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Directors Report of Nitesh Estates Ltd.

Mar 31, 2016

The Directors present their Twelfth Annual Report and the standalone and consolidated annual audited accounts of the Company for the year ended March 31, 2016.

1. FINANCIAL RESULTS:

Rupees in Lakh

Particulars

STANDALONE

CONSOLIDATED

2015-16

2014-15

2015-16

2014-15

Income :

Income from operations

8712

12501

25351

28760

Other Income

193

41

751

298

Total Income

8905

12542

26102

29058

Profit/(Loss) before depreciation

(2039)

2614

(3643)

4029

Less : Depreciation

132

117

1418

133

Profit/(Loss) before tax

(2171)

2497

(5061)

3896

Less : Income tax

(34)

474

(9)

803

Profit / (Loss) after tax

(2136)

2023

(5052)

3093

Less: Minority interest & share of profit/ (loss) in Associate

0

0

(2220)

(2857)

Net Profit/(Loss)

(2137)

2023

(7272)

236

2. DIVIDEND:

The Directors could not recommend dividend as the Company has incurred loss during the current financial year and it is proposed to conserve the reserves for the projects growth and sound financial position of the Company.

3. State of Company''s Affairs:

I. Standalone:

During the year under review the Company could achieve a turnover of Rs. 8,712 Lakh as against Rs. 12,501 Lakh in the previous year and other income of Rs. 193 Lakh as compared to Rs. 41 Lakh in the previous year. The operations had resulted in a loss of Rs. 2,039 Lakh as compared to previous year profit of Rs. 2,614 Lakh.

II. Consolidated:

In compliance with the applicable provisions of Companies Act, 2013 and regulations of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has prepared Consolidated Financial Statements and as per the applicable Accounting Standards issued by the Institute of Chartered Accountants of India.

The Audited Consolidated Financial Statements along with the Auditors'' Report have been annexed to the Annual Report. The total consolidated revenue for the year ended 31st March 2016 amounted to Rs. 26,102 Lakh including other income of Rs. 751 Lakh, as compared to Rs. 29,058 Lakh in the previous year. The Company has incurred a loss after tax of Rs. 5,052 Lakh as compared to previous year profit of Rs. 3,093 Lakh and a Net loss of Rs. 7,272 Lakh for the year (Previous year Net profit of Rs. 236 Lakh), after adjusting the minority interest in subsidiary companies and share of Profit/(Loss) from associate company amounting to Rs.(2,220) Lakh, as compared to the previous year Rs.(2,857) Lakh.

The audited consolidated Balance Sheet as at 31st March, 2016, consolidated Profit and Loss account for the year ended as on that date, Cash flow Statements together with the Notes and Reports of Auditors thereon forms part of the Annual Report. The financial figures have been regrouped in line with the Schedule III of Companies Act, 2013 disclosure requirements.

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

a. Nitesh Housing Developers Private Limited (NHDPL), has become a 100% owned subsidiary of the Company, consequent to the investors i.e. M/s. Housing Development Finance Corporation Limited (HDFC) transferring their stake of 5,05,000 Equity Shares in NHDPL to Kakanad Enterprises Private Limited (KEPL), a 100% subsidiary of the Company. Mr. Nitesh Shetty, Director and member of NHDPL also transferred his 100 Equity Shares to KEPL. This transaction extinguishes the obligations of the Company undertaken to HDFC.

Nitesh Housing Developers Private Limited, has availed a secured term loan of Rs.315 Cr. from Yes Bank Limited during the financial year and as a collateral security the Company has executed a non disposal undertaking on its 100% direct and indirect stake (50,00,000 Equity Shares and 41,50,000 Preference Shares) in NHDPL and the Company has also extended its Corporate Guarantee to NHDPL in favour of Yes Bank Limited.

b. There is a dispute between the landowners of Indiranagar Mall and Nitesh Indiranagar Retail Private Limited (NIRPL), the Company with respect to the Joint Development Agreement, now the same has been referred to Arbitration. The Company and NIRPL has obtained an interim injunction restraining the landowners from alienating the property.

c. Nitesh Urban Development Private Limited (NUDPL), a wholly owned subsidiary of the Company has fully redeemed and extinguished the Secured Non-convertible redeemable Debentures issued to Reliance Capital Limited. Consequently, the collateral securities and charge has been released.

Further, NUDPL has availed a secured term loan of Rs.160 Cr. from Yes Bank Limited on 26th April, 2016. The Company has extended its Corporate Guarantee and has also given a Non disposable Undertaking for 100% holding in NUDPL as collateral security for the said term loan in favour of Yes Bank.

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

During the year under review, there were no significant or material orders passed by the regulators or courts or tribunals against the Company, impacting the going concern status and Company''s operations in future.

4. The Board of Directors and the Committees thereof

I. Composition of the Board of Directors

The Board of Directors of the Company comprises of ten directors of which five are Independent Directors. The Composition of the Board of Directors is in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

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

The Company has received necessary declarations from the Independent Directors stating that they meet the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.

III. Change in the Board

During the year under review the Company appointed Mrs. Dipali Khanna (DIN: 03395440) as an Additional Independent Director for an initial term of 5 consecutive years with effect from 28th May, 2015 at its Board Meeting and later on her appointment was regularized at the 11th Annual General Meeting held on 28th September, 2015 by way of passing an Ordinary Resolution.

Mrs. Shobha Patil (DIN:07144385) who was appointed as an Additional Director (Independent) on the Board of the Company on 31st March, 2015, has resigned on 28th May, 2015, due to increasing work in her professional carrier.

IV. Meetings

During the year under review, the Board of Directors of the Company met 7 (Seven) times on the following dates.

April 20, 2015

May 28, 2015

August 11, 2015

September 28, 2015

November 6, 2015

February 10, 2016

March 29, 2016

-

In accordance with the provisions of the Companies Act, 2013, a separate meeting of the Independent Directors of the Company was held on 29th March, 2016.

V. Re-appointment of Director Retiring by Rotation

In terms of Section 152 of the Companies Act, 2013, Mr. Mahesh Bhupathi (DIN: 01603093) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors has recommended the re-appointment of Mr. Mahesh Bhupathi, as Director retiring by rotation.

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

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

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

VII. Familiarization programme for Independent Directors:

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

The Company also keeps the Board updated on the applicable laws, regulations, enactments etc. and any changes, amendments thereon from time to time

5. Directors'' Responsibility Statement:

In terms of the requirements of Section 134(5) of the Companies Act, 2013, we, on behalf of the Board of Directors, hereby state that:

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

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

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

6. Nomination and Remuneration Policy

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

The Nomination and Remuneration policy has been prepared pursuant to the applicable provisions of the Companies Act, 2013 and Listing Agreement /SEBI (LODR) Regulations 2015.

Non-Executive Directors are remunerated by way of sitting fees for attending the meetings of the Board and the Committees thereof. The sitting fees paid for Audit Committee and Board meeting is Rs. 50,000/- per meeting respectively, Nomination & Remuneration Committee is Rs 25,000/- per meeting and Stakeholders Relationship Committee and other Committees is Rs. 20,000/- per meeting respectively.

The extract of the Nomination & Remuneration Policy is reproduced in Annexure A to this report.

Remuneration Details of Directors and Employees

[Pursuant to Section 134 of the Companies Act, 2013 and the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

i. Ratio of remuneration of each director to the median remuneration of the employees and percentage increase in the remuneration :

Sl.

No.

Name of the Directors

Designation

Ratio of remuneration to median remuneration of the Company1

% increase in the remuneration of Directors

1

Mr. Nitesh Shetty

Chairman & Managing Director

25

15.63

2

Mr. L. S. Vaidyanathan

Executive Director

21

9.87

3

Mr. Ashwini Kumar

Executive Director & Chief Operating Officer

14

Nil

4

Mr. G. N. Bajpai

Independent Director

NA

NA

5

Mr. Jagdish Capoor

Independent Director

NA

NA

6

Mr. M. D. Mallya

Independent Director

NA

NA

7

Mrs. Dipali Khanna2

Independent Director

NA

NA

8

Mr. Ashok T. Aram

Independent Director

NA

NA

9

Mr. Sudhakar Rao

Non-Independent Director

NA

NA

10

Mr. Mahesh Bhupathi

Non-Independent Director

NA

NA

Note:

1 The median remuneration of employees during the financial year was Rs.6,37,584/- (Rupees Six Lakh Thirty Seven Thousand Five hundred and Eighty four only)

2 Mrs. Dipali Khanna was appointed as an Independent Director at the 11th Annual General Meeting of the Company for a term of 5 consecutive years.

ii. The percentage increase in the remuneration for the year ended 31st March, 2016 to the Key Managerial Personnel’s (other than Directors) namely, Company Secretary & Chief Compliance Officer and Chief Financial Officer is Nil.

iii. The median remuneration of employees during the financial year 2014-15 was Rs.6,57,257/- as compared to Rs.6,37,584 during the current financial year 2015-16. Hence, there is no increase in the percentage of median remuneration of employees.

iv. The number of permanent employees on the rolls of the Company as on 31st March, 2016 was 89 (the group has 309 employees).

v. The Company''s turnover is Rs. 8,712 Lakh for the current financial year 2015-16 as against Rs. 12,501 Lakh in the previous year and the operations have resulted in a loss of Rs. 2,039 Lakh as compared to previous year''s profit of Rs. 2,614 Lakh. Taking these factors into consideration along with the market scenario and competition in industry practice, and to compensate the inflation increase, there is no change during the financial year in the remuneration to the employees.

vi. In reference to the above the Nomination & Remuneration Committee has not approved any change in the remuneration to the Key Managerial Personnel.

vii. During the financial year 2015-16 there is no change in the aggregate remuneration of Key Managerial Personnel on an average.

viii. The last and only Initial public offer was made in May, 2010 and the price was Rs. 54/- per equity share. The percentage increase over decrease in the market quotations of the shares of the Company in comparison with the last Initial Public Offer is (72.63%).

The variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year is (on standalone basis), as follows:

Particulars

2014-15

2015-16

Variation

Share Prices

BSE

14.71

11.71

-25.62%

NSE

14.85

11.75

-26.38%

Market Capitalization (in full) (Rs. in Lakhs)

21553.98

17106.10

-26.00%

Market Capitalization (Free Float) (Rs. in Lakhs)

11527.90

9148.84

-26.00%

Price earnings ratio (based on audited results)

10.58

-7.97

-232.81%

EPS (in Rs.)

1.39

-1.47

-194.56%

ix. Average percentile increase in the salaries of employees other than the managerial personnel during 2015-16 was Nil. The percentile increase in the managerial remuneration during the same period was Nil. The percentage increase in the managerial remuneration was on account of the variable component of remuneration payable to the managerial personnel as per the terms and conditions of their appointment.

7. Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism policy for its directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct/business ethics that provides for adequate safeguards against victimization of the director(s) and employee(s) who avail of the mechanism. None of the directors/employees of the Company have been denied access to the Chairman of the Audit Committee. No complaint has been received during the financial year 2015-16.

8. Corporate Social Responsibility

In terms of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 the Company has constituted the Corporate Social Responsibility Committee. The Committee met once on 29th March, 2016 during the financial year 2015-16.

Pursuant, to the applicable provisions of the Companies Act, 2013 and the rules made there under, the Company was required to make a minimum contribution of Rs 3.52 lakh towards the Corporate Social Responsibility activities during the year. Accordingly, the Company had made a contribution of Rs 5 Lakh to CherYsh Trust, a NGO striving for the benefit of development of under privileged women and female children.

9. Internal Financial Controls

Based on the framework of internal financial controls and compliance systems established and maintained by the Company (with its inherent weaknesses), work performed by the internal, statutory and secretarial auditors and external consultants specially appointed for this purpose, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the Board of the Company is of the opinion that the Company''s internal financial controls were adequate and effective during the period ended as on 31st March, 2016.

10. Statutory Auditors

At the 10th Annual General Meeting held on 26th September, 2014, M/s Ray & Ray (Firm Registration Number: 301072E), the Chartered Accountants were appointed as the Statutory Auditors of the Company for an initial term of 5 (five) consecutive years which is subject to annual ratification by the members of the Company in terms of Section 139 of the Companies Act, 2013 read with the rules made there under. The Audit Committee and the Board of the Company recommends to the Members of the Company to ratify the appointment of M/s. Ray & Ray as the Statutory Auditors of the Company.

There is no qualifications or adverse remarks in the Statutory Auditors'' Report which require any explanation from the Board of Directors of the Company. The Statutory Auditors have expressed an unmodified opinion in their Audit Report for the financial year ended 31st March, 2016.

11. Secretarial Auditor

M/s. Kedarnath & Associates, the Practicing Company Secretaries, were appointed as the Secretarial Auditors of the Company for the financial year 2015-16 by the Board of Directors of the Company.

The Secretarial Audit Report for the year ended 31st March, 2016 issued by the Secretarial Auditors in accordance with the provisions of Section 204 of the Companies Act, 2013 and the rules made there under is annexed to this report separately as Annexure - B.

There is no qualifications or adverse remakes in the Secretarial Audit Report which requires any explanation from the Board of Directors of the Company.

12. Particulars of employees

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

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

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

14. Corporate Governance

The report on Corporate Governance and a certificate from M/s. S. Kedarnath & Associates, Practicing Company Secretaries affirming the compliance with the various provisions of the Corporate Governance in terms of Regulation 27 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

15. Code of Conduct

In terms of Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, a declaration signed by Mr. Nitesh Shetty, the Chairman & Managing Director of the Company affirming compliance with the Code of Conduct by the Directors and Senior Management Personnel of the Company for the financial year 2015-16 forms part of the Corporate Governance Report.

16. Management Discussion and Analysis Report

In terms of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is presented in a separate section of the Annual Report.

17. Extract of the Annual Return

In accordance with the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in the prescribed format of MGT-9 for the financial year 2015-16 is provided in Annexure -E to this Report.

18. Particulars of Loans, Guarantees and Investments

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

19. Related Party Transactions

During the year under review, the Company has not entered into any contract/ arrangement/ transaction with a related party which can be considered as material in terms of the policy adopted by the Company, Section 188 of the Companies Act, 2013 and the SEBI (LODR) Regulations 2015 on the Related Party transactions.

The related party transactions under AS 18 undertaken during the financial year 2015-16 are detailed in the Notes to Accounts section of the Annual Financial Statements.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under for prevention and redressal of complaints of sexual harassment at workplace. No complaint was received by the Management during the year.

21. Review of Subsidiaries and Associates

Pursuant to Section 129 of the Companies Act, 2013, the consolidated financial statements of the Company and its subsidiaries and associates, prepared in accordance with the relevant Accounting Standards specified under Section 133 of the Companies Act, 2013 read with the rules made there under, forms part of this Annual Report.

Pursuant to the provisions of the said section, a statement containing the salient features of the financial statements of the Company''s subsidiaries and associates is annexed to the Consolidated Financial Statement in the prescribed format of Form AOC-1.

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

There have been no material changes in the nature of the business of the subsidiaries (including Associate Company) during the financial year 2015-16.

In terms of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has adopted a policy for determining material subsidiaries. The Policy as approved may be accessed on the Company''s website at the link: http://www.niteshestates.com/Investor relations/Policies & Other Related Matters/Material Subsidiary Policy.

A. Nitesh Housing Developers Private Limited (NHDPL):

The Company directly holds 89.90% equity in NHDPL and during the year Kakanad Enterprises Private Limited (one of the wholly owned subsidiaries of the Company) acquired the balance 10.10% equity in NHDPL, consequently NHDPL has become a Wholly Owned Subsidiary of the Company.

The financial highlights are as below: Figures in Rs.

Particulars

2015-16

2014 -15

Paid up Capital

91,500,000

91,500,000

Reserves & Surplus

291,755,031

267,341,866

Revenue from operations

1,039,881,480

1,308,099,478

Other Income

4,093,570

2,970,968

Profit/(Loss) Before Tax

28,775,217

153,153,531

Profit/(Loss) After Tax

24,413,165

124,887,202

B. Nitesh Urban Development Private Limited (NUDPL):

NUDPL is a 100% subsidiary of the Company.

The financial highlights are as below: Figures in Rs.

Particulars

2015-16

2014 -15

Paid up Capital

65,820,000

65,820,000

Reserves & Surplus

77,246,209

109,095,226

Income from property development

515,595,121

249,316,545

Other Income

1,401,939

19,567,214

Profit/(Loss) Before Tax

(33,697,012)

13,529,622

Profit/(Loss) After Tax

(31,674,560)

11,211,977

C. NITESH INDIRANAGAR RETAIL PRIVATE LIMITED (NIRPL):

NIRPL is a 100% wholly owned subsidiary of the Company.

The financial highlights are as below: Figures in Rs.

Particulars

2015-16

2014-15

Paid up Capital

699,100,000

699,100,000

Reserves & Surplus

634,777,174

1,087,760,676

Other Income

46,228,752

171,880

Profit/(Loss) Before Tax

48,750,442

(30,826,984)

Profit/(Loss) After Tax

(273,901,373)

(30,826,984)

As reported earlier NIRPL has acquired 100% equity in Nitesh Pune Mall Private Limited (formerly ''Anuttam Developers Private Limited'') during the financial year. As a consequence Nitesh Pune Mall Private Limited has become Tier II Subsidiary of the Company.

The financial highlights of Nitesh Pune Mall Private Limited are as follows:

Figures in Rs.

Particulars

2015-16

2014 -15

Paid up Capital

280,409,530

242,400,000

Reserves & Surplus

(150,290,703)

(1,744,059,537)

Income from property development

53,227,928

53,258,236

Other Income

2,323,204

3,704,103

Profit/(Loss) Before Tax

(328,976,653)

76,608,717

Profit/(Loss) After Tax

(328,976,653)

76,608,717

D. NITESH PROPERTY MANAGEMENT PRIVATE LIMITED (NPMPL):

NPMPL is a 100% wholly owned subsidiary of the Company. NPMPL is mainly into the business of maintenance contracts with the owners of completed apartments developed by the Company.

The financial highlights are: Figures in Rs.

Particulars

2015-16

2014 -15

Paid up Capital

3,000,000

3,000,000

Reserves & Surplus

(6,153,964)

4,620,171

Current Liabilities

31,863,347

28,850,329

Income from operations

58,518,595

62,993,823

Other Income

23,836

2,845,005

Profit/(Loss) Before Tax

(10,599,176)

7,030,553

Profit/(Loss) After Tax

(10,774,136)

4,798,010

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

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

The status of the Subsidiary:

Figures in Rs.

Particulars

2015-16

2014 -15

Paid up Capital

500,000

500,000

Reserves & Surplus

(1,589,180)

(571,355)

Income from operations

NIL

NIL

Profit/(Loss) Before Tax

(1,017,825)

(98,248)

Profit/(Loss) After Tax

(1,017,825)

(98,248)

22. Additional Information to shareholders

All important and pertinent investor information such as financial results, investor presentations, press releases, project updates are made available on a regular basis on the website (www.niteshestates.com) of the Company.

Acknowledgement:

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

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

For and on behalf of the Board of Directors

Place: Bangalore NITESH SHETTY

Date : May 28, 2016 Chairman & Managing Director

DIN : 00304555


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, 2012

The Directors present their Eighth Annual Report and the Audited Accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS:

Rupees in Lakhs

STANDALONE CONSOLIDATED

Particulars 2011-12 2010-11 2011-12 2010-11

Income :

Income from operations 7903 9771 11622 12410

Other Income 12 1068 1359 1995

Total Income 7915 10839 12981 14405

Profit / (Loss) before depreciation (532) 355 676 1634

Less : Depreciation 181 66 184 66

Profit before tax (713) 289 492 1568

Less : Income tax (257) (87) 247 349

Profit / (Loss) after tax (456) 376 245 1219

Less: Minority interest & share of loss in Associate - - 214 127

Net Profit / (Loss) (456) 376 31 1092

DIVIDEND:

The Directors could not recommend any dividend in view of the loss.

OPERATIONS:

Stand Alone:

During the year under review the Company achieved a turnover of Rs. 7903 Lakh as against Rs. 9771 Lakh in the previous year and other income of Rs.12 Lakh as compared to Rs.1068 Lakh in the previous year. The operations had resulted in a loss of Rs. 456 Lakh as against a Profit of Rs. 376 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 2012 amounted to Rs. 12981 Lakh including other income of Rs. 1359 Lakh, as compared to Rs. 14405 Lakh in the previous year. The Company earned a Profit after tax of Rs. 245 Lakhs (Previous year Rs. 1219 Lakhs) and a Net Profit of Rs. 31 Lakh for the year (Previous year Rs. 1092 Lakhs), after adjusting the minority interest in subsidiary companies and share of loss from associate company amounting to Rs. 214 Lakh (Previous year Rs. 127 Lakhs).

The financial figures have been regrouped in line with the new Schedule VI disclosure requirements.

SUBSIDIARY COMPANIES: A. SUBSIDIARIES :

Nitesh Housing Developers Private Limited:

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

Figures Rs. In thousands

Particulars 2011-12 2010-11

Paid up Capital 50,000 50,000

Share Application Money 828,388 906,436

Reserves & Surplus 201,240 85,421

Secured Loans 24,854 634,033

Unsecured Loans 100 100

Income From Property Development 310,745 55,540

Sale of Villa Plots 41,514 193,324

Other Income 133,603 92,682

Profit Before Tax 181,129 130,909

Profit After Tax 115,819 87,312

Pursuant to the approval accorded by the Shareholder's at the Extraordinary General Meeting held on March 20, 2012 the Authorised Capital of the Subsidiary Company was increased to Rs. 10 Cr divided into 50,00,000 Equity Shares of Rs. 10/- each and 50,00,000 Preference Shares of Rs. 10/- each.

Nitesh Indiranagar Retail Private Limited:

This company is a 100% wholly owned subsidiary of Nitesh Estates Limited. The financial highlights are:

Figures Rs. In thousands

Particulars 2011-12 2010-11

Paid up Capital 132,480 11,600

Share Application money - 1,369,622

Reserves & Surplus 1,170,246 103,464

Unsecured Loans 195 12,238

Pursuant to the approval accorded by the Shareholder's at the Extraordinary General Meeting held on March 19, 2012 the Authorised Capital of the Subsidiary Company was increased to Rs. 15 Cr. 1,20,88,000 Equity Shares of Rs. 10/- each were allotted at a premium of Rs. 90/- per share aggregating to Rs. 120.88 crores to the Holding Company. The pre-operative expenses have been charged to Profit & Loss Account. The Loss for the year stood at Rs 2,11,73,979.

Kakanad Enterprises Private Limited (formerly known as Nitesh Kochi Projects and Developers Private Limited):

The Company has not commenced its commercial operations. The pre-operative expenses have been charged to the Profit and Loss Account. The loss for the year stood at Rs. 137,751/-.

effective, March 12, 2012 the Registered office of the Company was shifted to No. CC 49/2796, 2nd Floor, North Square, Paramara Road, Kochi - 682018, Kerala, INDIA.

During the year under review, pursuant to the approval accorded by the Shareholder's at the Extraordinary General Meeting held on March 27, 2012 the name of the Company was changed to Kakanad Enterprises Private Limited and the same was approved by the Registrar of Companies on April 4, 2012.

This Company is a 100% subsidiary of Nites Estates Limited.

Nitesh Urban Development Private Limited (formerly known as Nitesh Boat Club Private Limited):

FINANCIAL RESULTS:

The performance of the company for the financial year ended March 31, 2012 is given hereunder

Figures Rs. In thousands

Particulars 2011-12 2010-11

Income :

Income from operations: - -

Other Income 145 -

Total Income 145 -

Loss before depreciation 29,692 3,066

Depreciation

Loss before tax 29,692 3,066

Provision for income tax - -

Provision for deferred tax (8,899) -

Loss after tax 20,792 3,066

The Company during the current financial year executed a Joint Development Agreement on August 18, 2011 with the land owners for the development of the property bearing 1 Acres 14.56 Guntas situated at Kaikondarahalli Village, Varthur Hobli, Marathalli, Bangalore East Taluk for the construction and development of residential project "Nitesh Cape Cod".

The Company has obtained all the approval from the relevant authorities for commencement of the project and the final plan approval was obtained on March 19, 2012. This Project is expected to yield total revenue of Rs. 300 Cr.

The Company became a 100% subsidiary of Nitesh Estates Limited consequent to the acquisition of shares from the existing shareholder with effect form December 31 2011.

Pursuant to the approval accorded by the Shareholder's at the Extraordinary General Meeting held on January 18, 2012 the Company had acquired 5490 Equity Shares of Rs 10/- each of Courtyard Constructions Private Limited, Mumbai at a total consideration of Rs. 8.02 Cr from an existing share holder.

Pursuant to the approval accorded by the Shareholder's at the Extraordinary General Meeting held on March 19, 2012 the Authorised Capital of the Company was increased to Rs. 10 Cr. 65,72,000 Equity Shares of Rs. 10/- each were allotted at a premium of Rs. 26/- per share aggregating Rs. 26.65 Crores to the Holding Company.

Nitesh Property Management Private Limited:

This company is a 100% wholly owned subsidiary of the Company. It has entered into Maintenance Contracts with owners of completed apartments developed by the Company, with effect from April 1, 2011.

The performance of the company for the financial year ended March 31, 2012 is given hereunder:

Figures Rs. In thousands

Particulars 2011-12

Income :

Income from operations:

Building Maintenance income 29,936

Other operating Income 2,064

Other Income 263

Total Income 32,263

Profit/Loss before depreciation 885

Depreciation

Profit / Loss before tax 885

Provision for income tax 300

Provision for deferred tax (9)

Profit for the year 594

B. CONSOLIDATED ACCOUNTS:

The audited consolidated Balance Sheet as at March 31, 2012, consolidated Profit and Loss account for the year ended on that date, Cash 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, Nitesh Housing Developers Private Limited and Nitesh Indiranagar Retail Private Limited 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, 2012 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.

BOARD'S RESPONSE TO AUDIT OBSERVATION:

1. Paragraph 5 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 has also executed Agreement of Sale with the buyers for the aforesaid projects. The Management is reasonably confident of meeting the virtual certainty of the project execution and Profits to be earned thereon. Based on the above facts, the Company has recognized the Deferred Tax Asset.

2. Paragraph 6 of the Auditors Report:

The advances amounting to Rs. 828,236,000 are towards certain real estate projects. Out of the said advances Rs. 450,000,000 is towards joint development of a property wherein requisite documentation has been executed and registration has been completed. In respect of other advances, acquisition of land and obtaining approval for development of projects is under progress. The management is confident of completing acquisition and obtaining approval for development of projects.

3. Clause IV of the Annexure to the Auditors Report:

In order to strengthen the internal control systems for timely documentation and also for effective management of business, the Company has implemented 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.

4. Clause V(b) of the Annexure to the Auditors Report:

The observation by the Auditors is self explanatory.

5. Clause XVI of the Annexure to the Auditors Report:

The transaction is pertaining to financial year 2010-11 in respect of which there was an outstanding amount of Rs. 75 million at the end of the current financial year. As explained in the previous year, the project, for which the term loan was availed, was experiencing some delay. Hence, the Company deployed the amount temporarily for other purposes.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES AT, 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.

A Report on Corporate Governance forming part of the Directors' Report, along with a certificate from the Statutory Auditors confirming compliance, is annexed as Annexure IV and forms part of this Report.

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

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. Pushpalatha V Shetty and Mr. Ashok Aram Directors, will retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Mr. Ashwini Kumar was co-opted as an Additional Director and appointed as Whole-time Director designated as Executive Director & Chief Operating officer of the Company. He will seek re-appointment under Sec 257 of the Companies Act, 1956 for which the Company has received a notice from a member. Necessary resolution will be placed before the ensuing Annual General Meeting.

Your Board of Directors recommend their appointment.

AUDITORS:

The Company's Auditors, S.R. Batliboi & Associates, Chartered Accountants, (Firm Registration No. 101049W) hold office upto the conclusion of this Annual General Meeting. Statutory Auditors have expressed their desire not to seek reappointment at the forthcoming Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY:

While we continue to concentrate on our core business objective of building world-class projects, we are also aware of our responsibilities towards the society we operate in. We conduct our business in a fair and ethical manner and try to be change agents through meaningful contributions and partnerships.

Believing in the adage – 'charity begins at home' and taking cognizance of the fact that our business involves urbanization, we are extremely sensitive to our surroundings and ecology. We try to minimize our carbon footprint by erecting energy efcient buildings and investing in adequate green cover in all our project sites to supplement the ground cover.

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 : May 25, 2012 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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