Nahar Capital & Financial Services Ltd

DIRECTORS' REPORT

Dear Members,

Your Directors have immense pleasure in presenting the NINETEENTH ANNUAL REPORT on the affairs of the Company for the financial year ended 31^st March, 2024. FINANCIAL PERFORMANCE

Your Company's financial performance during the year is summarized below:

INDIAN ACCOUNTING STANDARD

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind- AS) as notified by Ministry of Corporate Affairs (MCA) under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and applicable guidelines issued by the Reserve Bank of India (RBI). The financial statements have been prepared in accordance with the format prescribed for a NonBanking Financial Company (NBFC) in compliance of the Companies (Indian Accounting Standards) Rules, 2015, in Division III of Notification No. GSR 1022 (E) dated October 11, 2018, issued by the Ministry of Corporate Affairs.

FINANCIAL PERFORMANCE REVIEW AND STATE OF AFFAIRS

We would like to inform you that as per Ind-AS 108 'Operating Segments', Company's activities can be classified under two segments namely; Investment/ Financial Activities and Real Estate Segment. The Company has made reporting of both the segments i.e. Investment/Financial Activities and Real Estate Activities in the financial statements for the year ended 31^st March, 2024.

Before reviewing overall performance of the company, we would like to brief you regarding the working performance of each segment, which is as under:-

INVESTMENT/FINANCIAL SEGMENT

The Company's primary business activities are 'Investment/Financial Activities' comprising of Long Term/Strategic Investments and Short Term/Trading Investments. Besides, the Company's business activities also include lending activities which is primarily to Group Companies and Affiliates. The Company makes investments in equity and debt securities, both in Primary and Secondary Market directly as well as through Mutual Funds, Portfolio Management Services, Alternative Investment Funds etc. Due to better financial markets, higher interest rate scenario and robust management decisions, your Company performed reasonably well and during the year under review, the Company achieved net revenue of Rs. 4983.16 Lakhs as compared to Rs. 3552.31 Lakhs in the previous year and earned a Profit (before tax and finance cost) of Rs. 4710.75 Lakhs as compared to Rs. 3307.99 Lakhs in the previous year from investment/financial activities.

REAL ESTATE SEGMENT

We would like to inform you that during the year under review the real estate segment performed well and achieved net revenue of Rs. 622.87 Lakhs as compared to Rs. 458.99 Lakhs in the previous year and earned a Profit (before tax and interest cost) of Rs. 506.12 Lakhs as compared to Rs. 348.72 Lakhs in the previous year.

OVERALL PERFORMANCE

Your Company performed reasonably well during the FY 2023-24 as enumerated in the table given above. We would brief you regarding the financial performance of the Company on standalone as well as consolidated basis, which is as under:-

STANDALONE FINANCIAL PERFORMANCE

On standalone basis, the Company earned operating/other income of Rs. 5606.03 Lakhs in the current year as against Rs. 4011.30 Lakhs in the previous year depicting a handsome increase of 39.76%. It earned a profit before tax of Rs. 4642.36 Lakhs as against Rs. 3093.66 Lakhs in the previous year depicting an impressive increase of 50.06%.

CONSOLIDATED FINANCIAL PERFORMANCE

Pursuant to the requirements of Section 129(3) of the Companies Act, 2013, the Company has consolidated the Financial Statements for the year ended 31st March, 2024 in respect of its Associate Companies namely; M/s. Nahar Spinning Mills Ltd. and M/s. Nahar Poly Films Ltd.

On consolidated basis, the Company earned lower operating/other income of Rs. 5177.71 Lakhs during the year under review as against Rs. 3381.98 Lakhs in the previous year. It earned a net profit after tax of Rs. 1176.57 Lakhs for the year ended 31.03.2024 as against Rs. 10671.79 Lakhs in the previous year ended 31.03.2023.

TRANSFER TO RESERVE

The Company has transferred an amount of Rs. 25

Crores to the General Reserve during the year under review and thus Company's General Reserve stands increased to Rs. 618.21 Crores as on 31^st March, 2024.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

The Board, considering the Company's performance for the financial year ended 31^st March, 2024, has recommended a dividend of Rs. 1.50/- (i.e. 30%) per equity shares of Rs. 5/- each on paid up equity share capital for the year ended 31^st March, 2024. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held on 25^th September, 2024. The total dividend involved a cash outflow of Rs. 251.19 Lakhs.

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 name shall appear in the Register of Members as on 6^th September, 2024 or Register of Beneficial Owners, maintained by the Depositories as at the close of 6^th September, 2024. Further, as per the Finance Act, 2020 dividend income is taxable in the hands of members and the Company is required to deduct tax at source (TDS) from the dividend payable to the members at the prescribed rates as per the Income Tax Act, 1961.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) 2015, a Dividend Distribution Policy setting out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company, is available on the website of the Company at http://owmnahar.com/nahar_cf/pdf/Dividend_Distributio n_Policy.pdf.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all dividends which remain unpaid/ unclaimed for a period of seven years shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government. Accordingly, the Company has transferred an amount of Rs. 4,81,819.00/- (Rupees Four Lakhs Eighty One Thousand Eight Hundred and Nineteen only) being the amount of unclaimed dividend for the year 2015-16 to the Investor Education and Protection Fund in November, 2023. Further, unpaid dividend for the year 2016-17 shall be transferred to Investor Education and Protection Fund pursuant to Section 124 of the Companies Act, 2013 in November, 2024. The Company has also sent letter/notice to the shareholders informing them to claim the unclaimed dividend from the Company before transferring the same to the Investor Education and Protection Fund.

Further, pursuant to the provisions of Section 124(6) of the Companies Act, 2013 read with Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, 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, during the year under review, the Company has transferred 8,662 (Eight Thousand Six Hundred Sixty Two) equity shares of Rs. 5/- each, to the demat account of IEPf Authority having DPID/Client ID: IN300708/10656671. Details of shares transferred to the IEPF Authority are available on the website of the Company and the same can be accessed through the link: http://www.owmnahar.com/nahar_cf/pdf/List-of- Shareholders-2015-16.pdf. The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in.

The shares as well as unclaimed dividends transferred to IEPF Authority can be claimed back by making an application to the IEPF Authority in e-Form IEPF-5 as per procedure provided under Rule 7 of the IEPF Rules. Concerned members/investors are advised to visit the web link: http://mca.gov.in for refund of shares and/or dividend from the IEPF Authority.

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 SEBI (LODR) Regulations, 2015.

• Re-appointment of Director

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013 and Article 117 of the Articles of Association of the Company, Mr. Jawahar Lal Oswal (DIN: 00463866) and Mr. Kamal Oswal (DIN: 00493213), Non-executive Directors of the Company, will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The Board has recommended their re-appointment to the members of the Company at the ensuing Annual General Meeting.

• Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Dinesh Oswal, Managing Director, Mr. H.R. Kapoor, Chief Financial Officer and Mrs. Anjali Modgil, Company Secretary, are the Key Managerial Personnel (hereinafter referred as KMP)

of the Company. There has been no change in the KMP since the last fiscal year.

FIT AND PROPER POLICY

The Directors have adopted a 'Fit and Proper' Policy for ascertaining the 'fit and proper' criteria to be adopted at the time of appointment of directors and on a continuing basis, pursuant to the Non Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015 issued by the Reserve Bank of India.

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 Evaluation is to be made by Board of its own performance and that of its Committees 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 of the Company and adopted by the Board. The evaluation was carried out through 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, bahaviour, 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 outcome of the Board Evaluation for the Fiscal 2024 was discussed by the Nomination and Remuneration Committee at the Meeting held on 27^th May, 2024 and the Board at its Meeting held on 29^th May, 2024.

The Board was satisfied with the evaluation process and 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, the Company has already formulated several corporate governance policies and the same are available on the company's website i.e. www.owmnahar .com. The said policies are reviewed periodically by the Board to make them compliant with the new Regulations /requirements.

The company has adopted certain policies, the details of which are given hereunder:

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. The present Board consists of ten members. Mr. Jawahar Lal Oswal is Non-Executive Chairman. Mr. Dinesh Oswal is a Managing Director. There are four Non Executive Directors and five are Independent Directors out of which one Director namely; Dr. Manisha Gupta is a woman Independent Director on the Board.

The Company's Policy of Appointment and Remuneration includes criteria for determining qualification, positive attributes, independence of directors and other matters as required under subsection 3 of Section 178 of the Companies Act, 2013. The Policy also laid down the criteria for determining the remuneration of directors, key managerial personnel and other employees. The Nomination & Remuneration Policy of the Company is available on the Company's website and can be accessed at http://owmnahar.com/ nahar_cf/pdf/NAHARCAPAPPOINTMENTANDREMUN ERATIONPOLICY.pdf. There has been no change in the Policy since the last fiscal year. We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

BOARD MEETINGS

During the year under review, the Board of Directors of the Company met four times i.e. 30^th May, 2023, 9^th August, 2023, 8^th November, 2023 and 10^th February, 2024 with a predefined agenda circulated well in advance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Company's Independent Directors met on 15^th November, 2023, without the attendance of Non-Independent Directors and members of Management. All the 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 Director and Non-Executive Directors;

iii. Assessed the quality, quantity 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 PROGRAMS 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 the Independent Directors are provided with all the Policies/Guidelines as framed by the Company under various statutes and SEBI Regulations, to familiarize them with Company's procedures and practices. Further, to update them on a regular basis, the Company provides copies of all the amendments in Corporate Laws, Corporate Governance Rules and SEBI Regulations. The details of Company's Policy on Familiarization Programs for Independent Directors are posted on the website of the Company and can be accessed at: http://www.owmnahar.com/nahar_cf/pdf/familiarization- program-2024.pdf.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

During the year under review, transactions entered into with Related Parties/Group Companies/Associate Companies are given in the Notes to the Financial Statements which were in the ordinary course of business at arm's length basis and in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No any contract or arrangement was entered into with the Related Parties as per Section 188(1) of the Companies Act, 2013 during the financial year ended 31^st March, 2024. Accordingly, the disclosure of contracts or arrangement with related parties referred to in Section 188(1) as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company. However, as per Company's policy, all the transactions with the Group Companies/Related Parties are placed before the Audit Committee as well as the Board, for their information and approval.

We would like to inform you that during the year, 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 with the interest of the Company at large.

MASTER DIRECTION-RESERVE BANK OF INDIA (NON-BANKING FINANCIAL COMPANY-SCALE BASED REGULATION) DIRECTIONS, 2023

RBI vide its circular dated October 19, 2023, has introduced Reserve Bank of India (Non-Banking Financial Company- Scale Based Regulation) Directions, 2023 (the 'Master Directions'). As per the Master Directions, regulatory structure for NBFCs shall comprise of four layers based on their size, activity, and perceived riskiness. NBFCs in the lowest layer shall be known as NBFC-Base Layer (NBFC-BL). NBFCs in middle layer and upper layer shall be known as NBFC-Middle Layer (NBFC-ML) and NBFC - Upper Layer (NBFC-UL), respectively. RBI may, based on the size of an NBFC, classify some of them as NBFC- Top Layer.

In accordance with the Master Directions, NBFCs not availing public funds and not having any customer interface are classified as a Base Layer of the regulatory structure. Considering the Company's nature of business, your Company is categorized as NBFC- Base Layer (NBFC-BL).

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

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this Report.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31^st March, 2024 is Rs. 837.31 Lakhs. During the year under review, the Company has neither issued shares with differential voting rights as to dividend, voting or otherwise nor granted 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 Notes to Financial Statements. The Company being a Non Banking Financial Company registered under Chapter IIIB of the Reserve Bank of India Act, 1934, thus the provisions of Section 186 (except Sub Section 1) of the Companies Act, 2013 in respect of lending and investment activities, are not applicable to the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Company adopted CSR Policy and decided 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 details of the CSR Policy are available on the company's 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 as amended, is annexed hereto as "Annexure I" and forms part of this Report.

AUDIT COMMITTEE

As required under Section 177 of the Companies Act, 2013, Company has already constituted an Audit Committee consisting of three Non-executive Directors under the Chairmanship of Dr. Vijay Asdhir, Mr. S.K. Sharma and Dr. Roshan Lal Behl as members as on 31^st March, 2024. Mrs. Anjali Modgil is the Secretary of the Committee. The Committee held four meetings during the year under review. During the year under review, the Board has accepted all the recommendations of the Audit Committee.

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 Company's Code of Conduct whereby any employee, directors, customers, vendors etc., can report the genuine concerns or grievances to the Compliance Officer or members of the Audit 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 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 Company has a dedicated e-mail address i.e. whistleblowerncfs@ owmnahar.com for reporting the genuine concerns. The Whistle Blower Policy/Vigil Mechanism is also posted on Company's Website and can be accessed at http://owmnahar.com/nahar_cf/pdf/vigil_mechanism.pdf

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

CREDIT RATING

Your Directors are pleased to inform that M/s. ICRA Limited vide their Report dated July 24, 2024 has reaffirmed the rating "[ICRA] A1+" (pronounced ICRA A one plus⁺) assigned to the proposed Short Term Debt/Commercial Paper Programme of the Company for Rs. 25 Crores. This rating is considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk. This is the highest credit quality rating by the ICRA to the Short Term Debt/Commercial Paper and it reflects the company's sound financial discipline and prudence.

SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES

The Company does not have any subsidiary and joint venture company. The Company has two Associate Companies viz. M/ s. Nahar Spinning Mills Ltd. and M/s. Nahar Poly Films Ltd. for the year under review.

CONSOLIDATED FINANCIAL STATEMENT

As per Companies Act, 2013, the Company has two Associate Companies viz. M/s. Nahar Spinning Mills Ltd. and M/s. Nahar Poly Films Ltd. Pursuant to the requirements of Section 129(3) of the Companies, Act, 2013, the Company has consolidated the financial statements in respect of above said two Associate Companies for the financial year ended 31^st March, 2024.

Further, a report on the performance and financial position of each of the Associate Company as per the Companies Act, 2013 in the Form AOC-1 is annexed to the Financial Statements for the year ended 31.03.2024.

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, 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, Company propose to send documents such as Notice 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: secncfs@owmnahar.com or gredressalncfsl@ 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 listed on the following Stock Exchanges:

1. The BSE Ltd., 25^th Floor Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001.

2. The National Stock Exchange of India Ltd., Exchange Plaza, Plot No.C/1, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai-400051.

The Company has paid listing fee to both the Stock Exchanges for the financial year 2024-25.

DEMATERIALISATION OF SHARES

Your Company has established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd (CDSL) to facilitate the holding and trading of securities in electronic form. As on 31^st March, 2024, 99.13% of the total Equity Share Capital of the Company has been dematerialized.

Pursuant to Regulation 40 (1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities shall not be processed unless the securities are held in dematerialized form with the Depository. Hence, all members, who are holding equity shares in physical form, are requested to go in for dematerialization of securities at the earliest.

Further, the 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/transmission, demat/remat, change of address etc. to our registrar at below mentioned address:

M/s. Alankit Assignments Ltd

(Unit Nahar Capital and Financial Services Ltd)

Alankit House,

4E/2, Jhandelwalan Extension

NEW DELHI-110055

Telephone No : (011) 42541234

Fax No. : (011)42541201

E-mail Address : rta@alankit.com

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

BUSINESS RISK MANAGEMENT

As per the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Non-Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015, the Company has constituted the Risk Management Committee with three members namely; Dr. Roshan Lal Behl, as Chairman and Dr. Rajan Dhir and Mr. Dinesh Gogna as members. The Company being essentially an Investment Company, its main source of income is dividend income/income receivable on investments in Equity Shares/Debentures/Bonds/deposits made and held by it in other companies and Mutual Funds. The financial business is always prone to risks of capital market fluctuations and economic cycle. The main term of reference of the Committee is to review and monitor the risk associated with Company's business and suggest measures for mitigation/management of the same as per Company's Risk Management Policy. The Risk Management Committee met four times during the financial year under review.

Further, to monitor and manage the risk associated with the Company's investment business, the Company has developed and implemented a Risk Management Policy including therein identification and risk mitigation measures. The Policy is also posted on Company's website i.e. www.owmnahar.com.

DIRECTORS RESPONSIBILITY STATEMENT

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

The Directors confirm:

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

ii) that they have selected such accounting policies and applied them consistently and made judgements 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 and 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 the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting any fraud and other irregularities;

iv) that they have prepared the Annual Accounts on a going concern basis;

v) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Statutory Auditors: The members at the Annual General Meeting held on 24th August, 2022, appointed M/s. Gupta Vigg and Co., Chartered Accountants (Firm Registration No. 001393N) as Statutory Auditors of the Company for a term of five consecutive years starting from the conclusion of the 17^th Annual General Meeting upto the conclusion of 22^nd Annual General Meeting of the Company to be held in the year 2027.

M/s. Gupta Vigg & Co., Chartered Accountants, have given declaration to the effect that they have not incurred any disqualification as mentioned under Section 141(3) of the Companies Act, 2013 after their appointment as Statutory Auditors of the Company.

Audit Report: M/s. Gupta Vigg and Co., Chartered Accountants, the Statutory Auditors have submitted the Audit Report on the Financial Statements of the Company for the accounting year ended 31^st March, 2024. There were no qualifications, reservations, adverse remarks or disclaimers in the Report. The observations and comments given by Auditors in their Report read together with the Notes to the Financial Statements are self explanatory and require no comments.

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

Secretarial Auditor:

The Board pursuant to the provisions 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 and Associates, a Practicing Company Secretaries, having Certificate of Practice No. 2585 to conduct the Secretarial Audit of the Company for the financial year 2024-25.

M/s. P.S. Bathla and Associates, Practicing Company Secretaries have carried out the Secretarial Audit for the financial year ended March 31,2024 and submitted their Secretarial Audit Report in the Form No. MR-3 which is annexed herewith as Annexure II and form part of this Report.

The Report is self explanatory and requires no comments.

SECRETARIAL STANDARDS

The Company has complied with the applicable

Secretarial Standards i.e. SS1 and SS2 relating to the Meetings of Board of Directors and General Meetings, respectively, issued by the Institute of Company Secretaries of India.

INTERNAL FINANCIAL CONTROL AND SYSTEM

The Company is maintaining an efficient and effective system of Internal Financial Control for the facilitation of speedy and accurate compilation of financial statements. The Company's internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations and procedures. Further, the statutory auditors of the Company have verified the systems and processes and confirmed that the internal financial controls system over financial reporting is operating effectively.

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Company has also appointed M/s. Piyush Singla & Associates, Chartered Accountant as Internal Auditor of the Company. The Internal Auditor tests the adequacy and effectiveness of Internal Control Systems laid down by the management and to suggest improvement in the systems. They also identify and address technology and IT-related security issues commensurate with the nature and complexities of its operations. The Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board which also reviews the adequacy and effectiveness of the internal controls in the Company. During the year, Company's Internal Controls were tested and no reportable weakness in the system was observed.

The company's Internal Financial Control System commensurate with the nature of its business and the size of its operations. In order to further strengthen the Internal control system and to automate the various processes of the business, company is making use of SAP S4 HANA application, which is based on SAP HANA database. It keeps all the data in memory which results in data processing that is magnitude faster than that of disk based system, allowing for advanced, real time analytics. The Asset Liability Management (ALM) Policy and Risk Management Policy concerned with the effective risk management in various Portfolios are also framed by the Company.

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.

ANNUALRETURN

The Annual Return of the Company pursuant to Section 92 of the Companies Act, 2013 for the financial year 2023-24 in the Form MGT-7 has been available on the Company's website at: http://www.owmnahar.com/nahar _cf/pdf/annual-return-2024.pdf

PUBLIC DEPOSITS

The Company is registered as Non-deposit taking NonBanking Financial Company with RBI. The Company has not accepted any Public Deposit within the meaning of Section 73 of 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.

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 Annexure III annexed hereto and form part of this Report.

During the year under review, Mr. Dinesh Oswal, Managing Director of the Company, has been paid remuneration of Rs. 4,91,19,137/- (Rupees Four Crores Ninety One Lakhs Nineteen Thousand One Hundred Thirty Seven only) as approved by shareholders vide their Special Resolution dated 29^th September, 2021. Mr. Dinesh Oswal is 59 years of age. He is a Commerce Graduate and has business experience of more than 39 years in textile industry and financial expertise. He is employed on contractual basis for five years w.e.f 1^st January, 2022 to 31^st December, 2026. Before joining the Company, he was employed with M/s. Oswal Woollen Mills Ltd. as Commercial Manager. His shareholding in the Company is 64091 equity shares of Rs. 5/- each. He is related to Mr. Jawahar Lal Oswal, Director/Chairman and Mr. Kamal Oswal, Director of the Company.

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.

MAINTENANCE OF COST RECORDS

The maintenance of cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013 is not applicable to the Company as the Company is a Non Banking Financial Company.

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. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2023-24, the Company has not received any complaint on sexual harassment and hence no complaint remains pending as of 31^st March, 2024.

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

Particulars with respect to the Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules 2014, are not applicable, as the company is a NonBanking Financial Company.

REPORT ON THE CORPORATE GOVERNANCE

Your Company continues to follow the principles of good Corporate Governance. The Company has constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report for the year ended 31^st March, 2024 along with Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith as Annexure IV and form part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year ended 31^st March, 2024 as stipulated under the Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed as per Annexure-V and form part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report for the year ended 31^st March, 2024 describing the initiatives taken by the listed entity from an environmental, social and governance perspective in the format as specified by the Board as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been available on the Company's website at: http://www.owmnahar.com/nahar_cf /pdf/BRSR-2023-24.pdf.

HUMAN RESOURCE/INDUSTRIAL RELATIONS

The Company recognizes human resource as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company is of firm belief that the Human Resources are the driving force that propels a Company towards progress and success. The Company has a team of able and experienced professionals to look after the affairs of the Company. The Company's employees at all levels have extended their whole hearted co-operation for the excellent performance of the Company.

ACKNOWLEDGEMENT

The Board of Directors of the Company wish to place on record their gratitude and appreciation to all workers, staff members and executives for their contribution to the operations of 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.