Nitin Fire Protection Industries Ltd Directors Report.
Nitin Fire Protection Industries Limited
Your Directors have pleasure in presenting their 23rd Annual Report on the business and operations 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)|
|Revenue from Operations||5523.48||26886.08||88774.73||132689.49|
|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)|
|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 the year ended March 31, 2018 is Rs. 19197.34 lakhs as compared to Rs. 12359.51 lakhs loss for the previous year. The loss for the year is mainly due to the lower turnover, increase in the finance costs, non-realization of receivables, adverse economic scenario, exceptional items for claims written off of Rs. 2263.73 lakhs and provision for doubtful debts of Rs. 571.45 lakhs. The total income during the year ended March 31, 2018, on consolidated 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, as compared 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 the year ended March 31, 2018.
The Company incurred loss of Rs.19,197.34 lakhs and hence no transfer to the General Reserve 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 per the recommendation of the Board of the Directors on November 3, 2017. The filing of SH-7 has not been completed by the Company and hence the record of the MCA has not been updated accordingly. The Board has considered the cancellation of the increase in authorized capital due to bad financial position and less chance of further issue of shares to public. The Board is proposing members to reverse the resolution and keep the authorized share capital at Rs. 75.00 crores as before the passing of the resolution on December 9, 2017.
There were no changes in the Paid-up Share Capital during the financial year 2017-18.
7. Directors, Key Managerial Personnel, Independent Directors & Compliance Officer:
Mr. Nitin M. Shah (DIN: 00073232) retires by rotation at the forthcoming 23rd Annual General Meeting of the Company and being eligible offers himself for re-appointment. The Board recommends his re-appointment.
All Independent Directors of the Company have submitted their declarations that they meet 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 Disclosure Requirements) 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 September 29, 2017.
Mr. Rahul Shah and Mr. Kunal Shah resigned with effect from December 12, 2017 due to being disqualified u/s. 164 of the Companies Act, 2013, for non-filing of accounts and annual return of Innova Finance Corporation Pvt Ltd
Mr. Kamlesh Gandhi, Chief Financial Officer (CFO) Shah resigned with effect from December 12, 2017.
Mr. Rahul Shah, Mr. Kunal Shah and Mr. Bharat Shah appointed as Chief Executive Officer, Chief Operating Officer and Chief Financial Officer (CFO) respectively by the recommendation 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. Atul Mehta. On August 28, 2018, the Board of Directors of the Company appointed Mr. Atul Mehta as 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, 2018 subject to approval of shareholders and others as required under the provisions of the Companies Act, 2013 and amendment thereof.
8. Particulars of Remuneration to its Employees / Directors / Key Managerial Personnel
The information required under the provisions of Section 197 of the Act read with Rule 5(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 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||Rahul N. Shah (*)||Whole-time Director KMP(*)||11,55,000||1993400/-||-838400/-||2.31|
|2||Kunal N. Shah (#)||Whole-time Director (#)||15,40,000||1979000/-||-439000/-||3.10|
|3||Kamlesh Gandhi(**)||CFO KMP||15,38,756||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 resigned with effect from December 12, 2017. ** Mr. Kamlesh Gandhi resigned with effect from December 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 the contract 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||(18,831,333 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||(30,673,000 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 Managerial Personnel) Rules, 2014:
|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 the recommendation of the Nomination & Remuneration
Committee framed a remuneration policy on March 26, 2016 and revised on February 12, 2018 for selection and appointment of
Directors, Senior Management and their remuneration
Remuneration to Key Managerial Personnel and Staff is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain qualified professional and talent.
For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein and guidelines issued by the Central Government and other authorities from time to time.
The remuneration paid to the whole-time directors has been provided in MGT-9 available at the link www.nitinfire.com
The Company pays sitting fees to all the Independent Directors for attendance in the meetings of the Board of Directors and the Audit Committee constituted by the Board of Directors 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 on 30.05.2017, 01.09.2017, 14.09.2017, 03.11.2017,12.12.2017 and 12.02.2018.
4 (Four) Audit Committee meetings were held on 30.05.2017, 14.09.2017, 12.12.2017 and 12.02.2018 for the year ended on March 31,2018. Nomination and Remuneration Committee meetings were held on 01.09.2017, 12.12.2017 and 12.02.2018 for 3 (three) times. There were 1 (one) Corporate Social Responsibility Committee meeting on 12.02.2018 and 1 (one) Independent Directors meetings on 12.02.2018. Stakeholders Relationship Committee meeting was held once on 12.02.2018 and Risk Management Committee meeting was held on 12.02.2018 for One (1) time during the year ended 31st March, 2018. The details of meetings and attendance thereat has been given in the Corporate Governance Report. The intervening gap between two consecutive Board meetings & Audit Committee Meetings respectively were within the period prescribed under the Companies Act, 2013.
The recommendation by the Audit Committee as and when made to the Board had been accepted by it or deferred to the next meeting.
10. Board Evaluation:
In line with the provisions under the Companies Act, 2013, SEBI Regulations, the evaluation of the Board, Committee(s) and Individual Directors were made by the Board at their 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 directors, the Chairman and the Board (as a whole). The Nomination & Remuneration Committee had discussed with the Directors of the Company on overall board effectiveness. The Board discussed overall performance of Board, individual directors (including IDs) and committees of Board.
After a joint discussion, the Chairpersons of the meeting of the Independent Directors, Nomination & Remuneration Committee and
Board expressed satisfaction on the evaluation of all the directors and overall performance 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 the salient features of the financial statement of a Companys subsidiary(ies), associate Company(ies) and joint venture(s) is given in Form AOC-1 as Annexure - I [Performance and financial position of the subsidiaries included 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 thereofuponspecificrequest by any Member(s) of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by 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 thereafter, M/s. Haribhakti & Co. LLP (FRN 103523W/ W-100048) was appointed as statutory auditors of the Company from the conclusion of the twenty first annual general meeting (AGM) of the Company held on September 30, 2016 till the conclusion of the twenty fifth AGM to be held in the year 2020, subject to ratification of their appointment at every AGM.
Since the provisions has been amended and ratification for appointment is no more required, the ratification made in the Annual General Meeting held on September 29, 2017 pursuant to the recommendation of the Board and the Audit Committee for appointment of auditors till the conclusion of the twenty fifth AGM to be held in the year 2020 will still remain in force. Hence the ratification was not repeated in the forthcoming Annual General Meeting to be held on September 29, 2018.
Audit Report: The Auditors disclaimer opinion and reply of the management are as under: Basis of disclaimer opinion of Statutory Auditors on Standalone Financial Statement: a) Disclaimer opinion in the Statutory Audit Report:
As more fully explained in Note No. 40 to the Standalone Ind AS Financial Statements, no provision has been made by the Company in respect of its dispute with a bank for claim made by the bank for Rs. 50,133,481 (excluding interest) on a derivative contract entered into by its erstwhile subsidiary, the liability for which has been taken over by the Company. The Company has not determined the quantum of provision required in this regard as at March 31, 2018 on the above contract and has relied on a legal opinion in the matter wherein no liability is expected. Pending the final settlement of the matter, we are unable to comment on the extent of provision required, if any, in this regard.
Managements Reply on disclaimer opinion in the Statutory Audit Report:
Consequent to part sale of equity stake in an erstwhile subsidiary in December, 2010, the Company has taken over an outstanding claim of a derivative contract amounting to Rs.50,133,481/- (excluding interest). Based on a legal opinion the Company has filed a petition in the Honble 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 Statements, the Company has an exposure in Worthing-ton Nitin Cylinders Private Limited aggregating Rs. 419,504,163 as at March 31, 2018. In the absence of the fair value of the investment as required under Ind AS 28 Investment in Associates and Joint Ventures, we are unable to comment on the impairment, if any, on the carrying amount of the investment as at March 31, 2018.
Managements Reply on disclaimer opinion in the Statutory Audit Report:
Worthington Nitin Cylinders Private Limited (WNCPL) is our Associate Company and based on the valuation of the fixed assets of WNCPL from an independent valuer, the Company is hopeful that impairment, if any, will not be material and if any such thing is noticed in future, 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, in relation to exposure in trade receivables aggregating Rs. 2,767,323,001 which are outstanding for a long period of time, payments for which are not forthcoming and are subject of independent confirmations from some of the trade receivables, any other alternate toindependentconfirmation. audit evidence and non recovery of any amount during the year and till date, we are unable to comment on the recoverability of the same and consequential write off, if any.
Managements Reply on disclaimer opinion in the Statutory Audit Report:
All efforts for recovery are being made. Amount which may not be ultimately realized cannot 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, the Trade receivables aggregating Rs. 345,994,837 (other than those covered under para (c) above), Trade payables aggregating Rs. 186,746,632 and loans to body corporates aggre-recon gating Rs. 33,108,413aresubjecttoconfirmation/reconciliation. In the absence of independent confirmation/ -ciliation, we are unable to comment on the consequential impact, if any.
Managements Reply on disclaimer opinion in the Statutory Audit Report:
The Management is in the process of doing needful and expects that there will not be any material impact post confirmation and if any impact arises, we will provide for the same in next quarter.
e) Auditors Qualification in Internal Financial control report:
In the qualified opinion it is mentioned that material weakness have been identifiedin the operating effectiveness of Companys in -ternal financial control with respect to provision for diminution of value of investment ( fully described in note 45 to the standalone financial statement), provision for a claim on a derivative contract (fully described in note 35 to the standalone financial statements), provision for not recognizing impairment in the carrying cost claims receivables shown under other non-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 payments for which are not forth coming (fully described in note 46 to the standalone financial statements), determination of terms of sale and purchase of items of inventory and underlying documentation relating to internal movements of item of inventory and policy documentation pertaining to human resources and payroll related matters, which could potentially impact the related account balances when determined and recognized.
Managements reply on Qualification in Internal Financial control report:
The clarification on the provision for diminution in value of investment of Worthington Nitin Cylinders Private Limited, for derivative contract claim, for claims receivable and export receivables not forthcoming have been explained above in audit observation and the Company has made lot of improvements and initiated further process to implement the required process and procedures in purchase and sales terms, inventory and pay roll related matters.
f) Basis of Qualification opinion of Statutory Auditors on Consolidated Financial Statement:
The above qualification of Statutory Auditors on Standalone Financial Statement remains same with respect to their basis of qualified opinion on Consolidated Financial Statement.
g) Auditors opinion:
The Standalone Ind AS Financial Statements, which indicates that the Company incurred a net loss of Rs. 1,915,770,553 during the year ended March 31, 2018 and, as of that date, the Companys current liabilities exceeded its total assets by Rs. 1,364,507,204. Further as stated therein, indicates that a material uncertainty existsthatmaycastsignificantdoubt on the Companys ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The Management is looking after all options to recover the Company and hoping turnaround to make as going concern. One of the main obstacles is burden of finance cost which can be sorted out after the proposal of one time settlement with lenders as in the process 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. Ved, Practicing Company Secretary, to undertake the Secretarial Audit for the financial year ended 31st March, 2017. The report of the Secretarial Auditors in Form No.MR-3 is enclosed as Annexure II. The qualifications of Secretarial Auditor and reply of the Management 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 the Companies (Cost Records and Audit)
Rules, 2014, as amended from time to time, the Company is not required to carry out the cost 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 the Listing Agreements with Stock Exchanges and the SEBI (LODR) Regulations, 2015, the Company had appointed M/s. Valueonshore Advisors as Internal Auditor of the Company for the year 2017-18. Further, the Board appointed again M/s. KNPS & Associates, Chartered Accountants as Internal Auditor of the financial Company for the financial year 2017-18 in place of M/s. Valueonshore Advisors. The report of the Internal Auditors had been placed from 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 for ensuring orderly and efficient conduct of business, safeguarding its assets, prevention & detection of frauds & errors & completeness of accounting records and timely preparation of reliable financial information. These systems are periodically reviewed by the Audit Committee of the Board of Directors.
The Audit Committee and the Board have ensured that the said system is adequate considering 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 including its Key Managerial Personnel and hence, the provisions of Rule 12 (9) of the Companies (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 is given in Corporate Governance Report forming part of this report and the same has been posted on the Companys 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 and the policy of the Company on risk management as provided in Management Discussion and 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 a new India. Though several sectors had improved well, the fire and safety sector had suffered due to deficiency of the Governments attention to strong policy measures and implementation of the rules and regulations. The next upcoming important issue for the world leaders is to protect the world from global warming and destruction of assets by fire. The Global Community has failed to take unanimous and collective decision to protect from the impact of global warming. America has stepped back to support global community in the year 2017 at Bonn, Germany. United States declared that they will no longer contribute to the Green Climate Fund for global warming assistance.
The support and participation of the developed countries will make the solution easier for the global issue like global warming to save the planet earth. Globally and In India, particularly the Fire protection industry has been affected due to changes in the policy of the various governments and the main reason being the taxation on running the fire business. The two major domestic policy developments:
Implementation of the Goods and Services Tax (GST) and demonetization of the Rs. 500 and Rs. 1,000 Indian bank notes has affected the macro economic development of the Country with a negative impact on the fire fighting .
Our business and strong track record
Our Company has establishment in overseas countries. Due to that reason the business may be affected if the foreign countries make changes in the policies, taxation and business rules. Nitin Fire Protection Industries Limited (NFPIL) is nationally and Fire Protection solutions provider with wide range of systems to protect and prevent from disaster of fire.internationallycertified The Company is providing end to end Fire ProtectionSolutionsforvariousindustrieslikeRefineries,Control Rooms, Power Plants,
Offshore Platforms, Server Rooms & Data Centres, Warehouses, Commercial Spaces, Hospitals and Hospitality sector.
We undertake large scale fire protection system installation and have successfully completed 35 years of operation in India and have completed various installations both direct & indirect across India.
We have following objectives:-
Safe living of the society and increasing awareness and education of safety and security at all times.
To promote and use the advance technology and modern fire safety and protection systems.
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 to gradually increase its market share. There is a definite demand for Fire Protection products worldwide with newer products under development. The Innovation and Product Development are the critical aspects of success in the industry.
Financial performance of the company is given in the directors report.
OUTLOOK, OPPORTUNITIES AND CHALLENGES India:
Though business prospects seem to be brighter in the near future, the main deterrent to the Company at present is financial burden that has not been met in the due course. The Board and promoters are trying hard to bring the lenders into the one time Settlement. Once the same is agreed and closed from both the ends, the up moving phase will be visible sooner. The company had to face the recessionary market conditions and it had a difficult time realizing the outstanding dues from the customers in the Middle East as well as
South East Asian countries due to slack in the overall business scenario in these countries. Due to this, the company could not meet the commitments of the working capital lenders. Also the reduction in the limit by one of the working capital lenders and the untied portion of the assessed working capital limit further added to the liquidity problems. The change in rules of taxation in Dubai is also going to impact the operation of the Company.
Due to the above, the company is facing liquidity crunch to run its operations. The accounts of the company are monitored by the bank. The company is coordinating with the working capital lenders for Debt Restructuring program. Hence till that time the company is not taking any new major contracts/projects. The reduction in the price of oil and slowdown 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 short term effects on the business.
The overall Fire protection business outlook in India seems gradually improving. Except Industrial clients, small units like housing societies and commercial complexes are expecting to create scope for Fire Protection Industry. The Company has over 60 (domestic + international) approvals from various agencies & regulatory bodies required to operate in this business & execute fire protection, safety & security solution projects across various demographics. Hence, the Company believes that once the proposed debt restructuring programme and liquidity crisis is over the company will be able to regain its past glory.
There will be large spending, asset creation and business development in UAE due to the Expo 2020 and other events. With UAE contributing 76.92% of the total revenue, your Company 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 concerns for the safety.
The diversified portfolio of products and its regular up gradation has helped your Company to add value in markets of UAE, South Asia and Europe. Our strength is our determination and team work.
Employees are the key to achieve the Companys objectives and strategies. Your Company considers human resource to be an important and valuable asset for the organization. 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 and sacrifices. the Company expects their continuous guidance and support in future. The Company inspires and motivates employees and promotes teamwork, trust and confidence for the organizational growth and to attain the organizational goals. The Company is going to provide a and help to realize their potential and motivation to develop personally meaningfulenvironmentwhichgivesboostintheirconfidence and professionally. The Board is reshaping 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 and in the interest of the Company considering the provisions of the acts, rules and regulation applicable from time to time. The Company has a system of controls in order to ensure that all assets are safeguarded against loss from unauthorized use or disposal and also 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 executed effectively and that proper and adequate systems are in place and is reviewed by audit committee constituted by the Board of Directors. Though the audit Committee and Risk Management Committee analyzes the same, the promoters are advised to come forward to take all the necessary steps to implement the internal control system.
Your Company continues to comply with laws, regulations and policies as per the regulatory guidelines that are applicable.
The Company monitors principal risks and uncertainties that can impact our ability to achieve strategic objectives. Internal controls are regularly tested for design and operating effectiveness. The Internal Control System is supplemented by defined risk management programme identifying and mitigating risks which are reviewed by the Board of Directors of the Company.
In this Managements Discussion and Analysis and directors report detailing the Companys objectives, projections, estimates, expectations or predictions and describing the Companys strength, strategies and estimates are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results 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) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form MGT 9 as a part of this Annual Report is available in the website of the Company. The link/website to view the MGT 9 is www.nitinfire.com.
22. Material changes and commitments, if any, affecting the financial position of the Company which of the financial year of the Company to which the financial statements relate and the date of the report
The adverse material changes or commitments occurred during the financial year ending March 31, 2018 are as follows: During the year the short term borrowing has been increased by repayment of SBLC of Rs. 1595133449/- against the guarantee commitment to the global subsidiaries in favour of Nitin Ventures, FZE and Nitin Global Limited. There was also increase in finance of Rs. 190162783/- in comparison to previous year. The Company has written off the claim of Rs. 2263.73 lakhs on account of loss of intangible assets as per the extended litigation and order of the Delhi High Court in relation to the Joint venture 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 the financial year 31st March, 2018 except as above and the claim of the financial creditors and banks.
23. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future or material orders passed by the Regulators, courts or tribunals which impact the going concern status of the Therearenosignificant
Company. However some judgments has been passed by the courts which may affect the future operations. However members attention is drawn to the following developments: As per the order of the Bombay High Court, mentioned hereunder, it can be stated that the operation will not be affected in future according to the order passed by the regulators. Standard Chartered Bank Bank had filed the petition against Nitin Fire Protection Industries Limited (NFPIL) before the Honble High Court of Bombay to recover the 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 the Company seeking winding up is barred by limitation and stands dismissed. The Company was the guarantor under the Master Agreement entered into between Worthington Nitin Cylinders Limited (principal borrower) and Standard Chartered Bank, petitioner. The Honble High Court has passed the order in favour of Nitin Fire Protection Industries Limited by dismissing / rejecting Standard Chartered Banks Company Petition, on the basis that the same was filed after the expiry of the limitation period. The Company had entered into a joint venture with Oil Block (RJ-ONN-2004/1 which was un-incorporated. As per the order of the High Court of Delhi, on September 5, 2017, the company has become the defaulting party and shall be deemed to have surrendered the participating interest in the Joint venture. The petition filed by the Company under the Joint venture agreement against Gail (India) Ltd for recovery of the loss happened to the Company before the High Court of Delhi, New Delhi was dismissed and disposed off. The Management had taken the note of the same as claims written off for Rs. 2263.73 lakhs and provided under the books of accounts in the standalone financial results of the Company for the quarter and nine 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 the Companies Act, 2013
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note 4, 5 and 13 to Financial Statements.
26. Particulars of contracts or arrangements with related parties
Details of transaction with related party have been given in the note number 41 to the financial 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 the Companyand certificatefrom Mr. Mayank Arora, Practicing Company Secretary, Mumbai, for the year ended 31st March, 2018 are enclosed to the report. The Company has fully complied with the Corporate Governance practices specified under the Companies Act, 2013 and the Listing Agreement with the BSE Limited and the National Stock Exchange of India Limited and SEBI Listing Regulations, 2015.
28. Disclosure as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Under the said Act, the Company has set up a "Committee for Harassment of Women at Work Place" to look into complaints relating to sexual harassment at work place of any women employees. During the year under review, the Company has not received any complaints of harassment.
29. Conservation of energy, technology absorption and foreign exchange earnings and outgo
Information required under section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 with regard to conservation of energy and technology absorption and foreign exchange earnings and outgo are provided in Annexure III attached to this report.
30. Corporate Social Responsibility (CSR)
Since the Company had incurred huge loss, the Company was not requiring any spending on Corporate Social Responsibility during 2017-18 as per the provisions of the Companies Act, 2013 and amendment thereto. The Company has been carrying out Corporate Social Responsibility (CSR) activities. The unspent amount of Rs. 2,495,341/- is yet to be incurred after the improvement in the performance of the Company. These activities are carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. Annual Report on 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 in terms 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, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the Company and that such internal are adequate and were operating effectively; and (vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
32. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 125 of the Companies Act, 2013, on 31st March, 2018, the Company is having unclaimed or unpaid dividends of Rs. 52,146/- for the year ended 31st March, 2011 and the balance as on the date of completion of 7 years from the date of transfer 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 31,2014||No Dividend declared|
|March 31,2016||No Dividend declared|
|March 31,2017||No Dividend declared|
No Dividend recommended
Members who have not yet encashed their dividend warrant(s) for the financial year ended 31st March, 2011 onwards, are requested to make their claims to the Company accordingly, without any delay.
Details about transfer of unclaimed shares have been given in the Corporate Governance Report 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 Stock Exchange of India Limited (NSE) is yet to be paid where the Companys Shares are listed.
Your Directors wish to place on record their appreciation, for the contribution made by the employees at all levels but for whose hard work and support, your Companys achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith.
|For and on behalf of the Board|
|Nitin Fire Protection Industries Limited|
|(Atul H. Mehta)|
|Mumbai, August 28, 2018|