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Directors Report of Nirlon Ltd.

Mar 31, 2018

The Directors present their 59th Annual Report along with the Audited Financial Accounts for the Financial Year ended March 31, 2018.

DIRECTORS’ REPORT

1. *Financial Performance

The Company’s Financial Performance for the Year ended March 31, 2018 is summarized below:

(Rs, in Crore)

Particulars

2017-18

2016-17

Gross Income from Operations

293.57

292.56

Gross Profit

223.03

226.67

Interest Paid

65.55

77.96

Cash Profit

157.48

148.71

Depreciation

72.22

70.66

Net Profit for the Year before Tax

85.26

78.05

Current tax

21.04

17.49

Deferred tax

8.53

9.48

Net Profit for the Year after tax

55.69

51.08

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 in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013; and other recognised Accounting Practices and Policies to the extent applicable.

Beginning April 1, 2017, the Company has for the first time adopted Ind AS with a transition date of April 1, 2016, and hence the figures for the previous F.Y. 2016-17 are also re-grouped / adjusted, wherever necessary. Please therefore note that the numbers in this Annual Report, i.e. F.Y. 2017-18, are not comparable to the numbers in the Annual Report for the previous year, i.e. F.Y. 2016-17.

2. Financial Operations (Summary)

i. Gross Income from Operations for the Financial Year 2017-18 was Rs,293.57 Crore as against Rs,292.56 Crore for the F.Y. 2016-17.

ii. Gross Profit for the Financial Year 2017-18 was Rs,223.03 Crore as against Rs,226.67 Crore for the F.Y. 2016- 17.

iii. Cash Profit for the Financial Year 2017-18 was Rs,157.48 Crore as against Rs,148.71 Crore for the F.Y. 2016- 17.

iv. Net Profit for the Financial Year 2017-18 (after taxes) was Rs,55.69 Crore as against a profit of Rs,51.08 Crore for the F.Y. 2016-17.

The Company is in the business of development and managing an Industrial Park, and during the Year under review, there is no change in the business activity of the Company.

3. Reserves

The Board does not propose to transfer any amount to the General Reserve account in the Balance Sheet for the Financial Year 2017-18.

4. Dividend

For the Year under review, the Board recommends a dividend of Rs,0.75 per equity share of Rs,10 / - each (@ 7.5%) amounting to Rs,8.14 Crore (inclusive of tax of Rs,1.38 Crore), subject to the approval of Members of the Company at their 59th Annual General Meeting.

Dividend will be paid to Members whose names appear in the Register of Members as on Thursday, September

13, 2018. In respect of shares held in Dematerialized Form, dividend will be paid to Members whose names are furnished by the National 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 / Information Technology (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 Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the 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 Fee Commencement

The planning for the development of NKP in phases began in 2006, and construction 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 in Phases 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 as contracted by the Company as on March 31, 2017.

Please Note: The total constructed area of approx. 29.46 lakh sq. ft. for Phases 1, 2, 3 and 4 includes two (2) levels of basements in Phases 1, 2 and 3 and one (1) level of basement, the ground floor (part), mezzanine and four (4) upper levels 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, water tanks, electrical infrastructure etc. for Phases 1 and 2, in addition to visitor and occupant parking.

Phase 5 (Re-development of Phase 0):

After receiving the required approvals, the Company has begun development / construction of Phase

5 (re-development of Phase 0) in NKP, Goregaon from May 2017. Further particulars are provided in Annexure 8 to this Report, i.e. Management Discussion Analysis.

ii. License Fees

During the year under review, gross license fees aggregated approx. Rs,248.56 Crore 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 July 31, 2018) to reputed international and Indian corporates.

The Company has made a specific effort to license its development to well-regarded Corporates, and the campus is fully operational and functional in this regard.

iv. Financing

The Company’s debt funding to date continues to be provided by HDFC Limited.

At the request of the Company, HDFC Limited has granted a moratorium on payment of their principal securitized loan amounts effective from May 15, 2017, whereby the Company is required to repay only the interest amount on these outstanding securitized loans till the construction of Phase 5 (redevelopment of Phase 0) is completed. This principal moratorium has resulted in incremental cash flows being available to the Company to finance a larger part of the Phase 5 (re-development of Phase 0) construction from its internal 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 of the Company, when compared to the option of continuing to repay principal on a monthly basis.

The outstanding loan amounts as on July 31, 2018 aggregate ''769.85 Crore (including loans used for the ongoing construction of Phase 5 (re-development of Phase 0)), on which the Company is presently paying a competitive rate of interest.

The Company’s business plan continues to retain ownership of the NKP development, 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. 45,475 sq.ft. of area in the Nirlon House building in a prime location on Dr. A. B. Road, Worli in Central Mumbai.

7. I. Property Management Functions, Sale of specified Movable Assets and Name User

a. Reco Berry Private Limited (Reco) of Singapore, an affiliate of GIC, the Sovereign Wealth Fund of Singapore and Mr. Kunal V. Sagar, Mr. Rahul V. Sagar, Alfano Pte Limited and Deltron Pte Limited (Promoters) had entered into Share Purchase and Shareholders Agreements dated December 23, 2014, pursuant to which Nirlon Management Services Pvt. Ltd. (NMSPL) was incorporated under the provisions of the Companies Act, 2013 effective from October 7, 2015;

b. Thereafter, the Audit Committee and the Board of Directors of the Company approved, subject to Members’ approval, the proposed Related Party Transactions with NMSPL in accordance with the Related Party Transactions Policy, and the provisions of the Companies Act;

c. The Company obtained Members’ approval by way of an Ordinary Resolution on the proposed Related Party Transactions between the Company and NMSPL at its 57th AGM held on September 20, 2016

Please note : All interested parties abstained from voting on this item.

d. Post approval from Members, the following agreements were entered into by the Company and NMSPL on September 23, 2016, effective from October 1, 2016 with regard to:

i. Management Services Agreement appointing NMSPL as a provider of lease management, property management, marketing related, project management and general management services in 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 of identified movable assets relating to the services to be provided from the Company to NMSPL for a consideration of ''25.10 lakh from NMSPL.

b. the resignation of certain employees (save and except Key Managerial Personnel) from the Company and their employment with NMSPL on terms no less favourable than those given to them by the Company on the terms 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 the name and mark ‘Nirlon’ in the corporate name of NMSPL, on a royalty free basis, on the terms set out in the said Agreement.

7. II. Implementation / Commencement of Operations under various Agreements

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 by NMSPL at no less favourable terms; and

b. The Company upon receipt of the agreed consideration of ''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 receiving various management services from NMSPL under the Management Services Agreement.

Presently, the Shareholding Pattern of NMSPL is as under:

Class A Shares

Sr.

no.

Name of the Shareholder

No. of Shares held

% of Share Holding

1.

Mr. Kunal V. Sagar

5,000

33.335%

2.

Mr. Rahul V. Sagar

5,000

33.335%

3.

Reco Fortius Pte Limited

5,000

33.33%

Total

15,000

100%

Class B Shares

Sr.

no.

Name of the Shareholder

No. of Shares held

% of Share Holding

1.

Mr. Kunal V. Sagar

89,100

50%

2.

Mr. Rahul V.Sagar

89,100

50%

Total

1,78,200

100%

Class C Shares

Sr.

no.

Name of the Shareholder

No. of Shares held

% of Share Holding

1.

Reco Fortius Pte Limited

3,16,800

100%

Total

3,16,800

100%

8. The Board & its Committees

i. Board of Directors:

The total strength of the Board of Directors of the Company consists of 8 (eight) Directors including 2 (two) women Directors, out of which 1 (one) is an Independent woman Director. Of this number, 4 (four) Non-Executive Independent Directors, including 1 (one) woman Director, constitute 50% of the total strength of the Board of Directors of the Company.

For more detail, please refer to the link:

http: //www.nirlonltd.com/Board-committees.html

a. Re-appointment and Continuation of Directors at the 59th AGM

A brief resume of the Directors seeking reappointment and continuation as Directors at the 59th AGM is given below:

- Re-appointment of Mr. Chinniah,61, as a Director, who retires by rotation;

- Re-appointment of Mr. Raza, 81, and Mr. Gurbuxani, 84 , for a term of eighteen (18) months effective from April 1, 2019, and their continuation as Independent Directors; and

- Continuation of Mrs. Bhagat, 79, as a Director liable to retire by rotation.

The Board recommends:

- Re-appointment of Mr. Chinniah as a Director liable to retire by rotation;

- Re-appointment and Continuation of Mr. Raza and Mr. Gurbuxani, for a term of eighteen (18) months effective from April 1, 2019, as Independent Directors; and

- Continuation of Mrs. Bhagat, as a Director liable to retire by rotation.

b. Changes in the Board during the Financial Year 2017-18

There was no change in the Board of Directors during the F.Y. 2017-18.

The nature of each Director’s expertise, and the name of company / ies where they hold Chairmanships, Directorships and Memberships of Board / Committees and Shareholding if any, as stipulated under the required Regulation of the Listing Obligations & Disclosure Requirements Regulations, as well as the justification for reappointment and continuation of Directors, Including Independent Directors, is provided in this Report, and forms part of this Notice calling the 59th AGM.

ii. Committees of the Board of Directors and their Role and Responsibilities

a. Audit Committee (AC)

The AC of the Board played an important role during the Year under review, including recommending the appointment / re-appointment of, and co-ordinating with the Statutory Auditors, Internal Auditors, Cost Auditors and other Key Managerial Personnel of the Company. The AC has also rendered guidance, interalia, in the areas of corporate governance, internal audit, finance, taxation, accounts etc.

b. Stakeholders Relationship Committee (SRC)

The SRC met regularly over the course of the Year. With the compulsory dematerialization of the Company’s shares and electronic mode of transfers, postal dispatches which led to frequent complaints have been minimized.

As on March 31, 2018, approx. 92.51% of the Company’s total paid up equity share capital was held in Dematerialized Form, and there were no investor grievances / complaints pending.

Please note: As per the SEBI Amendment Regulations, 2018, the role of the SRC, interalia, shall include the following effective from April 1, 2019:

1. Resolving the grievances of the shareholders of the Company, including complaints related to transfer / transmission of shares, non-receipt of annual report, no receipt of declared dividends, issue of new / duplicate certificates, general meetings etc.;

2. Review of measures taken for effective exercise of voting rights by shareholders;

3. Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent; and

4. Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants / annual reports / statutory notices by the shareholders of the Company.

c. Corporate Social Responsibility Committee (CSRC)

The Board formed a Corporate Social Responsibility Committee on September 23, 2014, and based on its recommendations the Company commenced activities under its CSR Policy during the Year under review.

d. Nomination & Remuneration Committee (NRC)

The NRC recommends to the Board the remuneration / compensation packages of the Executive Director and Key Managerial 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 fulfil its role in, interlaid, identifying, evaluating and mitigating potential risks to the Company.

For more detail, please refer to the link:

http://www.nirlonltd.com/pdf/various_

committees.pdf

f. Anti- Sexual Harassment Committee (SHC)

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has constituted a committee which is responsible for redressal of complaints related to sexual harassment. During the Year under review, there were no complaints pertaining to sexual harassment.

For more detail, please refer to the link:http: //nirlonltd.com/pdf/policy_on_sexual_ harassment.pdf

9. Policies & Codes

SEBI introduced the LODR effective from December 1, 2015. The LODR provides, interalia, for various regulations, annexures and schedules and hence all prescribed companies were required to comply with the LODR latest by March 31, 2016.

In view of the above and in order to meet with these requirements, the Company made suitable modifications to its existing polices, and also adopted new policies on March 29, 2016. Your Company is compliant with the LODR requirements in this regard.

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 interalia, aims at:

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

b. ensuring that adequate and timely information is provided to investors;

c. avoiding establishment of a false market in the securities of the Company; and

d. Communicating the principles of materiality based on which the Company shall make disclosures of events or information.

For more detail, kindly refer to the link:

http://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 23 of the LODR, 2015 and Section 188 of the Companies Act, 2013, and is intended to ensure the proper approval and reporting of transaction / s between the Company and its Related Parties.

Aims of the RPT Policy

Interalia, to disclose in the Financial Statements of the Company applicable 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 best interest of the Company and its shareholders.

For more detail, kindly refer to the link:

http: //www.nirlonltd.com/pdf/related_party_ transaction_policy_mar_16.pdf

iii. Whistle Blower (WB) Policy

The Company has a vigil mechanism system called the Whistle Blower Policy (WBP) to deal with instances of fraud and mis-management, if any.

Aims of the WBP

The WBP meets with the requirement of Regulation 22 of the LODR, 2015, and Section 177 of the Act, and is intended to ensure that the Directors and Employees or any other person report their genuine concerns. During the year under review, there was no case of whistle blowing reported.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/whistle_blower_

policy_mar_16.pdf

iv. Corporate Social Responsibility (CSR) Policy

CSRC and CSR Policy are in compliance, and in agreement with Section 135 of the Act.

Amis of the CSR Policy:

a. To formulate and recommend to the Board, a Corporate Social Responsibility Plan which shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Act;

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

c. To monitor CSR activities; and

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

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/csr_policy_

mar_16.pdf

Details are given in the table overleaf:

The Composition of the CSR Committee is as follows:

The CSR Committee comprises of Mr. Moosa Raza (Chairman and Non- Executive Independent Director), Mr. Rama Varma, (Non- Executive Independent Director), Mrs. Rajani M. Bhagat, Mr. Kunal V. Sagar and Mr. Rahul V. Sagar (Promoters and Directors).

_C in Lakh)

1. Average Net Profit of the Company for the last three financial years

5,509.26

2. Prescribed CSR Expenditure @ two (2) % of the amount as in item 3 below:

110.19

3. Details of CSR spent during the Financial Year

a. Total amount to be spent for the Financial Year

111.00

b. Amount unspent, if any

Nil

c. Manner in which the amount spent during the Financial Year is detailed below:

1.

2.

3.

4.

5.

6.

7.

8.

Sr.

No.

CSR project or 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 C in Lakh)

Amount spent on the projects or programmes Sub-heads: Direct expenditure on projects or programmes Overheads: ('' in Lakh)

Cumulative expenditure upto to the reporting period ('' in Lakh)

Amount spent: Direct or through implementing agency (''in Lakh)

1.

Chief Minster’s Relief Fund, Maharashtra

Chief Minster’s Relief Fund, Maharashtra

Mumbai,

Maharashtra

51.00

51.00

51.00

51.00

2.

Chennai Liver Foundation

Medical

(Liver ailments)

Chennai , Tamil Nadu

10.00

10.00

10.00

10.00

3.

Venus Cultural Association

Medical (Dialysis unit)

Mumbai,

Maharashtra

10.00

10.00

10.00

10.00

4.

Kalse Dhamapur Shikshan Prasarak Mandal (kalse)

Education (Promotion of rural Education)

Dahamapur,

Maharashtra

10.00

10.00

10.00

10.00

5.

Dignity foundation

Eradication of Hunger and Poverty / food ration

Mumbai,

Maharashtra

10.00

10.00

10.00

10.00

6.

Jalyukta Shivar Abhiyan (JSA)

Water

conservation

Nagpur,

Maharashtra

20.00

20.00

20.00

20.00

Total

111.00

111.00

111.00

The Company contributed ''111.00 lakh to the implementing agencies towards its CSR Contribution.

Note:

The Company has allocated resources for CSR activities only after due diligence and identification of eligible Projects / Programmes. The Company shall endeavour to identify more eligible projects for utilization of the allocated budget for CSR activities in the coming years.

Responsibility Statement

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

v. Nomination & Remuneration (NR) Policy

NRC and NR Policy are in compliance with Section 178(1) of the Companies Act, 2013, and Regulation

19 read with Part D of Schedule II of the LODR.

Aims of the NR Policy:

a. To guide the Board in relation to appointment and removal of Directors and Key Managerial Personnel;

b. To evaluate the performance of the Members of the Board, and to provide necessary reports to the Board for further evaluation of the Board;

c. To recommend to the Board levels of remuneration / compensation payable to Directors and Key Managerial Personnel; and

d. ESOP and other related matters.

For more detail, kindly refer to the link: http://www.nirlonltd.com/pdf/nomination_and_ remuneration_policy_mar_16.pdf

vi. Risk Management (RM) Policy

The Regulation 21 of the LODR provides applicability for a Risk Management Committee and Risk Management Plan for the top 100 listed companies based on market capitalization as at the end of the immediate previous financial year.

Aims of the RM Policy

Although the Company is not required to have the RMC, the Company has instituted the RMC / RM Policy to better safeguard its business continuity and operations, and for timely assessment of potential risk, as well as risk mitigation and minimization procedures.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/risk_mgmt_policy_

mar_16.pdf

vii. Preservation of Documents (POD) Policy

Under Regulation 9 of the LODR, the Company is required to adopt the POD Policy.

Aims of the POD Policy

a. The POD Policy contains guidelines for identifying Documents that need to be maintained, the period of preservation of such Documents and the procedure for their destruction / disposal; and

b. To provide an efficient and systematic control on the periodicity and destruction of business related Documents.

For more detail, kindly refer to the link: http://www.nirlonltd.com/pdf/pod_policy_ mar_16.pdf

viii. Board Diversity (BD) Policy

The Policy sets out the approach to have diversity on the Board of the Company in terms of thought, experience, knowledge, perspective and gender, based on the applicable laws, rules and regulations for the Company.

Aims of the BD Policy

The Company believes that a diverse Board will, amongst other benefits:

a. Enhance the quality of decision making and facilitate better business performance;

b. Encourage diversity of perspective, thereby fueling creativity and innovation;

c. Complement and expand the skills, knowledge and experience of the Board as a whole; and

d. Provide better Corporate Governance.

For more detail, kindly refer to the link: http://www.nirlonltd.com/pdf/board_diversity_ policy.pdf

ix. Anti - Sexual Harassment (ASH) Policy Aims of the ASH Policy

The Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company also believes that all employees of the Company have the right to be treated with dignity. Sexual harassment at the work place or other than work place if involving employees is a grave offence, and is therefore, punishable.

During the year under review, there was no complaint in this regard.

For more detail, kindly refer to the link: http://www.nirlonltd.com / pdf / policy_on_sexual_ harassment.pdf

x. Succession Policy (SP)

The Company is not required to have a SP for the following reasons:

a. A specific arrangement exists under the Management Services Agreement executed by and between the Company and Nirlon Management Services Pvt. Ltd. (NMSPL) wherein all services are required to be provided

b. The principles prescribed in CCBE are general in nature, and lay down broad standards of compliance and ethics, as required by Regulation 17 (5) (a) and 26 of the LODR, 2015. The Board and Designated Employees shall also refer to other applicable policies and procedures of the Company for specific instructions and guidelines, which are to be read in conjunction with the CCBE.

For more detail, kindly refer to the link: http://www.nirlonltd.com/ pdf/ccbe_mar_16. Pdf by NMSPL ;

b. The Company has Key Managerial Personnel to the extent required for statutory compliance only.

Should any potential vacancy arise in (b) above, appropriate replacements will be identified by the NRC and the Board.

II. Codes

i. Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (ICCPIT)

The Board earlier adopted the internal Code of Conduct (‘ICCPIT’) for Regulating, Monitoring and Reporting of Trades under the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the same was effective from June 20, 2015.

Thereafter, the LODR came to force, and the existing ICCPIT was amended suitably. It is also mandatory under the LODR, that every listed entity should have a framework to avoid insider trading and abusive self-dealing.

Further, Regulation 8(1) of the PIT Regulations, 2015 mandates that listed companies formulate and display on their website a code of practices and procedures for fair disclosure of unpublished price sensitive information by adhering to the principles as set out in the Regulations. The principles of fair disclosure are also a part of ICCPIT, and the Company is compliant in this regard.

For more detail, kindly refer to the link: 1 http:// www.nirlonltd.com / pdf / iccpit_mar_16.pdf

ii. Code of Conduct for Board Members and Designated Employees (CCBE)

The LODR 2015 provides specific regulation with respect to the CCBE, and hence, the CCBE originally adopted by the Board on July 26, 2014 was amended suitably on March 29, 2016.

Aims of the CCBE

a. The CCBE envisages that the Board and Designated Employees must act within the boundaries of the authority conferred upon them, and with a duty to comply with the requirements of applicable laws, while discharging their duties and responsibilities; and

iii. Code of Conduct for Independent Directors (CCID)

The Board adopted the Code of Conduct for Independent Directors (CCID) and the same was effective from November 13, 2014. As the LODR provide specific regulation with respect to the CCID. The CCID originally adopted by the Board was amended suitably.

Aims of the CCID

To provide guidance for the professional conduct of Independent Directors (IDs) of the Company in order to adhere to desired standards by the IDs, and for fulfilment of their responsibilities in a professional and faithful manner, so as to promote confidence in the investment community, particularly stakeholders and regulators.

For more detail, kindly refer to the link: http:// www.nirlonltd.com / pdf / ccid_mar_16.pdf

10. i. Formal Annual Evaluation by the Directors

Pursuant to the provisions of the Act and the relevant provisions of LODR, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Compliance Committees.

ii. Familiarization Programme for Independent Directors

The Company’s Board is diversified with Independent Directors (IDs), who are highly qualified with rich experience. IDs had / have been associated with various Government agencies and departments, and have been associated with various corporate and business organizations including the Company. They are familiar with the Company’s business activities. Moreover, the Company provides them updates by providing a regular brief on its operations, as well making suitable arrangements for visits by the Independent Directors to the NKP site.

For more detail, kindly refer to the link: http://www.nirlonltd.com/pdf/familiarization_%20 programme_ids.pdf

iii. Declaration by and Tenure of Independent Directors

All IDs have given declarations that they meet the criteria of independence and are not disqualified to act as IDs as laid down under Section 149(6) of the Act and the relevant Regulation of LODR.

The IDs were appointed by Members of the Company at their Meeting held on September 23, 2014 to hold the office of Independent Director for a term of five consecutive years. Accordingly, the IDs shall hold office up to March 31, 2019. Letters of appointment were issued to IDs and the same were uploaded on the Company’s website.

For more detail, kindly refer to the links:

a. http://www.nirlonltd.com/pdf/mr_moosa_%20 raza.pdf

b. http://www.nirlonltd.com/pdf/mr_rama_varma. pdf

c. http://www. nirlonltd. com/pdf/mr_arjan_ gurbuxani.pdf

d. http://www.nirlonltd.com/pdf/mrs_aruna_ makhan.pdf

iv. Directors’ Responsibility Statement

To the best of your Directors’ knowledge and belief and according to the information and explanations obtained by them, your Directors make the following Statements in terms of Section 134 (3) (c) of the Act:

a. that in the preparation of the Annual Financial Statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b. that the Directors have selected such accounting policies as mentioned in Notes to the Financial Statements and have 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 March 31, 2018, and of the Profit of the Company for the Year ended on that date;

c. 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;

d. that the Directors have prepared the annual Financial Statements on a going concern basis;

e. that the Directors have laid down proper internal financial controls to be followed by the Company, and that such internal financial controls are adequate and were operating effectively; and

f. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems were adequate and operating effectively.

v. Number of Board & Audit Committee Meetings

A calendar of Meetings is prepared and circulated in advance to Directors. During the year, 5 (five) Board Meetings and 4 (four) Audit Committee Meetings were convened and held.

The details of these Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

11. Promoters & Key Managerial Personnel

a. Promoters

1. Mr. Kunal V. Sagar

2. Mr. Rahul V. Sagar

3. Mrs. Rajani M. Bhagat

4. Reco Berry Private Limited (w.e.f. April 28, 2015)

b. Key Managerial Personnel

1. Mr. Rahul V. Sagar, Executive Director

2. Mr. Jasmin K. Bhavsar, Company Secretary & Vice President (Legal) & Compliance Officer

3. Mr. Manish B. Parikh, Chief Financial Officer

There was no change in the composition of the Board of the Company, nor in the Key Managerial Personnel of the Company during the Financial Year 2017-18.

12. Loan, Guarantees, Security & Investment

The Company has not made any loan, or given any guarantee, or provided security to any person, and has not made any investment that attracts the provisions of Section 186 of the Companies Act, 2013, during the Financial Year.

13. Holding, Subsidiary & Associate Company

By virtue of the notification of the relevant provisions of the Companies (Amendment) Act 2017 on February 9, 2018, it has now been clarified that for the purpose of the definition of the term “holding company”, the expression “company” will also include a “body corporate”.

The term “body corporate” includes a company incorporated outside India. Accordingly, the purview of the definition of the term “holding company” has now been extended to companies incorporated outside India as well.

In view of the above amendment to the Companies Act, 2013, Reco Berry Pvt. Ltd. would now be considered as the holding company of Nirlon Limited for the purposes of the Act.

Save and except for the above, the Company is not a holding, subsidiary, or an associate company of any company and vice versa.

14. Fixed Deposits & Debentures

The Company has neither accepted, nor invited any fixed deposits during the Financial Year under review.

The Company has also not issued any debentures during the Financial Year under review.

15. Transfer of any amount to the Investor Education and Protection Fund (IEPF)

There is no amount lying with the Company as unpaid / unclaimed with respect to any debenture redemption amount and / or fixed deposit, and / or any outstanding interest thereon.

Please Note: As on July 31, 2018, there are amounts of ''17,43,417.00; ''16,69,509.00; ''17,49,265.50; and ''16,35,374.25 lying with the HDFC Bank Limited in a special accounts named the ‘Nirlon Limited - Dividend unpaid / unclaimed Dividend Accounts - ‘2013-14’, ‘2014-15’, ‘2015-16’ and ‘2016-17’ respectively.

16. Authorized Share Capital, Paid up Capital & Listed Capital of the Company

The Authorized Share Capital of the Company is ''150,00,00,000/- divided into 15,00,00,000 equity shares of ''10/- each, and the paid-up capital is ''90,11,80,400/divided into 9,01,18,040 equity shares of ''10/- each.

The Company’s paid up share capital is listed on the BSE Limited with the Security Code: 500307.

Please Note:

1. The Company issued a letter dated May 29, 2017 with regard to issue of New Share Certificates in Form SH - 1 with re-organized distinctive numbers to Members who hold shares in Physical Form, and fixed June 24, 2017 as the cut-off date for transacting with the old share certificates.

For more detail, kindly refer to the links:

a. http://www.nirlonltd.com/pdf/issue_of_new%20 share_certificate_2017.pdf

b. http://www.nirlonltd.com / pdf/newspaper_24_ may_2017.pdf

2. The Company successfully uploaded Distinctive Range Number (DRN) of its equity shares with NSDL & CDSL on July 13, 2017 in compliance with the SEBI circular no. CIR / MRD / DP / 10 / 2015.

17. Fraud Reporting

During the year under review, there was no fraud reported.

18. Related Party Transactions

The Company has entered into the following related party transactions during the Financial Year 2017-18:

i. The payment of remuneration to Mr. Rahul V. Sagar, Executive Director and KMPs of the Company;

ii. Payment of dividend declared by Members of the Company; and

iii. Execution of the following agreements on September 23, 2016:

a. Management Services Agreement;

b. Assets Sale Agreement; and Name User Agreement.

None of the Directors of the Company has received any commission from the Company.

None of the Directors and Key Managerial Personnel save and except as stated above, has any a pecuniary relationship or transactions vis-a-vis the Company.

As required by the Companies Act, 2013, complete details of all related party transactions are provided for in Form AOC-2 attached as Annexure 6A to this Report.

Related Party Disclosures under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are attached as Annexure 6Bto this Report.

19. Details of Significant & Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern Status & the Company’s Operations in Future

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

20. Spending on the Corporate Social Responsibility Programme

With respect to the Financial Year 2017-18, two (2) % of the average net profits of the Company made during the three (3) preceding financial year amounts to ''110.19 lakh.

The Company spent ''111.00 lakh during the Financial Year 2017-18 as per Section 135 of the Companies Act, 2013.

21. Intellectual Property Rights

The Company’s trade mark / service mark, logo / s, and copyrights are registered and protected under the respective statutes.

22. Auditors

i. Resignation of the Statutory Auditors

a. The Board of Directors of the Company at their Meeting held on August 9, 2017 had appointed Price Waterhouse Chartered Accountants LLP, Mumbai (FRN 012754N / N500016) as the Statutory Auditors of the Company.

b. Members of the Company at their 58th AGM held on September 29, 2017 confirmed their appointment as the Statutory Auditors of the Company for a period of five (5) years, commencing from the conclusion of the 58th AGM till the conclusion of the 63rd AGM of the Company.

c. Price Waterhouse Chartered Accountants LLP, Mumbai have, basis on their discussions with the Company, resigned as the auditors, and the Board accepted and recorded the resignation based on the recommendation by the Audit Committee at their meetings held on August 6, 2018.

ii. Statutory Auditors Report

a. The observations made by the Auditors in the Report referring to Notes forming part of the Accounts are self-explanatory, and therefore do not require any further comments under Section 134(3) (f) of the Companies Act, 2013.

b. There is no qualification in the Audit Report and a certificate to that effect is attached to this Report as Annexure 1.

iii. Recommendation for appointment of a New Statutory Auditor

a. Based on the recommendation of the Audit Committee, the Board of Directors, at their meeting held on August 6, 2018, have appointed S R B C & Co LLP, Chartered Accountants, Mumbai (FRN 324982E / E300003) as Statutory Auditors of the Company in place of the outgoing auditors of the Company.

b. S R B C & Co LLP, Chartered Accountants, Mumbai, have conveyed their consent for their apportionment as Statutory Auditors of the Company along with the confirmation that, their appointment, if approved by Members, would be within the limits prescribed under the Act.

Please note: There is no material change in fee payable to the new Statutory Auditors from what was paid to the outgoing Auditors.

Accordingly, consent of Members is being sought for passing an Ordinary Resolution as set out at Item No. 4 of the Notice for appointment of S R B C & Co LLP, as the Statutory Auditors of the Company to hold office from the conclusion of the 59th AGM till the conclusion of the 64th AGM and to conduct audits from the Financial Year 2018-19.

iv. Internal Auditors

KPMG India has been appointed as the Internal Auditors of the Company by the Board, based on the recommendation of the Audit Committee for the Financial Year 2018-19.

v. Secretarial Auditors & Secretarial Audit Report

a. Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Alwyn Jay & Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the Financial Year 2018-19. The Secretarial Audit Report for the Financial Year 2017-18 is annexed as Annexure 2.

b. There is no qualification in the Secretarial Audit Report.

vi. Cost Auditors & Cost Audit Records

Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 and the Companies (Cost Records and Audit) Amendment Rules 2014, specifies criteria for specified industries which are required to maintain cost records and get them audited, and is applicable to the Company.

The Company’s business as an Industrial Park is covered under Clause 5 (a) of Schedule VI of the Companies Act, 2013, and its turnover is also in excess of ''100/- Crore. It is, therefore, required to maintain cost records which should be audited by a practicing Cost Auditor.

a. In view of the above provisions of the Act, the Board, based on the recommendation of the Audit Committee, has approved the appointment and payment of remuneration to Mr. Vinay B. Mulay, the Practicing Cost Auditor (ICAI-CmA No. 8791 CP No. 101159) of Vinay Mulay & Co., Mumbai to conduct the audit of the cost records of the Company for the Financial Year ending March 31, 2019.

b. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor as recommended by the Audit Committee and approved by the Board of Directors, has to be ratified by Members of the Company at the 59th Annual General Meeting.

c. Accordingly, the consent of Members is sought for passing an Ordinary Resolution as set out at Item No.8 of the Notice for ratification of the remuneration payable to the Cost Auditor for the Financial Year ending March 31, 2019.

23. Conservation of Energy, Technology Absorption & Foreign Exchange Earning and Outgo

As required under Section 134 (3) (m) of the Companies Act, 2013 read with read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo were as under:

a. The Company has no manufacturing activities relating to conservation of energy.

b. i. The Company has not made any provision for research and development expenditure as the same is not applicable.

ii. The Company has no activity relating to technology absorption and innovation.

c. The Company has incurred '' Nil towards travel expenses in foreign currencies, and the Company has no foreign earnings.

The Company has incurred professional fee expenses in foreign currency aggregating to ''0.32 Crore.

24. Details of Appointment & Remuneration of Managerial Personnel and Top 10 Employees

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Managerial Personnel and Top 10 Employees of the Company forms a part of this Report as Annexure 3.

Please note: The Company only three (3) employees, being the KMPs as per the Act.

25. Remuneration Ratio of the Directors / Key Managerial Personnel / Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of Directors and KMPs of the Company is furnished in Annexure 4.

26. Employees Stock Option Scheme (Nirlon ESOP 2012)

i. Applicable disclosures as on March 31, 2018 are attached as Annexure 5 and form a part of this Report. Relevant details of the schemes have also been disclosed on the website of the Company.

For more detail, kindly refer to the link: http://www.nirlonltd.com/pdf/esop_scheme_2012. pdf

ii. Under the Nirlon ESOP 2012, the Board approved 7,17,656 options out of which 7,15,000 options were granted to eligible employees and the vesting period was accelerated (options corresponding to 2,656 equity shares of the Company have not been granted to any employees).

Furthermore, eligible employees have exercised their rights for 7,15,000 options under the Nirlon ESOP 2012.

iii. The Nirlon ESOP complies in all respects with the applicable rules and regulations.

iv. The Company has received a certificate from Chartered Accountants that the Scheme has been implemented in accordance with SEBI Guidelines, and the required resolution has been passed by Members. This Certificate will be available at the 59th AGM for inspection by Members.

v. As the Nirlon ESOP Trust had fulfilled is objectives, the Board, based on the recommendation of the NRC, passed a resolution on February 6, 2018 authorizing Directors to take steps to wind up the Nirlon ESOP Trust and Nirlon ESOP Plan 2012. Accordingly, the Trust sold the balance 2,656 ESOP shares on February 12, 2018 and utilized the proceeds as permitted by Statute.

With this, the Nirlon ESOP Plan is closed, and formalities for the winding up of the Trust have been initiated.

27. Corporate Governance Disclosure

The Company adheres to the principles of Corporate Governance mandated by SEBI under LODR (as applicable) and has complied with all mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance, i.e. Annexure 7 to this Report, and a certificate from Alwyn Jay & Co., the Practicing Company Secretaries, confirming compliance with Corporate Governance requirements as applicable, form part of this Report.

28. Management Discussion & Analysis

Details are provided in Annexure 8 and form part of this Report.

29. Extract of Annual Return

The details forming part of the extract of the Company’s Annual Return in form MGT 9 are provided in Annexure 9.

30. Share Transfer Agent (STA)

The Company appointed Link In time India Pvt. Ltd., as its Share Transfer Agent (the ‘STA’). w.e.f. June 3, 2016, pursuant to the SEBI direction, in place of Sharepro Services India Private Limited.

The Registers of Members, Annual Returns etc. are maintained by Link In time India Pvt. Ltd. at their Registered Office situate at C 101, 247 Park, L B S Marg, Vikhroli (West), Mumbai 400 083 and / or at such other place(s) within the city of Mumbai where the STA may have their office from time to time.

31. Enhancing Shareholders / Members Value

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the Company’s productive asset and resource base and nurturing its overall corporate reputation.

Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact socio-economic dimensions and contribute to sustainable growth and development.

32. Postal Ballot

i. Members of the Company passed the Special Resolution on June 18, 2018 through a Postal Ballot (vide Postal Ballot Notice dated April 28, 2018) approving and adopting the alterations to Articles 71 (C) and (D) of the Articles of Association of the Company.

ii. The Directors appointed Mr. Alwyn D’souza, Practising Company Secretary (FCS No.5559 CP No.5137) of Alwyn Jay & Co., Company Secretaries, Mumbai, as Scrutinizer (‘the Scrutinizer’) for scrutinizing the voting through the Postal Ballot, including e-voting, in a fair and transparent manner.

iii. The Postal Ballot Forms were deposited at the address given thereon. Duly completed Postal Ballot Forms which reached the Scrutinizer not later than 5.00 p.m. (IST) on Tuesday, June 12, 2018 were considered.

iv. The Scrutinizer submitted his report to Mr. Arjan R. Gurbuxani, authorised Director, after the completion of scrutiny of the Postal Ballot including e-voting. The result of the Postal Ballot including e-voting was declared on Monday, June 18, 2018 and communicated to the BSE Limited and the CDSL. The same was also displayed on the Company’s website at ‘www.nirlonltd.com’.

The following Links are attached w.r.t. Postal Ballot Notice, Form, Combined Results and the Amended Articles of Association of the Company:

a. http://nirlonltd.com/pdf/postal_ballot_notice_ apr_18.pdf

b. http://nirlonltd.com/pdf/postal_ballot_form_ apr_18.pdf

c. http://nirlonltd.com / pdf / postal_ballot_voting_ results_18_jun_18.pdf

d. http://nirlonltd.com/pdf/moa_and_aoa_nirlonltd. pdf

33. SEBI circular on Strengthening the Guidelines and Raising Industry Standards for RTA, Issuer Companies and Banker to Issue, & also the BSE Ltd.’s Circular on the amendment to Regulation 40 of the SEBI LODR, 2015 with respect to mandatory dematerialisation of physical shares for transfers after December 5, 2018

i. Members of the Company, who have not updated their various details as required by the SEBI in accordance with the SEBI Circular, are requested to update the same immediately by furnishing the details to the Company’s Share Transfer Agent. A copy of the Form and letter are attached in this Report.

The following Links are attached for the SEBI Circular, Share Transfer Agent Letter along with the KYC updating form:

a. http://nirlonltd.com/pdf/sebi_circular_20_ apr_2018.pdf

b. http://nirlonltd.com/pdf/updating_kyc_details_ aug_2018.pdf

ii. The Company requests its Members, who are holding shares in Physical Form, to immediately demat their physical shares in view of the amendment to the Regulation 40 of the SEBI LODR, 2015.

Accordingly, the Company and its Share Transfer Agents (STAs) shall, from December 5, 2018, transfer shares in dematerialized form only.

The following Link is also attached on the amended Regulation 40 of the SEBI LODR, 2015: http://nirlonltd.com/pdf/reg_40_of_sebi_lodr_2015_ aug_2018.pdf

The Share Transfer Agent letter along with KYC update form as required by the SEBI are attached to this Report.

34. Secretarial Standards

The Directors state that applicable Secretarial Standards,

i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

35. Acknowledgements

Your Directors record their appreciation for the services rendered by KMPs. They acknowledge and record their appreciation for the co-operation and assistance rendered by HDFC Limited, Banks and various Government authorities at State and Central levels. Your Directors thank all stakeholders for their continued support.

Your Directors would also like to place on record their sincere appreciation for the co-operation received from the Reserve Bank of India (RBI), SEBI, BSE Limited, CDSL, NSDL, SHCIL, MCGM and all other statutory and / or regulatory bodies.

For and on behalf of the Board of Directors

Nirlon Limited

Sd / -

Moosa Raza Chairman

(DIN 00145345)

Mumbai, August 6, 2018


Mar 31, 2017

The Directors present their 58th Annual Report along with the Audited Financial Accounts for the Financial Year ended March 31, 2017.

1. Financial Performance

The Company’s Financial Performance for the Year ended March 31, 2017 is summarized below:

(Rs, in Crore)

Particulars

2016-17

2015-16

Gross Income from Operations

281.02

289.85

Gross Profit

213.17

224.39

Interest Paid

64.79

72.25

Cash Profit

148.38

152.14

Depreciation

70.65

80.48

Net Profit / (Loss)

Before Exceptional Item/s

77.73

71.66

Add: Exceptional Item/s

2.40

(2.58)

Net Profit / Loss for the Year after Exceptional Item/s

80.13

69.08

Provision for Taxation:

Current tax

14.20

(0.01)

Deferred tax

8.67

25.52

Profit / (Loss) for the Year after tax

57.26

43.57

Add : Carried forward surplus

64.86

29.43

Amount available for appropriation Reserve

122.12

73.00

Proposed dividend on Equity shares

6.76

6.76

Tax on Dividend

1.38

1.38

Balance carried to Balance Sheet

113.98

64.86

2. Financial Operations (Summary)

After receiving the required approvals, the Company has begun development/construction of Phase 5 (redevelopment of Phase 0) in NKP, Goregaon from May 2017. Licences of licensees in these old existing buildings (Phase 0) were therefore not renewed by the Company to allow for the Phase 5 development (redevelopment of

Phase 0). As a result of such non-renewal of licenses, the Company’s Income from Operations, Gross Profit, as well as Cash Profit were marginally lower when compared to the last financial year.

i. Gross Income from Operations for the Financial Year 2016-17 was Rs,281.02 crore as against Rs,289.85 crore for 2015-16.

ii. Gross Profit for the Financial Year 2016-17 was Rs,213.17 crore as against Rs,224.39 crore for 201516.

iii. Cash Profit for the Financial Year 2016-17 was Rs,148.38 crore as against Rs,152.14 crore for 2015

16.

iv. The Exceptional Items :

a. for the Financial Year 2015-16 are the write back of the Property Tax liability of the earlier years on account of assessment as per the Capital Value System, payment of Excise Duty and interest thereon based on the Hon’ble Supreme Court order in relation to manufacture of Nylon Tyrecord Yarn and Fabric during the period April 1999 to June 2000, and payment of Liquidated Damages and interest thereon on delayed payment of Provident Fund dues during the period January 2000 to February 2007.

b. for the Financial Year 2016-17 are the write back of a portion of the property tax liability of earlier years on the basis of actual assessment of Phase 4 by the Municipal Corporation, as against the estimated amounts considered till then, and mesne profits received from Pfizer Limited under the Consent Terms filed before the Hon’ble Small Causes Court, Mumbai.

v. Net Profit for the Financial Year 2016-17 (after taxes and exceptional items) was Rs,57.26 crore as against a profit of Rs,43.57 crore for 2015-16.

The Company is in the business of development and managing an Industrial Park, and during the year under review, there is no change in the business activity of the Company.

3. Reserves

The Board does not propose to transfer any amount to the General Reserve account in the Balance Sheet for the Financial Year 2016-17.

4. Dividend

For the year under review, the Board recommends a dividend of Rs,0.75 paise per equity share of Rs,10/- each (7.5%) amounting to Rs,8.14 crore (inclusive of tax of Rs,1.38 crore), subject to the approval of Members of the Company at their 58th AGM.

Dividend will be paid to Members whose names appear in the Register of Members as on Thursday, September

14, 2017. In respect of shares held in Dematerialized Form, dividend will be paid to Members whose names are furnished by the National 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 / Information Technology (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 Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the 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 Fee Commencement

The planning for the development of NKP in phases began in 2006, and construction 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 in Phases 1, 2, 3 and 4 corresponding to approx. 18.78 lakh sq. ft. of licensable area. Licence fees for Phases 1, 2, 3 and 4 continue to be received by the Company as on March 31, 2017.

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

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

Phase 5 (redevelopment of Phase 0):

After receiving the required approvals, the Company has begun development/construction of Phase 5 (redevelopment of Phase 0) in NKP, Goregaon from May 2017. Further particulars are provided in Annexure 8 to this Report, i.e. Management Discussion Analysis.

ii. License Fees

During the year under review, gross license fees from Phases 1, 2, 3 and 4 aggregated approx. Rs,232.24 crore. Approx. Rs,7.77 crore by way of additional license fees were also received from the remaining existing old buildings (Phase 0) and Nirlon House, Worli, Central Mumbai.

iii. Marketing

Phases 1, 2, 3 and 4 of NKP continue to be approx. 99% licensed (as on August 9, 2017) to reputed international and Indian corporate.

The Company has made a specific effort to license its development to well-regarded Corporate, and the campus is fully operational and functional in this regard.

iv. Financing

The Company’s debt funding to date continues to be provided by HDFC Limited.

At the request of the Company, HDFC Limited, has granted a moratorium on payment of their principal securitized loan amounts effective from May 15, 2017, whereby the Company is required to repay only the interest amount on these outstanding securitized loans till the construction of Phase 5 (redevelopment of Phase 0) is completed. This principal moratorium has resulted in incremental cash flows being available to the Company to finance a larger part of the Phase 5 (redevelopment of Phase 0) construction from its internal accruals.

This will result in lower borrowings for the construction of Phase 5 (redevelopment of Phase 0), and consequently an overall reduction in the total debt of the Company, when compared to the option of continuing to repay principal on a monthly basis.

The outstanding loan amounts as on August 9, 2017 aggregate Rs,610.86 crore (including loans used for the ongoing construction of Phase 5 (redevelopment of Phase 0)), on which the Company is presently paying a competitive rate of interest.

The Company’s business plan continues to retain ownership of the NKP development, 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. 45,475.00 sq.ft. of area in the Nirlon House building in a prime location on Dr. A. B. Road, Worli in Central Mumbai.

7.1 Property Management Functions, Sale of specified Movable Assets and Name User

a. Reco Berry Private Limited (Reco) of Singapore, an affiliate of GIC, the Sovereign Wealth Fund of Singapore and Mr. Kunal V. Sagar, Mr. Rahul V. Sagar, Alfano Pte Limited and Deltron Pte Limited (Promoters) had entered into Share Purchase and Shareholders Agreements dated December 23, 2014, pursuant to which Nirlon Management Services Pvt. Ltd. (NMSPL) was incorporated under the provisions of the Companies Act,

2013 effective from October 7, 2015;

b. Thereafter, the Audit Committee and the Board of Directors of the Company approved, subject to Members’ approval, the proposed Related Party Transactions with NMSPL in accordance with the Related Party Transactions Policy, and the provisions of the Companies Act;

c. The Company obtained Members’ approval by way of an Ordinary Resolution on the proposed Related Party Transactions between the Company and NMSPL at its 57th AGM held on September 20, 2016 (please note that all interested parties abstained from the voting on this item).

d. Post approval from Members, the following agreements were entered into by the Company and NMSPL on September 23, 2016, effective from October 1, 2016 with regard to :

i. Management Services Agreement appointing NMSPL as a provider of lease management, property management, marketing related, project management and general management services in 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 of identified movable assets relating to the services to be provided from the Company to NMSPL for a consideration of Rs,25.10 lakh from NMSPL;

b. the resignation of certain employees (save and except Key Managerial Personnel) from the Company and their employment with NMSPL on terms no less favorable than those given to them by the Company on the terms 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 the name and mark ‘Nirlon’ in the corporate name of NMSPL, on a royalty free basis, on the terms set out in the said Agreement.

7.2 Implementation / Commencement of Operations under various Agreements

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 by NMSPL at no less favorable terms; and

b. the Company upon receipt of the agreed consideration of Rs, 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 receiving various management services from NMSPL under the Management Services Agreement.

Presently, the Shareholding Pattern of NMSPL is as under: Class A Shares

Sr.

No.

Name of the Shareholder

No. of Shares held

% of Share Holding

1.

Mr. Kunal V. Sagar

5,000

33.335%

2.

Mr. Rahul V. Sagar

5,000

33.335%

3.

Reco Fortius Pte Limited

5,000

33.33%

Total

15,000

100%

Class B Shares

Sr.

No.

Name of the Shareholder

No. of Shares held

% of Share Holding

1.

Mr. Kunal V. Sagar

89,100

50%

2.

Mr. Rahul V.Sagar

89,100

50%

Total

1,78,200

100%

Class C Shares

Sr.

Name of the Shareholder

No. of

% of Share

No.

Shares

held

Holding

1.

Reco Fortius Pte Limited

3,16,800

100%

Total

3,16,800

100%

8. The Board & its Committees

i. Board of Directors:

The total strength of the Board of Directors of the Company consists of 8 (eight) directors including 2 (two) women directors. Of this number, 4 (four) Independent Non-Executive directors, including 1 (one) woman director, constitute 50% of the total strength of the Board of Directors of the Company.

For more detail, please refer to the link:

http://www. nirlon ltd. com/board-committees. html

a. Reappointment of Director at the 58th AGM

Mrs. Rajani M. Bhagat (DIN 00870716), Director, retires by rotation and being eligible, offers herself for reappointment.

The Board recommends the reappointment of Mrs. Bhagat as a Director to retire by rotation.

b. Changes in the Board during the Financial Year 2016-17

Mr. Kunal V. Sagar who retired by rotation at

the 57th AGM was reappointed by Members at their 57th AGM.

Reco Berry Pvt. Ltd., a Promoter of the Company, nominated Mr. Kunnasagaran Chinniah (DIN 01590108), on the Board w.e.f. April 28, 2016. Thereafter, Members of the Company appointed Mr. Chinniah as a Director retiring by rotation at their 57th AGM held on September 20, 2016.

A brief resume of the Directors, including Mrs. Bhagat, nature of their expertise, and the name of company/ies where they hold Chairmanships, Directorships and Memberships of Board / Committees and Shareholding if any, as stipulated under the required Regulation of the Listing Obligations & Disclosure Requirements Regulations, 2015 (LODR), is provided in this Report, and forms part of this Notice calling the 58th AGM.

ii. Various Committees of the Board of Directors and their Role and Responsibilities

a. Audit Committee (AC)

The AC of the Board played an important role during the year under review including recommending the appointment/reappointment of, and coordinating with the Statutory Auditors, Internal Auditors, Cost Auditors and other Key Managerial Personnel of the Company. The AC has also rendered guidance, inter alia, in the areas of corporate governance, internal audit, finance, taxation, accounts etc.

b. Stakeholders Relationship Committee (SRC)

The SRC met regularly over the course of the year. With the compulsory dematerialization of the Company’s shares and electronic mode of transfers, postal dispatches / e-mail correspondence which led to frequent complaints have been minimized.

As on March 31, 2017, approx. 92.40 % of the Company’s total paid up equity share capital was held in Dematerialized Form, and there were no investor grievances /complaints pending.

c. Corporate Social Responsibility Committee (CSRC)

The Board formed a Corporate Social Responsibility Committee on September 23, 2014, and based on its recommendations the Company commenced activities under its CSR policy during the year under review (which was the first year it was required to do so as per the Act).

d. Nomination & Remuneration Committee (NRC)

The NRC recommends to the Board the remuneration/compensation packages of the Executive Director, Key Managerial Personnel and other employees.

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, inter alia, identifying, evaluating and mitigating potential risks to the Company.

For more detail, please refer to the link:

http://www.nirlonltd.com/pdf/various_

committees.pdf

f. Anti Sexual Harassment Committee (SHC)

Prevention of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made there under, your Company has constituted a committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment.

9. Policies & Codes

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

In view of the above and in order to meet with the requirements, the Company made suitable modifications to its existing polices, and also adopted new policies on March 29, 2016. Your Company is compliant with the LODR.

I. Policies

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

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

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

b. ensuring that adequate and timely information is provided to investors;

c. avoiding establishment of a false market in the securities of the Company; and

d. Communicating the principles of materiality based on which the Company shall make disclosures of events or information.

For more detail, kindly refer to the link:

http://www. nirlon ltd. com/pdf/dmei_policy_ mar_16.pdf

ii. Related Party Transaction ( RPT) Policy

The RPT Policy is in accordance with the requirement of Regulation 23 of the LODR, 2015 and Section 188 of the Companies Act, 2013, and is intended to ensure the proper approval and reporting of transaction/s between the Company and its Related Parties.

Aims of the RPT Policy

Inter alia, to disclose in the Financial Statements of the Company applicable transaction/s between the Company and Related Parties,

The Composition of the CSR Committee is as follows:

The CSR Committee comprises of Mr. Moosa Raza (Chairman and Independent Director), Mr. Rama Varma, (Independent Director), Mrs. Rajani M. Bhagat, 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

1,778.94

2. Prescribed CSR Expenditure (two (2) % of the amount as in item 3 below)

35.58

3. Details of CSR spent during the Financial Year

a. Total amount to be spent for the Financial Year

b. Amount unspent, if any

38.00

*16.80

c. Manner in which the amount spent during the Financial Year is detailed below:

1.

2.

3.

4.

5.

6.

7.

8.

Sr.

No.

CSR project or 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 C in Lakh)

Amount spent on the projects or programmes Sub-heads:

(1) Direct expenditure on projects or programmes (2) Overheads:

(in Rs,)

Cumulative expenditure upto to the reporting period

Rs, in Lakh)

Amount spent: Direct or through implementing agency

Rs, in Lakh)

1.

The Aangan Trust

Child Protection Service / Promotion of Education

Mumbai, Maharashtra

8.00

1) 7,72,800/2) 27,200/-

8.00

8.00

2.

Antarang Foundation

Employment in Enhancing vocational skills / Entrepreneurship pilot /

Communication

Mumbai, Maharashtra

10.00

Nil

Nil

Nil

3.

Dignity Foundation

Eradication of Hunger and Poverty / Food Ration

Mumbai, Maharashtra

10.00

1) 2,60,000/2) 60,000/-

3.20

3.20

4.

Jai Vakeel School, Mumbai run by Jai Vakeel Foundation & Research Centre

Special Education / Promotion of Education

Mumbai, Maharashtra

10.00

1) 9,95,357/2) 4,643/-

10.00

10.00

Total

38.00

21.20

21.20

The Company contributed '' 38 lakh to the implementing agencies towards its CSR Contribution.

*Amount unspent by the implementing agencies Note:

The Company has allocated resources for CSR activities only after due diligence and identification of eligible Projects/ Programmes. The Company shall endeavour to identify more eligible projects for utilization of the allocated budget for CSR activities in the coming years.

Responsibility Statement

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

v. Nomination & Remuneration (NR) Policy

NRC and NR Policy are in compliance with Section 178(1) of the Companies Act, 2013, and Regulation 19 read with Part D of Schedule II of the LODR.

Objectives of the NR Policy:

a. To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management;

b. To evaluate the performance of the Members of the Board, and to provide necessary reports to the Board for further evaluation of the Board;

c. To recommend to the Board levels of remuneration/compensation payable to Directors, Key Managerial Personnel and other Senior Management; and

d. ESOP and other related matters.

For more detail, kindly refer to the link:

http://www. nirlon ltd. com/pdf/nomination_and_ remuneration_policy_mar_16.pdf

vi. Risk Management (RM) Policy

The Regulation 21 of the LODR provides applicability for a Risk Management Committee and Risk Management Plan for the top 100 listed companies based on market capitalization as at the end of the immediate previous financial year.

Although the Company is not required to have the RMC, the Company has instituted the RMC/RM Policy for better safeguarding of business continuity, operations and timely assessment of potential risk, as well as mitigation and minimization procedures for the same.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/risk_mgmt_policy_

mar_16.pdf

vii. Preservation of Documents (POD) Policy

Under Regulation 9 of the LODR, the Company is required to adopt the POD Policy.

Aims of the POD Policy

a. The POD Policy contains guidelines for identifying Documents that need to be maintained, the period of preservation of such Documents and the procedure for their destruction/disposal; and

b. This Policy aims to provide an efficient and systematic control on the periodicity and destruction of business related Documents.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/pod_policy_

mar_16.pdf

viii. Board Diversity Policy

The Policy sets out the approach to have diversity on the Board of the Company in terms of thought, experience, knowledge, perspective and gender, based on the applicable laws, rules and regulations for the Company.

The Company believes that a diverse Board will, amongst others:

a. Enhance the quality of decision making and facilitate better business performance;

b. Encourage diversity of perspective, thereby fueling creativity and innovation;

c. Complement and expand the skills, knowledge and experience of the Board as a whole; and

d. Provide better Corporate Governance.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/board_diversity_

policy.pdf

ix. Anti Sexual Harassment Policy

The Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company also believes that all employees of the Company have the right to be treated with dignity. Sexual harassment at the work place or other than work place if involving employees is a grave offence, and is therefore, punishable.

During the year under review, there was no complaint in this regard.

II. Codes

i. Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (ICCPIT)

The Board earlier adopted the internal Code of Conduct (‘ICCPIT’) for Regulating, Monitoring and Reporting of Trades under the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the same was effective from June 20, 2015.

Thereafter, the LODR came to force, and the existing ICCPIT was amended suitably. It is also mandatory under the LODR, that every listed entity should have a framework to avoid insider trading and abusive self-dealing.

Further, Regulation 8(1) of the PIT Regulations,

2015 mandates that listed companies formulate and display on their website a code of practices and procedures for fair disclosure of unpublished price sensitive information by adhering to the principles as set out in the Regulations. The principles of fair disclosure are also a part of ICCPIT, and the Company is compliant in this regard.

For more detail, kindly refer to the link:

http://www.nirlonltd.com/pdf/iccpit_mar_16.pdf

ii. Code of Conduct for Board Members and Designated Employees (CCBE)

The LODR 2015 provides specific regulation with respect to the CCBE, and hence, the CCBE originally adopted by the Board on July 26, 2014 was amended suitably on March 29, 2016.

Objectives of CCBE

a. The CCBE envisages that the Board and Designated Employees must act within the boundaries of the authority conferred upon them, and with a duty to comply with the requirements of applicable laws, while discharging their duties and responsibilities; and

b. The principles prescribed in CCBE are general in nature, and lay down broad standards of compliance and ethics, as required by Regulation 17 (5) (a) and 26 of the LODR, 2015. The Board and Designated Employees shall also refer to other applicable policies and procedures of the Company for specific instructions and guidelines, which are to be read in conjunction with the CCBE.

For more detail, kindly refer to the link:

http://www. nirlon ltd. com/pdf/ccbe_mar_ 16.pdf

iii. Code of Conduct for Independent Directors (CCID)

The Board adopted the Code of Conduct for Independent Directors (CCID) and the same was effective from November 13, 2014. As the LODR provide specific regulation with respect to the CCID. The CCID originally adopted by the Board was amended suitably.

Objectives of the CCID

To provide guidance for the professional conduct of Independent Directors (IDs) of the Company in order to adhere to desired standards by the IDs, and for fulfillment of their responsibilities in a professional and faithful manner, so as to promote confidence in the investment community, particularly stakeholders, regulators etc.

For more detail, kindly refer to the link:

http://www. nirlonltd. com/pdf/ccid_mar_ 16.pdf

7. i. Formal Annual Evaluation by the Directors

Pursuant to the provisions of the Act and the relevant provisions of LODR, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Compliance Committees.

ii. Familiarization Programme for Independent Directors

The Company’s Board is diversified with Independent Directors (IDs), who are highly qualified with rich experience. IDs had/ have been associated with various Government agencies and departments, and have been associated with various corporate and business organizations including the Company. They are familiar with the Company’s business activities. Moreover, the Company provides them updates by providing a regular brief on the operations as well making suitable arrangements for visits by the Independent Directors to the NKP site.

For more detail, kindly refer to the link:

http://www. nirlonltd. com/pdf/familiarization_ %20 programme_ids.pdf

iii. Declaration by and Tenure of the Independent Directors

All IDs have given declarations that they meet the criteria of independence and are not disqualified to act as IDs as laid down under Section 149(6) of the Act and the relevant Regulation of LODR.

The IDs were appointed by Members of the Company at their Meeting held on September 23, 2014 to hold the office of Independent Director for a period of five consecutive years. Accordingly, the IDs shall hold office up to March 31, 2019. Letters of appointment were issued to IDs and the same were uploaded on the Company’s website.

For more detail, kindly refer to the links:

a. http://www. nirlonltd. com/pdf/mr_moosa_%20 raza.pdf

b. http://www.nirlonltd.com/pdf/mr_rama_varma. pdf

c. http://www.nirlonltd.com/pdf/mr_arjan_ gurbuxani.pdf

d. http://www.nirlonltd.com/pdf/mrs_aruna_ makhan.pdf

iv. Directors’ Responsibility Statement

To the best of your Directors’ knowledge and belief and according to the information and explanations obtained by them, your Directors make the following Statements in terms of Section 134 (3) (c) of the Act:

a. that in the preparation of the Annual Financial Statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b. that the Directors have selected such accounting policies as mentioned in Notes to the Financial Statements and have 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 March 31, 2017, and of the Profit of the Company for the year ended on that date;

c. 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;

d. that the Directors have prepared the annual Financial Statements on a going concern basis;

e. that the Directors have laid down proper internal financial controls to be followed by the Company, and that such internal financial controls are adequate and were operating effectively; and

f. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

v. Number of Board & Audit Committee Meetings

A calendar of Meetings is prepared and circulated in advance to Directors. During the year, 6 (Six) Board Meetings and 5 (five) Audit Committee Meetings were convened and held.

The details of these Meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

8. Promoters & Key Managerial Personnel

a. Promoters

1. Mr. Kunal V. Sagar

2. Mr. Rahul V. Sagar

3. Mrs. Rajani M. Bhagat

4. Reco Berry Private Limited (w.e.f. April 28, 2015)

b. Key Managerial Personnel

1. Mr. Rahul V. Sagar, Executive Director

2. Mr. Jasmin K. Bhavsar, Company Secretary & Vice President (Legal) & Compliance Officer

3. Mr. Manish B. Parikh, Chief Financial Officer

Except for the appointment of Mr. Kunnasagaran Chinniah as a Nominee Director of Reco Berry Pvt. Ltd. w.e.f. April 28, 2016, there was no change in the composition of the Board of the Company, nor in the Key Managerial Personnel of the Company during the Financial Year 2016-17.

9. Loan, Guarantees, Security & Investment

The Company has not made any loan, or given any guarantee, or provided security to any person, and has not made any investment that attracts the provisions of Section 186 of the Companies Act, 2013, during the Financial Year.

10. Holding, Subsidiary & Associate Company

The Company is not a holding, a subsidiary, or an associate company of any company and vice versa.

11. Fixed Deposits & Debentures

The Company has neither accepted, nor invited any fixed deposits during the Financial Year under review.

The Company has also not issued any debentures during the Financial Year under review.

12. Transfer of any amount to the Investor Education and Protection Fund (IEPF)

There is no amount lying with the Company as unpaid/ unclaimed with respect to any debenture redemption amount and/or fixed deposit, and/or any outstanding interest thereon.

However, as on July 31, 2017, there are amounts of Rs,17,46,884.25, Rs,16,74,005.25 and Rs,17,59,728.75 lying with HDFC Bank Limited in a special account named the ‘Nirlon Limited - Dividend unpaid / unclaimed Dividend Account - Rs,2013-14Rs,, Rs,2014-15’ and ‘2015-16’ respectively, which pertains only to Members who hold their shares in Physical Form.

13. Authorized Share Capital, Paid up Capital & Listed Capital of the Company

The Authorized Share Capital of the Company is Rs,150,00,00,000/- divided into 15,00,00,000 equity shares of Rs,10/- each, and the paid up capital is Rs,90,11,80,400/divided into 9,01,18,040 equity shares of Rs,10/- each.

The Company’s paid up share capital is listed on the BSE Limited with the security code 500307 with ISIN INE910A01012.

Please Note:

1. The Company issued a letter dated May 29, 2017 with regard to issue of New Share Certificates in Form SH - 1 with re-organized distinctive numbers to Members who hold shares in Physical Form, and fixed June 24, 2017 as the cut off date for transacting with the old share certificates.

For more detail, kindly refer to the links:

a. http://www.nirlonltd.com/pdf/issue_of_new%020 share_certificate_2017.pdf

b. http://www.nirlonltd.com/pdf/newspaper_24_ may_2017.pdf

2. The Company successfully uploaded Distinctive Range Number (DRN) of its equity shares with NSDL & CDSL on July 13, 2017 in compliance with the SEBI circular no. CIR/MRD/DP/10/ 2015.

14. Fraud Reporting

During the year under review, there was no fraud reported.

15. Related Party Transactions

The Company has entered into the following related party transactions during the Financial Year 2016-17:

i. The appointment and payment of Managerial remuneration to Mr. Rahul V. Sagar, Executive Director of the Company, pursuant to the special resolution passed by Members through a postal ballot on August 29, 2016;

ii. Payment of dividend declared by Members of the Company.

iii. Execution of the following agreements on September 23, 2016:

a. Management Services Agreement;

b. Assets Sale Agreement; and Name User Agreement.

None of the Directors of the Company has received any commission from the Company.

None of the Directors and Key Managerial Personnel, save and except as stated above, has any pecuniary relationships or transactions vis-a-vis the Company.

As required by the Companies Act, 2013, complete details of all related party transactions are provided for in Form AOC-2 attached as Annexure 6A to this Report.

Related Party Disclosures under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2014, are attached as Annexure 6B to this Report.

16. Details of Significant & Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern Status & the Company’s Operations in Future

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

17. Spending on the Corporate Social Responsibility Programme

With respect to the Financial Year 2016-17, two (2)% of the average net profits of the Company made during the three (3) preceding financial year amounts to Rs,35.58 lakh.

The Company spent Rs,38.00 lakh during the Financial Year 2016-17 as per Section 135 of the Companies Act, 2013.

18. Intellectual Property Rights

The Company’s trade mark/service mark, logo/s, and copyrights are registered and well protected under the respective statutes.

19. Auditors

i. Statutory Auditors & their Report

a. Members of the Company at their 57th AGM held on September 20, 2016 had approved the reappointment of N. M. Raiji & Co., Chartered Accountants, as the Statutory Auditors of the Company, to hold office till the conclusion of 58th AGM of the Company to be held in the year 2017.

b. In terms of the provisions of Section 139(2) of the Act, N. M. Raiji & Co. are not eligible to be reappointed as the statutory auditors of the Company, consequent to completion of their term. Accordingly, it is proposed to appoint Price Waterhouse Chartered Accountants LLP (FRN 012754N/ N500016), as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing AGM of the Company till the conclusion of the 63rd AGM to be held in the year 2022, subject to ratification of their appointment at every AGM, if applicable.

c. Price Waterhouse conveyed their consent to be appointed as the Statutory Auditors of the Company along with a confirmation that, their appointment, if made by Members, would be within the limits prescribed under the Companies Act, 2013. They have also furnished a declaration in terms of Section 141 of the Act that they are eligible to be appointed as Auditors of the Company and that they have not incurred any disqualifications under the Act.

d. Accordingly, consent of Members is sought for passing an Ordinary Resolution as set out at Item No. 4 of the Notice for appointment of Price Waterhouse Chartered Accountants LLP (FRN 012754N/N500016), Mumbai, as the Statutory Auditors of the Company to hold office from the conclusion of the 58th AGM till the conclusion of the 63rd AGM to conduct the audits for a period of five (5) years effective from financial years 2017-18 to 2021-22.

ii. Statutory Auditors Report

a. The observations made by the Auditors in the Report referring to Notes forming part of the Accounts are self-explanatory, and therefore do not require any further comments under Section 134(3) (f) of the Companies Act, 2013.

b. There is no qualification in the Audit Report and a certificate to that effect is attached to this Report as Annexure 1.

iii. Internal Auditors

KPMG India has been appointed as the Internal

Auditors of the Company by the Board, based on the recommendation of the Audit Committee for the

Financial Year 2017-18.

iv. Secretarial Auditors & Secretarial Audit Report

a. Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Alwyn Jay & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the Financial Year 2016-17 is annexed as Annexure 2.

b. There is no qualification in the Secretarial Audit Report.

v. Cost Auditors & Cost Audit Records

The Companies (Cost Records and Audit) Rules, 2014 read along with Companies (Cost Records and Audit) Amendment Rules 2014, specifies criteria for specified industries which are required to maintain cost records and get them audited. The Company’s business as an Industrial Park is covered under Clause 5(a) of Schedule VI of the Companies Act, 2013 and its turnover is also in excess of Rs,100/- crore. It is, therefore, required to maintain cost records which should be audited by a practicing Cost Auditor.

a. In view of the above provisions of the Act, the Board, based on the recommendation of the Audit Committee, has approved the appointment and remuneration of Mr. Vinay B. Mulay, the Practicing Cost Auditor (ICAI-CMA No. 8791 CP No. 101159) of Vinay Mulay & Co., Mumbai to conduct the audit of the cost records of the Company for the financial year ending March 31, 2018.

b. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor as recommended by the Audit Committee and approved by the Board of Directors, has to be ratified by Members of the Company.

c. Accordingly, the consent of Members is sought for passing an Ordinary Resolution as set out at Item No.5 of the Notice for ratification of the remuneration payable to the Cost Auditor for the financial year ending March 31, 2018.

20. Conservation of Energy, Technology Absorption & Foreign Exchange Earning and Outgo

As required under Section 134 (3) (m) of the Companies Act, 2013 read with read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo were as under:

a. The Company has no manufacturing activities relating to conservation of energy.

b. i. The Company has not made any provision for

research and development expenditure as the same is not applicable.

ii. The Company has no activity relating to technology absorption and innovation.

c. The Company has incurred travel expenses in foreign currencies aggregating to Rs,0.03 crore, and the Company has no foreign earnings.

The Company has incurred professional fee expenses in foreign currency aggregating to Rs,0.45 crore.

21. Details of Appointment & Remuneration of Managerial Personnel and Top 10 Employees

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Managerial Personnel and Top 10 Employees of the Company forms a part of this Report as Annexure 3.

22. Remuneration Ratio of the Directors/Key Managerial Personnel/ Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of Managerial Personnel, Directors and Employees of the Company is furnished in Annexure 4.

23. Employees Stock Option Scheme (Nirlon ESOP 2012)

i. Applicable disclosures as on March 31, 2017 are attached as Annexure 5 and form a part of this Report. Relevant details of the schemes have also been disclosed on the website of the Company.

For more detail, kindly refer to the link:

http://www. nirlonltd. com/pdf/esop_scheme_2012. pdf

ii. Under the Nirlon ESOP 2012, the Board approved

7.17.656 options out of which 7,15,000 options were granted to eligible employees and the vesting period was accelerated (options corresponding to

2.656 equity shares of the Company have not been granted till date).

Furthermore, eligible employees have exercised their rights for 7,15,000 options under the Nirlon ESOP 2012.

iii. There have been no material changes to the Nirlon ESOP 2012 during the Financial year under review. The Nirlon ESOP complies in all respects with the applicable rules and regulations.

iv. The Company has received a certificate from Chartered Accountants that the Scheme has been implemented in accordance with SEBI Guidelines, and the required resolution has been passed by Members. This Certificate will be available at the 58th AGM for inspection by Members.

Please note: The NRC/Board passed a resolution on August 9, 2017 authorizing Directors to take steps to wind up the Nirlon ESOP Trust and Nirlon ESOP Plan 2012 and utilize the proceeds as permitted by Statute.

24. Corporate Governance Disclosure

i. The Company adheres to the principles of Corporate Governance mandated by SEBI under LODR (as applicable), and has complied with all mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance, Annexure 7 to this Report, and a certificate from Alwyn Jay & Co., the Practicing Company Secretaries confirming compliance with Corporate Governance requirements as applicable, form part of this Report.

ii. The Executive Director’s declaration regarding compliance with the Code of Business Conduct and Ethics forms part of the Corporate Governance Report.

iii. The Executive Director’s and Chief Financial Officer’s certification under regulation 17 (8) of LODR forms part of the Corporate Governance Report.

25. Management Discussion & Analysis

Details are provided in Annexure 8and form part of this Report.

26. Extract of Annual Return

The details forming part of the extract of the Company’s Annual Return in form MGT 9 are provided in Annexure

9. 27. Share Transfer Agent (STA)

The Company appointed Link Intime India Pvt. Ltd., as its Share Transfer Agent (the ‘STA’). w.e.f. June 3, 2016, pursuant to the SEBI direction, in place of Sharepro Services India Private Limited.

The Registers of Members, Annual Returns etc. are maintained by Link In time India Pvt. Ltd. at their Registered Office situate at C 101, 247 Park, LB S Marg, Vikhroli (West),Mumbai 400 083 and/or at such other place(s) within the city of Mumbai where the STA may have their office from time to time.

28. Postal Ballot

i. The Company passed the following Special

Resolutions on August 29, 2016 through a Postal

Ballot (vide Postal Ballot Notice dated July 9, 2016):

a. Authorizing the Board of Directors to borrow up to Rs,1,500/- Crore from Lending Agency/ies;

b. Authorizing the Board of Directors to create charge(s)/mortgage(s)/ hypothecation(s) on the Company’s movable and/or immovable properties situate at Goregaon (East), Mumbai, both present and future, in order to create security in favor of Lending Agency/ies;

c. Appointing of Mr. Rahul V. Sagar (DIN 00388980) as Executive Director of the Company and the proposed payment of his Managerial Remuneration for a period of 5 (five) years w.e.f. February 1, 2016 to January 31, 2021; and

d. Ratifying of the appointment of Link In time India Pvt. Ltd., to act as the Share Transfer Agent (STA) of the Company, and to keep the Register of Members, Index of Members, Annual Returns etc. at the Registered Office of the STA, and to allow inspection of the same as required under the Act.

ii. The Directors appointed Mr. Alwyn D’souza, Practicing Company Secretary (FCS No.5559 CP No.5137) of Alwyn Jay & Co., Company Secretaries, Mumbai as Scrutinizer (‘the Scrutinizer’) for scrutinizing the voting through the Postal Ballot, including e-voting, in a fair and transparent manner.

iii. The Postal Ballot Forms were deposited at the address given thereon. Duly completed Postal Ballot Forms which reached the Scrutinizer not later than 5.00 p.m. (IST) on Tuesday, August, 23, 2016 were considered.

iv. The Scrutinizer submitted his report to the authorized Director after the completion of scrutiny of the Postal Ballot including e-voting. The result of the Postal Ballot including e-voting was declared on Monday, August 29, 2016 and communicated to the BSE Limited and CDSL. The same was also displayed on the Company’s website at ‘www.nirlonltd.com’.

29. Enhancing Shareholders/Members Value

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the Company’s productive asset and resource base and nurturing its overall corporate reputation.

Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact socio-economic dimensions and contribute to sustainable growth and development.

30. Personnel Relations & Acknowledgements

Personnel relations with employees continue to remain cordial. Your Directors record their appreciation for the services rendered by employees at all levels. They acknowledge and record their appreciation for the cooperation and assistance rendered by HDFC Limited, Banks and various Government authorities at State and Central levels. Your Directors thank all stakeholders for their continued support.

Your Directors would also like to place on record their sincere appreciation for the co-operation received from the Reserve Bank of India, SEBI, the BSE Limited and all other statutory and/or regulatory bodies.

For and on behalf of the Board of Directors

Nirlon Limited

Sd/-

Moosa Raza Chairman

Mumbai, August 9, 2017 (DIN 00145345)


Mar 31, 2015

Dear Members,

The Directors present their 56th Annual Report, and the Audited Financial Accounts for the Financial Year ended March 31, 2015.

1 FINANCIAL PERFORMANCE

The Company's Financial Performance for the Year ended March 31, 2015 is summarized below:

(Rs. in Crore)

Particulars 2014-15 2013-14

Gross income from 240.82 203.29 Operations

Gross Profit 185.40 156.22

Interest Paid 75.55 77.67

Cash Profit 109.85 78.55

Depreciation 68.65 48.93

Net Profit / (Loss) Before 41.20 29.62 Exceptional Item/s

Add: Exceptional Item/s 6.66 4.17

Net Profit / Loss for the Year 47.86 33.79 after Exceptional Item/s

Provision for Taxation:

Less: Currenttax 0.05 (5.18)

Less : Deferred tax 15.23 7.34

Profit / (Loss) for the Year 32.58 31.63 after tax

Add/(Less) : Carried Forward 6.33 (18.75) Profit / (Loss)

Amount available for 38.91 12.88 Appropriation

Less : Proposed dividend on 7.91 5.60 Equity shares

Less : Tax on Dividend 1.57 0.95

Balance carried to Balance 29.43 6.33 Sheet

2 FINANCIAL OPERATIONS (SUMMARY)

i) Income from Operations for the Financial Year 2014-15 were Rs. 240.82 crore as against Rs. 203.29 crore for 2013-14, an improvement of approx. 18.46%.

ii) Gross Profit for the Financial Year 2014-15 was Rs. 185.40 crore as against Rs. 156.22 crore for 2013- 14, an improvement of approx. 18.68%.

iii) Cash Profit for the Financial Year 2014-15 was Rs. 109.85 crore as against Rs. 78.55 crore for 2013- 14, an improvement of approx. 39.85%.

iv) The Exceptional Items for the Financial Year 2014-15 are the write back of the Property Tax liability of the earlier years due to the retrospective amendment in respect of the Property Tax levied by the appropriate authorities, and sale of future license fees receivable from Licensees in the Nirlon House premises owned by the Company net of expenses.

v) Net Profit for the Financial Year 2014-15 (after taxes and exceptional items) was Rs. 32.58 crore as against a profit of Rs. 31.63 crore for 2013-14, an improvement of approx. 3.0%.

The Company is in the business of development of an Industrial Park, and during the year under review, there is no change in the business activity of the Company.

3 RESERVES

The Board does not propose to transfer any amount to the General Reserve account in the Balance Sheet for the Financial Year 2014-15.

4 DIVIDEND

For the year under review, your Directors recommended a dividend of Rs. 0.75 paise per equity share of Rs.10 each (7.5 %) amounting to Rs. 8.13 crore (inclusive of tax of Rs.1.37 crore), subject to the approval of Members of the Company at this ensuing Annual General Meeting. Dividend will be paid to Members whose names appear in the Register of Members as on Thursday, September 10, 2015. In respect of shares held in Dematerialised Form, dividend will be paid to Members whose names are furnished by the National 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 AND FUTURE OUTLOOK

Development of the Industrial Park / Information Technology (IT) Park i.e. Nirlon Knowledge Park (NKP) - Goregaon (East), Mumbai.

Nirlon is the owner of NKP, a 23 acre campus in Goregaon (East), Mumbai. NKP is an Industrial Park as per the Consolidated Foreign Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the Government of Maharashtra's (GOM) Policy. NKP, being an Industrial Park, is eligible for FDI under the automatic route as per the GOI's Consolidated FDI Policy.

Construction, Delivery of Licensed Premises, and License Fee Commencement

Planning for the development of NKP in four phases began in 2006, and construction in April/May 2007. Currently, all four phases are completed.

The Company is in the process of conceptualising, planning and evaluating the feasibility of further development / re-development of its existing old buildings in NKP (phase 5).

Phases 1, 2, 3 and 4: A total of approx. 29.46 lac sq.ft. has been constructed in Phases 1, 2, 3 and 4 corresponding to approx. 18.78 lac sq. ft. licensable area. Income by way of licence fees from approx. 14.75 lac sq.

ft. licensable area, comprising the entire licensable area for Phases 1, 2 and 3 continued to be received by the Company as on March 31, 2015.

License fees for Phase 4 from approx. 98 % of its licensable area began to accrue to the Company in stages during March, June and July, 2015.

Please Note: The total constructed area of approx. 29.46 lac sq.ft. for Phases 1, 2, 3 and 4 includes two levels of basements in phases 1, 2 and 3 and one level of basement, the ground floor (part), mezzanine and four upper levels of parking in Phase 4, as well as a ten floor multi level car parking (MLCP) (which also has two basements) housing the utilities, i.e. generator, chillers, water tanks, electrical infrastructure etc. for Phases 1 and 2, in addition to visitor and occupant parking.

Licensee Fees

Gross license fees as on March 31, 2015 from Phases 1, 2 and 3 aggregated approx. Rs. 14.23 crore per month. Additional gross license fees as on March 31, 2014 of approx. Rs. 2.69 crore per month were also accruing from other licensees occupying the existing old buildings in NKP (approx. 3.27 lac sq.ft. as on March 31, 2015).

Further, as on date, approx. Rs. 3.77 crore per month is accruing to the Company from Phase 4 as license fees.

Marketing

Phases 1, 2 and 3 of Nirlon Knowledge Park continue to be fully licensed to reputed International and Indian Corporates.

Phase 4 is ready and has obtained the Occupation Certificate. Approx. 98 % of the licensable area of approx. 4.03 lac sq.ft.in Phase 4 is already licensed to well-regarded Corporates.

Once the fit outs of occupiers in Phase 4 are complete, the campus is expected to be fully occupied and operational.

Financing

The Company's debt funding to date continues to be provided by HDFC Limited, and can be broadly broken down in two categories:

1 Securitized Loans - Rs. 604.88 crore (as on July 29, 2015) being repaid in equal monthly instalments of principal and interest from the existing license fees for Phases 1, 2, 3 and 4.

2 Construction Loan - Rs. 56.00 crore for Phase 4 is still to be securitised as on July 29, 2015. However, interest on this loan is being paid on a monthly basis. This amount will be securitised once the draw down for Phase 4 is complete.

Please note: the Company is paying the same rate of interest for its securitised loans as well as for its construction loan to HDCF Limited.

The Company's business plan will continue to retain ownership of the NKP development, and to

offer office space on a leave and license basis only.

6 NIRLON HOUSE

The Company continues to co-own 75% undivided interest in approx. 45,475.00 sq.ft. in the Nirlon House building in a prime location on Dr. A. B. Road, Worli in Central Mumbai.

7 OPEN OFFER BY M/S. RECO BERRY PRIVATE LIMITED

Members may be aware that M/s. Reco Berry Private Limited (Reco) of Singapore, an affiliate of GIC, the Sovereign Wealth Fund of Singapore, has:

(i) acquired 2,56,00,000 equity shares of the Company comprising of approx. 28.41% of its share capital pursuant to an Open Offer made in accordance with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 for which a Public Announcement was made on December 23, 2014; and

(ii) acquired 3,01,59,872 equity shares of the Company comprising approx. 33.46% of its share capital by April 30, 2015, pursuant to certain Share Purchase Agreements dated December 23, 2014 and December 30, 2014.

Presently, Reco holds 5,57,59,872 equity shares of the Company comprising of approx. 61.87% of its share capital and has been classified as a Promoter of the Company, along with the existing Promoters, with effect from April 28, 2015.

8 DIRECTORS

Smt. Rajani M. Bhagat, Director, retires by rotation and being eligible, offer herself for re-appointment. The Board recommends the re-appointment of Smt. Bhagat for approval of the Members.

Brief resume of the directors, including Smt. Bhagat, nature of their expertise, and name of company/ies where they hold Chairmanships, Directorships and Memberships of Board / Committees and shareholding if any, as stipulated under Clause 49 of the listing agreement with the BSE Limited, is provided in this Report and forms part of this Notice calling the 56th Annual General Meeting.

9 NUMBER OF BOARD /AUDIT COMMITTEE MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, six (6) Board Meetings and four (4) Audit Committee Meetings were convened and held.

The details of these meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

10 DECLARATION BY AND TENURE OF THE INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the listing agreement.

The Independent Directors were appointed by the Members of the Company at their meeting held on September 23, 2014 to hold the office of Independent Director for a period of five consecutive years. Accordingly, the Independent Directors shall hold office up to March 31,2019.

Letters of appointment were issued to Independent Directors and the same were uploaded on the Company's website.

11 FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the listing agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Compliance Committees.

12 VARIOUS COMMITTEES OF THE BOARD OF DIRECTORS AND THEIR ROLE AND RESPONSIBILITIES

A) AUDIT COMMITTEE (AC)

The Audit Committee of the Board played an important role during the year. It co-ordinated with the Statutory Auditors, Internal Auditors and other key personnel of the Company and has rendered guidance in the areas of corporate governance, internal audit, finance and accounts.

B) STAKEHOLDERS RELATIONSHIP COMMITTEE (SRC)

The Stakeholders Relationship Committee has met regularly in the course of the year. With the compulsory dematerialization of the Company's shares and electronic mode of transfers, postal dispatches which led to frequent complaints have been minimized. As on March 31, 2015, approx. 91.64% of the Company's total paid up equity share capital was held Dematerialized Form, and there were no investor grievances /complaints pending with the Registrar.

C) NOMINATION & REMUNERATION COMMITTEE (NRC)

The Nomination and Remuneration Committee recommends to the Board the remuneration Package of Executive Directors, Key Managerial Personnel and other employees.

D) CORPORATE SOCIAL RESPONSIBILTY COMMITTEE (CSRC)

The Board formed a Corporate Social Responsibility Committee on September 23, 2014.

E) RISK MANAGEMENT COMMITTEE (RMC)

The Board formed a Risk Management Committee

on September 23, 2014.

13 ADOPTION OF VARIOUS POLICIES AND CODES BY THE COMPANY

I) POLICIES:

A) CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The Board has formulated a Corporate Social Responsibility Policy. However, the Company has not spent any amount on CSR activities during the Financial Year 2014-15 as the average net profits of the Company made during the three (3) immediately preceding financial years were negative as calculated under the relevant Section 135 (5) of the Companies Act, 2013.

B) RISK MANAGEMENT POLICY

The Company is required to follow an orderly risk management system, as the Company is exposed to various risks which might threaten its business continuity and operations, if not identified and addressed in time.

The Company therefore follows a proactive risk management policy, aimed at protecting its employees, assets and the environment, while at the same time ensuring growth and continuity of its business. Regular updates are made available to Executive Directors and Independent Directors at Board Meetings, and in special cases on an ad-hoc basis.

C) NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.

D) WHISTLE BLOWER POLICY

The Company has a vigil mechanism system called the Whistle Blower Policy (WBP) to deal with instances of fraud and mismanagement, if any.

E) RELATED PARTY TRANSACTIONS POLICY

The Company has laid down a Related Party Transactions Policy. During the year under review, there were no Related Party Transactions except as stated in Point No. 27 of the Directors' Report.

F) ANTI-SEXUAL HARRASEMENT POLICY

The Company has an Anti Sexual Harassment Policy in place. During the year under review, there were no complaints in this regard.

II) CODES:

A) CODE OF CONDUCT FOR INDEPENDENT DIRECTORS

B) CODE FOR BOARD AND DESIGNATED EMPLOYEES UNDER CLAUSE 49 OF THE

LISTING AGREMEENT

C) CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The above Policies and Codes are adopted by the Board, and are made available on the Company's Website, 'www.nirlonltd.com'.

14 DIRECTORS' RESPONSIBILITY STATEMENT

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

a) that in the preparation of the Annual Financial Statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently, and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at March 31, 2015, and of the Profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken 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;

d) that the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place, and that these financial controls were adequate and were operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws were in place, and were adequate and operating effectively.

15 STATUTORY AUDITORS AND THEIR REPORT

The Company's Statutory Auditors, M/s N. M. Raiji & Co. (Firm Registration no.108296W), Chartered Accountants, retire as auditors of the Company at the conclusion of 56th Annual General Meeting, and are eligible for re-appointment. They have indicated their willingness to accept re-appointment, and have furnished the necessary certificate in terms of Section 139 of the Companies Act, 2013.

The Audit Committee has considered and recommended the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as Statutory Auditors of the Company to the Board of Directors.

As required under Clause 49 of the listing agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Board of Directors have accepted the Audit Committee's recommendation, and recommended the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, to Members as the Statutory Auditors of the Company, and request Members to authorise the Board of Directors to fix their remuneration.

STATUTORY AUDITORS REPORT

The observation made by the Auditors in the Report referring to the Notes forming part of the Accounts are self-explanatory, and therefore do not require any further comments under Section 134(3) (f) of the Companies Act, 2013.

There is no qualification in the Audit Report and a certificate to that effect in 'Form A' as per Clause 31 of the listing agreement is attached to this Report as Annexure 1.

16 INTERNAL AUDITORS

M/s. DH Consultants Private Limited (earlier known as M/s. BDO Consulting Private Limited) are appointed as Internal Auditors of the Company, and their reports are reviewed by the Audit Committee appointed by the Board.

17 SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Alwyn Jay & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure 2.

There is no qualification in the Secretarial Audit Report.

18 COST AUDITORS AND COST AUDIT RECORDS

The Companies (Cost Records and Audit) Rules, 2014 read alongwith Companies (Cost Records and Audit) Amendment Rules 2014, specifies criteria for specified industries which are required to maintain cost records and get them audited. The Company's business as an Industrial Park is covered under Clause 5(a) of Schedule VI of the Companies Act, 2013 and its turnover is in excess of Rs. 100/- Crore. It is therefore required to maintain cost records which should be audited by a practicing Cost Auditor.

In view of the above provisions of the Act, the Board, based on the recommendation of the Audit Committee, has approved the appointment and remuneration of Shri Vinay B. Mulay, the Practicing Cost Auditor (ICAI-CMA No. 8791 CP No. 101159) of M/s. Vinay Mulay & Co., Mumbai to conduct the audit of the cost records of the Company for the financial year ending March 31,2016. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor as recommended by the Audit Committee and approved by the Board of Directors, has to be ratified by Members of the Company.

Accordingly, the consent of Members is sought for passing an Ordinary Resolution as set out at Item No.5 of the Notice for ratification of the remuneration payable to the Cost Auditor for the financial year ending March 31, 2016.

19 LOAN. GUARANTEE. SECURITY AND INVESTMENT

The Company has not made any loan, or given guarantee, or provided security to any person, and has not made any investment that attracts the provisions of Section 186 of the Companies Act, 2013, during the Financial Year.

20 HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY

The Company is not a holding, a subsidiary, or an associate company of any company and vice versa.

21 FIXED DEPOSITS AND DEBENTURES

The Company has neither accepted, nor invited any fixed deposits during the Financial Year.

The Company has also not issued any debentures during the Financial Year.

22 TRANSFER OF ANY AMOUNT TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There is no amount lying with the Company as unpaid/ unclaimed with respect to any debenture redemption amount and/or fixed deposit, and/or any outstanding interest thereon.

However, as on July 29, 2015, there is an amount of Rs. 17.69 lac lying with Bank of India in a special account named the "Nirlon Limited- Dividend unpaid / unclaimed Dividend Account - 2013-14" which pertains only to Shareholders who hold their shares in Physical Form.

23 PROMOTERS AND KEY MANAGERIAL PERSONNEL

A) Promoters

1. Shri Kunal V. Sagar

2. Shri Rahul V. Sagar

3. Smt. Rajani M. Bhagat

4. M/s. Reco Berry Private Limited (w.e.f. April 28, 2015)

B) Key Managerial Personnel

1. Shri Kunal V. Sagar, Executive Vice Chairman

2. Shri Rahul V. Sagar, Executive Director

3. Shri Jasmin K. Bhavsar, Company Secretary & Vice President (Legal) & Compliance Officer

4. Shri Manish B. Parikh, Chief Financial Officer There is no change in Directors, Key Managerial Personnel and Promoters during the Financial Year. However, M/s. Reco Berry Private Limited has become a Promoter effective from April 28, 2015.

24 RE-CLASSIFICATON OF THE AUTHORISED SHARE CAPITAL OF THE COMPANY

As on July 29, 2015, Members of the Company are in the process of casting their vote for, inter alia, the passing of a special resolution through a Postal Ballot, including e-voting, for the alteration of Capital Clause No. 5 of the Memorandum of Association of the Company by re-classifying its 1,00,000 un-issued cumulative redeemable preference shares of of Rs. 100 each, aggregating Rs. 1,00,00,000, to 10,00,000 equity shares of Rs. 10 each, aggregating Rs. 1,00,00,000. As a result, the Company's total Authorised Share Capital will become Rs. 150,00,00,000 divided into 15,00,00,000 equity shares of Rs. 10 each.

25 DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE

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

26 FRAUD REPORTING

During the year under review, there was no fraud in the Company.

27 RELATED PARTY TRANSACTIONS

There were no related party transactions during the Financial Year, except the appointment of and remuneration being paid to the Executive Vice Chairman, and Executive Director of the Company, pursuant to the special resolutions passed by the Members, and payment of dividend as declared by the Members of the Company.

The Company has a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors of the Company has received any commission from the Company.

None of the Directors and Key Managerial Personnel, save and except as stated above, have any pecuniary relationships or transactions vis-a-vis the Company.

The Company has not entered in to any contracts or arrangements with related parties and hence reporting in the Form AOC-2 is not applicable.

28 SPENDING ON THE CORPORATE SOCIAL RESPONSIBILITY PROGRAMME

The Company was not required to spend any amount during the Financial Year 2014-15 as the average net profits of the Company made during the three (3) immediately preceding financial years were negative as per Section 135 (5) of the Companies Act, 2013.

29 INTELLECTUAL PROPERTY RIGHTS

The Company's trade mark/service mark, logo/s, and copyrights are registered and well protected under the respective statutes.

30 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 read with Rule 8 of The Companies (Accounts) Rules, 2014, the particulars relating to the conservation of energy, technology absorption and foreign exchange earning and outgo were as under:

A) The Company has no manufacturing activities relating to conservation of energy.

B) 1. The Company has not made any provision for research and development expenditure as the same is not applicable.

2. The Company has no activity relating to technology absorption and innovation.

C) The Company has incurred travel expenses in foreign currencies aggregating to Rs. 0.03 crore, and the Company has no foreign earnings.

The Company has incurred professional fee expenses in foreign currency aggregating to Rs. 0.99 crore.

31 MANAGERIAL REMUNERATION

The information required pursuant to Section 197 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 forms a part of this Report as Annexure 3.

32 REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished in Annexure 3A.

33 EMPLOYEES STOCK OPTION SCHEME (NIRLON ESOP 2012)

The disclosure as required under clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 as on March 31, 2015 is attached as Annexure 4 and forms a part of this Report.

The Company has received a certificate from Chartered Accountants that the Scheme has been implemented in accordance with SEBI Guidelines, and the required resolution has been passed by Members. This Certificate will be available at the Company's 56th Annual General Meeting for inspection by Members.

34 CORPORATE GOVERNANCE DISCLOSURE

The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI), and has complied with all mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance, Annexure 5, to this Report, and a certificate from M/s. Alwyn Jay & Co., a firm of Company Secretaries in Practice confirming compliance with the Corporate Governance requirements as stipulated in Clause 49 of the listing agreement entered into with the BSE Limited, form part of this Report.

The Executive Vice Chairman and Executive Director's declarations regarding compliance with the Code of Business Conduct and Ethics forms part of this Corporate Governance Report.

35 MANAGEMENT DISCUSSION AND ANALYSIS

Details are provided in Annexure 6 and form part of this Report.

36 EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Company's Annual Return in form MGT 9 are provided in Annexure 7.

37 ENHANCING SHAREHOLDERS/MEMBERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the Company's productive asset and resource base and nurturing its overall corporate reputation.

Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact socio-economic dimensions and contribute to sustainable growth and development.

38 PERSONNEL RELATONS AND ACKNOWLEDGE- MENTS

Personnel relations with employees continue to remain cordial. Your Directors record their appreciation for the services rendered by employees at all levels. They acknowledge and record their appreciation for the co- operation and assistance rendered by HDFC Limited, Banks and various Government authorities at State and Central levels. Your Directors thank all stakeholders for their continued support.

We would also like to place on record our sincere appreciation for the co-operation received from the Reserve Bank of India, SEBI, the BSE Limited and all other statutory and/or regulatory bodies.

For and on behalf of the Board of Directors Nirlon Limited

Moosa Raza Mumbai, July 29, 2015 Chairman


Mar 31, 2013

The Directors'' present their 54th Annual Report, and the Audited Financial Accounts for the Year ended March 31, 2013.

FINANCIAL PERFORMANCE :

(Rs.in Crore) 2012-13 2011-12

Gross Sales and Other Income 161.68 142.60

Gross Profit 119.18 86.54

Interest paid 65.32 71.05

Cash Profit 53.86 15.49

Depreciation 42.62 49.41

Net Profit/ (Loss) before 11.24 (-33.92)

Exceptional items

Add: Exceptional items 11.50 0.00

Net Profit / (Loss) for the Year after 22.74 (-33.92)

Exceptional items

Provision for Taxation:

Current Tax 4.90 0.76

Deferred Tax 5.82 (-15.04)

Profit /(Loss) for the Year after Tax 12.02 (-19.64)

Gross Sales and Other Income for the Financial Year 2012- 13 were Rs. 161.68 crore as against Rs. 142.60 crore for 2011-12, an improvement of 13.38% (Rs. 19.08 Crore). Gross Profit for the Financial Year 2012-13 was Rs.119.18 crore as against Rs. 86.54 crore for 2011-12, an improvement of 37.71 % (Rs. 32.64 Crore).

Cash Profit for the Financial Year 2012-13 wasRs. 53.86 crore as against Rs. 15.49 crore for 2011-12, an improvement of 247.70 % (Rs. 38.37 Crore).

The Exceptional item for the Financial Year 2012-13 is the right back of the Property Tax liability of the earlier years due to the retrospective amendment in respect of the Property Tax levied by the appropriate authorities.

Net Profit for the Financal Year 2012-13 (after taxes and exceptional items) was Rs. 12.02 crore as aganst a loss of Rs. 19.64 crore for 2011-12. DIVIDEND

The Directors do not recommend any dividend.

DIRECTORS

Shri Arjan Gurbuxani and Smt. Rajani Bhagat, Directors, retire by rotation and being eligible, offer themselves for re-appointment at this 54th Annual General Meeting.

A brief resume of the Directors to be re-appointed, nature of their expertise, and name of the company/ies in which they hold Chairmanships, Directorships and Memberships of Board Committees, if any, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, Mumbai, is provided and forms part of the Notice calling the 54th Annual General Meeting, and is recommended for the approval of the Shareholders.

OPERATIONS & FUTURE OUTLOOK :

i) Development of the Industrial Park /Information Technology (IT) Park i.e. Nirlon Knowledge Park ( NKP) – Goregaon, Mumbai

Nirlon Limited is the owner of NKP, a 23 acre campus in Goregaon (E) Mumbai. NKP is an Industrial Park as per the Consolidated Foreign Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the Government of Maharashtra''s IT Policy. NKP, being an Industrial Park, is eligible for FDI under the Automatic Route as per the Government of India''s Consolidated FDI Policy.

Construction, Delivery of Premises, and License Fee Commencement

Planning for the development of NKP in four phases began in 2006, and construction in April/May 2007. Currently, Phases 1 and 2 are complete and phase 3 is expected to be complete by August -September 2013.

Phases 1 & 2: A total of approx. 16.75 lacs sq. ft. has been constructed in Phases 1 and 2, corrosponding to approx.10.75 lacs sq. ft. of licensable area. Income by way of License fees from this 10.75 lacs sq. ft. licensable area, comprising the entire licensable area for Phases 1 & 2, is accruing to the Company as on March 31, 2013.

Please note: The total constructed area of approx. 16.75 lacs sq.ft. for Phases 1 and 2 includes two levels of basement parking for each of the four office Blocks, as well as a 10 floor Multi Level Car Parking (MLCP) (which also has two basements) housing the utilities, i.e. generators, chillers, water tanks, electrical infrastructure etc. for Phases 1 and 2, in addition to visitor and occupant parking. Gross License fees as on March 31, 2013 from Phases 1 and 2 aggregate approx. Rs. 9.06 crore per month. Additional gross License fees as on March 31, 2013 of approx. Rs. 2.25 crore per month are also accruing from other licensees occupying the existing old buildings in NKP (approx. 3.41 lacs sq. ft. as on March 31, 2013).

Phase 3: Construction of Phase 3 (approx. 5.46 lacs sq. ft. of constructed area corresponding to approx. 4.00 lacs sq. ft. of licensable area) commenced in the last quarter of 2010, and is expected to be complete by August/September 2013. License fees from Phase 3 are estimated to begin accruing in stages from September 2013, and are expected to aggregate approx.Rs. 4.30 crore per month from the January-March quarter 2014 (the intervening period from the Project completion to license fee commencement being the fit out period for potential licensees).

Phase 4: Construction of Phase 4 (approx. 7.25 lacs sq. ft. of constructed area corresponding to approx. 4.00 lacs sq. ft. licensable area including additional parking area for all four phases) commenced in the last quarter 2012, and is expected to be complete by the October-December quarter of 2014, with license fee commencement from approx. April 2015. When complete, (estimated by October- December 2014) the total licensable area (including approx. 3.19 lacs sq. ft. in existing old buildings proposed to be retained) in NKP will be approx. 21.94 lacs sq. ft.

Marketing

Profiles of occupants occupying the Phase 1 and Phase 2 premises presently comprise highly regarded and well known International and Indian corporates. The Company has been successful in licensing space in Phase 3 to similarly renowned Corporates and MNCs, with approx. 96% of the space comitted by July 31, 2013.

The Company has received strong expressions of interest for its Phase 4 Developement, and is cautiously optimistic of receiving firm commitments for an appreciable amount of space in this phase before the expected building completion in the October-December 2014 quarter.

Financing

The Company''s debt funding to-date continues to be provided by HDFC Limited and can be broadly be broken down into three categories:- (i) Securitized loan - Rs. 561.68 crore (as on March 31, 2013) being repaid in equal monthly installments of principal and interest from the existing License fees. (ii) Construction loan for Phase 3 - Rs. 118.00 crore has been drawn down as on March 31, 2013 (out of a total of Rs. 200.00 crore sanctioned). (iii) Construction loan for Phase 4 - Has not yet been drawn down as on March 31, 2013 (total of Rs. 225.00 crore sanctioned).

The Company''s business plan will continue to retain ownership of the NKP development, and to offer office space on a leave and license basis only. ii) Nirlon House

The Company continues to own 75% undivided interest in approx. 45,475 sq.ft. in the ''Nirlon House'' building at a prime location on Dr. A. B. Road, Worli, in Central Mumbai.

FIXED DEPOSITS

The Company has neither accepted nor invited any fixed deposits during the Financial Year.

DEBENTURES

The Company has not issued any debentures during the Financial Year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

As required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Directors'') Rules, 1988 the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are as under:

(A) The Company has no manufacturing activities relating to conservation of energy.

(B) 1. The Company has not made any provision for research & development expenditure as the same is not applicable. 2. The Company has no activity relating to technology absorption and innovation.

(C) The Company has incurred travel expenses in foreign currency aggregating to Rs. 6.99 lacs (Previous Year Rs. 6.35 lacs), and the Company has no foreign exchange earnings.

The Company has incurred professional fee expenses in foreign currency aggregating to Rs. 80.91 lacs (Previous YearRs. 85.99 lacs). EMPLOYEES

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (''Particulars of Employees'') Rules, 1975 (as amended to date) is attached as Annexure I and forms part of this Report. EMPLOYEES'' STOCK OPTION SCHEME (NIRLON ESOP 2012)

The Disclosure as required under clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as on March 31, 2013 is attached as AnnexureII and forms part of this Report.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines, and the resolution passed by the Shareholders. The Certificate would be place at the Annual General Meeting for inspection by the Shareholders.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, the Board of Directors hereby confirm: i) that in the preparation of the Annual Accounts for the Year ended March 31, 2013, applicable Accounting Standards have been followed, along with proper explanations relating to material departures; ii) that the Directors have 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 for the Year ended March 31, 2013, and of the net Profit of the Company for that Year; iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the Accounts for the Year ended March 31, 2013 on a ''going concern'' basis.

CORPORATE GOVERNANCE DISCLOSURE

The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI), and has complied with all mandatory requirements. The non- mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance (Annexure III to this Report) and a certificate from the Statutory Auditors confirming compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange Limited, forms part of this Report.

The Executive Vice Chairman''s and Exceutive Director''s declaration regarding compliance with the Code of Business Conduct and Ethics forms part of this Corporate Governance Report.

MANAGEMENT DISCUSSION ANALYSIS

Details are provided in Annexure IV and form part of this Report.

STATUTORY AND INTERNAL AUDITORS

The Company''s Statutory Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, retire as Auditors of the Company at the conclusion of the 54th Annual General Meeting, and are eligible for re- appointment. They have indicated their willingness to accept re- appointment, and have further furnished the necessary Certificate in terms of Section 224 (1B) of the Companies Act, 1956.

The Audit Committee has considered and recommended the re- appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as Statutory Auditors of the Company to the Board of Directors.

The Board of Directors have accepted the recommendation, and recommend the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, to the Shareholders as the Statutory Auditors of the Company, and request the Shareholders to authorize the Board of Directors to fix their remuneration.

M/s. DH Consultants Private Limited (earlier known as "M/s. BDO Consulting Pvt. Ltd.") are appointed as Internal Auditors of the Company and their reports are reviewed by the Audit Committee appointed by the Board.

AUDITOR''S REPORT

The observations made by the Auditors in their Report referring to the Notes forming part of the Accounts are self explanatory, and therefore, do not require any further comments under Section 217(3) of the Companies Act, 1956.

NIRLON KNOWLEDGE PARK AWARDS & CERTIFICATION

AWARDS:

- INTERNATIONAL PROPERTY AWARDS ASIA PACIFIC, 2012- 13 for ''Best Commercial Renovation /Redevelopment''.

- CONSTRUCTION WEEK INDIA AWARDS, 2012 for -

a. Commercial Project of the Year (Runner Up)

b. Green Project of the Year (Runner Up)

- SMART LIVING AWARDS, 2010 for -

a. Safe Project Commercial

b. Best Green Project Commercial

c. Best Corporate Spaces - SEZ''s & IT Park

CERTIFICATION:

- Nirlon Knowledge Park (Phase 2) - An IT Park for Offices IT/ ITES & BFSI Companies, LEED India for Core & Shell Gold, June 2011.

- Nirlon Knowledge Park (Cooling Tower Café, Nirlon) - LEED India for Core & Shell Gold, May 2011.

- Nirlon Knowledge Park (Phase 1) - An IT Park for Offices IT/ ITES & BFSI Companies, LEED India for Core & Shell Gold, May 2010.

PERSONNEL RELATIONS AND ACKNOWLEDGEMENTS

Personnel relations with Employees continue to remain cordial. Your Directors record their appreciation for the services rendered by Employees at all levels. They acknowledge and record their appreciation for the co-operation and assistance rendered by HDFC Limited, Banks, and various Government Authorities at the State and Central levels. Your Directors thank all Stakeholders for their continued support.

For and on behalf of the Board of Directors

For Nirlon Limited

Moosa Raza Chairman

Mumbai, July 31, 2013


Mar 31, 2012

The Directors' present their Fifty Third Annual Report and the Audited Financial Accounts for the year ended March 31, 2012.

FINANCIAL PERFORMANCE

(Rs. in Crore)

2011-12 2010-11

Gross Sales and Other Income 142.42 152.85

Gross Profit 86.54 107.00

Interest paid 71.05 57.98

Cash Profit 15.49 49.02 Depreciation 49.41 46.00

Net Profit/ (Loss) before (-33.92) 3.02

extraordinary items

Less: Extraordinary items

VRS 0.00 2.52 Aet Profit/ (Loss) for the year after (-33.92) 0.50

extraordinary items

Provision for Taxation:

Current Tax 0.76 0.10

Income tax adjustments 0.00 0.00 of earlier years

Deferred Tax (-15.04) 0.04

Profit /(Loss) for the year after Tax (-19.64) 0.36

The Gross Sales and Other Income for the previous Financial Year 2010-11 includes onetime income, i.e. profit on sale of Tarapur land of Rs. 38.75 crore. Accordingly, the performance for the Financial Year 2011-12 as compared to financial year 2010-

11, excluding this onetime income, is as follows:

The Gross Sales and Other Income for the current year 2011-12 amounts to Rs. 142.42 crore as against Rs. 113.10 crore for the previous year 2010-11, an improvement of 26 %.

The Gross Profit for the current year 2011-12 amounts to Rs. 86.54 crore as against Rs. 68.25 crore for the previous year 2010-11, an improvement of 27 %.

The Cash Profit for the current year 2011-12 amounts to Rs. 15.49 crore as against Rs. 10.27 crore for the previous year 2010-11, an improvement of 51 %.

The Net Loss (before extraordinary items) for the current year 2011-12 amounts to Rs. 33.92 crore as against Rs. 35.73 crore for the previous year 2010-11, an improvement of 5 %.

DIVIDEND

The Directors do not recommend any dividend in view of the net loss for the year.

DIRECTORS

Shri Rama Varma and Smt. Aruna Makhan, Directors, retire by rotation and being eligible, offer themselves for re-appointment at this Fifty Third Annual General Meeting.

A brief resume of the Directors to be re-appointed, nature of their expertise, and name of the company/ies in which they hold Directorships and Memberships/ Chairmanships of Board Committees, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, Mumbai, is provided and forms part of the Notice of the Fifty Third Annual General Meeting, and is recommended for the approval of the shareholders.

Shri Jaidev Shroff has resigned from the Board as Director w.e.f. February 6, 2012. The Directors place on record their appreciation of the valuable services rendered by Shri Shroff during his tenure as Director of the Company.

OPERATIONS & FUTURE OUTLOOK i) Development of the Industrial Park /Information Technology (IT) Park i.e. Nirlon Knowledge Park ( NKP) - Goregaon, Mumbai

Nirlon Limited is the owner of NKP, a 23 acre campus in Goregaon (E), Mumbai. NKP is an Industrial Park as per the Consolidated Foreign Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the Government of Maharashtra's IT Policy. NKP, being an Industrial Park, is eligible for FDI under the Automatic Route as per the Government of India's Consolidated FDI Policy.

Construction, Delivery of Premises, and License Fee Commencement

Planning for the development of NKP in four phases began in 2006, and construction in April/May 2007. Currently, Phases 1 and 2 are complete.

Phases 1 & 2: A total of approx. 16.75 lac sq. ft. has been constructed in Phases 1 and 2. Income by way of License fees from approx. 10.60 lac sq. ft. licensable area, which corresponds to approx. 99 % of the total licensable area for Phases 1 & 2 of approx. 10.75 lac sq. ft., is accruing to the Company as on March 31, 2012.

Please note: The total constructed area of approx. 16.75 lac sq.ft. for Phases 1 and 2 includes two levels of basement parking for each of the four office Blocks, as well as a 10 floor Multi Level Car Parking ( MLCP) ( which also has two basements) housing the utilities, i.e. generators, chillers, water tanks, electrical infrastructure etc. for Phases 1 and

2, in addition to visitor and occupant parking.

Gross License fees as on March 31, 2012 from Phases 1 and 2 aggregate approx. Rs. 8.46 crore per month. Additional gross License fees as on March 31, 2012 of approx. Rs. 1.32 crore per month are also accruing from other licensees occupying the existing old buildings in NKP (approx. 3.41 lac sq. ft.).

Phase 3: Construction of Phase 3 (approx. 5.46 lac sq. ft. of constructed area corresponding to approx. 3.97 lac sq. ft. of licensable area) commenced in the last quarter of 2010, and is expected to be complete by approx. the April - June quarter of 2013.

License fees from Phase 3 are estimated to begin accruing in stages from approx. October 2013 (the intervening period from the Project completion to license fee commencement being the fit out period for potential licensees).

Phase 4: Construction of Phase 4 (approx. 7.25 lac sq. ft. of constructed area corresponding to approx. 4.23 lac sq. ft. licensable area [including additional parking area for all four phases]) is estimated to commence from July -August 2012. Completion of Phase 4 is expected by the October- December quarter of 2014, and license fee commencement from approx. April 2015.

When complete, (estimated by approx. October- December 2014) the total licensable area (including existing old buildings) in NKP will be approx 22.36 lac sq. ft.

Marketing

The profile of occupants occupying Phase 1 and Phase 2 presently comprise highly regarded and well known International and Indian corporates. The Company is targeting a similar profile of successful Corporates for its Phase 3 and Phase 4 development.

Thus far, the Company has signed binding LOIs with two MNC's who have committed to license space in Phases

3 / 4. Further the Company is in serious discussions with various other well known and financially sound Corporates to secure additional commitments for these phases.

Financing

The Company's debt funding to-date continues to be provided by HDFC Limited and can be broadly be broken down into three categories:-

(i) Securitized loan - Rs. 518.89 crore (as on March 31, 2012) being repaid in equal monthly installments of principal and interest from the existing License fees.

(ii) Construction loan for Phase 3 - Rs. 57.00 crore drawn down as on March 31, 2012 (out of a total of Rs. 200.00 crore sanctioned).

(iii) Construction loan for Phase 4 - Rs. 225.00 crore has been sanctioned to date.

Preferential Issue of 1,35,49,000 Equity Shares issued and allotted on July 21, 2011 ( at a premium of Rs. 45.00 per share) : The proceeds of Rs. 74.52 crore from this Preferential Issue have been utilized as envisaged, for enhancing the efficiency of the NKP development through a prudent and responsible mix of project financing.

The Company's business plan will continue to retain ownership of the NKP development, and to offer office space on a leave and license basis only.

ii) Nirlon House

The Company continues to own 75% undivided interest in approx. 45,475 sq.ft. in the 'Nirlon House' building at a prime location on Dr. A. B. Road, Worli, in Central Mumbai.

FIXED DEPOSITS

The Company has neither accepted nor invited any fixed deposits during the year.

DEBENTURES

The Company has not issued any debentures during the year. POSTAL BALLOT

The Company has passed special resolutions by way of a Postal Ballot , and has declared results on May 23, 2012 with respect to the following items:-

a. Under Section 269 read with the Schedule XIII to the Companies Act, 1956 and other applicable provisions of the Act seeking approval of the Members for the Appointment and Remuneration of Shri Rahul Sagar as the Executive Director of the Company for a period of three years w.e.f. April 1, 2012;

b. Under Section 31 of the Companies Act, 1956 for Alteration of Articles of Association of the Company by addition of Article 13A; and

c. Under Section 81(1A) and other applicable provisions of the Companies Act, 1956 for approval of the Nirlon Employee Stock Option Scheme 2012.

EMPLOYEES STOCK OPTION SCHEME (ESOP)

Pursuant to the resolution passed by the shareholders of the Company by way of a postal ballot on May 23, 2012, the Company granted 7,15,000 stock options to its employees at an issue price of Rs. 41.30 per share on May 30, 2012 in accordance with NIRLON ESOP 2012. Each option entitles the holder to purchase one equity share of the Company at the issue price. No options have been vested till date.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

As required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Directors') Rules 1988 the particulars

relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are as under :

(A) The Company has no manufacturing activities relating to conservation of energy.

(B) 1. The Company has made not made any provision for

research & development expenditure as the same is not applicable.

2. The Company has no activity relating to technology absorption and innovation.

(C) The Company has incurred travel expenses in foreign currency aggregating to Rs. 6.35 lac (Previous Year Rs. 2.76 lac) and the Company has no foreign exchange earnings.

The Company has incurred professional fee expenses in foreign currency aggregating to Rs. 85.99 lac (Previous Year Rs. 109.92 lac).

EMPLOYEES

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies ('Particulars of Employees') Rules, 1975 (as amended to date) is attached as Annexure I and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, the Board of Directors hereby confirm:

i) that in the preparation of the annual accounts for the year ended March 31, 2012, applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) that the Directors have selected such accounting policies and applied them consistently, and made judgments and estimates that were reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company for the year ended March 31, 2012, and of the net losses of the Company for that year;

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

iv) that the Directors have prepared the accounts for the year ended March 31, 2012 on a 'going concern' basis.

CORPORATE GOVERNANCE DISCLOSURE

The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI), and has complied with all the mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance (Annexure II to this Report) and a certificate from the Statutory Auditors confirming compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange Limited, forms part of this Report.

The Executive Vice Chairman's declaration regarding compliance with the Code of Business Conduct and Ethics forms part of this Corporate Governance Report.

MANAGEMENT DISCUSSION ANALYSIS

Details are provided in Annexure III and form part of this Report.

INTERNAL AND STATUTORY AUDITORS

M/s. Haribhakti & Co., Chartered Accountants are appointed as Internal Auditors of the Company and their reports are reviewed by the Audit Committee appointed by the Board.

The Company's Statutory Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, retire as Auditors of the Company at the conclusion of the ensuing Fifty Third Annual General Meeting, and are eligible for re-appointment. They have indicated their willingness to accept re-appointment and have further furnished the necessary Certificate in terms of Section 224(1B) of the Companies Act, 1956.

The Audit Committee has considered and recommended the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as Statutory Auditors of the Company to the Board of Directors. The Board of Directors have accepted the recommendation and recommend to the Shareholders the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as the Statutory Auditors of the Company and authorized the Board of Directors to fix their remuneration.

AUDITORS' REPORT

The observations made by the Auditors in their Report referring to the Notes forming part of the Accounts are self explanatory , and therefore, do not require any further comments under Section 217(3) of the Companies Act, 1956.

PERSONNEL RELATIONS AND ACKNOWLEDGEMENTS

Personnel relations with employees continue to remain cordial. Your Directors record their appreciation for the services rendered by employees at all levels. They acknowledge and record their appreciation for the co-operation and assistance rendered by HDFC Limited, Banks, and various Government Authorities at the State and Central levels. Your Directors thank all stakeholders for their continued support.

For the Behalf of the Board of Directors For Nirlon Limited Moosa

Raza Chairman

Mumbai, July 28, 2012


Mar 31, 2011

Dear Members,

The Directors present their 52nd Annual Report and the Audited Financial Accounts for the year ended March 31, 2011.

FINANCIAL HIGHLIGHTS

(Rupees in crore)

2010-11 2009-10

Gross Sales and Other Income 152.85 56.23

Gross Profit/(Loss) 107.00 24.53

Interest paid 57.98 22.17

Cash Profit/(Loss) 49.02 2.36

Depreciation 46.00 17.68

Net Profit before extraordinary items 3.02 (15.32)

Less : Extraordinary items

VRS 2.52 2.52

Net Profit for the year after 0.50 (17.84) extraordinary items

Provision for Taxation :

Current Tax 0.10 0.00

Income tax adjustments 0.00 0.22 of earlier years

Deferred Tax 0.04 0.28

Profit for the year after Tax 0.36 (18.34)



DIVIDEND

The Directors do not recommend any dividend in view of the marginal profit for the year.

DIRECTORS

Shri Moosa Raza and Shri Arjan Gurbuxani, Directors, retire by rotation and being eligible, offer themselves for re-appointment at this Annual General Meeting.

A brief resume of the Directors to be re-appointed, nature of their expertise, and name of the company/ies in which they hold Directorships and Memberships/Chairmanships of Board Committees, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, Mumbai, is provided in Annexure III, i.e. the Report on Corporate Governance forming a part of this Report.

OPERATIONS & FUTURE OUTLOOK

i) Development of the Industrial Park /Information Technology (IT) Park i.e. Nirlon Knowledge Park ( NKP) – Goregaon, Mumbai

Nirlon Limited is the owner of NKP, a 23 acre campus in Goregaon (E), Mumbai 400 0063. NKP is an Industrial Park as per the Consolidated Foreign Direct Investment (FDI) Policy of the Government of India (GOI), and is an IT Park under the Government of Maharashtra's IT Policy. NKP, being an Industrial Park, is eligible for FDI under the Automatic Route as per the Government of India's Consolidated FDI Policy.

Construction, Delivery of Premises, and License Fee Commencement

Planning for the development of NKP in four phases began in 2006, and construction in April/May 2007. Currently, Phases 1 and 2 are complete.

A total of approx. 16.75 lac sq. ft. has been constructed in Phases 1 and 2. Income by way of License fees from approx. 10.26 lac sq. ft., which corresponds to approx. 95.50 % of the total licensable area for Phases 1 & 2 of approx. 10.75 lac sq. ft., is accruing to the Company as on March 31, 2011.

Please note: - The total constructed area of approx. 16.75 lac sq.ft. for Phases 1 and 2 includes two levels of basement parking for each of the four office Blocks, as well as a 10 floor Multi Level Car Parking ( MLCP) ( which also has two basements) housing the utilities , i.e. generators, chillers, water tanks, electrical infrastructure etc. for Phases 1 and 2, in addition to visitor and occupant parking.

Gross License fees as on March 31, 2011 from Phases 1 and 2 aggregate approx. Rs.8.20 crore per month. Additional gross License fees as on March 31, 2011 of approx. Rs.1.51 crore per month are also accruing from other licensees occupying the existing old buildings in NKP ( approx. 3.91 lac sq. ft.).

Construction of Phase 3 (approx. 5.57 lac sq. ft. of constructed area corresponding to approx. 3.90 lac sq. ft. of licensable area) commenced in the last quarter of 2010, and is expected to be complete by approx. the second/third quarter of 2013.

Phase 4 (approx. 6.50 lac sq. ft. of constructed area corresponding to approx. 4.75 lac sq. ft. licensable area) is proposed to commence from the last quarter of 2011 / 1st quarter of 2012.

When complete, (estimated by approx. 2014) - the total constructed area ( including existing old buildings) in NKP will be approx. 32.22 lac sq. ft. corresponding to a total licensable area of approx. 22.76 lac sq. ft..

Marketing

The profile of occupants occupying Phase 1 and Phase 2 presently comprise of highly regarded and well known International and Indian corporates. The Company is targeting a similar profile of successful Corporates for its Phase 3 and Phase 4 development.

Financing

The Company's debt funding to-date has been provided by HDFC Limited and can be broadly be broken down into two categories:- (i) Securitized loan - Rs.568.49 crore (as on March 31, 2011) being repaid in equal monthly installments of principal and interest from the existing License fees.

(ii) Construction loan for Phase 3 - Rs.25.00 crore drawn down as on March 31, 2011 (out of a total of Rs.200.00 crore sanctioned).

Preferential issue of Equity Shares – On July 21, 2011 , the Company has successfully completed a Preferential Equity issue of Rs. 74.52 crore , by issuing 1,35,49,000 new equity shares at a price of Rs. 55.00 per share ( Rs. 10.00 face value Rs. 45.00 premium) to four investors including HDFC Limited. The issue was made under Chapter VII of SEBI ICDR, 2009, and was approved by a special resolution of shareholders in an Extra Ordinary General Meeting held on July 7, 2011.

The Company's revised subscribed and paid up share capital now stands increased to Rs. 71,76,55,860.00 ( earlier Rs. 58,21,65,860.00 ) comprising 7,17,65,586 equity shares of Rs. 10.00 each ( earlier 5,82,16,586 equity shares of Rs. 10.00 each ).

The proceeds from this Preferential issue have been utilized as envisaged, for enhancing the efficiency of the NKP development through a prudent and responsible mix of project financing.

Further Phases

Subject to adequate progress of Phase 3 and market conditions, the development of the fourth phase of NKP, comprising a constructed area of approx.6.50 lac sq. ft., is proposed to begin in the last quarter of 2011 /1st quarter of 2012.

License fee income at Goregaon from the licensees in existing old buildings may decrease to a small extent in 2011-12. This is because certain agreements are expiring and may be renewed for a short period only, or may not be renewed at all, so as to make further space available for the continued development of NKP in 2011-2012. The Company will make all efforts to ensure that there is a minimum loss of License fee in this transitory phase.

The Company's business plan will continue to retain ownership of the NKP development, and to offer office space on a leave and license basis only.

ii) Nirlon House

The Company continues to own 75% undivided interest in approx. 45,475 sq.ft. in the Nirlon House' building at a prime location on Dr. A. B. Road, Worli, in Central Mumbai.

iii) Tyrecord/ Industrial Fabric Division - Tarapur

The Company has discontinued the operations of this Division. It has already assigned its MIDC leasehold plot of land (Plot D-8) at Tarapur alongwith the buildings/ structures thereon to M/s. Bombay Rayon Clothing Limited, Mumbai as approved by the shareholders through a Postal Ballot, and has received the full and final consideration for the same from M/s. Bombay Rayon Clothing Limited, Mumbai.

FIXED DEPOSITS

The Company has neither accepted nor has invited any fixed deposits during the year.

DEBENTURES

The Company has not issued any debenture during the year.

The Company has already transferred the last unpaid/ unclaimed debenture redemption amount/interest pertaining to the No.IV and No.V issues of Debentures under Section 205-C of the Companies Act, 1956 ("the Act") to the "Investor Education and Protection Fund (IEPF)" on August 17, 2010 as required under the provisions of the Act. As a result , all outstanding amounts pertaining to unpaid/unclaimed debenture redemption amount/interest required to be paid / transferred under the provisions of the Act have been duly paid/ transferred.

PREFERENTIAL EQUITY ISSUE UNDER CHAPTER VII OF SEBI ICDR, 2009

The Company has successfully issued and allotted 1,35,49,000 Equity Shares on a preferential basis on July 21, 2011 upon receipt of the full consideration amount of Rs. 74.52 crore (inclusive of premium of Rs. 45.00 per Equity Share).

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.

The information as required under Section 217(1) (e) of the Act, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is provided in Annexure I and forms part of this Report.

EMPLOYEES

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees') Rules, 1975 (as amended to date) is attached as Annexure II and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors’ Responsibility Statement, the Board of Directors hereby confirm:

i) that in the preparation of the annual accounts for the year ended March 31, 2011, applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) that the Directors have selected such accounting policies and applied them consistently, and made judgments and estimates that were reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company for the year ended March 31, 2011, and of the profit of the Company for that year.

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

iv) that the Directors have prepared the accounts for the year ended March 31, 2011 on a going concern' basis.

CORPORATE GOVERNANCE DISCLOSURE

The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI), and has complied with all the mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.

A separate section on Corporate Governance (Annexure III to this Report), and a certificate from the Statutory Auditors confirming compliance with the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement entered into with Bombay Stock Exchange Limited, form part of this Report.

The Executive Vice Chairman's declaration regarding compliance with the Code of Business Conduct and Ethics forms part of this Corporate Governance Report.

MANAGEMENT DISCUSSION ANALYSIS

Details are provided in Annexure IV and forms part of this Report.

INTERNAL AND STATUTORY AUDITORS

M/s. Haribhakti & Co., Chartered Accountants are appointed as Internal Auditors of the Company and their reports are reviewed by the Audit Committee appointed by the Board.

The Company’s Statutory Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting, and are eligible for re-appointment. They have indicated their willingness to accept re-appointment and have further furnished the necessary Certificate in terms of Section 224(1B) of the Companies Act, 1956.

The Audit Committee has considered and recommended the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as Statutory Auditors of the Company, to the Board of Directors. The Board of Directors have accepted the recommendation and recommend to the Shareholders the re-appointment of M/s. N. M. Raiji & Co., Chartered Accountants, as the Statutory Auditors of the Company and authorize the Board of Directors to fix their remuneration.

AUDITORS' REPORT

The observation made by the Auditors in their Report referring to the Notes forming part of the Accounts are self explanatory, and therefore, do not require any further comments under Section 217(3) of the Companies Act, 1956.

PERSONNEL RELATIONS AND ACKNOWLEDGEMENTS

Personnel relations with employees continue to remain cordial. Your Directors record their appreciation for the services rendered by employees at all levels. They acknowledge and record their appreciation for the co-operation and assistance rendered by HDFC Limited, Financial Institutions, Banks and various Government Authorities at the State and Central levels. Your Directors thank all stakeholders for their continued support.

For and on behalf of the Board of Directors For Nirlon Limited

Moosa Raza Chairman

Mumbai, July 29, 2011


Mar 31, 2010

The Directors present their 51st Annual Report and the Audited Financial Accounts for the year ended March 31, 2010.

FINANCIAL HIGHLIGHTS

(Rupees in crore)

2009-10 2008-09

Gross Sales and Other Income 56.23 38.10

Gross Profit/(Loss) 24.53 13.45

Interest paid 22.17 5.32

Cash Profit/(Loss) 2.36 8.12

Depreciation 17.68 2.10

Net profit before extraordinary items (15.32) 6.02

Less: Extraordinary items

VRS 2.52 2.52



Net Profit for the year after

extraordinary items (17.84) 3.50

Provision for Taxation:

Current Tax - (0.40)

Income Tax adjustments of

earlier years (0.22) (0.01)

Deferred Tax (0.28) (0.05)

Fringe Benefit Tax - (0.14)



Profit for the year after Tax (18.34) 2.90

DIVIDEND

The Directors do not recommend any dividend in view of the net loss for the year.

DIRECTORS

We are pleased to inform you that our Chairman, Shri Moosa Raza, former Secretary to the Government of India has been conferred the Padma Bhushan Award by the President of India in the Republic Day Honors for distinguished Civil Service.

Smt. Rajani Bhagat and Shri Jaidev Shroff, Directors, retire by rotation and being eligible, offer themselves for re-appointment at this Annual General Meeting.

A brief resume of the Directors to be re-appointed, nature of their expertise, and name of the company/ies in which they hold Directorships and Memberships/Chairmanships of Board Committees, as stipulated under clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, is provided in Annexure III, i.e. the Report on Corporate Governance forming a part of this Report.

OPERATIONS & FUTURE OUTLOOK

a) Real Estate Division

i) Development of the Information Technology (IT) Park i.e. Nirlon Knowledge Park (NKP) - Goregaon, Mumbai

Phase 1 and 2

Construction, Delivery of Premises, and Licence Fee Commencement

During the period under review, construction of Phase 1, i.e. Buildings Blocks B 1, 2 and 3 as well as the Multi Level Car Park (MLCP) have been completed.

In the April-August 2009 period, the Company commenced delivery of these Phase 1 premises to its licensees for their fitout work. Income by way of license fees for approx. 715,000 sq.ft. commenced between July 2009 and March 2010. The total constructed area for Phase 1 is approx. 1,294,000 sq. ft. including two levels of basement parking and the ten floor MLCP (which will also be used for Phase 2 parking, visitor parking and houses utilities, i.e. generators, chillers, water tanks, etc. for both Phases 1 and 2).

During the period under review, the Company also completed construction of the Phase 2 Building Block B-7, and has commenced delivery of these premises to its licensees in stages for their fit out work from July 2010. Income by way of license fees for Phase 2 will begin from October 2010, and the Company estimates commencement of license fees from approx. 306,000 sq. ft. progressively through March 2010. The total constructed area for Phase 2 including two levels of basement parking is approx. 384,000 sq. ft.

Marketing

The profile of licensees occupying / contracted to occupy Phase 1 and Phase 2 presently comprises highly regarded and well known International and Indian corporates. The Company will continue to target a similar profile of successful Corporates for its Phase 3 and Phase 4 development.

Financing

HDFC Ltd., the Companys Lenders, continue to provide loan financing to the Company for the development of Phase 1 and Phase 2 of NKP as per the terms of their sanction.

Repayment of the loan to HDFC in equal monthly installments comprising Principal and Interest has begun from August 2009, with the securitization of a major portion of the Phase 1 and 2 loan. The repayment is being made as per HDFCs required schedule.

Interest and Depreciation

With the completion of Phase 1 and commencement of license fees, Interest Paid on the construction loan, and Depreciation on the new buildings form a part of the Profit & Loss Accounts for 2009-10. As a result, though Gross Profit is sharply higher than in 2008-09, the Financial Year 2009-10 shows a Loss after Depreciation. Interest Paid and Depreciation for Phase I are both expected to reduce in subsequent years as, respectively, outstanding loan amounts for this phase also reduce, and buildings become older. (On the assumption that the interest rate charged to the Company and loan tenure remain unchanged).

Further Phases

Subject to the successful commencement of license fee income from Phase 2, the development of the Phase 3 of NKP is proposed to begin in October-December 2010, comprising a constructed area of approx.550,000 sq. ft. Based on the progress of Phase 3, the Company will consider when to commence the fourth and final phase of the NKP Development.

The Companys business plan will continue to retain ownership of the NKP Development, (proposed constructed area of approx. 3 million sq. ft.) and to offer office space on a leave and license basis only.

ii) Leave and License activity

The Company continues to license built up area at Goregaon, Mumbai, (in the existing old Industrial Buildings) at Tarapur, Thane Dist., Maharashtra (upto August 2010), and in Nirlon House at Worli, Mumbai, to various corporates.This activity continues together with the development of various phases of NKP.

License fee income at Goregaon from the licensees in existing old buildings will decrease to some extent in Financial Year 2010-11. This is because certain agreements are expiring and may be renewed for a short period only, or may not be renewed at all, so as to make further space available for the continued development of NKP in Financial Year 2010-2011. The Company will make all efforts to ensure that there is a minimum loss of license fees during this transitory phase.

b) Tyrecord / Industrial Fabric Division- Tarapur

The Company is in the process of completing the remaining statutory formalities for completion of transfer of its MIDC leasehold plot of land (Plot D-8) at Tarapur alongwith the buildings/structures to M/s. Bombay Rayon Clothing Limited, Mumbai, as approved by the shareholders through a Postal Ballot.

FIXED DEPOSITS

The Company has neither accepted nor has invited any fixed deposits during the year.

DEBENTURES

The Company has no overdue debenture redemption amounts, save and except unclaimed amounts.

The Company has transferred unpaid/unclaimed debenture redemption amounts/interest pertaining to the No. IV and No. V issues of Debentures under Section 205-C of the Act to the Investor Education and Protection Fund (IEPF)” on January 12, 2010 as required under the provisions of the Act, and will further transfer unpaid/unclaimed debenture redemption amounts/interest after August 18, 2010 as required under the provisions of the Act.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.

The information as required under Section 217(1) (e) of the Act, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is provided in Annexure I and forms part of this Report.

EMPLOYEES

The information required under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is attached as Annexure II and forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, the Board of Directors hereby confirm:

i) that in the preparation of the annual accounts for the year ended March 31, 2010, applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) that the Directors have selected such accounting policies and applied them consistently, and made judgments and estimates that were reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company for the year ended March 31, 2010, and of the loss of the Company for that year;

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

iv) that the Directors have prepared the accounts for the year ended March 31, 2010 on a ‘going concern basis.

COMPLIANCE CERTIFICATE OF AUDITORS

A certificate from the Auditors of the Company, M/s. N. M. Raiji & Co, confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 is annexed to the Directors Report forming part of this Report.

CORPORATE GOVERNANCE DISCLOSURE

The information as required is provided in Annexure III and forms part of this Report.

MANAGEMENT DISCUSSION ANALYSIS

Details are provided in Annexure IV and forms part of this Report.

INTERNAL AND STATUTORY AUDITORS

M/s. Haribhakti & Co., Chartered Accountants are appointed as Internal Auditors of the Company and their reports are reviewed by the Audit Committee appointed by the Board.

M/s. N. M. Raiji & Co., Chartered Accountants, the Statutory Auditors of the Company, retire from the office of auditors, and being eligible offer themselves for re-appointment as the Statutory Auditors of the Company.

Members are requested to appoint M/s. N. M. Raiji & Co. as the Statutory Auditors of the Company and authorize the Board of Directors to fix their remuneration.

AUDITORS REPORT

The Auditors Report and Notes to the accounts are self- explanatory.

INDUSTRIAL RELATIONS AND ACKNOWLEDGEMENTS

Industrial relations with employees continue to remain cordial. Your Directors record their appreciation for the services rendered by employees at all levels. They acknowledge and record their appreciation for the co- operation and assistance rendered by HDFC Limited, Financial Institutions, Banks and various Government Authorities at the State and Central levels. Your Directors thank all stakeholders for their continued support.

For and on behalf of the Board of Directors

For Nirlon Limited

Moosa Raza

Chairman

Mumbai, July 30, 2010

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