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Nirlon Ltd.

BSE: 500307 Sector: Infrastructure
BSE 00:00 | 24 Sep 313.10 -1.00






NSE 05:30 | 01 Jan Nirlon Ltd
OPEN 314.10
52-Week high 321.00
52-Week low 225.25
P/E 23.23
Mkt Cap.(Rs cr) 2,822
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 314.10
CLOSE 314.10
52-Week high 321.00
52-Week low 225.25
P/E 23.23
Mkt Cap.(Rs cr) 2,822
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 60th Annual Report along withthe Audited Financial Accounts for the Financial Year ended March 31 2019.

1. *Financial Performance

The Company's Financial Performance for the Year ended March 312019 is summarized below:

( र in Crore)

Particulars 2018-19 2017-18
Gross Income from Operations 299.97 293.57
Gross Profit 227.38 223.03
Interest Paid 69.71 65.55
Cash Profit 157.67 157.48
Depreciation 58.88 72.22
Net Profit for the Year before Tax 98.79 85.26
Current tax 23.95 21.04
Deferred tax 11.56 8.53
Income tax adjustments for the earlier years (0.40) 0.00
Net Profit for the Year after tax 63.68 55.69
Proposed dividend on Equity shares 6.76 6.76
Tax on Dividend 1.38 1.38

*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.

Your Company has been ranked by the BSE Limited at Sr. No. 560 out ofthe top 1000 listed companies based on Market Capitalization as on March 31 2019.

2. Financial Operations (Summary) i. Gross Income fromOperations for the Financial Year 2018-19 was र 299.97 crore as against र293.57 crore for the F.Y. 2017-18. ii. Gross Profit for the Financial Year 2018-19was 227.38 crore as against र 223.03 crore for the F.Y. 2017- 18. iii. CashProfit for the Financial Year 2018-19 was 157.67 crore as against र157.48 crore for the F.Y. 2017- 18. iv. Net for the Financial Year 2018-19 (aftertaxes) was र 63.68 crore as against a profit of र 55.69 crore for the F.Y.2017-18.

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.

3. Reserves

The Board does not propose to transfer any amount to the GeneralReserve account in the Balance Sheet for the Financial Year 2018-19.

4. Dividend

For the Year under review the Board recommends a dividend of र0.75paise per equity share of र10/- each (@ 7.5%) amounting to र8.14 crore (inclusive of taxof र1.38 crore) subject to the approval of Members of the Company at their 60thAGM.

Dividend will be paid to Members whose names appear in the Register ofMembers as on Thursday August 22 2019. In respect of shares held inDematerialized Form dividend will be paid to Members whose names are furnished by theNational Securities Depository Limited and the Central Depository Services (India)Limited as Beneficial Owners as on that date.

5. Industrial Park Operations at Goregaon (East) Mumbai India& Future Outlook

Development and management of the Industrial Park / InformationTechnology (IT) Park i.e. Nirlon Knowledge Park (NKP) - Goregaon (East)Mumbai.

Nirlon is the owner of NKP an approx. 23 acre campus in Goregaon(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 underthe Government 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 four (4) phases of development have been completed.

Phases 1 2 3 and 4

A total of approx. 29.46 lakh sq. ft. area has been constructed inPhases 1 2 3 and 4 corresponding to approx. 18.78 lakh sq. ft. of licensable area.License fees for Phases 1 2 3 and 4 continue to be received by the Company as on March31 2019.

Please Note: The total constructed area of approx. 29.46 lakhsq.ft. for Phases 1 2 3 and 4 includes two (2) levels of basements in Phases 1 2 and 3and one (1) level of basement the ground floor (part) mezzanine and four (4) upperlevels of parking in

Phase 4 as well as a ten (10) floor multi level car parking (MLCP)(which also has two (2) basements) housing utilities i.e. generators chillers watertanks electrical infrastructure etc. for Phases 1 and 2 in addition to visitor andoccupant parking.

Phase 5 (re-development of Phase 0):

After receiving the required approvals in May 2017 the Company hasbegun and continues to develop

/ construct Phase 5 (re-development of Phase 0) in

NKP Goregaon.

Further particulars are provided in Annexure 7 to this Reporti.e. Management Discussion Analysis. ii. License Fees

During the Year under review gross license fees aggregated approx. र255.57 crore (as per Ind AS) including license fees from Nirlon House Worli

Central Mumbai. iii. Marketing

Phases 1 2 3 and 4 of NKP continue to be approx.

99% licensed (as on April 30 2019) to reputed international and Indiancorporates.

The Company has made a specific effort to license its development towell-regarded Corporates and the campus is fully operational and functional in thisregard. iv. Financing

The Company's debt funding to date continues to be provided byHDFC Limited.

At the request of the Company HDFC Limited has granted a moratorium onpayment of their principal securitized loan amounts effective from May 15 2017 wherebythe Company is required to repay only the interest amount on these outstanding securitizedloans till the construction of Phase 5 (redevelopment of Phase 0) is completed. Thisprincipal moratorium has resulted in incremental cash flows being available to the Companyto finance a large part of the Phase 5 (re-development of Phase 0) construction from itsinternal accruals.

This will result in lower borrowings for the construction of Phase 5(re-development of Phase 0) and consequently an overall reduction in the total debt ofthe Company when compared to the option of continuing to repay principal on a monthlybasis

The outstanding loan amounts as on March 31 2019 aggregate र 854.86crore (as per IGAAP) (including loans used for the ongoing construction of Phase 5(re-development of Phase 0)) on which the Company is presently paying a competitive rateof interest. The Company's business plan continues to retain ownership of the NKPdevelopment and offer office space on a leave and license basis only.

6. 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. Road

Worli in Central Mumbai.

7. A. Property Management Functions Sale of specified MovableAssets and Name User a. Reco Berry Private Limited (Reco) of Singapore anaffiliate of GIC the Wealth Fund of Singapore and Mr. Kunal V. Sagar Mr. Rahul V. SagarAlfano Pte Limited and Deltron Pte Limited (Promoters) had entered into SharePurchase and Shareholders Agreements dated December 23 2014 pursuant to which NirlonManagement Services Pvt. Ltd. (NMSPL) was incorporated under the provisions of theCompanies Act 2013 effective from October 7 2015; b. Thereafter the Audit Committee andthe Board of Directors of the Company approved subject to Members' approval theproposed Related

Party Transactions with NMSPL in accordance with the Related PartyTransactions Policy and the provisions of the Companies Act; c. The Company obtainedMembers' approval by way of an Ordinary Resolution on the proposed Related PartyTransactions between the

Company and NMSPL at its 57th AGM held on September 202016.

Please note: All interested parties abstained from the voting onthis item. d. Post approval from Members the following agreements were entered intoby the Company and NMSPL on September 23 2016 effective from October 1 2016 with regardto: i. Management Services Agreement appointing NMSPL as a provider of lease managementproperty management marketing related project management and general management servicesin respect of the properties of the Company on the terms set out in the said Agreement.

ii. Asset Sale Agreement with NMSPL recording: a. the transfer ofidentified movable assets relating to the services to be provided from the Company toNMSPL for a consideration of र25.10 lakh from NMSPL. b. the resignation of certainemployees (save and except Key Managerial Personnel) from the Company and their employmentwith NMSPL on terms no less favourable than those given to them by the Company on theterms set out in the said Agreement. c. Name User Agreement executed amongst

NMSPL Mr. Kunal V. Sagar Mr. Rahul V.

Sagar and the Company under which the Company approved the use of thename and mark ‘Nirlon' in the corporate name of NMSPL on a royalty free basison the terms set out in the said Agreement.

7. B. Implementation / Commencement of Operations under variousAgreements

Effective from October 1 2016 under the Asset Sale Agreement: a.Employees of the Company resigned from the services of the Company and were employed byNMSPL at no less favourable terms; and b. The Company upon receipt of the agreedconsideration of र 25.10 lakh (being not less than the market value of the assets)transferred the specified movable assets in favour of NMSPL.

Also effective from October 1 2016 the Company has been receivingvarious management services from

NMSPL under the Management Services Agreement. The shareholding patternof NMSPL is given below:

Class A Shares

Sr. Name of the no. Shareholder 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 5000 33.33%
Total 15000 100%

Class B Shares

Sr. Name of the no. 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. Name of the no. Shareholder No. of Shares held % of Share Holding
1. Reco Fortius Pte 316800 100%
Total 316800 100%

8. The Board & its Committees i. Board of Directors:

As on date the total strength of the Board of Directors of the Companyconsists of 7 (seven) Directors including 1 (one) Independent woman Director. Of thisnumber 4 (four) Independent Non-Executive Directors including 1 (one) woman Directorconstitute more than 50% of the total strength of the

Board of Directors of the Company. For more detail please refer to thelink: / board-committees.html a. Re-appointment / Appointment ofDirectors at the 60th AGM

A brief resume of the Directors seeking reappointment and appointmentat the 60th AGM respectively are as per the details given below:

Re-appointment of Mr. Kunal V. Sagar age 51 years as a Director whoretires by rotation;

Appointment of Mr. Rajinder Pal Singh and Ms. Anjali Seth Non-Executive Independent Directors each for a term of five (5) years with effect from May 132019.

The Board recommends:

re-appointment of Mr. Kunal V. Sagar as a Director to retire byrotation; and appointment of Mr. Rajinder Pal Singh and Ms. Anjali Seth as Non-ExecutiveIndependent Directors each for a term of five (5) years effective from May 13 2019.

b. Changes in the Board during the Financial Year 2018-19.

There was no change in the Board of Directors during the F.Y. 2018-19except Mrs. Rajani M.

Bhagat who was disqualified to act as a Director as per the MCA. Theterms of Mr. Rama Varma and Mrs. Aruna Makhan Independent Directors have expired onMarch 31 2019 on the completion of their term of 5 (five) years.

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

Listing Obligations & Disclosure Requirements Regulations as wellas the justification for reappointment of Mr. Kunal V. Sagar Director who retires byrotation at the ensuing AGM and appointment of Mr. Rajinder Pal Singh and Ms. AnjaliSeth Non-Executive Independent Directors appointed by the Board of Directors at theirmeeting held on May 13 2019 is provided in this Report and forms part of this Noticecalling the 60th AGM.

ii. Re-constitution of Various Committees of the Board of Directors

The Board of Directors at their meeting held on May 13 2019 havere-constituted various committees. Details of the same are given below:

a. Audit Committee

Mr. Moosa Raza Chairman & NE & ID Mr. Arjan Gurbuxani NE& ID

Mr. Rajinder Pal Singh NE & ID

b. Stakeholders Relationship Committee

Mr. Moosa Raza Chairman & NE & ID Mr. Arjan Gurbuxani NE& ID

Mr. Rajinder Pal Singh NE & ID

c. Nomination & Remuneration Committee

Mr. Arjan Gurbuxani Chairman & NE & ID Mr. Moosa Raza NE& ID

Mr. Rajinder Pal Singh NE & ID

d. Corporate Social Responsibility Committee

Mr. Moosa Raza Chairman & NE & ID Mr. Kunal V. Sagar PromoterDirector Mr. Rahul V. Sagar Executive Director & C.E.O.

e. Risk Management Committee

Mr. Arjan Gurbuxani Chairman & NE & ID Mr. Rajinder Pal SinghNE & ID

Mr. Kunal V. Sagar Promoter Director

Mr. Rahul V. Sagar Executive Director & C.E.O. *NE & ID meansNon –Executive Independent Director

** C.E.O. means Chief Executive Officer

iii. Committees of the Board of Directors and their Role 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 for the interest of Members.

With the compulsory dematerialization of the Company's shares andelectronic mode of transfers postal dispatches / e-mail correspondence which led tofrequent complaints have been minimized.

As on March 31 2019 approx. 92.70 % of the Company's total paidup equity share capital was held in Dematerialized Form and there were no investorgrievances / complaints 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 to the Board the remuneration

/ compensation packages of the Executive Director and Key ManagerialPersonnel.

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 the Company.

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

f. Prevention of Sexual Harassment (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 complaintsrelated to sexual harassment. During the Year under review there were no complaintspertaining to sexual harassment.

For more detail please refer to the link: harassment.pdf

9. Policies & Codes

SEBI introduced the SEBI LODR effective from December 1 2015. The SEBILODR provides inter alia for various regulations annexures and schedules and hence allprescribed companies were required to comply with the SEBI LODR latest by March 31 2016.

In view of the above and in order to meet with the requirements theCompany made suitable modifications to its existing polices and also adopted new policieson March 29 2016. 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 at: a. ensuring that all investors have equal access toimportant information that may affect their investment decisions; b. ensuring thatadequate and timely information is provided to investors; c. avoiding establishment of afalse market in the securities of the Company; and d. Communicating the principles ofmateriality based on which the Company shall make disclosures of events or information.

For more detail kindly refer to the link:

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 the properapproval and reporting of transaction / s between the Company and its Related


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 policies concerning transaction/ s with Related Parties. Such transactions are appropriate only if they are in the bestinterest of the Company and its shareholders.

For more detail kindly refer to the link: transaction_policy_mar_16.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: nov_18_v2.pdf iv. Corporate SocialResponsibility (CSR) Policy

CSRC and CSR Policy are in compliance and in agreement with Section135 of the Act.

Aims of the CSR Policy: a. To formulate and recommend to theBoard a Corporate Social Responsibility Plan which shall indicate the activities to beundertaken by the

Company as specified 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 inevery financial year at least two (2) % of the average net profits of the Company madeduring the three (3) preceding financial years.

Details are given in the table overleaf: For more detail kindly referto the link: mar_16.pdf

The Composition of the CSR Committee during the F.Y. 2018-19 was asfollows:

The CSR Committee was comprised of Mr. Moosa Raza (Chairman and NonExecutive Independent Director) Mr. Rama Varma (Non-Executive Independent Director up toMarch 31 2019 ) Mrs. Rajani M. Bhagat (up to March 21 2019) Mr. Kunal V. Sagar and Mr.Rahul V. Sagar (Promoters and Directors).

( in Lakh)
1. Average Net Profit of the Company for the last three financial years 7815.45
2. Prescribed CSR Expenditure @ two (2) % of the amount as in item 3 below: 156.31
3. Details of CSR spent during the Financial Year
a. Total amount to be spent for the Financial Year 156.50
b. Amount unspent if any Nil

c. Manner in which the amount was spent during the Financial Year isdetailed below:

Sr. CSR project or No. activity identified Sector in which the Project is covered Projects or programmes (1) Local area or other (2) Specify the State and district where projects or a programme was undertaken Amount outlay (budget / limit) project or programmes wise ( in Lakh) Amount spent on the projects or programmes Sub-heads: Direct expenditure on projects or programmes Overheads: ( in Lakh) Cumulative expenditure up to to the reporting period ( in Lakh) Amount spent: Direct or through implemen- ting agency (in Lakh)
1 Jalayukta Shivar Abhiyan (JSA) Water conservation Nagpur Maharashtra 80 80 80 80
2 EmancipAction India Foundation Providing Counsellors to the Government and private care homes to test a holistic trauma informed model of care to help children transform their lives. Core modules include wellness vocational planning and job placement Mumbai Maharashtra 10 10 10 10
3 Society for Rehabilitation of Crippled Children Helping children with learning disorders and developmental disabilities by providing therapy services Mumbai Maharashtra 5 5 5 5
4 Chennai Liver Foundation Medical (Liver ailments) Chennai Tamil Nadu 10 10 10 10
5 Ramakrishna Mission Ashrama Medical treatment for curable and preventable blindness Dehra Dun Uttarakhand 10 10 10 10
6 Konark Cancer Foundation Logistical emotional and financial support to the underprivileged cancer patients Mumbai Maharashtra 10 10 10 10
7 Rotary & Blood Bank Society Resource Centre 100% voluntary blood donations by means of either indoor or outdoor blood donation camps. Chandigarh 10 10 10 10
8 The Aangan Trust Children protection service / promotion of education Mumbai Maharashtra 7.5 7.5 7.5 7.5
9 Dignity Foundation Eradication of hunger and poverty / food rations Mumbai Maharashtra 7 7 7 7
10 Saraswati Vidyak Trust Education to under privileged children. Patiala Punjab 7 7 7 7
Total 156.5 156.5 156.5

The Company contributed र 156.50 lakh to the implementing agenciestowards its CSR Contribution.


The Company has allocated resources for CSR activities only after duediligence and identification of eligible projects / programs.

The Company shall endeavor to identify more eligible projects forutilization of the allocated budget for CSR activities in the coming years.

Responsibility Statement

Implementation and monitoring of the CSR Policy is in compliance withthe CSR objectives and Policy of the Company.

Moosa Raza Rahul V. Sagar
Chairman Executive Director & C.E.O.
DIN: 00145345 DIN: 00388980
Mumbai May 13 2019