Nitin Fire Protection Industries Limited
Your Directors have pleasure in presenting their 23rd Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2018.
1. Financial summary or highlights/Performance of the Company (Standalone &Consolidated):
| || || || ||Rs. ( in lakhs) |
|Particulars ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
| ||Standalone ||Standalone ||Consolidated ||Consolidated |
|Revenue from Operations ||5523.48 ||26886.08 ||88774.73 ||132689.49 |
|Other Income ||1163.62 ||304.54 ||552.29 ||425.06 |
|Total Income ||6687.10 ||27190.62 ||89327.02 ||133114.55 |
|Expenses ||23568.24 ||39577.33 ||104125.06 ||136873.84 |
|Share of profit / (loss) in associate ||- ||- ||393.63 ||(2637.81) |
|Profit/(Loss) Before Tax ||(19144.87) ||(12386.71) ||(16668.14) ||(6397.10) |
|Total Tax Expense ||52.47 ||(27.20) ||52.47 ||(36.78) |
|Profit/(Loss)After Tax ||(19197.34) ||(12359.51) ||(16720.61) ||(6360.32) |
|Other comprehensive income/expense (net of tax) ||39.65 ||(17.53) ||547.59 ||(760.65) |
2. Review of Operations:
The total income during the year ended March 31 2018 on standalone basis stood at Rs.6687.10 lakhs as compared to the previous year of Rs. 27190.62 lakhs. The net loss for theyear ended March 31 2018 is Rs. 19197.34 lakhs as compared to Rs. 12359.51 lakhs loss forthe previous year. The loss for the year is mainly due to the lower turnoverincrease in the finance costs non-realization of receivables adverse economic scenarioexceptional items for claims written off of Rs. 2263.73 lakhs and provision for doubtfuldebts of Rs. 571.45 lakhs. The total income during the year ended March 31 2018 onconsolidated basis stood at Rs. 89327.02 lakhs as compared to the previous year of Rs.133114.55 lakhs. The net loss for the year ended March 31 2018 is Rs. 16720.61 lakhs ascompared to the loss of Rs. 6360.32 lakhs in the previous year.
3. Change in the nature of business:
There is no change in business of the Company during the financial year 2017-18.
Due to losses the Directors regret their inability to recommend any dividend for theyear ended March 31 2018.
The Company incurred loss of Rs.19197.34 lakhs and hence no transfer to the GeneralReserve arisen in the current year.
6. Share Capital:
The Authorized Share Capital of the Company was increased from Rs. 75.00 crores to Rs.175.00 crores by way of approval of the members of the Company on December 9 2017 as perthe recommendation of the Board of the Directors on November 3 2017. The filing of SH-7has not been completed by the Company and hence the record of the MCA has not been updatedaccordingly. The Board has considered the cancellation of the increase in authorizedcapital due to bad financial position and less chance of further issue of shares topublic. The Board is proposing members to reverse the resolution and keep the authorizedshare capital at Rs. 75.00 crores as before the passing of the resolution on December 92017.
There were no changes in the Paid-up Share Capital during the financial year 2017-18.
7. Directors Key Managerial Personnel Independent Directors & ComplianceOfficer:
Mr. Nitin M. Shah (DIN: 00073232) retires by rotation at the forthcoming 23rd AnnualGeneral Meeting of the Company and being eligible offers himself for re-appointment. TheBoard recommends his re-appointment.
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").
Mr. Atul Mehta & Mr. Hariharan Iyer were appointed as Independent Directors w.e.f.September 1 2017 by the members of the Company at the annual general meeting on September29 2017.
Mr. Rahul Shah and Mr. Kunal Shah resigned with effect from December 12 2017 due tobeing disqualified u/s. 164 of the Companies Act 2013 for non-filing of accounts andannual return of Innova Finance Corporation Pvt Ltd
Mr. Kamlesh Gandhi Chief Financial Officer (CFO) Shah resigned with effect fromDecember 12 2017.
Mr. Rahul Shah Mr. Kunal Shah and Mr. Bharat Shah appointed as Chief ExecutiveOfficer Chief Operating Officer and Chief Financial Officer (CFO) respectively by therecommendation of Audit Committee (AC) and Nomination & Remuneration Committee (NRC)and by the approval of the Board w.e.f. May 30 2018.
Mr. Nitin Shah was appointed as Chairman w.e.f. May 30 2018 in place of Mr. AtulMehta. On August 28 2018 the Board of Directors of the Company appointed Mr. Atul Mehtaas Chairman of the Company in place of Mr. Nitin Shah. The Board of Directors appointed
Mr. Nitin Shah as Managing Director and Key Managerial Personnel w.e.f August 28 2018subject to approval of shareholders and others as required under the provisions of theCompanies Act 2013 and amendment thereof.
8. 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 ofemployees of the Company and Directors is furnished below:
|Sr. No. ||Name ||Designation ||Remuneration - FY 2017-18(Rs.) ||Remuneration - FY 2016-17(Rs.) ||Increase / (decrease) in remuneration from previous year (Rs.) ||Ratio/times per Median of employee remuneration (times) |
|1 ||2 ||3 ||4 ||5 ||6 ||7 |
|1 ||Rahul N. Shah (*) ||Whole-time Director KMP(*) ||1155000 ||1993400/- ||-838400/- ||2.31 |
|2 ||Kunal N. Shah (#) ||Whole-time Director (#) ||1540000 ||1979000/- ||-439000/- ||3.10 |
|3 ||Kamlesh Gandhi(**) ||CFO KMP ||1538756 ||2139357/- ||-600601/- ||3.09 |
|4 ||Sraban Kumar Karan ||CS - KMP ||945637/- ||935159/- ||10478/- ||1.90 |
* Mr. Rahul Shah resigned with effect from December 12 2017. # Mr. Kunal Shah resignedwith effect from December 12 2017. ** Mr. Kamlesh Gandhi resigned with effect fromDecember 12 2017.
Increase / decrease for those employees who was for part of the year is not applicable.The above increase and decrease are due to deficiency in the payment of thecontract amount in the previous year and payment for the part of the .
|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 |
|Graduate in Commerce & Diploma in Business Management and 19 years ||14.08.2014 ||40 ||Nitin Fire Protection Ind. Ltd. ||Contractual ||(18831333 shares) ||Mr. Nitin M. Shah & Mr. Kunal N. Shah are relatives |
|Bachelor in Electronic and Tele Communications and more than 4 years ||14.08.2014 ||34 ||Nitin Fire Protection Ind. Ltd. ||Contractual ||(30673000 shares) ||Mr. Nitin M. Shah & Mr. Rahul N. Shah are relatives |
|C. A. and 37 years ||17.06.2013 ||58 ||Greshma Shares & Stocks Ltd. ||Contractual ||NIL ||No |
|A.C.S. and 11 years ||19.01.2016 ||41 ||Mehta & Mehta Company Secretaries ||Contractual ||NIL ||No |
Other Disclosures pursuant to the Companies (Appointment and Remuneration of ManagerialPersonnel) 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. ||The directors and CFO left the Company on December 12 2017. There was no increment in the salary of any employees during the current year. During the year the directors were paid the salary up to July 31 2017 as per the resolution approved by the members earlier. |
|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 2018. ||127 |
|5 ||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 was no increase in the salary of any employees. |
|6 ||Affirmation that the remuneration is as per the remuneration policy of the Company. ||The remuneration is as per 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 policy on March 26 2016 and revised on February 122018 for selection and appointment of
Directors Senior Management and their remuneration
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.
The remuneration paid to the whole-time directors has been provided in MGT-9available at the link www.nitinfire.com
The Company pays sitting fees to all the Independent Directors for attendance in themeetings of the Board of Directors and the Audit Committee constituted by the Board ofDirectors of the Company.
The summary of Remuneration Policy is provided in the Corporate Governance Report.
During the year ended 31st March 2018 the Board of Directors had met 6 (six) times on30.05.2017 01.09.2017 14.09.2017 03.11.201712.12.2017 and 12.02.2018.
4 (Four) Audit Committee meetings were held on 30.05.2017 14.09.2017 12.12.2017 and12.02.2018 for the year ended on March 312018. Nomination and Remuneration Committeemeetings were held on 01.09.2017 12.12.2017 and 12.02.2018 for 3 (three) times. Therewere 1 (one) Corporate Social Responsibility Committee meeting on 12.02.2018 and 1 (one)Independent Directors' meetings on 12.02.2018. Stakeholders' Relationship Committeemeeting was held once on 12.02.2018 and Risk Management Committee meeting was held on12.02.2018 for One (1) time during the year ended 31st March 2018. The details ofmeetings and attendance thereat has been given in the Corporate Governance Report. Theintervening gap between two consecutive Board meetings & Audit Committee Meetingsrespectively were within the period prescribed under the Companies Act 2013.
The recommendation by the Audit Committee as and when made to the Board had beenaccepted by it or deferred to the next meeting.
10. Board Evaluation:
In line with the provisions under the Companies Act 2013 SEBI Regulations theevaluation of the Board Committee(s) and Individual Directors were made by the Board attheir meeting held on February 12 2018.
The evaluation questionnaires were circulated to all the directors along with agenda.It was consisting of three parts as follows:
BOARD EVALUATION; DIRECTORS' SELF EVALUATION; COMMITTEE EVALUATION.
Independent Directors (IDs) reviewed the performance of the non-independent directorsthe Chairman and the Board (as a whole). The Nomination & Remuneration Committee haddiscussed with the Directors of the Company on overall board effectiveness. The Boarddiscussed overall performance of Board individual directors (including IDs) andcommittees of Board.
After a joint discussion the Chairpersons of the meeting of the IndependentDirectors' Nomination & Remuneration Committee and
Board expressed satisfaction on the evaluation of all the directors and overallperformance of Board individual directors (including IDs) and committees of Board.
11. 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 Company's subsidiary(ies) associateCompany(ies) and joint venture(s) is given in Form AOC-1 as Annexure - I [Performance andfinancial position of the subsidiaries included in the consolidated financial statement].
Further the Annual Accounts and related documents of the subsidiary Company(ies) shallbe kept open for inspection at the Registered Office of the Company. The Company will alsomake available copy thereofuponspecificrequest by any Member(s) of the Company interestedin obtaining the same. Further pursuant to Accounting Standard AS-21 issued by theInstitute of Chartered Accountants of India Consolidated Financial Statements presentedby the Company in this Annual Report include the financial information of its subsidiary(ies).
Pursuant to the provisions of section 139 of the Act and the rules framed thereafterM/s. Haribhakti & Co. LLP (FRN 103523W/ W-100048) was appointed as statutory auditorsof the Company from the conclusion of the twenty first annual general meeting (AGM) of theCompany held on September 30 2016 till the conclusion of the twenty fifth AGM to be heldin the year 2020 subject to ratification of their appointment at every AGM.
Since the provisions has been amended and ratification for appointment is no morerequired the ratification made in the Annual General Meeting held on September 29 2017pursuant to the recommendation of the Board and the Audit Committee for appointment ofauditors till the conclusion of the twenty fifth AGM to be held in the year 2020 willstill remain in force. Hence the ratification was not repeated in the forthcoming AnnualGeneral Meeting to be held on September 29 2018.
Audit Report: The Auditors' disclaimer opinion and reply of the management are asunder: Basis of disclaimer opinion of Statutory Auditors' on Standalone FinancialStatement: a) Disclaimer opinion in the Statutory Audit Report:
As more fully explained in Note No. 40 to the Standalone Ind AS Financial Statementsno provision has been made by the Company in respect of its dispute with a bank forclaim made by the bank for Rs. 50133481 (excluding interest) on a derivative contractentered into by its erstwhile subsidiary the liability for which has been taken over bythe Company. The Company has not determined the quantum of provision required in thisregard as at March 31 2018 on the above contract and has relied on a legal opinion in thematter wherein no liability is expected. Pending the final settlement of the matter weare unable to comment on the extent of provision required if any in this regard.
Management's Reply on disclaimer opinion 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 toRs.50133481/- (excluding interest). Based on a legal opinion the Company has filed apetition in the Hon'ble High Court of Bombay challenging the legality of the contract.Pending decision no provision is made in the books of account for this claim.
b) Disclaimer opinion in the Statutory Audit Report:
As more clarified in Note No. 46 to the to the Standalone Ind AS Financial Statementsthe Company has an exposure in Worthing-ton Nitin Cylinders Private Limited aggregatingRs. 419504163 as at March 31 2018. In the absence of the fair value of the investmentas required under Ind AS 28 Investment in Associates and Joint Ventures' we areunable to comment on the impairment if any on the carrying amount of the investment asat March 31 2018.
Management's Reply on disclaimer opinion 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 ishopeful that impairment if any will not be material and if any such thing is noticed infuture we will provide for the same.
c) Disclaimer opinion in the Statutory Audit Report:
As more explained in the Note 47 to the Standalone Ind AS Financial Statements inrelation to exposure in trade receivables aggregating Rs. 2767323001 which areoutstanding for a long period of time payments for which are not forthcoming and aresubject of independent confirmations from some of the trade receivables any otheralternate toindependentconfirmation. audit evidence and non recovery of any amount duringthe year and till date we are unable to comment on the recoverability of the same andconsequential write off if any.
Management's Reply on disclaimer opinion in the Statutory Audit Report:
All efforts for recovery are being made. Amount which may not be ultimately realizedcannot be estimated as of now.
d) Disclaimer opinion in the Statutory Audit Report:
As more explained in the Note 48 to the Standalone Ind AS Financial Statements theTrade receivables aggregating Rs. 345994837 (other than those covered under para (c)above) Trade payables aggregating Rs. 186746632 and loans to body corporatesaggre-recon gating Rs. 33108413aresubjecttoconfirmation/reconciliation. In the absenceof independent confirmation/ -ciliation we are unable to comment on theconsequential impact if any.
Management's Reply on disclaimer opinion in the Statutory Audit Report:
The Management is in the process of doing needful and expects that there will not beany material impact post confirmation and if any impact arises we will provide for thesame in next quarter.
e) Auditors' Qualification in Internal Financial control report:
In the qualified opinion it is mentioned that material weakness have been identifiedinthe operating effectiveness of Company's in -ternal 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) provision for notrecognizing impairment in the carrying cost claims receivables shown under othernon-current assets (fully described in note 33 to the standalone financial statements)and for Export receivables which are outstanding for a long period of time and paymentsfor which are not forth coming (fully described in note 46 to the standalone financialstatements) determination of terms of sale and purchase of items of inventory andunderlying documentation relating to internal movements of item of inventory and policydocumentation pertaining to human resources and payroll related matters which couldpotentially impact the related account balances when determined and recognized.
Management's reply on Qualification in Internal Financial control report:
The clarification on the provision for diminution in value of investment of WorthingtonNitin Cylinders Private Limited for derivative contract claim for claims receivable andexport receivables not forthcoming have been explained above in audit observation and theCompany has made lot of improvements and initiated further process to implement therequired process and procedures in purchase and sales terms inventory and pay rollrelated matters.
f) 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.
g) Auditors' opinion:
The Standalone Ind AS Financial Statements which indicates that the Company incurred anet loss of Rs. 1915770553 during the year ended March 31 2018 and as of that datethe Company's current liabilities exceeded its total assets by Rs. 1364507204. Furtheras stated therein indicates that a material uncertainty existsthatmaycastsignificantdoubton the Company's ability to continue as a going concern. Our opinion is not modified inrespect of this matter.
The Management is looking after all options to recover the Company and hopingturnaround to make as going concern. One of the main obstacles is burden of finance costwhich can be sorted out after the proposal of one time settlement with lenders as in theprocess now.
13. 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 Directors of the Company had appointed Mr. Kishor V. VedPracticing Company Secretary to undertake the Secretarial Audit for the financial yearended 31st March 2017. The report of the Secretarial Auditors in Form No.MR-3 isenclosed as Annexure II. The qualifications of Secretarial Auditor and reply of theManagement are as follows:
|Qualifications of Secretarial Auditor ||Reply of the Management |
|The Company has delayed 1 day and 14 days in submitting the outcome of financialresult approved at the meeting to the Stock Exchanges for the quarter ended 31-Mar-17 and 31-Mar-18 respectively. ||The fines imposed by the stock exchanges for delay in submission have been paid by the Company as per SEBI (LODR) Regulations 2015. |
|The Company has submitted the voting results of the Annual General Meeting held on September 29 2017 to the Stock Exchange after expiry of the prescribed time limit. ||The delay in submission caused due to September 30 2017 the intermediate day being Sunday or holiday falling within the specified time limit of 48 hours. The Company had replied to National Stock Exchange with regard to the same. |
|The fees of BSE NSE CDSL and NSDL have not been paid constraints the management could not pay the for the financial year 2018-19. ||Duetofinancial same as on August 28 2018. |
14. 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 Company is not required to carry out thecost audit for the financial year ended
31st March 2018.
15. 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 Companyhad appointed M/s. Valueonshore Advisors as Internal Auditor of the Company for the year2017-18. Further the Board appointed again M/s. KNPS & Associates CharteredAccountants as Internal Auditor of the financial Company for the financial year 2017-18 inplace of M/s. Valueonshore Advisors. The report of the Internal Auditors had been placedfrom time to time at the meetings of the Board and Audit Committee.
16. 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 reviewedby the Audit Committee of the Board of Directors.
The Audit Committee and the Board have ensured that the said system is adequateconsidering the nature of business and size of the transactions.
17. Issue of employee stock options:
The Company has not issued / granted any stock options to its employees includingits Key Managerial Personnel and hence the provisions of Rule 12 (9) of theCompanies (Share Capital and Debentures) Rules 2014 are not applicable.
18. 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 Company's website at the link http://nitinfire.com/blog/vigil-mechanism/vig-il-mechanism.
19. Risk management policy:
The Company has been addressing various risks impacting the smooth operation andthe policy of the Company on risk management as provided in Management Discussionand Analysis section of the Annual Report.
20. Management Discussion and Analysis: Macroeconomic development:
The Government had taken many steps for development of the country and to form anew India. Though several sectors had improved well the fire and safety sector hadsuffered due to deficiency of the Government's attention to strong policy measures andimplementation of the rules and regulations. The next upcoming important issue for theworld leaders is to protect the world from global warming and destruction of assets byfire. The Global Community has failed to take unanimous and collective decision to protectfrom the impact of global warming. America has stepped back to support global community inthe year 2017 at Bonn Germany. United States declared that they will no longer contributeto the Green Climate Fund for global warming assistance.
The support and participation of the developed countries will make the solution easierfor the global issue like global warming to save the planet earth. Globally and In Indiaparticularly the Fire protection industry has been affected due to changes in the policyof the various governments and the main reason being the taxation on running the firebusiness. The two major domestic policy developments:
Implementation of the Goods and Services Tax (GST) and demonetization of the Rs. 500and Rs. 1000 Indian bank notes has affected the macro economic development of the Countrywith a negative impact on the fire fighting .
Our business and strong track record
Our Company has establishment in overseas countries. Due to that reason thebusiness may be affected if the foreign countries make changes in the policiestaxation and business rules. Nitin Fire Protection Industries Limited (NFPIL) isnationally and Fire Protection solutions provider with wide range of systems toprotect and prevent from disaster of fire.internationallycertified The Company isproviding end to end Fire ProtectionSolutionsforvariousindustrieslikeRefineriesControlRooms Power Plants
Offshore Platforms Server Rooms & Data Centres Warehouses Commercial SpacesHospitals and Hospitality sector.
We undertake large scale fire protection system installation and have successfullycompleted 35 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 protectionsystems.
To increase the footprints in overseas countries with the success of domestic country.
INDUSTRY STRUCTURE & DEVELOPMENT
The Global Fire & Safety market is steadily increasing and company expects togradually increase its market share. There is a definite demand for Fire Protectionproducts worldwide with newer products under development. The Innovation and ProductDevelopment are the critical aspects of success in the industry.
Financial performance of the company is given in the director's report.
OUTLOOK OPPORTUNITIES AND CHALLENGES India:
Though business prospects seem to be brighter in the near future the maindeterrent to the Company at present is financial burden that has not been met in the duecourse. The Board and promoters are trying hard to bring the lenders into the one timeSettlement. Once the same is agreed and closed from both the ends the up moving phasewill be visible sooner. The company had to face the recessionary market conditionsand it had a difficult time realizing the outstanding dues from the customers in theMiddle East as well as
South East Asian countries due to slack in the overall business scenario in thesecountries. Due to this the company could not meet the commitments of the workingcapital lenders. Also the reduction in the limit by one of the working capital lenders andthe untied portion of the assessed working capital limit further added to the liquidityproblems. The change in rules of taxation in Dubai is also going to impact the operationof the Company.
Due to the above the company is facing liquidity crunch to run its operations. Theaccounts of the company are monitored by the bank. The company is coordinating with theworking capital lenders for Debt Restructuring program. Hence till that time the companyis not taking any new major contracts/projects. The reduction in the price of oil andslowdown in the Middle East and South
East Asian countries have also affected export business.
GST on most of the Fire protection Equipments and products is 18% which may have shortterm effects on the business.
The overall Fire protection business outlook in India seems gradually improving. ExceptIndustrial clients small units like housing societies and commercial complexes areexpecting to create scope for Fire Protection Industry. The Company has over 60 (domestic+ international) approvals from various agencies & regulatory bodies requiredto operate in this business & execute fire protection safety & security solutionprojects across various demographics. Hence the Company believes that once the proposeddebt restructuring programme and liquidity crisis is over the company will be ableto regain its past glory.
There will be large spending asset creation and business development in UAE due tothe Expo 2020 and other events. With UAE contributing 76.92% 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.
The diversified portfolio of products and its regular up gradation has helped yourCompany to add value in markets of UAE South Asia and Europe. Our strength is ourdetermination and team work.
Employees are the key to achieve the Company's objectives and strategies. YourCompany 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.The Company thankfully acknowledges their commitment dedication and passion andsacrifices. the Company expects their continuous guidance and support in future. TheCompany inspires and motivates employees and promotes teamwork trust and confidence forthe organizational growth and to attain the organizational goals. The Company is going toprovide a and help to realize their potential and motivation to develop personallymeaningfulenvironmentwhichgivesboostintheirconfidence and professionally. The Board isreshaping the size of the employees as per the projects and business in hand.
Risk Management and Internal Control System
The Internal control system is vested with the promoters of the Company.Professionals and Independent directors advise and give guidance as per the necessity andin the interest of the Company considering the provisions of the acts rules andregulation applicable from time to time. The Company has a system of controls in order toensure that all assets are safeguarded against loss from unauthorized use or disposal andalso felt from time to time to be strengthened as per the advice of the professional.Regular Internal Audit is carried out to ensure that the responsibilities are executedeffectively and that proper and adequate systems are in place and is reviewed by auditcommittee constituted by the Board of Directors. Though the audit Committee and RiskManagement Committee analyzes the same the promoters are advised to come forward to takeall the necessary steps to implement the internal control system.
Your Company continues to comply with laws regulations and policies as per theregulatory guidelines that are applicable.
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.
In this Management's Discussion and Analysis and directors' report detailing theCompany's objectives projections estimates expectations or predictions anddescribing the Company's 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.
21. Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of annualreturn in Form MGT 9 as a part of this Annual Report is available in the website of theCompany. The link/website to view the MGT 9 is www.nitinfire.com.
22. Material changes and commitments if any affecting the financial position of theCompany which of the financial year of the Company to which the financial statementsrelate and the date of the report
The adverse material changes or commitments occurred during the financial year endingMarch 31 2018 are as follows: During the year the short term borrowing has been increasedby repayment of SBLC of Rs. 1595133449/- against the guarantee commitment to theglobal subsidiaries in favour of Nitin Ventures FZE and Nitin Global Limited. There wasalso increase in finance of Rs. 190162783/- in comparison to previous year. The Companyhas written off the claim of Rs. 2263.73 lakhs on account of loss of intangible assets asper the extended litigation and order of the Delhi High Court in relation to the Jointventure partnership with Oil Block. The Company has provided the doubtful debts of Rs.5.71 crores and ECL provision on trade receivables.
There were no such adverse material changes or commitments occurring after thefinancial year 31st March 2018 except as above and the claim of the financial creditorsand banks.
23. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future or materialorders passed by the Regulators courts or tribunals which impact the going concern statusof the Therearenosignificant
Company. However some judgments has been passed by the courts which may affect thefuture operations. However members' attention is drawn to the following developments: Asper the order of the Bombay High Court mentioned hereunder it can be stated that theoperation will not be affected in future according to the order passed by theregulators. Standard Chartered Bank Bank had filed the petition against Nitin FireProtection Industries Limited (NFPIL) before the Hon'ble High Court of Bombay to recoverthe dues against associate Company Worthington Nitin Cylinders Private Limited(WNCPL). WNCPL was the principal borrower. NFPIL was corporate guarantor.
The petition (COMPANY PETITION NO.159 OF 2016) of Standard Chartered Bank against theCompany seeking winding up is barred by limitation and stands dismissed. TheCompany was the guarantor under the Master Agreement entered into between WorthingtonNitin Cylinders Limited (principal borrower) and Standard Chartered Bank petitioner. TheHon'ble High Court has passed the order in favour of Nitin Fire Protection IndustriesLimited by dismissing / rejecting Standard Chartered Bank's Company Petition on the basisthat the same was filed after the expiry of the limitation period. The Company had enteredinto a joint venture with Oil Block (RJ-ONN-2004/1 which was un-incorporated. As per theorder of the High Court of Delhi on September 5 2017 the company has become thedefaulting party and shall be deemed to have surrendered the participating interestin the Joint venture. The petition filed by the Company under the Joint venture agreementagainst Gail (India) Ltd for recovery of the loss happened to the Company before the HighCourt of Delhi New Delhi was dismissed and disposed off. The Management had takenthe note of the same as claims written off for Rs. 2263.73 lakhs and provided under thebooks of accounts in the standalone financial results of the Company for the quarter andnine months ended December 31 2017.
The Company has not accepted any deposits during the financial year under review.
25. Particulars of loans guarantees or investments under section 186(4) of theCompanies Act 2013
Details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the note 4 5 and 13 to FinancialStatements.
26. Particulars of contracts or arrangements with related parties
Details of transaction with related party have been given in the note number 41 to thefinancial statements. There were no transactions required to be reported in form AOC-2.
27. Corporate Governance Certificate
A report on Corporate Governance approved by the Board of Directors of theCompanyand certificatefrom Mr. Mayank Arora Practicing Company Secretary Mumbaifor the year ended 31st March 2018 are enclosed to the report. The Company has fullycomplied with the Corporate Governance practices specified under the Companies Act 2013and the Listing Agreement with the BSE Limited and the National Stock Exchange of IndiaLimited and SEBI Listing Regulations 2015.
28. 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 ofWomen at Work Place" to look into complaints relating to sexual harassment at workplace of any women employees. During the year under review the Company has not receivedany complaints of harassment.
29. 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 andtechnology absorption and foreign exchange earnings and outgo are provided in Annexure IIIattached to this report.
30. Corporate Social Responsibility (CSR)
Since the Company had incurred huge loss the Company was not requiring anyspending on Corporate Social Responsibility during 2017-18 as per the provisions of theCompanies Act 2013 and amendment thereto. The Company has been carrying out CorporateSocial Responsibility (CSR) activities. The unspent amount of Rs. 2495341/- is yet to beincurred after the improvement in the performance of the Company. These activities arecarried out in terms of Section 135 read with Schedule VII of the Companies Act 2013 andthe Companies (Corporate Social Responsibility Policy) Rules 2014. Annual Reporton CSR activities is annexed herewith as Annexure IV.
31. 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 theAnnual Accounts for the year ended March 31 2018 the applicable accounting standardshave been followed along with proper explanation relating 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 atrue and fair view of the state of affairs of the Company as at March 31 2018 and of theprofit of the 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 concernbasis;
(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal are adequate and were operating effectively; and (vi) thatthe Directors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
32. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 125 of the Companies Act 2013 on 31st March 2018 theCompany is having unclaimed or unpaid dividends of Rs. 52146/- for the year ended31st March 2011 and the balance as on the date of completion of 7 years from the date oftransfer to Unpaid
Dividend Account will be transferred to the Investors Education and Protection Fund(the Fund) set up by the Government of India on or after September 12 2018.
Status of unclaimed and unpaid dividend (Rs. in lakhs)
|Year Ended ||Date of declaration of Dividend ||Amount of Dividend ||Unclaimed and unpaid dividend as on 31st March 2018 ||% of Unclaimed and Unpaid Dividend ||Due Date for transfer to IEPF Account |
|March 312011 ||11.08.2011 ||630.16 ||0.5214 ||0.08 ||12.09.2018 |
|March 312012 ||11.08.2012 ||882.21 ||0.7698 ||0.09 ||13.09.2019 |
|March 312013 ||13.08.2013 ||441.11 ||0.2609 ||0.06 ||14.09.2020 |
|March 312014 || || ||No Dividend declared || || |
|March 312015 ||21.09.2015 ||585.54 ||1.0722 ||0.18 ||23.10.2022 |
|March 312016 || || ||No Dividend declared || || |
|March 312017 || || ||No Dividend declared || || |
|March 312018 || || |
No Dividend recommended
| || |
Members who have not yet encashed their dividend warrant(s) for the financial yearended 31st March 2011 onwards are requested to make their claims to the Companyaccordingly without any delay.
Details about transfer of unclaimed shares have been given in the Corporate GovernanceReport and Notice of AGM.
33. Listing with the Stock Exchange
Annual Listing Fees for the year 2018-19 to the BSE Limited (BSE) and National StockExchange of India Limited (NSE) is yet to be paid where the Company's 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 Company'sachievements 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 |
| ||(Atul H. Mehta) |
| ||(Chairman) |
| ||(DIN 00112451) |
|Mumbai August 28 2018 || |