAR |
Total Income (Operation and other Income) |
2142.19 |
2154.15 |
Less: Total Expenses |
2188.50 |
2086.45 |
Profit/Loss before Tax |
-46.30 |
67.70 |
Less: Tax expenses (Including deferred tax) |
-14.12 |
21.73 |
Net Profit/Loss from continuing operations |
-32.18 |
45.97 |
Other Comprehensive Income |
0.98 |
6.25 |
Profit/Loss for the period |
-31.20 |
52.22 |
INDIAN ACCOUNTING STANDARD
The Ministry of Corporate Affairs (MCA) vide its notification dated February, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of Companies. The Company has adopted Indian Accounting Standards (Ind AS) and the financial statements have been prepared as per the Indian Accounting standard Rules, 2015, as prescribed under Section (133) of the Companies Act, 2013 read with relevant Rules issued hereunder and the other Accounting Principles generally accepted in India. OPERATIONAL REVIEW AND STATE OF AFFAIR We would like to inform you that Company operates in a single segment i.e. "TEXTILE" as such disclosure requirements as per Indian Accounting Standard (Ind AS) 108 issued by the Institute of Chartered Accountants of India, New Delhi, are not applicable.
Before reviewing the operational performance, we would like to inform you that Your Company has been awarded Gold Trophy for the Highest Exports of cotton yarn in Counts 50s and below under Category III by TEXPROCIL for the year 2016-17.
We would also like to inform you that the year gone by, has been a very difficult period for Textile Industry. The increase in the prices of raw cotton without the corresponding increase in the yarn prices coupled with decline in demand for cotton yarn affected the financial performance of the Company. The exchange rate fluctuations and reduction in export incentives further aggravated the problems and affected companyâs performance during the year. Inspite of the challenges, Company has been able to maintain its Top line at Rs. 2142.19 crores as against Rs. 2154.15 Crores in the previous year. However, the export at Rs. 1264.05 Crores has shown a decline of 5.93% as compared to previous year. The profitability of the Company was severely impacted because of the reasons mentioned above and it suffered a loss of Rs. 31.20 crores during the year under review. The Companyâs Reserves (other equity) stands at Rs. 800.50 crores as on 31st March 2018.
In the current year, the outlook for the Textile Industry seems to be Positive but reduction in export incentive and high Interest rates may impact the performance of sector. Your Management expects that company will be able to put up a reasonably good performance in the Current Year.
EXPANSION PLANS
Having regard to the future outlook of the Textile Industry, your Management has decided to go in for expansion plan of 36480 spindles at a capital outlay of Rs. 150 crores, at village Simrai, Distt: Raisen, Madhya Pradesh. The Company has already started taking effective steps for implementing the said expansion plan by March,
2019. The construction work of factory building is progressing as per schedule and the orders for the plant and machinery have also been placed. It is expected that the production from the new unit will start in February/March 2019. On completion of the project, Companyâs spindle capacity will stand increased to 5.34 Lakhs (appx.) spindles.
DIVIDEND
The Board, in its meeting held on 30th May, 2018 has recommended a dividend @ 10% (i.e. Rs. 0.50 per equity shares of Rs.5/- each) on paid up share capital for the year ended 31st March, 2018, out of the reserves of the company. The proposal is subject to the approval of the shareholders at the ensuing Annual General Meeting scheduled to be held on 28th September, 2018. The total dividend declared (excluding dividend distribution tax) for the current year is Rs. 1.80 crores.
The dividend, if approved at the forthcoming Annual General Meeting, will be paid out of the reserves of the Company to all those shareholders whose names shall appear in the Register of Members as on 11th September, 2018 or Register of beneficial Owners, maintained by the Depositories as at the close of 11th September, 2018. INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions Section 124(5) of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all dividend remaining unpaid or unclaimed for period of seven consecutive years is required to be transferred to the Investor Education Protection Fund (IEPF) established by the Central Government. Accordingly, the (DIN 00463866) and Sh. Satish Kumar Sharma, (DIN 00402712) will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment to the members of the Company at the ensuring Annual General Meeting.
Further, Regulation 17 (1A) of SEBI (LODR) (Amendment) Regulations 2018, notified on 9th May, 2018 and which will be applicable w.e.f 1st April, 2019, prescribes that no listed entity shall appoint a person or continue directorship of any person as a non-executive director, who has attained the age of seventy five years unless a Special Resolution is passed to that effect. We would like to inform you that Mr. Jawahar Lal Oswal, who is a Non-Executive Chairman, is going to reach the age of Seventy Five Years on 1st October, 2018. Likewise, Prof K.S.Maini, who is Non-Executive Independent Director who hold office upto 25th September, 2020, has already attained the age of Seventy Five years. Accordingly in compliance of Regulation 17 (1A) of SEBI (LoDr) (Amendment) Regulations 2018, Company has proposed two Special Resolutions in the accompanying Notice of 38th Annual General Meeting, for shareholders approval so that they can continue to be Directors of the Company even after the age of seventy five years. Pursuant to the provision of Section 203 of the Companies Act, 2013, Mr. Dinesh Oswal Managing Director, Mr. Anil Garg, Chief Financial Officer and Mr. Brij Sharma, Company Secretary are the Key Managerial Personnel (hereinafter refer as KMP) of the Company and there has been no change in the KMP since the last fiscal year.
BOARD EVALUATION
The provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandate that a formal annual performance evaluation is to be made by Board of its own performance and that of its Committee and individual Directors, Schedule IV of the Companies Act, 2013 states that performance evaluation of the Independent Director shall be done by Directors excluding the Director being evaluated.
The Board carried out a formal annual performance evaluation as per the criteria/framework laid down by the Nomination and Remuneration Committee and adopted by the Board. The 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, behavior, leadership qualities, level of engagement and contribution, independence of judgment, decision making ability for safeguarding the interest of the Company, stakeholders and its shareholders. The performance evaluation of the
Company has transferred an amount of Rs. 1148740/-(Rupees Eleven Lakhs Forty Eight Thousand Seven Hundred Forty Only) being the amount of unclaimed dividend for the year 2009-2010 to the Investor Education and Protection Fund. Further, unclaimed/unpaid dividend for the year 2010-11 shall be transferred to Investor Protection Fund pursuant to section 124(5) of the Companies Act, 2013 in November, 2018. The Company has already sent letter/notice to the shareholders informing them to claim the unclaimed dividend from the company before such transfer to the Investor Education and Protection Fund.
Besides, as per the provisions of Section 124 (6) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more is required to be transferred to the Demat Account of the IEPF Authority. Accordingly in compliance of the said provision of the Act, 3,69,262 (Three Lakh Sixty Nine Thousand Two Hundred Sixty Two Only) equity shares of Rs. 5/- each, were transferred to the DP/Client ID IN300708/10656671 opened in the name of the Investor Education and Protection Fund Authority. The details of the shareholders whose shares have been transferred to the Demat account of IEPF Authority is also available on companyâs website http://www.owmnahar.com/spinning/pdf/NaharspinListofShareholders200809.pdf. and the same can be accessed through the link: www.iepf.gov.in.
We are pleased to inform that Shareholders can reclaim their subject shares/dividend by making an application to the IEPF Authority in e-Form IEPF-5 as per procedure provided under Rule 7 of the IEPF Rules. The Shareholders can also view the procedure at www.iepf.gov.in.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.
APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Dr. (Mrs.) H. K. Bal and Dr. Y.P. Sachdeva were relieved from the office of Directors on the expiry of their terms of office on 26th September, 2017. Dr. Vijay Asdhir (DIN 006671174) and Dr. Manisha Gupta (DIN 06910242) were appointed as Independent Directors of the Company to hold office for Five (5) Consecutive years for a term upto 25th September, 2022 on 26th September, 2017. We would also like to inform you that pursuant to the provisions of Section 152(6) of the Companies Act, 2013 and Article 117 of Article of Association of the Company, Sh. Jawahar Lal Oswal
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 outcome of the Board Evaluation for the Fiscal 2018 was discussed by the Nomination and remuneration Committee at the meeting held on 29th May, 2018 and the Board at the meeting held on 30th May, 2018
The Board was satisfied with the evaluation process and the approved the evaluation results thereof.
CORPORATE POLICIES:
As per SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the listed Companies are required to formulate certain policies. As a good corporate entity, the Company has already formulated several corporate governance policies and the same are available on the Companyâs website i.e. www.owmnahar.com. The said policies are reviewed periodically by the Board to make them in compliance with the new Regulations/ requirements.
The Company has adopted certain policies, the details of which are given hereunder:
Committee formulated the CSR Policy which was adopted by the Board. The CSR policy outlines the various programmes/projects /Activities to be undertaken by the Company as laid down in schedule VII of the Companies Act, 2013. |
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Whistle Blower Policy |
Pursuant to the provisions of Section 177 of the Companies Act, 2013 Company has formulated and adopted Vigil Mechanism/Whistle Blower Policy for its Directors and employees. The aim of the policy is to provide a channel to the Directors and employees to report their genuine concerns about unethical behavior, Actual or suspected fraud or violation of the code of conduct. |
Policy on Materiality of Related Parties Transactions and Dealing with Related Parties Transactions |
Pursuant to the requirements of regulation 23 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, The Board has approved a policy on Materiality of Related Parties Transactions and Dealing with Related Party Transactions. The Policy regulates the transaction between the Company and its Group Companies and related parties. The policy has been uploaded on Companyâs website and can be accessed at www.owmnahar |
.com/spinning/pdf/RPT-NAHAR- |
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SPINNING.pdf. |
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Insider Trading Policy |
To provide the framework for dealing in the securities of the Company by the insiders, the Board has approved and adopted the following codes in its meeting held on 30th May, 2016 under SEBI(Prohibition of Insider Trading Regulation 2015). The Policy provides for: i. Code of practices and procedures for fair disclosure of unpublished price sensitive information. ii. Code of conduct to regulate, monitor and report trading by insiders. The Codes help to regulate trading in securities by the |
Name of the Policy |
Brief Description |
Appointment & Remuneration Policy |
Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board of Directors in their meeting held on 3rd February, 2015 approved the Policy for Appointment and Remuneration of Directors, Key Managerial Personnel and other employees as recommended by Nomination and Remuneration Committee. The policy formulates the principle and criteria for determining qualification, competence, positive attributes, integrity and independence etc. for Directors, Senior Management Personnel including its Key Managerial Personnel (KMP) and employees of the Company. The Policy also laid down the criteria for determining the remuneration of directors, key manager personnel and other employees. |
Corporate Social Responsibility Policy |
Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR |
Directors and designated employees of the Company. The Codes require pre- clearance for dealing in the Companyâs share and prohibit the purchase and sale of Companyâs shares by the Directors and the designated employees while in possession of u n pub ished price sensit ive information in relation to company and during the period when T rading Window is closed. |
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Policy for Preservation of documents |
Board of directors in their meeting held on 10th February, 2016 has approved and adopted the policy for Preservation of documents. The policy segregates the documents to be preserved permanently and documents to be preserved at least for a period of e i g h t ye ars as p er requirements of applicable laws. |
Archival Policy |
Pursuant to the requirements of Regulation 30(8) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 The Board has approved and adopted the Archival Policy in its Meeting held on 10th February, 201 6. The policy ensure protection, maintenance and arch i val of Com pan yâ s disclosures, documents and records that are placed on Companyâs website i.e. www.owmnahar.com |
Board Diversity Policy |
The Board of Directors in their Meeting held on 12th November, 2014 has approved and adopted the Board Diversity Policy as per th e recommendation of Nomination and Remuneration Committee. The policy envisages diversification of Companyâs Board in respect of age, knowledge, experience and expertise. |
functions of governance and management. The present Board consists of ten members Sh. Jawahar Lal Oswal is non-executive Chairman. Sh. Dinesh Oswal is a Managing Director. There are four Non Executive Directors and five are Independent Directors out of which one Director namely; Dr. (Mrs.) Manisha Gupta is a women director on the Board.
The Companyâs Policy of Appointment and Remuneration includes criteria for determining Qualification, Positive Attributes, Independence of Directors and other matters, as required under sub Section 3 of Section 178 of the Companies Act, 2013. The policy also laid down the criteria for determining the remuneration of directors, key managerial personnel and other employees. The Appointment and Remuneration Policy of the Company is available on the Companyâs website and can be accessed at www.owmnahar.com/spinning/pdf/NSMLAPPOINTMENTANDREMUNERATI ONPOLICY.pdf. There has been no change in the Policy since the last fiscal year. We affirm the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company. SEPARATE MEETING OF INDEPENDENT DIRECTORS
The Companyâs Independent Directors held their meeting on 22nd December, 2017 without the attendance of Non Independent Directors and members of the management. All Independent Directors were present 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 the flow of information between the companyâs Management and the Board which is necessary for the Board to effectively and reasonably perform their duties.
FAMILIARISATION PROGRAMME FOR BOARD MEMBERS
All new Independent Directors inducted into the Board, attend an orientation programme. Further, at the time of appointing a Director, the Company 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 policies/Guidelines as framed by the Company under various statutes and SEBI (Listing Obligations and Disclosure Requirements) Regulations, to familiarize with Companyâs procedure and practices. Further, to update them on regular basis, the Company provides copies of all amendments in Corporate Laws, Corporate Governance Rules and SEBI (Listing Obligations and Disclosure Requirements) Regulations. The details of the Companyâs policy on Familiarization
APPOINTMENT AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and 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 objective of the Policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its
Programs conducted during the year under review for Independent Directors are posted on the Companyâs website and can be assessed at: http://www.owmnahar. com/spinning/pdf/NSML-Familiarization-Program.pdf.
We would like to inform that the Securities Exchange Board of India vide its Notification dated 9th May, 2018 issued Regulations known as SEBI ( Listing Obligation and Disclosure Requirement) (Amendment) Regulations, 2018. Likewise, the Ministry Of Corporate Affairs, New Delhi also notified Companies (Amendment) Act, 2018 on 7th May, 2018 whereby some provisions of Companies Act, 2013 were changed/amended. The Company provided copies of said Regulations as well as Companies (Amendment) Act, 2018 to all the Directors so that they can update their Knowledge in Corporate/SEBI law. Besides, an interactive session was also conducted by Mr. P.S. Bathla, a Practicing Company Secretary with all the Directors to apprise them with the salient features of the SEBI Regulations and Companies (Amendment) Act, 2018.
NO. OF BOARD MEETINGS
During the year under review, the Board of Directors met four times i.e. 30th May, 2017, 12th August, 2017, 14thNovember, 2017 and 10th February, 2018 with a predefined agenda circulated well in advance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. RELATED PARTY TRANSACTIONS
Your Company is engaged in the Manufacture & Exports of yarns and knitted garments. Likewise some Group Companies (which are public limited Companies) are also engaged in the Textile Industry. Because of nature of Industry, sometimes sale/purchase/fabrication jobs, transactions takes place between the Group Companies, in the ordinary course of business at Armâs length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the sEbI (LODR) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc which may have potential conflict of interest with the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with the Rule 8 of the Companies (Accounts) Rules, 2014. However, the transactions entered into with the Group Companies during the year under review, has been given in Notes to the financial statements in accordance with the Accounting Standards.
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 Companyâs policy, all the Group Companies transactions regarding sales/purchase etc. are placed before the Audit Committee as well as the Board, for their information and approval.
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, 2018 is Rs. 1803.27 Lakhs. 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 T ribunals which impact the going concern status and Companyâs 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 form part of the Notes to the Financial Statements provided in the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
As reported in our last report, Company adopted CSR Policy and decided to undertake CSR Activity 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 details of the CSR policy are available on the Companyâs website i.e. www.owmnahar.com.
During the year under review, company could not spend an amount of Rs. 1.07 crores (being the 2% of the average net profits made during the three immediate preceeding financial years on CSR activities) because of the deferment of the Eye Care project by the charitable medical institution. The Company also made efforts to identify projects in other areas. However, it was not able to identify meaningful projects, finalize implementation agencies and the target beneficiaries which would have created a visible impact on the society.
Due to the aforementioned reasons, the Company was not able to spend its CSR amount during the Financial Year 2017-18 till 31st March 2018. The Company remains committed towards the noble cause of social
development and has accordingly, decided to carry forward the unspent amount of Rs. 1.07 Crores for the Financial Year 2017-18 to the next year. M/s Oswal Foundation has already begun helping to run the charitable hospital for the purposes of diagnosis and treatment besides other charitable activities Under CSR already approved.
We may further inform that in July, 2018, the company has issued a cheque amounting to Rs. 2.79 Crores (which includes the amount of Rs. 1.72 crores CSR liability for Financial Year 2016-17 and Rs. 1.07 Crores for the financial year 2017-18), in favour of M/s Oswal Foundation for the purposes of promotion of charitable hospital being run by Mohan Dai Oswal Cancer Treatment & Research Foundation. Thus, with the said transfer of amount, CSR Expenditure Reserve created in the books of accounts stand fully utilized for the purpose of CSR activities.
The disclosure in respect of the existing 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 I" and forms 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 three Non-Executive Directors namely; Prof. K.S. Maini as Chairman, Sh. Dinesh Gogna and Dr. S.K. Singla, 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, 2013, the Company established a Vigil Mechanism process as an extension of Companyâs Code of Conduct whereby any employee, directors, customers, vendors etc., can report the genuine concerns or grievances to the members of the Audit Committee about unethical behavior, actual or suspected fraud or violation of Companyâs 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 victimization of persons who uses such mechanism. The mechanism provides direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy/Vigil Mechanism is also posted on Companyâs Website. The Company has a dedicated e-mail address i.e. www.owmnahar.com/ spinning/pdf/vigil-mechanism.pdf for reporting the genuine concerns.
The Audit Committee regularly reviews the working of the Mechanism. No complaint was received during the year under review.
SUBSIDIARY, JOINT VENTURE OR ASSOCIATES COMPANY
The Company does not have any subsidiaries, joint venture and associates Company during the year under review.
CREDIT RATING
We are pleased to inform that the Credit Rating Information Services of India Ltd. (CRISIL) in their Credit Rating Report of 27th June 2018 has re-affirmed the credit rating "A/Stable" for long term debt instruments/ facilities and "A1" for the short term debt instruments/ facilities. The rating "A" indicates stable and rating "A1" indicates very strong degree of safety regarding timely payment of the financial obligations. Further the CRISIL in their Credit Report of July 2018 has re-affirmed the credit rating "A1"for Rs. 235.00 Million Commercial Paper.
GREEN INITIATIVE
The Ministry of Corporate Affairs (MCA) 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 environmental 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 Email at:-[email protected] 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 BSE 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 2018-19. DEMATERIALISATION OF SECURITIES
As the members must be aware that Companies securities are tradable compulsorily in electronic form w.e.f. 21stMarch, 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 96.67% of the total Equity Share Capital of the Company has been dematerialized. 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:
Alankit Assignments Limited
(Unit: Nahar Spinning Mills Limited)
Alankit House, 1E/13, Jhandewalan Extension
New Delhi - 110 055
Telephone No. : (011) 42541234
Fax No. : (011) 41540064
E-mail address : [email protected] SEBI vide its Gazetted notification dated June 08, 2018 amended the Regulation 40 (1) (b) of SEBI (LODR) Regulations, 2015 whereby it has been provided that except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in Dematerialized form with the Depository. The said amendment shall come into force on the one hundred and eightieth day from the publication of Official Gazette. In view of the above, members are hereby informed that effective 5th December, 2018 requests for effecting transfer of securities in physical form shall not be processed unless the securities are held in the dematerialized form with a depository. Hence all members who are holding equity shares in physical form are requested to go in for dematerialization of securities at the earliest.
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, confirm 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 the directors, in the case of a listed company, 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 the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS & AUDITORâS INDEPENDENT REPORT STATUTORY AUDITORS
We wish to inform you that M/s YAPL & Co, Chartered Accountants, Firm Registration no (017800N), were appointed as Statutory Auditors by the Members of the Company, for a term of five consecutive years starting from the conclusion of the 37th Annual General Meeting upto the conclusion of the 42nd Annual General Meeting of the Company in the calendar year 2022. As per the proviso of section 139 (1) the matter relating to appointment of the Auditors was to be ratified by the Members at the every Annual General Meeting of the Company. The Ministry of Corporate Affairs vide its notification dated 07 May, 2018, has omitted the first proviso of section 139 of the Principal Act in sub section (1). Accordingly the Board has not proposed any resolution for the ratification of Appointment of Auditors by the Shareholders.
AUDIT REPORT
The Statutory Auditors have submitted Audit Report on the Financial Statements of the Company for the Accounting year ended 31st March, 2018. 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 from the Board.
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 Companyâs business Activities have been included within the purview of Cost Audit requirement. Accordingly, the company is maintaining Accounts and Costing Records. Further, the Board of Directors on the recommendation of Audit Committee has also appointed M/s Ramanath Iyer & Co. (Firm Registration No. 000019), Cost Accountants, as Cost Auditors of the Company for financial year 2018-19 and has fixed a remuneration of Rs.1.75 Lakhs (Rupees One Lakh Seventy Five Thousand Only) plus applicable taxes and reimbursement of out of Pocket expenses incurred, subject to the ratification of the members as per the provision of Section 148(3) of the Companies Act, 2013 and Rules 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 for your approval.
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, Practicing Company Secretaries, having Certificate of Practice No. 2585 as Secretarial Auditor to conduct Secretarial Audit for the financial year 2018 2019.
M/s. P.S. Bathla & Associates, Practicing Company Secretaries has carried out the Secretarial Audit for the financial year ended March 31, 2018 and their Secretarial Audit Report in Form No. MR-3 is annexed hereto as Annexure II and from part of this Report.
The Report is self explanatory and requires no comments from the Board.
BUSINESS RISK MANAGEMENT
The Company has laid down Risk Management Policy. The Policy aims to identify, evaluate, manage and monitor all types of risks 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 SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Your Company is operating in Textile segment and has identified certain risks which may affect the performance of the Company. These are operational risks such as fluctuation in cotton prices, fluctuation in foreign exchange rates, Labour problems and regulatory risks such as change in Government Policy with respect to Textile Industry etc. The Companyâs Risk Management Policy aims to suggest the steps to be taken to control and mitigate the risk associated with the Companyâs Textile Business. We are of opinion that none of identified risk is such that which may threaten the existence of the Company. INTERNAL FINANCIAL CONTROL AND SYSTEMS The Company is maintaining an efficient and effective system of Internal Financial Control for facilitation of speedy and accurate compilations of financial statements. The Companyâs Internal Financial Control System is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliances with procedures, laws and regulations. The Companyâs Internal 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).
Mr. Sandeep Gupta Chartered Accountant, resigned w.e.f. 31st March, 2018 from Internal Auditor ship of the Company. The Board accepted his resignation. Further, the Board pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, appointed S.C. Vasudeva & Co., Chartered Accountants as Internal Auditors of the Company for the financial year 2018-19. The Company is also having Internal Audit Department to test the adequacy and effectiveness of Internal Control Systems lay down by the Management and suggests improvement in the systems. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board. During the year, Companyâs Internal Controls were tested and no reportable weakness in the system was observed.
Apart from the above, an Audit Committee consisting of three Non Executive Directors has been constituted. All the significant audit observations and follow up Actions thereon are taken care of by the Audit Committee. The Audit Committee also oversees and reviews the adequacy and effectiveness of Internal Control in the company. 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.
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 unclaimed as at the end of the year : Nil
(iii) Default in repayment of deposits and deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013 : N.A.
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 there under. The Company has complied with the provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2017-18, the Company has not received any complaints on sexual harassment and hence no compliant remains pending as of 31st March,
2018.
ANNUALRETURN
The Extract of Annual Return of the Company, pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2017-18 in the Form MGT-9 has been uploaded on Companyâs website at http://www.owmnahar.com/spinning/pdf/MGT-9.pdf as the requirement of attaching the extract of Annual Return with Boardâs Report has been done away by Section 36 of Companies (Amendment) Act, 2017 notified by Ministry of Corporate Affairs, New Delhi, vide its Notification dated 31st July, 2018.
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 III" and form part of this report.
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 III annexed hereto and form part of this report.
During the year under review, Sh. Dinesh Oswal, Managing Director of the Company has been paid a remuneration of Rs. 58371178/- for financial year 2017 18, as per the approval of the Central Government vide its letter no. SRN G41303728/2017-CL-VII dated 26th December; 2017.He has also been paid arrears of salary amounting to Rs. 10633250/- for the year 2016-17 during the year under review.
No other employee 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.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO
The detailed information as required under Section 134(3) of the Companies Act, 2013 read with Sub Rule 3 of the Rule 8 Companies (Accounts) Rules, 2014, is enclosed as per Annexure-IV and forms part of this report.
REPORT ON THE CORPORATE GOVERNANCE
Your Company continues to follow the principles of good 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 part C of Schedule V of the SEBI (Listing Obligation and disclosure Requirements) Regulations, 2015 is annexed hereto as Annexure-V and form part of this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 is enclosed as per Annexure-VI 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: 6th August, 2018 (Chairman)
DIN: 00463866
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. [email protected] 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:- [email protected] or [email protected]. 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 : [email protected]
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:- [email protected] or [email protected]. 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 : [email protected]
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:- [email protected] or
[email protected]. 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 : [email protected] 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:- [email protected] or
[email protected]. 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 : [email protected]
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:- [email protected] or [email protected]. 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 [email protected]
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 : [email protected]
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)