NEL Holdings South Ltd Directors Report.

Dear Members,

Your Directors present their Seventeenth Annual Report with the standalone and consolidated annual audited accounts of the Company for the year ended March 31, 2021.

1. Financial Results:

(Rupees in Lakh)

Particulars STANDALONE CONSOLIDATED
2020-21 2019-20 2020-21 2019-20
Revenue from operations 7,372 1,920 12,482 4,165
Other Income 243 612 22,708 1,072
Total Income 7,615 2,532 35,190 5,237
Total Expenses 21,157 12,426 53,463 20,005
Profit/(loss) before Exceptional Items and Tax (13,542) (9,894) (18,273) (14,768)
Exceptional Items 6,077 (92,461) 5,601 (62,824)
Profit/(Loss) before Tax (7,465) (1,02,355) (12,672) (77,592)
Less : Tax (662) (1,834) (7,842) (5,696)
Net Profit / (Loss) after tax (8,127) (1,00,521) (20,514) (71,898)

2. State of Companys Affairs:

I. Financial Statement:

The Company has complied with the applicable provisions of the Companies Act, 2013 (the Act) and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements), Regulations, 2015 (the Listing Regulations) in preparation of Standalone and Consolidated financial statements.

The audited consolidated Balance Sheet as at 31st March, 2021, consolidated statement of Profit and Loss for the year ended as on that date together with the Notes and Reports of Auditors along with the Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d), Cash flow Statements , Management Discussion and Analysis Report forms part of the Annual Report. The financial figures have been regrouped, wherever required, in line with Schedule III of the Act disclosure requirements.

a. Standalone:

During the year under review the Company has earned a total income of Rs. 7615 Lakhs as against Rs. 2532 Lakh in the previous year. The Company has incurred total expenses of Rs. 21157 Lakh as compared to previous years expenses of Rs. 12426 Lakhs. The Company has incurred net loss of Rs. 8127 Lakhs for the year 2020-2021 as against a loss of Rs. 100521 Lakhs in the previous year.

b. Consolidated:

During the year under review the Company has earned a total income of Rs. 35190 Lakhs as against Rs. 5237 Lakh in the previous year. The Company has incurred total expenses of Rs. 53463 Lakh as compared to previous years expenses of Rs. 20005 Lakhs. The Company has incurred net loss of Rs. 20514 Lakhs for the year 2020-2021 as against a loss of Rs. 71898 Lakhs in the previous year.

II. Exit from various Residential Projects

In accordance with the Company business policy and decisions, during the year the Company has exited from the various residential projects namely, Napa Valley, Virgin Island, Park Avenue and Knights Bridge. The Company further has entered into a Business Transfer Agreement/Settlement Agreement and is the process of exit from few other projects namely Caesars Palace, and Cape Cod.

Once the Company completes all its obligations of delivery to its customers, other stakeholders and lenders in the residential business, the Company shall be exiting this space of home building (Residential) totally.

3. Dividend:

In view of the loss, no dividend could be considered.

4. Deposits

The Company has not accepted any fresh deposits as per the provisions of Section 73 of the Act during the current financial year.

5. Transfer to Reserves

In view of the loss incurred by the Company during the financial year, no amount was required to be transferred to the reserves.

6. Material changes and commitments, if any, affecting the financial position of the Company occurred between the end of the financial year to which the financial statement relate and the date of the report:

There were no such material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year and the date of this Report. However, The Company has incurred losses over the years resulting in negative net worth, negative working capital and negative cash flows. The default in payment of dues to banks and financial institution and creditors etc are the identified events that, individually or collectively, still cast significant doubt on the Companys ability to continue as a going concern. The Company is in the process reduction of substantial project debt by exiting from the Projects which will ease its financial burden in the coming years.

7. 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 against the Company, impacting the Companys operations in future. There have been up to 28 NCLT matters filed against the Company till the end of last financial year and out of which Company has effectively settled 9 cases and all in its favour of which 17 matters have been dismissed by NCLT and 2 matters are pending.

The Company has however received various notices from different statutory authorities from time to time during the year.

8. Significant events/actions, having a major bearing on the Companys affairs:

During the year under review, the significant events/actions that may have a major bearing on the Company Affairs were:

a. The name of the Company was changed from NEL Holdings Limited to NEL Holdings South Limited during the year.

b. The Company has exited from various residential projects namely, Napa Valley, Virgin Island, Park Avenue and Knights Bridge. The Company further has entered into a Business Transfer Agreement and is in the process of exit from few other projects namely Caesars Palace and Cape Cod.

c. There are pending cases filed under Section 138 of the Negotiable Instruments Act in respect of Cheque bounces for which Summons were received by the Company.

9. The Board of Directors and the composition thereof

I. Composition of the Board

The Board of the Company currently comprises of 6 (Six) Directors of which three are Independent Directors and one is NonExecutive Independent Woman Director. The Composition of the Board of Directors is in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations.

Declaration by Independent Directors

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 and in the Listing Regulations. All Independent Directors of the Company have registered themselves as Independent Director with Indian Institute of Corporate Affairs at Manesar in accordance with the Companies (Appointment and Qualification of Directors) Rules, 2014.

II. Change in the Board

During the period under review, Mrs. Dipali Khanna retired from the Board as Independent Directors with effect from September 27, 2020. Your Board places its deep appreciation for the services rendered by them during her association with the Company.

Reasons for resignation:

Name of the Director Reason for Cessation
Mrs. Dipali Khanna, Independent Director (DIN: 003395440) Retirement after completion of 5 year term period

Two New Directors were inducted on the Board during the year.

Name of the Director Date of Appointment
Mr. KUMAR NELLORE GOPALAKRISHNA, Non-Executive Independent Director (DIN: 07197031) November 09, 2020
Mrs. GAYATHRI MUTTUR NAGARAJ, Non-Executive Independent Director (DIN: 06742638) January 08, 2021

All resignations and appointment of the Directors of the Company have been duly intimated to the Stock Exchanges and to the Ministry of Corporate Affairs, New Delhi.

IN. Meetings of the Board

The Board of Directors met 4 (Four) times during the year on July 31, 2020, September 15, 2020, November 11, 2020 and February 12, 2021.

In accordance with the provisions of the Companies Act, 2013, a separate meeting of the Independent Directors was held on February 12, 2021.

The Composition of the Board and the Committees along with the meeting attendance details are provided in the Corporate Governance Report.

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

The Independent Directors of the Company at their separate meeting held as per the provisions of Section 149 read with Schedule V of the Companies Act, 2013 and the Listing Regulations, had carried out an annual evaluation of the Board, Committees and individual Directors performance. 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, and 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 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.

10. 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.

11. Nomination and Remuneration Policy

The Nomination and Remuneration Committee (NRC) has formulated a policy relating to nomination of and remuneration for the directors, Key Managerial Personnel and Senior Management personnel.

The Nomination and Remuneration policy has been prepared pursuant to the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations.

Non-Executive Directors are remunerated by way of sitting fees for attending the meetings of the Board and the Committees thereof. During the year the sitting fees paid for Board Meetings and Audit Committee meetings is Rs. 50,000/- per meeting, the Nomination & Remuneration Committee is Rs 25,000/- per meeting and the Stakeholders Relationship Committee, other Committees including for a separate meeting of Independent Directors is Rs. 20,000/- per meeting. The Board however in its meeting held on February 12, 2021 has approved the proposed for reduction on sitting fees effective from April 01, 2021.

The Nomination & Remuneration Policy of the Company is uploaded on the Website of the Company at: https://nelholdings.in/policies-other-related-matters/

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]

Ratio of remuneration of each Director to the median remuneration of the employees and percentage increase in the remuneration is as follows:

Sl. No. 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 Nil
2. Mr. L. S Vaidyanathan Executive Director Nil

12. Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism policy for its Directors and Employees to report their concerns about unethical behaviour, 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. None of the Directors/Employees of the Company have been denied access to the Chairman of the Audit Committee. No complaint has been received during the financial year 2020-21.

Corporate Social Responsibility

In view of continues losses, the Company was not required to contribute towards CSR activities and has also not contributed towards any CSR activities during the year 2020-21. The Company was also not required to constitute a separate Corporate Social Responsibility Committee under the provisions of Companies Act 2013.

13. Political Contribution

The Company has not made any political contribution to any political parties during the financial year.

14. Internal Financial Controls

The Board of the Company is of the opinion that the Companys Internal Financial Controls were adequate and effective during the period ended as on 31st March, 2021, based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants specially appointed for this purpose, including audit of Internal Financial Controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board committees, including the Audit Committee.

The Company has an established Internal Financial Control framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the management and tested by internal audit team and presented to the audit committee. Based on periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

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

15. Statutory Auditors

M/s Ray & Ray Chartered Accountants (Firm Registration Number: 301072E), Statutory Auditors of the Company have expressed a modified opinion in their Audit Report for the financial year ended 31st March, 2021.

The Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d) along with the management response to the same is as below:

Audit Qualification (each Audit Qualification separately)

Audit Qualification:

1. a. Detail of Audit Qualification: The Company has incurred losses over the years resulting in negative net worth, negative working capital and negative cash flows. The default in payment of dues to banks and financial institution and creditors etc are the identified events that, individually or collectively, may cast significant doubt on the Companys ability to continue as a going concern.

During the year Company has sold two projects through a Business Transfer Agreement and repaid some portion of the bank loan. Further the Company has cancelled the development right of the project Nitesh Virgin Island and handed over the rights to original land owner.

Although these transactions have reduced the liability of the Company to banks and financial institutions, the ability of the Company to continue as a going concern continues to remain uncertain in view of the above.

As the Company has not recognized this fact and has prepared the standalone financial statements on a going concern assumption basis without carrying out any adjustments, in our opinion, the standalone financial statements may not give a true and fair view.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

Not Applicable as Auditor has not quantified the impact

e. For Audit qualification where the impact is not quantified by the Auditor

i. Managements estimation on the impact of audit qualification: Cannot be quantified.

ii. If Management is unable to estimate the impact, reasons for the same-Cannot be quantified.

iii. Auditors comment on (i) or (ii) above: It depends on the future plan of the management to improve the situation by resolving uncertainties to continue the business as a going concern. However management has not provided any concrete plan to ascertain the future of the company.

2. a. Detail of Audit Qualification: The Company has given unsecured advance amounting to Rs 3,515 Lakh to Boulevard Developers Pvt. Ltd (Boulevard) for acquiring various immovable properties on behalf of the Company for which no Joint Development Agreements could be produced to us. We have been informed that Boulevard is not in a position to honor its commitment and repay the advance. Considering these factors, we are concerned about the manner in which the funds were given without obtaining any security. Company has made full provision in the books during the year which in our opinion is a matter of concern.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

The Auditor has quantified the amount of Rs. 3515 lakhs and is provided in the books.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable.

iii. Auditors comment on (i) or (ii) above: Company will suffer substantial loss because of uncertainties of recovery without taking any legal course of action.

3. a. Detail of Audit Qualification: The Company had advanced Rs. 1227.98 Lakhs to Somerset Infra Projects Private Limited (Somerset) for acquiring immovable properties on behalf of the Company. Somerset has neither delivered any property to the Company as per the agreement nor refunded the money. The Company has made full provision for the said advance in the previous years. In our opinion, such injudicious advances are a matter of concern and may be prejudicial to the interest of the Company.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

The Auditor has quantified the amount of Rs. 1227.98 lakhs for which provision has already been made in the year ended 31st March, 2018. Hence, no further impact has been considered.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable

iii. Auditors comment on (i) or (ii) above: Though there is no financial impact we are concerned about the manner of disbursing of advance and their subsequent recovery.

4. a. Detail of Audit Qualification: The Company has accounted, Principal of Rs.35,586/- Lakhs, Accrued Interest of Rs.16,752/- Lakhs and Disputed Liability of Rs.14,933/- in its books of account as total outstanding to banks and financial institution as on 31st March, 2021. Pending confirmation and correspondence the outstanding balance and status of demand raised by the respective banks and financial institutions has not been verified by us. Further, penal interest on default on payment to banks and financial institution has neither been ascertained nor provided for in the books of account of the Company.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor No impact

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable

iii. Auditors comment on (i) or (ii) above: No Comments

5. a. Detail of Audit Qualification: The Company has sold the projects "Nitesh Knightsbridge" and "Park Avenue", during the year on an ongoing basis, through Business Transfer Agreements. Further the Company has cancelled the development right for the development of the project Nitesh Virgin Island and handed over the rights to the original land owners.

(i) The Company has borrowed Rs 28,497 Lakhs from HDFC Limited for various projects including Nitesh Knightsbridge and British Columbia, Virgin Island. As per the terms of business transfer agreement with the third party, an amount of Rs. 800 Lakhs and 3,500 Lakhs have been paid to HDFC Limited for release of charge on Nitesh Knightsbridge and Park Avenue respectively. Basis the same the Company has classified the remaining outstanding liability, to the extent allocated to the project, as disputed liability.

(ii) During the financial year, charge / mortgage of the project Nitesh Virgin Island was released by HDFC Limited. Such release was conditional that the same shall not be construed as settlement of any kind. Consequently, the Company has accounted for Rs 8,146 Lakhs being the estimated carrying value of loan and Rs 3,000 Lakhs being the interest component as a disputed liability in the standalone financial statements.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: First Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable

iii. Auditors comment on (i) or (ii) above: No Comments

6. a. Detail of Audit Qualification: As stated in the standalone financial statements, the Company has collected Rs 452 Lakhs as advance from customers from closed/suspended residential projects in the earlier years which have now been abandoned. Such receipts are in the nature of deemed deposits under rule 2(c) (xii) (b) of the Companies Acceptance of deposit (Rules) 2014 and is within the purview of sections 73 to 76 of the Companies Act, 2013. Proper disclosure has not been made in the standalone financial statements in this respect.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

The Auditor has quantified the amount of Rs. 452 lakhs for which Liability is already appearing and no further impact has been considered.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable

iii. Auditors comment on (i) or (ii) above: It is a violation of Companies Act.

7. a. Detail of Audit Qualification: In spite of the negative net worth of the subsidiaries, the Company has not accounted for impairment loss of Rs 9,224 Lakhs (after providing for Rs. 4,546 Lakhs out of the total receivable) against advance given to them, resulting in the understatement of loss and overstatement of net worth by the said amount.

Even after making the above noted provision, the Company has disbursed fresh advance amounting Rs 360 Lakhs during the year which in our opinion may be a matter of concern.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

The Auditor has quantified the amount of Rs. 9224 lakhs for which impact has been considered in above table.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable.

iii. Auditors comment on (i) or (ii) above: No Comments

8. a. Detail of Audit Qualification: The Company has not tested impairment of its projects CWIP and Inventories amounting to Rs 8,835/- Lakhs and Rs 12,466/- Lakhs (Net of "Payable to land owner for land under Joint Development Agreement, JDA") respectively as on 31st March, 2021.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

The Auditor has not quantified the amount mentioning that no impairment test has been done to ascertain the realisable value.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable.

iii. Auditors comment on (i) or (ii) above: In our opinion, in the current scenario recovery is uncertain.

9. a. Detail of Audit Qualification: Year-end balance confirmation certificates in respect of trade payables, vendor and other advances have not been provided for our verification and record. In absence of adequate audit evidence, we are unable to ascertain as to whether any provision is required with respect to the carrying amounts of these balances as at reporting date. Further, Trade Receivable amounting to Rs.753/- Lakhs receivable from customer as on 31st March, 2021 has not been considered for impairment loss based on expected credit loss method as per requirement of Ind AS 109.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: First Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

i. The Company could not obtain balance confirmation due to Covid-19 post year-end and reduced resources to undertake such tasks. However, Management is of the view that it will not have any additional impact on realisable value more than what has already been impaired under various heads.

ii. If Management is unable to estimate the impact, reasons for the same-

Owing to the nature of observation, impact cannot be quantified. However, Management is of the view that it will not have any additional impact on realisable value more than what has already been impaired under various heads.

iii. Auditors comment on (i) or (ii) above: Impact is not ascertainable at this stage

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not Applicable as impact is quantified.

ii. If Management is unable to estimate the impact, reasons for the same- Not applicable

iii. Auditors comment on (i) or (ii) above: No Comments

10. a. Detail of Audit Qualification: As per the records of the group and information and explanations provided to us, the Company has been irregular in depositing the undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, Goods and Services tax, cess.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: First Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor Not applicable as impact is not quantified.

e. For Audit qualification where the impact is not quantified by the Auditor

i. Not applicable as impact has not been quantified

ii. If Management is unable to estimate the impact, reasons for the same-

i. Auditors comment on (i) or (ii) above: It is violation of IT act.

11. a. Detail of Audit Qualification: The Company has neither ascertained nor accounted for component wise Deferred Tax Assets/ Liabilities as on balance sheet date and its adjustment in the Statement of Profit & Loss during the year.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor

Not applicable as impact is not quantified.

e. For Audit qualification where the impact is not quantified by the Auditor

i. The Company could not ascertain component wise Deferred tax due to reduced resources to undertake such tasks. However, impact cannot be quantified until component wise deferred tax is determined.

ii. If Management is unable to estimate the impact, reasons for the same-

Owing to the nature of observation, impact cannot be quantified until component wise deferred tax is determined.

iii. Auditors comment on (i) or (ii) above: No Comments

12. a. Detail of Audit Qualification: The Company has not provided customer wise reconciled figures for some outstanding balances for "Billing in excess of revenue" (Net of debit balance) (Refer Note No 20(ii) to the standalone financial statement). Due to non-availability of the said details we are unable to verify the correctness of the same.

b. Type of Audit Qualification: Qualified Opinion

c. Frequency of Qualification: Second Time Qualification

d. For Audit qualification where the impact is quantified by the Auditor Not applicable as impact is not quantified.

e. For Audit qualification where the impact is not quantified by the Auditor

i. The Company has provided the workings of billing in excess of revenue However, impact cannot be quantified nor the management is not expecting any impact because of such reconciliation.

ii. If Management is unable to estimate the impact, reasons for the same-

Owing to the nature of observation, impact cannot be quantified until reconciliation is made. However, the management is expecting any impact because of such reconciliation.

iv. Auditors comment on (i) or (ii) above: No Comments

16. Secretarial Auditor

Mr. Kedarnath, Practicing Company Secretary was appointed as the Secretarial Auditors of the Company for the financial year 2020-21 by the Board of Directors of the Company. The Secretarial Audit Report for the year ended 31st March, 2021 issued by the Secretarial Auditor 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 - A.

The qualifications or adverse remakes in the Secretarial Audit Report as explained by the Board of Directors of the Company are as below:

1. There are Advances outstanding which are collected from customers towards proposed projects which are delayed and being outstanding in the books for more than one year, attract Section 73 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

Management Response: Due to inadequacy of funds the Company was unable to pay off the advances collected from its Customers and its making its sincere efforts to repay the same.

2. The Company has not complied the provisions of Section 152(6) of the Companies Act, 2013 in relation to Rotation of Directors.

Management Response: The Company has all its Directors as whole-time, non-retiring and non-rotational Directors on Board.

3. The Company has defaulted compliance of the following:

a. Applicable General Laws, such as ESI and PFrequirements and MSME Act.2006

b. Income Tax Act, 1961 and Goods and Services Tax Act, 2017

Management Response: The payment has been delayed due to scarcity of funds and the Company is making its sincere efforts to pay the same and ensure Compliance.

4. The Company has not appointed Women Director in the Board as required under the regulation 17(1) of LODR (Regulation) 2015 and Section 149 of the Companies Act, 2013.

Management Response: Post retirement of Woman Director on Board of the Company, the Company has been looking for the Woman Director to be appointed as Director on Board of the Company. However, the Company was unable to comply with the regulation 17 of SEBI (LODR) Regulations, 2015 and Section 149 of Companies Act 149 due to COVID related restrictions and prevailing COVID cases in the Company and also due to yearend holidays.

SEBI further levied the penalty for non-compliance of regulation 17 of SEBI (LODR) Regulations, 2015 and the Company paid the same.

The Company has appointed Woman Director on Board of the Company on Jan 08, 2021.

17. 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 B to this report. There were a total of 63 employees during the end of the financial year and the Company has failed to pay the Salary dues to its few employees on time.

18. 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 C to this report.

19. Corporate Governance

In terms of Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, Corporate Governance Report forms part of this Annual Report.

Further, a certificate from Mr. S. Kedarnath, Practicing Company Secretary affirming the compliance with the various provisions of the Corporate Governance in terms of Regulation 27 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms part of the Annual Report and exhibited separately.

20. Secretarial Standards

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

21. Cost Audit and Cost Records

During the year under review, Cost Audit was not applicable to the Company. However, the maintenance of Cost Records as prescribed under the provisions of Section 148 of the Act was applicable for the business activities carried out by the Company.

22. Code of Conduct

In terms of Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, a declaration signed by Mr. Nitesh Shetty, the Chairman & Managing Director of the Company affirming compliance with the Code of Conduct by the Directors and Senior Management Personnel of the Company for the financial year 2020-21 forms part of the Corporate Governance Report.

23. 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 Report is presented in a separate section of the Annual Report.

24. Extract of the Annual Return

In accordance with the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, rule 12, sub rule (1) as amended, the extract of the Annual Return (MGT-9) is no longer required to be attached along with Board Report. The copy of the Annual Return for the year 2020-21 can be accessed on the Companys website at the link: https://nelholdings.in/Annual Return/

25. 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 is detailed in the Notes to Accounts section of the Annual Financial Statements.

26. 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, Section 188 of the Companies Act, 2013 and the Listing Regulations on the Related Party transactions.

The Related Party Transactions under IND-AS 24 undertaken during the financial year 2020-21 are detailed in the Notes to Accounts section of the Annual Financial Statements.

27. 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 made thereunder for prevention and redressal of complaints of sexual harassment at workplace.

28. Risk Management Policy

The Company has formulated a comprehensive Risk Management Policy and is in regular compliance of the same.

29. 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 the Annual Report.

A statement containing the salient features of the financial statements of the Companys subsidiaries is annexed 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, 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.

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

- the name of NHDPL Properties Private Limited was changed to NHDPL South Private Limited on April 22, 2020.

- the name of Nitesh Indiranagar Retail Private Limited was changed to NIRPL Ventures Private Limited on December 29, 2020.

In terms of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has adopted a policy for determining material subsidiaries. The Policy may be accessed on the Companys website at the link: https://nelholdings.in/policies-other-related-matters/

30. Additional Information to shareholders

All important and pertinent investor information such as financial results, press releases, project updates and other corporate announcements are made available on a regular basis on the website www.nelholdings.in of the Company.

31. 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 the Companys operations.

Your Directors also place on record their appreciation on the significant contributions 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
Nitesh Shetty
Place: Bengaluru Chairman & Managing Director
Date: June 29, 2021 DIN:00304555