Mar 31, 2014
We have audited the accompanying Financial Statements of Nitin Fire
Protection Industries Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, the Statement of Profit and Loss
and Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these Financial
Statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the Financial Statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the Financial Statements. The procedures
selected depend on the auditors'' judgment, including the assessment of
the risks of material misstatement of the Financial Statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the Financial Statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
A) As more clarified 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 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.
B) As more clarified in Note no. 41 to the notes to the financial
statements, provision of Rs. 450,000 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. 450,000 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.
Emphasis of Matter
We draw attention to:
As more clarified in Note no. 48 to the notes to the financial
statements, relating to the Exposure in Worthington Nitin Cylinders
Private Limited (WNCPL), aggregating Rs. 461,154,781 as at March 31,
2014 (Previous year Rs. 461,154,781), where the net worth of WNCPL has
been substantially eroded. The Management has, barring any significant
uncertainties in future, relied upon valuation of Fixed Assets and net
Current Assets of WNCPL for the recoverability of the investment.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the Financial
Statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of Section 227 of the Companies Act, 1956, we give in the
Annexure, a statement on the matters specified in paragraphs 4 and 5 of
the Order.
2. As required by Section 227(3) of the Companies Act, 1956, we report
that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit except for the matter described in the Basis for Qualified
Opinion paragraph;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. except for the possible effects of the matter described in the Basis
for Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Nitin Fire Protection Industries Limited on the financial
statements for the year ended March 31, 2014]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion, the frequency of verification is reasonable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory has been physically verified by the Management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the Management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) The Company has granted unsecured loan to one company covered
in the register maintained under section 301 of the Companies Act,1956.
The maximum amount involved during the year was Rs. 21,69,29,179 and
the year end balance of loan granted to such party was NIL.
(b) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions of the
loan given by the company are not prejudicial to the interest of the
company.
(c) As there is no outstanding balance receivable clause (c) and (d) of
the order is not applicable.
(d) The company has taken unsecured loan from one party covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 11,00,000 and the year
end balance of loan granted by such party was NIL.
(e) In our opinion, the rate of interest and other terms and conditions
for such loans are not, prima facie, prejudicial to the interest of the
company.
(f) As there is no outstanding balance payable clause (g) of the order
is not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct weakness
in internal control system of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of the contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the Company has an internal audit system which
needs to be further strengthened to make it commensurate with the size
of the company and nature of its business
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-Section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty, cess and other material statutory dues applicable to
it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of income tax, sales-tax, wealth tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans & advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has given guarantee for loans taken by a
subsidiary from banks, the terms and conditions whereof are not
prejudicial to the interest of the Company.
(xvi) The Company has not obtained any term loans.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under section 301 of
the Act.
(xix) According to the information and explanations given to us, no
debentures have been issued by the Company during the year.
(xx) The Company has not raised money by way of public issue during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Sd/-
Sumant Sakhardande
Mumbai Partner
May 17, 2014 Membership No.34828
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Nitin Fire
Protection Industries Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2013, and the Statement of Profit and
Loss and Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors'' judgment, including the assessment
ofthe risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation ofthe
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
(a) 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 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 ofthe matter, we are unable to
quantify the extent of provision required, if any in this regard.
(b) As more fully explained in note no. 42 to the notes to the
financial statements, provision of Rs. 450,000 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. 450,000 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.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs ofthe
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, ofthe profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, ofthe cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of section 227 ofthe Act, we give in the Annexure, a
statement on the matters specified in paragraphs 4 of the Order.
2. As required by section 227(3) ofthe Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit except for the matter described in the Basis for Qualified
Opinion paragraph;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. except for the effects / possible effects of the matter described
in the Basis for Qualified Opinion, in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
accounting standards referred to in sub-section (3C) of section 211
ofthe Act;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 2/4 of the Companies Act, 1956.
ANNEXURE TO AUDITORS'' REPORT
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Nitin Fire Protection Industries Limited ("the Company")
on the financial statements for the year ended March 31, 2013]
(I) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have not been physically verified by the management
during the year. Accordingly, the discrepancies, if any, could not be
ascertained and therefore, we are unable to comment on whether the
discrepancies,if any, have been properly dealt with in the books of
account.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) The Company has granted unsecured loan to one company covered
in the register maintained under section 301 ofthe Companies Act, 1956.
The maximum amount involved during the year was Rs. 264,590,844 and the
year end balance of loan granted to such party was nil.
(b) In our opinion and according to the information and explanations
given to us , the rate of interest and other terms and conditions of
the loans given by the company are not prejudicial to the interest
ofthe company.
(c) As there is no outstanding balance receivable clause (c) and (d)
ofthe order are not applicable.
(e) The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 5,47,00,000 and the
year end balance of the loan taken from such parties was nil.
(f) In our opinion, the rate of interest and other terms and conditions
for such loans are not, prima facie, prejudicial to the interest of the
Company.
(g) As there is no outstanding balance payable clause (g) ofthe order
is not applicable
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weakness in internal control system ofthe company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the Company has an internal audit system which
needs to be further strengthened to make it commensurate with the size
of the Company and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and we are ofthe opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, income-tax, sales-tax,
wealth-tax, service tax, customs duty, excise duty, cess and other
material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act,1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees'' state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty, cess and other
statutory dues which were outstanding, at the year end for a period of
more than six months from the date they became payable are as follows:
Name of Nature of Amount Period to
which the Due Date Date of
the statute the dues (Rs.) amount
relates Payment
Service Tax Service
tax 2,017,102 F.Y2011-12 31.3.2012 Unpaid
Act and
rules
(c) According to the records of the company, the dues outstanding of
income tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess which have not been deposited on account of any dispute,
are as follows:
Name of Nature of Amount Period to
which the Forum where dispute is
the statute dues (Rs.) amount pending
relates
Income Tax Income tax 6,241,100 A.Y 2010-11 Assistant
Commissioner of
Act 1961 Income Tax
(x) The company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the company has not
granted loans & advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has given guarantee for loans taken by a
subsidiary from banks, the terms and conditions whereof are not
prejudicial to the interest ofthe Company.
(xvi) The Company has not obtained any term loans.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under section 301
ofthe Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised money by way of public issue during the
year.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Sd/-
Sumant Sakhardande
Mumbai Partner
May 23, 2013 Membership No.34828
Mar 31, 2012
1. We have audited the attached Balance Sheet of Nitin Fire Protection
Industries Limited ('the Company') as at March 31, 2012 and also the
Statement of Profit and Loss and the cash flow statement for the year
ended on that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, (as
amended), issued by the Central Government of India in terms of sub-
section (4A) of Section 227 of 'The Companies Act, 1956' of India (the
'Act') and on the basis of such checks of the books and records of the
company as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the paragraph 3 above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956.
v. On the basis of written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
5. (a) 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.
(b) 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.
(c) The Company is in the process of obtaining details regarding
identification of creditors registered under the Micro, Small and
Medium Enterprise Development Act, 2006.
6. In our opinion and to the best of our information and according to
the explanations given to us, subject to the effects of our
observations given in paragraph 5 above, the said accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Nitin Fire Protection Industries Limited on the financial
statements for the year ended March 31, 2012]
(i) (a) The Company has not maintained full particulars, including
quantitative details and situation of fixed assets, and is in the
process of updating its fixed assets register.
(b) The fixed assets are not being physically verified by the
management during the year. Hence we are unable to comment on the
discrepancies, if any.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The inventory has been physically verified by the management
at the end of the year. In our opinion, the frequency of verification
is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loan to one company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 255,280,544/- and the
year-end balance of loan granted to such party was Rs. 253,090,844/-.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prejudicial to the interest of the
Company.
(c) The principal amount is repayable on demand and there is no
repayment schedule.
(d) The principal amount is repayable on demand and therefore the
question of overdue amounts does not arise.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Consequently, the requirement of Clauses (iii) (f) and (iii) (g) of
paragraph 4 of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct weakness in internal
control system of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of five lakhs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) In our opinion and according to the information and explanation
given to us, the Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products of the company.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, income-tax, sales-tax,
wealth-tax, service tax, customs duty, cess and other material
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, income-tax, wealth-tax, service tax,
sales-tax, customs duty, cess and other undisputed statutory dues were
outstanding, at the year end, for a period of more than six months from
the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of income tax, sales-tax, wealth tax, service tax, customs duty
and cess which have not been deposited on account of any dispute.
(x) The company does not have accumulated losses as at 31st March, 2012
and it has not incurred any cash losses in the financial year ended on
that date or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) According to information and explanation given to us, the company
has given guarantees for loans taken by subsidiaries from banks. The
terms and conditions whereof are, not prejudicial to the interests
of the Company.
(xvi) The Company did not have any term loans outstanding during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii)According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Sd/-
Sumant Sakhardande
Partner
Membership No.34828
Mumbai
May 29, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Nitin Fire Protection
Industries Limited ('the Company') as at March 31,2011, the Profit and
Loss account and Cash Flow Statements for the year ended on that date
annexed thereto.These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statement presentation.We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003,
(CARO), issued by the Central Government of India in terms of
sub-section (4A) of Section227 of The Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Furtherto our comments in the paragraph 3 above, wereportthat:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
ouraudit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956,
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of
clause(g) of sub-section(l) of section 274 of the Companies Act, 1956.
5. (a) 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 ofwork and the contracts entered into
bythecompany the contract revenue andcontract costsneed 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 as certainable.
(b) 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 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 associatebased on a sale of its 40% share and
increase inpaid 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.
(c) As stated in note 6 of the Schedule O, the Company is in process of
obtaining details regarding identification of creditors registered
underthe Micro, Small and Medium Enterprise Development Act, 2006.
6. In our opinion and to the best of our information and according to
the explanations given to us, subject to the effects of our
observations
give a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31,2011;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Nitin Fire Protection Industries Limited on the financial
statements for the year ended March31,2011]
(i) (a) The company has not maintainedfull particulars, including
quantitative details and situation offixed assets, and is inthe process
of updating its fixed assets register.
(b) The fixed assets are not being physically verified by the
management during the year. Hence we are unable to comment on the
discrepancies, if any.
(c) Therewasno substantial disposal of fixed assets during the year.
(ii) (a) The inventory has been physically verified by the management
at the end of the year, m our opinion, the frequency of verification
is reasonable
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and thenature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) As informed, the Company has not granted or taken any loans,
secured or unsecured to/from companies, firms or other parties
covered in the register maintained under section 301 of the Companies
Act, 1956.
Accordingly, clauses (iii) (b), (c) and (d) of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Companyand
hence, not reported upon.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods.Durmg the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas. Duringthe course of our audit, we have not observed any
continuing failure to correct major weakness in internal control system
ofthe company.
(v) The Company does not have any transaction with 301 parties, hence
clause (v) (a) and (b) ofthe Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(vi) The company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA ofthe Act and the rules
framedthereunder.
(vii) The Company has an internal audit system, the scope and coverage
of which, in our opinion requires to be enlarged to be commensurate
withthesizeandnatureofitsbusiness.
(viii) To the best of our knowledge and as explained, the Central
Government of India has not prescribed maintenance of cost records
under clause(d) of sub-section(l) of Section209 of the Companies Act,
1956 for the products of the company.
(ix) (a) Undisputed statutory dues including provident fund, employees'
state insurance, income-tax, sales-tax, wealth-tax, customs duty,
excise duty, service tax, cess and any other statutory dues have
generally been regularly deposited with the appropriate authorities.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441A of the Companies Act,1956, we
are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, sales-tax, wealth-tax, customs duty,
excise duty, service tax, cess and any other undisputed statutory dues
were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of provident fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, customs duty, excise duty, service tax, cess and
any other statutory dues which have not been deposited on account of
any dispute.
(x) The company does not have accumulated losses at the end of the
financial year and has not incurred cash losses in current and
immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks.
(xii) According to the information and explanations given to us and
based on the documents andrecords produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge
of shares,debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
company has given guarantees for loans taken by subsidiaries from
baris.The terms and conditions where of are, not prejudicial to the
interests of the Company
(xvi) The Company did not have any term loans out standing during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the Act, hence, clause (xviii) of paragraph 4 of the Companies
(Auditor's Report) Order, 2003 is not applicable and not reported upon.
(xix) The Company did not have any out standing debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported
during the course of our audit.
For Haribhakti & Co.
Chartered Accountants
FRN:103523W
Sd/-
Sarah George
Partner
Membership No.: 45255
Mumbai
May 29,2011
Mar 31, 2010
We have audited the attached Balance Sheet of Nitin Fire Protection
Industries Limited (the Company) as at March 31, 2010, the Profit and
Loss Account and also the Cash Flow Statement of the Company for the
year ended on that date annexed thereto (collectively, together with
the schedules and the notes thereto comprising the Financial
Statements), which we have signed under reference to this report.
These financial statements are the responsibility ofthe Companys
Management. Our responsibility is to express an opinion on these
financial statements based on ouraudit.
1. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall presentation
of financial statements. Webelieve that ouraudiprovides a
reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (the
Order) (as amended), issued by the Central Government of India in
terms of sub-section (4A) of section 227 ofthe Companies Act 1956
(the Act), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order to the extent applicable.
3. Furtherto our comments in the Annexure referred to above,
wereportthat:
(a)we have obtained all the information and explanations which to
the best of our knowledge and belief were necessary for the purposes
of our audit;
(b) inouropinion,properbooksofaccountasrequiredbylawhavebeenkept by the
Company so far as appears from our examination of thosebooks;
(c) the financial statements dealt with by this report are in
agreement with the books of account;
(d) in our opinion, financial statements dealt with by this report
comply with the mandatory accounting standards notified under the
Companies (Accounting Standards) Rules, 2006 (as amended) issued by the
Central Government in exercise ofthe power conferred
undersub-section (I) (a) of section 642 of the Act, readtogether
with section 211(3C)oftheAct;
(e) on the basis of written representations received from the
Directors, and taken on record by the Board of Directors ofthe Company.
none ofthe Directors is disqualified as on March 31,2010 from being
appointed as a Director in terms of clause (g) of sub-section (1)
ofSection274oftheAct;
(f) in our opinion and to the best of our information and according to
the explanations given to us, the financial statements dealt with this
report give the information required by the Act, in the manner so
required and present a true and fair view in conformity with the
accountingprinciplesgenerallyacceptedinIndia;inthecaseof:
(i) the Balance Sheet, ofthe state of affairs ofthe Company as at March
31,2010;
(ii) the Profit and Loss Account, of the profit for the year ended on that
date; and
(iii) the Cash Flow Statement, ofthe cash flows for the year ended on
that date.
Annexure to the Auditors Report of even date to the members of Nitin
Fire Protection Industries Limited (the Company), on the
financial statements for the year ended March31,201U
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to
usTandthebooksofaccountandotherrecords examined byus in
thenormalcourseof audit, wereportthat:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year, which in our opinion is reasonable having
regard to the size of the Companyandnatae of its assets. No material
discrepancies were noticed on such physical verification.
(c) In our opinion, the Company has not disposed of a substantial part
of fixed assets during the year. Accordingly, the provisions of clause
4 (1) (c) ofthe Order are not applicable.
(ii) (a) Inventoryhas been physically verified by the management at
reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the
sizeoftheCompanyandthenatureofitsbusiness.
(c) The Company has maintained proper records of inventory and no
material discrepancies were noticed on physical verification of
inventory as compared to the bookrecords.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register
maintained under section 301 of the Act. Accordingly, the provisions of
clauses 4(iii) (b), (c) and (d) of the Order are not applicable.
(b) The Company has taken interest free unsecured loan from one party
covered in the register maintained under section 301 ofthe Act. The
maximum outstanding and closing balance was Rs^.OOooOO. The other
terms and conditions are not prejudicial to the interests ofthe
Company. The Company is regular in repaying the principal amount. There
were no other loans secured or unsecured to companies, firms or other
parties covered in the register maintained under section 301 ofthe Act.
(iv) hi our opinion, there is an adequate internal control system
commensurate with the size ofthe Company and the nature of its business
for
the purchase of inventory, fixed assets and also for sale of goods.
During the course of our audit, no major weaknesses have been noticed
in the internal control system in respect of these areas.
(v) (a) In our opinion, the transactions made in pursuance of contracts
or arrangements which needed to be entered in the register
maintained under section 301 of the Act have been soentered.
(b) In our opinion, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act and exceeding Rs.500,000 in respect of any party during the
year, have been made at prices which are reasonable
havingregardtoprevailingmarketpriceattherelevanttime
(vi) The Company has not accepted any deposits from the pubhc with
inthemeningof Sections 58 A and 58AA ofthe Act and the Companies
(Acceptance of Deposits) Rules, 1975 Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii)in our opinion,the Company has an internalauditsystem commensurate
with its size and nature of its business.
(viii) To the best of our knowledge and belief, the Central Government
has not prescribed maintenance of cost records by the Company under
Section 209(l)(d) of the Act for any of its products. Accordmgly,the
provisions of clause 4(viii) of the Order are not apphcabL
(ix) (a) Amounts deducted/accrued in the books of account in respect of
undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income-tax,
Sales tax, Wealth tax, Service tax, Customs duty and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate
section comes into force has not yet been notified by the Central
Government. No undisputed amounts payable in respect of Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs duty and other
material statutory dueswerein arrears as at March 31,2010 for a period
of more than six months from thedatetheybecamepayable.
(b) There are no dues of Income tax, Sales tax, Wealth tax and Customs
duty which have not been deposited with the appropriate authorities on
account of any dispute except in respect of Income tax under the Income
Tax Act, 1961 of Rs.593,529 for the F.Y.2007-08 which is pending before
the Commissioner of Income Tax (Appeals). As explained to us, the
provisions of Excise duty are not applicable to the Company. Inrespect
of Cess refer to our comments in Para (ix) (a) above.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and the
immediatelyprecedingfinancialyear.
(xi) The Company has not defaulted in repayment of dues to a bank. The
Company did not have any debentures outstanding during the year.
Accordingly the provisions of clause4(xi) of the Order are
not applicable
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
Accordingly, the provisions ofclause 4 (xii)ofthe Order are not
applicable
(xiii)The Company is neither a chit fundnoranidhi/mumal benefit
fund/society. Accordmgly, the provisions of clause4(xiii) of
the Order are not applicable.
(xiv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. The Company has maintained proper
records of shares and other investments and timely entries have been
made therein. All shares have been held by the Company in its own name.
(xv) m our opinion and the representations made by the Management,
guarantees given by the Company for loans taken by wholly owned
subsidiaries from baris is prima facie not prejudicial to the
interests of the Company.
(xvi) The Company has not taken any term loans during the year.Accordingly,
the provisions of clause 4 (xvi) of the Order are not applicable.
(xvii) Based on an overall examination of the balance sheet and cash
flow statement of the Company, we report that no funds raised on short
term basis have been used for long term investment.
(xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of theAct. Accordingly, ^provisions of clause 4(xviii) of the Order
are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions ofclause 4(xix) of the
Orderarenotapplicable.
(xx) The Company has not raised any money by a public issue during
the year. Accordingly,the provisions of clause4(xx)of the Order are not
applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the year that causes the financial statements to be materially
misstated.
For Tolia& Associates
Chartered Accountants
FirmRegistrationNumber:111017W
Sd/-
Kiran P.Tolia
Proprietor
Membership Number: 43637
Mumbai
August 17, 2010
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