Home  »  Company  »  Nitin Fire Protectio  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Nitin Fire Protection Industries Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Nineteenth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2014.

FINANCIAL RESULTS

Accounting Policy

The Company follows the Generally Accepted Accounting Principles (GAAP) in India applicable accounting standards/provisions of the Companies Act, 1956, for the preparation of its financial statements. The Company also follows accrual basis of accounting except in cases of revaluation of assets and impairment, if any.

Summarised Profit and Loss Statement (Rs. in lacs)

Particulars Standalone Consolidated

For the For the For the For the year year year year 2013-14 2012-13 2013-14 2012-13

Sales & other income 45664.73 36286.29 101801.70 72293.54

Profit before depreciation, amortization & tax 1496.09 2325.18 8014.83 7099.74

Depreciation/amortization 116.20 105.01 1058.64 473.16

Profit before tax 1379.89 2220.17 6956.19 6626.58

Provision for income tax including deferred tax & wealth tax 241.18 446.34 263.49 469.93

Tax adjustments of earlier years (net) 41.14 19.98 40.29 19.98

Profit aftertax 1097.57 1753.85 6652.41 6136.68

Add: Share of (loss)/profit in an associate - - - (435.98)

Profit brought forward from previous year 4893.93 3656.15 21020.03 15835.41

Profit available for appropriation 5991.50 5410.00 27672.44 21536.11

APPROPRIATIONS

Transferred to General Reserve - - - -

Proposed dividend 438.41 441.10 438.41 441.10

Corporate dividend tax on proposed dividend 74.51 74.97 74.51 74.97

Surplus carried forward to Balance Sheet 5478.58 4893.93 27159.52 21020.03

DIVIDEND

The Board of Directors encouraged with the above financial performance of the Company recommends dividend of Rs. 0.20/- per share on 21,92,06,111 Equity Shares of Rs. 2/- each (Previous year Rs. 0.20/- per share on 22,05,52,694 Equity Shares of Rs. 2/- each).

BUY-BACK OF SHARES

During the year under review, pursuant to approval of the Board of Directors of the Company, for buy-back of shares under section 77A of the Companies Act, 1956, upto 10% of the paid-up equity share capital and free reserves of the Company, the Company has bought back 13,46,583 fully paid up equity shares of the Company through open market transactions for an amount of Rs. 7,69,86,186/- by utilizing Securities Premium Account to the extent of Rs. 7,42,93,020/- and the Company has not allotted any shares and there is no change in the Authorized Share Capital of the Company.

TRANSFER TO RESERVES

The Board has not recommended the divided exceeding 10% of the face value of the equity share. As per the Companies (Transfer of Profits to Reserves) Rules, 1975, the Company has not proposed to transfer its profit to the General Reserve out of the amount available for appropriation and an amount of Rs. 5,478.58 Lacs proposed to be retained in the Statement of Profit and Loss.

RESERVE AND SURPLUS

Total Reserves and Surplus stood at Rs. 10465.84 lacs as at March 31, 2014, compared to Rs. 10631.13 lacs as at March 31, 2013.

OPERATION RESULTS AND BUSINESS

The Company continued to see strong and profitable growth in the Financial Year 2013-14 across all markets driven by good performance across all business segments.

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2014, stood at Rs. 45664.73 lacs registering an increase of 25.84% as compared to the previous year. As per the Consolidated Financial Statements total income was Rs. 101801.71 lacs registering an increase of 40.82% as compared to the previous year. The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company during the current year.

The Company is among the leading fire fighting equipment manufacturing companies in India and continues to retain its leadership position among the Indian companies. It has continued to win new engagements and grow existing relationships in the traditional area of development manufacturing and distribution of fire protection and electronic security systems, CNG cascades commissioning and installation of safety and security solutions and execution of annual maintenance contracts for fire protection systems. It provides automated water and gas based fire suppression systems along with fire detection and security systems on turnkey basis. The broad range of products and services enables the Company to provide "end -to-end" services to its customers combined with its industry focus and its geographical spread, the Company is able to provide comprehensive and high value added services to its customers. Considering the need to deepen relationships with customers in the industry to acquire new customers in the markets where your Company is already a significant force and to expand in emerging markets.

Cost Audit Report

As per section 233B of the Companies Act, 1956 and subject to the approval of the Central Government, the Company has appointed Mr. Vinayak B. Kulkarni, Practising Cost Accountant, Mumbai, as the cost auditor of the company to conduct audit of cost accounting records maintained by the Company for product(s)/Services covered under MCA Cost Audit Order(s) for the year ending on March 31, 2014.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year 2012-13, the Company has formed two wholly owned subsidiaries viz. Nitin Fire Protection Systems Private Limited and Nitin Fire Protection Appliances Private Limited. Since the said subsidiaries has not carried out any business activities during the financial year 2013-14, the Board of Directors of the said Companies has decided to apply the Registrar of Companies under section 560 of the Companies Act, 1956 (Proposed Section 248 of the Companies Act, 2013), declaring the said Companies as defunct companies.

Now, your Company has three subsidiaries namely (1) Eurotech Cylinders Private Limited, India (2) Nitin Venture FZE, UAE including its subsidiary New Age LLC, UAE and Firetec Systems Limited, UK , and (3) Nitin Global Pte Limited, Singapore.

We believe that the presentation of the Consolidated Financial Statement presents a more comprehensive picture rather than the Standalone Financial Statements of the Company and each of its subsidiaries.

However, summary of financial information of each subsidiary regarding Capital Reserves, Total Assets, Total Liabilities, Details of Investment, Turnover, Profit before Taxation, Provision for Taxation Profit after tax and Proposed Dividend have been separately furnished forming part of this Annual Report.

Eurotech Cylinders Private Limited, India (ECPL)

ECPL is in the business of purchase and supply of high pressure seamless/compressed natural gas cylinders (CNG) and valves. The Company''s products are sold under the brand name ''EURO'' and basically cater to domestic markets. ECPL supplies the above products to dealers of industrial/medical gases, fire fighting equipments, CNG-NGV vehicles, CNG Cascades etc.

Nitin Venture, FZE, UAE (NV)

NV is set up in the free trade zone at Jebel Ali, Dubai, to meet the demands of the international customers and providing simple standalone conventional to intelligent integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NV is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone/integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

Firetec Systems Limited, UK

FSL (Firetec Systems Ltd.) was launched at the 2013 Firex exhibition in Birmingham with great success. Our fledgling organisation, backed by a long-standing international specialist company, aims to set itself apart from competitors in gaseous suppression systems by providing a more flexible, personal service and higher level of customer care. FSL brings a fresh outlook to the market place and wish to utilise available technology in order to make life easier for customers; whether that be through an online BOM & quote generator, large file share or quotation storage. FSL is positioning itself as the independent option for trade organisations seeking gaseous suppression systems.

New Age LLC, UAE (NA)

New Age LLC ("NA"), UAE was established in 1976 at UAE. NA has got office and representation in all seven Emirates.

NA is a Professional Fire Protection Engineering Company providing Equipments, Fire Protection System, Fire Detection System, Emergency Lighting System and Water Mist Fire Protection Systems.

NA has taken several projects like Municipality, Airport Development Board, Port Authority, Telecommunication Sites, Cement Plants, Ministry of Education and Civil Defense. NA has also got Major Overseas License(s) along with Local License with staff over 140 personnel directly employed by the Company.

Nitin Global Pte Limited, Singapore (NGPL)

NGPL was incorporated in July, 2009, to meet the demands of South-East Asian market and for providing simple standalone conventional to intelligent integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

There has been no other material change in the nature of the business of the subsidiaries. A statement containing brief financial details of the subsidiaries is included in the Annual Report.

ANNUAL REPORT OF SUBSIDIARY COMPANIES

In terms of general exemption given by the Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011, under section 212(8) of the Companies Act, 1956, a copy of Audited Balance Sheet, Audited Statement of Profit and Loss, Report of the Board of Directors and the Auditors of the above mentioned five subsidiary companies for the year ended March 31, 2014, have not been attached with the Annual Report of the Company. We believe that the presentation of the Audited Consolidated Financial Statements present a true and fair picture of the state of affairs and the financial conditions.

The Company has also annexed a statement at the end of this Annual Report pursuant to general exemption granted by the Ministry of Corporate Affairs, Government of India, under section 212(8) of the Companies Act, 1956, related to its subsidiary companies for the year ended March 31, 2014.

The Company shall make available these documents/details upon request by any shareholder of the Company interested in obtaining the same. The Annual Accounts of the Company and its subsidiary companies are also available for inspection by the shareholders during business hours at the registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21, ''Accounting Standard 27 ''Financial Reporting of Interest in Joint Ventures'' for previous year, the Company has followed the Accounting Standard 23, Accounting for Investments in Associates in Consolidated Financial Statements'', your Directors have pleasure in attaching the Consolidated Financial Statements which form part of the Annual Report.

FIXED DEPOSITS

The Company has not invited/accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Nitin M. Shah (DIN - 00073232) shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offers himself for reappointment.

Changes in Independent Directors

Dr. Surendra A. Dave, Independent Director, has resigned from the directorship of the Company w.e.f. February 18, 2014.

As per the provisions of Section 149 of the Companies Act, 2013 ("the Act"), which has come into force with effect from April 1, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation. In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. Ramakant M. Nayak, Mr. Krishnakant Jha and Mr. S. K. Dheri as Independent Directors is being placed before the Members in the ensuing Annual General Meeting for their approval. The Company has received necessary declaration from all the three Independent Directors to the effect to the Board that they meet the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, they fulfill the conditions specified in the Act and the Rules made there under for the appointment as Independent Directors and are independent of the management. Members are requested to refer to the Notice of the Annual General Meeting and the Explanatory Statement for details of the qualifications and experience of the Directors and the period of their appointment. The Board recommends the passing of the Resolutions at Item Nos. 5 to 7 of the Notice of the Annual General Meeting. The Company will post the detailed profile of the above mentioned Independent Directors on the website of the Company shortly. Brief particulars and expertise of these Directors have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting.

Changes in Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Company has appointed Mr. Nitin M. Shah, Managing Director and Mr. Kamlesh Gandhi as the Chief Financial Officer and Mr. Abhishek Shrivastava, Company Secretary, all as Key Managerial Personnel of the Company w.e.f. May 17 2014.

Mr. Nitin M. Shah has resigned from the post of Managing Director and also as Key Managerial Personnel of the Company w.e.f. May 17, 2014. However, he will continue as Director and Non-Executive Chairman of the Company.

Mr. Rahul N. Shah has resigned from the directorship of the Company w.e.f. May 17, 2014.

Mr. Kunal N. Shah was appointed as an Executive Director of the Company w.e.f. April 1, 2014 and he has resigned from the directorship of the Company w.e.f. May 17, 2014.

Mr. Rahul N. Shah is appointed as an additional director of the Company and also as Whole-time Director and Key Managerial Personnel of the Company on August 14, 2014, for a term of three years. The Company has received a notice from a member proposing his candidature as a director of the Company along with deposit of requisite amount under section 160 of the provisions of the Companies Act, 2013. Mr. Rahul N. Shah is not disqualified from being appointed as director in terms of section 164 of the Act and has given his consent to act as a Director, Whole-time Director and Key Managerial Personnel of the Company. Mr. Rahul N. Shah, Whole-time Director, look after all plants manufacturing /production and marketing in India. He also looks after Finance and statutory compliances of the company. The Board recommends resolution No. 8 & 9 for the approval of the members.

Mr. Kunal N Shah is appointed as an additional director of the Company and also as Whole-time Director of the Company on August 14, 2014 for a term of three years. The Company has received a notice from a member proposing his candidature as a director of the Company along with deposit of requisite amount under section 160 of the provisions of the Companies Act, 2013. Mr. Kunal N. Shah has given his consent to act as a director and whole-time director of the Company. Mr. Kunal N. Shah, Whole-time Director look after all plants manufacturing /production and marketing in India. He also looks after Finance and statutory compliances of the company. The Board recommends resolution No. 10 & 11 for the approval of the members.

ADOPTION OF VARIOUS POLICIES OF THE COMPANY

The Board of Directors of the Company has approved and adopted the following policies during the period from April 1, 2014 till August 14, 2014:

1) Related party transactions policy pursuant to Section 188 of the Companies Act, 2013

2) Vigil mechanism policy pursuant to Section 177 of the Companies Act, 2013

3) Remuneration policy pursuant to Section 178 of the Companies Act, 2013

4) Corporate Social Responsibility policy pursuant to Section 135 of the Companies Act, 2013

WEBSITE OF THE COMPANY:

The Company agrees to post the following details on the website of the Company viz. www.nitinfire.com:

* Establishment of Whistle Blower Policy & Vigil Mechanism & Related Part Transaction Policy & Remuneration Policy including the evaluation criteria

* Letter of resignation(s) with the detailed reasons of resignation

* Letter of appointment of the Independent Directors

INSURANCE

The properties of the Company viz. building, plant and machinery and stocks have been adequately insured.

EMPLOYEES

Employee''s relations remained cordial during the year under review.

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors'' Report for the year ended March 31, 2014, are as under:

Name Age Designation & Remuneration Nature of duties Received (Rs.)

Nitin M. 57 Chairman and Managing Director 1,32,48,000/- Shah (*) (Managing day to day activities and Engineering business development activities)

Partho Roy 48 Director-Marketing 66,00,000/- (Responsible for Marketing on all Computer India basis Marketing for fire safety Science systems)



Name Qualification Experience Date of Particulars of (in years) commencement pervious of employment employers

Nitin M. Diploma in 38 March 16, 2006 None Shah(* Mechanical Engineering

Partho Roy Bachelor in 28 December 1, 2012 New Age Computer LLC, UAE Science

(*) Relatives of Mr. Rahul N. Shah & Mr. Kunal N Shah, Directors of the Company and Mr. Nitin M. Shah has resigned from the post of the Managing Directorship, but, continue to act as a Director and Non-Executive Chairman w.e.f. May 17, 2014

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The Company has an in house internal audit system and procedures to ensure reliability of financial reporting compliance with the Company''s policies and practices governmental regulations and statutes.

INTERNAL AUDITOR

Pursuant to Section 138 of the Companies Act, 2013, read with the Clause 49 of the Listing Agreements with Stock Exchanges, the Company has appointed M/s Tolia and Associates, Chartered Accountants (Firm Registration Number:111017W) as the Internal Auditor of the company for the financial year 2013-14 and also appointed them for the financial year 2014-15.

RISK AND CONCERNS

Indian Economy has been on a growth track again. The growth is expected to accelerate during the current year. However, excess liquidity and inflation induced by supply constraints and anxiety about the eventual withdrawal of stimulus continue to cause concern. The Company had reported good growth in the Financial Year''s 2012-13 and 2013-14.

The Management continues to monitor the risks concerning the Company and take actions as appropriate to the situation.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, are provided in annexure to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement the Directors confirm that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2014, the applicable accounting standards have been followed and no material departures have been made from the same;

ii. Appropriate accounting policies have been selected and applied consistently and have 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 as at March 31, 2014 and of the Profit for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. The annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors of the Company M/s. Haribhakti & Co. LLP (converted on June 17, 2014 from a firm M/s. Haribhakti & Co.) (FRN - 103523W) retire at the conclusion of the ensuing Annual General meeting of the Company and being eligible, offer themselves for re-appointment as statutory auditors for the Financial Year 2014-2015.

The Company has received a letter from M/s. Haribhakti & Co. LLP, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified within the meaning of Section 141 of the said Act.

Members are requested to consider their appointment on a remuneration to be decided by the Board of Directors thereof for the ensuing Financial Year i.e. 2014-2015.

AUDITOR''S REPORT

The Board has duly examined the statutory Auditor''s Report to the financial statements and clarifications wherever necessary have been included in the Notes to the Financial Statements section of the Annual Report.

EXPLANATION TO THE AUDITORS OBSERVATION:

Reply to qualification given by the auditors in the Standalone Auditors Report:

Auditors Qualification: Para (A) of the Auditors Report: As more fully explained in Note No 34 to the notes to the 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/- on a derivative contract entered into by its erstwhile subsidiary (now an associate), the liability for which has been taken over by the Company. The Company has not determined the quantum of mark to market losses as of the balance sheet date on the above contract and have relied on a legal opinion in the matter wherein, no liability is expected. Pending final settlement of the matter, we are unable to quantify the extent of provision required, if any, in this regard.

Managements Reply: 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. 501.33 Lacs (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.

Auditors Qualification: Para (B) of the Auditors Report: As more fully explained in Note No. 41 to the Notes to the Financial Statements provisions of Rs. 4,50,000/- has been made for penalty towards compounding of offence petition filed for the alleged non-compliance of several provisions of the Act before Ministry of Corporate Affairs. Based on opinion obtained, the Company expects maximum penalty Rs. 450000/- on disposal of its petitions. Pending disposal of petition, we are unable to quantify the extent of additional provision required if any in this regard.

Management Reply:

The Company has filed the requisite applications with the Ministry of Corporate Affairs (the MCA) for compounding for non-compliance of few sections of the Companies Act, 1956 on 28th January, 2013, 30th January, 2013, 2nd February, 2013, 11th February, 2013 & 11th April, 2013 and same has been compounded.

Further, the Company has filed the requisite applications with the Ministry of Corporate Affairs (the MCA) for compounding for non-compliance of few sections of the Companies Act, 1956 on February 27, 2014, January 31, 2014 and January 24, 2014. The Company is waiting for hearing from the MCA.

Reply to qualification given by the auditors in the Consolidated Auditors Report:

Auditors Qualification: Para (A) of the Auditors Report: As more clarified in Note no. 36 to the notes to the Consolidated Financial Statements, no provision has been made by the Company in respect of its dispute with a bank for a claim made by the bank for Rs. 50,133,481 on a derivative contract entered into by its erstwhile subsidiary (now an associate), the liability for which has been taken over by the Company. The Company has not determined the quantum of mark to market losses as of the Balance Sheet date on the above contract and have relied on a legal opinion in the matter wherein no liability is expected. Pending the final settlement of the matter, we are unable to quantify the extent of provision required, if any in this regard.

Managements Reply: 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. 501.33 Lacs (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.

Auditors Qualification: Para (B) of the Auditors Report: As more clarified in Note no. 37 to the notes to the Consolidated Financial Statements, provision of Rs. 4,50,000 has been made for penalty towards compounding of offence petitions filed for the alleged non-compliance of several provisions of the Act before Ministry of Finance, Department of Company Affairs. Based on opinion obtained, the Company expects maximum penalty of Rs. 4,50,000 on disposal of its petitions. Pending disposal of petition, we are unable to quantify the extent of additional provision required, if any, in this regard.

Management reply:

The Company has filed the requisite applications with the Ministry of Corporate Affairs (the MCA) for compounding for non-compliance of few sections of the Companies Act, 1956 on 28th January, 2013, 30th January, 2013, 2nd February, 2013, 11th February, 2013 & 11th April, 2013 and same has been compounded.

Further, the Company has filed the requisite applications with the Ministry of Corporate Affairs (the MCA) for compounding for non-compliance of few sections of the Companies Act, 1956 on February 27, 2014, January 31, 2014 and January 24, 2014. The Company is waiting for hearing from the MCA.

MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Management Discussion and Analysis is annexed and same forms part of this Report.

CORPORATE GOVERNANCE REPORT

The Company has adopted the best possible Corporate Governance norms and it has been our endeavor to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Clause 49 of the Listing Agreement with the stock exchanges form part of this Report.

In terms of sub-clause (v) of the Clause 49 of the Listing Agreement, a certificate of the Chairman & Director, inter alia, confirming the correctness of the financial statements adequacy of the internal control measures and reporting to matters to the Audit Committee in terms of the said Clause is also enclosed as a part of this Report.

ACKNOWLEDGMENTS

The Board acknowledges 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, co-ordination and support.

For and on behalf of the Board

Sd/- Mumbai Nitin M Shah August 14, 2014 Chairman & Director


Mar 31, 2013

To the Members of Nitin Fire Protection Industries Limited

The Directors have pleasure in presenting the Eighteenth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2013.

FINANCIAL RESULTS

Accounting Policy

The Company follows the Generally Accepted Accounting Principles (GAAP) in India, applicable accounting standards/provisions of the Companies Act, 1956 for the preparation of its financial statements. The Company also follows accrual basis of accounting except in cases of revaluation of assets and impairment, if any.

Summarised Profit and Loss Statement (Rs. in lacs)

Particulars Standalone Consolidated For the year For the year For the year For the year 2012-13 2011-12 2012-13 2011-12

Sales & other income 36286.79 16535.44 72293.54 53906.88

Profit before depreciation, amortization & tax 2325.18 1358.33 7099.74 5378.52

Depreciation/ amortization 105.01 99.75 473.16 296.88

Profit before tax 2220.17 1258.58 6626.58 5081.64

Provision for income tax including deferred tax & wealth tax 446.34 253.88 469.93 373.97

Tax adjustments of earlier years (net) 19.98 -0.83 19.98 3.20

Profit after tax 1753.85 1005.53 6136.68 4704.47

Less: Share of Minority Interest in income - - - -

Add: Share of (loss)/profit in an associate - - -435.98 -302.75

Profit brought forward from previous year 3656.15 3822.35 21536.11 13862.12

Surplus on Amalgamation - -66.41 - -1323.10

Profit available for appropriation 5410.00 4761.47 21536.11 16940.75

APPROPRIATIONS

Transferred to General Reserve - 80.00 - 80.00

Proposed dividend 441.10 882.21 441.10 882.21

Corporate dividend tax on proposed dividend 74.97 143.12 74.97 143.12

Surplus carried forward to Balance Sheet 4893.93 3 656.15 21020.03 15835.41

DIVIDEND

The Board of Directors encouraged with the above financial performance of the Company, recommends dividend of Rs. 0.20/- per share on 22,05,52,694 Equity Shares of Rs. 2/- each (Previous year Rs. 0.40/- per share on 22,05,52,694 Equity Shares of Rs. 2/- each).

SHARE CAPITAL

During the year, Company has not allotted any share and not changed its Authorized Capital.

TRANSFER TO RESERVES

The Board has not recommended the divided exceeding 10% of the face value of the equity share. As per Companies (Transfer of Profits to Reserves) Rules, 1975, the Company has not proposes to transfer its profit to the General Reserve out of the amount available for appropriations and an amount of Rs. 4893.92 lacs is proposed to be retained in the Profit and Loss Account.

RESERVE AND SURPLUS

Total Reserves and Surplus stood at Rs. 10631.13 lacs as at March 31, 2013 compared to Rs. 9401.47 lacs as at March 31, 2012. The increase was due to retained earnings.

OPERATION RESULTS AND BUSINESS

The Company continued to see strong and profitable growth in the Financial Year 2012-13 across all markets driven by good performance across all business segments.

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2013 stood at Rs. 36286.79 lacs registering an increase of 119.45% as compared to the previous year. As per the Consolidated Financial Statements, total income was Rs. 72293.54 lacs registering an increase of 34.11% as compared to the previous year. The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company during the current year.

The Company is among the leading fire fighting equipment manufacturing companies in India and continues to retain its leadership position among the Indian companies. It has continued to win new engagements and grow existing relationships in the traditional area of development, manufacturing and distribution of fire protection and electronic security systems, CNG cascades, commissioning and installation of safety and security solutions and execution of annual maintenance contracts for fire protection systems. It provides automated water and gas based fire suppression systems along with fire detection and security systems on turnkey basis. The broad range of products and services enables the Company to provide "end -to-end" services to its customers, combined with its industry focus and its geographical spread, the Company is able to provide comprehensive and high value added services to its customers. Considering the need to deepen relationships with customers in the industry, to acquire new customers in the markets where your Company is already a significant force and to expand in emerging markets.

Cost Audit Report

As per section 233B of the Companies Act, 1956 and subject to the approval ofthe Central Government, the Company has appointed Mr. Vinayak B. Kulkarni, Practising Cost Accountant, as the cost auditor of the company to conduct audit of cost accounting records maintained by the Company for product(s)/Services covered under MCA Cost Audit Order(s) for the year ending on March 31, 2013.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

During the year 2012-13, the Company has formed two wholly owned subsidiaries viz. Nitin Fire Protection Systems Private Limited and Nitin Fire Protection Appliances Private Limited. Since, the said subsidiaries has not carried out any business activities during the financial year 2012- 13, the Board of Directors of the said Companies has decided to apply the Registrar of Companies under section 560 of the Companies Act, 1956, declaring the said Companies as defunct companies.

Now, your Company has three subsidiaries, namely, Eurotech Cylinders Private Limited, India, Nitin Venture FZE, UAE including its subsidiary New Age LLC, UAE and Nitin Global Pte Limited, Singapore.

We believe that the presentation of the Consolidated Financial Statement presents a more comprehensive picture rather than the Standalone Financial Statements ofthe Company and each of its subsidiaries.

However, a summary of financial information of each subsidiary regarding Capital, Reserves, Total Assets, Total Liabilities, Details of Investment, Turnover, Profit before Taxation, Provision for Taxation, Profit after tax and Proposed Dividend have been separately furnished forming part of this Annual Report.

Eurotech Cylinders Private Limited, India (ECPL)

ECPL is in the business of purchase and supply of high pressure seamless/compressed natural gas cylinders (CNG) and valves. The Company''s products are sold under the brand name ''EURO'' and basically cater to domestic markets. ECPL supplies the above products to dealers of industrial/medical gases, fire fighting equipments, CNG-NGV vehicles, CNG Cascades etc.

Nitin Venture FZE, UAE (NV)

NV is set up in the free trade zone at Jebel Ali, Dubai to meet the demands of international customers and providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NV is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone/integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

New Age LLC, UAE (NA)

New Age LLC ("NA"), UAE was established in 1976 at UAE. NA has got office and representation in all seven Emirates.

NA is Professional Fire Protection Engineering Company providing Equipments, Fire Protection System, Fire Detection System, Emergency Lighting System and Water Mist Fire Protection Systems.

NA has taken several projects like Municipality, Airport Development Board, Port Authority, Telecommunication Sites, Cement Plants, Ministry of Education and Civil Defense. NA has also got Major Overseas License along with Local License with staff over 140 personnel directly employed by the Company.

Nitin Global Pte Limited, Singapore (NGPL)

NGPL was incorporated in July 2009 to meet the demands of South-East Asian market and for providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

There has been no other material change in the nature of the business of the subsidiaries. A statement containing brief financial details of the subsidiaries is included in the Annual Report.

ANNUAL REPORT OF SUBSIDIARY COMPANIES

In terms of general exemption given by the Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011 under section 212(8) of the Companies Act, 1956, a copy of Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Auditors of the above mentioned three subsidiary companies for the year ended March 31, 2013 have not been attached with the Annual Report of the Company. We believe that the presentation of the Audited Consolidated Financials present a true and fair picture of the state of affairs and the financial conditions.

The Company has also annexed a statement at the end of this Annual Report pursuant to general exemption granted given by the Ministry of Corporate Affairs, Government of India under section 212(8) of the Companies Act, 1956, related to its subsidiary companies for the year ended March 31, 2013.

The Company shall make available these documents/details upon request by any shareholder of the Company interested in obtaining the same. The Annual Accounts of the Company and its subsidiary companies are also available for inspection by the shareholders during business hours at the registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 ''Consolidated Financial Statements'', Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements'' and Accounting Standard 27 ''Financial Reporting of Interest in Joint Ventures'', your Directors have pleasure in attaching the Consolidated Financial Statements which form part of the Annual Report.

FIXED DEPOSITS

The Company has not invited/accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding on the date ofthe Balance Sheet.

DIRECTORS

The Board of Directors at its meeting held on May 23, 2013 has subject to the approval ofthe members at the ensuing Annual General Meeting; the Board of Directors ofthe Company has proposed to revise remuneration of Mr. Nitin M. Shah, Chairman and Managing Director and Mr. Rahul N. Shah, Executive Director ofthe Company w.e.f. April 1, 2013 for a balance period of 2 years.

Mr. K. H. Vaidyanathan, shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment.

Mr. Ramakant M. Nayak, shall retire by rotation at the forthcoming Annual General Meeting ofthe Company and being eligible, offers himself for reappointment.

Brief particulars and expertise of these Directors have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting.

INSURANCE

The properties ofthe Company viz. building, plant and machinery and stocks have been adequately insured.

EMPLOYEES

Employee''s relations remained cordial during the year under review.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The Company has an in house internal audit system and procedures to ensure reliability of financial reporting, compliance with the Company''s policies and practices, governmental regulations and statutes. The Company has appointed M/s Tolia and Associates, Chartered Accountants as Internal Auditor of the company from financial year 2012-13 and also appointed for the financial year 2013-14.

RISK AND CONCERNS

Indian Economy has been on a growth track again. The growth is expected to accelerate during the current year. However, excess liquidity and inflation induced by supply constraints and anxiety about the eventual withdrawal of stimulus continue to cause concern. The Company had reported good growth in the Financial Year''s 2011-12 and 2012-13.

The Management continues to monitor the risks concerning the Company and take actions as appropriate to the situation.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 217(1)(e) ofthe Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided in annexure to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Directors confirm that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2013, the applicable accounting standards have been followed and no material departures have been made from the same;

ii. Appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view ofthe state of affairs ofthe Company as at March 31, 2013 and ofthe Profit for that period;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities, and

iv. The annual accounts have been prepared on a going concern basis.

AUDITOR''S REPORT

The Board has duly examined the statutory Auditor''s Report to the financial statements and clarifications, wherever necessary, have been included in the Notes to the Financial Statements section ofthe Annual Report.

EXPLANATION TO AUDITORS OBSERVATION:

Reply to qualification given by the auditors in the Auditors Report:

Auditors Qualification: Para (a) ofthe Auditors Report: As more fully explained in note No 34 to the notes to the 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/- on a derivative contract entered into by its erstwhile subsidiary(now an associate), the liability for which has been takenover by the Company. The Company has not determined the quantum of mark to market losses as of the balance sheet date on the above contract and have relied on a legal opinion in the matter wherein no liability is expected. Pending to final settlement ofthe matter, we are unable to quantify the extent of provision required, if any, in this regard.

Managements Reply: 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. 501.33 Lacs (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.

Auditors Qualification: Para (b) of the Auditors Report: As more fully explained in Note No. 42 to the Notes to the Financial Statements, provisions of Rs. 4,50,000/- has been made for penalty towards compounding of offences. Petition filed for alleged non-compliance of several provisions of the Act before Ministry of Corporate Affairs. Based on opinion obtained, the Company expects maximum penalty Rs.4,50,000/- on disposal of its petitions. Pending disposal of petition, we are unable to quantify the extent of additional provision required, if any, in this regard.

MANAGEMENT REPLY:

The Company has filed the requisite applications with the Ministry of Corporate Affairs (the MCA) for compounding for non-compliance of few sections of the Companies Act, 1956 on January 28, 2013, January 30, 2013, February 2, 2013, February 11, 2013 & April 11, 2013. The Company is awaiting for hearing from the MCA.

AUDITORS

The Auditors of the Company, M/s. Haribhakti & Co., Chartered Accountants (FRN - 103523W) retire at the conclusion of ensuing Annual General Meeting ofthe Company and being eligible offer themselves for re-appointment as a statutory auditors for the Financial Year 2013-2014.

The Company has received a letter from M/s. Haribhakti & Co., Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956 and that they are not disqualified within the meaning of Section 226 ofthe said Act.

Members are requested to consider their appointment, on a remuneration to be decided by the Board of Directors thereof for the ensuing Financial Year i.e. 2013-2014.

The Notes to the Financial Statements referred to in the Auditor''s Report are self-explanatory and therefore do not call for any further comments.

MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Management Discussion and Analysis is annexed and same forms part of this Report.

CORPORATE GOVERNANCE REPORT

The Company has adopted the best possible Corporate Governance norms and it has been our endeavor to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from a Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Clause 49 ofthe Listing Agreement with the stock exchanges form part of this Report.

In terms of sub-clause (v) of the Clause 49 of the Listing Agreement, a certificate of the Managing Director and Vice President Finance, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting to matters to the Audit Committee in terms ofthe said Clause, is also enclosed as a part of this Report.

ACKNOWLEDGEMENTS

The Board acknowledges 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, co-ordination and support.

For and on behalf of the Board Mumbai Sd/-

May 23, 2013 Nitin M. Shah

Chairman and Managing Director


Mar 31, 2012

To the Members of Nitin Fire Protection Industries Limited

The Directors have pleasure in presenting the Seventeenth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2012.

FINANCIAL RESULTS

Accounting Policy

The Company follows the Generally Accepted Accounting Principles (GAAP) in India, applicable accounting standards/provisions of the Companies Act, 1956 for the preparation of its financial statements. The Company also follows accrual basis of accounting except in cases of revaluation of assets and impairment, if any.

Summarised Statement of Profit and Loss

(Rs. in lacs)

Particulars Standalone Consolidated For the year For the year For the year For the year 2011-12 2010-11 2011-12 2010-11

Sales & other income 16,535.44 16,225.28 53,906.88 45,226.08

Profit before depreciation, amortisation & tax 1,358.34 2,855.33 5,378.52 6,822.37

Depreciation/ amortisation 99.75 28.33 296.88 534.30

Profit before tax 1,258.58 2,827.00 5,081.64 6,288.07

Provision for income tax including deferred tax 253.51 349.20 373.21 375.09

Provision for wealth tax 0.37 0.07 0.76 1.35

Tax adjustments of earlier years (net) (0.83) 105.91 3.20 110.39

Profit after tax 1,005.53 2,371.82 4,704.47 5,801.24

Less: Share of Minority Interest in income - - - 122.85

Add: Share of (loss)/profit in an associate - - (302.75) (342.37)

Profit brought forward from previous year 3,822.35 2,362.28 13,862.12 9,538.48

Surplus on Amalgamation (66.41) - (1323.09) -

Profit available for appropriation 4,827.89 4,734.10 18,263.83 14,874.50

APPROPRIATIONS

Transferred to General Reserve 80.00 237.50 80.00 280.00

Proposed dividend 882.21 630.15 882.21 630.15

Corporate dividend tax on proposed dividend 143.12 44.10 143.12 102.23

Surplus carried forward to Balance Sheet 3,656.15 3,822.35 15,835.41 13,862.12

DIVIDEND

The Board of Directors encouraged with the above financial performance of the Company, recommends dividend of Rs. 0.40/- per share on 22,05,52,694 Equity Shares of Rs. 2/- each (Previous year Rs. 1/- per share on 63,015,705 Equity Shares of Rs. 2/- each)

SHARE CAPITAL

During the year, the Company has allotted 15,75,36,989 Bonus Shares . The paid up share capital of the Company has been increased from 63,015,705 Equity Shares of Rs. 2/- each to 22,05,52,694 Equity Shares of Rs. 2/- each.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 80.00 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 3,656.15 lacs is proposed to be retained in the Profit and Loss Account

RESERVE AND SURPLUS

Reserves and Surplus stood at to Rs. 9,401.46 lacs as at March 31, 2012 compared to Rs. 11,380.32 lacs as at March 31, 2011. The decreases is due to issue of bonus shares.

OPERATION RESULTS AND BUSINESS

The Company continued to see strong and profitable growth in the Financial Year 2011-12 across all markets driven by good performance across all business segments.

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2012 stood at Rs. 16,535.44 lacs registering an increase of 1.91% as compared to the previous year. As per the Consolidated Financial Statements, total income was Rs. 53,906.88 lacs registering an increase of 19.19% as compared to the previous year. The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company during the current year.

The Company is among the leading fire fighting equipment manufacturing companies in India, and continues to retain its leadership position among the Indian companies. It has continued to win new engagements and grow existing relationships in the traditional area of development, manufacturing and distribution of fire protection and electronic security systems, CNG cascades, commissioning and installation of safety and security solutions and execution of annual maintenance contracts for fire protection systems. It provides automated water and gas based fire suppression systems along with fire detection and security systems on turnkey basis. The broad range of products and services enables the Company to provide "end -to-end" services to its customers, combined with its industry focus and its geographical spread, the Company is able to provide comprehensive and high value added services to its customers. Considering the need to deepen relationships with customers in the industry, to acquire new customers in the markets where your Company is already a significant force and to expand in emerging markets.

AMALGAMATION

Alert Fire Protection Systems Private Limited and Logicon Building Systems Private Limited, wholly owned subsidiaries of the Company has on May 16, 2011 filed a Scheme for amalgamation with the Company with the Hon'ble High Court of Bombay. The Scheme shall be given effect to in the Books with effect from the Appointed Date of April 1, 2010. The Company has received approval from the Hon'ble High Court of Bombay on January 13, 2012.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has four subsidiaries, namely, Eurotech Cylinders Private Limited, India, Nitin Venture FZE, UAE, New Age LLC, UAE, and Nitin Global Pte Limited, Singapore .

We believe that the presentation of the Consolidated Financial Statements presents a more comprehensive picture rather than the Standalone Financial Statements of the Company and each of its subsidiaries.

However, a summary of financial information of each subsidiary regarding Capital, Reserves, Total Assets, Total Liabilities, Details of Investment, Turnover, Profit before Taxation, Provision for Taxation, Profit after tax and Proposed Dividend have been separately furnished forming part of this Annual Report.

Eurotech Cylinders Private Limited, India (ECPL)

ECPL is in the business of purchase and supply of high pressure seamless/compressed natural gas cylinders (CNG) and valves. The Company's products are sold under the brand name 'EURO' and basically cater to domestic markets. ECPL supplies the above products to dealers of industrial/medical gases, fire fighting equipments, CNG-NGV vehicles, CNG Cascades etc.

Nitin Venture FZE, UAE (NV)

NV is set up in the free trade zone at Jebel Ali, Dubai to meet the demands of international customers and providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NV is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone/integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

New Age LLC, UAE (NA)

New Age LLC, UAE was established in 1976 at UAE. NA has got office and representation in Abu Dhabi, Cubai, Sharjah, with experience in installation in all seven Emirates.

NA is Professional Fire Protection Engineering Company providing Equipments, Fire Protection System, Fire Detection System, Emergency Lighting System and Water Mist Fire Protection Systems.

NA has taken several projects like Municipality, Airport Development Board, Port Authority, Telecommunication Sites, Cement Plants, Ministry of Education and Civil Defense. NA has also got Major Overseas License along with Local License with staff over 140 personnel directly employed by the Company.

Nitin Global Pte Limited, Singapore (NGPL)

NGPL was incorporated in July 2009 to meet the demands of South-East Asian market and for providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

There has been no other material change in the nature of the business of the subsidiaries. A statement containing brief financial details of the subsidiaries is included in the Annual Report

ANNUAL REPORT OF SUBSIDIARY COMPANIES

In terms of general exemption given by the Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated February 8, 2011 under section 212(8) of the Companies Act, 1956, a copy of Balance Sheet, Statements of Profit and Loss, Report of the Board of Directors and the Auditors of the above mentioned four subsidiary companies for the year ended March 31, 2012 have not been attached with the Annual Report of the Company. We believe that the presentation of the Audited Consolidated Financials present a true and fair picture of the state of affairs and the financial conditions.

The Company has also annexed a statement at the end of this Annual Report pursuant to general exemption granted given by the Ministry of Corporate Affairs, Government of India under section 212(8) of the Companies Act, 1956, related to its subsidiary companies for the year ended March 31, 2012.

The Company shall make available these documents/details upon request by any shareholder of the Company interested in obtaining the same. The Annual Accounts of the Company and its subsidiary companies are also available for inspection by the shareholders during business hours at the registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 'Consolidated Financial Statements', Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements' and Accounting Standard 27 'Financial Reporting of Interest in Joint Ventures', your Directors have pleasure in attaching the Consolidated Financial Statements which form part of the Annual Report.

FIXED DEPOSITS

The Company has not invited/accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

DIRECTORS

The Board of Directors at its meeting held on May 29, 2012 has subject to the approval Central Government and members of the Company at the ensuing Annual General Meeting, reappointed Mr. Nitin M. Shah as Managing Director designated as Chairman & Managing Director of the Company w.e.f. April 1, 2012 for a further period of 3 years.

The Board of Directors at its meeting held on May 29, 2012 has subject to the approval of the members at the ensuing Annual General Meeting, reappointed Mr. Rahul N. Shah as Executive Director of the Company w.e.f. April 1, 2012 for a further period of 3 years.

Mr. Krishnakant Jha, shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment.

Mr. Satish K. Dheri was appointed as an Additional Director of the Company at meeting of the Board held on May 29, 2012. Mr. Satish K. Dheri is holding office of Director until the date of the ensuing Annual General Meeting. The Company had received Notice and requisite fee from a shareholder for proposing appointment of Mr. Satish K. Dheri in the Board.

Brief particulars and expertise of these Directors have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting.

INSURANCE

The properties of the Company viz. building, plant and machinery and stocks have been adequately insured.

EMPLOYEES

None of the employees of the Company has received remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

Employee's relations remained cordial during the year under review.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The Company has an in house internal audit system and procedures to ensure reliability of financial reporting, compliance with the Company's policies and practices, governmental regulations and statutes.

RISK AND CONCERNS

Indian Economy has been on a growth track again. The growth is expected to accelerate during the current year. However, excess liquidity and inflation induced by supply constraints and anxiety about the eventual withdrawal of stimulus continue to cause concern. The Company had reported good growth in the Financial Year 2011-12.

The Management continues to monitor the risks concerning the Company and take actions as appropriate to the situation.

CONSERVATION OF ENERGY

The Company is not required to furnish the prescribed information under Section 217(I) (e) of the Companies Act, 1956 relating to conservation of energy, as the Company does not fall under the Industries included in the Schedule to relevant rules. However, your Directors report that operations of the Company do not involve much use of energy. The Company makes every possible effort to conserve energy at all levels of its operations. Statement of particulars of the conservation of energy forms part of this Report

TECHNOLOGY ABSORPTION

The Company is presently carrying its business with in-house Indian technology. Statement of particulars of the technology absorption forms part of this Report

FOREIGN EXCHANGE EARNINGS AND OUTGO

Statement of particulars of the foreign exchange earnings and outgo forms part of this Report

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Directors confirm that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2011, the applicable accounting standards have been followed and no material departures have been made from the same,

ii. Appropriate accounting policies have been selected and applied consistently, and have 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 as at March 31, 2011 and of the Statements of Profit & Loss for the year than ended.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and

iv. The annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors of the Company, Haribhakti & Co, Chartered Accountants retire at the conclusion of ensuing Annual General meeting of the Company and being eligible offer themselves for re-appointment as statutory auditors for the Financial Year 2012-2013.

The Company has received a letter from Haribhakti & Co, Chartered Accountants to the effect that their appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified within the meaning of Section 226 of the said Act.

Members are requested to consider their appointment, on a remuneration to be decided by the Board of Directors thereof for the ensuing Financial Year i.e. 2012-2013.

The Notes to the Financial Statements referred to in the Auditor's Report are self-explanatory and therefore do not call for any further comments. AUDITOR'S REPORT

The Board has duly examined the statutory Auditor's Report to the financial statements and clarifications, wherever necessary, have been included in the Notes to the Financial Statements section of the Annual Report.

EXPLANATION TO AUDITORS OBSERVATION:

Reply to qualification given by the auditors in the Auditors Report:

Auditors Qualification: Para 5(a) of the Auditors Report: the Company executes composite contracts with its customers for the supply and installation of fire protection system. Based on the nature of the activity, execution of work and the contracts entered into by the company, the contract revenue and contract costs need to be accounted by adopting the percentage of completion method as prescribed under AS 7 "Construction Contracts". However the Company has accounted the revenue as per AS 9 "Revenue Recognition" based on the dispatch of material and on completion of installation work. The impact due to above is presently not ascertainable.

Managements Reply: The Company is under the process of implementing an ERP system and accordingly will ensure compliance with Accounting Standard-7.

Auditors Qualification: Para 5(b) of the Auditors Report: The Company is in dispute with a bank for a claim made by the bank for Rs. 50,133,481/- on a derivative contract entered into by its erstwhile subsidiary, the liability for which has been taken over by the Company. The erstwhile subsidiary is now an associate based on a sale of its 40% share and increase in paid up capital of the associate. The Company has not determined the quantum of mark to market losses as of the balance sheet date on the above contract and have relied on a legal opinion in the matter wherein no liability is expected. Pending the final settlement of the matter, we are unable to quantify the extent of provision required, if any in this regard.

Managements Reply: 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.

Auditors Qualification: Para 5(c) of the Auditors Report: The Company is in the process of obtaining details regarding identification of creditors registered under the Micro, Small and Medium Enterprise Development Act, 2006.

Managements Reply: The Company is in the process of obtaining necessary information relating to the registration status of suppliers under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, the information required under the said Act, could not be compiled and disclosed. However, the Company since obtained few confirmations to this effect.

MANAGEMENT DISCUSSION AND ANALYSIS

A Report on Management Discussion and Analysis is annexed and same forms part of this Report.

CORPORATE GOVERNANCE REPORT

The Company has adopted the best possible Corporate Governance norms and it has been our endeavor to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Clause 49 of the Listing Agreement with the stock exchanges form part of this Report.

In terms of sub-clause (v) of the Clause 49 of the Listing Agreement, a certificate of the Managing Director inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting to matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of this Report.

ACKNOWLEDGEMENTS

The Board acknowledges 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, co-ordination and support.

For and on behalf of the Board

Sd/-

Mumbai Nitin M Shah

May 29, 2012 Chairman & Managing Director


Mar 31, 2011

To the Members,

The Directors have pleasure in presenting the Sixteenth Annual Report together with the Audited Statement of Accounts for the year ended March31,2011.

FINANCIALRESULTS

Accounting Policy

The Company follows the Generally Accepted Accounting Principles (GAAP) in India, applicable accounting standards/provisions of the Companies Act, 1956 for the preparation of its financial statements The Company also follows accrual basis of accounting except in cases of revaluation of assets and impairment losses, if any.

Summarised Profit and Loss Statement

(Rs. in lacs)

Particulars Standalone Consolidated

For the year For the year For the year For the year 2010-11 2009-10 2010-11 2009-10

Sales & other income 16,226.99 9,425.05 45,330.91 31,625.94

Profit before depreciation / amortisation & tax 2,855.33 1,489.79 6,822.36 4,999.92

Depreciation/ amortisation 28.33 48.36 534.30 415.21

Profit before tax 2,827.00 1,441.43 6,288.06 4,584.71

Provision for income tax including deferred tax 349.20 207.26 375.62 808.71

Provision for wealth tax 0.07 0.15 0.82 1.25

Tax adjustments of earlier years (net) 105.91 58.92 110.39 75.73

Profit after tax 2,371.82 1,175.10 5,801.23 3,699.02

Less: Share of minority interest in income - - 122.85 -

Add: Share of (loss)/ profit in an associate - - (342.36) 481.46

Add: Prior period adjustments - - - 12.80

Profit brought forward from previous year 2,362.28 1,863.26 9,538.48 6,021.28

Profit available for appropriation 4,734.10 3,038.36 14,874.50 10,214.56

APPROPRIATIONS

Transferred to General Reserve 237.50 160.00 280.00 160.00

Proposed dividend 630.15 441.11 630.15 441.11

Corporate dividend tax on proposed dividend 44.10 74.97 102.23 74.97

Surplus carried forward to Balance Sheet 3,822.35 2,362.28 13,862.12 9,538.48

DIVIDEND

The Board of Directors encouraged with the above financial performance of the Company, recommends dividend of Rs.1/- per share on 6,30,15,705 Equity Shares of Rs. 21- each (Previous year Rs. 3.50 per share on 1,26,03,141Equity Shares of Rs.10/-each)

SHARE CAPITAL

During the year, the Company has sub-divided (split) its shares from Rs. 10/- each to Rs. 21- each. There was no change in the paid up share capital of the Company during the year

TRANSFERTO RESERVES

The Company proposes to transfer Rs. 237.5 lacs to the General Reserve out of the amount available for appropriations and an amount ofRs. 3,822.35 lacs is proposed to be retained in the Profit and Loss Account

RESERVE AND SURPLUS

Reserves and Surplus stood at toRs. 11,380.32 lacs as at March31,2011 compared toRs.9,693.60 lacs as at March31,2010. The increase was due to retainedearnings

OPERATION RESULTS AND BUSINESS

The Company continued to see strong and profitable growth during the Financial Year 2010-11 across all markets driven by good performance across allbusiness segments.

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2011 stood at Rs. 16,226.99 lacs registering an increase of 72% as compared to the previous year. As per the Consolidated Financial Statements, total income was Rs. 45,330.91 lacs registering an increase of 43.33% as compared to the previous year The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company duringthecurrentyear.

The Company is among the leading fire fighting equipment manufacturing companies in India, and continues to retain its leadership position among the Indian companies. It has continued to wm new engagements and grow existing relationships in the traditional area of development, manufacturing and distribution of fire protection and electronic security systems, CNG cascades, commissioning and installation of safety and security solutions and execution of annual maintenance contracts for fire protection systems. It provides automated water and gas based fire suppression systems along with fire detection and security systems on turnkey basis The broad range of products and services enables the Company to provide "end to-end" services to its customers, combined with its industry focus and its geographical spread, the Company is able to provide comprehensive and high value added services to its customers. Considering the need to deepen relationships with customers in the industry, to acquirenew customers in the markets where your Company is already a significant force and to expand in emerging markets.

SUBSIDIARY COMPANIES AND CONSOLROATED FINANCIAL STATEMENTS

Your Company has six subsidiaries, namely' Alert Fire Protection Systems Private Limited, India Eurotech Cylinders Private Limited, India, Logicon Building Systems Private Limited, India, Nitin Venture FZE, UAE, New Age Company LLC, UAE and Nitin Global Pte Limited, Singapore. One domestic subsidiary i.e. Nitin Cylinders Limited has become associate of the Company which has changed its name to Worthington Nitin Cylinders Limited. A Foreign associate Company i.e. New Age LLC, UAE, has become a step down subsidiary with the holding being throug haforeign subsidiary.

We believe that the presentation of the Consolidated Financial Statements presents a more comprehensive picture rather than the Standalone Financial Statements of the Company and each of its subsidiaries. As per terms of general exemption, a summary of financial information of each subsidiary regarding Capital, Reserves, Total Assets, Total Liabilities, Details of Investment, Turnover, Profit before Taxation, Provision for Taxation, Profit after Rs. Tax and Proposed Dividend have been separately furnished forming part of this Annual Report.

Alert Fire Protection Systems Private Limited, India (Alert)

Alert is in the business of purchase and supply of fire alarm and detection equipments, control panels and related components/spare parts which are mainly sourced from all.K. based Company viz. Apollo Fire Detectors and Fire Fighting Enterprise.

Eurotech Cylinders Private Limited, India (ECPL)

ECPL is in the business of purchase and supply of high pressure seamless and valves. The Company's products are sold under the brand name 'EURO' and basically cater to domestic markets. ECPL supplies the above products to dealers of industrial/medical gases, fire fighting equipments.

Logicon Building Systems Private Limited, India (Logicon)

Logicon is in the business of setting up of turnkey contracts for intelligent building management systems, clean agent and fire detection alarm systems including water based hydrant systems, CCTV and security systems including designing, integration, installation of such systems and maintenance services. Such systems are used for security and building automation of all kindsof buildings, be it I.T complexes, shopping malls, industrial plant buildings, hospitals, hotels, banks, datacenters etc.

Nitin VentureFZE, UAE (NV)

NV is set up in the free trade zone at Jebel Ali, Dubai to meet the demands of international customers andprovides simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NV is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone/integrated fire detection Systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, highpressure storage cylinders & accessories and integrated building management systems.

New Age Company LLC, UAE (NA)

NA was established in 1976 at UAE. NAhas got offices and representations in Abu Dhabi, Dubai, and Sharjah with experience in installation in all the seven emirates.

NA is professional fire protection engineering company providing equipments, fire protection system, fire detection system, emergency lighting systeirland water mist fire protectionsystems

NA has taken several projects for Municipality, Airport Development Board, Port Authority, Industrial Warehouses, Commercial Warehouses, Electricity Board etc and also other government bodies.

Nitin GlobalPteLimited,Singapore(NGPL)

NGPL was incorporated in July 2009 to meet the demands of South-East Asian markets and for providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning customers for conventional to intelligent

standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, highpressure storage cylinders & accessories and toegratedbuilding management systems.

There has been no other material change in the nature of the business of the subsidiaries. A statement containing brief financial details of the subsidiariesisincludedintheAnnualReport

PROPOSED AMALGAMATION OF SUBSIDIARY COMPANIES WITH THECOMPANY

The Board of Directors of the Company in its board meeting held on February 11, 2011 has approved the amalgamation with itself of Alert Fire Protection Systems Private Limited and Logicon Building Systems Private Limited with April 1, 2010 being the appointed date. In this regard, your Company has received an in principle approval from both the stock exchanges. Your Company has since filed a joint petition before the Hon'ble High Court of Bombay for the sanction of the scheme and approval is awaited.

ANNUALREPORT OF SUBSIDIARY COMPANIES

In terms of general exemption givenbythe Ministry ofCorporateAffairs, Government of lndia, vide General Circular No.2/2011 dated February 8,2011 under section 212(8) ofthe Companies Act,l 956, acopy of Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Auditors of the abovementioned six subsidiary companies for the year ended March 31,2011 have not been attached with the Annual Report of the Company. We believe that the presentation of the Audited Consolidated Financials present a true and fair picture of the state of affairs and the financial conditions.

The Company has also annexed a statement at the end of this Annual Report pursuant to general exemption granted given by the Ministry of Corporate Affairs, Government of rndia under section 212(8) of the Companies Act, 1956, related to its subsidiary companies for the year ended March31,2011.

The Company shall make available these documents/details upon request by any shareholder of the Company interested in obtaining the same. The annual accounts of the Company and its subsidiary companies are also available for inspection by the shareholders during business hours at theregisteredofficeoftheCompany

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements have been prepared in accordance with the Accounting Standard 21 'Consolidated Financial Statements', Accounting Standard 23 'Accounting for Investments in Associates in Consolidated Financial Statements' and Accounting Standard 27 'Financial Reporting of Interest in Joint Ventures'. Your Directors have pleasure in attaching the Consolidated Financial Statements which form part of the Annual Report.

FIXEDDEPOSITS

The Company has not invited/accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet

DIRECTORS

Dr. Surendra A. Dave, shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment.

Mr. Kunal N. Shah was appointed as an Additional Director of the Company at meeting of the Board held on May 29,2011. Mr. Kunal N. Shah is holding office of Director until the date of the ensuing Annual General Meeting. The Company had received Notice and requisite fee from a shareholder forproposing appointment of Mr. Kunal N Shah in the Board.

Brief particulars and expertise of these Directors have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting

Insurance

The properties of the Company viz. building, plant and machinery and stocks have been adequately insured.

EMPLOYEES

None of the employees of the Company has received remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 read withthe Companies (Particulars of Employees) Rules, 1975.

Employee's relations remained cordial during the year under review.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The Company has an in house internal audit system and procedures to ensure reliability of financial reporting, compliancewiththeCompany'spolicies andpractices, governmental regulations and statutes.

RISK AND CONCERNS

Indian Economy has been on a growth track again. The growth is expected to accelerate during the current year. However, excess liquidity and inflation induced by supply constraints and anxiety about the eventual withdrawal of stimulus continue to cause concern. The Company had reported good growth in the Financial Year's 2009-10 and 2010-ll.

The Management continues to monitor the risks concerning the Company and take actions as appropriate to the situation.

CONSERVATION OF ENERGY

The Company is not required to furnish the prescribed information under Section 217 (I)(e) of the Companies Act, 1956 relating to conservation of energy, as the Company does not fall under the industries included in the Schedule to relevant rules. However, your Directors report that operations of the Company do not involve much use of energy. The Company makes every possible effort to conserve energy at all levels of its operations. Statement of particulars of the conservation of energy forms part of this Report

TECHNOLOGYABSORPTION

The Company is presently carrying its business with in-house Indian technology. Statement of particulars of the technology absorption forms part of this Report

FOREIGN EXCHANGE EARNINGS AND OUTGO

Statement of particulars of the foreign exchange earnings and outgo forms part of this Report

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Directors confirm that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2011, the applicable accounting standards have been followed and nomaterial departure shave been made from the same,

ii. Appropriate accounting policies have been selected and applied consistently, and have 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 as at March 31,2011 and of the Profit & Loss Account for theyearthanended.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and

iv. The annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors of the Company, Haribhakti & Co, Chartered Accountants retire at the conclusion of ensuing Annual General meeting of the Company and bemg eligible offer themselves forre - appointment as statutory auditors for the Financial Year 2011-2012.

The Company has received a letter from Haribhakti & Co, Chartered Accountants to the effect that their appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified within the meaning of Section 226 of the saidAct.

Members arerequested to consider their appointment, on a remuneration to be decided by the Board of Directors thereof for the ensuing Financial Yearie. 2011-2012.

The Notes to the Financial Statements referred to in the Auditor's Report are self-explanatory and therefore do not call for any further comments.

AUDITOR'S REPORT

TheBoardhasduly examined the statutoryAuditor's Report to the financial statements andclarifications, wherever necessary, have been included in the Notes to the Financial Statements section of the Annual Report.

EXPLANATIONTOAUDITORSOBSERVATIONS:

Reply to qualifications given by the auditors intheAuditors Report:

Auditors Qualification: Para 5(a) of the Auditors Report: The Company executes composite contracts with its customers for the supply and installation of fire protection system. Based on the nature of the activity, execution of work and the contracts entered into by the company, the contract revenue and contract costs need to be accounted by adopting the percentage of completion method as prescribed under AS - 7 "Construction Contracts". However, the Company has accounted revenue as per AS - 9 "Revenue Recognition" based on dispatch of material and on completion of installation work. The impact due to above is presently not as certainable.

Managements Reply: The Company is under the process of implementing an ERP system and accordingly will ensure compliance with Accounting Standard-7 "ConstructionContracts" in the subsequent fcancial years.

Auditors Qualification: Para 5(b) of the Auditors Report: As stated in note 21 of the Schedule O, the Company is in dispute with a bank for a 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 takenover by the Company. The erstwhile subsidiary is now an associate based on a sale of its 40% share and increase in paid up capital of the associate. The Company has not determined the quantum of mark to market losses as of the balance sheet date on the above contract and have relied on a legal opinion in the matter mentioning that no liability is expected. Pending final settlement of the matter, we are unable to quantify the extent of provision required, if any in this regard

Managements Reply: Consequentto part sale of equity stake in Worthington Nitin Cylinders Limited inDecember 2010, the Company has taken over the outstanding claim of a derivative contract amounting to Rs. 50,133,481 (excluding interest). The Company has obtained a legal opinion mentioning that the said contract is in violation of the RBI regulations andhence, no liability is expected. Further, the Company has filed a petition in the HonWe High Court of Bombay challen^^^

Auditors Qualification: Para 5(c) of the Auditors Report: As stated innote 6 of the Schedule O, the Company is in process of obtaining details regarding identification of creditors register edunder the Micro, Small and Medium Enterprise Development Act; 2006

Managements Reply: The Company is intheprocess of obtaining necessary information relating to the registration status of suppliers under the Micro Small and Medium Enterprises Development Act, 2006. Hence, the information required under the said Act, could not be compiled and disclosed. However, the Company since obtained few confirmations to this effect.

MANAGEMENTDISCUSSIONAND ANALYSIS

AReport on Management Discussion and Analysis is annexed and same forms part of this Report.

CORPORATE GOVERNANCE REPORT

The Company has adopted the best possible Corporate Governance norms and it has been our endeavor to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated underClause49oftheListingAgreementwiththe stock exchanges form part of this Report.

In terms of sub-clause (v) of the Clause 49 of the Listing Agreement, a certificate of the Managing Director inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting to matters to the Audit Committee in terms of the said Clause, is also enclosedas apart ofthis Report.

ACKNOWLEDGEMENTS

The Board acknowledges 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 fortheir 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 wasmadepossMebytheirhardworkloyalty dedication, co-ordination and support.

For and on behalf of the Board

Mumbai Sd/-

July8,2011 Nitin M Shah

Chairman & Managing Director










Mar 31, 2010

The Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited Statement of Accounts for the year ended March 31,2010.

FINANCIAL RESULTS

Accounting Policy

The Company follows the Generally Accepted Accounting Principles (GAAP) in India, applicable accounting standards/provisions of the Companies Act, 1956 for the preparation of its financial statements The Company also follows accrual basis of accounting except in cases of revaluationofassetsandimpakment,ifany.

Summarised Profit and Loss Statemen (in lacs)

Particulars Standalone Consolidated For the For the For the For the year year year year 2009-10 2009-09 2009-10 2008-09

Sales, operating income & other income 9,425.05 6,648.39 32,107.40 25,149.13

Profit before depreciation & tax 1,489.78 1,730.02 5,481.39 4,780.63

Depreciation/amortisation 48.35 46.92 415.21 335.31

Profit before tax 1,441.43 1,683.10 5,066.18 4,445.32

Provision for income tax including deferred tax 207.26 275.57 808.71 956.27

Provision for fringe benefit tax - 5.70 - 16.85

Provision for wealth tax 0.15 0.10 1.25 0.65

Tax adjustments of earlier years (net) 58.92 - 75.73 -

Profit after tax 1,175.10 1,401.73 4,180.48 3,471.55

Add: Prior period adjustments - - 12.80 -

Profit brought forward from previous year 1,863.26 1,006.39 6,021.28 3,236.08

Profit available for appropriation 3,038.36 2,408.12 10,214.56 6,707.63

APPROPRIATIONS

Transferred to General Reserve 160.00 145.00 160.00 244.00

Proposed dividend 441.11 378.09 441.11 378.09

Corporate dividend tax on proposed dividend 74.97 21.77 74.97 64.26

Surplus carried forward to Balance Sheet 2,362.28 1,863.26 9,538.48 6,021.28

DIVIDEND

The Board of Directors encouraged with the above financial performance of the Company, recommends a dividend of ? 3.50 per share (Previous year? 3.00 per share) on 12,603,141 Equity Shares of ? 10/- each

SHARE CAPITAL

During the year, authorized share capital of the Company was increased from ? 1,500 lacs to ? 6,000 lacs. The issued and subscribed share capital

of the Company consists of 12,603,141 equity shares of? 10/- each. There was no change in the paid up share capital of the Company during the year P

TRANSFER TO RESERVES

The Company proposes to transfer ? 160 lacs to the General Reserve out of the amount available for appropriation and an amount of? 2,362.28 lacs is proposed to be retained in the Profit and Loss Account.

RESERVES AND SURPLUS

Reserves and Surplus stood at to ? 9,693.60 lacs as at March 31, 2010 compared to ? 9,047.14 lacs as at March 31, 2009. The increase was due to retained earnings

OPERATION RESULTS AND BUSINESS

The Company continued to see strong and profitable growth in the Financial Year 2009-10 across all markets driven by good performance across all business segments.

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2010 stood at ? 9,425.05 lacs registering an increase of 41.76% as compared to the previous year. As per the Consolidated Financial Statements, total income was ? 32,107.40 lacs registering an increase of 27.67% as compared to the previous year The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company during the current year.

The Company is among the leading fire fighting equipment manufacturing companies in India, and continues to retain its leadership position among the Indian companies. It has continued to win new engagements and grow existing relationships in the traditional area of development, manufacturing and distribution of fire protection and electronic security systems, CNG cascades, commissioning and installation of safety and security solutions and execution of annual maintenance contracts for fire protection systems. It provides automated water and gas based fire suppression systems along with fire detection and security systems on turnkey basis The broad range of products and services enables the Company to provide "end to-end" services to its customers, combined with its industry focus and its geographical spread, the Company is able to provide comprehensive and high value added services to its customers. Considering the need to deepen relationships with customers in the mdustry,toacqukenewcustomLinthemarketswhereyourCompanyisa lreadyasigrdficantforceand to expand in emerging markets.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has six subsidiaries, namely Alert Fire Protection Systems Private Limited, India Eurotech Cylinders Private Limited, india. Logicon Building Systems Private Limited, india, Nitin Cylinders Limited, India, Nitin Venture FZE, UAE and Nitin Global Pte Limited: Singapore

We believe that the presentation of the Consolidated Financial Statement presents a more comprehensive picture rather than the Standalone Financial Statements of the Company and each of its subsidiaries. We, therefore, applied to the Ministry of Corporate Affairs, Government of India and sough texemption from the requirement to present detaile dfinancial statements of each subsidiary.

However, as per terms of exemption granted, a summary of financial information of each subsidiary regarding Capital, Reserves, Total Assets. Total Liabilities, Details of Investment, Turnover, Profit before Taxation, Provision for Taxation, Profit after Tax and Proposed Dividend have been separately furnished forming part of this Annual Report.

Alert Fire Protection Systems Private Limited, India (Alert)

Alert is in the business of purchase and supply of fire alarm and detection equipments, control panels and related components/spare parts which are mainly sourced from UK. based companies viz. Apollo Fire Detectors and Fixe Fighting Enterprise.

Eurotech Cylinders Private Limited, India (ECPL)

ECPL is in the business of purchase and supply of high pressure seamless/compressed natural gas cylinders (CNG) and valves. The Companys products are sold under the brand name EURO and basically cater to domestic markets. ECPL supplies the above products to dealers of industrial/medical gases, fire fighting equipments, CNG-NGV vehicles, CNG Cascades etc.

Logicon Building Systems Private Limited, India (Logicon)

Logicon is in the business of setting up of turnkey contracts for intelligent building management systems, clean agent and fire detection alarm system including water based hydrant systems, CCTV and security systems including designing, integration, installation of such systems and maintenance services. Such systems are used for security and building automation of all kinds of buildings, be it I.T complexes, shopping malls, industrial plant buildings, hospitals, hotels, banks, datacenters etc.

Nitin Cylinders Limited, India (NCL)

NCLs business activity is that of manufacture and sale of high pressure seamless (CNG) cylinders with its manufacturing facilities located at Vishakhapatnam Special Economic Zone (VSEZ), Andhra Pradesh and sales being both within and outside India. The cylinders are marketed under the brand name NITIE. For this said purpose, NCL has entered into an agreement with your Company for use of the said brand name. The installed/licensedcapacitytomanufacturetneabovecylindersis 500,000cylindersperannum

NitinVentureFZE,UAE(NV)

NV is set up in the free trade zone at Jebel Ali, Dubai to meet the demands of international customers and providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrin of fire and safety products with international approvals. NV is strategically placed to be an rntemationalone stop source to discerning customers for conventional to intelligent standalone/integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, highpressure storage cylinders & accessories and integrated building management systems.

Nitin Global Pte Limited, Singapore (NGPL)

NGPL was incorporated in July 2009 to meet the demands of South-East Asian market and for providing simple, standalone conventional to intelligent, integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning Customers for conventional to intelligent standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV, access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building"management systems.

There hasbeennomaterialchangeinthenatureofthebusinessofthesubsidiaries. Astatementcontamingbrieffinancialdetailsofthesubsidiaries is included in the Annual Report

ANNUAL REPORTOFSUBSIDIARYCOMPANIES

In terms of approval granted by the Ministry of Corporate Affairs, Government ofmdia, vide letter datedApril5,2010undersection212(8)ofthe CompaniesAct, 1956, a copy of Balance Sheet, Profit and Loss Account, Report ofthe Board of Directors and the Auditors ofthe above mentioned six subsidiary companies for the year ended March 31, 2010 have not been attached with the Annual Report ofthe Company. We believe that the presentationoftheLditedConsolidatedFinancialspresentatmeandf airpictureofthestateofaffaksandthefmancialcL

The Company has also annexed a statement at the end of this Annual Report pursuant to exemption received from the Ministry of Corporate Affairs, Government of India under section 212(8) ofthe Companies Act, 1956, related to its subsidiary companies for the year ended March 31, 2010.

The Company shall make available these documents/details upon request by any shareholder ofthe Company interested in obtaining the same. The Annual Accounts ofthe Company and its subsidiary companies are also available for inspection by the shareholders during business hours at theregisteredofficeoftheCompany

CONSOLIDATED FINANCIALSTATEMENTS

hi accordance with the Accounting Standard 21 Consolidated Financial Statements, Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27 Financial Reporting of Interest in Joint Ventures, your Directors havepleasureinattachmgtheConsolidatedFinancialStatements whichformpartoftheAnnualReport.

FIXEDDEPOSITS

The Company has not invited/accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet

DIRECTORS

Mr. Kailat H. Vaidhyanathan shall retire by rotation at the forthcoming Annual General Meeting ofthe Company and being eligible, offers himself Reappointment.

Mr.RamakantM.Nayakwas appointed as anIndependentDirectorofthe CompanyatmeetingoftheBoardheldonAprill2,2010.Mr.Ramakant M. Nayak is holding office of Director until the date of the ensuing Annual General Meeting. The Company had received Notice and requisite fee from a shareholder for proposing appointment of Mr.Ramakant MN ayakintheBoard.

Brief particulars and expertise of these Directors have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting

INSURANCE

The properties of the Company viz. building, plant and machinery and stocks have been adequately insured.

EMPLOYEES

Employees relations remained cordial during the year under review.

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part ofthe Directors Report for the year ended March 31, 2010 are not attached to this report as permitted under theprovisionsofSection219(l)(b)(iv)oftheCompanie^ Company Secretary at the registered office of the Company.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The Company has an in house internal audit system and procedures to ensure reliability of financial reporting, compliance with the Companys policies and practices, governmental regulations and statutes.

RISKAND CONCERNS

Indian Economy has been on a growth track again. The growth is expected to accelerate during the current year. However, excess liquidity and inflation induced by supply constraints and anxiety about the eventual withdrawal of stimulus continue to cause concern. The Company had reported good growminFinancial Years 2008-09 and2009-10.

The Management continues to monitor the risks concerning the Company and take actions as appropriate to the situation.

CONSERVATION OF ENERGY

TheCompanyisnotrequkedtofurmshtheprescribedinf"

energy, as the Company does not fall under the Industries included in the Schedule to relevant rules. However, your Directors report that operations of the Company do not involve much use of energy. The Company makes every possible effort to conserve energy at all levels of its operations. Statement of particulars of the conservation of energy forms part of this Report

TECHNOLOGYABSORPTION

The Company is presently carrying its business with in-house Indian technology Statement of particulars of the technology absorption forms part of this Report

FOREIGN EXCHANGE EARNINGS AND OUTGO

Statement of particulars of the foreign exchange earnings and outgo forms part of this Report

DIRECTORSRESPONSIBILITYSTATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, the Directors confirm that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2010, the applicable accounting standards have been followed and no material departures have been made from the same,

ii. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state affairs of the Company as at March 31,2010andoftheProfit&LossAccountforthe year than ended.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the CompaniesAct,1956forsafeguardingtheassetsoftheCompanyandforpreven tinganddetectingfraudandother irregularities, and

iv. The annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors of the Company, Tolia & Associates, Chartered Accountants retire at the conclusion of ensuing Annual General meeting of the Companyandbeingeligibteofferthemselvesforre-appomtmentasstatuto ryauditorsfortheFmancialYear2010-2011^

The Company has received a letter from Tolia & Associates, Chartered Accountants to the effect that their appointment if made, would be within theprescribed limits under Section 224(1 B) ofthe Companies Act, 1956 and that they are not disqualified withm the meaning of Section226 ofthe saidAct.

Members are requested to consider their appointment, on a remuneration to be decided by the Board of Directors thereof forthe ensuing Financial Yeari.e.2010-2011.

TheNotestotheFmancialStatementsreferredtointheAuditors Reportareself-explanatoryandthereforedonotcallforanyfurthercomments.

AUDITORS REPORT

TheBoardhasdulyexaminedthestatutoryAuditorsReporttothefinancial statementsandclarifications,wherevernecessary,havebeen included in the Notes to the Financial Statements section of the Annual Report.

AUDITORS OBSERVATION:

The Audit Report and Notes to the Financial Statements referred to in the Auditors Report are self-explanatory and therefore do not call for any furthercomments.

MANAGEMENTDISCUSSIONAND ANALYSIS

A Report on Management Discussion and Analysis is annexed and same is forms part of this Report.

CORPORATE GOVERNANCE REPORT

The Company has adopted the best possible corporate governance norms and it has been our endeavor to comply and upgrade to the changing norms.

A separate section on corporate governance and a certificate from a Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the Clause 49 ofthe Listing Agreement with the stock exchanges form part of this Report.

In terms of sub-clause (v) of the Clause 49 of the Listing Agreement, a certificate of the Managing Director inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting to matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of this Report.

ACKNOWLEDGEMENTS

The Board acknowledges with appreciation the efforts put in by its employees during the year under review. The Company is grateful to its customers, shareholders, suppliers,fmancial 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, co-ordination and support.

For and on behalf of the Board of Directors

Sd/- NitinMShah Chairman & Managing Director

London August 17, 2010

 
Subscribe now to get personal finance updates in your inbox!