The Directors'' present their Fifty Third Annual Report and the Audited
Financial Accounts for the year ended March 31, 2012.
(Rs. in Crore)
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
Less: Extraordinary items
VRS 0.00 2.52
Aet Profit/ (Loss) for the year after (-33.92) 0.50
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 %.
The Directors do not recommend any dividend in view of the net loss for
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) -
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
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.
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.
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
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.
The Company has neither accepted nor invited any fixed deposits during
The Company has not issued any debentures during the year. POSTAL
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
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
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
(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).
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
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.
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
Mumbai, July 28, 2012