Nitin Fire Protection Industries Ltd Management Discussions.

Macroeconomic development:

The global economy grew at 2.6% which was below expectation. The rapid decline in the oil price was one of the key event of the year 2014-15. Despite uncertainties, the global economy is expected to recover due to strong recovery in the United States. The Indian economy is likely to be one of the fastest growing economy in 2016 and GDP growth, even if pegged at 7.4% in 2014-15, is up from 6.9% in 2013-14. Your company is poised to grow forward with the growth in Indian and Global economy. However, the company remains alert to handle any uncertain events affecting economic growth.

Our business and strong track record:

Nitin Fire Protection Industries Limited (NFPIL) is a Fire Protection solutions provider, with an agenda to provide wide range of systems to protect and prevent from disaster of fire, The Company Providing End to End Fire Protection Solutions for various industries like Refineries , 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 31 years of operation in India and have completed more than 8000 direct installation and more than 24000 indirect installation across India.

We have following objectives :-

• Safe living of the society and increasing awareness and education of fire safety.

• To promote and use the advance technology and modern fire safety systems.

INDUSTRY STRUCTURE & DEVELOPMENT:

Global Fire & Security market is estimated to be US$100bn, growing in excess of GDP and is expected to grow at CAGR of 15%. This industry is currently lead by TYCO having 12% of the market share alongwith UTC, Honeywell ,Siemens in the space. Highly fragmented market with top five players account for less than 20% share. NFPIL currently enjoys 0.1% share of the Global Fire Industry. 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

During the year, your company continues to grow and has delivered a year on your growth of 12 % in consolidated revenues largely attributing to the success in the Middle East. The consolidated PAT has grown from Rs. 665 mn in FY 2014 to Rs. 671 mn in FY 2015. The earning per share was Rs. 2.30 in FY 15 compared to Rs. 2.27 in the same period last year.

OUTLOOK, OPPORTUNITIES AND CHALLENGES:

Future Growth

The Government initiatives and new stringent norms for fire detection, prevention and safety would drive growth for the industry.

Urbanization and industrialization is increasing at the rapid pace. The housing societies and commercial complexes taking necessary steps to become fire safe and safeguard their localities. All these augurs well for the demand for Fire Protection Industry.

Our company has initiated steps to enter into Defense and other government organisation, which will help your company to sustain growth.

As one of the leading and experienced player with an expertise in the fire protection, safety and security industry. your Company is well placed to exploit the opportunities available in the Indian Fire Protection Industry.

Dubais World Expo 2020 is held under the theme of Connecting Minds, Creating the Future, echoing the powerful spirit of partnership and cooperation that has driven the UAEs success in pioneering new paths of development and innovation. There will be large spending, asset creation and business development in UAE due to the Expo 2020 and other events. With UAE contributing 53.27 % 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.

With almost three decades of experience your company has established a better footprint in India to match the fire safety standards required by the growing needs from these sectors. The diversified portfolio of products and its regular up gradation has helped your company to add value in markets ofUAE, South EastAsia and Europe.

Our strength is our determination and team work, Challenges and threats are competition, the vibrations in the economy, government policies, government spending on new projects etc.

Human Resources

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 has grown due to the commitment, dedication and passion of our employees and we thank them for their continuous support, efforts and sacrifices. And 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 its goals. The required Initiatives are taken in the areas of employees health, safety training and development. Company takes 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 all assets are safeguarded against loss from unauthorized use or disposal. Regular Internal Audit checks are carried out to ensure that the responsibilities are executed effectively and that proper and adequate systems are in place and is reviewed by auditing committee set by the Management.

Your company continues to comply with laws, regulations and policies as per the regulatory guidelines that are applicable. Your company maintain strong compliance and has dedicated Compliance Department for ensuring regulatory compliance.

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.

Awards Won:

The company have been awarded Asia Pacific Entrepreneurship outstanding category award 2015 Vision 2020

• Accelerate growth via entering into growing market

• Develop & Promote Technologically Sound products

• Lookout for in-organic opportunities in this space;

• Introduce & penetrate the largest market for Fire protection, North America;

CAUTIONARY STATEMENT

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.

20. 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 enclosed as an Annexure V.

21. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There are no adverse material changes or commitments occurring after 31st March, 2015 which may affect the financial position of the Company or may require disclosure.

22. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future:

Nil

23. Deposits:

The company has not accepted any deposits during the financial year under review.

24. Particulars of loans, guarantees or investments under section 186(4): ( Rs. in Lacs)

PARTICULARS 2014-15 (Rs.)
LOANS TO BODY CORPORATE & OTHERS
LOANS GIVEN 1,127.00
RECEIVED BACK 645.25
INVESTMENTS
IFCI LIMITED (FIXED INTEREST BONDS ROI @9.35% p.a.) 25.00
GAURANTEES GIVEN
Standby letter of credit facility provided to Foreign subsidiaries (incl. a step down foreign subsidiary) Nitin Ventures FZE (including New Age Company LLC) 1,502.18(USD 2.40 Mn)

The above disclosures was not applicable for the previous year

25. Particulars of contracts or arrangements with related parties:

The particulars of contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 during the financial year have been provided in Form AOC-2, as disclosed in Annexure II.

26. Corporate Governance Certificate:

A report on Corporate Governance approved by the Board of Directors of the Company and a certificate from Mr. Kishor V. Ved, Practicing Company Secretary, Mumbai, for the year ended 31st March, 2015 is set out in the Annexure to the Directors report. The Company has fully complied with the Corporate Governance practices specified under the Companies Act, 2013 and the Listing Agreement with the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited.

27. Disclosure As Per The Sexual Harassment OfWomen 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.

28. 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 VI attached to this report.

29. 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 the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Annual Report on CSR activities that includes details about the CSR policy of the Company and CSR initiatives taken during the year is annexed herewith as Annexure I.

30. Vigil Mechanism / Whistle Blower Policy:

Your company has put in place Whistler 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.

31. Human Resources:

Your Company treats its own employees as “human resources”, one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

32. Directors Responsibility Statement:

The Directors Responsibility Statement referred to in clause of sub-section (3) of Section 134 and Section 134(5) of the Companies Act, 2013, shall state that—

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

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

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

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

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

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

33. Transfer of Amounts to Investor Education and Protection Fund:

Pursuant to Section 125 of the Companies Act, 2013, the Company is having unclaimed or unpaid dividends of Rs. 44,730/- for the year ended 31st March, 2008 and the same will be transferred to the Investors Education and Protection Fund in September, 2015.

Pursuant to Section 125 of the Companies Act, 2013 (Erstwhile Section 205C of the Companies Act, 1956), the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (the Fund) set up by the Government of India and no payments shall be made in respect of any such claims by the Fund. Members who have not yet encashed their dividend warrant(s) for the financial year ended 31st March, 2009 onwards, are requested to make their claims to the Company accordingly, without any delay.

Status of unclaimed and unpaid dividend (Rs. in lacs)
Year Ended Amount of Dividend Unclaimed and unpaid dividend as on 31st March, 2015 % of Unclaimed and Unpaid Dividend
March 31,2008 252.06 0.4533 0.18
March 31,2009 378.09 0.8579 0.23
March 31,2010 441.11 0.9038 0.20
March 31,2011 630.16 0.5366 0.09
March 31,2012 882.21 0.7933 0.09
March 31,2013 441.11 0.2736 0.06
March 31,2014 NIL NIL NIL

34. Listing with the Stock Exchange:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE) where the Companys Shares are listed.

35. Acknowledgements

The Board acknowledge with appreciation the efforts put in by its employees during the year under review. The Company is grateful to its customers, shareholders, suppliers, financial institutions, bankers, Central and State Governments for their constant support to the Company The Directors also place on record their deep appreciation of the contribution made by employees at all levels the consistent growth of the Company was made possible by their hard work, loyalty, dedication, coordination and support.

For and on behalf of the Board
Mumbai, 14th August, 2015 Nitin Fire Protection Industries Limited
Sd/-
(Nitin M. Shah)
CHAIRMAN & MANAGING DIRECTOR)
(DIN - 00073232)