(m) Provisions & contingent liabilities
Provisions
A provision is recognised when the Company has a
present obligation (legal or constructive) as a result of
past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and the amount can be reliably estimated.
These estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a
finance cost.
Contingent liabilities
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a
present obligation that is not recognised because it is not
probable that an outflow of resources will be required to
settle the obligation or a reliable estimate of the amount
cannot be made. The Company does not recognize a
contingent liability but discloses its existence in the
financial statements unless the probability of outflow of
resources is remote.
(n) Leases
Company as a lessor
At inception of contract, the Company assesses whether
the Contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of
time in exchange for consideration. At inception or
on reassessment of a contract that contains a lease
component, the Company allocates consideration in the
contract to each lease component on the basis of their
relative standalone price.
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership of an
asset are classified as operating leases. Rental income
from operating lease is recognised on a straight-line
basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on
the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are
earned.
Leases are classified as finance leases when substantially
all of the risks and rewards of ownership transfer from
the Company to the lessee. Amounts due from lessees
under finance leases are recorded as receivables at the
Company's net investment in the leases. Finance lease
income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the net investment
outstanding in respect of the lease.
(o) Segment Reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker.
(p) Revenue recognition
Revenue from contract with customers
Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange
for those goods or services.
Revenue from operations also consist of the revenue
received/ receivable from tenants for the Common Area
Maintenance (CAM) services provided as per the terms
of agreement with the tenants and third parties, if any.
Contract assets are transferred to receivables when
the rights become unconditional. Contract asset is the
right to consideration in exchange for goods or services
transferred to the customer. Contract liabilities are
recognised as revenue as and when the performance
obligation is satisfied. Contract liability is the entity's
obligation to transfer goods or services to a customer
for which the entity has received consideration from the
customer in advance.
Leasing Income
License fee / lease income and income incidental to it,
arising from operating leases on investment properties
is accounted for on a straight-line basis over the lease
terms, unless there is another systematic basis which is
more representative of the time pattern of the lease.
Other operating revenue comprises of car parking
charges which are recognised as income as per the
terms and conditions of the agreement with lessees.
Interest income
Interest income from debt instruments is recognised
using the effective interest rate method.
Insurance claims and scrap sales are accounted for in
the books on an accrual basis.
(q) Dividend distribution to equity shareholders
The Company recognises a liability to pay dividend to
equity holders when the distribution is authorised, and the
distribution is no longer at the discretion of the Company.
A corresponding amount is recognised directly in equity.
(r) Critical estimates and judgements
The preparation of financial statements requires the use
of accounting estimates which, by definition, will seldom
equal the actual results. This note provides an overview
of the areas that involved a higher degree of judgment
or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions
turning out to be different than those originally assessed.
Detailed information about each of these estimates
and judgments is included in relevant notes together
with information about the basis of calculation for each
affected line item in the financial statements.
The areas involving critical estimates or judgments are:
- Estimation of Useful life of Property, plant and
equipment and Investment property (Note 2 and 3)
- Estimation of taxes (Note 16 and 26)
- Estimation of provision and assessment of the likely
outcome of contingent liabilities (Note 28)
- Estimation of fair value measurement of financial
assets and liabilities (Note 33)
Estimates and judgments are continually evaluated.
They are based on historical experience and other
factors, including expectations of future events that may
have a financial impact on the Company and that are
believed to be reasonable under the circumstances.
(s) New and amended standards
The Company applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after 1 April 2024. The Company has not
early adopted any standard, interpretation or amendment
that has been issued but is not yet effective.
• Ind AS 117 Insurance Contracts
The Ministry of corporate Affairs (MCA) notified the
Ind AS 117, Insurance Contracts, vide notification
dated 12 August 2024, under the Companies (Indian
Accounting Standards) Amendment Rules, 2024,
which is effective from annual reporting periods
beginning on or after 1 April 2024.
Ind AS 117 Insurance Contracts is a comprehensive
new accounting standard for insurance contracts
covering recognition and measurement,
presentation and disclosure. Ind AS 117 replaces
Ind AS 104 Insurance Contracts. Ind AS 117 applies
to all types of insurance contracts, regardless of
the type of entities that issue them as well as to
certain guarantees and financial instruments with
discretionary participation features.
The application of Ind AS 117 had no impact on the
Company's financial statements as the Company
has not entered any contracts in the nature of
insurance contracts covered under Ind AS 117.
• Ind AS 116 Leases - Lease Liability in a sale and
leaseback
The MCA notified the Companies (Indian Accounting
Standards) Second Amendment Rules, 2024, which
amend Ind AS 116, Leases, with respect to Lease
Liability in a Sale and Leaseback.
The amendment specifies the requirements that a
seller-lessee uses in measuring the lease liability
arising in a sale and leaseback transaction, to
ensure the seller-lessee does not recognise any
amount of the gain or loss that relates to the right of
use it retains.
The amendment is effective for annual reporting
periods beginning on or after 1 April 2024 and must
be applied retrospectively to sale and leaseback
transactions entered into after the date of initial
application of Ind AS 116.
The amendment had no impact on the Company's
financial statements.
(t) Standards notified but not yet effective
There are no standards that are notified and not yet
effective as on the date
(iv) Contractual Obligations
Refer to Note 29 for disclosure of contractual commitments for the purchase, construction or development of investment
property or its enhancements.
(v) Investment properties pledged as security
Refer to Note 13 for information on investment properties and property, plant and equipments pledged as security by the
Company.
(vi) Fair value
As at March 31,2025 and March 31,2024, the fair values of the investment properties excluding capital work in progress
is ' 6,56,958.50 lakhs and ' 4,55,827.04 lakhs respectively. These valuations are based on valuations performed by an
independent valuer who is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation)
Rules, 2017. The main inputs used are the lease rentals, rent escalations, benchmark lease rentals, running costs and
lease management charges. Fair valuation is based on discounted cash flow method. The fair value measurement is
categorised within level 3 fair value hierarchy.
Note (iii): Terms and rights attached to equity shares
The company has only one class of equity shares having par value of ' 1 per share. Each holder of equity shares is entitled
to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the
company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held
by the shareholders.
Note (iv): The Company has not issued any equity shares as bonus or for consideration other than cash and has not bought
back any shares during the period of five years immediately preceding March 31,2025.
30. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (“CODM”) of the Company. Executive Director and Chief Executive Officer of the Company has been identified as
CODM who is responsible for allocating resources and assessing performance of the operating segments.
The Company has determined "licensing of investment properties" as a reportable segment as evaluated by the CODM for
allocation of resources and assessing the performance. There are no other reportable segment as per Ind AS 108 - Operating
Segments. All the assets of the Company and source of revenue of the Company is within India and hence, no separate
geographical segment is identified. Revenue from four customers, for the year ended March 31,2025 amounting to ' 42,366.26
lakhs (March 31,2024: ' 44,391.16 lakhs) with whom the Company has entered into leasing arrangements accounts for more
than 10% of the total revenue for the year then ended.
B. Measurement of fair value
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and cash equivalents, other bank balances, trade receivables, other current financial assets,
trade payables, security deposits from licensees and other current financial liabilities approximate their carrying
amounts largely due to short term maturities of these instruments.
2. The fair values of the Company's interest-bearing borrowings are determined by using discounted cash flow method
using discount rate that reflects the borrowing rate as at the end of the reporting period. The own non-performance
risk as at March 31, 2025 and March 31, 2024 was assessed to be insignificant.
C. Fair value hierarchy
The fair value of financial instruments as referred to above have been classified into three categories depending on the
inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
During the year there were no transfer between level 1 & level 2 and no transfer into & out of level 3 fair value
measurements.
34. Financial risk management
The Company's Board of Directors have overall responsibility for the establishment and oversight of the Company's risk
management framework. The Board of Directors have established the Risk Management Committee, which is responsible
for developing and monitoring the Company's risk management policies. The Committee reports regularly to the Board
of Directors on its activities. The Company's financial risk management is an integral part of how to plan and execute its
business strategies.
i. Trade receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However credit risk with regards to trade receivable is not significant for the Company as the Company has 3
to 12 months of rentals as deposit from the licensees.
ii. Cash and bank balances
The Company held cash and cash equivalent and other bank balance of ' 17,393.60 lakhs as at March 31,
2025 (March 31, 2024: 6,095.22 lakhs). The same are held with banks and financial institutions with good
credit rating. Also, the Company invests its short term surplus funds in bank fixed deposit which carry no mark
to market risks for short duration, therefore does not expose the Company to credit risk.
iii. Other financial assets
The Company has held other financial assets which majorly comprise of the security deposits, margin money
held with banks and recoverable from related parties. The margin money held is with the banks and and
financial institution with good credit rating. The security deposits are held with reputed power distribution
company and municipal corporation for water supply, therefore does not expose the Company to credit risk.
B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity
is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis
of expected cash flows.
(C) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates (currency risk) and interest rates
(interest rate risk), will affect the Company's income. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates is
very minimal. There are no foreign currency payables or receivable as at the end of each reporting period for which
Company is exposed to foreign currency risk.
The Company closely tracks and observes the movement of foreign currency with regards to ' and also forward
cover rate. The Company decides to cover or keep the foreign currency exposure open based on the above.
(ii) Cash flow and fair value interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates
primarily to the Company's long term debt obligation at floating interest rates.
35. Capital management
a. Risk Management
For the purpose of Company's capital management, capital includes issued equity share capital, securities
premium, all other equity reserves attributable to the equity shareholders of the Company and borrowings. The
primary objective of the Company's capital management is to ensure that it maintains an efficient capital structure
and maximises shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions,
annual operating plans and long term and other strategic investment plans. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to shareholders or issue new shares. No changes
were made in the objectives, policies or processes for managing capital during the year ended March 31, 2025 and
March 31,2024.
The Company monitors capital using a ratio of 'adjusted net debt' to 'equity'. For this purpose, adjusted net debt is
defined as interest-bearing loans and accrued interest thereon less cash and bank balances. Equity comprises all
components of equity including share premium and all other equity reserves attributable to the equity share holders.
37. Other statutory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company did not have any transactions with struck off companies.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign
entities (Intermediaries) with the understanding that the Intermediary shall
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961, such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961
(viii) The Company has not given any loans or advances in the nature of loans to promoters, directors, KMPs and/ or
related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are
repayable on demand, or without specifying any terms or period of repayment.
(ix) The Company is not required to file quarterly returns or statements of current assets with banks.
(x) The Company has used the borrowings for the purpose for which it was taken.
38. Maintenance of audit trail and back-up of books of accounts
The Company has used Microsoft SQL, an accounting software, for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions
recorded in the software, except that audit trail feature is not enabled at the database level, viz. fa_current, which is a
non SaaS application hosted inhouse, insofar as it relates to the said accounting software. Further no instance of audit
trail feature being tampered with was noted in respect of the said software. Additionally, the Company has recorded and
preserved the audit trail to the extent it was enabled and recorded for respective years.
The Company is maintaining proper books of accounts as required by the law and the back-up of books of accounts is
performed on a daily basis on server located in India.
39. Significant events after the reporting period
There were no significant adjusting events that occurred subsequent to the reporting period.
40. Approval of Ind AS financial statements
The financial statements were approved for issue by the Board of Directors on May 21, 2025.
For and on behalf of the Board of Directors of
NIRLON LIMITED
CIN: L17120MH1958PLC011045
As per our report of even date attached RAHUL V. SAGAR ANJALI K. SETH
For S R B C & CO LLP Executive Director and Chief Executive Officer Director
Firm Registration No : 324982E/E300003 DIN : 00388980 DIN : 05234352
Hemal D Shah MANISH B. PARIKH JASMIN K. BHAVSAR
Partner Chief Financial Officer & Vice President Company Secretary & Vice President
(Finance) (Legal)
Membership No. : 110829 FCS: 4178
Place: Mumbai Place: Mumbai Place: Mumbai
Date: May 21,2025 Date: May 21,2025 Date: May 21,2025
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