You are here » Home » Companies » Company Overview » NEL Holdings Ltd

NEL Holdings Ltd.

BSE: 533202 Sector: Infrastructure
NSE: NITESHEST ISIN Code: INE639K01016
BSE 00:00 | 27 Feb 1.03 0.04
(4.04%)
OPEN

1.05

HIGH

1.05

LOW

0.93

NSE 05:30 | 01 Jan NEL Holdings Ltd
OPEN 1.05
PREVIOUS CLOSE 0.99
VOLUME 16108
52-Week high 8.23
52-Week low 0.93
P/E
Mkt Cap.(Rs cr) 15
Buy Price 0.91
Buy Qty 100.00
Sell Price 1.03
Sell Qty 971.00
OPEN 1.05
CLOSE 0.99
VOLUME 16108
52-Week high 8.23
52-Week low 0.93
P/E
Mkt Cap.(Rs cr) 15
Buy Price 0.91
Buy Qty 100.00
Sell Price 1.03
Sell Qty 971.00

NEL Holdings Ltd. (NITESHEST) - Director Report

Company director report

Dear Members

Your Directors present their Fourteenth Annual Report with the standalone andconsolidated annual audited accounts of the Company for the year ended March 31 2018.

1. Financial Results:

(Rupees in Lakh)

Particulars STANDALONE CONSOLIDATED
2017-18 2016-17 2017-18 2016-17
Income :
Revenue from operations 2754 19429 3625 30786
Other Income 1358 189 2004 698
Total Income 4112 19618 5629 31484
Profit/(Loss) before depreciation (10695) 4094 (25445) (12596)
Less : Depreciation 44 70 1264 1414
Profit/(Loss) before tax (10739) (4164) (26709) (14010)
Less : Tax (1177) 90 (1087) (154)
Profit / (Loss) after tax (9562) (4254) (25621) (14164)
Less: Minority interest & share of Profit/ (loss) in Associate - - - -
Net Profit/(Loss) (9562) (4254) (25621) (14164)

2. Dividend:

In view of the loss no dividend could be considered.

3. State of Company's Affairs:

I. Financial Statement:

The Ministry of Corporate Affairs vide its notification dated 16th February2015 notified the Companies (India Accounting Standard) Rules 2015 and the same was madeeffective from 1st April 2015. As per the said Rules the Indian AccountingStandard (IND AS) was made applicable to the Company and to the subsidiary companies withe_ect from 1st April 2017. Accordingly the financial statements (bothstandalone and consolidated) for the year ended March 31 2018 was prepared based on INDAS.

The Company has compiled with the applicable provisions of the Companies Act 2013 andRegulations of the Securities and Exchange Board of India (Listing Obligations &Disclosure Requirements) Regulations 2015 (‘the Listing Regulations') inpreparation of Standalone and Consolidated financial statements.

The audited consolidated Balance Sheet as at 31st March 2018 consolidated statementof Profit and Loss for the year ended as on that date Cash flow Statements together withthe Notes and Reports of Auditors thereon forms part of the Annual Report. The financialfigures have been regrouped wherever required in line with Schedule III of the CompaniesAct 2013 disclosure requirements.

a. Standalone:

During the year under review the Company had achieved a turnover of Rs. 2754 Lakhs asagainst Rs. 19429 Lakh in the previous year and other income of Rs. 1358 Lakh as comparedto Rs. 189 Lakh in the previous year. The operations had resulted in a loss of Rs. 9562Lakh as compared to previous year loss of Rs. 4254 Lakhs.

b. Consolidated: The total consolidated revenue for the year ended 31stMarch 2018 amounted to Rs. 3625 Lakh and other income of Rs. 2004 Lakh as comparedto Rs. 30786 Lakhs and other income of Rs. 698 Lakh in the previous year. The Company hasincurred a loss after tax of Rs. 25621 Lakhs (previous year's Loss Rs. 14164 Lakh).

II. Material changes and commitments if any affecting the financialposition of the Company occurred between the end of the financial year to which thefinancial statement relate and the date of the report:

a. The Company through its subsidiary Nitesh Urban Development Private Limited washolding 50% of share capital of Courtyard Constructions Private Limited (CCPL). During theyear the Company acquired the remaining 50% of the share capital of CCPL from BudhraniGroup as a result CCPL became wholly owned subsidiary of NEL with effect from July 122017. b. The Company has transferred 54149499 Class A equity shares of NiteshResidency Hotels Private Limited to Mr. Nitesh Shetty and Nitesh Industries PrivateLimited consequently the percentage of shares held by the Company in Nitesh ResidencyHotels Private Limited is reduced to 12%.

III. 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

The Board of the Company comprises of 7 (Seven) Directors of which four are IndependentDirectors. The Composition of the Board of Directors is in compliance with the applicableprovisions of the Companies Act 2013 and the Listing Regulations. Declaration byIndependent Directors The Company has received necessary declarations from the IndependentDirectors stating that they meet the criteria of independence as specified in Section 149(6) of the Companies Act 2013 and in the Listing Regulations.

II. Change in the Board

During the period under review Mr. Mahesh Bhupathi was appointed as an IndependentDirector with effect from March 20 2018 and Mr. M. D Mallya Independent Directorresigned from the Board on April 5 2018 due to his professional pre- occupation.

Mr. Nitesh Shetty Chairman and Managing Director and Mr. Ashwini Kumar ExecutiveDirector and Chief Operating Officer who were appointed for a term of 3 years completedtheir term on December 14 2017 and April 18 2018 respectively and were re-appointed asChairman and Managing Director and as Executive Director and Chief Operating Officer for aperiod of three years with effect from December 15 2017 and April 19 2018 respectively.The re-appointment was approved by passing special resolutions by Shareholders throughPostal Ballot on October 30 2017.

III. Meetings of the Board

The Board of Directors met 6(Six) times during the year on the following dates:

May 28 2017 July 20 2017
September 14 2017 December 12 2017
February 12 2018 March 20 2018

In accordance with the provisions of the Companies Act 2013 a separate meeting of theIndependent Directors was held on February 12 2018.

The Details of the committees and their meetings forms part of the Corporate GovernanceReport.

IV. 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 the 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 Director's on the basis of criteria such as their participationcontribution at the meetings their preparedness on the agenda items to be discussed etc.Additionally the Chairman was also evaluated on key aspects of his role.

V. 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) thedirectors had laid down internal financial controls to be followed by the Company and suchinternal financial controls are adequate and were operating effectively. f) the directorshad devised proper systems to ensure compliance with the provisions of all applicable lawsand 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 Regulations.

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 Board Meetingsand Audit Committee meetings is Rs. 50000/- per meeting respectively Nomination &Remuneration Committee is Rs 25000/- per meeting and Stakeholders Relationship Committeeother Committees including for a separate meeting of Independent Directors is Rs. 20000/-per meeting respectively.

The extract of the Nomination & Remuneration Policy is reproduced in Annexure Ato this 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 ofremuneration of each director to the median remuneration of the employees and percentageincrease in the remuneration is as follows:

Name of the Directors Designation Ratio of remuneration to median remuneration of the Company % increase in the remuneration of Directors
1. Mr. Nitesh Shetty Managing Director 22 0.0%
2. Mr. L. S Vaidyanathan Executive Director 18 0.0%
3. Mr. Ashwini Kumar Executive Director 16 0.0%
4. Mr. G N Bajpai Independent Director NA NA
5. Mr. Jagdish Capoor Independent Director NA NA
6. Mrs. Dipali Khanna Independent Director NA NA
7. Mr. Mahesh Bhupathi* Independent Director NA NA
8. Mr. M.D Mallya** Independent Director NA NA

March 20 2018.

**Mr. M.D Mallya resigned from the Board with effect from April 5 2018.

Note: i. The median remuneration of Directors during the financial year was Rs.722532 (Rupees Seven Lakhs Twenty Two Thousand Five Hundred and Thirty Two Only) ii. Thepercentage increase in the remuneration for the year ended 31st March 2018 tothe Key Managerial Personnel (other than Directors) namely Company Secretary & ChiefCompliance Officer and Chief Financial Officer is 0 %. iii. The median remuneration ofemployees during the financial year 2017-18 was Rs. 722532/- as compared to Rs.761457/-. Hence there is no increase in the percentage of median remuneration ofemployees. iv. The number of permanent employees on the rolls of the Company as on 31stMarch 2018 was 110 (the group has 203 employees).

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 2017-18.

8. Corporate Social Responsibility

The Company has constituted Corporate Social Responsibility Committee and has adoptedthe policy in terms of Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility) Rules 2014. There was no contribution towards CSRspending as the same is not applicable to the Company for the financial year 2017-18.

9. Internal Financial Controls

The Board of the Company is of the opinion that the Company's Internal FinancialControls were adequate and effective during the period ended as on 31st March2018 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 Company has an established Internal Financial Control framework including internalcontrols over financial reporting operating controls and anti-fraud framework. Theframework is reviewed regularly by the management and tested by internal audit team andpresented to the audit committee. Based on periodical testing the framework isstrengthened from time to time to ensure adequacy and effectiveness of InternalFinancial Controls.

The Company has a proper and adequate Internal Control System to ensure that all theassets of the Company are safeguarded and protected against any loss and that all thetransactions are properly authorized and recorded. Information provided to Management isreliable and timely. Company ensures adherence to all statutes.

10. Statutory Auditors

M/s Ray & Ray Chartered Accountants (Firm Registration Number: 301072E) wereappointed as the Statutory Auditors of the Company for an initial term of 5 (_ve)consecutive years at the 10th Annual General Meeting of the Company held on 26thSeptember 2014. The appointment is subject to annual rati_cation by the members of theCompany in terms of Section 139 of the Companies Act 2013 read with the rules madethereunder. The Audit Committee and the Board of the Company recommends to the Members ofthe Company to ratify the appointment of M/s. Ray & Ray as the Statutory Auditors ofthe Company for the financial year 2018-19. There are no qualifications or adverse remarksin the Statutory Auditors' Report which require any explanation from the Board ofDirectors of the Company. The Statutory Auditors have expressed an unmodified opinion intheir Audit Report for the financial year ended 31st March 2018.

11. Secretarial Auditor

M/s. Kedarnath & Associates the Practicing Company Secretaries were appointed asthe Secretarial Auditors of the Company for the financial year 2017-18 by the Board ofDirectors of the Company.

The Secretarial Audit Report for the year ended 31st March 2018 issued bythe Secretarial 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 are no qualifications or adverse remakes in the Secretarial Audit Reportwhich requires 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 certi_cate from M/s. S. Kedarnath &Associates Practicing Company Secretaries a_rming 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 a declarationsigned by Mr. Nitesh Shetty the Chairman & Managing Director of the Company a_rmingcompliance with the Code of Conduct by the Directors and Senior Management Personnel ofthe Company for the financial year 2017-18 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 2017-18 is provided in Annexure–Eto 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 theListing Regulations on the Related Party transactions.

The Related Party Transactions under IND-AS 24 undertaken during the financial year2017-18 are 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. Risk Management Policy

The Company has formulated a comprehensive Risk Management Policy.

22. 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 the Annual Report.

A statement containing the salient features of the financial statements of theCompany's subsidiaries is annexed to the Consolidated Financial Statement in theprescribed 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.

During the year the following material changes occurred relating to subsidiaries:

- Addition of Subsidiary – Effective from July 12 2017 Courtyard constructionsPrivate Limited has become a subsidiary of the Company having 50% of the share capitalheld by Nitesh Estates Limited and 50% of the share capital held by Nitesh UrbanDevelopment Private Limited and Courtyard Constructions Private Limited has shifted itsRegistered O_ce to the State of Karnataka from the State of Maharashtra.

- The name of Kakanad Enterprises Private Limited 100% Wholly owned subsidiary hasbeen changed to Nitesh O_ce Parks Private Limited effective from April 3 2017 and theRegistered O_ce has been shifted from State of Kerala to State of Karnataka.

- The Arbitration Tribunal has passed its award in the dispute between the land ownerMr. George Thangaiah and Nitesh Indiranagar Retail Private Limited on 25thApril 2018. The tribunal has rejected the stand of landowners and stated that there is norepudiation of contract. The tribunal has awarded a net amount of Rs 42 Crores to thesubsidiary. The subsidiary has preferred an appeal In terms of the Securities and ExchangeBoard of India (Listing Obligations & Disclosure Requirements) Regulations 2015 theCompany has adopted a policy for determining material subsidiaries. The Policy as approvedmay be accessed on the Company's website at the link:http://www.niteshestates.com/Investor relations/Policies & Other RelatedMatters/Material Subsidiary Policy

A. Nitesh Housing Developers Private Limited (NHDPL):

NHDPL is a wholly owned subsidiary of the Company. The financial highlights are asbelow:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 500.00 500.00
Reserves & Surplus (15817.35) (9012.69)
Revenue from operations (1389.16) 6001.46
Other Income 76.15 85.31
Profit/(Loss) Before Tax (6877.79) (2566.60)
Profit/(Loss) After Tax (6841.06) (2435.09)

B. Nitesh Urban Development Private Limited (NUDPL):

NUDPL is a wholly owned subsidiary of the Company. The financial highlights(Standalone) are as below:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 658.20 658.20
Reserves & Surplus (5505.82) (3617.89)
Revenue from operations 749.29 3610.28
Other Income 42.41 47.54
Profit/(Loss) Before Tax (1888.44) (1004.72)
Profit/(Loss) After Tax (1896.96) (982.49)

C. Nitesh Indiranagar Retail Private Limited (NIRPL):

NIRPL is a wholly owned subsidiary of the Company. The financial highlights(Standalone) are as below:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 6991.00 6991.00
Reserves & Surplus 17821.81 18243.53
Income from operations - -
Other Income 2.04 17.01
Profit/(Loss) Before Tax (430.45) (161.75)
Profit/(Loss) After Tax (421.72) (161.79)

D. Nitesh Pune Mall Private Limited (formerly Anuttam Developers Private Limited)

Nitesh Pune Mall Private Limited is a Tier II Subsidiary of the Company. The financialhighlights of Nitesh Pune Mall Private Limited are as follows:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 2804.10 2804.10
Reserves & surplus (14905.91) (8402.65)
Revenue from Operations 1329.67 1049.87
Other income 63.09 16.43
Total Income 1392.76 1066.30
Profit/Loss Before Tax (6384.66) (5964.37)
Profit/Loss After Tax (6502.97) (6080.91)

E. 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 as follows:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 30.00 30.00
Reserves & Surplus (613.73) (302.39)
Revenue from operations 181.63 696.27
Other Income 0.08 0.64
Profit/(Loss) Before Tax (314.22) (240.66)
Profit/(Loss) After Tax (314.22) (240.85)

F. Nitesh Office Parks Private Limited (Formerly Kakanad Enterprises PrivateLimited) :

This Subsidiary has not yet commenced its commercial operations. NOPPL is a 100%subsidiary of the Company. The status of the Subsidiary is as follows:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 5.00 5.00
Reserves & Surplus (17.84) (16.68)
Revenue from operations - -
Other Income - -
Profit/(Loss) Before Tax (1.16) (0.79)
Profit/(Loss) After Tax (1.16) (0.79)

G. Courtyard Constructions Private Limited (CCPL):

This Company has become wholly owned subsidiary of the Company during the year and theCompany and the status of the Subsidiary is as follows:

(Rupees in Lakh)

Particulars 2017-18 2016-17
Paid up Capital 1.09 1.09
Reserves & Surplus (76.87) (27.43)
Revenue from operations - -
Other Income 17.99 -
Profit/(Loss) Before Tax (49.45) (1.79)
Profit/(Loss) After Tax (49.45) (1.79)

23. 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 the Company.

24. Acknowledgement:

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.

For and on behalf of the Board of Directors
sd/-
Place: Bengaluru NITESH SHETTY
Date: May 30 2018 Chairman & Managing Director
DIN: 00304555