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Directors Report of Nitesh Estates Ltd.

Mar 31, 2014

Dear Members,

The Directors present their Tenth Annual Report and the Audited Accounts of the Company for the year ended March 31, 2014.

FINANCIAL RESULTS:

Rupees in Lakh

STANDALONE CONSOLIDATED Particulars 2013-14 2012-13 2013-14 2012-13 Income :

Income from operations 11290 4688 29757 8287

Other Income 189 255 339 530

Total Income 11479 4943 30096 8817

Profit/(Loss) before depreciation 1039 (2679) 3107 (13508)

Less : Depreciation 158 171 171 179

Profit/(Loss) before tax 881 (2850) 2936 (13688)

Less : Income tax 111 388 581 574

Profit / (Loss) after tax 770 (3238) 2355 (14262)

Less: Minority interest & share of profit in Associate 0 - (1830) 56

Net Profit/(Loss) 770 (3238) 525 (14206)

DIVIDEND:

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

PREPARATION OF FINANCIAL STATEMENTS, DIRECTORS'' REPORT ETC.

Members are hereby informed that the Companies Act, 2013 (''the Act, 2013'') has been enacted by the Parliament with efect from April 1, 2014 replacing the Companies Act, 1956. The Rules as required under the various provisions of the Act, 2013 also have been notifed by the Ministry of Corporate Afairs in phased manner along with the new e-forms and formats for fling returns, disclosures, applications with the concerned authorities and also for maintaining statutory documents under the Act, 2013.

Pursuant to the General Circular No. 08/2014 dated April 4, 2014 by the Ministry of Corporate Afairs, it is clarifed that the provisions of the Companies Act, 1956 shall continue to be in force with regard to maintenance of books of accounts, preparations/adoption/ fling of financial statements, Auditors report, Directors'' Report and attachments to such statements and reports for the Financial Year 2013-14. The relevant provisions of the Act, 2013 shall be applicable from the Financial Year 2014-15.

OPERATIONS:

Standalone:

During the year under review the Company could achieve turnover of Rs.11,290 Lakh as against Rs. 4,688 Lakh in the previous year and other income of Rs. 189 Lakh as compared to Rs. 255 Lakh in the previous year. The operations had resulted in a profit of Rs. 770 Lakh as against a loss of Rs. 3,238 Lakh in the last year.

Consolidated:

In compliance with the applicable Clauses of the Listing Agreement with the Stock Exchanges, the Company has prepared Consolidated Financial Statements as per the Accounting Standard on Consolidated Financial Statements (AS 21) issued by the Institute of Chartered Accountants of India.

The Audited Consolidated Financial Statements along with the Auditors'' Report have been annexed to this Annual Report. The total consolidated revenue for the year ended 31st March 2014 amounted to Rs. 30,096 Lakh including other income of Rs. 339 Lakh, as compared to Rs. 8,817 Lakh in the previous year. The Company has achieved a profit after tax of Rs. 2,355 Lakh as compared to previous year loss of Rs. 14,262 Lakh and a Net profit of Rs. 525 Lakh for the year (Previous year Net loss of Rs. 14,206 Lakh), after adjusting the minority interest in subsidiary companies and share of profit/(Loss) from associate company amounting to Rs. (1,830 ) Lakh (Previous year profit Rs. 56 Lakh).

The audited consolidated Balance Sheet as at 31st March, 2014, consolidated profit and Loss account for the year ended as on that date, Cash fow Statement together with the Notes and Reports of Auditors thereon form part of this Annual Report. The financial figures have been regrouped in line with the new Schedule VI disclosure requirements.

Debentures:

During the financial year 2012-13, the Company had issued 6000 - 18.50% Secured Unlisted Redeemable Non-Convertible Debentures of Rs. 1,00,000 each aggregating to Rs. 60,00,00,000 (Rupees Sixty Crores Only) to PHL Finance Private Limited on February 1, 2013 and as per the terms of repayment, the Company had redeemed 400 Debentures of Rs. 1,00,000 each in one quarterly installment of Rs. 4 Crore including interest payable thereon. The value of outstanding Debentures as on 31st March 2014 was Rs. 56 Cr.

SUBSIDIARY COMPANIES:

NITESH HOUSING DEVELOPERS PRIVATE LIMITED (''NHDPL''):

The Company holds 89.9% of equity share capital of this subsidiary.

The financial highlights are:

Figures in Rs. Particulars 2013-14 2012-13

Paid up Capital 9,15,00,000 9,15,00,000

Reserves & Surplus 14,24,54,665 1,90,72,639

Income From Property Development 113,11,94,625 30,80,87,667

Other Income 27,67,216 2,00,60,691

profit/(Loss) Before Tax 15,55,82,026 (96,96,97,994)

profit/(Loss) After Tax 12,33,82,026 (97,06,67,368)

Nitesh Housing Developers Private Limited, as mutually agreed between the Company and the Sole Debenture Holder, HDFC Asset Management Company Limited has completed full redemption of the entire outstanding debentures in multiple tranches. The subsidiary had redeemed the entire 62,00,000 Debentures of Rs. 100 each along with the premium payable thereon in full on March 29, 2014.

NITESH INDIRANAGAR RETAIL PRIVATE LIMITED ( ''NIRPL'' ):

NIRPL is a 100% wholly owned subsidiary of Nitesh Estates Limited.

The financial highlights are:

Figures in Rs. Particular 2013-14 2012-13

Paid up Capital 13,24,80,000 13,24,80,000

Reserves & Surplus 1,11,85,87,660 114,04,66,105

Other Income 3,794 4,482

profit/(Loss) Before Tax (2,18,78,445) (2,16,79,416)

profit/(Loss) After Tax (2,18,78,445) (2,97,79,916)

The Retail Mall project of this Subsidiary at Indiranagar, Bangalore has built up area of 700,000 Sq. Ft. housing a hypermarket, 130 shops, food courts, multiplex with 11 screens and restaurants, at Indiranagar, Bangalore.

During the year, the Subsidiary and Nitesh Estates Limited have executed the Supplementary Agreement to Joint Development Agreement dt. 11.02.2011 with the land owner on February 11, 2014 to give efect to certain modifications in terms and conditions of Joint Development Agreement agreeing for extended period of time and time line for the project.

During the year the Subsidiary had approached the Banks for Term Loan facility of Rs. 300 Crores for fnancing the Retail Mall Project. Accordingly, the loan application is under consideration of the Consortium bankers comprising of Bank of Baroda, Punjab National Bank and Corporation Bank.

NITESH URBAN DEVELOPMENT PRIVATE LIMITED (''NUDPL''):

NUDPL is a 100% subsidiary of the Company.

The financial highlights are:

Figures in Rs. Particulars 2013-14 2012-13

Paid up Capital 6,58,20,000 6,58,20,000

Reserves surpules 9,78,83,249 4,88,45,859

Income from operation 64,22,8 9,832

Other Income 39,53,0106 1,00,677

Profit/(Loss) Before Tax 6,11,77,390 (8,92,68,066)

ProfJt/(Loss) After Tax 4,90,37390 (9,81,67,785)

Nitesh Cape Cod project being executed by the Subsidiary has obtained all the approvals from the relevant authorities and the project is progressing well.

As reported in the last report, JM Financial Property Fund II had invested in the Subsidiary by way of Unsecured Zero Coupon Compulsorily Convertible Debentures aggregating to Rs. 35 Cr. The investor and Subsidiary is exploring possibility of including another project Nitesh Palo Alto. Necessary applications have been made with the relevant authorities for project approval.

NITESH PROPERTY MANAGEMENT PRIVATE LIMITED (''NPMPL''):

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

The financial highlights are:

Figures in Rs. Particulars 2013-14 2012-13 Paid up Capital 1,00,000 1,00,000

Reserves & Surplus (1,77,840) (58,42,981)

Current Liabilities 2,32,57,327 1,92,91,591

Income from Operations 4,91,17,379 3,71,47,297

Other income 81,60,100 6,78,297

profit/(Loss) Before Tax 57,63,837 (60,24,210)

profit/(Loss) After Tax 56,65,141 (64,36,647)

KAKANAD ENTERPRISES PRIVATE LIMITED (''KEPL''):

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

The status of the Subsidiary :

Figures in Rs. Particulars 2013-14 2012-13

Paid up Capital 1,00,000 1,00,000

Reserves & Surplus (4,73,107) (3,58,123)

Income Nil Nil

profit/(Loss) Before Tax (1,14,984) (1,08,083)

profit/(Loss) After Tax (1,14,984) (1,08,083)

The Board of the Subsidiary is looking for financially viable projects. Once the suitable projects are identified, additional capital will be infused and with the help of income generated out of such identified project, the net worth erosion will be avoided.

During the year, the Subsidiary has mortgaged its immovable property situated at Bolghatty, Kanaynnur Taluk District in favour of the Corporation Bank to partly secure a loan facility of Rs. 7.50 Crore extended to Nitesh Estates Limited, Holding Company. The Subsidiary has also provided a corporate guarantee to secure the said loan facility.

EXEMPTION FROM ATTACHING OF SUBSIDIARIES ACCOUNTS :

Pursuant to the general permission accorded by Ministry of Corporate Afairs, vide their Circular No. 2/2011 dated February 8, 2011 the Company is not attaching the Annual Reports of the Subsidiary Companies as approved by the Board at their meeting held on May 28, 2014. However, any shareholder who wishes to have information on the Subsidiary Companies or a copy of the Annual Report of the Subsidiary Companies may write to the Company requesting for the same.

The Statements pursuant to Section 212 of the Companies Act, 1956 has been annexed with the Standalone financials of the Company.

MATERIAL NON-LISTED INDIAN SUBSIDIARY:

Pursuant to Clause 49 of the Listing Agreement, Nitesh Housing Developers Private Limited, Nitesh Urban Development Private Limited and Nitesh Indiranagar Retail Private Limited will be treated as a material non-listed Indian subsidiary for the financial year 2013-14. Necessary steps are being taken as required under the Listing Agreement.

RITZ CARLTON

Your Company is the co-promoter and developer of the luxury hotel The Ritz Carlton, Banglore, owned by Nitesh Residency Hotels Private Limited, an associate company. The hotel has commenced its operations from 30th October, 2013.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, to the best of their knowledge and belief, confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date;

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

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

BOARD''S RESPONSE TO AUDITORS'' OBSERVATION:

B S R & Co. LLP, the Statutory Auditors'' for the financial year ended 31st March, 2014 have qualified as below in their Audit Report for the financial year 2013-14 :

1. As stated in note 37 of the financial statements, the Company has advanced an amount aggregating Rs. 157,000,000 as at 31 March 2014, to various parties for purchase/joint development of land/properties. Considering the timeline of these advances, the same should have been converted into acquired land / joint development agreements or these amounts should have been recovered. Management continues to believe that these advances have been made to parties for which a joint development agreements / acquisition of land will be consummated and in the event that it does not consummate, these advances can be recovered. However, in the absence of sufcient documentation to justify the timing around when these advances are capable of being converted into joint development agreements / acquisition of land and considering that they are not secured, we are unable to comment on the recoverability of these advances and the consequential efect, if any, on the financial statements for the year ended 31 March 2014.

Board''s Reply to Auditors'' Qualification:

The Company has advanced an amount aggregating Rs. 157,000,000 as at 31st March 2014, to various parties for purchase/joint development of land/ properties. In respect of these advances, acquisition of land and obtaining approvals for development of projects is under progress. Management continues to believe that these advances have been made to parties with which a joint development agreements / acquisition of land will be consummated and in the event that it does not consummate, these advances can be recovered.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956:

Information required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure I and forms part of this Report.

Information in terms of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure II and forms part of this Report.

CORPORATE GOVERNANCE REPORT:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed by the Listing Agreement with the Stock Exchanges have been complied with.

The Management Discussion & Analysis Report is attached as Annexure III and forms part of this Report.

A Report on Corporate Governance forming part of the Directors'' Report, along with a certifcate from the Practicing Company Secretary confirming compliance, is annexed as Annexure IV and forms part of this Report.

DIRECTORS:

During the year Mr. Ranga Iyer resigned from the Board efective 29th Aug 2013. Mr. Sudhakar Rao, who was appointed as an Additional Director on 30th Aug 2013, vacated ofce on 27th Sept. 2013 as per Sec . 260 of the Companies Act, 1956. The Board at their meeting held on 27th Sept. 2013 appointed him as an Additional Director.

Mr. M. D. Mallya was appointed as an Additional Director on 12th Feb 2014.

As per Section 256 of the erstwhile Companies Act, 1956, Mr. Mahesh Bhupathi will retire by rotation and pursuant to the Companies Act, 1956 and the Companies Act, 2013, would be eligible for reappointment.

The Ministry of Corporate Afairs (MCA) during the year, had notifed the provisions relating to selection, manner of appointment, roles, functions, duties, reappointment of independent directors (IDs) with efect from 1st April 2014. Further, in terms of the provisions

of the Act 2013, IDs are eligible to hold ofce for a term upto five consecutive years and shall not be liable to ''retire by rotation''. It is, therefore, proposed to appoint Mr. G.N.Bajpai, Mr. Jagdish Capoor, Mr. Ashok T. Aram and Mr. M.D. Mallya (who was appointed by the Board will vacate ofce at the ensuring Annual General Meeting and would be eligible for reappointment pursuant to the provisions of the Act, 2013) as Independent Directors for the frst term of five consecutive years at the ensuing Annual General Meeting.

Mr. Sudhakar Rao, who was appointed by the Board will vacate ofce at the ensuing Annual General Meeting and will be eligible for appointment under the Companies Act, 2013.

Necessary resolutions will be placed before the ensuing Annual General Meeting.

The Board also reconstituted the Committees of Board in line with the provisions of Companies Act, 2013, at their meeting held on

27th Sept 2013:

A. Audit Committee:

- Mr. Jagdish Capoor

- Mr. G. N. Bajpai

- Mr. Sudhakar Rao

- Mr. L. S. Vaidyanathan

B. Stakeholders Relationship Committee:

- Mr. Jagdish Capoor

- Mr. L. S. Vaidyanathan

C. Nomination & Remuneration Committee (formerly ''Remuneration Committee''):

- Mr. Jagdish Capoor

- Mr. G. N. Bajpai

- Mr. Sudhakar Rao

- Mr. Nitesh Shetty

D. Corporate Social Responsibility:

The Board also constituted CSR Committee, with the following members : Mr. Sudhakar Rao Mr. Nitesh Shetty Mr. L. S. Vaidyanathan

The management of the Company is committed to the development of weaker sections of the society and has been contributing for cause of women education, development of art etc.

Mr. M.D. Mallya, Independent Director was appointed as an additional member on the Audit Committee and Nomination and Remuneration Committee in the Board meeeting held on 28th May, 2014. The Board also noted the declaration by Mr. Sudhakar Roa, as Non-Executive Non-Independent Director.

AUDITORS:

B S R & Co. LLP, Chartered Accountants, Bangalore (Firm Regn.101248W) hold ofce up to the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

ACKNOWLEDGEMENT:

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

Your Directors also place on record their appreciation of the significant contribution made, and support extended, by the employees of the Company at all levels during the year.

For and on behalf of the Board of Directors Place : Bangalore NITESH SHETTY Date : May 28, 2014 Chairman & Managing Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their Seventh Annual Report and the Audited Accounts of the Company for the year ended March31,2011.

FINANCIAL RESULTS:

Rupees in Lakhs

Particulars STAND ALONE CONSOLIDATED

2010-11 2009-10 2010-11

Income:

Income from operations 9771 7113 12411

Other Income 1068 2528 1995

Total Income 10839 9641 14406

Profit before depreciation 356 690 1634

Less: Depreciation 66 55 66

Profit before tax 290 635 1568

Less: Income tax (87) 167 349

Profit after tax 377 468 1219

Less: Minority interest & share of loss in Associate - - 127

Net Profit 377 468 1092

Profit& Loss account at the beginning of the year 581 724 (244)

Available for appropriation 958 1192 848

Appropriation:

Dividend on Equity Shares Re. 0.25 pro-rata period paid-up 344 - 344

Tax on Dividend 57 - 57

Total Appropriation 401 - 401

Capitalisation of Issue of Bonus Shares - 610 -

Profits Loss Account Balance at the end of the year 557 581 447

DIVIDEND:

The Board of Directors are pleased to recommend payment of a dividend of Rs. 0.25 per equity share of the face value of Rs. 10/- each which, if approved by the Members at the Annual General Meeting, will involve an Appropriation of Rs. 344 Lakh towards Dividend and Rs. 57 Lakh as Dividend DistributionTax resulting in a total outflow of Rs. 401 Lakh.

OPERATIONS:

Stand Alone:

During the year under review the Company achieved a turnover of Rs. 9,771 Lakh as against Rs. 7,113 Lakh in the previous year and other income of Rs.1,068 Lakh as compared to Rs. 2,528 Lakh in the previous year. The Company has earned a net profit of Rs. 377 Lakh as against Rs. 468 Lakh in the last year.

Consolidated:

In compliance with the applicable Clauses of the Listing Agreement with the Stock Exchanges, the Company has prepared Consolidated Financial Statements as per the Accounting Standards on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements atong with the Auditors Report have been annexed to this Annual Report.

Since the audited financial statements for the year ended March 31, 2011 are the first published by the Company in compliance with Clause41 of the Listing Agreement, the corresponding figures forthe year ended March 31,2010 are not provided.

The total consolidated revenue for the year ended 31st March 2011 amounted to Rs 14,406 Lakh including other income of Rs. 1,995 Lakh. The Company earned a profit after tax of Rs. 1,219 Lakh and a Net profit of Rs. 1,092 Lakh after adjusting the minority interest in subsidiary companies and share of loss from associate company aggregating to Rs. 127 Lakh.

The Company has repaid an amount of Rs.15,054 Lakh in discharge of all debts on consolidated basis incurred by it prior to the IPO, except for Loan of Rs. 6370 Lakh. The debt gearing is significantly low at 0.17 as on 31st March 2011.

INITIAL PUBLIC OFFERING:

As reported in our previous Annual Report, your Company entered the capital market with the Initial Public Offer (IPO) of 75,000,000 Equity Shares of Rs. 10/-each, through 100% Book Building Process in April 2010, for cash at a price of Rs. 54 per Equity Share including a premium of Rs. 44/-per share. The issue was fully subscribed and the Equity Shares were listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited on May 13,2010.

SUBSIDIA RY COMPANIES:

A. SUBSIDIARIES:

Nitesh Housing Developers Private Limited:

This company is a 89.9% subsidiary of the Company. It is presently executing 4 residential Projects. The financial highlights are:

Rs. in thousands

Particulars Amount

Paid up Capital 50,000

Share Application money 906,436

Reserves & Surplus 85,421

Secured Loans 634,033

Unsecured Loans 100

Income From Property Development 55,540

Sale of Villa Plots 193,324

Other Income 92,681

Profit Before Tax 130,909

Profit After Tax 87,312

Nitesh Indiranagar Retail Private Limited:

This company is a 100% subsidiary of the Company. It commenced its business during the year under review. The financial highlights are:

Rs. in thousands

Particulars Amount

Paid up Capital 11,600

Share Application money 1,369,622

Reserves & Surplus 103,500

Unsecured Loans 12,238

Effective Feb 10,2011 the entire paid up capital is held by the Company including one share being held by its nominee.

The Company has finalized the deal with Mr. George Thangaiah for the development of a Mall project at Indiranagar, Bangalore on February 11, 2011.The total built up area of the Mall will be 1.14 million sq feet. The sharing ratio between the land owner and the Company is 50:50. The construction of the mall is expected to be completed by 2014, barring unforeseen circumstances.

Nitesh Kochi Projects and Developers Private Limited:

This company is a 100% subsidiary of the Company. The entire paid up capital of this company was acquired on Dec 20,2010. It is yet to commence commercial operations.The financial highlights are:

Rs. in thousands

Particulars Amount

Paid up Capital 100

Share Application money 11,585

Land (Inventory) 26,152

Nitesh Urban Developers Private Limited (formerly known as Nitesh Boat Club Private Limited): This company is a 51 % subsidiary of the Company. It is yet to commence commercial operations.

Nitesh Property Management Private Limited:

This company is a 100% subsidiary of the Company. It has entered into Maintenance Contracts with the flat owners of all the projects developed by the Company, with effect from April 1, 2011. This company is expected to earn service fees of Rs.200 Lakh during the currentfinancialyearthrough maintenance contracts.

B. CONSOLIDATED ACCOUNTS:

The audited consolidated Balance Sheet as at March 31,2011, consolidated Profit and Loss account for the year ended on that date, Cash flow together with the Notes and Reports of Auditors thereon form part of this Annual Report.

Pursuant to the general permission accorded by Ministry of Corporate Affairs, vide their Circular No. 2/2011 dated February 8,2011 the Company is not attaching the Annual Reports of the Subsidiary Companies. However, any shareholder who wishes to have information on the Subsidiary Companies or a copy of the Annual report of the subsidiary companies may write to the Company requesting for the same.

C. MATERIAL NON-LISTED INDIAN SUBSIDIARY:

Pursuant to Clause 49 of the Listing Agreement, the turnover of Nitesh Housing Developers Private Limited exceeds 20% of the consolidated turnover of the Company. It will be treated as a material non-listed subsidiary for the financial year 2011 -12. Necessary steps are being taken as required under the Listing agreement.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors, to the best of their knowledge and belief, confirm that :-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made 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 31,2011 and of the profit of the Company for the year ended on that date;

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

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

RESPONSE TO AUDIT OBSERVATIONS:

1. Paragraph 5 of the Auditors Report:

During the year ended March 31, 2011, the Company purchased a developed property (Apartment) from a related party. On identification of a suitable buyer for the Apartment, in the normal course of its business as a developer of properties, the Company has sold the Apartment to the other third party buyer at a higher price consideration. The transaction being unique in nature comparative figures are not available. Auditor's comments are self-explanatory in this regard.

2. Paragraph 6 of the Auditors Report:

During the Year the Company recognized Deferred Tax Asset on the basis of future taxable income expected out of certain ongoing & proposed projects. In respect of the ongoing projects, the Company has already received necessary approvals from the concerned statutory authorities for commencement of construction of the project and the Company has started sale bookings in respect of the said ongoing projects. The Company is in the process of executing Agreement of Sale with the buyers for the aforesaid projects. The Management is reasonably confident of project execution and profits to be earned thereon. Based on the above facts, the Company has recognized the Deferred Tax Asset.

Clause IV of the Annexure to the Auditors Report:

In order to strengthen the internal control systems for timely documentation, the Company is implementing SAP system. Further the Company has appointed Deloitte Touch Tomashu Private Limited as Internal Auditors of the Company towards ensuring an effective internal control system.

Clause V(b) of the Annexure to the Auditors Report: The observation by the Auditors is self explanatory. Clause XI of the Annexure to the Auditors Report:

During the course of the business there have been some delays in repayment of dues and interest thereon to the Financial Institutions and Banks on account of tight liquidity conditions. The amounts have been subsequently repaid and there are no outstanding dues at the end of the financial year, management is taking steps to ensure timely repayment of all moneys due and payable to Financial Institutions and Banks.

Clause XV of the Annexure to the Auditors Report:

The Company has availed loans from the Financial Intuitions for execution of certain projects. However these projects were assigned to other companies along with the loan availed against the projects. As per the agreed terms with the Financial Intuitions, until repayment of the loan by the said companies, the Company is obliged to be a guarantorfor repayment of the loans.

Clause XVI of the Annexure to the Auditors Report:

The project, for which the term loan was availed, was experiencing some delay. Hence, the Company deployed the amount temporarily forcorporate purposes.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956:

Information required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, is given in Annexure I and forms part of this Report.

Information in terms of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure II and forms part of this Report.

CORPORATE GOVERNANCE REPORT:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed by the Listing Agreement of the Stock Exchanges on which the Company's shares are listed, have been complied with.

The Management Discussion & Analysis Report is attached as Annexure III and forms part of this Report.

A Report on Corporate Governance forming part of the Directors' Report, along with a certificate from the Practicing Company Secretary confirming compliance, is annexed as Annexure IVand forms part of this Report.

AWARDS AND RECOGNITION:

Your Directors take pleasure in informing you that the Company received the CNBC Award CNBC AWAAZ, CRISIL, CREDAI Real Estate Awards2010 forthe best Luxury Residential Project, forNitesh Garden Enclave.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. G.N. Bajpai and Mr. James Stephen Brent, Directors, will retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Board of Directors recommend their reappointment.

AUDITORS:

The Company's Auditors, S.R. Batliboi & Associates, Chartered Accountants,(Firm Registration No. 101049W) hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate from them pursuant to Section 224(1 B) of the Companies Act, 1956, confirming their eligibility for appointment as Auditors of the Company.

ACKNOWLEDGEMENT:

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

Your Directors also place on record their appreciation of the significant contribution made, and support extended, by the employees of the Company at all levels during the year.

For and on behalf of the Board of Directors

Place: Mumbai NITESH SHETTY

Date: 30th May, 2011 Chairman & Managing Director














Mar 31, 2010

The Board of Directors have great pleasure in presenting the Sixth Annual Report on the performance of your Company for the financial year ended March 31, 2010 along with the Audited Statement of Accounts.

1. FINANCIAL RESULTS:

The performance of the company for the financial year ended March 31, 2010 is given hereunder:

Rs. in Lakhs

Particulars 2009-2010 2008-2009

Income :

Income from operations 7113 8679

Other Income 2528 10

Total Income 9641 8689

Profit before depreciation 690 496

Depreciation 55 73

Profit before tax 635 423

Provision for income tax 38 279

Provision for deferred tax 129 (149)

Provision for fringe benefit tax NA 8

Profit after tax and before prior period items 468 276

Prior period items - 9.34

Net Profit for the year 468 260

2. DIVIDEND:

With a view to augment the resources of the Company, the Directors do not recommend for payment of dividend.

3. CURRENT SCENARIO AND FUTURE PROSPECTS:

The financial year 2009-10 was a challenging one due to global and domestic economic downturn. Job losses and the resultant dip in consumer confidence affected the sales of homes in many of our markets. Volatile market conditions also delayed the launch of some of our new projects during this period.

The financial year 2010-11 is expected to be a better year for the industry in general and company in specific. With the consumer sentiment improving, the demand for real estate barring unforeseen circumstances is expected to go up considerably. The company, however, has recognized the changed dynamics of the industry and has reacted swiftly to modify the product mix and pricing strategies to suit the market conditions better.

4. BRAND IMAGE OF "NITESH ESTATES":

With a firm belief that brand equity will be one of the key differentiators for consumers, the Company has been working towards creating a lasting brand name. The result is visible: Nitesh Estates has, in a short span of time, emerged as one of the leading brands south of Vindhyas.

Consistent with this belief, the company continued its brand building exercise in the last fiscal also. By virtue of creating some of the finest addresses, the positioning of the brand has been in the premium segment. With the Company aggressively expanding into mid-segment housing, the focus going forward is to make the brand more broad-based. The Association of the brand with the premium products is proving to be beneficial for attracting customers even in the Mid Segment.

5. ONGOING PROJECTS:

a. Nitesh Forest Hills

b. Nitesh Flushing Meadows

c. Nitesh Wimbledon Gardens

d. Nitesh Hyde Park

e. Nitesh Columbus Square

f. The Ritz-Carlton Brand Hotel

6. FUTURE PROJECTS:

a. Nitesh Fischer Island

b. Nitesh Key Biscayne

c. Nitesh Roland Garros

d. Nitesh Mall

7. INITIAL PUBLIC OFFERING (IPO)

The company has made a public issue of 75,000,000 Equity Share of Rs. 10 Each for cash at a price of Rs. 54 per Equity Share (including a Share Premium of Rs.44 per Equity Share) aggregating to Rs. 4,050.00 Million in the Month of April 2010 vide prospectus dated May 3, 2010 . The issue was fully subscribed. The Shares of the Company are listed in the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. The company has 11,383 Share Holders.

8. QUALITY:

Our Companys Quality System is compatible with ISO 9001:2008 and has been certified by BUREAU VERITAS. The certificate is valid till 20th April 2012.

9. FIXED DEPOSITS:

The Company has not accepted any deposits during the year. There are no deposits repaid during the year or any unclaimed deposits with the company.

10. HUMAN RESOURCES:

In order to meet the needs of the rapidly growing business, the organizations HR related participations and process are currently under review.

11. BOARD OF DIRECTORS:

Mr. Subir Raha, an Independent Director of the Company passed away on February 1, 2010. Mr. Subir Raha was an invaluable member of the Board of the Company. The Board of Directors has conveyed to his family its deep sense of grief at his untimely passing away. The Board also places on record the significant contributions made by Mr. Subir Raha during his tenure as a Director of the Company.

In accordance with the Articles of Association of the Company Mrs. Pushpalatha V Shetty, Mr. Darius Udwadia, & Mr. Mahesh Bhupathi, retires by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board at its Meeting held on 28
12. AUDITORS:

M/s. S.R. Batliboi & Associates, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible for re-appointment offers themselves for re-appointment as the Statutory Auditors of the Company.

M/s. S.R. Batliboi & Associates, Chartered Accountants, have confirmed that the appointment if made will be in accordance with the limitations prescribed under Sections 224(1 B) of the Companies Act, 1956.

13. EXPLANATION TO AUDITORS REPORT:

Clause V(b) of the Annexure to the Auditors Report

The auditors comment in their report is self explanatory.

Clause IX(a) & XI of the Annexure to the Auditors Report

During the course of the business there have been certain delays in payment of Service Tax, Withholding Taxes, repayment of dues and interest thereon to the financial instructions on account of tight liquidity conditions.

Clause XV of the Annexure to the Auditors Report

Regarding Guarantee given by the company. The Company has availed loans from the Financial Intuitions for execution of certain projects. However these projects were assigned to other companies along with the loan availed against the projects. As per the agreed terms with the financial intuitions, till the time the loan is been repaid by the companies took over the project, Nitesh Estates Limited is bound to be a guarantor to the loans.

Clause XVI of the Annexure to the Auditors Report

Utilization of Term Loan: The loan was availed and utilized during the financial year 2008-09 and it is outstanding as on the date of Balance Sheet. Subsequently the Company has repaid the said loan..

14. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the Annual Accounts for the year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) 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 the Company as at March 31, 2010 and of the profit of the Company for the said period;

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

(iv) The directors have prepared the accounts for the financial year ended March 31, 2010, on a going concern basis.

15. CORPORATE GOVERNANCE:

A detailed report on Corporate Governance has been included as an attachment to this Report.

16. PARTICULARS OF EMPLOYEES:

Information as per sub-section (2A) of Section 217 of the Companies Act 1956, red with the Companies (Particulars of Employees) Rules 1975 forming part of the Directors Report for the year ended 31st March 2010 is contained in Annexure "A".

17. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to Conservation to energy, technology absorption and foreign exchange earnings & outgo pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956, red with Companies (Disclosure of Particulars in Report of Board of Directors) Rule, 1988, is contained in Annexure "B".

18. SUBSIDIARY COMPANIES

M/s Nitesh Indiranagar Retail Private Limited, and M/s Nitesh Housing Developers Private Limited are subsidiaries of our Company. M/s Nitesh Estates Ltd., hold 11,59,900 equity shares of M/s Nitesh Indiranagar Retail Private Limited and 44,94,900 equity shares of M/s Nitesh Housing Developers Private Limited.

19. ACKNOWLEDGMENTS:

Your Directors are pleased to place on record their sincere appreciation for 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 Share Holders. Your Directors desire to place on record their appreciation of the dedicated services and valuable contribution by the employees of the company at all levels.

For and on behalf of the Board of Directors of M/s. Nitesh Estates Limited

Place: Bangalore NITESH SHETTY

Date : August 11,2010 CHAIRMAN

 
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