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Your Directors present their Fourteenth Annual Report with the standalone and consolidated annual audited accounts of the Company for the year ended March 31, 2018.
1. Financial Results:
(Rupees in Lakh)
|Revenue from operations||2754||19429||3625||30786|
|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||-||-||-||-|
In view of the loss, no dividend could be considered.
3. State of Companys Affairs:
I. Financial Statement:
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 notified the Companies (India Accounting Standard) Rules, 2015 and the same was made effective from 1st April, 2015. As per the said Rules, the Indian Accounting Standard (IND AS) was made applicable to the Company and to the subsidiary companies with e_ect from 1st April 2017. Accordingly the financial statements (both standalone and consolidated) for the year ended March 31, 2018 was prepared based on IND AS.
The Company has compiled with the applicable provisions of the Companies Act, 2013 and Regulations of 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, 2018, consolidated statement of Profit and Loss for the year ended as on that date, Cash flow Statements together with the Notes and Reports of Auditors thereon forms part of the Annual Report. The financial figures have been regrouped, wherever required, in line with Schedule III of the Companies Act, 2013 disclosure requirements.
During the year under review the Company had achieved a turnover of Rs. 2754 Lakhs as against Rs. 19429 Lakh in the previous year and other income of Rs. 1358 Lakh as compared to Rs. 189 Lakh in the previous year. The operations had resulted in a loss of Rs. 9562 Lakh as compared to previous year loss of Rs. 4254 Lakhs.
b. Consolidated: The total consolidated revenue for the year ended 31st March 2018 amounted to Rs. 3625 Lakh and other income of Rs. 2004 Lakh, as compared to Rs. 30786 Lakhs and other income of Rs. 698 Lakh in the previous year. The Company has incurred a loss after tax of Rs. 25621 Lakhs (previous years Loss Rs. 14164 Lakh).
II. 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:
a. The Company through its subsidiary Nitesh Urban Development Private Limited was holding 50% of share capital of Courtyard Constructions Private Limited (CCPL). During the year the Company acquired the remaining 50% of the share capital of CCPL from Budhrani Group, as a result CCPL became wholly owned subsidiary of NEL with effect from July 12, 2017. b. The Company, has transferred 5,41,49,499 Class A equity shares of Nitesh Residency Hotels Private Limited to Mr. Nitesh Shetty and Nitesh Industries Private Limited consequently the percentage of shares held by the Company in Nitesh Residency Hotels 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 by the regulators or courts or tribunals against the Company, impacting the going concern status and Companys 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 Independent Directors. 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.
II. Change in the Board
During the period under review, Mr. Mahesh Bhupathi was appointed as an Independent Director with effect from March 20, 2018 and Mr. M. D Mallya, Independent Director resigned from the Board on April 5, 2018 due to his professional pre- occupation.
Mr. Nitesh Shetty, Chairman and Managing Director and Mr. Ashwini Kumar, Executive Director and Chief Operating Officer who were appointed for a term of 3 years completed their term on December 14, 2017 and April 18, 2018 respectively and were re-appointed as Chairman and Managing Director and as Executive Director and Chief Operating Officer for a period 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 through Postal 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 the Independent Directors was held on February 12, 2018.
The Details of the committees and their meetings forms part of 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, 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.
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. 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 Listing Regulations.
Non-Executive Directors are remunerated by way of sitting fees for attending the meetings of the Board and the Committees thereof. The sitting fees paid for Board Meetings and Audit Committee meetings is Rs. 50,000/- per meeting respectively, Nomination & Remuneration Committee is Rs 25,000/- per meeting and Stakeholders Relationship Committee, other Committees including for a separate meeting of Independent Directors is Rs. 20,000/- per meeting 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 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. 7,22,532 (Rupees Seven Lakhs Twenty Two Thousand Five Hundred and Thirty Two Only) ii. The percentage increase in the remuneration for the year ended 31st March, 2018 to the Key Managerial Personnel (other than Directors) namely, Company Secretary & Chief Compliance Officer and Chief Financial Officer is 0 %. iii. The median remuneration of employees during the financial year 2017-18 was Rs. 7,22,532/- as compared to Rs. 7,61,457/-. 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 31st March, 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 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. 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 2017-18.
8. Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee and has adopted the 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 CSR spending 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 Companys Internal Financial Controls were adequate and effective during the period ended as on 31st March, 2018, based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company (with its inherent weaknesses), 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.
10. Statutory Auditors
M/s Ray & Ray Chartered Accountants (Firm Registration Number: 301072E), were appointed 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 26th September, 2014. The appointment is subject to annual rati_cation by the members of the Company in terms of Section 139 of the Companies Act, 2013 read with the rules made thereunder. The Audit Committee and the Board of the Company recommends to the Members of the Company to ratify the appointment of M/s. Ray & Ray as the Statutory Auditors of the Company for the financial year 2018-19. There are no qualifications or adverse remarks in the Statutory Auditors Report which require any explanation from the Board of Directors of the Company. The Statutory Auditors have expressed an unmodified opinion in their Audit Report for the financial year ended 31st March, 2018.
11. Secretarial Auditor
M/s. Kedarnath & Associates, the Practicing Company Secretaries, were appointed as the Secretarial Auditors of the Company for the financial year 2017-18 by the Board of Directors of the Company.
The Secretarial Audit Report for the year ended 31st March, 2018 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. 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.
13. 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.
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 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.
15. 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 a_rming compliance with the Code of Conduct by the Directors and Senior Management Personnel of the 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 Report is 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 with the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in the prescribed format of MGT-9 for the financial year 2017-18 is provided in AnnexureE to this Report.
18. 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.
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 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 2017-18 are detailed in the Notes to Accounts section of the Annual Financial Statements.
20. Disclosures as per the Sexual Harassment of Women at Workplace (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. No complaint was received by the 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 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:
- Addition of Subsidiary Effective from July 12, 2017, Courtyard constructions Private Limited has become a subsidiary of the Company having 50% of the share capital held by Nitesh Estates Limited and 50% of the share capital held by Nitesh Urban Development Private Limited and Courtyard Constructions Private Limited has shifted its Registered O_ce to the State of Karnataka from the State of Maharashtra.
- The name of Kakanad Enterprises Private Limited, 100% Wholly owned subsidiary has been changed to Nitesh O_ce Parks Private Limited effective from April 3, 2017, and the Registered 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 owner Mr. George Thangaiah and Nitesh Indiranagar Retail Private Limited on 25th April 2018. The tribunal has rejected the stand of landowners and stated that there is no repudiation of contract. The tribunal has awarded a net amount of Rs 42 Crores to the subsidiary. The subsidiary has preferred an appeal 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 as approved may be accessed on the Companys website at the link: http://www.niteshestates.com/Investor relations/Policies & Other Related 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:
(Rupees in Lakh)
|Paid up Capital||500.00||500.00|
|Reserves & Surplus||(15817.35)||(9012.69)|
|Revenue from operations||(1389.16)||6001.46|
|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)
|Paid up Capital||658.20||658.20|
|Reserves & Surplus||(5505.82)||(3617.89)|
|Revenue from operations||749.29||3610.28|
|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)
|Paid up Capital||6991.00||6991.00|
|Reserves & Surplus||17821.81||18243.53|
|Income from operations||-||-|
|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 financial highlights of Nitesh Pune Mall Private Limited are as follows:
(Rupees in Lakh)
|Paid up Capital||2804.10||2804.10|
|Reserves & surplus||(14905.91)||(8402.65)|
|Revenue from Operations||1329.67||1049.87|
|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 the business of maintenance contracts with the owners of completed apartments developed by the Company.
The financial highlights are as follows:
(Rupees in Lakh)
|Paid up Capital||30.00||30.00|
|Reserves & Surplus||(613.73)||(302.39)|
|Revenue from operations||181.63||696.27|
|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 Private Limited) :
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)
|Paid up Capital||5.00||5.00|
|Reserves & Surplus||(17.84)||(16.68)|
|Revenue from operations||-||-|
|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 the Company and the status of the Subsidiary is as follows:
(Rupees in Lakh)
|Paid up Capital||1.09||1.09|
|Reserves & Surplus||(76.87)||(27.43)|
|Revenue from operations||-||-|
|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, investor presentations, press releases, project updates are made available on a regular basis on the website (www.niteshestates.com) of the Company.
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|
|Place: Bengaluru||NITESH SHETTY|
|Date: May 30, 2018||Chairman & Managing Director|