Your Directors present their Eleventh Annual Report and the Audited Accounts of the Company for the year ended March 31, 2015.

1. FINANCIAL RESULTS:

Rupees in Lakh

Particulars STANDALONE CONSOLIDATED
2014-15 2013-14 2014-15 2013-14
Income :
Income from operations 12501 11205 28760 29757
Other Income 41 274 298 339
Total Income 12542 11479 29058 30096
Profit/(Loss) before depreciation 2614 1039 4029 3107
Less : Depreciation 117 158 133 171
Profit/(Loss) before tax 2497 881 3896 2936
Less : Income tax 474 111 803 581
Profit / (Loss) after tax 2023 770 3093 2355
Less: Minority interest & share of profit/ (loss) in Associate 0 0 (2857) (1830)
Net Profit/(Loss) 2023 770 236 525

2. DIVIDEND:

The Directors could not recommend dividend to conserve the funds for the projects growth and sound financial position of the Company.

3. State of Company’s Affairs:

a. Standalone:

During the year under review the Company could achieve a turnover of Rs. 12,501 Lakh as against Rs. 11,205 Lakh in the previous year and other income of Rs.41 Lakh as compared to Rs.274 Lakh in the previous year. The operations had resulted in a profit after tax of Rs. 2,023 Lakh as against Rs. 770 Lakh in the last year.

b. Consolidated:

In compliance with the applicable Clauses of the Listing Agreement with the Stock Exchanges, the Company has prepared Consolidated Financial Statements as per the Accounting Standards on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

The Audited Consolidated Financial Statements along with the Auditors’ Report have been annexed to this Annual Report. The total consolidated revenue for the year ended 31st March 2015 amounted to Rs. 29,058 Lakh including other income of Rs. 298 Lakh, as compared to Rs. 30,096 Lakh in the previous year. The Company has achieved a profit after tax of Rs.3,093 Lakh as compared to previous year’s profit of Rs. 2,355 Lakh and a Net profit of Rs.236 Lakh for the year (Previous year Net profit of Rs. 525 Lakh), after adjusting the minority interest in subsidiary companies and share of Profit/(Loss) from associate company amounting to Rs. (2,857) Lakh (Previous year loss Rs. 1,830 Lakh).

The audited consolidated Balance Sheet as at 31st March, 2015, consolidated Profit and Loss account for the year ended as on that date, Cash flow Statement together with the Notes and Reports of Auditors thereon form part of this Annual Report. The financial figures have been regrouped in line with the new Schedule VI disclosure requirements.

c. Material changes and commitment if any affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of the report:

Nitesh Indiranagar Retail Private Limited (NIRPL), a wholly owned subsidiary of the Company acquired Anuttam Developers Private Limited (ADPL), the owner of a retail commercial mall located at Pune on 22nd May, 2015. Upon the said acquisition ADPL became the wholly owned subsidiary of NIRPL, consequent to which ADPL became the second layer subsidiary of the Company.

In terms of the Secured, Listed Non convertible Debentures (NCDs) aggregating to Rs. 235 Crores issued by Anuttam Developers Private Limited, the Company is required and has provided the corporate guarantee to the trustees of Debentures to ensure the due repayment and servicing of the NCDs. The Company is also required to fund the short fall if any in the operations of the second layer subsidiary.

d. Significant or material orders passed by the regulators/ courts:

During the year under review, there were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status 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 are Independent Directors. The Composition of the Board of Directors is in compliance with Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement .

II. Declarations pursuant to Section 149 (6) of the Companies Act, 2013

The Company has received necessary declarations from the Independent Directors stating that they meet the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013.

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 with effect from 28th May, 2015.

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 May, 2015, due to increasing work in her professional carrier.

IV. Meetings

During the year under review, the Board of Directors of the Company met 10 times on the following dates,

April 4, 2014 September 26, 2014
May 22, 2014 November 11, 2014
May 28, 2014 December 10, 2014
June 18, 2014 February 11, 2015
August 6, 2014 March 31, 2015

V. Appointment of Directors

Pursuant to the applicable provisions of the Companies Act, 2013 and rules made thereunder, Mrs. Dipali Khanna (DIN:03395440) was appointed as an Additional Director in the capacity of an Independent Director, who will vacate office at the ensuing Annual General Meeting.

The Board has recommended her appointment as an Independent Director for an initial term of 5 consecutive years.

VI. Re-appointment of Director Retiring by Rotation

In terms of Section 152 of the Companies Act, 2013, Mr. Sudhakar Rao (DIN: 00267211) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible Offers himself for re-appointment. The Board of Directors has recommended the re-appointment of Mr. Sudhakar Rao, as Director retiring by rotation.

VII. Annual Evaluation of the Board, its Committees and Individual Directors

The Independent Directors of the Company at their meeting pursuant to Section 149 read with Schedule V of the Companies Act, 2013 had carried out an annual evaluation of Board’s performance, board committees and individual directors as required under the Companies Act, 2013 and the Listing Agreement. The performance of the Board was evaluated after seeking inputs from the Independent Directors on the basis of criteria such as Board composition, structure, board processes and their effectiveness, information given to the board etc.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of the individual directors on the basis of criteria such as their participation, contribution at the meetings, their preparedness on the issues to be discussed etc. Additionally the Chairman was also evaluated on key aspects of his role.

VIII. Familiarization programme for Independent Directors:

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry.

The Company also keeps the Board updated on the applicable laws, regulations, enactments 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, on behalf of the Board of Directors, hereby state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company 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 adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the Company and such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

6. Remuneration Policy

The Nomination and Remuneration Committee (NRC) has formulated a policy relating to the remuneration for the directors, key managerial personnel and Senior Management personnel.

The remuneration policy has been prepared pursuant to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. While formulating the Nomination and Remuneration policy, the NRC has considered the factors laid down in the foregoing provisions.

Non-executive directors are remunerated by way of sitting fees for attending the meetings of the board and committees of the board. During the year, the board approved the increase in the sitting fees for the Audit Committee and the Board to Rs. 50,000/- respectively, Nomination and Remuneration Committee Rs. 25,000/- and Stakeholders Relationship Committee and other committees to Rs. 20,000/- respectively.

The extract of the Nomination & Remuneration Policy is reproduced in Annexure A to 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 employees and percentage increase in the remuneration :

Sl. No. Name of the Directors Designation Ratio of remuneration to median remuneration of the Company* % increase in the remuneration of the Directors
1 Mr. Nitesh Shetty Chairman & Managing Director 24 15.00**
2 Mr. L. S. Vaidyanathan Executive Director 20 9.40
3 Mr. Ashwini Kumar Executive Director & Chief Operating Officer 14 Nil
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. Shobha Patil Independent Director NA NA
8 Mr. Ashok T. Aram Independent Director NA NA
9 Mr. Sudhakar Rao Non-Independent Director NA NA
10 Mr. Mahesh Bhupathi Non-Independent Director NA NA

* The median remuneration of employees during the financial year was Rs.6,57,257/- (Rupees Six Lakh Fifty Seven Thousand Two hundred and Fifty Seven only)

** The remuneration was increased as per the Central Government approval for the part of the financial year i.e. with effect from 15th Dec. 2014.

Note : Mrs. Dipali Khanna, was inducted to the Board on 28th May, 2015 as Additional Director (Independent) and no remuneration was paid to her.

ii. The percentage increase in the remuneration for the year ended 31st March, 2015 to the Key Managerial Personnel other than Directors : for Company Secretary & Chief Compliance Officer 12% and Chief Financial Officer -NA

iii. The percentage increase in the median remuneration of employees in the financial year 2014-15 was 11%.

iv. The number of permanent employees on the rolls of the Company as on 31st March, 2015 was 84 (the group has 552 employees).

v. Though the turnover of the Company has increased by 11% in comparison with the last year and there is a modest increase in the profitability, taking the market scenario and competition in industry practice, and to compensate the inflation increase, the Management has granted an increase in the remuneration to the employees on an average of 10%.

vi. Though the turnover of the Company has increased by 11% in comparison with the last year and there is a modest increase in the profitability, taking the market scenario and competition in industry practice, and to compensate the inflation increase, the Nomination & Remuneration Committee has granted an increase in the remuneration to the Key Managerial Personnel on an average of 12%. vii. During the financial year 2014-15 the aggregate remuneration of Key Managerial Personnel increased by 12% on an average. viii. The last and only Initial public Offer was made in May, 2010 and the price was Rs.54/- per equity share. The percentage increase over decrease in the market quotations of 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 earning ratio as at the closing date of the current financial year and previous financial year is (on standalone basis), as follows:

Particulars 2013-14 2014-15 Variation
Share Prices BSE 11.40 14.71 22.52%
NSE 11.60 14.85 21.89%
Market Capitalization (in full) 16770.69 21553.98 22.19%
(Rs. in Lakhs)
Market Capitalization (Free Float) (Rs. in Lakhs) 9021.31 11528.22 21.75%
Price earning ration (based on audited results) 21.58 10.58 (103.97)
EPS (in Rs.) 0.53 1.39 61.87%

ix. Average percentile increase in the salaries of employees other than the managerial personnel during 2014-15 was 11%. The percentile increase in the managerial remuneration during the same period was 11%. The percentage increase in the managerial remuneration was on account of the variable component of remuneration payable to the managerial personnel as 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 report their concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct/business ethics that provides for adequate safeguards against victimization of the director(s) and employee(s) who avail of the mechanism. No director/employee has been denied access to the Chairman of the Audit Committee of the Company.

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 the Corporate Social Responsibility Committee.

There are no adequate profits as reckoned under the rules, requiring the Company to make contributions to the Corporate Social Responsibility activities during the year. However, the Company and its subsidiaries contributed to couple of NGOs to the benefit of development of under privileged women and female children.

9. Internal Financial Controls

The Company has adequate system of Internal Controls which are detailed in the Management Discussion and Analysis Report.

10. Statutory Auditors

At the 10th Annual General Meeting of the Company held on 26th September, 2014, appointed M/s Ray & Ray (Firm’s Regn.301072E) as the Statutory Auditors of the Company for an initial term of 5 consecutive years which is subject to annual ratification by the members of the Company in terms of Section 139 of the Companies Act, 2013 read with the rules made thereunder.

There are no qualifications or adverse remarks in the Statutory Auditors’ Report which require any explanation from the Board of Directors of the Company.

11. Secretarial Auditor

M/s. Kedarnath & Associates, the Practicing Company Secretaries were appointed as the Secretarial Auditors of the Company for the financial year 2014-15 by the Board of Directors of the Company.

The Secretarial Audit Report for the year ended 31st March, 2015 issued by the Secretarial Auditors in accordance with the provisions of Section 204 of the Companies Act, 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 which requires any explanation from the Board of Directors of the Company.

12. Cost Auditor

In term of Section 148 of the Companies Act, 2013, subject to ratification by shareholders for the remuneration payable. M/s. G. S. & Associates, Practising Cost Accountants, having Firm Registration No. 000301, allotted by The Institute of Cost Accountants of India, were apointed as Cost Auditors of the Company on a remuneration of Rs. 1 Lakh per annum excluding the reimbursement of out of pocket expenses for the Financial Year 2014-15 and 2015-16 respectively.

13. Particulars of employees

The details of remuneration to directors, key managerial personnel and the statement of employees in receipt of remuneration exceeding the limits prescribed under Section 134 of the Companies Act, 2013 read with rules made thereunder has been provided in Annexure C to this report.

14. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In terms of Section 134 of the Companies Act, 2013 read with rules made thereunder, the particulars of conservation of energy, technology absorption, and foreign exchange earnings and outgo are set out in Annexure D to this report.

15. Corporate Governance

The report on Corporate Governance and a certificate from M/s. S. Kedarnath & Associates, Practicing Company Secretaries afirming the compliance with the various provisions of the Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

16. Management Discussion and Analysis Report

Pursuant to the terms of Listing Agreement the Management Discussion and Analysis Report is annexed in a separate section to this Annual Report.

17. Code of Conduct

In terms of Clause 49 of the Listing Agreement, a declaration signed by Mr. Nitesh Shetty, the Chairman & Managing Director of the Company afirming the compliance with the Code of Conduct of the Company for the financial year 2014-15 forms part of the Corporate Governance Report.

18. The Extract of the Annual Report

Pursuant to Section 134 of the Companies Act, 2013 and the rules made thereunder the extract of the Annual report in the prescribed format of MGT-9 for the financial year 2014-15 is provided in a separate section as an annexure to this Report as

Annexure -E.

19. Particulars of Loans, Guarantees and Investments

Pursuant to the provisions of Section 134 of the Companies Act, 2013 the particulars of the loans, guarantees and investments made by the Company under Section 186 of the Companies Act, 2013 and the rules made thereunder is detailed in the Notes to Accounts section of the Financial Statements.

20. 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 terms of the policy adopted by the Company in terms of Section 188 of the Companies Act, 2013 and the Listing Agreement on the Related Party transactions.

The related party transactions undertaken during the financial year 2014-15 are detailed in the Notes to Accounts section of the Financial Statements.

21. Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

22. Review of Subsidiaries and Associates

Pursuant to Section 129 of the Companies Act, 2013, the consolidated financial statements of the Company and its subsidiaries and associates, prepared in accordance with the relevant Accounting Standards specified under Section 133 of the Companies Act, 2013 read with the rules made thereunder, forms part of this Annual Report. Pursuant to the provisions of the said section, a statement containing the salient features of the financial statements of the Company’s subsidiaries and associates in Form AOC-1, that forms part of the Consolidated Financial Statements.

Further, pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with the relevant documents and separate accounts in respect of subsidiaries are available on the website of the Company.

There have been no material changes in the nature of the business of the subsidiaries (including associates) during the financial year 2014-15.

In terms of the Clause 49 of the Listing Agreement the Company has adopted a policy for determining material subsidiaries. The Policy as approved may be accessed on the Company’s website at the link: http://www.niteshestates.com/Investor relations/ Policies & Other Related Matters/Material Subsidiary Policy

Performance highlights of key operating Subsidiaries and Associates: A. Nitesh Housing Developers Private Limited (NHDPL):

The Company holds 89.9% of equity share capital of this subsidiary. The financial highlights are as below:

Figures in Rs.

Particulars 2014 -15 2013-14
Paid up Capital 91,500,000 91,500,000
Reserves & Surplus 267,341,866 142,454,665
Revenue from operations 1,308,099,478 1,131,194,625
Other Income 2,970,968 2,767,216
Profit/(Loss) Before Tax 153,153,531 155,582,025
Profit/(Loss) After Tax 124,887,202 123,383,026
B. Nitesh Urban Development Private Limited (NUDPL):
NUDPL is a 100% subsidiary of the Company.
The financial highlights are as below:
Figures in Rs.
Particulars 2014 -15 2013-14
Paid up Capital 65,820,000 65,820,000
Reserves & Surplus 109,095,226 97,883,249
Income from property development 249,316,545 642,289,832
Other Income 19,567,214 3,953,010
Profit/(Loss) Before Tax 13,529,622 61,177,390
Profit/(Loss) After Tax 11,211,977 49,037,390
C. NITESH INDIRANAGAR RETAIL PRIVATE LIMITED (NIRPL):
NIRPL is a 100% wholly owned subsidiary of Nitesh Estates Limited.
The financial highlights are as below:
Figures in Rs.
Particulars 2014-15 2013-14
Paid up Capital 699,100,000 1,324,800,000
Reserves & Surplus 1,087,760,676 1,118,587,660
Other Income 171,880 3,794
Profit/(Loss) Before Tax (30,826,984) (21,878,445)
Profit/(Loss) After Tax (30,826,984) (21,878,445)

NIRPL acquired Anuttam Developers Private Limited (ADPL), owner of a retail commercial mall located at Pune on 22nd May, 2015. ADPL became the wholly owned subsidiary of NIRPL consequent to which ADPL became the second layer subsidiary of the Company.

D. NITESH PROPERTY MANAGEMENT PRIVATE LIMITED (NPMPL):

NPMPL is a 100% wholly owned subsidiary of the Company. It has entered into Maintenance Contracts with the owners of completed apartments developed by the Company.

The financial highlights are:

Figures in Rs.

Particulars 2014 -15 2013-14
Paid up Capital 3,000,000 100,000
Reserves & Surplus 4,620,171 (177,840)
Current Liabilities 28,850,329 23,257,327
Income from operations 62,993,823 49,117,379
Other Income 2,845,005 8,160,100
Profit/(Loss) Before Tax 7,030,553 5,763,837
Profit/(Loss) After Tax 4,798,010 5,665,141

E. KAKANAD ENTERPRISES PRIVATE LIMITED (‘KEPL’):

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

Figures in Rs.

Particulars 2014 -15 2013-14
Paid up Capital 500,000 100,000
Reserves & Surplus (571,355) (473,107)
Income from operations NIL NIL
Profit/(Loss) Before Tax (98,248) (114,984)
Profit/(Loss) After Tax (98,248) (114,984)

23. Acknowledgement:

Your Directors are pleased to place on record their sincere appreciation of the valuable assistance and co-operation extended to the Company by its Customers, Bankers, Financial Institutions, State and Central Government authorities, Service Providers, Contractors and the Shareholders for their valued support to the Company’s operations.

Your Directors also place on record their appreciation of the significant contribution made, 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 28, 2015 Chairman & Managing Director