Mar 31, 2016
1. Terms/rights attached to equity shares
Each holder of equity shares is entitled to one vote per equity share. They are entitled to receive dividend proposed by the Board of Directors and approved by shareholders in General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2. Pursuant to the approval of the members of the Company at the Extraordinary General Meeting held on November 3, 2014 for issue of bonus shares in accordance with provisions of Section 63 and other applicable provisions of the Act, the Company has issued bonus shares in the proportion of one bonus share of Rs, 2 each for every three fully paid up equity shares of Rs, 2 each on the aforesaid date.
3. Pursuant to a special resolution pased by the members of the Company at the 20th Annual General Meeting (AGM) held on September 21, 2015, the authorized capital of the Company has been increased from Rs, 650,000,000 divided into 325,000,000 equity shares of Rs, 2 each to Rs, 750,000,000 divided into 375,000,000 equity shares of Rs, 2 each.
4. Pursuant to resolution passed by the members in the Annual General Meeting held on September 30, 2014 , dividend of Rs, 43,841,222 and dividend distribution tax thereon of Rs, 7,450,816 which was provided in the year ended March 31, 2014 has been reversed in the previous year ended March 31, 2015.
5. IFCI Limited
6. The term loan outstanding as at March 31, 2016 of Rs,181,562,500 (P.Y. Rs, 207,500,000) is secured by exclusive first charge on the commercial property owned by the promoters, situated at Ghatkopar - Mumbai and industrial land at village Khalapur, district - Raigarh, exclusive pledge of 9,573,527 (P.Y.13,733,334) equity shares of the Company, owned by the promoters, so as to give security cover of 1.5 times of the loan amount and personal guarantee of Nitin M Shah and Rahul N Shah.
7. The aforesaid loan is repayable in 8 quarterly installments of Rs,25,937,500 each at the end of 15th,18th, 21st, 24th, 27th, 30th, 33rd and 36th month, starting from November 03, 2014 and rate of interest ranges from 14% per annum to 14.50% per annum.
8. Aditya Birla Finance Limited
9. The term loan outstanding as at March 31, 2016 of Rs,48,365,449 (P.Y. Rs, 53,000,000) is secured by exclusive charge on office no. 801, 8th floor, Wing C, Neelkanth Business Park, Kirol Road, Vidyavihar West, Mumbai 400086.
10. The aforesaid loan is repayable in 84 monthly installments of Rs, 945,545 each starting from April 05, 2015 and carries rate of interest of 12.35% per annum.
11. IFCI Limited
11. The term loan outstanding as at March 31, 2016 of Rs,400,000,000 (P.Y. Rs, Nil) is secured by exclusive charge on the immovable property owned by Nitin M. Shah (HUF) situated at 7001, 70th floor, World One Tower, Lower Parel, Mumbai 400 013, exclusive charge on an immovable property owned by the promoters such that the combined distress value of both the properties shall provide a cover of one time of the loan outstanding , pledge of 14,590,803 (P.Y.Nil) equity shares of the Company owned by the promoters, so as to give security cover of 1.25 times of the loan amount and personal guarantee of Nitin M Shah and Rahul N Shah.
12. The aforesaid loan is for a period of five years including moratorium period of two years. Repayment will be in 36 equal monthly installments beginning from 25th month and continuing till 60th month and rate of interest ranges from 14% to 14.50% per annum.
13. PNB Housing Finance Limited
14. The term loan outstanding as at March 31, 2016 of Rs,54,275,537 (P.Y.Rs, Nil) taken from a financial institution is co-borrowed along with Nitin M. Shah and Rahul N. Shah, promoters of the Company which is secured by mortgage of property owned by the Company and situated at C-802, Neelkanth Business Park, Kirol Road, Vidyavihar -W, Mumbai 400 086.
15. Loan is repayable in 180 equal monthly installments of Rs, 662,493 each commencing from July 10, 2015 and carries an interest rate of 12.00% per annum.
16. Vehicle loan taken from a bank and outstanding as at March 31, 2016 of Rs,Nil (P.Y.Rs, 111,656) is secured by the hypothecation of the underlying asset.
17. The aforesaid loan is re-payable in 36 monthly installments of Rs, 56,580 each and carries rate of interest of 10.14% per annum. The charge has been satisfied.
18. The above borrowings are availed through a consortium agreement with bankers namely IDBI Bank Limited (Lead bank), Bank of Baroda, Dena Bank and Axis Bank Limited.
19. Security
First pari passu charge by way of hypothecation or indenture of mortgage and /or pledge of borrowers current assets,namely, stock of raw materials, semi finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts and all movable current assets , both present and future.
First pari passu charge on immovable and movable assets of the Company both present and future including its location at (i)factory at A-117,TTC Industrial area, Pawana Village, Navi Mumbai-400 705 (ii) office premises at 501/502 Delta Technology Street, Hiranandani Gardens, Powai, Mumbai - 400 076 and
(iii)immovable properties of Eurotech Cylinders Private Limited, situated at EL-29, TTC Industrial Area, Mahape, Navi Mumbai 400 701 (only for IDBI Bank Limited).
Personal guarantees of Nitin M. Shah and Rahul N. Shah.
20. Credit facilities availed
Working capital loan and other non-fund based facilities.
21. Rate of interest ranges from 11.65% to 14.5% per annum.
22. IDBI Bank Limited:
23. Primary security: First pari passu charge on immovable properties of Eurotech Cylinders Private Limited at EL-29, TTC, Navi Mumbai 400 705.
Collateral security: Second pari passu charge on (i) entire current assets and movable assets of the Company both present and future (ii) 501/502 Delta, Technology Street, Hiranandani Gardens, Powai, Mumbai 400076 and its factory at A-117, TTC Industrial Area, Pawana Village, Navi Mumbai 400 705. Pledge of promoters shares held in the Company to the extent of 100% of the exposure.
Personal guarantees of the Nitn M. Shah and Rahul N. Shah.
24. Credit facilities availed: Standby letter of credit.
25. Axis Bank Limited:
26. Primary security: Negative lien on receivables of Nitin Ventures FZE and New Age Company LLC .
27. Collateral security: Pledge of the Companyâs shares having aggregate market value of atleast 75% of the facility amount.
Pari passu second charge on fixed assets of the Companys (i) factory at A-117,TTC Industrial area, Pawana Village, Navi Mumbai-400 705 (ii) office premises at 501/502 Delta Technology Street, Hiranandani Gardens, Powai, Mumbai - 400 076 and (iii) on the entire current assets of the Company both present and future.
PDCâs for the facility amount of Nitin Ventures FZE and New Age Company LLC to the Dubai branch of the bank.
Personal guarantees of Nitn M. Shah and Rahul N. Shah.
28. Credit facilities availed
Stand by letter of credit.
29. Details of default: The Company has defaulted in the repayment of its loans to banks from February 2016 onwards. An amount of Rs,238,826,241 (P.Y. Rs, Nil) on account of principal and Rs,10,740,795 (P.Y. Rs, Nil) on account of Interest aggregating to Rs,249,567,036 (P.Y. Rs, Nil) are overdue as at March 31, 2016. Subsequent to the date of the Balance Sheet, the Company has paid Rs, 238,826,241 on account of principal and Rs, 8,140,465 on account of interest aggregating to Rs, 246,966,706.
(* There are no unpaid dividends which are required to be transferred to Investor Education and Protection Fund)
30. In view of book profits being in excess of taxable profits for the year ended March 31, 2016, as per computation of income, the provision for tax has been made as per MAT under section 115JB of the Income Tax Act, 1961. The Company is entitled to avail credit under section 115JAA (1A) which will be availed as and when due.
31. Sales include manufacturing sales of Rs, 5,695,875 (P.Y. Rs, 5,845,658) and materials and components consumed includes raw materials consumed for manufacturing activates amounting to Rs, 4,770,295 (P.Y.Rs, 4,987,741).
32. Relating to the exposure of Rs, 457,844,451 in Equity Shares of Worthington Nitin Cylinders Private Limited (WNCPL) as at March 31, 2016:The Companyâs management had carried out the valuation of fixed assets of WNCPL from an independent value to substantiate the recoverability of the investment as at March 31, 2016. However, in the absence of the fair value of the investment as required under Accounting Standard 13 âAccounting for Investmentsâ and audited financial statements for the years ended March 31, 2014, March 31, 2015 and March 31, 2016, the Management is unable to comment on the impairment, if any, on the carrying amount of the investment.
33. Previous year:
Current yearâs figures are stated in bold prints and previous yearâs figures are regrouped/restated wherever considered necessary.
Mar 31, 2014
(A) Background and nature of operations:
"Nitin Fire Protection Industries Limited (NFPIL or the ''Company'') was
incorporated in Mumbai, India on September 4, 1995 as a public limited
company under the ''Companies Act, 1956'' (the ''Act''). The Company''s
business activity is that of manufacturing fire fighting equipment (gas
based and water based fire extinguishers) under the brand name ''NITIE''
(also certified by the Bureau of Indian Standard (BIS)), providing
turnkey solutions including procurement, designing, system integration,
commissioning and installation of fire fighting systems including
annual maintenance contracts for fire protection systems. The Company
undertakes above activities from Maharashtra and Andhra Pradesh and has
marketing offices in Maharashtra, Tamil Nadu, Andhra Pradesh, Gujarat
and Uttar Pradesh. As part of its business activities, the Company has
formed/acquired domestic/foreign subsidiaries (including a step down
foreign subsidiary), has a stake in an associate and invested in a
non-integrated un-incorporated joint venture for crude oil. NFPIL is a
ISO 9001:2000 certified Company.
The Company made an initial public offer (''IPO'') in India in May 2007
and its shares are listed on the Bombay Stock Exchange Limited and the
National Stock Exchange Limited."
(B) Basis of preparation of financial statements:
(i) The accompanying financial statements have been prepared and
presented in accordance with Indian Generally Accepted Accounting
Principles (GAAP), under the historical cost convention (except for
revaluation of certain fixed assets) and follows accrual basis of
accounting. GAAP comprises mandatory accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended)
issued by the Central Government in exercise of the powers conferred
under sub-section (I)
(a) of section 642, the relevant provisions of the Act (to the extent
applicable), guidelines issued by the Securities and Exchange Board of
India and the provisions of the Companies Act, 2013 (to the extent
notified). GAAP also includes other relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI). Accounting policies
have been consistently applied except where a newly issued accounting
standard, if initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) The preparation of the financial statements in conformity with
GAAP requires the Management make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the
results of operations during the reporting periods. These estimates are
based upon the Management''s best knowledge of current events and
actions. Actual results could differ from these estimates.
Terms/rights attached to equity shares
Each holder of equity shares is entitled to one vote per equity share.
They are entitled to receive dividend proposed by the Board of
Directors and approved by shareholders in General Meeting, right to
receive annual report and other quarterly / half yearly / annual
publications and right to get new shares proportionately in case of
issuance of additional shares by the Company.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after the distribution of all preferential amounts. The distribution
will be in proportion to the number of equity shares held by the
shareholders.
Pursuant to the approval of the Board of Directors, for buy back of
equity shares under Section 77A of the Act up to 10% of the paid up
equity share capital and free reserves of the Company aggregating to
Rs. 149,000,000, at a maximum price of Rs. 66.60 per equity share, the
Company has bought back 1,346,583 equity shares through open market
transactions for an aggregate amount of Rs. 76,986,186 by utilising
Securities Premium Account to the extent of Rs. 74,293,020.
Short term borrowings
IDBI Bank Limited:
Primary security: First pari pasu charge on inventory and book debts
and entire movable assets of the Company, both present and future.
Collateral security: First pari passu charge on the movable and
immovable fixed assets of the Company both present and future including
its location at its factory at A-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office premises at 501/502 Delta, Technology
Street, Hiranandani Gardens, Powai, Mumbai 400076, equitable mortgage
(first charge) of premises belonging to a domestic subsidiary viz.
Eurotech Cylinders Private Limited located at EL-29, TTC Industrial
Area, Mahape, Navi Mumbai 400 701.
Personal guarantees of the Managing Director and a Whole Time Director
aggregating to Rs. 1,600,000,000 (P.Y.?1,600,000,000). For SBLC
facility, further secured by pledge of 14,070,000 (P.Y.14,070,000)
shares of the Company (belonging to the Director of the Company).
Credit facilities availed:
Working capital loan, stand by letter of credit and other non-fund
based facilities.
Axis Bank Limited:
Primary security: First pari passu charge on the current assets of the
Company, both present and future, negative lien on the receivables of a
foreign subsidiary viz. Nitin Ventures FZE.
Collateral security: Pari passu charge on the fixed assets of the
Company at its factory at A-117,TTC Industrial area, Pawana Village,
Navi Mumbai and also pari passu charge on office premises at 501/502
Delta Technology Street, Hiranandani Gardens, Powai and pledge of
14,000,000 (P.Y.12,250,000) shares of the Company (belonging to
promoters of the Company) and personal guarantees of the Managing
Director and a Whole Time Director aggregating to Rs. 1,712,000,000
(P.Y.Rs. 1,485,000,000).
Credit facilities availed
Working capital loan, stand by letter of credit and other non-fund
based facilities.
Yes Bank Limited:
Primary security: First pari pasu charge on inventory and book debts
and entire movable assets of the Company, both present and future.
Collateral security: First pari passu charge on the movable and
immovable fixed assets of the Company both present and future including
its location at its factory at A-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office premises at 501/502 Delta, Technology
Street, Hiranandani Gardens, Powai, Mumbai 400076.
Personal guarantee of a Whole Time Director aggregating to Rs. Nil
(P.Y.Rs. 430,000,000) and pledge of Nil (P.Y.10,100,000) shares of the
Company (belonging to the promoters of the Company).
Credit facilities availed:
Working capital loan, stand by letter of credit and other non-fund
based facilities.
The facilities as above are fully satisfied on October 9, 2013.
Bank of Baroda
Primary security: First pari passu charge on the inventory and book
debts and entire movable assets of the Company , both present and
future with other consortium member banks.
Collateral security: First pari passu charge on the movable and
immovable fixed assets of the Company both present and future including
its location at its factory at A-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office premises at 501/502 Delta, Technology
Street, Hiranandani Gardens, Powai, Mumbai 400076.
Personal guarantee of the Managing Director and a Whole Time Director
aggregating to Rs. 890,000,000 (P.Y. Rs. 890,000,000) .
Credit facilities availed:
Working capital loan and other non-fund based facilities.
Dena Bank
Primary security: First pari pasu charge on inventory and book debts
and entire movable assets of the Company, both present and future.
Collateral security: First pari passu charge on the movable and
immovable fixed assets of the Company both present and future including
its location at its factory at A-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office premises at 501/502 Delta, Technology
Street, Hiranandani Gardens, Powai, Mumbai 400076.
Personal guarantee of the Manging Director and a Whole Time Director
aggregating to Rs. 300,000,000 (P.Y.Nil).
Credit facilities availed:
Working capital loan and other non-fund based facilities from September
30, 2013.
Segment information:
As the Company publishes standalone financial statements along with the
consolidated financial statements in the annual report, in terms of
AS-17 ''Segment Reporting'', segment information has been provided in the
Notes to the Consolidated Financial Statements.
Operating lease:
Note: The impact of escalation in lease payments which may arise is not
considered due to its uncertainty.
(a) Lease payments recognized in the Statement of Profit and Loss: Rs.
1,173,611 (P. Y. Rs. 2,175,642).
(b) Lease rentals are charged on the basis of agreed terms.
Disclosures in respect of a joint venture:
The joint venture (as above) for oil and gas producing activities is
under exploratory phase. Hence, disclosures required viz. net
quantities of the Company''s interest in proved reserves and proved
developed reserves of oil (including condensate and natural gas
liquids), gas at the beginning and additions, deductions, production
and closing balance of the year and the above disclosures on
geographical basis required pursuant to the Guidance Note on Accounting
for Oil and Gas Producing Activities issued by the ICAI are currently
not applicable.
Disclosure as per clause 32 of the Listing Agreement:
(a) Loans and advances shown above fall under the category of loans and
advances in the nature of loans where there is no repayment schedule,
is repayable on demand and is interest free.
(b) As at the year-end, the Company has no loans and advances in the
nature of loans to associates, wherein there is no repayment schedule
or repayment is beyond seven years and has no loans and advances to
firms/companies in which the directors are interested.
(c) The above subsidiaries have not made investments in the shares of
the Company.
(d) Loans to employees have been considered to be outside the purview
of disclosure requirements.
* Consequent to dilution of equity stake in Worthington Nitin Cylinders
Private Limited in December 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 which
states that the said contract is in violation of the RBI regulations
and hence, no liability is expected. Further, 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.
Financial statements of subsidiaries (including a step down
subsidiary):
The Ministry of Corporate Affairs, Government of India vide its General
Circular No.2 and 3 dated February 8, 2011 and February 21, 2011
respectively has granted general exemption from compliance of section
212 of the Act, subject to fulfillment of conditions stipulated
therein. The Company has satisfied the conditions stipulated therein
and hence entitled to exemption. Necessary information relating to
subsidiaries (including a step down subsidiary) has been included in
the consolidated financial statements.
Notes:
(a) Related party relationships are as identified by the Company on the
basis of information available and accepted by the auditors.
(b) No amount has been written off or written back in respect of debts
due from or to related party.
(c) The above particulars does not include receivables/payables on
account of re-imbursement of expenses, if any.
Contingent liabilities not provided for in respect of :*
No Particulars As at As at
March 31, 2014 March 31, 2013
Rs. Rs.
i Performance/bid-bond guarantees 52,574,026 48,727,102
ii Corporate financial guarantees provided
on behalf of a domestic subsidiary
- Limit 150,000,000 150,000,000
- Outstanding 124,222,229 98,825,912
iii Standby letters of credit provided
on behalf of foreign subsidiaries
(including a step down subsidiary)
and an associate
- Limit (includes exchange rate
translation difference, if any) 1,256,788,816 1,384,303,143
- Outstanding 1,243,522,868 1,384,303,143
iv Claim against the Company not
acknowledged as debt:
- Income Tax demand for A. Y.
2010-11 - 4,752,314
(* other than attributable to a interest in a joint venture-Refer Note
32)
Note:
Contingent liabilities in respect of above matters arising in the
ordinary course of business, it is anticipated that no material
liabilities will arise.
* During the year, the Registrar of Companies has carried out
re-inspection of books of account under section 209 A of the Act and
has issued show cause notices for non -compliance of few sections of
the Act. Pursuant to above, the Company has filed petitions with the
respective authority for compounding of such offences and based on
legal opinion obtained, has provided Rs. 450,000 as maximum penalty
pending disposal of the petitions as on the Balance Sheet date.
* In view of book profits being in excess of taxable profits, as per
computation of income, the provision for tax has been made as per MAT
under section 115JB of the Income Tax Act, 1961. The Company is
entitled to avail credit under section section 115JAA (1A) which will
be availed as and when due.
* The Company has established a comprehensive system of maintenance of
information and documents as required by transfer pricing legislation
under the provisions of the Income Tax Act, 1961 for its domestic /
international transactions. The Management is of the opinion that all
above transactions are at arm''s length so that aforesaid legislation
will not have any impact on the financial statements, particularly on
the amount of tax expense and that of provision for taxation.
* Sales include manufacturing sales of Rs. 4,769,789 (P.Y. Rs.
4,973,322) and materials and components consumed includes raw materials
consumed for manufacturing activites amounting to Rs. 4,125,867 (P.Y.
Rs. 4,326,790).
* The Company has an investment of Rs. 461,154,781 (P.Y. Rs.
461,154,781) in equity shares of WNCPL. Based on unaudited financial
statements, the net worth of WNCPL has been substantially eroded as at
March 31, 2014. As the Management intends to sell the investment in
near future, the cost of investment in shares has been transferred to
''Other Current Assets''. The Management considers investment in WNCPL to
be ''Good'' and adequately covered based on the valuation of fixed assets
and net current assets of WNCPL as at March 31, 2014. Hence, barring
unforeseen circumstances, the Company expects full realisability of the
same in near future. Accordingly, no provision for diminution in the
value of investments is required.
Mar 31, 2013
1. (A) Background and nature of operations:
Nitin Fire Protection Industries Limited (NFPIL or the ''Company'')
was incorporated in Mumbai, India on September 4, 1995 as a public
limited company under the ''Companies Act, 1956'' (the ''Act'').
The Company''s business activity is that of manufacturing fire
fighting equipment (gas based and water based fire extinguishers) under
the brand name ''NITIE'' (also certified by the Bureau of Indian
Standard (BIS)), providing turnkey solutions including procurement,
designing, system integration, commissioning and installation of safety
and security solutions, manufacturing compressed natural gas (CNG)
cascades and execution of annual maintenance contracts for fire
protection systems. The Company undertakes above activities from
Maharashtra and Andhra Pradesh and has marketing offices in Maharashtra
and Tamil Nadu. As part of its business activities, the Company has
formed/acquired domestic/foreign subsidiaries (including a step down
foreign subsidiary), has a stake in an associate and invested in a
non-integrated un-incorporated joint venture for crude oil. NFPIL is a
ISO 9001:2000 certified Company, is authorised to use LPCB mark for its
various fire fighting systems and some of its products used in fire
fighting systems are UL approved. The Company made an initial public
offer (''IPO'') in May 2007 and its shares are listed on the Bombay
Stock Exchange Limited and the National Stock Exchange Limited.
(B) Basis of preparation of financial statements:
(i) The accompanying financial statements have been prepared and
presented in accordance with Indian Generally Accepted Accounting
Principles (GAAP), under the historical cost convention (except for
revaluation of certain fixed assets) and follows accrual basis of
accounting. GAAP comprises mandatory accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended)
issued by the Central Government in exercise of the powers conferred
under sub-section (I) (a) of section 642, the relevant provisions of
the Act and guidelines issued by the Securities and Exchange Board of
India. GAAP also includes other relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI). Accounting policies
have been consistently applied except where a newly issued accounting
standard, if initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) The preparation of the financial statements in conformity with
GAAP requires the management make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the
results of operations during the reporting periods. These estimates are
based upon the management''s best knowledge of current events and
actions. Actual results could differ from these estimates.
2.1 The Company is registered as a small scale entrepreneur under
Ministry of Small Scale Industries. Hence, in view ofthe same the
Company is not liable to collect and pay excise duty on sale of
products.
3 Segment information:
As the Company publishes standalone financial statements along with the
consolidated financial statements in the annual report, in terms of
AS-17 ''Segment Reporting'', segment information has been provided in
the Notes to the Consolidated Financial Statements.
4.1 The joint venture (as above) for oil and gas producing activities
is under exploratory phase. Hence, disclosures required viz. net
quantities of the Company''s interest in proved reserves and proved
developed reserves of oil (including condensate and natural gas
liquids), gas at the beginning and additions, deductions, production
and closing balance of the year and the above disclosures on
geographical basis required pursuant to the Guidance Note on Accounting
for Oil and Gas Producing Activities issued by the ICAI are currently
not applicable.
5 Consequent to dilution of equity stake in Worthington Nitin
Cylinders Private Limited in December 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 which states that the said contract is in violation of the RBI
regulations and hence, no liability is expected. Further, the Company
has filed a petition in the Hon''ble High Court of Bombay challenging
the legality ofthe contract. Pending decision, no provision is made in
the books of account.
6 Derivative instruments and unhedged foreign currency exposure:
(a) No derivative instruments were outstanding at the close ofthe year.
(b) The year end foreign currency exposures that have not been hedged
by a derivative instrument or otherwise are given below:
7 Financial statements of subsidiaries (including a step down
subsidiary):
The Ministry of Corporate Affairs, Government of India vide its General
Circular No.2 and 3 dated February 8, 2011 and February 21, 2011
respectively has granted general exemption from compliance of section
212 ofthe Act, subject to fulfillment of conditions stipulated therein.
The Company has satisfied the conditions stipulated therein and hence
entitled to exemption. Necessary information relating to subsidiaries
(including a step down subsidiary) has been included in the
consolidated financial statements.
8 Commitments:
Estimated amount of contracts remaining to be executed on capital
account (net of advances, unsecured and considered good) : Rs.
255,369,550 (Rs.46,663,843)
9 During the year the Company has complied with AS-7 in respect ofthe
revenues generated from composite contracts and hence the sales have
been under stated by Rs. 36,301,395 and the cost of goods sold has been
under stated by Rs. 32,725,819.
10 During the year, the Registrar of Companies has carried out the
inspection of books of account under section 209 A of the Act and has
issued show cause notices to the Company for non -compliance of few
sections of the Act. The Company has filed petitions with the Company
Law Board for compounding of such offences on January 28, 2013. The
Company has provided Rs. 450,000 as maximum penalty pending the
disposal ofthe petitions as on the balance sheet date.
11 Previous year:
Current year''s figures are stated in bold prints and previous years
figures are regrouped/restated wherever considered necessary.
Mar 31, 2012
1. (A) Background and nature of operations:
Nitin Fire Protection Industries Limited (NFPIL or the 'Company')
was incorporated in Mumbai, India on September 4, 1995 as a public
limited company under the 'Companies Act, 1956' (the 'Act').
The Company's business activity is that of manufacturing fire
fighting equipment (gas based and water based fire extinguishers) under
the brand name 'NITIE' (also certified by the Bureau of Indian
Standard (BIS)), providing turnkey solutions including procurement,
designing, system integration, commissioning and installation of safety
and security solutions, manufacturing compressed natural gas (CNG)
cascades and execution of annual maintenance contracts for fire
protection systems. The Company undertakes above activities from
Maharashtra, Andhra Pradesh and Himachal Pradesh and has marketing
offices in Maharashtra and Tamil Nadu. As part of its business
activities, the Company has formed/acquired domestic/foreign
subsidiaries (including a step down foreign subsidiary), has a stake in
an associate and invested in a non-integrated un- incorporated joint
venture for crude oil. NFPIL is a ISO 9001:2000 certified Company, is
authorised to use LPCB mark for its various fire fighting systems and
some of its products used in fire fighting systems are UL approved.
The Company made an initial public offer ('IPO') in May 2007 and
its shares are listed on the Bombay Stock Exchange Limited and the
National Stock Exchange Limited.
(B) Basis of preparation of financial statements:
(i) The accompanying financial statements have been prepared and
presented in accordance with the Indian Generally Accepted Accounting
Principles (GAAP), under the historical cost convention (except for
revaluation of certain fixed assets) and follows accrual basis of
accounting. GAAP comprises mandatory accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended)
issued by the Central Government in exercise of the power conferred
under sub-section (I) (a) of section 642, the relevant provisions of
the Act and guidelines issued by the Securities and Exchange Board of
India. GAAP also includes other relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI). Accounting policies
have been consistently applied except where a newly issued accounting
standard, if initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) The preparation of the financial statements in conformity with
GAAP requires the management make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the
results of operations during the reporting periods. These estimates are
based upon the management's best knowledge of current events and
actions. Actual results could differ from these estimates.
2.1 Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.
2 per share. Each holder of equity shares is entitled to one vote per
share.
The Company declares and pays dividends in Indian Rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2012, the amount of per share dividend
recognised as distribution to equity shareholders was Rs. 0.40 (March 31,
2011:Rs. 1.00)
In the event of liquidation of the Company, the distribution of net
assets to equity holders will be in proportion to the number of equity
shares held by the shareholders.
3.1 IDBI Bank Limited:
3.1.1 Primary security: First charge on inventory and book debts
31.2 Collateral security: First pari passu charge on the fixed assets
of the Company at its factory at A-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office premises at 501/502 Delta, Technology
Street, Hiranandani Gardens, Powai, Mumbai 400076, equitable mortgage
(first charge) of premises belonging to a domestic subsidiary viz.
Eurotech Cylinders Private Limited located at EL-29, TTC Industrial
Area, Mahape, Navi Mumbai 400 701.
Personal guarantees of the Managing Director and a Whole Time Director
aggregating to Rs. 1,270,000,000 (Rs.1,070,000,000) and pledge of
14,070,000 (4,020,000) shares of the Company (belonging to the promoters
of the Company)
3.1.3. Credit facilities availed:
Working capital loan, stand by letter of credit and other non-fund
based facilities.
3.2 Axis Bank Limited:
3.2.1 Primary security: Pari passu charge on the current assets of the
Company, negative lien on the receivables of a foreign subsidiary viz.
Nitin Ventures FZE and second charge on the current / fixed assets
of the Company.
3.2.2 Collateral security: Pari passu charge on the fixed assets of the
Company and pledge of 26,250,000 (7,500,000) shares of the Company
(belonging to the promoters of the Company) and personal guarantees of
the Managing Director and a Whole Time Director aggregating to Rs.
1,235,000,000 C 1,220,000,000).
3.2.3 Credit facilities availed
Working capital loan, stand by letter of credit and other non-fund
based facilities.
3.3 Yes Bank Limited:
3.3.1 Primary security: First exclusive charge by way of hypothecation
on the specific goods purchased and debtors arising out of sale of such
goods and on the underlying debtors of post shipment in foreign
currency.
3.3.2 Personal guarantee of a Whole Time Director aggregating to Rs.
700,000,000 (Rs.200,000,000) and pledge of 27,000,000 (Nil) shares of the
Company (belonging to the promoters of the Company).
3.3.3 Credit facilities availed:
Letters of undertaking for buyers credit and post shipment credit in
foreign currency.
In assessing the Company's post retirement liabilities, the Company
monitors mortality assumptions and uses up-to-date mortality tables.
The base being the LiC 1994-96 ultimate tables.
Expected return on plan assets is based on expectation of the average
long term rate of return expected on investments of the fund during the
estimated term of the obligations.
The estimates of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
* The surplus of plan assets over defined benefit obligation has not
been recognized as the Company believes there is no amount recoverable
in cash from the LIC of India.
** The details of the composition of the plan assets, by category, from
the insurers have not been received and hence the disclosures as
required by Accounting Standard (AS) - 15 in "Employee Benefits"
have not been given.
Note : The values of materials and components consumed have been
arrived on the basis of opening inventories plus purchases less closing
inventories. The consumption is net of adjustments for
shortages/excess, if any.
4 Segment information:
As the Company publishes standalone financial statements along with the
consolidated financial statements in the annual report, in terms of
AS-17 'Segment Reporting', segment information has been provided in
the Notes to the Consolidated Financial Statements.
Note: The impact of escalation in lease payments which may arise is not
considered due to its uncertainty.
(b) Lease payments recognized in the Statement of Profit and Loss: Rs.
8,281,838 ( Rs. 2,287,730)
(C) Lease rentals are charged on the basis of agreed terms.
5 Disclosures in respect of a joint venture:
Information as required by AS-27 'Financial Reporting of Interests in
Joint Ventures':
(a) Name of the field in a joint venture, description of interest etc.:
5.1 The joint venture (as above) for oil and gas producing activities
is under exploratory phase. Hence, disclosures required viz. net
quantities of the Company's interest in proved reserves and proved
developed reserves of oil (including condensate and natural gas
liquids), gas at the beginning and additions, deductions, production
and closing balance of the year and the above disclosures on
geographical basis required pursuant to the Guidance Note on Accounting
for Oil and Gas Producing Activities issued by the ICAI are currently
not applicable.
6 Taxation:
The Company is entitled to avail credit in respect of an earlier year
under section 115JAA (1A) of the Income Tax Act, 1961, which will be
availed as and when due.
7 In terms of provision of sub section 1A of Section 115 O of the
Income Tax Act, 1961, in the previous year ended March 31, 2011 the
Company has taken credit of corporate dividend tax aggregating to Rs.
5,813,063 on account of dividends received from its subsidiaries.
(a) Loans and advances shown above to a domestic subsidiary fall under
the category of loans and advances in the nature of loans where there
is no repayment schedule, is repayable on demand and is interest free.
(b) As at the year-end, the Company has no loans and advances in the
nature of loans to associates, wherein there is no repayment schedule
or repayment is beyond seven years and has no loans and advances to
firms/companies in which the directors are interested.
(c) The above subsidiary/associate has not made investments in the
shares of the Company.
(d) Loans to employees have been considered to be outside the purview
of disclosure requirements.
(e) The above particulars do not include share application money
pending allotment of equity shares.
8 Consequent to dilution of equity stake in Worthington Nitin
Cylinders Private Limited in December 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 which states that the said contract is in violation of the RBI
regulations and hence, no liability is expected. Further, 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.
9 Financial statements of subsidiaries (including a step down
subsidiary):
The Ministry of Corporate Affairs, Government of India vide its General
Circular No.2 and 3 dated February 8, 2011 and February 21, 2011
respectively has granted general exemption from compliance of section
212 of the Act, subject to fulfillment of conditions stipulated therein.
The Company has satisfied the conditions stipulated therein and hence
entitled to exemption. Necessary information relating to subsidiaries
(including a step down subsidiary) has been included in the
consolidated financial statements.
Notes:
(a) Related party relationships are as identified by the Company on the
basis of information available and accepted by the auditors.
(b) No amount has been written off or written back in respect of debts
due from or to related party.
(c) The above particulars does not include outstanding in respect of
personal financial guarantees given by the KMP's and towards re-
imbursement of expenses.
10 Contingent liabilities not provided for in respect of :*
No Particulars As at As at
March
31, 2012 March
31, 2011
Rs. Rs.
i Performance/bid-bond guarantees 31,611,510 7,949,105
ii Un-expired letters of credit 1,913,528 2,411,100
iii Corporate financial guarantees
provided on behalf of domestic
subsidiaries
- Limit 150,000,000 325,000,000
- Outstanding 110,807,279 189,876,359
iv Standby letters of credit provided
on behalf of foreign subsidiaries
(including a step down subsidiary)
and an associate
- Limit 1,361,500,000 1,130,000,000
- Outstanding 1,012,171,514 1,095,417,500
(* other than attributable to a interest in a joint venture-Refer Note
28)
Note:
Contingent liabilities in respect of above matters arising in the
ordinary course of business, it is anticipated that no material
liabilities will arise.
11 Commitments:
11.1 Estimated amount of contracts remaining to be executed on capital
account (net of advances, unsecured and considered good) : Rs.
46,663,843(Rs.Nil)
12 Pursuant to the Scheme of Amalgamation (Scheme) under section 391 to
section 394 of the Act, approved by the Hon'ble High Court of
Bombay vide its order dated January 13, 2012 which became effective on
March 5, 2012 on filing of the certified copy of the order of the
Hon'ble High Court in the office of the Registrar of Companies, w.e.f.
April 1, 2010, the appointed date of the Scheme:
(a) The entire businesses of Alert Fire Protection Systems Private
Limited (Alert) and Logicon Building Systems Private Limited (Logicon),
wholly owned subsidiaries of the Company, engaged in the business of
purchase and supply of fire alarm and detection equipments, control
panels and related components/spare parts and 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 respectively, has been
transferred to the Company.
(b) The amalgamation has been accounted for under the 'pooling of
interests' method, being an amalgamation in the nature of merger, as
prescribed by the Accounting Standard AS-14, 'Accounting for
Amalgamations' issued by the Companies (Accounting Standards) Rules,
2006.
(c) There were no material differences in accounting policies between
the amalgamated company and the amalgamating companies.
(d) As Alert and Logicon are wholly owned subsidiaries of the Company,
no consideration is paid and 10,000 equity shares of Alert and 17,500
equity shares of Logicon stand's cancelled.
(e) All expenses pertaining to amalgamation have been debited to
Amalgamation Reserve Account.
(g) The balance in Amalgamation Reserve after the above said effects
has been transferred to General Reserve.
(h) Authorised share capital of the amalgamating companies has been
added to the authorised share capital of the amalgamated company.
13 Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006
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.
14 Previous year:
As notified by Ministry of Corporate Affairs, Revised Schedule VI under
the Companies Act, 1956 is applicable to the Financial Statements for
the financial year commencing on or after 1st April, 2011. Accordingly,
the financial statements for the year ended March 31, 2012 are prepared
in accordance with the Revised Schedule VI. The amounts and disclosures
included in the financial statements of the previous year have been
reclassified to conform to the requirements of Revised Schedule VI."
Current year's figures are stated in bold prints and pursuant to
disclosure in Note 37 above, the same are not comparable with those
ofthe previous year to that extent.
Mar 31, 2011
1. (A) Background and nature of operations:
Nitin Fire Protection Industries Limited (NFPIL or the 'Company') was
incorporated in Mumbai, India on September 4, 1995 as a public limited
company under the 'Companies Act, 1956' (the Act'). The Company's
business activity is that of manufacturing fire fighting equipment (gas
based and water based fire extinguishers) under the brand name 'NITIE'
(also certified by the Bureau of Indian Standard (BIS)), providing
turnkey solutions including procurement, designing, system integration,
commissioning and installation of safety and security solutions,
manufacturing compressed natural gas (CNG) cascades and execution of
annual maintenance contracts for fire protection systems. The Company
undertakes above activities from Maharashtra, Andhra Pradesh and
Himachal Pradesh and has marketing offices in Maharashtra and Tamil
Nadu. As part of its business activities, the Company has
formed/acquired domestic/foreign subsidiaries (including a step
downforeign subsidiary), has a stake in an associate andhas entered
into a non-integrated un-incorporated joint venture for oil exploration
block. NFPIL is a ISO 9001:2000 certified Company, is authorised to use
LPCB mark for its various fire fighting systems and some of its
products used in fire fighting systems are UL approved.
The Company made an initial public offer ('IPO') in May 2007 and its
shares are listed on the Bombay Stock Exchange Limited and the National
Stock Exchange Limited.
(B) Basis of preparation of financial statements:
(i) The accompanying financial statements have been prepared and
presented in accordance with Indian Generally Accepted
AccountmgPrmciples (GAAP), under the historical cost convention (except
for revaluation of certam fixed assets) on accrual
basis of accountg. GAAP comprises mandatory accounting standards
notified under the Companies(AccountmgStandards) Rules, 2006 (as
amended) issued by the Central Government in exercise of the power
conferred under sub-section (I) (a) of section 642,the relevant
provisions of the Act and guidelines issued by the Securities and
Exchange Board of India. GAAP also includes other relevant
pronouncements of the Institute of Chartered Accountants of India
(ICAI). Accounting policies have been consistently applied except where
a newly issued accounting standard, if initially adopted or a revision
to an existing accounting standard requires a change in the accounting
policy hitherto in use. Management evaluates all recently issued or
revised accounting standards on an ongoing basis.
(ii) The preparation of the financial statements in conformity with
GAAP requires the management make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the
results of operations during the reporting periods. These estimates are
based upon the management's best knowledge of current events and
actions Actual results could differ from these estimates.
3. Sub division of shares
Effective November 8, 2010 the Company has subdivided the face value of
equity shares from Rs. 10 each to Rs. 2 each (sub division), after
obtaining shareholders' approval vide special resolution passed in the
15* Annual General Meeting of the Company held on September 21, 2010.
The basic and diluted earnings pe,"share disclosed (Refer Note 13
below) have been computed for the current year and recomputed for the
previous year based on the revised face value of Rs. 2 each.
4. Contingent liabilities not provided for in respect of:
(Other than attributable to ajoint venture (ReferNote 17, below)
Sr.No. Particulars As at As at
March 31,
2011 March 31,
2010
(Rs.) (Rs.)
(i) Performance/bid-bond
guarantees 7,949,105 59,034,403
(fixed deposits deposited
Rs. 433,915 (Rs. 713,915)
and mortgage of fixed
assets provided).
(ii) Un-expired letters of
credit 2,411,100 Nil
(iii) Corporate financial
guarantees provided on
behalf of domestic
Subsidiaries
-Limit 325,000,000 1,206,000,000
-Outstanding 189,876,359 662,512,542
(iv) Standby letter of credit
provided on behalf of
foreign
subsidiaries
(including a step down
subsidiary) and an associate
-Limit 1,130,000,000 240,000,000
-Outstanding 1,095,417,500 232,471,000
(v) Income tax matter disputed
in an appeal Nil 593,529
Note: Contingent liabilities in respect of above matters arising in the
ordinary course of business, it is anticipated that no material
liabilities will arise.
5. Details of secured loans:
Sr.
no. Name of the lender Security created/credit facilities
availed
(a) IDBI Bank Limited Security created:
Primary-
First charge on inventory andbook
debts
Collateral:
Second charge on: the fixed assets
of the Company at its factory at A
-117, TTC Industrial Area, Pawana
Village, Navi Mumbai and office
premises at 501/502 Delta,
Technology Street, Hiranandani
Gardens, Powai, Mumbai 400076,
equitable mortgage (first charge)
of premises belonging to a domestic
subsidiary viz. Eurotech Cylinder
Private Limited located at EL-29,
TTC Industrial Area, Mahape, Navi
Mumbai 400 701.
Personal guarantees ofthe Managing
Director and a Whole time director
aggregating to
Rs. 1,070,000,000 (Rs. 600,000,000).
Credit facilities availed:
Working capital loan, stand by
letter of credit and other non-fund
based facilities.
(b) Axis Bank Limited Security created:
Primary :
Pari passu charge on the current
assets ofthe Company, negative
lien on the receivables of a
foreigi subsidiary viz. Nitin
Ventures Fze, second charge on the
current and fixed assets of the
Company.
Collateral:
Pari passu charge on the fixed
assets of the Company and pledge of
7,500,000(500,000ofRs.10
each) shares ofthe Company
(belonging to the promoters of the
Company) and personal guarantees of
the Managing Director and a Whole
time director aggregating to
11,220,000,000 (Rs. 340 000,000).
Credit facilities availed:
Working capital loan, stand by
letter of credit and other non-fund
based facilities.
(c) Yes Bank Limited Security created:
First exclusive charge by way of
hypothecation on the specific goods
purchased and debtors arising out of
sale of such goods and on the
underlying debtors of post shipment
in foreign currency.
Personal guarantees of the Managing
Director and a Whole time director
aggregating to Rs.200,000,000
(Rs.Nil.)
Credit facilities availed:
Letters of undertaking for buyers
credit and post shipment credit in
foreign currency.
6. Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006
The Company is in the process of obtaining necessary information
relating to the registration status of suppliers under the Micro, Small
and Medium Lerprises DevelopmentAct, 2006. Hence, the ^^
7. Information in terms of provisions of paragraphs 3,4C and 4D of
Part II of Schedule VI to the Act:
(a) Licensed and installed capacity: Not applicable.
(b) The Ministry of Corporate Affairs, Government of rndia vide its
General Notification No. S.O.301 (e) dated February 8, 2011 issued
under section 211 (3) of the Act has exempted certain classes of
companies from disclosing certain information in their profit and loss
account. The Company being an export oriented unit is entitled to the
exemption. AccordLgly, disclosures mandated by paragraphs
3(i)(a),3(ii)(a),3(ii)band3(ii)d of PartII of Schedule VI to the Act
have not been disclosed.
8. Segment reporting:
As the Company publishes standalone financial statements along with the
consolidated financial statements in theannual report, interms of
AS-17'Segment Reporting', segment information has been prodded in the
Notes to the Consolidated Financial Statements.
9. Employee Benefits:
a) Defined Contribution Plan:
Companyscontribution to Provident Fund Rs.886,509(Rs.l,059,246)
In assessing the Company's post retirement liabilities, the Company
monitors mortality assumptions and uses up-to-date mortality
tables.The base being the LIC1994-96 ultimate tables.
Expected return on plan assets is based on expectation of the average
long term rate of return expected on investments of the fund during the
estimated term of the obligations.
The estimates of future salary increase, considered in actuarial
valuation, takes account of inflation, seniority, promotion and other
relevant factors, suchas supply and demand in the employment market.
* The surplus of plan assets over defined benefit obligation has not
been recognized as the Company believes there is no amount recoverable
in cash from the LIC of mdia.
** The details of the composition of the plan assets, by category, from
the insurers have not been received and hence the disclosures as
required by Accounting Standard (AS) 15 in "Employee Benefits" have not
been given.
10. Related party transactions:
(a) Parties where control/significant influence existand/orotherrelated
parties with whom transactions have taken place include:
Domestic subsidiaries
Alert Fire Protection Systems Private Limited Eurotech Cylinders
Private Limited Logicon Building Systems Private Limited
Foreign subsidiaries (including a step down subsidiary)
Nitin Ventures FZE, UAE
Nitin Global Pte Limited, Singapore (effective July 23,2009)
New Age Company LLC, UAE* (effective April 1,2010)
(*Associatefortheyear2009-10)
Un-incorporated Joint Venture
OilBlock(RJ-ONN-2004/l)(Ref.No.l9)
(Name of the field in an un-incorporated joint venture)
Associate
Worthington Nitin Cylinders Limited(effectiveDecember29,2010)
(Earlier Nitin Cylinders Limited and domestic subsidiary upto
December28,2010, including forthe year 2009-10) (Refer Note 21 (b),
below)
Key Management Personnel (KMP) Represented on the Board
Nitin M. Shah (Chairman and Managrng Director) Rahul N. Shah (Whole
time Director)
Relatives of KMP
Saroj N. Shah (spouse of Nitin M. Shah)
KunalN. Shah (son ofNitinM. Shah)
NitinM.Shah(HUF)
RahulN.Shah(HUF)
ReshmaN. Shah (daughter of Nitin M. Shah)
11. Exchange differences:
Exchange gain included in the profit and loss accountRs. 9,124,632
(Rs.9,878,012).
b) Lease payments recognized in the Profit and Loss Account:
Rs. 2,287,730 (Rs.1,968,754) 17.
Disclosuresin respect of a joint venture:
Information as required by AS27 Financial Reporting of Interests in
Joint Ventures':
(b) Contingent liabilities in relation to interest in a joint venture:
Rs. 46,439,705 (Rs. 18,020,678) and share in contingent liabilities
jointly with other venturers:Rs.Nil(Rs.Nil).
(c) Share in contingent liabilities of a joint venture it self for
which the Company is contingently liable:Rs.Nil(Rs. Nil).
(d) Contingent liabilities inrespect of liabilities of other venturers
of ajoint venture:Rs.Nil(Rs. Nil).
(e) Capital commitments (net of advances) in relation to interests in a
joint venture and not provided for: Rs. Nil (Rs. Nil) and its share in
capital commitments (netofadvances) that have been incurred jointly
with other venturers and not provided for:Rs.Nil(Rs. Nil).
(f) Company's share of capital commitments (net of advances) ofthejoint
venturers themselves and not provided for: Rs. Nil(Rs. Nil). 18.
Derivative instruments and unhedged foreign currency exposure:
(a) No derivative instruments were outstanding at the close of the
year.
12. a. Associate becoming a step down subsidiary of the Company:
Pursuant to Nitin Ventures Fze a foreign subsidiary of the Parent
Company increasing its ownership interest to 49% from 40% in New Age
Co. LLC (New Age), New Age has become a step down subsidiary of the
Parent Company by virtue of the said subsidiary vesting management
control effective April 1,2010.
b. Domestic subsidiary becoming an associate of the Company:
Pursuant to sale of part stake in Worthington Nitin Cylinders Limited
(WNCL) and increase in it's paid up share capital; WNCL has
become an associate of the Parent Company effective December29,2010.
13. Consequent to dilution of equity stake in Worthington Nitin
Cylinders Limited in December 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 and hence, no liability is expected. Further, 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 m
the books ofaccount.
14. Financial statements of subsidiaries (including a step down
subsidiary):
The Ministry of Corporate Affairs, Govemment of India vide its General
Circular No.2 and 3 dated February 8, 2011 and February 21, 2011
respectively has granted general exemption from compliance of section
212 of the Act, subject to fulfillment of conditions stipulated
therein. The Company haf satisfied the conditions stipulated therein
and hence entitled to exemption. Necessary information relating to
subsidiaries (including a step down subsidiary) has been included in
the consolidated financial statements.
15. Taxation:
(a) In view of book profits being in excess of taxable profits, as per
computation of income, the provision for tax has been made as per MAT
under section 115 JB of the Income Tax Act, 1961. The Company is
entitled to avail credit under section 115 JAA (1 A) which
willbeavailedasandwhendue.
(b) Provision for current tax includesRs. 7,000 (Rs. 15,000) for
wealthtax.
16. The joint venture (referred to innote 17 above) for oil and gas
producing activities is under exploratory phase. Hence, disclosures
required viz. net quantities of the Company's interest in proved
reserves and proved developed reserves of oil (deluding condensate and
natural gas liquids), gas at the beginning and additions, deductions,
production and closmg balance of the year and the above disclosures on
geographical basis required pursuant to the Guidance Note on Accounting
for Oil and Gas Producing Activities issued by the ICAI are currently
not applicable.
17. In terms of provision of sub section lAof Section 115 O ofthe
Income TaxAct, 1961, the Company has taken credit of corporate dividend
tax aggregating to Rs.5,813,063 (Rs.Nil) on account of dividends
received from its subsidiaries.
18. Turnoverincludes income from services ofRs. 15,707,439 (f
8,736,456)
19. The Board of Directors ofthe 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, the Parent Company has received an inprinciple approval from
both the stock exchanges The Parent Company has since filed ajoint
petitionbefore the Hon'ble High Court of Bombay for the sanction of the
scheme and approval is awaited.
20. The accounts of previous year were auditedby another Auditor and
opening balances are as per such accounts.
21. Previous year:
Figures in parenthesis represent the corresponding previous year
figures, which have also been regrouped/restated to conform to current
year'spresentation,wher ever applicable and current year's figures are
stated in bold prints.
Mar 31, 2010
1. (A) Background and nature of operations:
Nitin Fire Protection Industries Limited (NFPIL or the Company) was
incorporated in Mumbai, India on September 4, 1995 as a public limited
company under the Companies Act, 1956 (the Act). The Companys
business activity is that of manufacturing fire fighting equipment (gas
based and water based fire extinguishers) under the brand name NITIE
(also certified by the Bureau of Indian Standard (BIS)), providing
turnkey solutions including procurement, designing, system integration,
commissioning and installation of safety and security solutions,
manufacturing compressed natural gas (CNG) cascades and execution of
annual maintenance contracts for fire protection systems. The CompLy
undertakes above activities from Maharashtra, Andhra Pradesh and
Himachal Pradesh and has marketing offices in Maharashtra and Tamil
Nadu. As part of its business activities, the Company has
formed/acquired wholly owned domestic/foreign subsidiaries and acquired
stake in a foreign associate (share holding is through a foreign
subsidiary) and has also enteredmtoanon4ntegratedun4ncorporated
join tventure foroilex ploration block .NFPIL is aISO
9001 2000 certified Company, is authorised to use LPCB mark for its
various fire fighting systems and some of its products used in fire
fighting systems are UL approved. The Company is rated A-/Stable/P2+
by CRISIL for its various bank facilities.
The Company made an initial public offer (IPO) in May 2007 and its
shares are listed for trading on the Bombay Stock Exchange
Limited and the National Stock Exchange Limited.
2. Contingent liabilities not provided for in respect of:
Sr.No. Particulars As at As at
March 31, 2010 March 31, 2010
(Rs.) (Rs.)
(i) Performance/bid-bond
guarantees 77,055,081 26,659,755
(fixed deposits deposited
Rs. 713,915(Rs. 1,435,857)
and mortgage of fixed assets
provided).
(ii) Corporate financial gu
arantees provided on
behalf of wholly owned
domestic subsidiaries
- Limit 1,206,000,000 1,105,000,000
- Outstanding 662,512,542 653,893,888
(hi) Standby letter of credit
provided on behalf a wholly
owned foreign subsidiary
- Limit 240,000,000 Nil
- Outstanding 232,471,000 Nil
(iv) Income tax matter disputed
in an appeal 593,529 Nil
Note: Contingent liabilities in respect of above matters arising in the
ordinary course of business, it is anticipated that no material
liabilities willarrie.
3. Details of secured loans:
Sr.No. Nameofthelender Security created/credit facilities availed
(a) IDBI BankLimited Security created:
Primary:
First charge on inventories andbook debts
Collateral:
Second charge on: the fixed assets of the
Company at its f actory at A-117, TTC
Industrial
Area, Pawanl Village, Navi Mumbai and
office premises at 501 Delta,
Technology Street,
Hiranandani Gardens, Powai, Mumbai 400076,
equitable mortgage (first charge) of
premises belonging to a domestic
subsidiary viz. Eurotech Cylinders
Prhate Limited located
at EL-29, TTC rndustrial Area,
Mahape, Navi Mumbai 400 701.
Personal guarantees of the Managing
Director and a Whole time director
aggregating to
Rs.600,000,000 (Rs. 360,000,000).
Creditfacilities availed:
Working capital loan and other
nonfund based credit facilities.
Kb) AxisBankLimited Security created:
Primary:
Pari passu charge on the current
assets of the Company, negative lien
on the receivables of a
foreign subsidiary viz. Nitin
Ventures Fze, second charge on the
current and fixed assets of
the Company.
Collateral:
Pari passu charge on the fixed
assets of the Company and pledge of
500,000 shares of the
Company (belonging to the promoters of
the Company) and personal guarantees of the
Managing Director and a Whole time
director ggregatingto Rs.340,000,000
(Rs.Nil).
Credit facilities availed:
Working capital loan and stand by
letter of credit.
4. There are no Micro, Small and Medium Enterprises to whom the
Company owes dues which are outstanding for more than 45 days as at
March 31, 2010.
The above information, as required to be disclosed under the Micro,
Small and Medium Enterprises Act, 2006 has been determined to the
extent such parties have been identified on the basis of information
available with the Company which has been the Auditors.
Note: There are no opening and closing inventories of goods for resale.
(d) There being no common units of materials and components consumed,
no quantitative information is given and each of them accounts
forlessthan 10% of the total consumption.
5. Deferred taxation:
In terms of AS-22 Accounting for Taxes on Income, deferred tax
liability included in the balance sheet relates to excess of
depreciation and amortisation allowable under the Income Tax law over
depreciation and amortisation provided in the books of account
amounting to
Note:
The employee wise break up of liability on account of gratuity, based
on estimation is not ascertainable. The amounts relatable to the
Managing Director and a Wholetime Director is therefore, not considered
above
The figures of the current year are only in respect of the Managing
Director. Whereas, the previous years figures include also that of
aWholetime Director.
6. Earnings per share (EPS):
The Company has not issued any potential equity shares and accordingly,
the basic and diluted earnings per share are the same. Numbers
usedforcalculating basic and diluted earnings per share are as
statedbelow:
7. Related party transactions:
(a) Parties where control/significant influence exist and/or other
related parties with whom transactions have taken place include:
Wholly owned domestic subsidiaries
Alert Fire Protection Systems Private Limited
Eurotech Cylinders Private Limited
Logicon Building Systems Private Limited
Nitn Cylinders Limited
Wholly owned foreign subsidiaries
Nitin Ventures FZE, UAE
Nitin Global Pte Limited,
Singapore (effective July 23,2009)
Partnership firm
EurotechCorporation
Un-incorporatedJointVenture
OilBlock(RJ-ONN-2004/l)(Ref.No.l9)
(Nameofthefieldinanun-incorporatedjointventure)
Foreign associate
New Age CompanyLLC
Key Management Personnel (KMP) Represented on the Board
Nitin M. Shah (Chairman and Managing Director)
Rahul N. Shah (Wholetime Director)
Gopalkrishna Shahi (Wholetime Director up to April 24, 2008)
Relatives of KMP
Saroj N. Shah (spouse of Nitin M. Shah)
KunalN.Shah(sonofNitinM.Shah)
Nitin M. Shah (HUF)
RahulN. Shah (HUF)
ReshmaN. Shah (daughter of Nitin M. Shah)
Notes:
(a)RelatedpartyrelationshipsareasidentifiedbytheCompanyonthebasisof
informationavailableandacceptedbytheauditors.
(b) No amounthas been written off or written back in respect of debts
due from or to related party.
(c) Reimbursements of expenses incurred by related parties for and on
behalf of the Company and vice versa have not been includedabove.
8. Impairment of assets:
Pursuant to AS-28 Impairment of Assets, the Company has reviewed its
carrying cost of assets with value in use (determined based on future
earnings)/ net selling price (determined based on valuation). Based on
such a review, management is of the view that in the current
financialyearimpairmentofassetsisnotconsiderednecessary.
9. Provisions, contingent liabilities and contingent assets:
As per the best estimate of management, no provision is required to be
made as per AS-29 Provisions, Contingent Liabilities and Contingent
Assets, in respect of any present obligation as a result of a past
event that could lead to a probable outflow of resources, which
wouldberequiredto settle the obligation.
10. Exchange differences:
Exchangegain included in the profit and loss account Rs.9,878,012 (Rs.
4,575,861).
(*Country of mcorporation not applicable as it is anun-incorporated
jointventure)
(b) Contingent liabilities in relation to interest in a joint venture
as at March 31, 2010: Rs.18,020,678 (Rs. 43,849,578) and share in
contingent liabilities jointly with other venturers as at March
31,2010:Rs. Nil (Rs. Nil).
(c) Share in contingent liabilities of a joint venture itself for which
the Company is contingently liable as at March 31,2010: Rs. Nil (Rs.
Nil).
(d) Contingent liabilities inrespect of liabilities of other venturers
of ajoint venture as at March 31,2010: RS. Nil (Rs. Nil).
(e) Capital commitments (net of advances) in relation to interests in
ajoint venture and not provided for as at March 31, 2010:RS. Nil (Rs
Nil) and its share in capital commitments (net of advances) that have
been incurred jointly with other venturers and not provided
forasatMarch31,2010:RS.Nil(Rs.Nil).
(f) Companys share of capital commitments (net of advances) of the
joint venturers themselves andnot provided for as at March 31. 2010
Nil (Rs. Nil).
11. Initial surveys in respect of a joint venture (referred to in note
17 above) for oil and gas producing activities are under progress.
Hence. disclosures required viz. net quantities of the Companys
interest in proved reserves and proved developed reserves of oil
(including condensate and natural gas liquids), gas at the beginning
and additions, deductions, production and closing balance of the year
and the above disclosures on geographical basis required pursuant to
the Guidance Note on Accounting for Oil and Gas Producing Activities
issued by the ICAI are currently not applicable.
12. Derivative instruments and unhedged foreign currency exposure:
(a) No derivative instruments were outstanding at the close of the
year.
The above out standings in foreign currency have been translated at the
rates of exchange prevailing on the Balance Sheet date in
accordance with AS-IIThe Effects of Changes in Foreign Exchange Rates
(Revised2003).
13.(a) Provision for current tax has been made after considering
various allowances/deductions available and excluding profits derived
from activities undertaken by units located in places eligible for
exemption/deduction under Sections lOAAand 80IC of the Income Tax Act,
1961.
(b) Provision for current tax includesRs.15,000(Rs.1O,000)for
wealth tax.
14. As per provision of the Income Tax Act,1961the Company has taken
credit of corporate dividend tax aggregating to RS.Nil (Rs.4,248,750) on
account of dividend received from its wholly owned[domestic subsidiaries.
15. Disclosure in respect of loans and advances in the nature of loans
pursuant to Clause 32 of the listing agreement entered with the stock
exchanges:
Notes:
(a) Loans and advances shown above to wholly owned domestic
subsidiaries fall under the category of loans and advances in the
nature ofloanswherethereisnorepaymentschedule,isrepayable
ondemandandisinterestfree.
(b) As at the year-end, the Company has no loans and advances in the
nature of loans to associates, wherein there is no repayment schedule
Prepayment is beyond seven years andhas no loans and advances to
firms/companies in which the directors are interested.
(c) The above loanees have not made investments in the shares of the
Company.
16. According to the Company, providing turnkey solutions including
procurement, designing, system integration, commissioning and
installation of safety and security solutions thereof is a service
activity and therefore, the same is covered underparagraph 3 (ii) (c)
of Part II of Schedule VI to theAct.
17. a. The Company incorporated a wholly owned foreign subsidiary viz.
Nitin Global Pte Limited,Singapore in July2009.
b. The Company through its wholly owned foreign subsidiary viz. Nitin
Ventures Fze increased its stake in a foreign associate from
40%to49%inApril2010.
18. The Ministry of Corporate Affairs, Government of India has
exempted the Company from attaching the balance sheets and profit and
loss accounts of its subsidiaries under Section 212(1) of the Act. As
per the terms of exemption, akey detail of each subsidiary is attached
along withtheStatementunderSection212oftheAct.
19. Amount remitted in foreign currency on account of dividend:
20. (a) Some of the fixed assets of the Company are hypothecated to
the bankers as collateral security for credit facilities extended to a
wholly owned domestic subsidiary.
(b) Manufacturing sales include sales exempt from excise duty amounting
to RS.1,701,000(Rs.10,931,000)inrespectoftheCompanys unit at
Parwanoo,Himachal Pradesh.
(c) Sundry debtors include Rs.347,739,354 (Rs.2,891,102) due from
wholly owned domestic / foreign subsidiaries.
21. Figures in parenthesis represent the corresponding previous year
figures, which have also been regrouped/restated to conform to current
yearspresentation,wherever applicable an Currentyears figures are
stated in bold.
Signatures to Schedules Ato Q which form an integral part of the
Financial Statements.