Dear Members,

Your directors have pleasure in presenting their 39th Annual Report together with the audited financial statements for the financial the year ended 31st March, 2023.

1. FINANCIAL RESULTS

The Company's financial performance for the year ended 31st March, 2023 is summarized below:

2. PERFORMANCE REVIEW

The Company operates in two Business segments i.e. Textile and Sugar as per Indian Accounting Standard (AS)-108 (Operating Segment).

i) Textile: The textile division accounts for 88.60% (including inter-segment) of the total turnover of the company for the year ended 31st March, 2023. The Business wise performance of this segment is as under:

a. Yarn: The Company has produced 39245 MTs of yarn as against 60408 MTs in the previous year.

b. Fabric: The Company has produced 504.93 lacs meters of fabrics (both grey and processed) as against 572.45 lacs meters in the previous year.

The total turnover of this segment (Yarns and

Fabrics) has decreased to Rs. 1562.83 crores as against Rs. Rs. 1865.41 crores in the previous year showing a decrease of 16.22 %.

ii) Sugar: The Company has produced 4,31,230 Qtls. of sugar as against 4,12,630 Qtls. in the previous year at a Recovery rate of 10.00% (previous year 9.83%).

The total turnover of this segment has increased to Rs. 205.61 crores as against Rs. 123.73 crores in the previous year showing an increase of 66.17%.

Overall Performance (Standalone/Consolidated)

We wish to inform you that during the year under review on standalone basis, the company has achieved operational income of Rs. 1773.87 crores as against Rs. 2006.36 crores showing a decrease of 11.59% over the previous year. The company has earned Profit before depreciation, finance cost and tax of Rs. 188.26 crores as against Rs. 320.98 crores in the previous year. After providing for Depreciation of Rs. 48.33 crores (previous year Rs. 49.84 crores), finance cost of Rs. 37.66 crores (previous year Rs. 55.59 crores) and Tax Expenses of Rs. 21.83 crores (previous year Rs. 58.74 crores) (inclusive of Deferred Tax) the Profit after tax for the year comes to Rs. 79.27 crores as against Profit of Rs. 156.81 crores in the previous year.

We wish to inform you that during the year under review on consolidated basis, the company has achieved operational income of Rs. 1773.87 crores as against Rs. 2006.36 crores showing a decrease of 11.59% over the previous year. The company has earned Profit before depreciation, finance cost and tax of Rs. 188.26 crores as against Rs. 320.98 crores in the previous year. After providing for Depreciation of Rs. 48.33 crores (previous year Rs. 49.84 crores), finance cost of Rs. 37.66 crores (previous year Rs. 55.59 crores), Share of Profit/(Loss) of Associates of Rs. (34.12) lacs (previous year Rs. 33.28 lacs) and Tax Expenses of Rs. 21.84 crores (previous year Rs. 58.92 crores) (inclusive of Deferred Tax) the Profit after tax for the year comes to Rs. 78.92 crores as against Profit of Rs. 156.97 crores in the previous year.

During Financial year 2022-23 an uncertain business environment prevailed in the Textile industry and it continues into the current financial year too. The subdued demand of textile products is a major concern for textile industry and this would affect the performance of the Company.

3. AMALGAMATION

The Hon'ble National Company Law Tribunal, Chandigarh Bench, Chandigarh has sanctioned the Scheme of Arrangement for Amalgamation of Cotton County Retail Limited (Transferor Company) with Nahar Industrial Enterprises Limited (Transferee Company) and their respective shareholders and creditors vide its Order dated 21.02.2023. The Scheme becomes effective upon the filing of certified copy of the NCLT Order with Registrar of Companies, Chandigarh on 18.03.2023. Consequent to amalgamation, the Transferor Company ceased to be the Associate of the Company.

4. TRANSFER TO RESERVES

Your company has transferred Rs. 7987.66 lacs [previous year Rs. 15416.62 lacs] to the General Reserves and thus company's Reserves (Other Equity) stand increased to Rs. 90673.15 lacs as on 31.03.2023 as against Rs. 84828.23 lacs as on

31.03.2022.

5. CREDIT RATING

During the year, the Rating agency CRISIL Limited vide its letter dated April 10, 2023 has accorded the Long Term Rating of total bank loans facilities 'CRISILA-/Stable' and Short Term Rating 'CRISIL A2+'.

6. DIVIDEND

In order to retain the profits of the company, your directors do not recommend any dividend for the financial year ended on 31st March, 2023. The requirement of formulating a Dividend Distribution Policy as per Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the company.

7. INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act 2013 and rules framed there under, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid account is required to be transferred to Investor Education and Protection Fund (IEPF) of the Central Government. The Company has already transferred the amount of unclaimed dividend for the year 2013-14 to the IEPF. Members who have not yet en-cashed or claimed the dividends for the year 2015-16 and 2016-17 are requested to refer to Note No. 7 of the Notice of AGM for updating the KYC details at the earliest and for claiming the dividend relating to aforesaid two years.

In terms of the requirements of Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended ('the Rules') the Company is required to transmit the Shares in respect of which the dividend has remained unpaid or unclaimed for a period of seven consecutive years to the IEPF Account. Members are requested to take note of the same and claim their unclaimed dividend immediately to avoid transmission of the underlying shares to IEPF Account. The shares transmitted to the IEPF Account can be claimed back by the concerned members from the IEPF authority after complying with the procedure prescribed under the rules.

8. SHARE CAPITAL

Pursuant to the Scheme of Amalgamation approved by the Hon'ble National Company Law Tribunal, Chandigarh the Authorized capital of Cotton County Retail Limited has been merged with the Company. Accordingly the authorized Capital of the Company stands increased to Rs. 205,50,00,000/- divided into 10,00,00,000 equity shares of Rs. 10/- each and 1,05,50,000 - 5.5% Non-Convertible Non-Cumulative Redeemable Preference Shares of the face value of Rs. 100/- each (Preference Shares). The Company allotted 33,70,440 fully paid-up Equity Shares of Rs. 10/- each to the eligible shareholders of the Transferor Company. 76,20,000 Preference Shares held by the Transferor Company in the Transferee Company stands extinguished. 1,02,28,441 Equity Shares of Rs. 10/- each of the Transferor Company held by the Transferee Company stands cancelled. The paid up Share Capital of the Company as at 31 March, 2023 was Rs. 83,20,55,810/- consisting of Equity Share Capital of Rs. 43,20,55,810/- divided into 4,32,05,581 Equity Shares of the face value of Rs. 10/- each and Preference Share Capital of Rs. 40,00,00,000/- divided into 40,00,000 5.5% Non-Convertible Non-Cumulative Redeemable Preference Shares of the face value of Rs. 100/- each (Preference Shares).

During the year the Company has not issued any shares with differential voting right nor has granted any stock options or sweat equity. As on 31st March, 2023 none of the Promoters / Directors of the Company hold instruments convertible into equity shares of the Company.

9. DEPOSITS

During the year, the Company has not accepted any deposit from the public. As such there are no outstanding deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

INVESTMENT BY THE COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements.

POSITION OF THE COMPANY

No changes and commitments affecting the financial position of the company have occurred during the year under review as well as the period between the end of financial year till the date of this report.

Appointment and change in Directors

• lIn accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association Sh. Jawahar Lal Oswal

(DIN: 00463866) and Sh. Dinesh Oswal (DIN: 00607290), Directors of the Company will be retiring by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. Accordingly, the requisite resolution(s) are proposed at the ensuing Annual General Meeting for approval.

• During the Current year, Sh. Ved Parkash Gaur (DIN: 02439897), Independent Director of the Company, resigned from the Directorship of the Company with effect from 15.07.2023. As such he ceased to be director of the Company and Chairperson/ Member of the Committees of the Board of Directors. The board places on record its appreciation for the valuable contribution received from him during his tenure with the company as an Independent Director.

• Pursuant to the provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and Companies (Appointment & Qualifications of Directors) Rules, 2014, the Company has proposed the appointment of Dr. Anchal Kumar Jain (DIN: 09546925) as an Independent Director of the company in the meeting of board of directors held on 14.08.2023 for a term of 5 (five) years i.e. upto 26.09.2028. Brief profile of Dr. Anchal Kumar Jain is given in the Explanatory Statement attached to this Notice.

Declaration by Independent Directors

Necessary declaration has been obtained from all Independent Directors under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015.

Number of Meetings of the Board

During the year six Board Meetings were convened and held on 11.04.2022, 14.05.2022, 30.07.2022, 07.11.2022, 08.02.2023 and 30.03.2023. The detail thereof is also given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has devised a policy for performance evaluation of the board, its committees and all the Directors individually as per the criteria laid down by the Nomination & Remuneration Committee of the Company. The manner of evaluation is stated in the Corporate Governance Report forming an integral part of this report.

Independent Directors Meeting

During the financial year 2022-23, the Independent Directors met on 17.12.2022, inter-alia, to discuss:-

(i) The performance of Non-Independent Directors and the Board as a whole;

(ii) The performance of the Chairman of the Company taking into account the views of Executive and Non Executive Directors and

(iii) To assess the quality, quantity and timeliness of flow of information between the company management and the board that is necessary for the board to effectively and reasonably perform their duties.

13. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3) (c) and (5) of the Companies Act, 2013:-

(i) that in the preparation of the Annual Accounts for the year ended on 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors 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 as at 31st March, 2023 and of the profit of the Company for the year ended on that date;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that annual accounts have been prepared on a going concern basis;

(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(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.

14. ANNUAL RETURN

The web-link for the Annual Return for the financial year 2022-23 in the Form MGT-7 is placed on the Company's website at http://www.owmnahar.com/ nahar_ie/pdf/annual-return-2022-23.pdf

15. RELATED PARTY TRANSACTIONS

During the financial year under review, all transactions entered into with related parties as defined under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are in the ordinary course of business and at arm's length basis. The company has not entered into any contract or arrangement with related parties / Group companies other than arm's length price. The details of Related Party Transactions are placed before the Audit Committee for its review and approval on quarterly basis. These transactions were entered into as per the Company's policy on Related Party Transactions and are approved by the Audit Committee, Board and shareholders. The company's policy on Related Party Transactions is available at the web link: www.owmnahar.com/nahar_ie/pdf/RPT_Policy.pdf. The details of Related Parties transactions are given in Note No. 39 of the Notes to Financial Statements. Pursuant to the provisions of section 134(3) Form AOC-2 is annexed herewith as Annexure-A.

16. AUDIT COMMITTEE

The Company has constituted an Audit Committee pursuant to Section 177(8) read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Presently, the Audit Committee of the Company consists of Sh. Dinesh Gogna, Dr. Manisha Gupta, as Members and Dr. Roshan Lal Behl is the Chairman of the Audit Committee. The detailed information regarding Audit Committee and its terms of reference is given in Corporate Governance Report forming an integral part of the Directors Report.

17. NOMINATION & REMUNERATION COMMITTEE

The Company has constituted a Nomination & Remuneration Committee pursuant to Section 178(1) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, since Sh. Ved Parkash Gaur resigned as an Independent Director of the company, he also ceased to be the Chairman of the Nomination & Remuneration Committee. The Board of

Directors in its meeting held on 14.08.2023 reconstituted the Nomination & Remuneration Committee with the induction of Dr. Yash Paul Sachdeva as the Chairman of the Committee. Presently, the Nomination & Remuneration Committee consists of Dr. Suresh Kumar Singla and Dr. Roshan Lal Behl as Members and Dr. Yash Paul Sachdeva is the Chairman of the Nomination & Remuneration Committee. The detailed information regarding Nomination & Remuneration Committee and its terms of reference is given in Corporate Governance Report forming an integral part of the Directors Report.

18. RISK MANAGEMENT

The Company has laid down a Risk Management Policy and identified threat of such events which if occurs will adversely affect the ability of the company to achieve its objectives. Evaluation of business risk and managing the risk has always been an ongoing process in your company. The Audit Committee has also been delegated the responsibility for assessment, mitigation, monitoring and review of all elements of risks which the Company may be exposed to. The Board also reviews the risk management and minimization procedures.

19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board adopted a Vigil Mechanism/ Whistle Blower Policy as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 177 of the Companies Act, 2013 to report genuine concerns or grievances about unethical behavior of employees, actual or suspected fraud or violation of the Company's Code of Conduct. The Company's Vigil mechanism/Whistle Blower Policy are available at the Company's website i.e. www.owmnahar.com.

INTERNAL FINANCIAL CONTROL

The Indian Accounting Standard (Ind AS) became applicable on the Company w.e.f. 1st April, 2016. Accordingly, the Financial Statements have been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company is having adequate internal financial control systems and procedures which commensurate with the size of the Company. The Company is having Internal Audit Department which ensures optimal utilization and protection of Company's resources. The Internal Auditor monitors and evaluates the efficiency and adequacy of internal control systems in the company, its compliance with operating systems, accounting procedures and also ensures that the internal control systems are properly followed by all concerned departments of the company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

21. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year, the Company has complied with the applicable Secretarial Standards as prescribed under section 118 of the Companies Act, 2013.

BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

Other Information(s)

M/s MNP Cotex, prop. Vipin Garg and Picadily Sugar and allied Industries Limited had filed application under section 9 of Insolvency and Bankruptcy Code, 2016. These cases are pending for adjudication.

During the financial year 2022-23 there is no instance that the Company has made any one time settlement with Banks or Financial Institutions.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted a Corporate Social Responsibility (CSR) Committee of the board in accordance with section 135 of the Companies Act, 2013. The Company has adopted a CSR Policy and undertaking CSR programmes/ projects along with group companies under one umbrella through Oswal Foundation (OSF) which is a registered society formed in 2006 having its charitable objects in various fields and registered with MCA vide registration No. CSR00000145.

The CSR policy of the company has been placed on the Company's website at web-link www.owmnahar. com/nahar_ie/pdf/CSR_Policy_NIEL.pdf. The report on CSR activities as required under the Companies (Corporate Social Responsibility) Rules, 2014 including brief outline of the Company's CSR policy is annexed herewith marked as Annexure-B. During the year, a meeting of CSR committee was held on 30.03.2023 and all the members were present in the meeting.

Pursuant to the provisions of Section 135 of the Companies Act, 2013, for the financial year 2022-23 there is a CSR liability of Rs. 1,16,08,827/- on the Company for spending CSR expenses. The company has made compliance of the applicable provisions of the CSR obligation for the year.

24. NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of Nomination and Remuneration Committee, framed a policy for appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down criteria for determining qualifications, positive attributes, independence of directors and other matters provided under section 178 of the Companies Act, 2013. The Nomination and Remuneration policy of the company is elaborated in the Corporate Governance Report forming an integral part of this report.

i) Statutory Audit & Auditor's Report

The shareholders at their 38 Annual General Meeting (AGM) held on 26th September, 2022 had already approved the appointment of M/s. K.R. Aggarwal & Associates, Chartered Accountants, (Firm Registration No. 030088N) as statutory auditors of the Company, to hold office from the conclusion of 38th AGM up to the conclusion of 43rd AGM to be held in the year 2027. The Auditors Report on the accounts of the Company for the financial year 2022-23 is self-explanatory and requires no comments. No frauds were reported by the auditors under section 143 (12) of the Companies Act, 2013.

ii) Cost Auditor & Cost Audit Report

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its textiles and sugar segments are required to be audited. The Company has maintained accounts and cost records with respect to Textile and Sugar business as specified by the Government under Section 148(1) of the Companies Act, 2013. The cost audit report in Form CRA-4 for the financial year 2021-22 was filed with the Ministry of Corporate Affairs on 19.01.2023. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. R.R. & Co., Cost Accountants, Ludhiana to audit the cost accounts of the Company for the financial year 2023-24. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking members' ratification for the remuneration payable to M/s. R.R. & Co., Cost

Accountants, is included in the Notice convening the Annual General Meeting.

iii) Secretarial Audit & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company had appointed M/s. P.S.Bathla & Associates, a firm of Company Secretaries in Practice (C.P. No. 2585) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is attached as Annexure-C and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.

26. KEY MANAGERIAL PERSONNEL

As per the provisions of Section 203 of the Companies Act, 2013 Sh. Kamal Oswal, Vice Chairman-cum-Managing Director, Sh. Bharat Bhushan Gupta, Chief Financial Officer and Sh. Mukesh Sood, Company Secretary are the Key Managerial Personnel of the Company.

27. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(1), 5(2) and 5(3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (as amended up to date) in respect of employees of the Company, forming part of the Directors' Report for the year ended 31st March, 2023 is given in Annexure-D to this Report.

ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014, is annexed herewith as

29. CORPORATE GOVERNANCE REPORT

Your Company continues to follow the principles of good corporate governance. The corporate governance report along with Auditor's certificate regarding compliance of the conditions of corporate governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming compliance is annexed herewith as Annexure-F and forms part of this Report.

REPORT

As per Regulation 34(2)(f) of the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015, the submission of Business Responsibility and Sustainability Report is not applicable to the company.

31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under the Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith as Annexure-G and forms part of this Report.

32. ASSOCIATE / CONSOLIDATED FINANCIAL STATEMENT

As on 31st March, 2023 the company had four Associate Companies i.e. Atam Vallabh Financiers Limited, Vardhman Investment Limited, J L Growth Fund Limited and OWM Renew LLP, the accounts of which have been consolidated in accordance with the applicable Accounting Standards (Ind AS) and pursuant to Section 129(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The audited consolidated financial statements are provided in the Annual Report. A statement containing salient features of financial statements of associate companies in Form AOC-1 is annexed with the financial statements. The financials of the associate companies is given below:-

i) Atam Vallabh Financiers Limited (AVFL)

The company holds 36.85% equity shares of AVFL. During the year, the revenue from operations of the company was Rs. 18.07 lacs as compared to Rs. 13.82 lacs in the previous year. The company has earned a net profit of Rs. 13.15 lacs as against a net profit of Rs. 10.06 lacs in the previous year.

ii) Vardhman Investment Limited (VIL)

The company holds 47.17% equity shares of VIL. During the year, the revenue from operations of the company was Rs. 18.76 lacs as compared to Rs. 15.32 lacs in the previous year. The company has earned a net profit of Rs.13.59 lacs as against a net profit of Rs. 11.03 lacs in the previous year.

iii) J L Growth Fund Limited (JLGF)

The company holds 41.10% equity shares of JLGF. During the year, the revenue from operations of the company was Rs. 73.02 lacs as compared to Rs. 93.70 lacs in the previous year. The company has earned a net profit of Rs. 54.17 lacs as against a net profit of Rs. 70.02 lacs in the previous year.

iv) OWM Renew LLP

The company had made a contribution of 26% in OWM Renew LLP. During the year, the revenue from operations was Rs. 477.58 lacs as compared to Nil in the previous year and a net loss of Rs. 303.57 lacs as against Nil in the previous year.

WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company is committed to create and maintain an atmosphere in which employees can work together, without any fear of exploitation. The Company has complied with the 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 2022-23 the company has not received any complaint on sexual harassment and hence no complaint remains pending as on 31st March, 2023.

34. INDUSTRIAL RELATIONS

Industrial relations throughout the year continued to be very cordial and satisfactory.

35. ACKNOWLEDGEMENT

Your directors would like to express their appreciation for the assistance and co-operation received from financial institutions, banks and shareholders. They also place on record their appreciation for the cooperation of employees at all levels.