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Nirlon Ltd.

BSE: 500307 Sector: Infrastructure
NSE: NIRLON ISIN Code: INE910A01012
BSE 00:00 | 27 Jan 362.70 2.60
(0.72%)
OPEN

358.90

HIGH

364.00

LOW

355.00

NSE 05:30 | 01 Jan Nirlon Ltd
OPEN 358.90
PREVIOUS CLOSE 360.10
VOLUME 6282
52-Week high 420.10
52-Week low 301.10
P/E 31.08
Mkt Cap.(Rs cr) 3,269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 358.90
CLOSE 360.10
VOLUME 6282
52-Week high 420.10
52-Week low 301.10
P/E 31.08
Mkt Cap.(Rs cr) 3,269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nirlon Ltd. (NIRLON) - Director Report

Company director report

Your Directors present their 63rd Annual Report along withthe Audited Financial Accounts for the Financial Year (F.Y.) ended March 312022.

1. *Financial Performance

The Company's Financial Performance for the F.Y. ended March 312022 issummarized below:

(Rs in Crore)

Particulars 2021-2022 2020-2021
Gross Income from Operations 386.72 319.37
Gross Profit 300.12 239.64
Interest Paid 34.59 14.03
Cash Profit 265.53 225.61
Depreciation 75.48 48.70
Net Profit for the Year before Tax: 190.05 176.91
Current tax 35.34 33.04
Deferred tax 43.90 16.47
Net Profit for the Year after tax 110.81 127.40
Interim Dividend of '15/- per share paid on the face value of equity shares of ' 10/ - each 135.18 0.00
Proposed Final Dividend of ' 11/- per share to be paid on the face value of equity shares of '10/- each 99.13 72.09

*The Statement of Standalone Financial Results has been prepared inaccordance with the Companies (Indian Accounting Standards) Rules 2015 (Ind AS)prescribed under Section 133 of the Companies Act 2013 and other recognised accountingpractices and policies to the extent applicable.

Please Note:

During the F.Y. ended March 31 2022 the Company has completed theconstruction of Phase 5 at Nirlon Knowledge Park and licensed the same w.e.f. December 152021. Accordingly income and expenses relating to Phase 5 are recognised in the Profit& Loss Account w.e.f. December 15 2021.

2. Market Capitalisation Ranking on BSE Limited

Your Company has been ranked by the BSE Limited at Sr. No. 557(previous year F.Y. 2020-2021 at sr. no. 534) out of the top 1000 listed companies basedon Market Capitalization as on March 312022.

3. Financial Operations (Summary)

i. Gross Income from Operations for the F.Y. 2021- 2022 was ' 386.72Crore as against '319.37 Crore for the F.Y. 2020-2021.

ii. Gross Profit for the F.Y. 2021-2022 was ' 300.12 Crore as against '239.64 Crore for the F.Y. 2020- 2021.

iii. Cash Profit for the F.Y. 2021-2022 was ' 265.53 Crore as against '225.61 Crore for the F.Y. 2020- 2021.

iv. Net Profit for the F.Y. 2021-2022 (after taxes) was '110.81 Croreas against a profit of '127.40 Crore for the F.Y. 2020-2021.The net profit for the F.Y2021-2022 (after taxes) is lower mainly because of tax provisions for earlier years.(refer note no. 29 of the Accounts)

v. An Interim Dividend of '135.18 Crore was paid during the year and aFinal Dividend of '99.13 Crore for the

F.Y. 2021-22 is proposed to be paid as against a Final Dividend of'72.09 Crore paid for the F.Y. 2020-2021.

vi. Implication of Old versus New Income Tax Regimes:

To Maintain flexibility for any future restructuring opportunities theCompany continues under the Old Tax Regime as the decision to change to the New Tax Regimeis irrevocable.

4. The Company? Business Activity

The Company is in the business of development and managing anIndustrial Park and during the Year under review there is no change in the businessactivity of the Company.

5. Finance & Material Changes affecting the Financial Position ofthe Company

There is no material change and commitment affecting the financialposition of the Company which has occurred during the F.Y. 2021-2022 or from then on tillthe date of this Report.

6. Reserves

The Board of Directors do not propose to transfer any amount to theGeneral Reserve account in the Balance Sheet for the F.Y. 2021-2022.

7. Dividend

For the Year under review the Board of Directors at their meeting heldon February 9 2022 declared an interim dividend of '15.00 per equity share of '10/- each(@ 150%) amounting to '135.18 Crore and the same was paid to the Shareholders.

Further the Board of Directors at their meeting held on May 27 2022recommended a final dividend of '11.00 per equity share of ' 10/- each (@ 110 %) amountingto ' 99.13 Crore subject to the approval of Members of the Company at their 63rdAGM.

Dividend will be paid to Members whose names appear in the Register ofMembers as on Thursday September 08 2022 (the Record Date).

In respect of shares held in Dematerialized Form dividend will be paidto Members whose names are furnished by the National Securities Depository Limited("NSDL") and the Central Depository Services (India) Limited ("CDSL") as Beneficial Owners as on the Record Date.

8. Development Management and Operations of the Industrial Park /Information Technology (IT) Park i.e. Nirlon Knowledge Park (NKP) - Goregaon (East)Mumbai. and Future Outlook

Nirlon Limited is the owner of NKP an approx. 23 acre campus inGoregaon (East) Mumbai. NKP is an Industrial Park as per the Consolidated Foreign DirectInvestment (FDI) Policy of the Government of India (GOI) and is an IT Park under theGovernment of Maharashtra's (GOM) Policy. The current FDI Policy of the GOI permits 100%FDI in Industrial Parks.

i. Construction Delivery of Licensed Premises and License FeeCommencement

The planning for the development of NKP in phases began in 2006 andconstruction in April / May 2007. Currently all five (5) phases of development have beencompleted.

Phases 1-5

A total of approx. 47.63 lakh sq. ft. area has been constructed inPhases 1-5 corresponding to approx. 30.53 lakh sq. ft. of licensable area. License feesfor Phases 1-4 continued to be received by the Company through FY. 2021-2022.

License Fees from Phase 5 have commenced from May 15 2022 and arerecognised in the Profit & Loss Account as per Ind AS w.e.f. December 15 2021 i.e.the date of completion of Phase 5.

Please Note:

a. The total constructed area of approx. 47.63 lakh sq.ft. for Phases1-5 includes two (2) levels of basements in Phases 1 2 and 3 and one (1) level ofbasement the ground floor (part) mezzanine and four (4) upper levels of parking in Phase4 as well as a ten (10) floor ( G+9) multi level car parking (MLCP) (which also has two(2) basements) housing utilities i.e. generators chillers water tanks electricalinfrastructure etc. for Phases 1 and 2. Phase 5 has three (3) levels of basements in blockB9 B10 & B11 and seven upper levels of parking in block B11 .

Phase 5 (re-development of Phase 0):

The Company has completed the development of Phase 5 and received theOC on June 18 2021.

The Company licensed the entire licensable area of approx 11.60 lakhsq.ft. to J.P.Morgan Services India Pvt. Ltd. ("JPM"). Further particulars areprovided in Annexure 7 to this Report i.e. Management Discussion Analysis.

ii. License Fees

During the Year under review gross license fees aggregated approx. '341.55 Crore (as per Ind AS).

iii. Marketing

Phases 1-5 of NKP continue to be approx. 97.17 % licensed (as on June30 2022) to reputed international and Indian corporates.

The Company has always made a specific effort to license itsdevelopment to well-regarded Corporates and the campus remains operational and functionalin all respects.

iv. Financing

a. The outstanding loan amounts as on March 31 2022 aggregated '1179.86 Crore (as per IGAAP).

b. The Company's secured debt up to May 02 2022 was provided by HDFCLimited ("HDFC").

c. On May 02 2022 the Company refinanced its entire HDFC debt byavailing a loan of '1230.00 Crore as a Green Loan with a sub-limit of '80.00 crore by wayof an Overdraft limit from The Hongkong and Shanghai Banking Corporation Limited("HSBC") and paid all its dues of ' 1179.86 Crore to HDFC on May 02 2022. TheCompany executed and registered a Mortgage Deed by creating a first and exclusive chargein favour of HSBC by mortgaging the Company's immovable property i.e. Land Buildings andstructures standing on the Land situate at Goregaon (East) Mumbai 400 063 as per theFacilities documents executed by and between the Company and HSBC.

d. Crisil Ratings has assigned CRISIL AA+/Stable? rating to thisHSBC facility.

9. The Company?s business plan continues to be to offer officespace in NKP on a leave and license basis only.

10. Nirlon House

The Company continues to co-own 75% undivided interest in approx.45475 sq.ft. of area in the Nirlon House building in a prime location on Dr. A. B. RoadWorli in Central Mumbai.

11. A. Property Management Functions as per the

Execution of the New Management Services Agreement with NirlonManagement Services Pvt. Ltd. w.e.f.October 1 2020 to March 31 2024

i. Reco Berry Private Limited (Reco) of Singapore an affiliate of GICthe Sovereign Wealth Fund of Singapore and Mr. Kunal V. Sagar Mr. Rahul V. Sagar AlfanoPte Limited and Deltron Pte Limited (Promoters) had entered into Share Purchase andShareholders Agreements dated December 23 2014 pursuant to which Nirlon ManagementServices Pvt. Ltd. (NMSPL) was incorporated under the provisions of the Companies Act2013 effective from October 7 2015;

ii. The Members' of the Company by way of an Ordinary Resolution passedat their 57th AGM held on September 20 2016 approved interalia execution ofManagement Services Agreement (MSA) with NMPSL w.e.f. October 1 2016 to September 302020.

iii. Thereafter the Members' of the Company further by way of anOrdinary Resolution passed at their 61st AGM held on September 29 2020approved interalia execution of a New Management Services Agreement with NMPSL w.e.f.October 1 2020 to March 312024.

Please Note: All interested Parties as per law abstained from votingof the above item.

B. Implementation / Commencement of Operations under New ManagementServices Agreement

Effective from October 01 2020 the Company has been receiving variousmanagement services from NMSPL under the New Management Services Agreement as contracted.

The Shareholding Pattern of NMSPL is given below:

Class A Shares

Sr. no. Name of the Shareholderd> No. of Shares held % of Share Holding
1. Mr. Kunal V. Sagar 5000 33.335%
2. Mr. Rahul V. Sagar 5000 33.335%
3. Reco Fortius Pte Limited 5000 33.33%
Total 15000 100%

Class B Shares

Sr. no. Name of the Shareholder No. of Shares held % of Share Holding
1. Mr. Kunal V. Sagar 89100 50%
2. Mr. Rahul V.Sagar 89100 50%
Total 178200 100%
Class C Shares
Sr. no. Name of the Shareholder No. of Shares held % of Share Holding
1. Reco Fortius Pte Limited 316800 100%
Total 316800 100%

12. The Board & its Committees

i. Board of Directors:

As on date the total strength of the Board of Directors of the Companyconsists of 6 (six) Directors including 1 (one) Independent woman Director. Of thisnumber 3 (three) Independent Non-Executive Directors including 1(one) woman Directorconstitute 50% of the total strength of the Board of Directors of the Company.

For more detail please refer to the link:

https://www.nirlonltd.com/board-committees.html

Re-appointment of Director at the 63rd AGM

A brief resume of the Director seeking re-appointment at the 63rdAGM is as per the details given below:

• Re-appointment of Mr. Kunnasagaran Chinniah (DIN 01590108) aged65 years as a Director who retires by rotation.

• The Board recommends re-appointment of Mr. Kunnasagaran Chinniahas a Director to retire by rotation.

For more details please refer to the Note no. 21 of the 63rdAGM Notice

a. Changes in the Board during the F.Y. 2021-22

• There was no change in the Board constitution during the F.Y.2021-22.

b. The nature of each Director's expertise and the name of company /ies where they hold Chairmanships Directorships and Memberships of Board / Committees andShareholding if any as stipulated under the required Regulation of the ListingObligations & Disclosure Requirements Regulations as well as the justification forre-

appointment of Mr. Kunnasagaran Chinniah Director who retires byrotation at the ensuing AGM is provided in this Report and forms part of the Noticecalling the 63rd AGM.

ii. Various Committees of the Board of Directors

a. Audit Committee

i. Mr. Rajinder Pal Singh Chairman & NE & ID;

ii. Ms. Anjali Seth NE & ID; and

iii. Mr. Sridhar Srinivasan NE & ID.

b. Stakeholders Relationship Committee

i. Ms. Anjali Seth Chairperson & NE & ID;

ii. Mr. Rajinder Pal Singh NE & ID; and

iii. Mr. Sridhar Srinivasan NE & ID.

c. Nomination & Remuneration Committee

i. Ms. Anjali Seth Chairperson & NE & ID;

ii. Mr. Rajinder Pal Singh NE & ID; and

iii. Mr. Sridhar Srinivasan NE & ID.

d. Corporate Social Responsibility Committee

i. Mr. Sridhar Srinivasan Chairman & NE & ID;

ii. Mr. Kunal V. Sagar Promoter Director; and

iii. Mr. Rahul V. Sagar Executive Director &

C.E.O.

e. Risk Management Committee

i. Mr. Rajinder Pal Singh Chairman & NE & ID;

ii. Ms. Anjali Seth NE & ID;

iii. Mr. Kunal V. Sagar Promoter Director; and

iv. Mr. Rahul V. Sagar Executive Director & C.E.O.

f. Independent Directors Committee

i. Mr. Rajinder Pal Singh NE & ID;

ii. Ms. Anjali Seth NE & ID; and

iii. Mr. Sridhar Srinivasan NE & ID.

*NE & ID means Non -Executive Independent Director ** C.E.O. meansChief Executive Officer

iii. Committees of the Board of Directors and their Roles andResponsibilities

a. Audit Committee (AC)

The AC of the Board played an important role during the Year underreview including recommending the appointment /re-appointment of and co-ordinating withthe Statutory Auditors Internal Auditors Cost Auditors and other Key ManagerialPersonnel of the Company. The AC has also rendered guidance inter alia in the areas ofcorporate governance internal audit finance taxation accounts etc.

b. Stakeholders Relationship Committee (SRC)

The SRC met regularly over the course of the Year to attend variousaspects in the interest of Members. With the compulsory dematerialization of the Company'sshares and electronic mode of transfers postal dispatches / e-mail correspondence whichled to frequent complaints have been minimized.

As on March 31 2022 approx. 97.20% of the Company's total paid upequity share capital was held in Dematerialized Form and there was no investor grievance/ complaint pending.

c. Corporate Social Responsibility Committee (CSRC)

The Board formed a Corporate Social Responsibility Committee onSeptember 23 2014 and based on its recommendations the Company implemented activitiesunder its CSR policy during the Year under review as per the Act.

d. Nomination & Remuneration Committee (NRC) The NRC recommends tothe Board the remuneration / compensation packages of the Executive Director and KeyManagerial Personnel.

e. Risk Management Committee (RMC)

The Board formed a Risk Management Committee on September 23 2014.During the Year under review this Committee has continued to fulfill its role in interalia identifying evaluating and mitigating potential risks to theCompany.

The Risk Management Committee met twice on November 09 2021 andFebruary 09 2022.

f. Independent Director Committee (IDC)

The Company has an Independent Directors Committee as required underthe law.

For more detail on various Committees please refer to the link /s:

i. https://www.nirlonltd.com/pdf/audit.pdf

ii. https://www.nirlonltd.com/pdf/stackholders relationship.pdf

iii. https://www.nirlonltd.com/pdf/csr.pdf

iv. https://www.nirlonltd.com/pdf/nomination remuneration.pdf

v. https://www.nirlonltd.com/pdf/risk management.pdf

vi. https://www.nirlonltd.com/pdf/ind directors.pdf

g. POSH Committee

As per the requirement of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with rules made thereunder yourCompany has constituted a

Committee which is responsible for redressal of complaints related tosexual harassment.

During the Year under review there was no complaint pertaining tosexual harassment received. For more detail please refer to the link:https://www.nirlonltd.com/Ddf/Dosh.Ddf

13. Policies & Codes

SEBI introduced the SEBI LODR effective from December 1 2015. The SEBILODR provides inter alia various regulations annexures and schedules and hence allprescribed companies were required to comply with the SEBI LODR latest by March 312016.

In view of the above and meeting with the requirements the Companymade suitable modifications to its existing polices and also reviews the same from timeto time. Your Company is compliant with the SEBI LODR.

I. Policies

i. Determination of Materiality of Events / Information (DMEI) Policy

Aims of the DMEI Policy

The DMEI Policy for determination of materiality of events /information inter alia aims to:

a. Ensure that all investors have equal access to important informationthat may affect their investment decisions;

b. Ensure that adequate and timely information is provided toinvestors;

c. Avoid establishment of a false market in the securities of theCompany; and

d. Communicate the principles of materiality based on which the Companyshall make disclosures of events or information.

For more detail kindly refer to the link: https://www.nirlonltd.com/pdf/dmei policy mar 16.pdf

ii. Related Party Transaction (RPT) Policy

The RPT Policy is in accordance with the requirement of Regulation 23of the SEBI LODR and Section 188 of the Companies Act 2013 and is intended to ensure theproper approval and reporting of transaction / s between the Company and its RelatedParties.

Aims of the RPT Policy

Inter alia to disclose in the Financial Statements of the Companyapplicable transaction/s between the Company and Related Parties as well as policiesconcerning transaction / s with Related Parties. Such transactions are appropriate only ifthey are in the best interest of the Company and its shareholders.

For more detail kindly refer to the link: https://www.nirlonltd.com/pdf/related party transaction policy apr 22.pdf

iii. Whistle Blower (WB) Policy

The Company has a vigil mechanism system called the Whistle BlowerPolicy to deal with instances of fraud and mis-management if any.

Aims of the WB Policy

The WB Policy meets with the requirement of Regulation 22 of the SEBILODR and Section 177 of the Act and is intended to ensure that the Directors andEmployees or any other person report their genuine concerns. During the Year under reviewthere was no case of whistle blowing reported.

For more detail kindly refer to the link: https://www.nirlonltd.com/pdf/whistle blower policy feb 21 v3.pdf

iv. Corporate Social Responsibility (CSR) Policy

The CSR Policy is in compliance and in agreement with the CompaniesAct 2013 ("the Act")

Aims of the CSR Policy:

a. To formulate and recommend to the Board a Corporate SocialResponsibility Plan which shall indicate the activities to be undertaken by the Company asspecified in Schedule VII to the Act;

b. To recommend the amount of expenditure to be incurred on CSRactivities;

c. To monitor CSR activities; and

d. To ensure that the Company spends in every financial year at leasttwo (2) % of the average net profits of the Company made during the three (3) immediatelypreceding financial years.

.