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Directors Report of Nesco Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting 57th annual report of your Company for the year ended 31 March 2016.

1. Financial Results:

(Rs, in lakhs)

Particulars Consolidated Standalone

2015-16 2014-15 2015-16 2014-15

Income 27,559.14 22,277.98 27,336.39 22,271.88

Profit before depreciation and tax 20,034.13 16,634.54 20,032.98 16,647.56

Depreciation 670.13 670.09 670.13 670.09

Profit Before Taxes 19,364.00 15,964.45 19,362.85 15,977.47

Provision for Taxes 6,072.03 4,814.02 6,072.03 4,814.02

Net Profit after Taxes 13,291.97 11,150.43 13,290.82 11,163.45

Balance brought Forward 50.00 50.00 50.00 50.00

Amount available for appropriations: 1. Dividend 1,197.83 915.98 1,197.83 915.98

2. Tax on Dividend 243.85 155.67 243.85 155.67

3. Transfer to General Reserve 11,850.29 10,078.79 11,849.14 10,091.80

4. Surplus carried forward to Profit and

Loss Account 50.00 50.00 50.00 50.00

2. Review of Operations:

Your Company achieved a consolidated turnover of Rs, 27,559.14 lakhs, an increase of 23.71% over the previous year''s consolidated turnover of Rs, 22,277.98 lakhs.

Consolidated Profit before depreciation and tax was Rs, 20,034.13 lakhs as compared to Rs, 16,634.54 lakhs in previous year, an increase of 20.44%.

Consolidated earnings per share amounted to Rs, 94.32 (previous year Rs, 79.13). Company''s general reserves increased from Rs, 52,547.26 lakhs to Rs, 64,397.55 lakhs.

3. Dividend:

The Board of Directors has decided that interim dividend of Rs, 8.50 per share of Rs, 10.00 each be confirmed as final dividend.

4. Management Discussion and Analysis:

i) Nesco IT Park:

Income for the year was Rs, 12,046.02 lakhs (previous year Rs, 9,067.36 lakhs), an increase of 32.85%.

Your Company has started construction of IT building 4, having built up area of approx. 17,00,000 sq. ft. The building is pre-certified Platinum rated under the LEED India for Core & Shell rating system from the Indian Green Building Council. IT buildings 1, 2 and 3 are fully occupied by well renowned companies. Hall 3 provides Incubation Centre and Child Care Centre for children of employees working in Nesco IT Park.

ii) Bombay Exhibition Centre:

Income for the year was Rs, 11,183.36 lakhs compared to Rs, 8,586.27 lakhs in the previous year, an increase of 30.25%.

During the year 156 exhibitions and conventions were held in our Centre, out of which 33 were new organizers. Some of the new clients include Infinity Exhibitions & Conferences Pvt. Ltd., JP Morgan Services India Pvt. Ltd., V-Rock Entertainment Agency, Dalit Indian Chambers of Commerce & Industry (DICCI), New Media Communication Pvt. Ltd. and Artisians & Weavers Welfare Association.

The Maritime Exhibition organized by Ministry of Shipping held in April 2016 in Bombay Exhibition Centre was inaugurated by Indian Prime Minister Mr. Narendra Modi when Chief Ministers of Maharashtra, Gujarat, other states and several foreign and national dignitaries were present. This exhibition has attracted large investments.

Our Centre continues to bring large number of visitors and tourists from out of City, State and Country.

iii) Nesco Hospitality Private Limited:

Nesco Hospitality Private Limited, wholly owned subsidiary of your Company, has earned revenue of Rs, 222.75 lakhs as compared to Rs, 6.10 lakhs during the previous period.

The Company has started food court services within our Nesco Complex with leading international and national food brands and is targeting to cater the growing demand of quality food services from the exhibition organizers, exhibitors, visitors and employees working in Nesco IT Park. Your Company is taking steps to establish a large world class kitchen, construction is expected to start in later part of this year.

iv) Indabrator:

In the year under review, Indabrator income was Rs, 2,501.74 lakhs (previous year Rs, 1,790.92 lakhs), an increase of 39.69%

2015-16 showed some progress in the capital goods industry. A number of projects which were deferred in the previous year were completed in the current year. Your Company has recently won several large contracts. Company has decided to expand its machine building division at its Visholi Complex, Gujarat, construction for which is expected to start in Q4 of this year.

v) Investments:

Income from investments and other income was Rs, 1,605.27 lakhs (previous year Rs, 2,827.33 lakhs).

5. Finance:

Your Company had no debt as on 31 March 2016. Company''s liquid resources (fixed maturity plans, mutual funds, cash & bank balances) increased by 6.59% to Rs, 41,439.01 lakhs from Rs, 38,878.07 lakhs.

Your Company has neither accepted any deposits from the public during the year nor are any deposits outstanding for repayment.

6. Corporate Social Responsibility:

Your Company has undertaken several programs and activities as part of its Corporate Social Responsibility Group. In the rural areas your Company has supported setting up of an industrial training institute and three English Medium Schools.

These Schools provide modern education facilities including smart class / audio visual learning system, modern computer labs, etc. The Company''s CSR team regularly monitors these activities.

Your Company has also taken initiatives under "Swachh Bharat Abhiyan". A new 9,00,000 Litres Over Head Water Tank at a nearby village is completed with your Company''s assistance. Old Water Tank having capacity of 2,40,000 Litres was also renovated. Several toilets were constructed in a village as part of Swachh Bharat Program.

The Company is evaluating and will take up more CSR activities in different areas. The Annual Report on CSR activities is annexed as "Annexure A."

7. Directors and Key Managerial Personnel:

Dr. Ram S. Tarneja, Independent Director of the Company, who was a Director of the Company for many years, expired on 07 August 2015. Your Board places on record its appreciation for outstanding contribution made by Dr. Tarneja during his tenure as an Independent Director.

Mrs. Sudha S. Patel, Non-Executive Director, retires by rotation at the ensuing annual general meeting pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of Association of your Company and being eligible has offered herself for reappointment. Her brief resume and other related information has been detailed in the annexure to the notice.

Mr. Sumant J. Patel, Chairman & Managing Director, Mr. Krishna S. Patel, Joint Managing Director, Mr. Dipesh R. Singhania, Chief Financial Officer and Ms. Jinal J. Shah, Company Secretary and Compliance Officer (appointed w.e.f. 09 February 2016) are the Key Managerial Personnel.

8. Board Evaluation:

Regulation 17 of the Listing Regulations mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this annual report.

9. Training of Independent Directors:

Your Company''s Independent Directors are highly qualified and have been associated with corporate and business organizations. They have been associated with your Company since last several years, hence they all understand Company''s business and activities very well, however, pursuant to Regulation 4 of the Listing Regulations, the Board has shown all the Independent Directors Company''s business and manufacturing activities and were also introduced to Company''s staff. They were also introduced to new activities of the Company namely, Day Care Centre, Food Court area and the new Hospitality Subsidiary Company.

10. Declaration by Independent Directors:

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the Listing Regulations.

11. Number of Board and Committee Meetings:

Pursuant to Section 134(3)(b), details of Board Meetings held during the year are given in the Report on Corporate Governance.

During the year 5 (Five) Board Meetings and 4 (four) Audit Committee meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

A separate meeting of Independent Directors, pursuant to Section 149(7) read with Schedule VI of the Companies Act, 2013 and Clause 49 was held on 23 May 2015.

12. Policy on Directors appointment and Remuneration and other details:

The Company''s policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in Corporate Governance Report, which forms part of Annual Report.

13. Directors'' Responsibility Statement as required under Section 134(3)(c) of the Companies Act, 2013:

The Directors state that: -

a. in the preparation of the annual accounts for the financial year ended 31 March 2016, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have 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 your Company as at 31 March 2016 and of the Profit and loss of the Company for the financial year ended 31 March 2016;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and,

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

14. A. Auditors and Auditors Report:

The Board of Directors in their meeting held on 23 May 2015, on the basis of recommendations of the Audit Committee, in accordance with the provisions of Section 139(1) of the Companies Act, 2013, had appointed M/s Manubhai & Shah LLP, to act as the Statutory Auditors of your Company till the conclusion of the 60th Annual General Meeting. The Company has received certificate from the Auditors to the effect that the appointment is in accordance with the limits specified under Section 139(9) of the Companies Act, 2013.

The Board of Directors in their meeting held on 30 May 2016, ratified the appointment of Auditors for the financial year 2016-17.

The Auditors Report for the financial year 2015-16, does not contain any Qualification, reservation or adverse remark.

B. Secretarial Audit and Secretarial Audit Report:

The Board of Directors at its meeting held on 17 March 2016, in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed M/s. ND & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit Report is annexed herewith as "Annexure B." The Secretarial Auditors Report for the financial year 2015-16, does not contain any Qualification, reservation or adverse remark.

15. Particulars of Loans, Guarantees and Investments:

The particulars of loans, guarantees and investments made by the Company pursuant to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements forming part of Annual Report.

16. Internal Financial Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defend standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors. The internal audit is conducted at various locations of Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

17. Vigil Mechanism/Whistle Blower Policy:

The Company has a vigil mechanism to deal with fraud and mismanagement, if any. The policy is on the website of the Company.

18. Safety, Health and Environment:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. In fact your Company''s goals are: no accidents, no injuries to people and no damage to environment. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is the focus of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

19. Corporate Governance:

As required by Regulation 27 of the Listing Regulations of stock exchange, a report on corporate governance and a certificate from M/s. Manubhai & Shah LLP, Chartered Accountants confirming compliance with requirement of corporate governance are given as a separate report, which forms part of this annual report.

20. Prevention of Sexual Harassment at Workplace:

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made there under, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment.

21. Conversion of energy, technology absorption, foreign exchange earnings and outgo:

The Company is undertaking necessary energy conservation activities in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

22. Extract of Annual Return:

Pursuant to Section 134(3)(a), extract of Annual Return in Form MGT- 9 has been annexed herewith as "Annexure C".

23. Particulars of Employees:

The information required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company has been annexed herewith as "Annexure D."

24. Subsidiary Company:

During the previous year your Company had entered into the business of food catering and related services within the Nesco Complex. Nesco Hospitality Private Limited, a wholly owned subsidiary of your Company is now operating Food Courts, Day Care Centre and Gymnasium in Bombay Exhibition Centre and Nesco IT Park. The Company is also in process of setting up world class kitchen facility to cater the needs of employees working in Nesco IT Park and visitors to exhibitions and conventions.

A separate statement containing the salient features of financial statements of subsidiary of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013.

25. Related Party Transactions:

During the financial year 2015-16, all related party transactions that were entered into were on an arm''s length basis and were in the ordinary course of business.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential confect with the interest of the Company at large.

The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure E" to this Report.

26. Deposits from Public:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

27. Consolidated Financial Statement:

The Consolidated Financial Statement of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

28. Appreciation:

Your Board of Directors wish to convey their appreciation for the support extended by the clients, shareholders, bankers and the employees of the Company.

For and on behalf of the Board of Directors

Sumant J. Patel

Chairman & Managing Director

DIN: 00186976

Mumbai, 30 May 2016


Mar 31, 2013

The Directors have pleasure in presenting their annual report with the audited statement of accounts for the year ended 31 March 2013.

1. Financial Results:

PARTICULARS 2012-13(Rs.) 2011-12(Rs.)

Income 1,627,438,061 1,394,736,879

Profit before depreciation and tax 1,195,011,844 1,002,640,393

Depreciation 58,277,241 34,164,996

Profit before taxes 1,136,734,603 968,475,397

Provision for taxes 319,878,455 294,890,526

Net Profit 816,856,148 673,584,871

Exceptional Items - 231,659

Balance brought forward 5,000,000 5,000,000

Amount available for appropriations 821,856,148 678,353,212

Appropriations:

i) Dividend 49,321,972 42,275,976

ii) Tax on Proposed Dividend 8,382,269 7,021,511

iii) Transfer to General Reserve 759,151,907 624,055,725

iv) Surplus carried forward to P & L Account 5,000,000 5,000,000

2. Review of Operations:

During the year Company achieved a turnover of Rs. 1,627,438,061, an increase of 16.68 % over the previous year turnover of Rs. 1,394,736,879. PBT was Rs. 1,136,734,603 as compared to Rs. 968,475,397 in previous year, an increase of 17.37%. Earnings per share amounted to Rs. 57.97 (previous year Rs. 47.78). The Company''s general reserves increased from Rs. 2,760,356,908 to Rs. 3,519,266,728.

3. Dividend:

Your Directors are pleased to recommend a dividend of 35% per equity share of Rs. 10/- each (previous year 30%) for the year ended 31 March 2013 amounting to Rs.49,321,972 (previous year Rs. 42,275,976), subject to approval by shareholders at the 54th annual general meeting. This would involve a cash outflow of Rs. 57,704,241. The dividend is free of tax in the hands of the shareholders.

4. Finance:

Your Company had no debt as on 31 March 2013. Company''s liquid resources (FMPs, MFs, FD''s, Cash & Bank balances) increased by 21.53 % to Rs. 2,605,714,553 from Rs. 2,144,146,612.

Your Company has neither accepted any deposits from the public during the year nor are any deposits outstanding for repayment.

5. Internal Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company also follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor expectations and budgeted results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the Internal Auditors. The internal audit is conducted at various locations of Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

6. Safety, Health and Environment:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. Infact your Company''s goals are: no accidents, no injuries to people and no damage to environment. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

7. Directors:

Mr. Jai S. Diwanji was appointed as additional director with effect from 3 November 2012.

Mr. Mahendra Chouhan and Mr. K. Srinivasa Murty retire by rotation at the ensuing annual general meeting and being eligible offer themselves for reappointment. The profile of the Directors to be reappointed at the annual general meeting is given in the annexure to the notice.

Mrs. Sudha Patel has expressed her desire not to be re-appointed as Joint Managing Director. She has agreed to continue as Director.

During the year Mr. Mohan Parikh resigned from his position as Director of the Company after having served the Company for 50 years. Directors place on record their appreciation of the valuable services rendered by Mr. Parikh during his tenure as Director.

8. Directors'' Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that to the best of their knowledge and belief and according to the information and explanations available to them

i) In the preparation of the annual accounts the applicable accounting standards have been followed.

ii) Appropriate accounting policies have been selected and supplied consistently and have made judgments that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31.03.2013 and of the profit of the Company for the year ended on that date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

9. Corporate Governance:

As required by Clause 49 of the listing agreement of stock exchange, a report on corporate governance and a certificate from M/s. Shah & Co., Chartered Accountants confirming compliance with requirement of corpo'' itn governance are given in an -tnnfixure which forms part of this report

10. Corporate Social Responsibility:

Nesco group continued to increase its activities in the rural social sector. In the education field an English medium school in a village is being setup with our assistance which will commence its activities from acpmic year 2013-2014. Students from needy families are being given scholarships. Our CSR group monitors these activities, recently, Nesco provided support to Mumbai Police department in organizing Mahila Melava 2013 in Bombay Exhibition Centre for women safety and rights wherein more than 3,000 women from different parts of the city participated. The Bombay Exhibition Centre will also be providing assistance to NGO 2013, an event for the NGOs to showcase their activities and thereby gather public support.

11. Auditors:

Shah & Co., Chartered Accountants, retire as auditors of the Company on th<= c -nclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The members are re r-uebted to appoint auditors for the current year and fix theirremuneration.

12. Conversion of energy, technology absorption, foreign exchange earnings and outgo:

The Company is undertaking the necessary energy conservation activities in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988.

13. Particulars of Employees:

The information required under section 217 (2A) of the Companies Art 1956 read with Companies (particular of employees) Rules, 1975, in respect of employees of the Company, is provided in annexure forming part of this report. In terms of section 219(1 )(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining copy of the same may write to the Company Secretary.

14. Acknowledgment:

The Directors thank the shareholders, customers, vendors and bankers for their support.

The Directors also thank all members of the Nesco team for their valuable contribution

For and on behalf of the Board of Directors

Sumant J. Patel

Mumbai, 25 May 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their annual report with the audited statement of accounts for the year ended 31 March 2012.

1. Financial Results:

PARTICULARS 2011-12 (Rs) 2010-11(Rs)

Income 1,394,736,879 1,269,885000

Profit before taxes 968,475,397 822,363,772

Provision for taxes 294,890,526 313,862,766

Net Profit 673,584,871 508,501,006

Exceptional Items 231,659 177,741,596

Balance brought forward 5,000,000 5,000,000

Amount available for appropriations 678,353,212 691,242,602

Appropriations:

i) Dividend 42,275,976 35,229,980

ii) Tax on Proposed Dividend 7,021,511 5,851,347

iii) Dividend in respect of FY 2009-2010 (including taxes thereon) - 12,324,504

iv) Transfer to General Reserve 624,055,725 632,836,771

iv) Surplus carried forward to Profit & Loss Account 5,000,000 5,000,000

2. Dividend:

Your Directors are pleased to recommend a dividend of Rs 3 per equity share of Rs 10/- each (i.e. 30%, previous year 25%) for the year ended 31 March 2012 amounting to Rs 42,275,976 (previous year Rs 35,229,980) subject to approval by shareholders at the 53rd annual general meeting. This would involve a cash outflow of Rs 49,297,487. The dividend is free of tax in the hands of the shareholders.

3. Year in Retrospect:

It was a challenging year for the Indian economy. Due to high inflation, there was increase in cost of funds. There was decline in infrastructure, power & other projects and in industrial investment. Delay in policy decisions further adversely affected the domestic economic growth. Debt crisis in Europe and other global issues also affected the Indian economy, which slowed down reporting a growth of 6.10%, lowest during the last 9 years. These factors affected demand for IT space and for capital goods.

4. Performance:

During the year Company achieved a turnover of Rs 1,394,736,879, which is an increase of 9.83% over the previous year. Profit before exceptional item and tax was Rs 968,475,397 as compared to Rs 822,363,772 in previous year, an increase of 17.77%. Earnings per share amounted to Rs 48 (previous year Rs 49). The Company's reserves increased from Rs 2,136,765,184 to Rs 2,760,356,908.

Divisional Performance:

Bombay Convention & Exhibition Centre: Income for the year was Rs 762,974,607 compared to Rs 656,229,418 in the previous year registering an increase of 16%. Over 116 conventions & exhibitions were held in our Centre, of which 48 were new clients, including Engineering Export Promotion Council, The Energy Resources Institution and Images Multimedia. Over 1,146,400 persons visited BCEC, out of which over 480,000 were from out of Mumbai / abroad. BCEC is the venue which brings more visitors to Mumbai than any other venue. During the year, the Company spent Rs 40,089,277 (previous year Rs 48,528,217) on repairs and upgradation of the convention & exhibition centre halls covering an area of over450,000 sq.ft.

Nesco IT Park: Income for the year was Rs 267,154,906 (previous year Rs 337,363,875). Income was lower due to reduced demand after slowdown in India and in several Western countries. IT Building No.3 admeasuring about 800,000 sq.ft., is ready with construction work completed while internal finishing work is going on. So far the Company has incurred capital expenditure of Rs 1,133,109,185onthis project, which was financed from internal resources.

Indabrator - Industrial Capital Goods Group: In the year under review, the Industrial Capital Goods Group's income increased to Rs 249,624,321 (previous year Rs 168,210,331), an increase of 48%. Such increase was possible despite slowdown in the capital goods segment. During the year, the Company spent Rs 7,209,955 on capital expenditure.

Income from Investments: Income from investments and other income was Rs 114,983,045 (previous year Rs 108,081,376), an increase of 6%.

5. Finance:

Your Company had no debt as on 31 March 2012. Company's liquid resources (FDs, FMPs, MFs, cash & bank balances) increased by 27% to Rs 2,144,146,612 from Rs 1,687,436,427. General reserves increased by 31% from Rs 2,136,765,184 to Rs 2,760,356,908.

During the year the Company paid a total amount of Rs 292,486,146 by way Of various taxes and duties. Your Company has neither accepted any deposits from the public during The year no rare any deposits out standing for repayment.

6. Management Discussion and Analysis:

Company is in the initial stage of considering expansion of the Bombay Convention & Exhibition Centre. We expect to finalize plans during this year.

The IT building 3 is now completed and is expected to start generating revenue from the current financial year. Company expects significant growth in revenues in 2013-14. The Company has initiated steps to secure required approvals for starting construction of IT building 4, admeasuring about 1,200,000 sq ft, which has been designed by a leading American architects firm. Cost of construction is expected to be Met through internal resources.

Though uncertainty still prevails in the capital goods segment which showed negative growth last year, your Company was able to achieve significant growth. Your Company has been continuously investing in developing new products and technologies. To accelerate this process your Company is investing in construction of a new building and other capital expenditure to set up a Research and Development Centre for Indabrator, its Industrial Capital Goods Division. Construction of this new building is progressing well, besides several new equipment and facilities will also be installed.

Our Directors are of the view that Indian economy will recover in the near future, and India growth story will continue. Accordingly our Company has decided to continue without delay its investment plans in all its three divisions.

7. Recognition:

Forbes Asia September 2011 issue has published a list of "200 Best Under A Billion" Companies in Asia. Nesco is one of the Companies in the list. The 'Best Under A Billion' list is chosen from nearly 15,000 publicly-listed Asia-Pacific companies with actively traded shares and having annual revenues in the range of $5 million - $ 1 billion and are publicly traded for at least a year. The selection of the best 200 companies is based on earnings growth, sales growth, and shareholders return on equity in the past 12 months and over three years.

Nesco was included amongst top India Inc 500 Club- India's best performing midsized companies.

8. Internal Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company also follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor expectations and budgeted results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the Internal Auditors. The internal audit is conducted at various locations of the Company and covers all the key areas. All audit observations and follow up actions are discussed with the Management also the Statutory Auditors and the Audit Committee reviews them regularly.

9. Safety, Health and Environment:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. Infact your Company's goals are: no accidents, no injuries to people and no damage to environment. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

10. Directors:

Dr. Ram S Tarneja and Mr. Bharat V Patel retire by rotation at the ensuing annual general meeting and being eligible offer themselves for reappointment. The profile of the Directors to be reappointed at the annual general meeting is given in the annexure to the notice. There are no other changes in the Board of Directors of the Company.

11. Directors' Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 1956, your Directors confirm that to the best of their knowledge and belief and according to the information and explanations available to them:

i. in the preparation of the annual accounts the applicable accounting standards have been followed;

ii. appropriate accounting policies have been selected and applied consistently and have made judgments that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2012 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. the annual accounts have been prepared on a going concern basis.

12. Corporate Governance:

Your company is compliant with the requirement of Clause 49 of the listing agreement. Necessary disclosures have been made in this regard in the Corporate Governance Report. A certificate from the Statutory Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under Clause 49 of the listing agreement is attached to this report. The report on Corporate Governance is included and forms part of this report

13. Corporate Social Responsibility:

Nesco continued its activities in the rural social sector. Anew English medium school is under construction in a village with funds provided by our Company. Students from needy families are being given scholarships. Our CSR Group is closely involved with these activities.

14. Auditors:

Shah & Co., Chartered Accountants, retire as auditors of the Company on the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The members are requested to appoint auditors for the current year and fix their remuneration.

Recently, Mr. Hemendra N. Shah, partner of Shah & Co, passed away. Your Directors wish to place on record their appreciation of the long, constructive relationship our Company had with Mr. Shah and convey their sincere condolences to his family.

15. Conversion of energy, technology absorption, foreign exchange earning and outgo:

The Company is undertaking the necessary energy conservation activities in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988.

16. Particulars of Employees:

In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, names and other particulars of employees are required to be attached to this report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Annual accounts sent to the shareholders do not contain the said annexure. Any member desirous of obtaining a copy of the said annexure may write to the Compliance Officer at the Registered Office of the Company.

17. Acknowledgment:

The Directors thanks for the support received from the shareholders, customers, vendors and bankers.

The Directors also thank all members of the Nesco team for their valuable contribution.

For and on behalf of the Board of Directors

Sumant J. Patel

Mumbai, 30 May 2012 Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting their annual report with the audited statement of accounts for the year ended 31 March 2011.

2010-11 2009-10

1. Financial Results: Rs. Rs,

Income 1,448,689,517 1,198,196,927

Profit before tax 1,001,168,289 787,277,164

Provision for tax 315,000,000 225,000,000

Net Profit 686,242,602 550,084,657

Balance brought forward 5,000,000 5,000,000

Amount available for appropriations 691,242,602 554,767,877

Appropriations:

i) Dividend 35,229,980 10,568,994

ii) Tax on Proposed Dividend 5,851,347 1,755,510

iii) Transfer to General Reserve 632,836,771 537,443,373

Surplus carried forward to Profit & Loss Account 5,000,000 5,000,000

2. Dividend:

Your Directors are pleased to recommend a dividend of 25% (15% previous year) on the increased capital of 14,091,992 equity shares after issue of 1:1 bonus shares last year. This would involve a cash outflow of Rs.41,081,327 inclusive of dividend tax.

It is our Companys policy to pay dividends which can be sustained in the years to come, while considering the Companys goal to finance its expansion plans from internal funds as far as possible.

3. Year in Retrospect:

During the year Company achieved a turnover of Rs.1,448,689,517 as compared to Rs. 1,198,196,927 in previous year, an increase of 21%. The PBT was Rs. 1,001,168,289 as compared to Rs. 787,277,164 in previous year, an increase of 27%. Earnings per share amounted to Rs.49 on doubled equity capital after issue of bonus shares (previous year Rs.78). The Companys reserves increased from Rs.1,574,900,517 to Rs.2,127,062,258.

During the year, the Company paid an amount of Rs. 372,643,007 by way of various taxes and duties.

Divisional Performance:

a) Bombay Convention & Exhibition Centre:

Bombay Convention & Exhibition Centre income was Rs.656,229,418 compared to Rs.540,429,225 in the previous year, an increase of 21%.

Over 105 conventions & exhibitions were held in our Centre.

During the year, the Company spent Rs.48,528,217 (previous year Rs.42,869,185) on capital expenses, repairs, modernization and upgradation of the four convention & exhibition centre halls covering an area of over4,50,000 sq. ft.

b) Nesco IT Park and Realty Division:

Income from IT Park and Realty Division increased from Rs.229,549,115 to Rs.516,168,392.

As regards IT Building no.3 admeasuring about 800,000 sq., construction work is completed and internal finishing work is going on. So far the Company has incurred capital expenditure of Rs.788,942,710 on this project.

c) Indabrator- Industrial Capital Goods Group:

In the year under review, the Industrial Capital Goods segment did not pick up as was expected but in fact showed negative growth in the country as many corporates deferred their plans for capital investment. Besides, several customers could not take delivery of equipment ordered by them. As a result, income was Rs.168,210,331 as compared to Rs.248,305,826 in previous year.

d) Income from Investments:

Income from investments and other income was Rs. 108,081,376 (previous year Rs. 179,912,761). Due to economic slow down in 2008-09, the interest rates had reduced significantly. As most of the Companys investments are in debt funds, the income was lower, at Rs. 70,928,951 (previous year Rs. 103,043,900) even though the amount invested was higher.

Finance:

Your Company had no debt as on 31 March 2011. Companys liquid resources (FDs, FMPs, MFs, cash & bank balances) increased by 24% to Rs.1,687,436,427 from Rs. 1,358,883,404. General reserves increased from Rs. 1,574,900,517 to Rs.2,136,765,184.

Your Company has neither accepted any deposits from the public during the year nor are any deposits outstanding for repayment.

4. Management Discussion and Analysis:

a. Bombay Convention & Exhibition Centre, the largest centre in India in the private sector, has become the most popular venue for conventions & exhibitions, with all world leading organizers holding their events in our centre. Its space utilization is better than world average. The Company is in the process of finalizing its expansion plans for which a world leading American architect firm has been appointed. Our Company hopes to start construction of the first new convention & exhibition hall before the end of this financial year. We expect our Convention & Exhibition Centre revenues to grow in 2011 -12.

b. Nesco IT Parks third building is nearing completion: construction work is over, internal finishing is now in progress. Company expects some revenues from IT building 3 in 2011 -12 and full occupancy in 2012-13. A leading American architect firm has been appointed for subsequent IT buildings, designs for IT building 4 are under finalization. We expect to start work on IT building 4 by December 2011.

c. In a slowdown, capital goods are the first to be affected and last to pick up. This segment is now showing positive trend, inflow of orders is increasing, the Company expects good growth in 2011-12 in its Indabrator Division.

d. Now that interest rates are going up, our Investment income is likely to be higherthan previous year.

5. Internal Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company also follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor expectations and budgeted results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the Internal Auditors. The internal audit is conducted at various locations of the Company and covers all the key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

6. Safety, Health and Environment:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. Infact your Companys goal are: no accidents, no harm to people and no damage to environment. The health and medical services are accessible to all employees through well equipped occupational health centers at all manufacturing facilities. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing _facilities._

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

7. Directors:

Mr. Mahendra K Chouhan and Mr. Mohan P Parikh retire by rotation at the ensuing annual general meeting and being eligible offer themselves for reappointment. The profile of the Directors to be reappointed at the annual general meeting is given in the annexure to the notice. There are no other changes in the Board of Directors of the Company.

8. Directors Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that to the best of their knowledge and belief and according to the information and explanations available to them

(i) In the preparation of the annual accounts the applicable accounting standards have been followed.

ii) Appropriate accounting policies have been selected and supplied consistently and have made judgments that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31.03.2011 and of the profit of the Company for the year ended on that date;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The annual accounts have been prepared ongoing concern basis.

9. Corporate Governance:

As required by Clause 49 of the listing agreement of stock exchange, a report on corporate governance and a certificate from M/s. Shah & Co., Chartered Accountants confirming compliance with requirement of corporate governance are given in an annexure which forms part of this report

10. Corporate Social Responsibility:

Nesco group continued to increase its activities in the rural social sector. In the education field, after setting up an English medium school in a village, further assistance is being given to upgrade and expand this school. Proposal is under consideration to impart training in entrepreneurship. Students from needy families are being given scholarships. In the health field, our Company assisted hospitals and health projects. Our CSR group monitors these activities.

11. Auditors:

Shah & Co., Chartered Accountants, retire as auditors of the Company on the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The members are requested to appoint auditors for the current year and fix their remu neration.

12. Conversion of energy, technology absorption, foreign exchange earning and outgo:

The Company is undertaking the necessary energy conservation activities in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988.

13. Particulars of Employees:

As required under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (particular of employees) Rules, 1975, the name and other particulars are set out in the Schedule 13 note 11A (a)

14. Acknowledgment:

The Directors thankfor the support received from the shareholders, customers, vendors and bankers. The Directors also thank all members of the Nesco team for their valuable contribution.

For and on behalf of the Board of Directors

Sumant J. Patel

Mumbai, 27 May 2011 Chairman & Managing Director




Mar 31, 2010

The Directors present their 51st annual report togetherwith the audited statement of accounts for the year ended 31 March 2010.

1. Financial Results:

2009-10 2008-09 Rs, Rs.

Income 1,198,196,927 946,913,649

Profit before tax 787,277,164 460,777,730

Provision for tax 225,000,000 145,000,000

Net Profit 550,084,657 328,030,027

Balance brought forward 5,000,000 5,000,000

Amount available for appropriations 554,767,877 333,992,292

Appropriations:

i) Dividend 10,568,994 8,455,195

ii) Tax on Proposed Dividend 1,755,510 1,436,960

iii) Transfer to General Reserve 537,443,373 319,100,137

Surplus carried forward to Profit & Loss Account 5,000,000 5,000,000

2. Bonus Issue:

It has been our Companys policy to enhance shareholder value. Shareholders will recollect that Company had made a 1:1 bonus issue in 2006. In view of the improved performance, the Directors had, in the 29 May 2010 Board meeting, again recommended a 1:1 bonus issue. Authorized share capital of the Company to be increased from Rs. 7,50,00,000 to Rs. 15,00,00,000. Due to recent introduction of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the Company was required to complete all formalities within two months from the date of passing of the board resolution. Accordingly the Company had the resolutions for issue of bonus shares and increase in authorized capital approved by postal ballot and the bonus shares were listed effective from 29 July 2010.

3. Dividend:

Your Directors, in the Board meeting held on 11 August 2010 have recommended a dividend of 15%, Rs. 1.50 per equity share (previous year 12%, Rs. 1.20 per equity share), on the increased capital of 14,091,992 equity shares of Rs. 10/- each, amounting to Rs. 21,137,988 (previous year Rs. 8,455,195). In the annual accounts, the Company has made provision for dividend amount of Rs. 10,568,994 and tax on proposed dividend of Rs. 17,55,510, the balance dividend amount of Rs. 10,568,994 and the balance tax on proposed dividend of Rs. 17,55,510 will be given effect in the financial year 2010-2011.

4. Management Discussion and Analysis:

i) Overview

During the year Company achieved a turnover of Rs.1,198,196,927 as compared to Rs.946,913,649 in previous year an increase of 26%. The PBT was Rs. 787,277,164 as compared to Rs. 460,777,730 in previous year, an increase of 71%. Earnings per share amounted to Rs.79 (previous year Rs.47). The Companys reserves increased from Rs. 1,038,022,585 to Rs. 1,574,900,517.

ii) Divisional Performance

During the year 2009-10, Companys all business groups were profitable.

Invoicing 2009 - 10 2008 - 09 Rs. Rs.

Services Group:

Bombay Convention & Exhibition Centre, Nesco IT Park and

Realty Group 769,978,340 571,375,972

Industrial Capital Goods Group:

Indabrator 248,305,826 279,608,347

Income from Investments & Other Income 179,912,761 95,929,330

Total 1,198,196,927 946,913,649

a) Bombay Convention & Exhibition Centre

Bombay Convention & Exhibition Centre income was Rs.540,429,225 compared to Rs.349,615,729 in the previous year, an increase of 54%.

New organizers who hosted their convention & exhibitions at our Convention & Exhibition Centre in 2009-10 include: Messe Nurnberg; Business India Exhibitions; Orbitz Exhibitions and others. For the year 2010-11 new customers will include Messe Munich; Bangkok Exhibition Services; Diversified Communications; Arc Light Events; Electronics Today; Indian Aviation; Infomedia 18; and several others, including those focusing on power & renewable energy.

During the year, the Company spent Rs.42,869,185 (previous year Rs.53,126,909) on repairs, modernization and upgradation of the four convention & exhibition centre halls covering an area of over 4,50,000 sq. ft.

b) Nesco IT Park and Realty Division

Income from IT Park and Realty Division increased from Rs.221,760,243 to Rs.229,549,115.

As regards IT Building no.3 admeasuring about 800,000 sq., construction is under way. So far the Company has spent Rs.442,384,347 on this project.

c) Indabrator-Industrial Capital Goods Group

Income was Rs.248,305,826 as compared to Rs.279,608,347 in previous year. Large value of finished/semi finished goods could not be dispatched due to constraints faced by our customers. Due to economic slowdown, several corporates had deferred or cancelled their plans for capital investments. Now, with the economy improving, orders inflow is improving.

d) Income from Investments

Income from investments and other income was Rs.179,912,761 (previous year Rs.95,929,330).

iii) Future Outlook

2008-09 was a year in which the world went through economic upheavals, affecting growth, demand and new investments. Now the Indian economy is back on growth path.

As a result, our Convention & Exhibition Centre was the first to benefit, its revenues increasing by 54%. We expect revenues to also grow in 2010-11.

Nesco IT Park expects increase in revenues in 2011 -12 once the IT building no.3 is completed.

In a slow down, capital goods are the first to be affected and last to pick up. Now, the new order inflow for Indabrator has started improving, we expect Indabratorto increase revenue this year.

Company was able to improve management of its funds, as a result there was a good increase in the investment income. As interest rates have gone down, investment income may not show significant growth.

5. Finance:

Your Company had no debt as on 31 March 2010.

Companys liquid resources (FDs, FMPs, Debt MFs, etc) increased to Rs.1,358,883,404 from Rs.1,232,004,368. General reserves increased from Rs. 1,038,022,585 to Rs.1,574,900,517.

Your Company has neither accepted any deposits from the public during the year nor are any deposits outstanding for repayment.

6. Internal Control Systems:

Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company also follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor expectations and budgeted results and scrutinizes reasons for deviations in order to take necessary collective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the Internal Auditors. The internal audit is conducted at various locations of the Company and covers all the key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.

7. Safety, Health and Environment:

Your Company recognizes its role in health and safety, as well as its responsibility towards environment and society. Infact your Companys goal are: no accidents, no harm to people and no damage to environment. The health and medical services are accessible to all employees through well equipped occupational health centers at all manufacturing facilities. Safety and security of personnel, assets and environmental protection are also on top of the agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is the focus of operations of the Company. The projects and activities are planned and designed with environment protection as an integral part to ensure a safe and clean environment for sustainable development.

8. Personnel:

Employee relations during the year were cordial and stable.

The Directors appreciate the contributions, dedication and commitment of all employees of Company in achieving the 2009- 2010 results.

9. Listing:

The Companys equity shares are traded both on the National Stock Exchange of India Limited and Bombay Stock Exchange Limited (BSE).

10. Directors:

Dr. Ram S Tarneja and Mr. K. S. Srinivasa Murty retire by rotation at the ensuing annual general meeting and being eligible offer themselves for reappointment. The profile of the Directors to be reappointed at the annual general meeting is given in the annexure to the notice. There are no other changes in the Board of Directors of the Company.

11. Directors Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors confirm that to the best of their knowledge and belief and according to the information and explanations available to them

(i) In the preparation of the annual accounts the applicable accounting standards have been followed.

(ii) Appropriate accounting policies have been selected and supplied consistently and have made judgments that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31.03.2010 and of the profit of the Company forthe year ended on the date;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The annual accounts have been prepared on a going concern basis.

12. Corporate Governance:

As required by Clause 49 of the listing agreement of stock exchange, a report on corporate governance and a certificate from M/s. Shah & Co., Chartered Accountants confirming compliance with requirement of corporate governance are given in an annexure which form part of this report

13. CSR:

Nesco group continued to increase its activities in the rural social sector. Schools are being assisted to expand & modernise; and students from needy families are being given scholarships. Proposals are under consideration to set up new schools in rural areas. For these activities a separate CSR group has been set up.

14. Auditors:

M/s Shah & Co., Chartered Accountants, retire as auditors of the Company on the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The members are requested to appoint auditors for the current year and fix their remuneration.

15. Conversion of energy, technology absorption, foreign exchange earning and outgo:

The Company is undertaking the necessary energy conservation activities in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988.

16. Particulars of Employees:

As required under sub-section (2A) of section 217 of the Companies Act, 1956 read with Companies (particular of employees) rules, 1975, the name and other particulars are set out in the schedule 13 note 11 A(a).

17. Acknowledgment:

Directors wish to express their appreciation for the assistance and co-operation received from the shareholders, employees and all other stakeholders of the Company.

For and on behalf of the Board of Directors

Sumant J. Patel Chairman & Managing Director

Mumbai, 11 August 2010

 
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