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निरलॉन निदेशकों की रिपोर्ट, निरलॉन निर्देशकों द्वारा रिपोर्ट

निरलॉन

बीएसई: 500307  |  NSE: NIRLON  |  ISIN: INE910A01012  |  Textiles - Manmade

खोजें निरलॉन कनेक्शन Mar 17
निदेशकों की रिपोर्ट वर्षांत : Mar '18

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

स्रोत: रेलीगरे टेचनोवा

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