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Nitin Fire Protection Industries Ltd.

BSE: 532854 Sector: Engineering
NSE: NITINFIRE ISIN Code: INE489H01020
BSE LIVE 15:51 | 26 Sep 8.70 0.41
(4.95%)
OPEN

8.42

HIGH

8.70

LOW

8.10

NSE 15:59 | 26 Sep 8.05 0.35
(4.55%)
OPEN

8.05

HIGH

8.05

LOW

8.05

OPEN 8.42
PREVIOUS CLOSE 8.29
VOLUME 1020099
52-Week high 37.35
52-Week low 3.60
P/E
Mkt Cap.(Rs cr) 254
Buy Price 8.70
Buy Qty 126559.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.42
CLOSE 8.29
VOLUME 1020099
52-Week high 37.35
52-Week low 3.60
P/E
Mkt Cap.(Rs cr) 254
Buy Price 8.70
Buy Qty 126559.00
Sell Price 0.00
Sell Qty 0.00

Nitin Fire Protection Industries Ltd. (NITINFIRE) - Auditors Report

Company auditors report

To the Members of Nitin Fire Protection Industries Limited Report on the StandaloneFinancial Statements

We have audited the accompanying standalone financial statements of Nitin FireProtection Industries Limited. ("the Company") which comprise the BalanceSheet as at March 31 2016 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summary of significant . accounting policies and otherexplanatoryinformation

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give atrueandfairviewofthe financialperformance and position cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards prescribedunder section 133 of the Act as applicable. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under section 143 (11)of the Act. statements in accordance with the Standards on Auditing specified underSection 143 (10) Weconductedour auditofthestandalonefinancial of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion.

Basis for Qualified Opinion

(a) As described in note 35 to the financial statements the reasons for notrecognising provision for a claim of Rs. 50133481 by a bank with respect to a derivativecontract entered into by its erstwhile subsidiary company. As stated in the note theCompany has filed a petition in the High Court of Bombay. Pending the final outcome of thematter we are unable to comment on the extent of provision required if any in thisregard.

(b) As described in note 45 to the financial statements the reasons for notrecognising provision for diminution in value of long-term investment in equity shares ofWorthington Nitin Cylinders Private Limited (WNCPL) aggregating Rs. 457844451 as atMarch 31 2016. In the absence of any assessment of the fair value of the investment asrequired under Accounting Standard 13 ‘Accounting for Investments’andauditedfinancialstatements of WNCPL for the period subsequent to March 31 2013 we areunable to comment on the diminution if any on the carrying amount of the investment asat March 31 2016.

The audit report on the standalone financial statements for the year ended March 312015 was qualified in respect of these matters.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2016 and its profit/loss and its cash flows forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that:

a) We have sought and except for the possible effects of the matters described in theBasis for QualifiedOpinion paragraph obtained all the information and explanations whichto the best of our knowledge and belief were necessary for the purpose of our audit.

b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid standalone financial statements complywith the Accounting Standards prescribed under section 133 of the Act as applicable.

e) The matters described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating of such controls refer to our separate Reportin "Annexure A". Our report expresses a qualified opinion on the operatingeffectiveness of the Company’s internal financial controls over financial reporting

i) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditor’s) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements in accordance with the generally acceptedaccounting practices. Also refer note 38 to the standalone financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

HARIBHAKTI & CO. LLP DELOITTE HASKINS & SELLS LLP
Chartered Accountants Chartered Accountants
Firm Registration No. 103523W/W-100048 Firm Registration No. 117366W/W-100018
Sd/- Sd/-
Snehal Shah Ketan Vora
Partner Partner
Membership No: 48539 Membership No: 100459
Place: Mumbai Place: Mumbai
Date: May 30 2016 Date: May 30 2016

ANNEXURE "A" TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(h) under ‘Report on Other Legal and RegulatoryRequirements’ of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Nitin FireProtection Industries Limited as of March 31 2016 conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India(the ‘Guidance Note’).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Note to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company’s internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting reporting includes those policies and procedures that (1)pertain to the principles. Acompany’s internal financial control over financialmaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our auditmaterial weaknesses have been identified in the operating effectiveness of theCompany’s internal financial controls over financial reporting as at March 31 2016with respect to provision for diminution in the value of an investment (fully described inNote 45 to the standalone financial statements); provision for a claim on a derivativecontract (fully described in Note 35 to the standalone financial statements);determination of terms of purchase of items of inventory and underlying documentationrelating to internal movement of items of inventory; and policy documentation pertainingto human resources and payroll related matters which could potentially impact the relatedaccount balances when determined and/or recognised.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects maintained adequate internal financialcontrols over financial reporting as of March 31 2016 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India" and except for the possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria theCompany’s internal financial controls over financial reporting were operatingeffectively as of March 31 2016.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the financialstatements of the Company for the year ended March 31 2016 and except for the materialweaknesses relating to provision for diminution in the value of an investment andprovision for a claim on a derivative contract which affects our opinion on the standalonefinancial statements of the Company the other material weaknesses do not affect ouropinion on the standalone financial statements of the Company.

HARIBHAKTI & CO. LLP DELOITTE HASKINS & SELLS LLP
Chartered Accountants Chartered Accountants
Firm Registration No. 103523W/W-100048 Firm Registration No. 117366W/W-100018
Sd/- Sd/-
Snehal Shah Ketan Vora
Partner Partner
Membership No: 48539 Membership No: 100459
Place: Mumbai Place: Mumbai
Date: May 30 2016 Date: May 30 2016

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) During the year fixed assets have not been physically verified by the management.However there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company except for the details givenbelow:

Particulars Total number of cases Gross Block as on March 31 2016 (Rs.) Net Block as at March 31 2016 (Rs.)
Leasehold land 1 1620000 1620000

(ii) Based on the information and explanation given to us the inventories werephysically verified during the year by the Management at reasonable intervals. Materialdiscrepanciesnoticed verificationduring the year have been properly dealt with inthe books physical of account.

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies covered in the register maintained underSection 189 of the Companies Act 2013 ("the Act") in respect of which: (a) Theterms and conditions of the grant of such loans are in our opinion prima facie notprejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has not beenstipulated and in the absence of such schedule we are unable to comment on the regularityof the repayments or receipts of principal amounts and interest.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theAct.

(vi) The maintenance of cost records has been prescribed by the Central Governmentunder section 148(1) of the Act. Based on the information and explanations given to usthe Company is in the process of updating the cost records for the year that are requiredto be maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules2014.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income-tax Sales Tax ServiceTax Customs Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident FundEmployees’ State Insurance Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax cess and other material statutory dues in arrears as at March 312016 for a period of more than six months from the date they became payable except forthe following:

Name of Statute Nature of Dues Amount (Rs.) Period to which the Amount Relates Due Date Date of subsequent payment
Income Tax Act 1961 Dividend distribution Tax ` 9895494/- (includes interest ` 2398908/- ) FY 2012-13 August 23 2013 -

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on March 31 2016 on account ofdisputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Involved Amount Unpaid
(Rs.) (Rs.)
Income Tax Act 1961 Income tax Commissioner of Income Tax AY 2013-14 48514370 48514370
Income Tax Act 1961 Income tax (Appeal) AY 2012-13 18346380 10346380
Income Tax Act 1961 Income tax AY 2010-11 604790 454790
Income Tax Act 1961 Income tax AY 2009-10 1561786 1361786
The Central Sales Tax Act 1956 Sales tax Commissioner of sales tax FY 2011-12 1645954 14452
The Central Sales Tax Act 1956 Sales tax Commissioner of sales tax FY 2010-11 2150379 541274

(viii) In our opinion and according to the information and explanations given tous the Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders except as under: (a) Incase of defaults in the repayment of loans or borrowings to financial institutions banksand government:

Particulars Amount of default of repayment (Rs.) Period of default
Principal Interest
Due to banks: 238826241 10740795 Two months

public offer and the term loans have been applied by the Company during the year forthe purposes for which they were raised. (x) To the best of our knowledge and according tothe information and explanations given to us no fraud by the Company and no fraud on theCompany by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given tous the Company is in compliance with Section 188 and 177 of the Act where applicablefor all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements . asrequired bythe applicableaccountingstandards (xiv)During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of CARO 2016 Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable. (xvi) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.

HARIBHAKTI & CO. LLP DELOITTE HASKINS & SELLS LLP
Chartered Accountants Chartered Accountants
Firm Registration No. 103523W/W-100048 Firm Registration No. 117366W/W-100018
Sd/- Sd/-
Snehal Shah Ketan Vora
Partner Partner
Membership No: 48539 Membership No: 100459
Place: Mumbai Place: Mumbai
Date: May 30 2016 Date: May 30 2016