Nitin Fire Protection Industries Limited
Your Directors have pleasure in presenting their 21st Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended 31st March 2016.
1. Financial summary or highlights/Performance of the Company (Standalone &Consolidated):
| || || || ||(Rs in lakhs) |
|Particulars ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
| ||Standalone ||Standalone ||Consolidated ||Consolidated |
|Sales and other Income ||47130.03 ||50234.68 ||149424.68 ||115786.73 |
|Profit Before Interest and Depreciation ||4907.09 ||5114.88 ||18644.43 ||12680.71 |
|Finance Charges ||3471.86 ||3154.28 ||5250.05 ||4136.60 |
|Gross Profit ||1435.23 ||1960.60 ||13394.38 ||8544.11 |
|Provision for Depreciation & amortization expense ||655.91 ||250.47 ||3287.28 ||1444.54 |
|Net Profit Before Tax ||779.32 ||1710.13 ||10107.10 ||7099.57 |
|Provision for income tax including deferred tax & wealth tax ||208.98 ||353.00 ||227.30 ||377.30 |
|Tax adjustments of earlier years(net) ||26.47 ||0.33 ||26.35 ||10.80 |
|Net ProfitAfter Tax ||543.87 ||1356.80 ||9853.45 ||6711.47 |
|Balance B/fd from earlier year ||6756.23 ||5478.58 ||33791.84 ||27159.52 |
|Balance available for appropriation ||7300.10 ||6835.38 ||43645.29 ||33870.99 |
|Transferred to General Reserve ||- ||- ||- ||- |
|Write back of proposed Dividend (p.y.) ||- ||512.92 ||- ||512.92 |
|Proposed Dividend on Equity Shares ||- ||(584.54) ||- ||(584.54) |
|Tax on proposed Dividend ||- ||- ||- ||- |
|Other adjustments related to Fixed Assets ||- ||7.53 ||- ||7.53 |
|Surplus carried to Balance Sheet. ||7300.10 ||6756.23 ||43645.29 ||33791.84 |
2. Brief description of the Companys working during the year/State ofCompanys affairs:
The Company faced a marginal decline in its income in the Financial Year 2015-16 due torecession in the domestic economy however there was a robust growth at a consolidatedlevel. The Company operates in one segment viz. fire fighting industry
Total income during the year ended March 31 2016 on standalone basis stood at`47130.03 lakhs which is marginally lower than that compared to the previous year`50234.68 lakhs. However as per the Consolidated Financial Statements total income was`149424.68 lakhs registering an increase of 29.05% as compared to the previousyears `115786.73 lakhs. The working of the Company is considered satisfactory.Barring unforeseen circumstances the Board of Directors are hopeful of better performanceof the Company during the current year.
The Company is one of the leading player in the fire fighting industry in India andcontinues to retain its leadership position among the Indian companies. It has continuedto win new engagements and grow existing relationships and Company have started theinitial process of eligibility norms for various Public and Private Sector undertakings.The Company is growing in the area of supply install and commissioning of fire &safety solutions manufacturing and distribution of fire protection and execution ofannual maintenance contracts for fire protection systems. It also provides automated waterand gas based fire suppression systems along with fire detection and BMS systems onturnkey basis. The broad range of products and services enables the Company to provide"end-to-end" services to its customers combined with its industry focus and itsgeographical spread the Company is able to provide comprehensive and high value addedservices to its customers and is already a significant force and to expand in emergingmarkets.
3. Change in the nature of business:
There is no change in business of the Company during the financial year 2015-16.
The Board of Directors of the Company discussed to conserve the resources for futurecapitalization and growth and have not recommend any dividend for the year ended 31stMarch 2016. (P. Y.: The Board recommend a Dividend of `0.20/- per share on 292269622Equity Shares of `2/- each.)
The Company has not proposed to transfer its profit to the General Reserve out of theamount available for appropriation and an amount of `7300.10 Lakhs proposed to beretained in the Statement of Profit and Loss.
6. Share Capital:
During the year and by way of approval of the members at the 20th Annual GeneralMeeting on September 21 2015 the Authorized Share Capital of the Company had beenincreased from `65.00 Crores to `75.00 Crores divided into 375000000 equity shares of`2/- each. As on 31st March 2016 total issued subscribed and paid-up share capital ofthe Company is `584539244/- divided into 292269622 equity shares of `2/- each fullypaid-up.
Out of total 292269622 equity shares of the Company 292267561 are indematerialized form and 2061 are in physical form and Bigshare Services Private Limitedis our Registrar & Share Transfer Agent.
7. Shifting of Registered Office:
The Board at their meeting held on February 4 2016 had approved the shifting of theregistered office from 501 Delta Technology Street Hiranandani Gardens Powai Mumbai -400076 to Office No. 801 & 802 C-wing Neelkanth Business Park Kirol Road
Vidhyavihar (W) Mumbai - 400086 with effect from 1st April 2016.
8. Directors Key Managerial Personnel Independent Directors & ComplianceOfficer:
Mr. Nitin M. Shah (DIN: 00073232) retires by rotation at the forthcoming 21st AnnualGeneral Meeting of the Company and being eligible offers himself for re-appointment. TheBoard recommends the passing of the Resolution at Item No. 2 of the Notice of the AnnualGeneral Meeting.
All Independent Directors of the Company have submitted their declarations that theymeet the criteria of independence as provided in section 149(6) of the Companies Act 2013("Act") and Regulation 16(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations 2015").
Changes in Key Managerial Personnel
Mr. Nitin M. Shah has resigned from the post of Managing Director and also as KeyManagerial Personnel of the Company w.e.f. November 10 2015 and continue as aNon-Executive Chairman of the Company.
Pursuant to Section 203 of the Act the Company has appointed Mr. Sraban Kumar Karan asa Company Secretary and Compliance
Officerand also as a Key Managerial Personnel of the Company w.e.f. February 4 2016.Mrs. Hemangi Patil has resigned from the post of Company Secretary & Key ManagerialPersonnel w.e.f. 9th March 2015. However the Board of Directors of the Company haveaccepted her resignation as CS & KMP w.e.f. 25th May 2015.
9. Particulars of Remuneration to its Employees / Directors / Key ManagerialPersonnel
The information required under the provisions of Section 197 of the Act read with Rule5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company and Directors is furnished below:
|Sr. No. ||Name ||Designation ||Remuneration - FY 2015-16 (Rs.) ||Remuneration - FY 2014-15 (Rs.) ||Increase / (decrease) in remuneration from previous year (Rs.) ||Ratio/times per Median of employee remuneration (times) ||Qualifications and experience of the employee ||Date of commencement of employment ||Age ||Last employment held by such employee before joining the Company ||Nature of employment whether contractual or otherwise ||Percentage of equity shares held by the employee in the Company within the meaning of clause (iii) of Rule 5(2) ||Such employee is a relative of any director or manager of the Company and if so name of such director or manager |
|1 ||Nitin M. Shah (*) ||Non-executive Chairman(*) ||3616000/- ||2310000/- ||1306000/- ||17.50 ||Diploma in Mechanical Engineering and 38 Years ||01.04.2006 ||59 ||None ||Contractual ||20.61% (60226835 shares) ||Mr. Rahul N. Shah & Mr. Kunal N. Shah Directors are relatives |
|2 ||Partho Roy ||CEO Project ||7701507/- ||7150000/- ||551507/- ||25.00 ||Bachelor in Computer Science and 30 Years ||01.12.2012 ||50 ||New Age LLC UAE ||Contractual ||NIL ||No |
|3 ||Rahul N. Shah ||Whole-time Director KMP ||54000/- ||134129/- ||(80129/-) ||0.82 ||Graduate in Commerce & Diploma in Business Management and 17 years ||14.08.2014 ||38 ||Nitin Fire Protection Ind. Ltd. ||Contractual ||6.44% (18831333 shares) ||Mr. Nitin M. Shah & Mr. Kunal N. Shah Directors are relatives |
|4 ||Kunal N. Shah ||Whole-time Director ||54000/- ||134129/- ||(80129/-) ||0.82 ||Bachelor in Electronic and Tele Communications and more than 2 years ||14.08.2014 ||32 ||Nitin Fire Protection Ind. Ltd. ||Contractual ||10.49% (30673000 shares) ||Mr. Nitin M. Shah & Mr. Rahul N. Shah Directors are relatives |
|5 ||Kamlesh Gandhi ||CFO KMP ||2184694/- ||1964204/- ||220490/- ||8.35 ||C. A. and 35 years ||17.06.2013 ||56 ||Greshma Shares & Stocks Ltd. ||Contractual ||NIL ||No |
|6 ||Sraban Kumar Karan (**) ||CS - KMP ||162138/- ||NA ||NA ||3.82 ||A.C.S. and 9 years ||19.01.2016 ||39 ||Mehta & Mehta Company Secretaries ||Contractual ||NIL ||No |
(*) Resigned from the post of Managing Director and re-designated as Non-executiveChairman w.e.f. November 10 2015 (**) Appointed as Company Secretary & KMP w.e.f.February 4 2016 by the Board.
Other Disclosures pursuant to the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:
|Sr. No. ||Requirements ||Disclosure |
|1 ||Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year. ||Refer to the particulars of remuneration to Employees and Director. For this purpose sitting fees paid to the Directors have not been considered as remuneration. |
|2 ||Percentage increase in remuneration of Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year. ||Name ||% Increase in remuneration |
| || ||Mr. Nitin M. Shah -Director* ||56.54% |
| || ||Mr. Rahul N. Shah - WTD ||Not applicable (N.A.) as there is reduction in salary |
| || ||Mr. Kunal N. Shah WTD ||N. A. as there is reduction in salary |
| || ||Mr. Partho Roy - CEO Project ||7.71% |
| || ||Mr. Kamlesh Gandhi CFO ||11.22% |
| || ||Mr. Sraban Kumar Karan CS ||N.A. as appointed at the Board Meeting dated 04.02.2016. |
| || ||(*) Resigned from the post of Managing Director and re-designated as Non-executive Chairman w.e.f. November 10 2015. Difference in remuneration between F.Y. 2015-16 & 2014-15 is due to bonus leave encashment & other allowance paid. There is no increase in salary of KMP during F. Y. 2015-16. |
|3 ||Percentage increase in the median remuneration of employees in the financial year. ||Nil. |
|4 ||Number of permanent employees on the rolls of Company as on 31st March 2016. ||140 |
|5 ||Explanation on the relationship between average increase in remuneration and Company performance. ||Factors considered while recommending increase in remuneration were performance of employee financial performance of the Company etc. There is no increase in salary during F.Y. 2015-16 except in few cases. |
|6 ||Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the Company. ||There is no increase in salary during F. Y. 2015-16. |
|7 ||Variations in the market capitalization of the || || || |
| || || ||31/03/2016 ||31/03/2015 |
| ||Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer. ||Market Capitalisation (Rs. Cr.) ||976 ||1016 |
| || ||PE ratio (consolidated) ||9.91 ||15.10 |
| || ||Last Public Offer : 2007 Issue Price `190/- per share. |
| || ||There is 410% increase in market price compared to the public issue offer price. |
|8 ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||There is no increase in salary during F. Y. 2015-16 for employees of the Company except in few cases which is based on performance of employees. |
|9 ||Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company. ||The details of remuneration paid to the Key Mangerial Personnel are given above in point no. 9 for remuneration paid to employee and directors and it is in line with the performance of the Company. |
|10 ||Key parameters for any variable component of remuneration availed by the directors. ||- |
|11 ||Ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year. ||0.70 : 1.00 (ratio) |
|12 ||Affirmation that the remuneration policy of the Company. ||The remuneration is as paid per is as theper the remuneration policy of the Company. |
Pursuant to the provisions of Section 178(3) of the Act the Board has on therecommendation of the Nomination & Remuneration Committee framed a remuneration policyon March 26 2016 for selection and appointment of Directors Senior Management and theirremuneration
Remuneration to Key Managerial Personnel and Staff is industry driven in which it isoperating taking into account the performance leverage and factors such as to attract andretain qualified professional and talent.
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein and guidelines issued by the CentralGovernment and other authorities from time to time.
During the year remuneration paid to the managing director and whole-time directorsare as under:
1. Mr. Nitin M. Shah (Chairman & Managing Director till November 9 2015) `3616000/-
2. Mr. Rahul N. Shah (Whole-time Director) `54000/-
3. Mr. Kunal N. Shah (Whole-time Director) `54000/-
The Company pays sitting fees to all the Independent Directors for attendance duringthe meetings of the Board of Directors and the Audit Committee constituted by the Board ofDirectors of the Company.
During the year ended 31st March 2016 the Board of Directors have met 7 (seven)times on 25.05.2015 13.06.2015 14.08.2015
10.11.2015 14.12.2015 04.02.2016 and 26.03.2016 and 5 (five) Audit Committee meetingswere held on 25.05.2015 14.08.2015
10.11.2015 14.12.2015 and 04.02.2016 & One (1) Nomination and RemunerationCommittee meeting was held on 04.02.2016 & One (1) Corporate Social ResponsibilityCommittee meeting was held on 04.02.2016 & One (1) Independent Directors meetingwas held on 04.02.2016 & Four (4) Stakeholders Relationship Committee meetingswere held on 25.05.2015 14.08.2015 10.11.2015 and 04.02.2016 & One (1) RiskManagement Committee meeting was held on 04.02.2016. The details of which are given in theCorporate Governance Report. The intervening gap between two consecutive Board meetings& Audit Committee Meetings respectively were within the period prescribed under theCompanies Act 2013.
The recommendation by the Audit Committee as and when made to the Board has beenaccepted by it.
11. Board Evaluation:
The Board of Directors of the Company had discussed in their Board Meeting held onFebruary 4 2016 to evaluate its own performance the directors individually as well asthe evaluation of the working of its Audit and Nomination & Remuneration Committees.The evaluation was in the stage of implementation process till the completion of financialyear ended on March 31 2016. The evaluation was made by the Board in their meeting heldon May 30 2016.
12. Details of Subsidiary/Joint Ventures/Associate Companies:
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient features of the financial statement of a
Companys subsidiary(ies) associate Company(ies) and joint venture(s) is given inForm AOC-1 as Annexure - I [Performance and financial position of the subsidiariesincluded in the consolidated financial statement].
Further the Annual Accounts and related documents of the subsidiary Company(ies)shall be kept open for inspection at the Registered
Office of the Company. The Company will also make available copy thereof upon specificrequest by any Member(s) of the Company interested in obtaining the same. Furtherpursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants ofIndia Consolidated Financial Statements presented by the Company in this Annual Reportinclude the financial information of its subsidiary(ies).
Pursuant to the provisions of section 139 of the Act and the rules framedthereafter M/s. Haribhakti & Co. LLP (FRN 103523W/W-100048) and DeloitteHaskins & Sells LLP Chartered Accountants (FRN -117366W / W-100018) were appointedas joint statutory auditors of the Company from the conclusion of the twentieth annualgeneral meeting (AGM) of the Company held on September 21 2015 till the conclusion of thetwenty fifth AGM to be heldintheyear2020subjecttoratification everyAGM . oftheirappointment at The Company has received ratification letters dated 10th May 2016 and 30thAugust 2016 from Haribhakti & Co. LLP & M/s. Deloitte Haskins & Sells LLPChartered Accountants (FRN -117366W / W-100018) respectively giving their consent toratification re-appointment as Statutory Auditors for the year ended 31st March 2017. TheBoard recommends the resolution No. 3 of the Notice of the AGM for the approval of theMembers of the Company.
Audit Report: The Auditors qualifications and reply of the managment are asunder: Basis of Qualification opinion of Statutory Auditors on Standalone FinancialStatement: a) Qualification in the Statutory Audit Report:
Note (a) of Statutory Audit Report describing the reasons for not recognizing provisionfor a claim of ` 50133481/- by a Bank with respect to a derivative contract entered intoby its erstwhile subsidiary Company. As stated in the note the Company has filed apetition in the High Court of Bombay. Pending the final outcome of the matter we areunable to comment on the extent of provision required if any in this regard.
a) Managements Reply on Qualification in the Statutory Audit Report:
Consequent to part sale of equity stake in an erstwhile subsidiary in December 2010the Company has taken over an outstanding claim of a derivative contract amounting to`50133481/- (excluding interest). Based on a legal opinion the Company has filed apetition in the
Honble High Court of Bombay challenging the legality of the contract. Pendingdecision no provision is made in the books of account for this claim.
b) Qualification in the Statutory Audit Report:
Note (b) of Statutory Audit Report describing the reasons for not recognizing provisionfor diminution in the value of long term investment in equity shares of Worthington NitinCylinders Private Limited (WNCPL) aggregating `457844451/- as at March 31 2016. In theabsence of any assessment of the fair value of the investment as required under AccountingStandard 13 Accounting for
Investments and audited financial statements of WNCPL for the period subsequentto March 31 2013 we are unable to comment on the diminution if any on the carryingamount of the investment as at March 31 2016.
b) Managements Reply on Qualification in the Statutory Audit Report:
Worthington Nitin Cylinders Private Limited (WNCPL) is our Associate Company and basedon the valuation of the fixed assets of
WNCPL from an independent valuer the Company is hopeful that impairment if any willnot be material and if any such thing is noticed in future we will provide for the same.
c) Auditors Qualification in Internal Financial control report:
In the qualified opinion it is mentioned that material weakness have been identified inthe operating effectiveness of Companys internal financial control with respect toprovision for diminution of value of investment ( fully described in note 45 to thestandalone financial statement) provision for a claim on a derivative contract (fullydescribed in note 35 to the standalone financial statements) determination of terms ofpurchase of items of inventory and underlying documentation relating to internal movementsof item of inventory and policy documentation pertaining to human resources and payrollrelated matters which could potentially impact the related account balances whendetermined and recognized.
c) Managements reply on Qualification in Internal Financial control report:
The clarification on the provision for diminution in value of investment of WorthingtonNitin Cylinders contract claim have been explained above in audit observation and theCompany has initiated process to implement the required process and procedures in purchaseterms inventory and pay roll related matters.
d) Basis of Qualification opinion of Statutory Auditors on Consolidated FinancialStatement:
The above qualification of Statutory Auditors on Standalone Financial Statementremains same with respect to their basis of qualified opinion on Consolidated FinancialStatement in addition to non-consideration of accounts of the associate Company i.e;Worthington
Nitin Cylinders Private Limited when prepared the Consolidated Financial Statement. Thequalification is as given below:
As described in note 46 to the consolidated financial statements the reasons for notconsolidating the financial statements and the reasons for not recognising provision fordiminution in value of long-term investment in equity shares of Worthington NitinCylinders Private Limited (WNCPL) aggregating `457844451/- as at March 31 2016. In theabsence of any assessment of the fair value of the investment as required under AccountingStandard 13 Accounting for Investments and audited financial statements ofWNCPL for the period subsequent to March 31 2013 we are unable to comment on thediminution if any on the carrying amount of the investment as at March 31 2016.
d) Managements reply on Qualification in Consolidated Financial Statement:
The Company has not received the audited financialstatement from the associate Company.Finalization of the accounts is under process. With respect to provision for diminution ofvalue of investment (fully described in note 46 to the consolidated financial statement)it is hereby stated that Worthington Nitin Cylinders Private Limited (WNCPL) is ourAssociate Company and based on the valuation of the fixed assets of WNCPL from anindependent valuer the Company is hopeful that impairment if any will not be materialand if any such thing is noticed in future we will provide for the same.
14. Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed Mr. Kishor V. Ved Practicing Company Secretary to undertakethe
Secretarial Audit for the financial year ended 31st March 2016. The report of theSecretarial Auditors in Form No. MR-3 is enclosed as
Annexure II to this report. The observation of Secretarial Auditor and reply of theManagement are as follows:
|OBSERVATIONS OF SECRETARIAL AUDITOR ||MANAGEMENTS REPLY |
|Ms. Hemangli Patils resignation dated 09.03.2015 as a Company Secretary and Key Managerial Personnel (CS & KMP) was accepted by the Board of Directors of the Company w.e.f. 25.05.2015. However the Company has appointed Mr. Sraban Kumar Karan as a CS & KMP w.e.f. 04.02.2016 i.e. after a period of six months of vacation of office as required under section 203 of the Companies Act 2013 ("Act"). ||The Company could not get a suitable candidate for the post of a CS & KMP & hence there was delay in appointment. The Company ensures the compliances of the Act within the prescribed time limit in future. |
|As per scrutinizers report of the 20th Annual General Meeting of the Company held on 21.09.2015 the Company has provided 3 days for postal ballot voting. However the members of the Company have approved and passed the special resolutions with requisite majority. ||The members of the Company has not raised any objections for shorter period of voting due to oversight of the provisions of the Companies Act 2013 and approved and passed the special resolutions with requisite majority. The Company ensures the compliances of the Act within the prescribed time limit in future. |
|The Company has submitted voting results on 25.09.2015 after 48 hours of conclusion of AGM held on 21.09.2015 vide NSEs letter dated 11.12.2015 ||The Company has explained the reasons for delay in filing of the same to the National Stock Exchange of India Limited (NSE) vide the Companys letter dated 13.01.2016. The Company ensures the submission of the same within the prescribed time limit in future. |
|OBSERVATIONS OF SECRETARIAL AUDITOR ||MANAGEMENTS REPLY |
|The Company has declared dividend at the AGM held on 21.09.2015 and deposited the amount of dividend declared in a separate dividend bank account on 28.09.2015 five(5) days of declaration of . .after dividend as required under section 123(4) of the Act. ||There was delay in deposit of dividend into a separate bank account and the Company ensures the submission of the same within the prescribed time limit in future. |
|The Company has received the SEBIs letter dated 28.10.2015 with regard to updation of the related party transaction policy on the Companys website under clause 49 of the Listing Agreement. ||By oversight the RPT policy could not be posted on website of the Company. The Company has informed the SEBI on 19.11.2015 that the RPT policy has been updated on the Companys website and the Company ensures the submission of the same within the prescribed time limit in future. |
|There was delay in filing of the corporate governance for the quarter ended 31st December 2015. ||By oversight there was a delay in submission. However the Company has paid fine of Rs.4000/- to the NSE vide the Companys letter dated 25.05.2016 and 14.06.2016. The Company ensures the submission of the same within the prescribed time limit in future. |
|The Standalone Audited Financial Results for the year ended 31.03.2016 was submitted to Stock Exchanges on 31.05.2016 and the Consolidated Audited Financial Results for the year ended 31.03.2016 was submitted with the Stock Exchanges on 03.06.2016 & 04.06.2016 after the prescribed time limit as specified in Reg. 33 of the SEBI (LODR) Regulations 2015 ||By oversight there was a delay in submission of financial results and the Company has paid penalty for the same to the Bombay Stock Exchange (BSE) vide the Companys letter dated 29.06.2016 and also to NSE vide the Companys letter dated 14.06.2016. The Company ensures the submission of the same within the prescribed time limit in future. |
|The consolidated financial statements of the Company for the year ended 31st March 2016 has been prepared in absence of audited financial statement of Associate Company viz. Worthington Nitin Cylinders Pvt. Ltd (WNCPL). ||WNCPL is in process of finalizing their financial statement & on completion of the same the Company will comply with the provisions of the Companies Act 2013 as required. |
|Pursuant to the provisions of Section 92 of the Act the details regarding changes in shareholding of the one of the promoters and two (2) out of the top ten (10) shareholders of the Company during the financial year 2015-16 are yet to filed in Form MGT-10 with the Registrar of Companies. ||The Company is in process of submission of the details with Registrar of Companies and the same will be submitted in due course. The Company ensures the submission of the same within the prescribed time limit in future. |
|There was delay in filing of E-forms and E-returns of few forms. ||Due to oversight of the provisions of the Act. The Company ensures the submission of the same within the prescribed time limit in future. |
15. Disclosure about Cost Audit:
Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Companyis not required to carry out the cost audit for the financial year ended 31st March 2016.
However the maintenance of cost records is necessary and the Company is in process ofupdating the cost records for the year ended 31st March 2016.
16. Internal Audit & Controls:
Pursuant to Section 138 of the Companies Act 2013 read with the Clause 49 of theListing Agreements with Stock Exchanges and the SEBI (LODR) Regulations 2015 the Companyhas appointed M/s. Tolia and Associates Chartered Accountants (Firm Registration
Number:111017W) as Internal Auditor of the Company for the financial year 2015-16 andalso appointed them for the financial year 2016-17.
17. Internal Financial Control System:
The Company has overall effective systems and procedure for internal control forensuring orderly and efficient conduct of business safeguarding its assets prevention& detection of frauds & errors & completeness of accounting records and timelypreparation of reliable financial information. These systems are periodically reviewed bythe Audit Committee of the Board of Directors. The Audit Committee and the Board haveensured that the said system is adequate considering the nature of business and size ofthe transactions.
18. Issue of employee stock options:
The Company has not issued / granted any stock options to its employees including itsKey Managerial Personnel and hence the provisions of Rule 12 (9) of the Companies (ShareCapital and Debentures) Rules 2014 are not applicable.
19. Vigil Mechanism / Whistle Blower Policy:
Your Company has put in place Whistle Blower Mechanism. The detailed mechanism isgiven in Corporate Governance Report forming part of this report and the same has beenposted on the Companys website at www.nitinfire.com under investors link.
20. Risk management policy:
The Company has been addressing various risks impacting and the policy of the Companyon risk management is provided in Management Discussion and Analysis in the Annual Report.
21. Management Discussion And Analysis:
The Indian economy is in upward trend if the growth of previous years will be compared.The growth rate for the financial is 7.6 per cent despite below normal monsoon slow downin export and subdued global demand. Besides that IMF and World Bank has marked India asbright spot in the world economy. The adoption of liberalized foreign direct investmentpolicy by the regulators has witnessed continuous economic growth in India. With moreinvestment and industrialization the Company is firm in its growth in the near future.
Our business and strong track record
Nitin Fire Protection Industries Limited (NFPIL) is a Fire Protection solutionsprovider with an agenda to provide wide range of systems to protect and prevent fromdisaster of fire. The Company is providing end to end Fire Protection Solutions forvarious industries like Refineries Control Rooms Power Plants Offshore PlatformsServer Hospitals and Hospitality sector.
We undertake large scale fire protection system installation and have successfullycompleted 32 years of operation in India and have completed various installations bothdirect & indirect across India.
We have following objectives:-
Safe living of the society and increasing awareness and education of safety andsecurity at all times.
To promote and use the advance technology and modern fire safety and protection systems
INDUSTRY STRUCTURE & DEVELOPMENT
The Company estimates the Global Fire & Safety market to be US$100bn growingin excess of GDP. The major players are TYCO UTC Honeywell Siemens etc. NFPIL currentlyenjoys 0.1% share of the Global Fire Industry and it expects to gradually increase itsmarket share. There is a definite demand for Fire Protection products worldwide with newerproducts under development. The
Innovation and Product Development are the critical aspects of success in the industry
During the year your company continues to grow and has delivered a year on yeargrowth of 29.05% in consolidated revenues largely attributing to the success in the MiddleEast. The consolidated PAT has grown from ` 671 mn in FY 2015 to ` 985 mn in FY 2016. Theearning per share was `3.37 in FY 16 compared to ` 2.30 in the same period last year.
OUTLOOK OPPORTUNITIES AND CHALLENGES
Not only Industry but also the housing societies and commercial complexes are shiftingtheir attention to take necessary steps to safeguard their localities. All these augurswell for the demand for Fire Protection Industry.
Your Company has initiated steps to enter into new Public and Private sectorundertakings which will help your Company to sustain growth.
The Companys strategy for longer term growth has been to (a) continually expandits addressable market by penetrating into the newer geographies newer segments and (b)strengthen and deepen existing client relationships through a customer centric approachsuperior execution that gives clients satisfaction.
The Company has over 60 (domestic + international) approvals from various agencies& regulatory bodies required to operate in this business & execute fireprotectionsafety & security solution projects across various demographics. The Company also hastie-ups with international components & product manufacturers to procure &distribute their products & use their technology thereby giving it an edge over thelocal players in providing fire protection safety & security solutions to the clients
There will be large spending asset creation and business development in UAE due to theExpo 2020 and other events. With UAE contributing 64.91% of the total revenue yourCompany is in a position to capture the higher growth potential of the growing markets.Worldwide demand for this segment is expected to grow due to more awareness and concernsfor the safety.
With almost three decades of experience your Company has established a betterfootprint in India to match the fire safety standards required by the growing needs fromthese sectors. The diversified portfolio of products and its regular up gradation hashelped your
Company to add value in markets of UAE South Asia and Europe.
Our strength is our determination and team work Challenges and threats areCompetition the vibrations in the economy government policies government spending onnew projects etc.
Your Company considers human resource to be an important and valuable asset for theorganization. Therefore it constantly strives to attract and retain best"Talents" for the present and future business requirements and growth. TheCompany has grown due to the commitment dedication and passion of our employees and wethank them for their continuous support efforts and sacrifices. And the Company expectstheir continuous guidance and support in future. The Company inspires and motivatesemployees and promotes teamwork trust and confidencefor the organizational growth and toattain the organizational goals. The Company is focused in providing a meaningfulenvironment whichprovidesthemtheconfidenceto realize their potential and motivatesemployees to develop themselves personally and professionally. The required Initiativesare taken in the areas of employees health safety training and development. Companytakes pains to see that employees interest and growth are not overlooked.
Risk Management and Internal Control System
The Company has a proper and adequate system of controls in order to ensure that allassets are safeguarded against loss from unauthorized use or disposal. Regular InternalAudit checks are carried out to ensure that the responsibilities are executed effectivelyand that proper and adequate systems are in place and is reviewed by auditing committeeset by the Management.
Your Company continues to comply with laws regulations and policies as per theregulatory guidelines that are applicable. Your Company maintains strong compliance andhas dedicated Compliance Department for ensuring regulatory compliance.
The Company monitors principal risks and uncertainties that can impact our ability toachieve strategic objectives. Internal controls are regularly tested for design andoperating effectiveness. The Internal Control System is supplemented by defined riskmanagement programme identifying and mitigating risks which are reviewed by the Board ofDirectors of the Company.
Accelerate growth via entering into growing market; Develop & PromoteTechnologically Sound products; Lookout for in-organic opportunities in this space;
Introduce & penetrate the largest market for Fire protection North America.
In this Managements Discussion and Analysis and directors report detailingthe Companys objectives projections estimates expectations or predictions anddescribing the Companys strength strategies and estimates are "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied.
22. Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT 9 as a part of this Annual Report is enclosed as an Annexure III.
23. Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report
There are no adverse material changes or commitments occurring after 31st March 2016which may affect the financial position of the
Company or may require disclosure.
24. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and
Companys operations in future
The Company has not accepted any deposits during the financial year under review.
26. Particulars of loans guarantees or investments under section 186(4) of theCompanies Act 2013
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the note 34(II) to Financial Statements.
27. Particulars of contracts or arrangements with related parties
The particulars of contracts or arrangements entered into by the Company with relatedparties referred to in sub-section (1) of section
188 of the Companies Act 2013 during the financial year have been provided in FormAOC-2 as disclosed in Annexure IV.
28. Corporate Governance Certificate
A report on Corporate Governance approved by the Board of Directors of the Company anda certificate from Mr. Kishor V. Ved
Practicing Company Secretary Mumbai for the year ended 31st March 2016 is set out inthe Annexure to the Directors report.
The Company has fully complied with the Corporate Governance practices specified underthe Companies Act 2013 and the Listing
Agreement with the BSE Limited and the National Stock Exchange of India Limited andSEBI Listing Regulations 2015.
29. Disclosure as per The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
Under the said Act the Company has set up a "Committee for Harassment of Women atWork Place" to look into complaints relating to sexual harassment at work place ofany women employees. During the year under review the Company has not received anycomplaints of harassment.
30. Conservation of energy technology absorption and foreign exchange earnings andoutgo
Information required under section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 with regard to conservation of energy and technologyabsorption and foreign exchange earnings and outgo are provided in Annexure V attached tothis report.
31. Corporate Social Responsibility (CSR)
The Company has been carrying out Corporate Social Responsibility (CSR) activities.These activities are carried out in terms of Section 135 read with Schedule VII of theCompanies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules2014.
Annual Report on CSR activities that includes details about the CSR policy of theCompany and CSR initiatives taken during the year is annexed herewith as Annexure VI.
32. Directors Responsibility Statement
To the best of knowledge and belief your Directors make the following statement interms of Section 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the Annual Accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the profit ofthe Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) that the Directors had laid down internal financial controls to be followed by theCompany are adequate and were operating effectively; and
(vi) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
33. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 125 of the Companies Act 2013 the Company is having unclaimed orunpaid dividends of `93309/- for the year ended 31st March 2009 and the balance as onthe date of completion of 7 years from the date of transfer to Unpaid Dividend Accountwill be transferred to the Investors Education and Protection Fund (the Fund) set up bythe Government of India in September 2016 and no payments shall be made from such Fundif any claim arises after the said transfer to the Fund.
Members who have not yet encashed their dividend warrant(s) for the financial yearended 31st March 2009 onwards are requested to make their claims to the Companyaccordingly without any delay.
|Status of unclaimed and unpaid dividend || || ||(Rs. in lakhs) |
|Year Ended || |
Amount of Dividend
|Unclaimed and unpaid dividend as on ||% of Unclaimed and Unpaid Dividend |
| || ||31st March 2016 || |
|March 312009 || |
|0.9331 ||0.25 |
|March 312010 || |
|0.8933 ||0.20 |
|March 312011 || |
|0.5216 ||0.08 |
|March 312012 || |
|0.7723 ||0.09 |
|March 312013 || |
|0.2624 ||0.06 |
|March 312014 || ||No Dividend Declared || |
|March 312015 || |
|1.2221 ||0.21 |
34. Listing with the Stock Exchange
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 tothe BSE Limited (BSE) and the National Stock
Exchange of India Limited (NSE) where the Companys Shares are listed.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Companysachievements would not have been possible. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith.
| || ||For and on behalf of the Board |
| || ||Nitin Fire Protection Industries Limited |
| ||Sd/- ||Sd/- |
| ||(Rahul N. Shah) ||(Kunal N. Shah) |
| ||(Whole-time Director) ||(Whole-time Director) |
|Mumbai September 6 2016 ||(DIN 00073226) ||(DIN 00077216) |