To,
The Members,
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) |
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 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.
4. Dividend:
Due to losses, the Directors regret their inability to recommend any dividend for the
year ended March 31, 2018.
5. Reserves:
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 |
2 |
3 |
4 |
5 |
6 |
7 |
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:
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. |
Remuneration Policy:
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.
Managerial Remuneration:
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.
9. Meetings:
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 Company's 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).
12. Auditors:
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.
Management's 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 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 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.
Management's 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.
Management's 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.
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 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 Company's 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.
Management's 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 Company's current liabilities exceeded its total assets by Rs. 1,364,507,204. Further
as stated therein, indicates that a material uncertainty existsthatmaycastsignificantdoubt
on the Company's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Managements' Reply:
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 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 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 Government's 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
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 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.
Global subsidiaries
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.
Human Resources
Employees are the key to achieve the Company's 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.
Cautionary Statement
In this Management's Discussion and Analysis and directors' report detailing the
Company's objectives, projections, estimates, expectations or predictions and
describing the Company's 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 Company's 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 Hon'ble 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
Hon'ble High Court has passed the order in favour of Nitin Fire Protection Industries
Limited by dismissing / rejecting Standard Chartered Bank's 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.
24. Deposits
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 31,2011 |
11.08.2011 |
630.16 |
0.5214 |
0.08 |
12.09.2018 |
March 31,2012 |
11.08.2012 |
882.21 |
0.7698 |
0.09 |
13.09.2019 |
March 31,2013 |
13.08.2013 |
441.11 |
0.2609 |
0.06 |
14.09.2020 |
March 31,2014 |
|
|
No Dividend declared |
|
|
March 31,2015 |
21.09.2015 |
585.54 |
1.0722 |
0.18 |
23.10.2022 |
March 31,2016 |
|
|
No Dividend declared |
|
|
March 31,2017 |
|
|
No Dividend declared |
|
|
March 31,2018 |
|
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 Company's Shares are listed.
34. Acknowledgements
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 Company's
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) |
|
(Chairman) |
|
(DIN 00112451) |
Mumbai, August 28, 2018 |
|
|