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Nitesh Estates Ltd.

BSE: 533202 Sector: Infrastructure
NSE: NITESHEST ISIN Code: INE639K01016
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VOLUME 5432
52-Week high 23.50
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Mkt Cap.(Rs cr) 110
Buy Price 0.00
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OPEN 7.99
CLOSE 7.62
VOLUME 5432
52-Week high 23.50
52-Week low 6.19
P/E
Mkt Cap.(Rs cr) 110
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nitesh Estates Ltd. (NITESHEST) - Director Report

Company director report

Dear Members

Your Directors present their Thirteenth Annual Report with the standalone andconsolidated annual audited accounts of the Company for the year ended March 31 2017.

1. Financial Results:

Particulars STANDALONE CONSOLIDATED
2016-17 2015-16 2016-17 2015-16
Income :
Income from operations 7432 8712 19313 25351
Other Income 20 193 214 751
Total Income 7452 8905 19527 26102
Profit/(Loss) before depreciation (4414) (2039) (8888) (3643)
Less : Depreciation 70 132 1414 1418
Profit/(Loss) before tax (4484) (2171) (10302) (5061)
Less : Income tax (19) (34) (14) (9)
Profit / (Loss) after tax (4465) (2137) (10288) (5052)
Less: Minority interest & share of profit/ (loss) in Associate 0 0 0 (2220)
Net Profit/(Loss) (4465) (2137) (10288) (7272)

2. Dividend:

No dividend has been declared for the financial year ended 31st March2017 as the Company has incurred loss and it is proposed to conserve the existing reservesfor the projects growth and sound financial position of the Company.

3. State of Company's Affairs:

I. Standalone:

During the year under review the Company has achieved a turnover of Rs. 7432 Lakh asagainst Rs. 8712 Lakh in the previous year and other income of Rs. 20 Lakh as compared toRs. 193 Lakh in the previous year. The operations had resulted in a loss of Rs. 4465 Lakhas compared to previous year loss of Rs. 2137 Lakhs.

II. Consolidated:

In compliance with the applicable provisions of the Companies Act 2013 and Regulationsof the Securities and Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 ("Listing Regulations") and as per theapplicable Accounting Standards issued by the Institute of Chartered Accountants of Indiathe Company has prepared the Consolidated Financial Statements.

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 March 2017 amountedto Rs. 19527 Lakh including other income of Rs. 214 Lakh as compared to Rs. 26102 Lakhin the previous year. The Company has incurred a loss after tax of Rs. 10288 Lakh a(previous year's Loss Rs. 7272 Lakh).

The audited consolidated Balance Sheet as at 31st March 2017 consolidatedProfit and Loss account for the year ended as on that date Cash flow Statements togetherwith the Notes and Reports of Auditors thereon forms part of the Annual Report. Thefinancial figures have been regrouped in line with Schedule III of the Companies Act 2013disclosure requirements.

III. Material changes and commitments if any affecting the financial position ofthe Company occurred between the end of the financial year to which the financialstatement relate and the date of the report:

a) The Company has redeemed 700 Non Convertible Debentures (Unlisted NCD)s out of 1250Non Convertible Debentures held by IDFC Limited for the aggregate value of Rs 70 Cr.

b) The Company being one of the promoters of Nitesh Residency Hotels Private Limited(NRHPL) had transferred 15970675 Class A Equity shares held in NRHPL to Mr. NiteshShetty (another promoter of NRHPL) thus NRHPL is no longer an Associate Company asdefined under Section 2 (6) of the Companies Act 2013.

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 theBoard

The Board of the Company comprises of 8 (Eight) 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.

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 in the Listing Regulations.

II. Change in the Board

During the year under review Mr. Sudhakar Rao (DIN: 00267211) and Mr. Ashok T Aram(DIN: 02817547) have resigned from the Board of the Company with effect from October 122016 and February 7 2017 respectively due to their professional commitments.

Mr. L. S. Vaidyanathan (DIN:00304652) Whole time director designated as ExecutiveDirector –Business Development was re-appointed for a term of 3 consecutive yearswith effect from 1st April 2017 the re-appointment was approved by way ofspecial resolution by the shareholders at a general meeting held through postal ballot on30th March 2017.

III. Meetings

During the year under review the Board met 7 (Seven) times on the following dates

May 28 2016 August 9 2016 August 25 2016 September 28 2016
November 11 2016 February 9 2017 March 23 2017

In accordance with the provisions of the Companies Act 2013 a separate meeting of theIndependent Directors of the Company was held on 23rd March 2017.

IV. 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.

V. 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 agenda items to be discussed etc.Additionally the Chairman was also evaluated on key aspects of his role.

VI. 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 annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; b) the directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the 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 Agreement / 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 AuditCommittee and Board meeting is Rs. 50000/- per meeting respectively Nomination &

Remuneration Committee is Rs 25000/- per meeting and Stakeholders RelationshipCommittee other Committees including for a separate meeting of Independent Directors isRs. 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 of remuneration of each director to the median remuneration of the employeesand percentage increase 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 Chairman & Managing Director 21 0.0%
2 Mr. L. S. Vaidyanathan Executive Director 17 0.0%
3 Mr. Ashwini Kumar Executive Director & Chief Operating Officer 15 21.4%
4 Mr. G. N. Bajpai Independent Director NA NA
5 Mr. Jagdish Capoor Independent Director NA NA
6 Mr. M. D. Mallya Independent Director NA NA
7 Mrs. Dipali Khanna Independent Director NA NA
8 Mr. Ashok T. Aram1 Independent Director NA NA
9 Mr. Sudhakar Rao 2 Non-Independent Director NA NA
10 Mr. Mahesh Bhupathi Non-Independent Director NA NA

1. Resigned from the Board on 7th February 2017.

2. Resigned from the Board on 12th October 2016.

Note: i. The median remuneration of employees during the financial year was Rs.761457/- (Rupees Seven Lakh Sixty One Thousand Four hundred and Fifty Seven only)

ii. The percentage increase in the remuneration for the year ended 31stMarch 2017 to the Key Managerial Personnels (other than Directors) namely CompanySecretary & Chief Compliance Officer and Chief Financial Officer is 9.5 % and 4.6%respectively.

iii. The median remuneration of employees during the financial year 2016-17 was Rs.761457/- as compared to Rs. 637584/- during the previous financial year 2015-16.Hence there 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 31stMarch 2017 was 87 (the group has 279 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 2016-17.

8. Corporate Social Responsibility

In terms of Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has constituted theCorporate Social Responsibility Committee and has adopted the policy for Corporate SocialResponsibility. As per the provisions of Section 135 Corporate Social Responsibilitycontribution is not applicable for this financial year.

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 2017.

10. Statutory Auditors

At the 10th Annual General Meeting of the Company held on 26thSeptember 2014 M/s Ray & Ray (Firm Registration Number: 301072E) the CharteredAccountants were appointed as the Statutory Auditors of the Company for an initial term of5 (five) consecutive years which 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.

There are 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 ended 31st March 2017.

11. Secretarial Auditor

M/s. Kedarnath & Associates the Practicing Company Secretaries were appointedas the Secretarial Auditors of the Company for the financial year 2016-17 by the Board ofDirectors of the Company.

The Secretarial Audit Report for the year ended 31st March 2017 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 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 thereunderthe particulars 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 afirming 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 Listing Regulations adeclaration signed by Mr. Nitesh Shetty the Chairman & Managing Director of theCompany afirming compliance with the Code of Conduct by the Directors and SeniorManagement Personnel of the Company for the financial year 2016-17 forms part of theCorporate 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 2016-17 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 theparticulars of the loans guarantees and investments made by the Company under Section 186of the Companies Act 2013 is detailed in the Notes to Accounts section of the AnnualFinancial Statements.

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 AS 18 undertaken during the financial year 2016-17are 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 2016-17.

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/Investor relations/Policies & OtherRelated Matters/Material Subsidiary Policy

A. Nitesh Housing Developers Private Limited (NHDPL):

NHDPL is a wholly owned subsidiary of the Company.

The financial highlights are as below:

Particulars 2016-17 2015 -16
Paid up Capital 91500000 91500000
Reserves & Surplus 74042600 291755031
Revenue from operations 641027468 1039881480
Other Income 8531467 4093570
Profit/(Loss) Before Tax (217574822) 28775217
Profit/(Loss) After Tax (217712431) 24413165

B. Nitesh Urban Development Private Limited (NUDPL):

NUDPL is a wholly owned subsidiary of the Company.

The financial highlights (Standalone) are as below:

Particulars 2016-17 2015 -16
Paid up Capital 65820000 65820000
Reserves & Surplus (13937382) 77246209
Income from property development 376962050 515595121
Other Income 4754369 1401939
Profit/(Loss) Before Tax (91042614) (33697012)
Profit/(Loss) After Tax (91351149) (31674560)

C. NITESH INDIRANAGAR RETAIL PRIVATE LIMITED (NIRPL):

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

Particulars 2016-17 2015 -16
Paid up Capital 699100000 699100000
Reserves & Surplus 1048661394 634777174
Other Income NIL 46228752
Profit/(Loss) Before Tax 1701466 48750442
Profit/(Loss) After Tax (16178694) (273901373)

D. NITESH PUNE MALL PRIVATE LIMITED (formerly Anuttam Developers Private Limited)

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:

Particulars 2016-17 2015 -16
Paid up Capital 280409530 280409530
Reserves & Surplus (738118416) (150290703)
Income from property development 100506120 53227928
Other Income 4298839 2323204
Profit/(Loss) Before Tax (232359745) (328976653)
Profit/(Loss) After Tax (232359745) (328976653)

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:

Particulars 2016-17 2015 -16
Paid up Capital 3000000 3000000
Reserves & Surplus (30239008) (6153964)
Current Liabilities 67788031 31863347
Income from operations 69626302 58518595
Other Income 64228 23836
Profit/(Loss) Before Tax (24065933) (10599176)
Profit/(Loss) After Tax (24085044) (10774136)

F. NITESH OFFICE PARKS PRIVATE LIMITED (Formerly Kakanad Enterprises PrivateLimited) :

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

Particulars 2016-17 2015 -16
Paid up Capital 500000 500000
Reserves & Surplus (1668115) (1589180)
Income from operations NIL NIL
Profit/(Loss) Before Tax (78936) (1017825)
Profit/(Loss) After Tax (78936) (1017825)

22. Additional Information to shareholders

All important and pertinent investor information such as financial resultsinvestor presentations press releases project updates are made available on a regularbasis on the website (www.niteshestates.com) of the Company.

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
Place: Bangalore NITESH SHETTY
Date : May 27 2017 Chairman & Managing Director
DIN : 00304555