Nitesh Estates Ltd.
|BSE: 533202||Sector: Infrastructure|
|NSE: NITESHEST||ISIN Code: INE639K01016|
|BSE LIVE 19:40 | 19 Oct||9.25||
|NSE 19:31 | 19 Oct||9.20||
|Mkt Cap.(Rs cr)||135|
|Mkt Cap.(Rs cr)||134.89|
Nitesh Estates Ltd. (NITESHEST) - Director Report
Company director report
Your Directors present their Twelfth Annual Report and the standalone and consolidatedannual audited accounts of the Company for the year ended March 312016.
1. FINANCIAL RESULTS:
Rupees in Lakh
The Directors could not recommend dividend as the Company has incurred loss during thecurrent financial year and it is proposed to conserve the reserves for the projects growthand sound financial position of the Company.
3. State of Company's Affairs:
During the year under review the Company could achieve a turnover of Rs. 8712 Lakh asagainst Rs. 12501 Lakh in the previous year and other income of Rs. 193 Lakh as comparedto Rs. 41 Lakh in the previous year. The operations had resulted in a loss of Rs. 2039Lakh as compared to previous year profit of Rs. 2614 Lakh.
In compliance with the applicable provisions of Companies Act 2013 and regulations ofthe Securities and Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 the Company has prepared Consolidated FinancialStatements and as per the applicable Accounting Standards issued by the Institute ofChartered Accountants of India.
The Audited Consolidated Financial Statements along with the Auditors' Report have beenannexed to the Annual Report. The total consolidated revenue for the year ended 31st March2016 amounted to Rs. 26102 Lakh including other income of Rs. 751 Lakh as compared toRs. 29058 Lakh in the previous year. The Company has incurred a loss after tax of Rs.5052 Lakh as compared to previous year profit of Rs. 3093 Lakh and a Net loss of Rs.7272 Lakh for the year (Previous year Net profit of Rs. 236 Lakh) after adjusting theminority interest in subsidiary companies and share of Profit/(Loss) from associatecompany amounting to Rs.(2220) Lakh as compared to the previous year Rs.(2857) Lakh.
The audited consolidated Balance Sheet as at 31st March 2016 consolidated Profit andLoss account for the year ended as on that date Cash flow Statements together with theNotes and Reports of Auditors thereon forms part of the Annual Report. The financialfigures have been regrouped in line with the Schedule III of Companies Act 2013disclosure requirements.
III. Material changes and commitments if any affecting the financial position of theCompany occurred between the end of the financial year to which this financial statementsrelate and the date of the report:
a. Nitesh Housing Developers Private Limited (NHDPL) has become a 100% ownedsubsidiary of the Company consequent to the investors i.e. M/s. Housing DevelopmentFinance Corporation Limited (HDFC) transferring their stake of 505000 Equity Shares inNHDPL to Kakanad Enterprises Private Limited (KEPL) a 100% subsidiary of the Company. Mr.Nitesh Shetty Director and member of NHDPL also transferred his 100 Equity Shares toKEPL. This transaction extinguishes the obligations of the Company undertaken to HDFC.
Nitesh Housing Developers Private Limited has availed a secured term loan of Rs.315Cr. from Yes Bank Limited during the financial year and as a collateral security theCompany has executed a non disposal undertaking on its 100% direct and indirect stake(5000000 Equity Shares and 4150000 Preference Shares) in NHDPL and the Company hasalso extended its Corporate Guarantee to NHDPL in favour of Yes Bank Limited.
b. There is a dispute between the landowners of Indiranagar Mall and Nitesh IndiranagarRetail Private Limited (NIRPL) the Company with respect to the Joint DevelopmentAgreement now the same has been referred to Arbitration. The Company and NIRPL hasobtained an interim injunction restraining the landowners from alienating the property.
c. Nitesh Urban Development Private Limited (NUDPL) a wholly owned subsidiary of theCompany has fully redeemed and extinguished the Secured Non-convertible redeemableDebentures issued to Reliance Capital Limited. Consequently the collateral securities andcharge has been released.
Further NUDPL has availed a secured term loan of Rs.160 Cr. from Yes Bank Limited on26th April 2016. The Company has extended its Corporate Guarantee and has also given aNon disposable Undertaking for 100% holding in NUDPL as collateral security for the saidterm loan in favour of Yes Bank.
IV. Significant or material orders passed by the regulators/ courts :
During the year under review there were no significant or material orders passed bythe regulators or courts or tribunals against the Company impacting the going concernstatus and Company's operations in future.
4. The Board of Directors and the Committees thereof
I. Composition of the Board of Directors
The Board of Directors of the Company comprises of ten directors of which five areIndependent Directors. The Composition of the Board of Directors is in compliance with theapplicable provisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015.
II. Declarations pursuant to Section 149 (6) of the Companies Act 2013
The Company has received necessary declarations from the Independent Directors statingthat they meet the criteria of independence as specified in Section 149 (6) of theCompanies Act 2013 and Regulation 16 of the Listing Regulations.
III. Change in the Board
During the year under review the Company appointed Mrs. Dipali Khanna (DIN: 03395440)as an Additional Independent Director for an initial term of 5 consecutive years witheffect from 28th May 2015 at its Board Meeting and later on her appointment wasregularized at the 11th Annual General Meeting held on 28th September 2015 by way ofpassing an Ordinary Resolution.
Mrs. Shobha Patil (DIN:07144385) who was appointed as an Additional Director(Independent) on the Board of the Company on 31st March 2015 has resigned on 28th May2015 due to increasing work in her professional carrier.
During the year under review the Board of Directors of the Company met 7 (Seven) timeson the following dates.
In accordance with the provisions of the Companies Act 2013 a separate meeting of theIndependent Directors of the Company was held on 29th March 2016.
V. Re-appointment of Director Retiring by Rotation
In terms of Section 152 of the Companies Act 2013 Mr. Mahesh Bhupathi (DIN: 01603093)is liable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board of Directors has recommended there-appointment of Mr. Mahesh Bhupathi as Director retiring by rotation.
VI. Annual Evaluation of the Board its Committees and Individual Directors
The Independent Directors of the Company at their separate meeting held as per theprovisions of Section 149 read with Schedule V of the Companies Act 2013 and ListingRegulations had carried out an annual evaluation of the Board Committees and individualdirectors performance. The performance of the Board was evaluated after seeking inputsfrom the Independent Directors on the basis of criteria such as Board compositionstructure board processes and their effectiveness information given to the Board etc.
The Board and the Nomination and Remuneration Committee (NRC) reviewed the performanceof the individual directors on the basis of criteria such as their participationcontribution at the meetings their preparedness on the issues to be discussed etc.Additionally the Chairman was also evaluated on key aspects of his role.
VII. Familiarization programme for Independent Directors:
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry.
The Company also keeps the Board updated on the applicable laws regulationsenactments etc. and any changes amendments thereon from time to time
5. Directors' Responsibility Statement:
In terms of the requirements of Section 134(5) of the Companies Act 2013 we onbehalf of the Board of Directors hereby state that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis; and
e) the directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
6. Nomination and Remuneration Policy
The Nomination and Remuneration Committee (NRC) has formulated a policy relating tonomination of and remuneration for the directors key managerial personnel and SeniorManagement personnel.
The Nomination and Remuneration policy has been prepared pursuant to the applicableprovisions of the Companies Act 2013 and Listing Agreement /SEBI (LODR) Regulations 2015.
Non-Executive Directors are remunerated by way of sitting fees for attending themeetings of the Board and the Committees thereof. The sitting fees paid for AuditCommittee and Board meeting is Rs. 50000/- per meeting respectively Nomination &Remuneration Committee is Rs 25000/- per meeting and Stakeholders Relationship Committeeand other Committees is Rs. 20000/- per meeting respectively.
The extract of the Nomination & Remuneration Policy is reproduced in Annexure A tothis report.
Remuneration Details of Directors and Employees
[Pursuant to Section 134 of the Companies Act 2013 and the Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
i. Ratio of remuneration of each director to the median remuneration of the employeesand percentage increase in the remuneration :
1 The median remuneration of employees during the financial year was Rs.637584/-(Rupees Six Lakh Thirty Seven Thousand Five hundred and Eighty four only)
2 Mrs. Dipali Khanna was appointed as an Independent Director at the 11th AnnualGeneral Meeting of the Company for a term of 5 consecutive years.
ii. The percentage increase in the remuneration for the year ended 31st March 2016 tothe Key Managerial Personnels (other than Directors) namely Company Secretary & ChiefCompliance Officer and Chief Financial Officer is Nil.
iii. The median remuneration of employees during the financial year 2014-15 wasRs.657257/- as compared to Rs.637584 during the current financial year 2015-16. Hencethere is no increase in the percentage of median remuneration of employees.
iv. The number of permanent employees on the rolls of the Company as on 31st March2016 was 89 (the group has 309 employees).
v. The Company's turnover is Rs. 8712 Lakh for the current financial year 2015-16 asagainst Rs. 12501 Lakh in the previous year and the operations have resulted in a loss ofRs. 2039 Lakh as compared to previous year's profit of Rs. 2614 Lakh. Taking thesefactors into consideration along with the market scenario and competition in industrypractice and to compensate the inflation increase there is no change during thefinancial year in the remuneration to the employees.
vi. In reference to the above the Nomination & Remuneration Committee has notapproved any change in the remuneration to the Key Managerial Personnel.
vii. During the financial year 2015-16 there is no change in the aggregate remunerationof Key Managerial Personnel on an average.
viii. The last and only Initial public offer was made in May 2010 and the price wasRs. 54/- per equity share. The percentage increase over decrease in the market quotationsof the shares of the Company in comparison with the last Initial Public Offer is (72.63%).
The variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year is (onstandalone basis) as follows:
ix. Average percentile increase in the salaries of employees other than the managerialpersonnel during 2015-16 was Nil. The percentile increase in the managerial remunerationduring the same period was Nil. The percentage increase in the managerial remuneration wason account of the variable component of remuneration payable to the managerial personnelas per the terms and conditions of their appointment.
7. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism policy for its directors and employees to reporttheir concerns about unethical behavior actual or suspected fraud or violation of thecode of conduct/business ethics that provides for adequate safeguards againstvictimization of the director(s) and employee(s) who avail of the mechanism. None of thedirectors/employees of the Company have been denied access to the Chairman of the AuditCommittee. No complaint has been received during the financial year 2015-16.
8. Corporate Social Responsibility
In terms of Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 the Company has constituted the Corporate SocialResponsibility Committee. The Committee met once on 29th March 2016 during the financialyear 2015-16.
Pursuant to the applicable provisions of the Companies Act 2013 and the rules madethereunder the Company was required to make a minimum contribution of Rs 3.52 lakhtowards the Corporate Social Responsibility activities during the year. Accordingly theCompany had made a contribution of Rs 5 Lakh to CherYsh Trust a NGO striving for thebenefit of development of under privileged women and female children.
9. Internal Financial Controls
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company (with its inherent weaknesses) work performedby the internal statutory and secretarial auditors and external consultants speciallyappointed for this purpose including audit of internal financial controls over financialreporting by the statutory auditors and the reviews performed by management and therelevant board committees including the audit committee the Board of the Company is ofthe opinion that the Company's internal financial controls were adequate and effectiveduring the period ended as on 31st March 2016.
10. Statutory Auditors
At the 10th Annual General Meeting held on 26th September 2014 M/s Ray & Ray(Firm Registration Number: 301072E) the Chartered Accountants were appointed as theStatutory Auditors of the Company for an initial term of 5 (five) consecutive years whichis subject to annual ratification by the members of the Company in terms of Section 139 ofthe Companies Act 2013 read with the rules made thereunder. The Audit Committee and theBoard of the Company recommends to the Members of the Company to ratify the appointment ofM/s. Ray & Ray as the Statutory Auditors of the Company.
There is no qualifications or adverse remarks in the Statutory Auditors' Report whichrequire any explanation from the Board of Directors of the Company. The Statutory Auditorshave expressed an unmodified opinion in their Audit Report for the financial year ended31st March 2016.
11. Secretarial Auditor
M/s. Kedarnath & Associates the Practicing Company Secretaries were appointed asthe Secretarial Auditors of the Company for the financial year 2015-16 by the Board ofDirectors of the Company.
The Secretarial Audit Report for the year ended 31st March 2016 issued by theSecretarial Auditors in accordance with the provisions of Section 204 of the CompaniesAct 2013 and the rules made thereunder is annexed to this report separately as Annexure- B.
There is no qualifications or adverse remakes in the Secretarial Audit Report whichrequires any explanation from the Board of Directors of the Company.
12. Particulars of employees
The details of remuneration to directors key managerial personnel and the statement ofemployees in receipt of remuneration exceeding the limits prescribed under Section 134 ofthe Companies Act 2013 read with rules made thereunder has been provided in Annexure Cto this report.
13. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
In terms of Section 134 of the Companies Act 2013 read with rules made thereunder theparticulars of conservation of energy technology absorption and foreign exchangeearnings and outgo are set out in Annexure D to this report.
14. Corporate Governance
The report on Corporate Governance and a certificate from M/s. S. Kedarnath &Associates Practicing Company Secretaries affirming the compliance with the variousprovisions of the Corporate Governance in terms of Regulation 27 read with Schedule V ofthe Securities and Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 forms part of the Annual Report.
15. Code of Conduct
In terms of Regulation 34 read with Schedule V of the Securities and Exchange Board ofIndia (Listing Obligations & Disclosure Requirements) Regulations 2015 a declarationsigned by Mr. Nitesh Shetty the Chairman & Managing Director of the Company affirmingcompliance with the Code of Conduct by the Directors and Senior Management Personnel ofthe Company for the financial year 2015-16 forms part of the Corporate Governance Report.
16. Management Discussion and Analysis Report
In terms of the Securities and Exchange Board of India (Listing Obligations &Disclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis presented in a separate section of the Annual Report.
17. Extract of the Annual Return
In accordance with the provisions of Section 134 of the Companies Act 2013 read withthe Companies (Management and Administration) Rules 2014 the extract of the AnnualReturn in the prescribed format of MGT-9 for the financial year 2015-16 is provided in Annexure-E to this Report.
18. Particulars of Loans Guarantees and Investments
Pursuant to the provisions of Section 134 of the Companies Act 2013 the particulars ofthe loans guarantees and investments made by the Company under Section 186 of theCompanies Act 2013 is detailed in the Notes to Accounts section of the Annual FinancialStatements.
19. Related Party Transactions
During the year under review the Company has not entered into any contract/arrangement/ transaction with a related party which can be considered as material in termsof the policy adopted by the Company Section 188 of the Companies Act 2013 and the SEBI(LODR) Regulations 2015 on the Related Party transactions.
The related party transactions under AS 18 undertaken during the financial year 2015-16are detailed in the Notes to Accounts section of the Annual Financial Statements.
20. Disclosures as per the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder for prevention andredressal of complaints of sexual harassment at workplace. No complaint was received bythe Management during the year.
21. Review of Subsidiaries and Associates
Pursuant to Section 129 of the Companies Act 2013 the consolidated financialstatements of the Company and its subsidiaries and associates prepared in accordance withthe relevant Accounting Standards specified under Section 133 of the Companies Act 2013read with the rules made thereunder forms part of this Annual Report.
Pursuant to the provisions of the said section a statement containing the salientfeatures of the financial statements of the Company's subsidiaries and associates isannexed to the Consolidated Financial Statement in the prescribed format of Form AOC-1.
Further pursuant to the provisions of Section 136 of the Companies Act 2013 thefinancial statements of the Company consolidated financial statements along with therelevant documents and separate accounts in respect of subsidiaries are available on thewebsite of the Company.
There have been no material changes in the nature of the business of the subsidiaries(including Associate Company) during the financial year 2015-16.
In terms of the Securities and Exchange Board of India (Listing Obligations &Disclosure Requirements) Regulations 2015 the Company has adopted a policy fordetermining material subsidiaries. The Policy as approved may be accessed on the Company'swebsite at the link: http://www.niteshestates.com/Investorrelations/Policies & Other Related Matters/Material Subsidiary Policy.
A. Nitesh Housing Developers Private Limited (NHDPL):
The Company directly holds 89.90% equity in NHDPL and during the year KakanadEnterprises Private Limited (one of the wholly owned subsidiaries of the Company) acquiredthe balance 10.10% equity in NHDPL consequently NHDPL has become a Wholly OwnedSubsidiary of the Company.
The financial highlights are as below: Figures in Rs.
B. Nitesh Urban Development Private Limited (NUDPL):
NUDPL is a 100% subsidiary of the Company.
The financial highlights are as below: Figures in Rs.
C. NITESH INDIRANAGAR RETAIL PRIVATE LIMITED (NIRPL):
NIRPL is a 100% wholly owned subsidiary of the Company.
The financial highlights are as below: Figures in Rs.
As reported earlier NIRPL has acquired 100% equity in Nitesh Pune Mall Private Limited(formerly 'Anuttam Developers Private Limited') during the financial year. As aconsequence Nitesh Pune Mall Private Limited has become Tier II Subsidiary of the Company.
The financial highlights of Nitesh Pune Mall Private Limited are as follows: Figures inRs.
D. NITESH PROPERTY MANAGEMENT PRIVATE LIMITED (NPMPL):
NPMPL is a 100% wholly owned subsidiary of the Company. NPMPL is mainly into thebusiness of maintenance contracts with the owners of completed apartments developed by theCompany.
The financial highlights are: Figures in Rs.
E. KAKANAD ENTERPRISES PRIVATE LIMITED ('KEPL'):
This Subsidiary has not yet commenced its commercial operations. KEPL is a 100%subsidiary of the Company.
The status of the Subsidiary:
Figures in Rs.
22. Additional Information to shareholders
All important and pertinent investor information such as financial results investorpresentations press releases project updates are made available on a regular basis onthe website (www.niteshestates.com) of theCompany.
Your Directors are pleased to place on record their sincere appreciation of thevaluable assistance and co-operation extended to the Company by its Customers BankersFinancial Institutions State and Central Government authorities Service ProvidersContractors and the Shareholders for the Company's operations.
Your Directors also place on record their appreciation on the significant contributionsmade and support extended by the employees of the Company at all levels during the year.