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MR. NITIN M. SHAHCHAIRMAN

Dear Shareholders,

It gives me immense pleasure to inform you that your company Nitin Fire Protection Industries Limited continues to be a leading player in the fire

protection equipment manufacturing and system installation company and is one of the reputed name in Indian and Overseas market.

Despite a very competitive, challenging and adverse business environment, the overall performance of your Company is satisfactory and the company

continues to grow in sales and profit for the Financial year 2013 -14.

Your Company is focused on its sustainable global profitable growth strategy, creating value and satisfaction for its customers, shareholders and

employees. Your company will continue to build on its strengths through strong systems and processes, competitiveness, Global brand, ability to adapt

to changes quickly and Customer Engagement. Our excellence in operation has resulted in the repeated orders from our valued customers.

We take this opportunity to convey our appreciation and thanks to our stakeholders, customers for their continuous support and faith, our Members of

the Board for their valuable guidance and support, our bankers and financial institutions, the Government of India, the State Governments and other

agencies for their valuable support. We deeply appreciate the contribution of all our employees for their enthusiasm, unstinted devotion, loyalty,

commitment for excellence and hard work, as without their support, the company would not have achieved the consistent growth.

Nitin M. Shah

Chairman

Sd/-

For a fast-growing company, it is imperative to be well served by not just a proven team of Directors at the helm, but also a highly competent line of Management.

Brief profile of our Directors Mr. Nitin M. ShahChairman and Director

The founder and driving force behind the Company, he has Diploma in Mechanical Engineering. After completing his Diploma in Mechanical Engineering in 1975, he joined his family business namely, Zenith Fire Services which was into manufacturing of fire extinguishers. Subsequently, he did his training in BRK Electronics, U.S.A., which is one of the largest manufacturers of smoke detectors. He set up Nitin Fire in 1995 and has more than 3 decades of experience in fire fighting equipment business. With a hands-on managerial style, he is the guiding light for the Company.

Mr. Rahul N. ShahWhole-time Director

He is a commerce graduate and holds a Diploma in Business Management. He gained experience in commissioning and installation of fire detection and alarm systems as well as gas suppression systems. In 1998, he took the training of HFC 227EA gas suppression systems at Fike South-east Asia Pte Singapore and in 1999, the training of addressable fire alarm systems from Apollo Fire Detectors Ltd. in U.K, to improve the quality of fire alarm systems. All import transactions and dealings are done under his supervision. He is also responsible for materials management.

Mr. Kunal N. ShahWhole-time Director

He is a Bachelor of Engineering in Electronics and Tele Communications from Padmabhushan Vasantdada Patil Prathisthans College of Engineering. He has experience in assembling, testing, and functioning of CNG dispensers for CNG fuel vehicles.

Mr. Kailat H. VaidyananthanNon-Executive Director

He is a graduate in Mechanical Engineering with post graduate studies in Industrial Engineering. He has more than 40 years of experience in various engineering fields including about 27 years in the area of high pressure seamless cylinders and allied equipments. He has been instrumental in implementing the project of NCL and all matters related to cylinder applications. He is responsible for all technical negotiation with cylinder suppliers as well as the customers for cylinders and allied items.

Mr. Satish K. Dheri Independent Director

He has worked as the CFO with the Delhi Fire Services and has also been former President of Institution of Fire Engineers (India) Council & Honorary Member of Commonwealth and overseas Fire Services Association, U.K. as the Chairman, National Building Code Part – IV of Bureau of Indian Standards his contribution has been praiseworthy. He also worked as Fire Expert for formulation of new building bye-laws for Municipal Corporation of Delhi, in 2005 and also served as Director of International Fire Chiefs' Association of Asia From 1984-2001.

Mr. Krishna Kant Jha Independent Director

He is a Mechanical Engineer and a member of the Fellow of Institution of Engineers (FIE), India. Previously, he was an Executive Director (Health, Safety & Environment) of Gas Authority of India Limited (GAIL) and has a total experience of 42 years in the areas of project management, operations and maintenance, administration and health, safety and environment related activities.

Mr. Ramakant M. NayakIndependent Director

He has degrees in science and law and a Diploma in Marketing and Advertising. He is also a certified associate of Indian Institute of Banking. He has an experience of 45 years in the area of investment advisory and banking industry. Mr. Nayak has been associated with various banking and advisory companies such as Sun Global Investments Limited, London, Sun Capital Advisory, Lord Krishna Bank (Now merged with HDFC Bank Limited) and Lakshmi Vilas Bank through which he contributed in the areas of banking, finance, economy, human resources, business strategy and risk management.

BANKERSIDBI Bank LimitedAxis Bank Limited

Bank of BarodaYES Bank

BOARD OF DIRECTORS

Mr. Nitin M. Shah - Chairman & Managing DirectorMr. Rahul N. Shah - Executive DirectorMr. Kailat H. Vaidyanathan - Non Executive DirectorMr. Kunal N. Shah - Non Executive DirectorMr. Krishna Kant Jha - Independent DirectorDr. Surendra A. Dave - Independent DirectorMr. Ramakant M. Nayak - Independent DirectorMr. Satish K. Dheri - Independent Director

REGISTERED OFFICE501, Delta, Technology Street,

Hiranandani Gardens, Powai, Mumbai - 400 076.

Maharashtra, India.Tel.: +91 22 4045 7000Fax: +91 22 2570 1110

Website: www.nitinfire.com

AUDITORSHaribhakti & Co.

Chartered Accountants

REGISTRAR & SHARE TRANSFER AGENTS

Bigshare Services Private LimitedE-2, Ansa Industrial Estate, Sakivihar Road, Saki Naka,

Andheri (E), Mumbai - 400 076.Maharashtra, India.

Tel.: +91 22 4043 0200Fax: +91 22 2847 5207

Website: www.bigshareonline.com

A-117 TTC Industrial Area,Pawana Village,

Navi Mumbai – 400701Maharastra, India

PLANT LOCATIONS

COMPANY SECRETARYAbhishek Shrivastava

COMPANY INFORMATION

NITIN FIRE PROTECTION INDUSTRIES LIMITEDAnnual Report 2013-2014

Shed -6 Phase- IDuvada VSEZ

Vishakhapatnam - 530049 Andhra Pradesh,

India

PROTECTION ENGINEERSFIRE

BANKERSIDBI Bank LimitedAxis Bank Limited

Bank of BarodaDena Bank

BOARD OF DIRECTORS

Mr. Nitin M. Shah (DIN-00073232) - Non-Executive Chairman & DirectorMr. Rahul N. Shah (DIN – 00073226) - Whole-time Director & Key Managerial Personnel

(w.e.f. August 14, 2014)Mr. Kunal N. Shah (DIN – 00077216) - Whole-time Director

(w.e.f. August 14, 2014)Mr. Kailat H. Vaidyanathan (DIN-00077323) - Non Executive DirectorMr. Krishna Kant Jha (DIN-02816500) - Independent DirectorMr. Ramakant M. Nayak (DIN-00129854) - Independent DirectorMr. Satish K. Dheri (DIN-00077533) - Independent Director

REGISTERED OFFICE501, Delta, Technology Street,

Hiranandani Gardens, Powai, Mumbai - 400 076.

Maharashtra, India.Tel.: +91 22 4045 7000Fax: +91 22 2570 1110

Website: www.nitinfire.comEmail : [email protected]

AUDITORSHaribhakti & Co.

Chartered Accountants

REGISTRAR & SHARE TRANSFER AGENTS

Bigshare Services Private LimitedE-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka,

Andheri (E), Mumbai - 400 076.Maharashtra, India.

Tel.: +91 22 4043 0200Fax: +91 22 2847 5207

Website: www.bigshareonline.com

A-117 TTC Industrial Area,Pawana Village,

Navi Mumbai – 400701Maharastra, India

PLANT LOCATIONS

COMPANY SECRETARYAbhishek Shrivastava

COMPANY INFORMATION


Shed -6, Phase- I,Duvada VSEZ,

Vishakhapatnam - 530049 Andhra Pradesh,

India


CHIEF FINANCIAL OFFICERKamlesh Gandhi

CIN No. L29193MH1995PLC092323

NITIN FIRE PROTECTION INDUSTRIES LIMITEDAnnual Report 2013-2014 PROTECTION ENGINEERSFIRE

Contents

Notice and Explanatory Statement

Directors’ Report

Report on Corporate Governance

Corporate Governance Compliance Certificate

Management Discussion and Analysis

Standalone Financial Statements

Auditors’ Report & Annexure

Balance Sheet

Statement of Profit and Loss

Cash Flow Statement

Notes to the Financial Statements

Consolidated Financial Statements

Auditors’ Report

Balance Sheet


Cash Flow Statement


Statement pursuant to Section 212 & general exemption under Section 212 (8) of the Companies Act, 1956

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Contents

Notice and Explanatory Statement

Directors’ Report

Report on Corporate Governance

Corporate Governance Compliance Certificate

Management Discussion and Analysis

Standalone Financial Statements

Auditors’ Report & Annexure

Balance Sheet


Cash Flow Statement


Consolidated Financial Statements

Auditors’ Report

Balance Sheet


Cash Flow Statement


Statement pursuant to Section 212 & general exemption under Section 212 (8) of the Companies Act, 1956

Attendance Slip / P

Assent / Dissent Form

Payment Of Dividend Through NECS

“Green Initiative in the Corporate Governance”

roxy Form

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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 19th Annual General Meeting of the Members of Nitin Fire Protection Industries Limited will be held on Tuesday, September 30, 2014, at 3.00 p.m. at Centre for Excellence in Telecom Technology and Management (CETTM), Conference Hall, Technology Street, Hiranandani Gardens, Powai , Mumbai 400 076 to transact the following business as:

Ordinary Business:

1. To consider and adopt the Audited Balance Sheet as at March 31, 2014 and the Audited Statement of Profit & Loss and Cash Flow Statement for the year ended on that date together with the Reports of the Directors and the Auditors thereon.

2. To declare dividend for the Financial Year ended March 31, 2014.

3. To appoint a director in place of Mr. Nitin M. Shah (DIN No. 00073232) who retires by rotation and being eligible offers himself for re-appointment.

4. To appoint Auditors and to fix their remuneration and in this regard to consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT M/s. Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Firm Registration Number 103523W) be and is hereby re-appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as may be fixed by the Board of Directors in consultation with the Auditors.”

Special Business:

5. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION:

Appointment of Mr. K. K. Jha as an Independent Director

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and Schedule IV and other applicable provisions, if any, of the Companies Act 2013 (‘the Act’) and the Rules made there under, as amended from time to time, Mr. K. K. Jha (DIN No. 02816500), an existing Independent Director of the Company who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from September 30, 2014 up to September 29, 2019.”


Appointment of Mr. R. M. Nayak as an Independent Director

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 (‘the Act’) and the Rules made there under, as amended from time to time, Mr. R. M. Nayak (DIN No. 00129854), an existing Independent Director of the Company who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from September 30, 2014 up to September 29, 2019.”


Appointment of Mr. S. K. Dheri as an Independent Director

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 (‘the Act’) and the Rules made there under, as amended from time to time, Mr. S. K. Dheri (DIN No. 00077533), an existing Independent Director of the Company who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company with effect from September 30, 2014 up to September 29, 2019.”

8. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

Appointment of Mr. Rahul N. Shah as a Director

“RESOLVED THAT Mr. Rahul N. Shah (DIN: 00073226), in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013, from a member proposing his candidature for the office of Director, who was appointed as an Additional Director of the Company and who holds office of the directorship upto the date of ensuing Annual General Meeting, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

9. To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

To consider and appoint Mr. Rahul N. Shah as the Whole-time Director and fix his remuneration

"RESOLVED THAT pursuant to the provisions of Section 196 and Section 197 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013, the consent of the members of the Company be and is hereby accorded for the appointment of Mr. Rahul N. Shah as the Whole-time Director of the Company for a period of 3 (three) years w.e.f. August 14, 2014, on remuneration and perquisites payable to him and other terms and conditions as set out below:

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Salary and perquisites and Allowances together with Retirals:

1. Salary: 3,50,000/- (Rupees Three Lakhs Fifty Thousand only) per month, payable on quarterly basis. However, total salary shall not exceed the limit prescribed u/s.197 and 198 of the Act.

2. House Rent allowances: ` 35,000/- (Rupees Thirty Five Thousand only) per month, payable on quarterly basis, subject to the provisions of the Income tax Act, 1961.

3. Bonus: One month of Salary and H. R. A.

4. Commission: In addition to the salary allowances and perquisites in the years in which the Company has sufficient profit, the appointee shall be paid commission on the annual net profits of the Company as may be decided by the Nomination and Remuneration Committee and/or Board of Directors at the end of each financial year computed in the manner laid down under Section 198 of the Act and subject to the ceiling laid down under Sections 196 and 197 of the Act on the total remuneration.

5. Provident Fund: at the rate which it is payable to other employees of the Company, subject to the maximum permissible under the Income Tax Act, 1961.

In addition to the perquisites specified as above, the Whole-time Director shall also be eligible for the following perquisites which shall not be included in the computation of the ceiling on remuneration:

a) The Company’s contribution to the Provident Fund, Superannuation Fund (or other benefit permissible in lieu thereof) or annuity fund as per the rules of the Company and the same will not be included in the computation of the ceiling on perquisites to the extend these either singly or put together are not taxable under the Income Tax Act, 1961.

b) Gratuity: At such rate which it is payable to other employees of the company or in the alternative the Whole-time Director may join Group gratuity- cum life assurance scheme and avail the benefit of such scheme. Gratuity to be payable at the rate of half month’s salary for each completed years of service or such rate which have been prescribed at the time of retirement.

c) Leave: On full pay as per the rules of the company but not exceeding one month leave for every completed year of service and leave encashment as per the rules of the company.

d) Personal accident Insurance for India and Abroad.

e) Key Man Insurance policy.

f) Entrance as well as yearly membership fees of any two clubs or an association at Mumbai for the benefit of the Company.

g) Free use of car with driver for official and private purposes.

h) Provision of telephone (Mobile and land line), Fax, and Internet connection at residence of the Whole-time Director with provision of the computer at residence for the use of Company’s business or private purpose.

i) Actual electricity charges of residence.

Provided all perquisites together with expenditure incurred on the Whole-time Director shall not exceed total amount of salary.

The Whole-time Director shall be paid and /or reimbursed all reasonable out of pocket / entertainment expenses incurred by him in the course of discharging duties as Whole-time Director by cash / cheque or through Credit Card.

RESOLVED FURTHER THAT the board of directors of the Company be and is hereby authorised to vary or increase the remuneration and perquisites including monetary value thereof as specified above to the extent the Nomination and Remuneration Committee and/or the Board of Directors may consider appropriate and as may be permitted or authorised in accordance with any provisions under the Companies Act, 2013 for the time being in force provided, however, that the remuneration payable to Mr. Rahul N. Shah shall be within the limits set out in the said Act or any amendments thereto or any modifications or statutory re-enactment(s) thereof and/or any rules or regulations framed there under and the terms of the aforesaid appointment of Mr. Rahul N. Shah shall be suitably modified to give effect to such variations or increase as the case may be.

RESOLVED FURTHER THAT during the currency of the tenure of the Whole-time Director where in any financial year, the Company has no profits or its profits are inadequate, the Company do pay to the Whole-time Director Minimum remuneration by way of salary and perquisites as specified above as per relevant applicable provisions of law including provisions as contained in Schedule V to the Companies Act, 2013.

RESOLVED FUTHER THAT the Board of Directors be and is hereby authorized to do and perform all such acts, deeds, matters and things as may be necessary desirable or appropriate to give effect to this Resolution”.

10. To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

Appointment of Mr. Kunal N. Shah as a Director

“RESOLVED THAT Mr. Kunal N. Shah (DIN: 00077216), in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013, from a member proposing his candidature for the office of Director and who was appointed as an Additional Director of the Company and who holds office of the directorship upto the date of ensuing Annual General Meeting, be and is

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hereby appointed as a Director of the Company, liable to retire by rotation.”

11. To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

To consider and appoint Mr. Kunal N. Shah as the Whole-time Director and fix his remuneration

"RESOLVED THAT pursuant to the provisions of Section 196 and Section 197 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013, the consent of the members of the Company be and is hereby accorded to the appointment of Mr. Kunal N. Shah as the Whole-time Director of the Company for a period of 3 (three) years w.e.f. August 14, 2014, on remuneration and perquisites payable to him and other terms and conditions as set out below:

Salary and perquisites and Allowances together with Retirals:

1. Salary: 3,50,000/- (Rupees Three Lakhs Fifty Thousand only) per month, payable on quarterly basis. However, total salary shall not exceed the limit prescribed u/s.197 and 198 of the Act.

2. House Rent allowances: ` 35,000/- (Rupees Thirty Five Thousand only) per month, payable on quarterly basis, subject to the provisions of the Income tax Act, 1961.

3. Bonus: One month of Salary and H. R. A.

4. Commission: In addition to the salary allowances and perquisites in the years in which the Company has sufficient profit the appointee shall be paid commission on the annual net profits of the Company as may be decided by the Nomination and Remuneration Committee and/or Board of Directors at the end of each financial year computed in the manner laid down under Section 198 of the Act and subject to the ceiling laid down under Sections 196 and 197 of the Act on he total remuneration.

5. Provident Fund: at the rate which it is payable to other employees of the Company, subject to the maximum permissible under the Income Tax Act, 1961.

In addition to the perquisites specified as above, the Whole-time Director shall also be eligible for the following perquisites which shall not be included in the computation of the ceiling on remuneration:

a) The Company’s contribution to the Provident Fund, Superannuation Fund ( or other benefit permissible in lieu thereof) or annuity fund as per the rules of the Company and the same will not be included in the computation of the ceiling on perquisites to the extend these either singly or put together are not taxable under the Income Tax Act, 1961.

b) Gratuity: At such rate which it is payable to other employees of the company or in the alternative the Whole-time Director may join Group gratuity- cum life assurance scheme and avail the benefit of such scheme. Gratuity to be payable at the rate of half month’s salary for each completed years of service or such rate which have been prescribed at the time of retirement.

c) Leave: On full pay as per the rules of the company but not exceeding one month leave for every completed year of service and leave encashment as per the rules of the company.

d) Personal accident Insurance for India and Abroad.

e) Key Man Insurance policy.

f) Entrance as well as yearly membership fees of any two clubs or an association at Mumbai for the benefit of the Company.

g) Free use of car with driver for official and private purposes.

h) Provision of telephone (Mobile and land line), Fax and Internet connection at residence of the Whole-time Director with provision of the computer at residence for the use of Company’s business or private purpose.

i) Actual electricity charges of residence.

Provided all perquisites together with expenditure incurred on the Whole-time Director shall not exceed total amount of salary.

The Whole-time Director shall be paid and /or reimbursed all reasonable out of pocket / entertainment expenses incurred by him in the course of discharging duties as the Whole-time Director by cash / cheque or through Credit Card.

RESOLVED FURTHER THAT the board of directors of the Company be and is hereby authorised to vary or increase the remuneration and perquisites including monetary value thereof as specified above to the extent the Nomination and Remuneration Committee and/or the Board of Directors may consider appropriate and as may be permitted or authorised in accordance with any provisions under the Companies Act, 2013, for the time being in force provided however that the remuneration payable to Mr. Kunal N. Shah shall be within the limits set out in the said Act or any amendments thereto or any modifications or statutory re-enactment(s) thereof and/or any rules or regulations framed there under and the terms of the aforesaid Appointment of Mr. Kunal N. Shah shall be suitably modified to give effect to such variations or increase as the case may be.

RESOLVED FURTHER THAT during the currency of the tenure of the Executive Director where in any financial year the Company has no profits or its profits are inadequate, the Company do pay to the Whole-time Director Minimum remuneration by way of salary and perquisites as specified above as per relevant applicable provisions of law including provisions as contained in Schedule V to the Companies Act, 2013.

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RESOLVED FUTHER THAT the Board of Directors be and is hereby authorized to do and perform all such acts deeds matters and things as may be necessary desirable or appropriate to give effect to this Resolution”.

12. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL RESOLUTION BY POSTAL BALLOT:

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To consider the issue of further shares by the Company

“RESOLVED that in accordance with Section 40, 41, 42, 62 and all other applicable provisions, if any, of the Companies Act, 2013 and Rules made there under, as amended and also provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure

To consider the authority to borrow funds for the business Under Section 180(1)(c) of the Companies Act, 2013 (erstwhile Section 293(1)(d) of the Companies Act, 1956)

“RESOLVED THAT pursuant to the provisions of Section 180(1)(c) of the Companies Act, 2013 (erstwhile Section 293(1)(d) of the Companies Act, 1956) and other enabling provisions, if any, consent of the Company be and is hereby accorded to the Board of Directors of the Company for borrowing any sum or sums of moneys for and on behalf of the Company, from time to time, from any one or more persons, firms, bodies corporate, bankers, financial institutions or from any others persons by way of advances, deposits, loans or otherwise and whether unsecured or secured by mortgage, charge, hypothecation or lien or pledge of the Company's assets and properties, whether movable or immovable or stock-in trade/process and debts and advances, notwithstanding that the sum or sums of moneys so borrowed together with moneys, if any, already borrowed by the Company (apart from the temporary loans obtained from the Company's bankers in the ordinary course of business) will or may exceed the aggregate of the paid up capital of the Company and its free reserves which have not

been set apart for any specific purpose, provided that the total amount upto which the moneys may be borrowed shall not exceed 555.00 Crores (Rupees Five Hundred Fifty Five Crores Only) at any point of time on account of the principal.”

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds and things to execute all such documents instruments and writings as may be required and to delegate all or any of its powers herein conferred to a Committee constituted by the Board and/ or any member of such Committee with power to the said Committee to sub-delegate its powers to any of its members.”

Consent for delay in investment made from moneys received under the Initial Public Offer in the year 2007

“RESOLVED THAT pursuant to the provisions of Section 27 of the Companies Act, 2013 (erstwhile Section 61 of the Companies Act,

1956) the consent of the Members of the Company be and is hereby accorded to the delay in investment of 18.99 Crores made from

moneys received under the Initial Public Offer (IPO) in the year 2007, out of the total Projected investment of 56.87 Crores received from

IPO in the year 2007 as per the IPO projection and less amount invested 37.88 Crores as on 31.03.2008 and the delay in 1 (one) year in the project implementation and starting of the commercial production i.e. it was to start from October, 2007, as per Red Herring Prospectus, but, actually started in the third quarter of the year 2008-2009.”

Giving of loan or guarantee or providing security exceeding 60% of the paid-up share capital, free reserves & share premium account of the Company:

"RESOLVED THAT pursuant to the provisions of Section 186 and any other applicable provision, if any, of the Companies Act, 2013, ('the Act') including any statutory modification or re- enactment thereof for the time being in force, the Board of Directors of the Company be and is hereby authorised to agree to at its discretion to make loan(s) and/or give any guarantee(s)/provide any security(ies) in connection with loan(s) made to and to make investments in Shares, Debentures and/or any other Securities of other body corporates, whether Indian or overseas and/or in various schemes of Mutual Funds or such other funds, in their absolute discretion deem beneficial and in the interest of the Company in excess of 60% of the paid up Share Capital, Free Reserves and Securities Premium Account of the Company or 100% of its Free Reserves and Securities Premium Account of the Company, whichever is more, as prescribed under section 186 of the Companies Act,

2013, from time to time, in one or more tranches, upto maximum amount of 555.00 Crores (Rupees Five Hundred Fifty Five Crores Only), notwithstanding that investments along with Company's existing loans or guarantee/ security or investments shall be in excess of the limits prescribed under Section 186 aforesaid.

RESOLVED FURTHER THAT the Board be and is hereby authorised to take from time to time all decisions and steps in respect of the above investment including the timing, amount and other terms and conditions of such investment and varying the same through transfer, sale, disinvestments or otherwise, either in part or in full, as it may deem appropriate, and to do and perform all such acts, deeds, matters and things, as may be necessary or expedient in this regard and to exercise all the rights and powers which would vest in the Company in pursuance of such investment.”

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Requirements) Regulations, 2009 (the “SEBI Regulations”) as amended the provisions of the Foreign Exchange Management Act, 1999, as amended and rules and regulations made hereunder including the Foreign Exchange Management (Transfer and Issue of Securities by a Person Resident Outside India) Regulations, 2000, as amended, if applicable, any other applicable law or laws rules and regulations (including any amendment thereto or re-enactment thereof for the time being in force) and enabling provisions in the Memorandum and Articles of Associations of the Company and the Listing Agreement entered into by the Company with the Stock Exchanges where the shares of the Company are listed and subject to the approval, if applicable, Government of India, Reserve Bank of India, Securities and Exchange Board of India and/or all other authorities institutions or bodies within or outside India and subject to such conditions as may be prescribed by any of them while granting such approval, the Board of Directors (hereinafter referred to as “Board” which include any committee thereof whether constituted or to be constituted) of the Company are hereby authorized to create, offer, issue and allot in one or more tranche(s) in the course of domestic and / or international offerings and /or Qualified Institutional Placements (“QIP”) with or without an over allotment/ green shoe issue option in one or more foreign markets or domestic markets to domestic institutions, foreign institutions, non-resident Indians, Indian public companies, corporate bodies, mutual funds, banks, insurance companies, pension funds, individuals, qualified institutional buyers or other persons or entities whether shareholders of the Company or not through a public issue and/or on a private placement basis and/or qualified institutional placement within the meaning of the SEBI Regulations and /or preferential issue and/or other kind of public issue and /or private placement or through a combination of the foregoing as may be permitted under applicable law from time to time with or without an over allotment/ green shoe option, equity shares, secured or unsecured debentures bonds or any other securities whether convertible into equity shares or not including but not limited to Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Debentures (“OCD”) Bonds with share warrants attached, Global Depository Receipts (“GDRs”), American Depository Receipts (“ADRs”), Rights Issue, Issue of Warrants or any other equity related instruments of the Company or a combination of the foregoing including but not limited to a combination of equity shares with bonds and/or any other securities whether convertible into equity shares or not (hereinafter referred to as “securities”) for a value upto USD 100 Million (United States Dollars Hundred Million Only) or its Indian Rupee equivalent inclusive of such premium as may be finalized by the Board whether to be listed on any stock exchange inside India or any international stock exchange outside India through an offer document and/or prospectus and/or offer letter and/or offering circular and/or on public and/or private or preferential basis whether rupee denominated in foreign currency at such time or times at such price or prices in such manner and on such terms and conditions including security rate of interest etc. as may be decided by and deemed appropriate by the board as per applicable law including the discretion to determine the categories of investors to whom the offer issue and allotment shall be made considering the prevailing market conditions and other relevant factors wherever necessary in consultation with its advisors as the Board in its absolute discretion may deem fit and appropriate.

RESOLVED FURTHER THAT in addition to all applicable Indian laws, the securities issued in pursuance of this resolution shall also be governed by all applicable laws and regulations of any jurisdiction outside India where they are listed or that may in any other manner apply to such securities or provided in the terms of their issue.

RESOLVED FURTHER THAT the unsubscribed securities may be disposed off by the Board in its absolute discretion in such manner as the Board may deem fit and as permissible by the law.

RESOLVED FURTHER THAT in case of a QIP/Rights Issue/Preferential Allotment pursuant to the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the allotment of securities and the relevant date for the determination of the price of the equity shares to be issued shall be the date on which the board decides to open the issue of securities or such other time as may be allowed by SEBI Regulations, from time to time.

RESOLVED FURTHER THAT in case of an issuance of FCCBs/ADRs/GDRs the relevant date for the determination of the issue price of the securities offered shall be determined in accordance with the Issue of Foreign Currency Convertible Bonds and Ordinary shares (through Depository Receipt Mechanism) Scheme, 1993, as may be amended from time to time.

RESOLVED FURTHER THAT the issue of securities shall be subject to the following terms and conditions:

a) The securities shall be subject to the provisions of Memorandum and Articles of Associations of the Company and in accordance with the terms of the issue; and

b) The number and/or price of the securities shall be appropriately adjusted for corporate actions such as bonus issue, rights issue, stock split, merger, demerger, transfer of undertaking, sale of division or any such capital or corporate restructuring.

RESOLVED FURTHER that the Common Seal of the Company, if required, to be affixed in India and/or outside India on any agreement, undertaking, deed or other document, the same be affixed in the presence of any one of the Directors of the Company or any one of the officers of the Company in accordance with the Articles of Association of the Company.

RESOLVED FURTHER that subject to the applicable laws, the Board and/or the Committee authorised by the Board be and is hereby authorized to do such acts, deeds and things as the Board in its absolute discretion deems necessary or desirable in connection with the issue of the securities including without limitation of the following;

a) Decide the date for the opening of the issue of securities;

b) Decide the price band for the issue;

c) Finalization of the issue price;

d) Finalization of the allotment of the securities on the basis of the subscriptions received;

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e) Finalization of signing of and arrangement for the submission of the preliminary and final offering circulars/prospectus(es)/offer document(s) and any amendments and supplements thereto along with supporting papers needed to be filed for seeking listing approval with any applicable government and regulatory authorities institutions or bodies as may be required;

f) Deciding the pricing and terms of the securities and all other related matters including taking any action on two-way fungibility for conversion of underlying equity shares into FCCBs/ GDRs/ ADRs as per applicable laws, regulations or guidelines;

g) Appoint in its absolute discretion managers (including lead manager), investment bankers, merchant bankers, underwriters, guarantors, financial and /or legal advisors, depositories, custodians, principal paying/transfer/conversion agents, listing agents, registrars, trustees and all other agencies whether in India or abroad entering into or execution of all such agreements/arrangements/MoUs/documents with any such agencies in connection with the proposed offering of the securities;

h) Approval of the Deposit Agreements(s), the Purchase/Underwriting Agreement(s), the Trust Deed(s), the Indenture(s), the Master/Global GDRs/ADRs/FCCBS/Other Securities, Letters of Allotment, Listing Application, Engagement Letter(s), Memorandum of Understanding and any other agreements or documents as may be necessary in connection with the issue/offering (including amending varying or modifying the same as may be considered desirable or expedient) in accordance with all applicable, laws, rules, regulations and guidelines;

i) Settle all questions, difficulties or doubts that may arise in regards to the issue, offer or allotment of securities and utilization of the proceeds of the issue in such a manner and to do all such acts, deeds, matters and things as it may in its absolute discretion deem fit.

RESOLVED FURTHER THAT the Board and/or the Committee authorized by the Board be and is hereby authorized to accept any modifications in the proposals as may be required by the authorities involved in such issues but subject to such conditions as the SEBI/GoI/RBI or such other appropriate authorities may impose at the time of their approval and as agreed to by the Board;

RESOLVED FURTHER THAT without prejudice to the generality of the foregoing issue of the securities may be done upon all or any terms or combination of terms in accordance with international practices relating to the payment of interest, additional interest, premium on redemption, prepayment or any other debt service payments and all such terms as are provided customarily in an issue of securities of this nature.

RESOLVED FURTHER THAT the Company may enter into any arrangement with any agency or body authorized by the Company for the issue of depository receipts representing the underlying equity shares issued by the Company in registered or bearer form with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability of free transferability thereof as per international practices and regulations (including listing on one or more stock exchange(s) inside or outside India) and under the forms and practices prevalent in the international markets.”

16. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY RESOLUTION:

To approve the remuneration of the Cost Auditors for the financial year ending March 31, 2015

“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) Mr. Vinayak Kulkarni, Cost Auditors appointed by the Board of Directors of the Company to conduct the audit of the cost records of the Company for the financial year ending March 31, 2015, be paid the remuneration as may be decided by the Board of Directors of the Company in consultation with the Cost Auditors.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary proper or expedient to give effect to this resolution.”


`

Creation of Charge on the assets of the Company

“RESOLVED THAT pursuant to the provisions of Section 180 (1) (a) and other applicable provisions, if any, of the Companies Act, 2013, as amended, from time to time, consent of the Company be and is hereby given to the Board of Directors of the Company ('the Board') to create such charges, mortgages and hypothecations, in addition to the existing charges, mortgages and hypothecations, if any, created by the Company on such movable and immovable properties, both present and future and in such manner as the Board may deem fit in favour of Banks/Financial Institutions/Insurance Companies/other lending/investing agencies or bodies/trustees for holders of debentures/bonds which may be issued to or subscribed to by all or any of the Banks / Financial Institutions / Insurance Companies / other lending / investing agencies or any other person(s)/bodies corporate by way of private placement or otherwise (hereinafter collectively referred to as 'Lenders') provided that the total amount of loans together with interest thereon additional interest, compound interest, liquidated damages, commitment charges, premia on pre-payment or on redemption costs, charges, expenses and all other moneys payable by the Company in respect of the said loans for which such charges, mortgages and hypothecations are created shall not at any time exceed the limit of

555.00 Crores (Rupees Five Hundred Fifty Five Crores Only).

RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds and things to execute all such documents, instruments and writings as may be required and to delegate all or any of its powers herein conferred to a Committee constituted by the

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Board and/ or any member of such Committee with power to the said Committee to sub-delegate its powers to any of its members.”

To Adopt New set of Articles of Association of the Company

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisions of the Companies Act, 2013, read with Companies (Incorporation) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) the draft regulations contained in the Articles of Association submitted to this meeting, be and is hereby approved and adopted in substitution and to the entire exclusion of the regulations contained in the existing Articles of Association of the Company;

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”



Entering into Related Party Transactions:

“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services and re-imbursement of expenses with Eurotech Cylinders Private Limited in which Mr. Rahul N. Shah and Mr. K. H. Vaidyanathan, Directors of the Company are also Directors and hence, Mr. Kailat H. Vaidyanathan, Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :

RESOLVED FURTHER THAT any one of the Directors of the Company be and is hereby authorized to sign and execute all the Agreements, other papers and documents as may be required and to do all such acts, deeds and things as may be necessary to give effect to this resolution.”



“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services with New Age LLC, UAE, Step-down Subsidiary in which Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :

RESOLVED FURTHER THAT any one of the Directors of the Company be and is hereby authorized to sign and execute all the Agreements, other papers and documents as may be required and to do all such acts deeds and things as may be necessary to give effect to this resolution.”



“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for leasing of properties from Mr. Nitin M. Shah and hence, Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :

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Period Estimated Value of Sale of Goods and Services ( in Cores)`

Estimated Value of Purchase of goods

and services( in Cores)`

Reimbursement of expenses ( in Cores)`

Total Estimated Value

( in Cores)`

01.04.2014 to 31.03.2015 10.00 20.00 0.25 30.2501.04.2015 to 31.03.2016 15.00 25.00 0.50 40.5001.04.2016 to 31.03.2017 20.00 30.00 0.75 50.75

Period Estimated Value of Sale of Goods and Services

( in Cores)`

Estimated Value of Purchase of goods and services

( in Cores)`

Total Estimated Value ( in Cores)`

01.04.2014 to 31.03.2015 5.00 5.00 10.0001.04.2015 to 31.03.2016 5.00 5.00 10.0001.04.2016 to 31.03.2017 5.00 5.00 10.00

RESOLVED FURTHER THAT any one of the Directors of the Company be and is hereby authorized to sign and execute all the Agreements, other papers and documents as may be required and to do all such acts deeds and things as may be necessary to give effect to this resolution.”



“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services with Nitin Global Pte Ltd, Singapore, in which Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :




“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services and Reimbursement of Bank Charges with Nitin Ventures LLC, U. A. E., in which Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :




“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for leasing of properties from Mrs. Saroj Nitin Shah and hence, Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :

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Period Total Estimated Value ( in Cores)`

01.04.2014 to 31.03.2015 0.1501.04.2015 to 31.03.2016 0.1801.04.2016 to 31.03.2017 0.21


( in Cores)`


( in Cores)`


01.04.2014 to 31.03.2015 5.00 5.00 10.0001.04.2015 to 31.03.2016 5.00 5.00 10.0001.04.2016 to 31.03.2017 5.00 5.00 10.00

Period Estimated Value of Sale of Goods and Services ( in Cores)`

Estimated Value of Purchase of goods

and services( in Cores)`


( in Cores)`

01.04.2014 to 31.03.2015 5.00 5.00 2.50 12.5001.04.2015 to 31.03.2016 10.00 10.00 3.00 23.0001.04.2016 to 31.03.2017 15.00 15.00 3.50 33.50

Reimbursement of Bank Charges ( in Crores)`

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“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services, leasing of property and Reimbursement of Expenses with Worthington Nitin Cynlinders Private Limited, in which Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested and hence, interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :




“RESOLVED THAT pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 the consent of the Company be and is hereby accorded to the Board of Directors of the Company for entering into contract for purchase and sale of goods and services with Firetec Systems Limited, Step-down Subsidiary in which Mr. Nitin M. Shah, Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company are interested for the period commencing from April 1, 2014 to March 31, 2017 (both days inclusive), the details of which are as under :


For and on behalf of the Board

Mumbai Sd/-August 14, 2014 Abhishek Shrivastava

Company Secretary

Period Total Estimated Value ( in Cores)`

01.04.2014 to 31.03.2015 0.1501.04.2015 to 31.03.2016 0.1801.04.2016 to 31.03.2017 0.21

Period Estimated Value of Sale

of Goods and Services ( in Cores)`

Estimated Value of

Purchase of goods and services

( in Cores)`


( in Cores)`

01.04.2014 to 31.03.2015 0.25 0.25 0.40 0.02 0.05 0.9701.04.2015 to 31.03.2016 0.50 0.50 0.40 0.03 0.05 1.4801.04.2016 to 31.03.2017 1.00 1.00 0.40 0.04 0.05 2.49

Leasing of property

( in Crores)`

Reimbursement of Telephone

Charges ( in Crores)`

Reimbursement of Bus Charges

( in Cores)`


( in Cores)`


( in Cores)`


01.04.2014 to 31.03.2015 10.00 10.00 20.0001.04.2015 to 31.03.2016 15.00 15.00 30.0001.04.2016 to 31.03.2017 20.00 20.00 40.00

Notes:

a. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUST BE RECEIVED AT THE COMPANY'S REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE MEETING. PROXIES SUBMITTED ON BEHALF OF COMPANIES / SOCIETIES / PARTNERSHIP FIRMS ETC. MUST BE SUPPORTED BY APPROPRIATE RESOLUTION/ AUTHORITY AS APPLICABLE ISSUED ON BEHALF OF THE NOMINATING ORGANIZATION. MEMBERS ARE REQUESTED TO NOTE THAT A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS NOT EXCEEDING 50 AND HOLDING IN THE AGGREGATE NOT MORE THAN 10% OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS. IN CASE A PROXY IS PROPOSED TO BE APPOINTED BY A MEMBER HOLDING MORE THAN 10% OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS, THEN, SUCH PROXY SHALL NOT ACT AS A PROXY FOR ANY OTHER PERSON OR SHAREHOLDER.

b. Corporate members intending to send their authorized representatives to attend the Meeting are requested to send the Company, a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the Meeting.

c. The relevant explanatory statement pursuant to Section 102 of the Companies Act, 2013 in respect of the business under Item Nos. 5 to 26 above is annexed hereto.

d. Members are requested to bring their attendance slip along with their copy of Annual Report to the Meeting.

e. In case of joint holders attending the Meeting only such joint holder which is higher in the order of names will be entitled to vote.

f. Documents relating to any of the items mentioned in the Notice and the Explanatory Statement thereto are open for inspection at the Registered Office of the Company on all working days during business hours up to the date of the Meeting.

g. The dividend on equity shares, if declared, will be payable within five days from the date of Annual General Meeting on or after September 30, 2014, to those members whose names stand on the Register of Members of the Company.

h. The Register of Members and Transfer Book of the Company will remain close from Tuesday, September 23, 2014 to Tuesday, September 30, 2014 (both days inclusive).

i. Members are requested to intimate to the Company queries, if any, regarding the accounts/notices at least seven days before the Annual General Meeting to enable the management to keep the information ready at the meeting.

j. Members are requested to notify immediately of any change in their address to the Company. Members holding shares in electronic form are advised to notify any change in their address to the concerned depository participants.

k. Pursuant to Section 125 of the Companies Act, 2013, the Company is not having any unclaimed or unpaid dividends liable to be transferred to the Investors Education and Protection Fund.

l. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are therefore, requested to submit the PAN to their depository participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company.

m. As per the provisions of the Companies Act, 2013, facility for making nomination is available for the Members in respect of the shares held by them. Nomination forms can be obtained from the Company's Share Registrars and Transfer Agents by Members holding shares in physical form. Members holding shares in electronic form may obtain Nomination forms from their respective Depository Participant.

n. The relevant details of Directors seeking re-appointment/ appointment under Item Nos. 5 to 11 pursuant to Clause 49 of the Listing Agreements entered into with the stock exchanges the following particulars of Directors who is appointed /re-appointed i.e. Mr. Nitin M. Shah, Mr. Rahul N. Shah, Mr. Kunal N. Shah, Mr. K. K. Jha, Mr. S. K. Dheri and Mr. Ramakant M. Nayak are as under.

Mr. Nitin M. Shah aged 57 years is a founder and driving force behind the Company and he has a Diploma in Mechanical Engineering. After completing his Diploma in Mechanical Engineering in 1975, he joined his family business namely Zenith Fire Services which was into manufacturing of fire extinguishers. Subsequently, he did his training in BRK Electronics U.S.A. which is one of the largest manufacturers of smoke detectors. He set up Nitin Fire in 1995 and more than 3 decades of experience in fire fighting equipment business. With a hands-on managerial style, he is the guiding light for the Company.

Mr. Nitin M. Shah, Director of the Company is one of the promoter holds 45089126 shares (20.44%) in the equity share capital of the Company. Mr. Nitin M. Shah is a father of Mr. Rahul N. Shah and Mr. Kunal N. Shah, Directors of the Company. He has no relationship with any other managerial personnel.

Mr. Rahul N. Shah aged 35 years is a commerce graduate and holds a Diploma in Business Management. He gained experience in commissioning and installation of fire detection and alarm systems as well as gas suppression systems. In 1998, he took the training of HFC 227EA gas suppression systems at Fike South-east Asia Pte, Singapore and in 1999, the training of addressable fire alarm systems from

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Apollo Fire Detectors Ltd. in U.K to improve the quality of fire alarm systems. All import transactions and dealings are done under his supervision. He is also responsible for materials management.

Mr. Rahul N. Shah, Director of the Company is one of the promoter holds 14123500 shares (6.40%) in the equity share capital of the Company. Mr. Rahul N. Shah is a son of Mr. Nitin M. Shah Chairman and Director and brother of Mr. Kunal N. Shah, Director of the Company. He has no relationship with any other managerial personnel.

Mr. Kunal N. Shah aged 29 years is a Bachelor of Engineering in Electronics and Tele Communications from Padmabhushan Vasantdada Patil Prathisthans College of Engineering. He has experience in assembling, testing and functioning of CNG dispensers for CNG fuel vehicles.

Mr. Kunal N. Shah, Director of the Company is one of the promoter holds 23004750 shares (10.49%) in the equity share capital of the Company. Mr. Kunal N. Shah is a son of Mr. Nitin M. Shah, Chairman and Director and brother of Mr. Rahul N. Shah, Director of the Company. He has no relationship with any other managerial personnel.

Mr. K. K. Jha is a Non-Executive Director of the Company since April 10, 2006 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. K. K. Jha holds a degree of Mechanical Engineer and a member of the Fellow of Institution of Engineers (FIE) India. Previously, he was an Executive Director (Health Safety & Environment) of Gas Authority of India Limited (GAIL) and has more than 40 years of experience in the areas of project management, operations and maintenance, administration and health safety and environment related activities.

Mr. R. M. Nayak is a Non-Executive Director of the Company since April 12, 2010 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. R. M. Nayak holds a degree in science and law and a Diploma in Marketing and Advertising. He is also a certified associate of Indian Institute of Banking. He has more than 45 years of experience in the area of investment advisory and banking industry. Mr. Nayak has been associated with various banking and advisory companies such as Sun Global Investments Limited, London, Sun Capital Advisory, Lord Krishna Bank (Now merged with HDFC Bank Limited) and Lakshmi Vilas Bank through which he contributed in the areas of banking, finance, economy, human resources, business strategy and risk management.

Mr. S. K. Dheri is a Non-Executive Director of the Company since May 29, 2012 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. S. K. Dheri has worked as the CFO with the Delhi Fire Services and has also been former President of Institution of Fire Engineers (India) Council & Honorary Member of Commonwealth and overseas Fire Services Association, U.K. and the Chairman of National Building Code Part – IV of Bureau of Indian Standards, his contribution has been praiseworthy. He also worked as Fire Expert for formulation of new building bye-laws for Municipal Corporation of Delhi in 2005 and also served as a Director of International Fire Chiefs' Association of Asia From 1984-2001.

o. Members / Proxies should bring the attendance slips filled in for attending the meeting.

p. Process and manner for members opting for e-voting are as under:

In compliance with the provisions of Section 108 of the Companies Act, 2013, read with Rule 20 of The Companies (Management and Administration) Rules, 2014, the Company is pleased to provide to the Members the facility to exercise their right to vote at the 19th Annual General Meeting (AGM) by electronic means and the business may be transacted through e-voting services provided by Central Depository Services Ltd. (CDSL).

The instructions for e-voting are as under:

(i) The voting period begins on September 22, 2014 from 8.00 a.m and ends on September 29, 2014 till 6.00 p.m. During this period shareholders' of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of August 22, 2014, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) The shareholders should log on to the e-voting website www.evotingindia.com.

(iii) Click on Shareholders.

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

(vii) If you are a first time user follow the steps given below:

(viii) After entering these details appropriately, click on “SUBMIT” tab.

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(ix) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) If Demat account holder has forgotten the same password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xviii) Note for Non – Individual Shareholders and Custodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details they have to create a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xix) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].

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For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)• Members who have not updated their PAN with the Company/Depository Participant are requested to use the

first two letters of their name and the 8 digits of the folio/client id number in the PAN field.• In case the folio number is less than 8 digits enter the applicable number of 0's before the number after the first

two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with folio number 1 then enter RA00000001 in the PAN field.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.

• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the number of shares in the Dividend Bank details field.

DividendBank Details#

Annexure to the Notice

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013.

Item No. 5:

Appointment of Mr. K. K. Jha as an Independent Director

Mr. K. K. Jha is a Non-Executive Director of the Company since April 10, 2006 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. K. K. Jha holds a degree of Mechanical Engineer and a member of the Fellow of Institution of Engineers (FIE) India. Previously, he was an Executive Director (Health Safety & Environment) of Gas Authority of India Limited (GAIL) and has more than 40 years of experience in the areas of project management, operations and maintenance, administration and health, safety and environment related activities.

As per the provisions of Section 149 of the Act which has come into force with effect from April 1, 2014, an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation.

Mr. K. K. Jha has given a declaration to the Board that he meets the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, Mr. K. K. Jha fulfills the conditions specified in the Act and the Rules made there under for appointment as an Independent Director and he is independent of the management.

The matter regarding the appointment of Mr. K. K. Jha as an Independent Director was placed before the Nomination & Remuneration Committee which re-commends his appointment as an Independent Director for a period of five years from the date of the Annual General Meeting i.e. up to September 29, 2019.

In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. K. K. Jha as an Independent Director is now being placed before the Members in General Meeting for their approval.

The terms and conditions of appointment of Mr. K. K. Jha, pursuant to the provisions of Schedule IV of the Act, shall be open for inspection at the Registered Office of the Company by any Member during normal business hours on any working day of the Company.

Mr. K. K. Jha is interested and concerned in the Resolution mentioned at Item No. 5 of the Notice. Other than Mr. K. K. Jha, no other Directors, key managerial personnel or their respective relatives are concerned or interested in the Resolution mentioned at Item No. 5 of the Notice.

Item No. 6:

Appointment of Mr. R. M. Nayak as an Independent Director

Mr. R. M. Nayak is a Non-Executive Director of the Company since April 12, 2010 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. R. M. Nayak holds a degree in science and law and a Diploma in Marketing and Advertising. He is also a certified associate of Indian Institute of Banking. He has more than 45 years of experience in the area of investment, advisory and banking industry. Mr. Nayak has been associated with various banking and advisory companies such as Sun Global Investments Limited, London, Sun Capital Advisory, Lord Krishna Bank (Now merged with HDFC Bank Limited) and Lakshmi Vilas Bank through which he contributed in the areas of banking, finance, economy, human resources, business strategy and risk management.


Mr. R. M. Nayak has given a declaration to the Board that he meets the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, Mr. R. M. Nayak fulfills the conditions specified in the Act and the Rules made there under for appointment as an Independent Director and he is independent of the management.

The matter regarding the appointment of Mr. R. M. Nayak as an Independent Director was placed before the Nomination & Remuneration Committee which recommends his appointment as an Independent Director for a period of five years from the date of the Annual General Meeting i.e. up to September 29, 2019.

In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. R. M. Nayak as an Independent Director is now being placed before the Members in General Meeting for their approval.

The terms and conditions of appointment of Mr. R. M. Nayak pursuant to the provisions of Schedule IV of the Act, shall be open for inspection at the Registered Office of the Company by any Member during normal business hours on any working day of the Company.

Mr. R. M. Nayak is interested and concerned in the Resolution mentioned at Item No. 6 of the Notice. Other than Mr. R. M. Nayak, no other Directors, key managerial personnel or their respective relatives are concerned or interested in the Resolution mentioned at Item No. 6 of the Notice.

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Item No. 7:

Appointment of Mr. S. K. Dheri as an Independent Director

Mr. S. K. Dheri is a Non-Executive Director of the Company since May 29, 2012 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. S. K. Dheri has worked as the CFO with the Delhi Fire Services and has also been former President of Institution of Fire Engineers (India) Council & Honorary Member of Commonwealth and overseas Fire Services Association, U.K. and the Chairman of National Building Code Part – IV of Bureau of Indian Standards, his contribution has been praiseworthy. He also worked as Fire Expert for formulation of new building bye-laws for Municipal Corporation of Delhi in 2005 and also served as Director of International Fire Chiefs’ Association of Asia From 1984-2001.


Mr. S. K. Dheri has given a declaration to the Board that he meets the criteria of independence as provided under Section 149 (6) of the Act. In the opinion of the Board, Mr. S. K. Dheri fulfils the conditions specified in the Act and the Rules made there under for appointment as an Independent Director and he is independent of the management.

The matter regarding the appointment of Mr. S. K. Dheri as an Independent Director was placed before the Nomination & Remuneration Committee which recommends his appointment as an Independent Director for a period of five years from the date of the Annual General Meeting i.e. up to September 29, 2019.

In compliance with the provisions of Section 149 read with Schedule IV of the Act, the appointment of Mr. S. K. Dheri as an Independent Director is now being placed before the Members in General Meeting for their approval.

The terms and conditions of appointment of Mr. S. K. Dheri pursuant to the provisions of Schedule IV of the Act, shall be open for inspection at the Registered Office of the Company by any Member during normal business hours on any working day of the Company.

Mr. S. K. Dheri, is interested and concerned in the Resolution mentioned at Item No. 7 of the Notice. Other than Mr. S. K. Dheri, no other Directors, key managerial personnel or their respective relatives are concerned or interested in the Resolution mentioned at Item No. 7 of the Notice.

Item No. 8 & 9:

To consider the appointment and Fix remuneration of Mr. Rahul N. Shah, Whole-time Director

Mr. Rahul N. Shah is appointed as an additional and Whole-time Director of the company on August 14, 2014, for a term of three years. With the expansion of the business of the Company and the additional responsibility shoulder on the Whole-time Director, the Nomination and Remuneration Committee and Board of Directors have decided the remuneration payable to Mr. Rahul N. Shah, subject to approval by the shareholders of the Company. Mr. Rahul N. Shah, Whole-time Director looks after all plants, manufacturing /production and marketing in India. He also looks after Finance and statutory compliances of the company. The remuneration is justified by the Board and recommends passing of a Special Resolution at item no. 9.

Remuneration proposed:

Details of remuneration proposed for Mr. Rahul N. Shah, Whole-time Director for a period of three years with effect from August 14, 2014 to August 13, 2017, have been fully set out in the Special Resolution at item No. 9 of the accompanying notice.

The Board recommends passing of the resolutions as set out in item No. 8 & 9 of the accompanying notice.

Your Directors recommend the approval of proposed resolutions by the Members by way of an Ordinary Resolution and a Special Resolution.

None of the Directors except Mr. Rahul N. Shah, himself, Mr. Nitin M Shah and Kunal N. Shah as relatives of Mr. Rahul N. Shah, considered as an interested Directors in the above resolutions.

Item No. 10 & 11:

To consider the appointment and Fix remuneration of Mr. Kunal N. Shah, Whole-time Director

Mr. Kunal N Shah is appointed as an additional and Whole-time Director of the company on August 14, 2014, for a term of three years. With the expansion of the business of the Company and the additional responsibility shoulder on the Whole-time Director, the Nomination and Remuneration Committee and Board of Directors have decided the remuneration payable to Mr. Kunal N. Shah subject to approval by the shareholders of the Company. Mr. Kunal N. Shah, Whole-time Director looks after all plants, manufacturing /production and marketing in India. He also looks after Finance and statutory compliances of the company. The remuneration is justified by the Board and recommends passing of a Special Resolution at item no. 11.

Remuneration proposed:

Details of remuneration proposed for Mr. Kunal N. Shah, Whole-time Director for a period of three years with effect from August 14, 2014 to August 13, 2017, have been fully set out in the Special Resolution at item No. 11 of the accompanying notice.

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The Board recommends passing of the resolutions as set out in item No. 10 & 11 of the accompanying notice.

Your Directors recommend the approval of proposed resolutions by the Members by way of an Ordinary Resolution and a Special Resolution.

None of the Directors except Mr. Kunal N. Shah, himself, Mr. Nitin M Shah and Rahul N. Shah as relatives of Mr. Kunal N. Shah considered as an interested Directors in the above resolutions .

Item No. 12:

Authority to borrow funds:

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`

Item No. 13:

Consent for delay in investment made from moneys received under the Initial Public Offer in the year 2007

` ``

`

` `

`

The Members of the Company are informed that at the Extra Ordinary General Meeting of the Company held on November 10, 2003, the Company had accorded its consent under Section 293 (1) (d) of the Companies Act, 1956, to the Directors borrowing monies upto a limit of 50.00 Crores (apart from temporary loans obtained from the Company's bankers in the ordinary course of business). As the Company is planning

to raise further funds towards funding requirements and approaching Financial Institutions and Banks for availing Term Loans and Working Capital facilities for its expansion of business activities, it was felt necessary to authorize the Board of Directors to borrow further sums of money amounting to a sum of not exceeding 505.00 Crores thereby raising the total borrowing limit from 50.00 Crores (Rupees Fifty Crores only) to 555.00 Crores (Rupees Five Hundred Fifty Five Crores Only).

Under the erstwhile Section 293 (1) (d) of the Companies Act, 1956, the Board of Directors of a Company could with the consent of the shareholders obtained by an Ordinary Resolution borrow moneys apart from temporary loans obtained from the Company's Bankers in the ordinary course of business in excess of the aggregate of paid-up capital and free reserves of the Company that is to say reserves not set apart for any specific purpose.

Under the provisions of Section 180 (1) (c) of the Companies Act, 2013, the above powers can be exercised by the Board only with the consent of the shareholders obtained by a Special Resolution. Hence, it is necessary to obtain fresh approval of the shareholders by means of a Special Resolution to enable the Board of Directors of the Company to borrow moneys apart from temporary loans obtained from the Company's Bankers in the ordinary course of business in excess of the aggregate of paid-up share capital and free reserves of the Company which have not been set

apart for any specific purpose provided that the total amount upto which the moneys may be borrowed shall not exceed 555.00 Crores (Rupees Five Hundred Fifty Five Crores only) at any point of time on account of the principal.”

The Board recommends the Resolution at Item No.12 of the Notice for approval of the shareholders by a Special Resolution.

None of the Directors and key managerial personnel of the Company or their respective relatives are concerned or interested in the Resolution mentioned at Item No.12 of the Notice.

The Company during the year 2007, came out with the Initial Public Offer (IPO) for 64.47 Crores divided into 33,93,141 equity shares of 10/- each, for a price at 190/- per share, with the object to utlise the IPO amount in the following :

1) Investment in Nitin Cylinder Ltd. - 56.87 Crores (Subsidiary Company)

2) Public Issue Expenses - 5.26 Crores3) General corporate purpose - 2.34 Crores

--------------------Total - 64.47 Crores

============

There was a delay of 1 (one) year in the project implementation and starting of the commercial production i.e. it was to start from October 2007 as per Red Herring Prospectus, but, actually started in the third quarter of the year 2008-2009. In this connection, the Company has not obtained the approval of its shareholders in its general meeting for variation of utilization of IPO money/schedule of completed pursuant to Section 61 of the Companies Act, 1956 in the year 2008-2009. In view of the above, the consent of the Members of the Company is sought under section 27 of the Companies Act, 2013 (erstwhile Section 61 of the Companies Act, 1956).

The Resolution as set out in item No.13 of the Notice will be placed before the Meeting for the approval of the Members.

Your Directors recommend the approval of proposed resolution by the Members by way of a Special Resolution.

None of the Directors of the Company is concerned or interested in the proposed resolution.

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Item No. 14:

Giving of loan or guarantee or providing security exceeding 60% of the paid-up capital, free reserves & share premium account of the Company:

`

`

Item No. 15:

To consider issue of further share capital by the Company

The Company proposes to raise funds upto USD 100 Million (United States Dollars Hundred Million Only) or its Indian Rupee equivalent inclusive of such premium as may be finalized by the Board in one or more tranches through public issues and/or on a private placement basis and/or QIP within the meaning of the SEBI Regulations and/or preferential issue and/or any other kind of public issue and/or private placement as may be permitted under applicable laws, form time to time. The resolution contained in the business of the Notice related to a proposal by the Company to create, offer, issue and allot equity shares and/or such other securities as stated in the Special Resolution (the “Securities”) which seeks to empower the Board of Directors (hereinafter referred to as “Board” which include any Committee thereof whether constituted or to be constituted) to undertake such issue or offer of securities.

1. Objects of the issue

• To acquire or establish company/companies in India and/or abroad • To repay its debt obligations and strengthen the capital base of the Company and• General corporate purposes.

2. Pricing

In case of an issue of Securities to Qualified Institutional Buyers/Preferential Allotment pursuant to the SEBI Regulations, the issue price of Securities shall be at a price being not less than the price calculated in accordance with the SEBI Regulations as may be amended from time to time and the Relevant Date in this regard shall be the date on which the Board decides to open the issue of securities or such other time as may be allowed by SEBI Regulations, from time to time.

In case of a QIP pursuant to Chapter VIII of SEBI (ICDR) Regulations, 2009, the allotment of Securities shall be completed within twelve months from the date of passing of this shareholders resolution.

In case of issue of ADRs/GDRs, the issue price shall be at a price being not less than the price calculated in accordance with applicable laws including the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993, as may be amended from time to time.

3. Instrument s and other terms and conditions

The detailed terms and conditions for the offer will be determined by the Board in consultation with Advisors Lead Manager(s)/Book Runners / Underwriters and such other authority or authorities as may be required to be consulted by the Company considering the

To achieve substantial inorganic growth and to capture emerging business opportunities for growth, the Company is actively contemplating to acquire at an opportune time Overseas Corporate/bodies engaged in the fire protection systems and product business which necessitates financial flexibility as to investment in the area of business besides best utilisation of surplus funds available with the Company from time to time, it is proposed to authorise the Board of Directors of the Company to invest into securities of any body corporate and/or make loan(s) and/or give any guarantee(s)/provide any security(ies) in connection with loan(s) made upto 555.00 Crores (Rupees Five Hundred Fifty Five Crores Only).

In case investments in shares and securities of other body corporates along with loans to any other body corporate or guarantee or security, in connection with a loan made by any other person to or to any other person by, any body corporate together with existing investments, loans provided or guarantees given is expected to exceed the limit fixed pursuant to Section 186 of the Companies Act, 2013, of 60% of the paid-up share capital, free reserves and Securities Premium Account of the Company or 100% of free reserves and securities premium account of the Company, whichever is more, at any point of time, the Company needs to obtain the approval of the Members by way of a special resolution.

The consent of the Members of the Company are being sought by way of a special resolution, authorizing the Board of Directors to make investment in shares, debentures, securities of other body corporates and/or various schemes of mutual funds and/or other funds in excess of 60% of the paid up Share Capital and Free Reserves and Securities Premium Account of the Company or 100% of Free Reserves and securities premium account of the Company, whichever is more, as prescribed under Section 186 of the Companies Act, 2013, from time to time, in one or

more tranches, upto a maximum amount of 555.00 Crores (Rupees Five Hundred Fifty Five Crores Only), notwithstanding that investments along with company's existing loans or guarantee(s)/security(ies) or investments shall be in excess of the limits prescribed under Section 186 aforesaid.

The Resolution as set out in Item No.14 the Notice will be placed before the Meeting for the approval of the Members.

Your Directors recommend the approval of proposed resolution by the Members by way of a Special Resolution.

None of the Directors of the Company is concerned or interested in the proposed resolution.

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prevailing market conditions and other relevant factors.

The issue/ allotment/ conversion would be subject to the availability of regulatory approvals, if any. The conversion of Securities held by foreign investors into shares would be subject to the applicable foreign investment limits.

The Special Resolution seeks to give the Board and/or Committee authorized by the Board, powers to issue Securities in one or more tranche or tranches at such time/times and to such person(s) including institutions incorporated bodies and/or individuals or otherwise as the Board may in its absolute discretion deem fit.

The consent of the shareholders is being sought pursuant to the provisions of Section 40, 41, 42, 62 and other applicable provisions of the Companies Act, 2013 and in terms of the provisions of the Listing Agreement executed by the Company with Stock Exchanges where the Equity Shares of the Company are listed.

The Special Resolution if passed will have the effect of allowing the Board and/or the Committee authorized by the Board to issue and allot Securities to the investors who may or may not be the existing shareholders of the Company and the Board and/or the Committee authorized by the Board will have the power to decide the date of opening of the issue.

For reasons aforesaid an enabling resolution is proposed for consideration of the shareholders to give adequate flexibility and discretion to the Board to finalize the terms of the issue of Specified Securities.

The Board believes that the issue of Specified Securities to investors who are not shareholders of the Company is in the interest of the Company and therefore recommends the resolution for your approval. The Directors recommend the special resolution No. 15 for your approval.

None of the directors of the Company are concerned or interested in the resolution except to the extent of their shareholding is affected.

Item No. 16:

Appointment of Cost Auditor:

The Board on the recommendation of the Audit Committee, has approved the appointment and remuneration of Mr. Vinayak Kulkarni, Cost Auditors to conduct the audit of the cost records of the Company for the financial year ending March 31, 2015.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company.

Accordingly consent of the members is sought for passing an Ordinary Resolution as set out at Item No. 16 of the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2015.

None of the Directors / Key Managerial Personnel of the Company / their relatives are in any way concerned or interested financially or otherwise in the resolution set out at Item No. 16 of the Notice.

The Board recommends the Ordinary Resolution set out at Item No. 16 of the Notice for approval by the shareholders.

Item No. 17:

Authority to create charges etc.

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Under the erstwhile Section 293 (1) (a) of the Companies Act, 1956, the Board of Directors of a Company could with the consent of the shareholders obtained by an Ordinary Resolution create charge/ mortgage/ hypothecation on the Company's assets, both present and future, in favour of the lenders/ trustees for the holders of debentures/ bonds to secure the repayment of moneys borrowed by the Company (including temporary loans obtained from the Company's Bankers in the ordinary course of business).

Under the provisions of Section 180 (1) (a) of the Companies Act, 2013, the above powers can be exercised by the Board only with the consent of the shareholders obtained by a Special Resolution. As such it is necessary to obtain approval of the shareholders by means of a Special Resolution to enable the Board of Directors of the Company to create charge/ mortgage/ hypothecation on the Company's assets, both present and future, in favour of the banks / financial institutions / insurance companies / other lending / investing / investing agencies / bodies corporate /lenders / trustees for the holders of debentures/ bonds to secure the repayment of moneys borrowed by the Company (including temporary loans obtained from the Company's Bankers in the ordinary course of business). As the documents to be executed between the Company and the lenders/ trustees for the holders of debentures/ bonds may contain the power to take over the management of the Company in certain events, it is necessary to obtain Members' approval under Section 180 (1) (a) of the Companies Act, 2013, by way of a Special Resolution.

The total amount upto which the moneys may be borrowed shall not exceed 555.00 Crores (Rupees Five Hundred Fifty Five Crores only) at any point of time on account of the principal.”

The Board recommends the Resolution at Item No. 17 of the Notice for approval of the shareholders by a Special Resolution.

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None of the Directors and key managerial personnel of the Company or their respective relatives are concerned or interested in the Resolution mentioned at Item No.17 of the Notice.

The Articles of Association (“AoA”) of the Company as presently in force since 1995. The existing AoA are based on the Companies Act, 1956, and several regulations in the existing AoA contain references to specific sections of the Companies Act, 1956, and some regulations in the existing AoA are no longer in conformity with the Act.

The Companies Act, 2013, (the Act) is now largely in force. On September 12, 2013, the Ministry of Corporate Affairs (“MCA”) had notified 98 Sections for implementation. Subsequently, on March 26, 2014, MCA notified most of the remaining Sections. However, substantive sections of the Act which deal with the general working of companies stand notified.

With the coming into force of the Act, several regulations of the existing AoA of the Company require alteration or deletions in several articles. Given this position, it is considered expedient to wholly replace the existing AoA by a new set of Articles.

The new AoA to be substituted in place of the existing AoA, which is based on Table 'F' of the Act which sets out the model articles of association for a company limited by shares.

The proposed new draft AoA is being uploaded on the Company's website for perusal by the shareholders.

None of the Directors / Key Managerial Personnel of the Company / their relatives are in any way concerned or interested financially or otherwise in the Special Resolution set out at Item No. 18 of the Notice.

The Board recommends the Special Resolution set out at Item No. 18 of the Notice for approval by the shareholders.

Item No. 18:

Alteration of Articles of Association

Item No. 19 to 26:

Entering into contracts with Related Parties:

Pursuant to the provision of section 188 and all other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014, the consent of the Members are being sought to authorize the Board of Directors of the Company to enter into various contracts for purchase and sale of goods and services and reimbursement of expenses as detailed in Item No. 19 to 26 (both inclusive) with the parties / contractee companies viz. (1) Eurotech Cylinders Private Limited, (2) New Age LLC, (3) Mr. Nitin M. Shah, (4) Nitin Global Pte. Ltd. Singapore, (5) Nitin Ventures LLC, (6) Mrs. Saroj N. Shah, (7) Worthington Nitin Cylinders Private Limited and (8) Firetec Systems Limited, for a period of 3 (three) years commencing from April 1, 2014 to March 31, 2017 (both days inclusive) for the total value of estimated value as mentioned in resolutions No. 19 to 26 above.

Further, the Board of Directors of the Company at their Board Meeting held on Thursday, August 14, 2014, has recommended to the Members to pass special resolutions under section 188 of the Companies Act 2013, as mentioned in Resolutions No. 19 to 26 of the Notice.

Your Directors recommend Special Resolutions No. 19 to 26 for your approval.

None of the Directors except Mr. Nitin M. Shah, Mr. Rahul N. Shah, Mr. Kunal N. Shah and Mr. K. H. Vaidyanathan, is concerned or interested in the resolutions.

For and on Behalf of the Board

Mumbai Sd/-August 14, 2014 Abhishek Shrivastava Company Secretary

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Name of Directors

Date of Birth

Date of Appointment

Expertise in specific functional areas

Qualifications

No. of shares held in the Company

List of companies in which Directorship held as on 31.03.2014

Chairman/ Member of the Mandatory Committees of the Board of the companies on which he is a Director as on 31.03.2014

Mr. R. M. Nayak

30/06/1945

12/04/2010

He has degrees in science and law and a Diploma in Marketing and Advertising. He is also a certified associate of Indian Institute of Banking. He has more than 45 years of experience in the area of investment advisory and banking industry. Mr. Nayak has been associated with various banking and advisory companies such as Sun Global Investments Limited, London, Sun Capital Advisory, Lord Krishna Bank (Now merged with HDFC Bank Limited) and Lakshmi Vilas Bank through which he contributed in the areas of banking, finance, economy, human resources, business strategy and risk management.

Degrees in Science and Law and Diploma in Marketing

Nil

Sun Capital Advisory Services Private LimitedSunteck Realty LimitedShree Pushkar Chemicals & Fertilisers LimitedPlexus Capital Ventures Private LimitedPoddar Developers LimitedFolksreise Tours Private LimitedAshapura Intimates Fashion Limited

Folksreise Tours Private Limited

Sun Capital Advisory Services Private Limited

Ashapura Intimates Fashion Limited

Shree Pushkar Chemicals & Fertilisers Limited

Poddar Developers Limited

Sunteck Realty Limited

Mr. K.K. Jha

18/08/1945

10/04/2006

He is a Mechanical Engineer and a member of the Fellow of Institution of Engineers (FIE) India. Previously, he was an Executive Director (Health Safety & Environment) of Gas Authority of India Limited (GAIL) and has more than 40 years of experience in the areas of project management, operations and maintenance, administration and health safety and environment related activities.

Mechanical Engineer

Nil

Nil

Nil

Mr. S.K. Dheri

23/11/1941

29/05/2012

He has worked as the CFO with the Delhi Fire Services and has also been former President of Institution of Fire Engineers (India) Council & Honorary Member of Commonwealth and overseas Fire Services Association, U.K. and the Chairman of National Building Code Part – IV of Bureau of I n d i a n S t a n d a r d s h i s c o n t r i b u t i o n h a s b e e n praiseworthy. He also worked as Fire Expert for formulation of new building bye-laws for Municipal Corporation of Delhi in 2005 and also served as Director of International Fire Chiefs’ Association of Asia From 1984-2001.

An alumni of Govt. College, Ajmer, Rajasthan.

Graduate from Institute of Fire Engineers, India

Advance Diploma in Fire Safety, Nagpur.

Passed Group Training Course in Fire Service Administration at Japan under Colombo Plan.

Nil

DLF Info City Developers (Chennai) LimitedDLF Info City Developers Chandigarh LimitedDLF Info City Developers Kolkata LimitedSecurity Skills Council (India) Limited

Nil

Details of Directors seeking appointment/ re-appointment at the forthcoming Annual General Meeting(Pursuant to Clause 49 of the Listing Agreement)

719


Name of Directors

Date of Birth

Date of Appointment

Expertise in specific functional areas

Qualifications

No. of shares held in the Company

List of companies in which Directorship held as on 31.03.2014

Chairman/ Member of the Mandatory Committees of the Board of the companies on which he is a Director as on 31.03.2014

Rahul N. Shah

01/02/1978

14/08/2014

Commissioning and installation of fire detection and alarm systems as well as gas suppression systems. In 1998, he took the training of HFC 227EA gas suppression systems at Fike South-east Asia Pte, Singapore and in 1999, the training of addressable fire alarm systems from Apollo Fire Detectors Ltd. in U.K to improve the quality of fire alarm systems.

Graduate in Commerce & Diploma in Business Management

14123500

Integrated Rural Services Private LimitedInnova Finance Corporation Private LimitedEurotech Cylinders Private LimitedNitin Fire Protection Appliances Private LimitedNitin Fire Protection Systems Private Limited

Nil

Nitin M. Shah

10/06/1957

01/04/2006

More than 3 decades of experience in fire fighting equipment business

Diploma in Mechanical Engineering

44289126

Alliance Pharma -Chem Private LimitedAanant Developers Private LimitedAanant Realities Pvt LtdWorthington Nitin Cylinders Private LimitedParin Constructions Company Private LimitedNitin Trusteeship Company Private Limited

Nil

Kunal N. Shah

13/11/1984

14/08/2014

H e h a s e x p e r i e n c e i n a s sembl ing t e s t i ng and functioning of CNG dispensers for CNG fuel vehicles.

Engineer in Electronics and Tele Communications

23004750

Alliance Pharma -Chem Private LimitedWorthington Nitin Cylinders Private LimitedInnova Finance Corporation Private LimitedN i t i n F i r e P r o t e c t i o n Appliances Private LimitedNitin Fire Protection Systems Private Limited

Nil

Details of Directors seeking appointment/ re-appointment at the forthcoming Annual General Meeting(Pursuant to Clause 49 of the Listing Agreement

720


Directors' Report

To the Members

Nitin Fire Protection Industries Limited

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

FINANCIAL RESULTS

Accounting Policy

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

Summarised Profit and Loss Statement

7


DIVIDEND

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

BUY-BACK OF SHARES

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

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

RESERVE AND SURPLUS

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

OPERATION RESULTS AND BUSINESS

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

The performance of your Company during the year under report has registered an improvement over the previous year. Total income during the year ended March 31, 2014, stood at 45664.73 lacs registering an increase of 25.84% as compared to the previous year. As per the Consolidated

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21

Particulars

For the year For the year For the year For the year2013-14 2012-13 2013-14 2012-13

Standalone Consolidated

(` in lacs)


Sales & other income 45664.73 36286.29 101801.70 72293.54Profit before depreciation, amortization & tax 1496.09 2325.18 8014.83 7099.74Depreciation/amortization 116.20 105.01 1058.64 473.16Profit before tax 1379.89 2220.17 6956.19 6626.58Provision for income tax including deferred tax & wealth tax 241.18 446.34 263.49 469.93Tax adjustments of earlier years (net) 41.14 19.98 40.29 19.98Profit after tax 1097.57 1753.85 6652.41 6136.68Add: Share of (loss)/profit in an associate - - - (435.98)Profit brought forward from previous year 4893.93 3656.15 21020.03 15835.41Profit available for appropriation 5991.50 5410.00 27672.44 21536.11APPROPRIATIONSTransferred to General Reserve - - - -Proposed dividend 438.41 441.10 438.41 441.10Corporate dividend tax on proposed dividend 74.51 74.97 74.51 74.97Surplus carried forward to Balance Sheet 5478.58 4893.93 27159.52 21020.03

Financial Statements total income was 101801.71 lacs registering an increase of 40.82% as compared to the previous year. The working of the Company is considered satisfactory. Barring unforeseen circumstances, the Board of Directors are hopeful of better performance of the Company during the current year.

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

Cost Audit Report

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

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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

Eurotech Cylinders Private Limited, India (ECPL)

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

Nitin Venture, FZE, UAE (NV)

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

Firetec Systems Limited, UK

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

New Age LLC, UAE (NA)

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

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

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

Nitin Global Pte Limited, Singapore (NGPL)

NGPL was incorporated in July, 2009, to meet the demands of South-East Asian market and for providing simple standalone conventional to

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22


intelligent integrated fire protection solutions backed by a product portfolio consisting of complete spectrum of fire and safety products with international approvals. NGPL is strategically placed to be an international one stop source to discerning customers for conventional to intelligent standalone / integrated fire detection systems, water and gas based fire extinguishing systems, gas detection systems, CCTV access control & intrusion detection systems, high pressure storage cylinders & accessories and integrated building management systems.

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

ANNUAL REPORT OF SUBSIDIARY COMPANIES

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

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

FIXED DEPOSITS

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

Changes in Independent Directors

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

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

Changes in Key Managerial Personnel

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

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

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

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

23


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

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

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

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

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

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

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

WEBSITE OF THE COMPANY:

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

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

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

Ø Letter of appointment of the Independent Directors

INSURANCE

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

EMPLOYEES

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

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

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

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

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

24


66,00,000/- Bachelor in Computer Science

December 1, 2012Partho Roy Director- Marketing

(Responsible for Marketing on all India basis Marketing for fire safety systems)

48 28 New Age LLC, UAE

Name Age Designation &

Nature of dutiesRemuneration Received ( )`

Qualification Experience (in years)

Date of commencement of employment

Particulars of pervious employers

57 1,32,48,000/- Diploma in Mechanical Engineering

NoneMarch 16, 200638Nitin M. Shah (*)

Chairman and Managing Director

(Managing day to day activities and business development activities)

INTERNAL AUDITOR

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

RISK AND CONCERNS

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

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

ii. Appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the Profit for that period;

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

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

AUDITORS

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

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

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

AUDITOR'S REPORT

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

EXPLANATION TO THE AUDITORS OBSERVATION:

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

Auditors Qualification: Para (A) of the Auditors Report: As more fully explained in Note No 34 to the notes to the financial statements, no provision has been made by the Company in respect of its dispute with a bank for claim made by the bank for ` 50,133,481/- on a derivative contract entered into by its erstwhile subsidiary (now an associate), the liability for which has been taken over by the Company. The Company has not determined the quantum of mark to market losses as of the balance sheet date on the above contract and have relied on a legal opinion in the matter wherein, no liability is expected. Pending final settlement of the matter, we are unable to quantify the extent of provision required, if any, in this regard.

Managements Reply: Consequent to part sale of equity stake in an erstwhile subsidiary in December, 2010, the Company has taken over an outstanding claim of a derivative contract amounting to ` 501.33 Lacs (excluding interest). Based on a legal opinion the Company has filed a petition in the Hon'ble High Court of Bombay challenging the legality of the contract. Pending decision, no provision is made in the books of account for this claim.

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

25


Management Reply:

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

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

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

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

Managements Reply: Consequent to part sale of equity stake in an erstwhile subsidiary in December, 2010, the Company has taken over an outstanding claim of a derivative contract amounting to 501.33 Lacs (excluding interest). Based on a legal opinion, the Company has filed a petition in the Hon'ble High Court of Bombay challenging the legality of the contract. Pending decision, no provision is made in the books of account for this claim.

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

Management reply:

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

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

MANAGEMENT DISCUSSION AND ANALYSIS

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

CORPORATE GOVERNANCE REPORT

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

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

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

ACKNOWLEDGMENTS

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


Sd/- Nitin M Shah

Chairman & Director

26


MumbaiAugust 14, 2014

ANNEXURE TO DIRECTORS' REPORT

INFORMATION UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN REPORT OF THE BOARD OF DIRECTORS) RULES, 1988, AND FORMING PART OF DIRECTORS' REPORT FOR THE YEAR ENDED MARCH 31, 2014:

A. CONSERVATION OF ENERGY:

Energy conservation measures taken;Ø The Company has been taking from time to time measures as deemed necessary and advisable for conservation of power.Ø Impact of above measures: This enables the Company to reduce energy consumption which in turn helps to reduce the production costs.Ø Total energy consumption per unit of production in prescribed Form - A

Form – A

B. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

1. Research & Development (R&D): Ø Improvement / modification of processes and technologyØ Reduction in consumption of materialØ Development of new products

2. Benefits derived as a result of above R&D:Ø Cost reductionØ Technology up gradation

3. Future plan of action & expenditure on R&D:Ø The development process is a part of operationsØ Expenditure on R&D is not specifically identifiable

4. Technology Adaptation and Innovation: Ø The technology has been developed by the Company in – houseØ There has been no purchase or import of technology

C. FOREIGN EXCHANGE, EARNINGS AND OUTGO

a. Initiatives taken to increase exports and exports plansYour Company has been in constant touch with various customers around the world. We do hope that our regular follow up will result in increase business from other countries.

b. Development of new export marketsYour Company is consistently exploring possibilities of exporting its products to new markets. This is an on going process.

c. Total Foreign Exchange, Earnings and Outgo


27


Earnings – Export sales at FOB (on accrual basis) 329,29,07,587 230,15,02,582Outgo – Import of materials and components at landed cost 168,97,03,760 141,79,28,778Expenditure in Foreign Currency – traveling, financial expenses & professional / license fees (on accrual basis) 3,05,30,585 1,84,19,308

Particulars

For the year2013-14

(`)

For the year2012-13

Sr. No. Particulars

[A] Power and fuel consumption 1 Electricity a) Purchased units 11,958 11,171 Amount (`) 78,340 67,710 Rate/Unit (`) 6.55 6.06b) Own Generation Nil Nil2 Coal Nil Nil3 Fuel Furnace Oil + Light Diesel Nil Nil4 Other/Internal Generations Nil Nil[B] Consumption per unit N.A. N.A. Electricity per Unit N.A. N.A.

For the year2013-14

For the year2012-13

REPORT ON CORPORATE GOVERNANCE(Annexure to the Nineteenth Directors' Report for the Financial Year 2013-14)

1. PHILOSOPHY ON CORPORATE GOVERNANCE

Strong corporate governance standards are vital not only for the healthy and dynamic Corporate Sector growth but also for inclusive growth of the economy. Good corporate governance practices enhance the Company's value and stakeholders' trust resulting into strong and healthy development of the economy.

The Company is committed towards implementing best corporate governance practices, wherever possible. The Company's philosophy on Corporate Governance is to create value for its shareholders and to conduct its affairs in a manner which is transparent, clear, and evident to those who deal with and have a stake in the Company viz. lenders, creditors, employees and shareholders. The commitment to good corporate governance practices reflects in the Company's value statement comprising of the following:

§ Right and equitable treatment of shareholders§ Protection of interest of other stakeholders§ Integrity and ethical behavior§ Timely disclosures and transparency§ Best sustainable profit performance§ Safety health and environmental responsibility and § Integrity

The Company's philosophy on Corporate Governance is, thus, concerned with the ethics values and morals of the Company and its Directors who are expected to act in the best interest of the Company and remain accountable to the shareholders and other beneficiaries for their action.

2. BOARD OF DIRECTORS

(i) Composition

The Board of Directors (the 'Board') of the Company represents an optimum mix of persons with experience and expertise in their respective fields. During the Financial Year 2013-14, the Board of the Company consisted of eight Directors, of which, one is Managing Director, one is Whole-time Director, two are Non-Executive Directors and four are Non-Executive Independent Directors. None of the Directors of the Company is a member of the Board of more than 15 companies in terms of section 275 of the Companies Act, 1956 and a member of more than 10 Committees or Chairman of more than 5 Committees (as specified in Clause 49 of the Listing Agreement). The Board is primarily responsible for the overall management of the Company's business. During the Financial Year 2013-14, the composition of Board is as under:

(*) Resigned from the post of Managing Directorship w.e.f. May 17, 2014, but, continued to act as a Director of the company

(**) Resigned from the directorship w.e.f May 17, 2014 and joined again w.e.f. August 14, 2014.

(***) Resigned from directorship w.e.f. February 18, 2014

1


28


Sr. No.

Name of the Directors Nature of Directorship

Number of Directorship’s of

other public companies

Membership in other Board Committees

Chairmanship

Committees in other Board

1. Nil Nil Nil

2. Nil

Nil

Nil

3. Nil Nil Nil

4.

Nil

Nil

Nil

5. N.A. N.A. N.A.

6. Nil Nil Nil

7.

Mr. Nitin M. Shah (*)

Mr. Rahul N. Shah (**)

Mr. Kailat H. Vaidyanathan

Mr. Kunal N. Shah (**)

Dr. Surendra A. Dave (***)

Mr. Krishna Kant Jha

Mr. Ramayana M. Nayak

Chairman and Managing Director

Executive Director

Non-Executive Director

Non-Executive Director

Independent Non-Executive Director



5 6 2

8. Mr. Satish Kumar Dheri


4 Nil Nil

(ii) Brief Resume of Directors seeking appointments / re-appointments

Mr. K. K. Jha is a Non-Executive Director of the Company since April 10, 2006 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. K. K. Jha holds a degree of Mechanical Engineer and a member of the Fellow of Institution of Engineers (FIE) India. Previously, he was an Executive Director (Health Safety & Environment) of Gas Authority of India Limited (GAIL) and has more than 40 years of experience in the areas of project management, operations and maintenance administration and health safety and environment related activities.

Mr. R. M. Nayak is a Non-Executive Director of the Company since April 12, 2010 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. R. M. Nayak holds a degree in science and law and a Diploma in Marketing and Advertising. He is also a certified associate of Indian Institute of Banking. He has more than 45 years of experience in the area of investment advisory and banking industry. Mr. Nayak has been associated with various banking and advisory companies such as Sun Global Investments Limited, London, Sun Capital Advisory, Lord Krishna Bank (Now merged with HDFC Bank Limited) and Lakshmi Vilas Bank through which he contributed in the areas of banking, finance, economy, human resources, business strategy and risk management.

Mr. S. K. Dheri is a Non-Executive Director of the Company since May 29, 2012 and was considered as an Independent Director for the purpose of Clause 49 of the Listing Agreement. Mr. S. K. Dheri has worked as the CFO with the Delhi Fire Services and has also been former President of Institution of Fire Engineers (India) Council & Honorary Member of Commonwealth and overseas Fire Services Association, U.K. as the Chairman National Building Code Part – IV of Bureau of Indian Standards his contribution has been praiseworthy. He also worked as Fire Expert for formulation of new building bye-laws for Municipal Corporation of Delhi in 2005 and also served as Director of International Fire Chiefs' Association of Asia From 1984-2001.

Mr. Nitin M. Shah aged 57 years is a founder and driving force behind the Company and he has a Diploma in Mechanical Engineering. After completing his Diploma in Mechanical Engineering in 1975, he joined his family business namely Zenith Fire Services which was into manufacturing of fire extinguishers. Subsequently, he did his training in BRK Electronics, U.S.A. which is one of the largest manufacturers of smoke detectors. He set up Nitin Fire in 1995 and more than 3 decades of experience in fire fighting equipment business. With a hands-on managerial style he is the guiding light for the Company.

Mr. Nitin M. Shah, Director of the Company is one of the promoter holds 4,50,89,126 equity shares (20.57%) in the equity share capital of the Company. Mr. Nitin M. Shah is father of Mr. Rahul N. Shah, Director and Mr. Kunal N. Shah, Director of the Company. He has no relationship with any other managerial personnel.

Mr. Rahul N. Shah aged 36 years is a commerce graduate and holds a Diploma in Business Management. He gained experience in commissioning and installation of fire detection and alarm systems as well as gas suppression systems. In 1998, he took the training of HFC 227EA gas suppression systems at Fike South-east Asia Pte., Singapore and in 1999, the training of addressable fire alarm systems from Apollo Fire Detectors Ltd. in U.K to improve the quality of fire alarm systems. All import transactions and dealings are done under his supervision. He is also responsible for materials management.

Mr. Rahul N. Shah, Director of the Company is one of the promoter holds 1,41,23,500 equity shares (6.44%) in the equity share capital of the Company. Mr. Rahul N. Shah is a son of Mr. Nitin M. Shah, Chairman and Director and brother of Mr. Kunal N. Shah, Director of the Company. He has no relationship with any other managerial personnel.

Mr. Kunal N. Shah aged 29 years is a Bachelor of Engineering in Electronics and Tele Communications from Padmabhushan Vasantdada Patil Prathisthans College of Engineering. He has experience in assembling testing and functioning of CNG dispensers for CNG fuel vehicles.

Mr. Kunal N. Shah, Director of the Company is one of the promoter holds 2,30,04,750 equity shares (10.49%) in the equity share capital of the Company. Mr. Kunal N. Shah is a son of Mr. Nitin M. Shah, Chairman and Director and brother of Mr. Rahul N. Shah, Director of the Company. He has no relationship with any other managerial personnel.

(iii) Board Meetings:

The Company prepares the schedule of the Board Meeting in advance to assist the Directors in scheduling their program. The agenda of the meeting is circulated to the members of the Board well in advance along with necessary papers, reports, recommendations and supporting documents so that each Board member can actively participate on agenda items during the meeting.

During the financial year 2013-14, four meetings have been held and the gap between two meetings did not exceed 4 months. Board Meetings were held on May 23, 2013, August 13, 2013, November 14, 2013 and February 12, 2014. Details of board meetings held and attended by the respective board members are as under:

1


29


(iv) Information supplies to the Board

The Board has complete access to any information within the Company. At Board Meeting employees who can provide additional insights into the items being discussed are invited:

• Quarterly results for the Company, its subsidiary companies and its associate;• Minutes of meeting of the Board Committees, resolutions passed by circulations and minutes of the meeting of the Board of

Subsidiary Companies;• Quarterly compliance certificates with the exception reports which includes non-compliance, if any, of any regulatory statutory

nature or listing requirements and shareholders service;• Disclosure received from Directors;• Related party transactions;• Regular business updates;• Report on action taken on last Board Meeting decisions;• Other information as mentioned in Annexure 1A to Clause 49 of the Listing Agreement.

3. BOARD COMMITTEES

For effective and efficient functioning of the Company, the Board has formed the following Committees:

• Audit Committee: Re-constituted Audit Committee as per Section 177 of the Companies Act, 2013.• Shareholders/Investors' Grievance Committee: Re-constituted and re-designated Investor Grievance Committee as Stakeholders

Relationship Committee as per Section 178 of the Companies Act, 2013.• Remuneration Committee: Re-constituted and re-designated Remuneration Committee as Nomination and Remuneration

Committee as per Section 178 of the Companies Act, 2013.• Corporate Social Responsibility Committee as per Section 135 of the Companies Act, 2013.

AUDIT COMMITTEE

During the Year 2013-14, the Audit Committee consists of two Independent and one Executive Director. Mr Krishana Kant Jha, Chairman of the committee, having knowledge of Accounts, Finance and Company Law. At present the committee comprises of the following Directors:

1. Mr. Krishna Kant Jha - Chairman - Independent Director 2. Mr. Ramakant M. Nayak - Member - Independent Director3. Mr. Rahul N. Shah - Member - Executive Director

During the financial year 2013-14, the committee met four times May 23, 2013, August 13, 2013, November 14, 2013 and February 12, 2014.

The Audit Committee was re-constituted w.e.f. May 17, 2014, as under:

1. Mr. R. M. Nayak - Chairman - Independent Director2. Mr. S. K. Dheri - Member - Independent Director3. Mr. K. H. Vaidyanathan - Member - Non-Executive Director

The Audit Committee shall act in accordance with the terms of reference to be specified in Section 177 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement, inter-alia, including the following matters:

(i) the recommendation for appointment, remuneration and terms of appointment of auditors of the company;(ii) review and monitor the auditor's independence and performance and effectiveness of audit process;(iv) approval or any subsequent modification of transactions of the company with related parties;(v) scrutiny of inter-corporate loans and investments;(vi) valuation of undertakings or assets of the Company, wherever it is necessary;(vii) evaluation of internal financial controls and risk management systems;(viii) monitoring the end use of funds raised through public offers and related matters;(ix) Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial

statement is correct sufficient and credible; 1


30


Sr. No.

Name of the Directors No. of meetings held

Last AGM attended

No. of meetings attended

1. Mr. Nitin M. Shah 4 3 Yes2. Mr. Rahul N. Shah 4 4 Yes3. Mr. Kunal N. Shah 4 4 Yes4. Mr. Krishna Kant Jha 4 4 Yes5. Dr. Surendra A. Dave 4 1 No6. Mr. Kailat H. Vaidyanathan 4 4 Yes7. Mr. Ramakant M. Nayak 4 4 Yes8. Mr. Satish Kumar Dheri 4 3 Yes

(x) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

(xi) Reviewing with the management the annual financial statements and auditor's report thereon before submission to the board for approval with particular reference to:

a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013;

b. Changes, if any, in accounting policies and practices and reasons for the same;

c. Major accounting entries involving estimates based on the exercise of judgment by management;

d. Significant adjustments made in the financial statements arising out of audit findings;

e. Compliance with listing and other legal requirements relating to financial statements;

f. Disclosure of any related party transactions;

g. Qualifications in the draft audit report;

(xii) Reviewing with the management the quarterly financial statements before submission to the board for approval;

(xiii) Reviewing with the management the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency, monitoring the utilization of proceeds of a public or rights issue and making appropriate recommendations to the Board to take up steps in this matter;

(xiv) Approval or any subsequent modification of transactions of the company with related parties;

(xv) Reviewing with the management performance of statutory and internal auditors and adequacy of the internal control systems;

(xvi) Reviewing the adequacy of internal audit functions, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department reporting structure, coverage and frequency of internal audit;

(xvii) Discussion with internal auditors of any significant findings and follow up there on;

(xviii) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

(xix) Discussion with statutory auditors before the audit commences about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

(xx) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

(xxi) To review the functioning of the Whistle Blower mechanism;

(xxii) Approval of appointment of CFO (i.e. the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background etc. of the candidate;

(xxiii) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

The Audit Committee, shall mandatory review the following information:

1. Management discussion and analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the Audit Committee) submitted by management;

3. Management letters of internal control & weaknesses issued by the statutory auditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.

SHAREHOLDER'S/INVESTOR'S GRIEVANCE COMMITTEE:

During the year 2013-2014, the Shareholder's/Investors' Grievance Committee consists of two Independent and one Executive Director. The Committee comprises of the following Directors:

1. Dr. Surendra A. Dave - Chairman - Independent Director 2. Mr. Krishna Kant Jha - Member - Independent Director3. Mr. Rahul N. Shah - Member - Executive Director

1


31


During the year under review, the committee met regularly to monitor and resolve grievances of the shareholders and met four times on May 23, 2013, August 13, 2013, November 14, 2013 and February 12, 2014.

The existing Shareholder's/Investors' Grievance Committee was re-constituted as Stakeholders Relationship Committee w.e.f May 17, 2014 as per Section 178 of the Companies Act, 2013, as under:

1. Mr. K. K. Jha – Chairman - Independent Director 2. Mr. S. K. Dheri – Member - Independent Director; and3. Mr. R. M. Nayak – Member - Independent Director

The Committee looks into the redressing of shareholders and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividend etc.

REMUNERATION COMMITTEE

During the year 2013-2014, the Remuneration Committee consists of three Independent Directors. The Committee comprises of the following Directors:

1. Mr. Krishna Kant Jha - Chairman - Independent Director 2. Dr. Surendra A. Dave - Member - Independent Director 3. Mr. Ramakant M. Nayak - Member - Independent Director

The Remuneration Committee is primarily responsible for implementing the remuneration policy of the Company.

During the year under review, the committee met two times on May 23, 2013 and February 12 2014.

The existing Remuneration Committee was re-constituted and re-designated as Nomination and Remuneration Committee w.e.f May 17, 2014, as per Section 178 of the Companies Act, 2013, as under:

1. Mr. S. K. Dheri - Chairman - Independent Director2. Mr. K. K. Jha - Member - Independent Director; and3. Mr. K. H. Vaidyanathan - Member - Non-Executive Director

The Committee shall, inter-alia, ensure the following:

1. Formulation of the criteria for determining qualifications positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel, Senior management and other employees;

2. Formulation of criteria for evaluation of Independent Directors and the Board;

3. Devising a policy on Board diversity;

4. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board, their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

5. (a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

(c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

The Board of Directors will decide remuneration to Non Executive Directors. The Company is not paying any commission to its Non-Executive Directors.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Pursuant to Section 135 of the Companies Act, 2013, the Board of Directors of the Company constituted the “CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE” consists of the following Directors of the Company with effect from May 17, 2014:

1. Mr. S. K. Dheri - Chairman -Independent Director; 2. Mr. K. H. Vaidyanathan; - Member - Non-Executive Director and3. Mr. Nitin M. Shah - Member - Non-Executive Director

In accordance with the provisions of Section 135 (3) of the Companies Act, 2013, the CSR Committee authorized to formulate and recommend to the Board, a CSR Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, recommend the amount of expenditure to be incurred on the specified CSR Activities and monitor the CSR Policy of the Company, from time to time.

1


32


The CSR Committee authorised to spend in every financial year at least two per cent of the average net profits of the Company made during the three immediately preceding financial years on any one or all together of the above mentioned CSR activities whenever applicable to the Company in accordance with the provisions of Section 135(5) of the Companies Act, 2013.

4. DIRECTOR'S REMUNERATION & SITTING FEES

a) The details of remuneration paid to the Managing Director and Executive Director during the Financial Year 2013-14, as approved by the Board is as under:

Note: The employee wise break up of liability on account of gratuity based on estimation is not ascertainable and hence, not considered above.

b) Details of payment for sitting fees (Including Board and Committee Meetings):

5. DISCLOSURES

Related Party Transactions

Details of material significant related party transactions i.e. transactions of the Company of material nature with its promoters, the Directors, its subsidiaries, relatives of the Directors etc. are presented under Note 37 (b) in the Standalone Financial Statements. All details on the financial and commercial transactions which may have a potential interest are provided to the Board. The interested directors neither participate in the discussion nor vote on such matters.

Accounting treatment in preparation of financial statements

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 on 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 of the Companies Act, 1956 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).

Compliances by the Company

The Equity Shares of the Company were listed on National Stock Exchange of India Limited, Mumbai and BSE Limited, Mumbai, for the entire year and there were no penalties or restrictions imposed on the Company by any Stock Exchanges or SEBI, for any matter.

6. MEANS OF COMMUNICATION

• Website: The Company's website www.nitinfire.com contains a separate dedicated section as “Investors Area” where shareholders information is available. Full Annual Report is also available on the website in a user friendly and downloadable form. Apart from this official news releases presentations etc. are also displayed on the Company's website.

• Financial Results: The annual, half yearly and quarterly results are regularly uploaded by the Company on its website. These are also submitted to the stock exchanges in accordance with the Listing Agreement and published in English and Marathi news papers.

• Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Directors' Report, Auditors Report and other important information is circulated to the Members and others entitled thereto. The Management's Discussion and Analysis (MD&A) Report forms part of the Annual Report.

1


33


Name of the Directors Salary, allowances & bonus

Contribution to provident fund

Total

(`)

(`) (`)

Mr. Nitin M. Shah, Managing Director (resigned as M. D. w.e.f. May 17, 2014) 1,08,00,000 24,48,000 1,32,48,000Mr. Rahul N. Shah, Executive Director(resigned as E. D. w.e.f. May 17, 2014) 36,000 8,640 44,640

1. Mr. Krishna Kant Jha 64000/-2. Dr. Surendra A. Dave 11000/-3. Mr. Ramakant M. Nayak 64000/-4. Mr. Satish Kumar Dheri 33000/-

Total 172000/-

S . r No. Particulars Sitting fees (`)

•and are also available on the website of the National Stock Exchange of India Limited – www.nseindia.com and Bombay Stock Exchange Limited-www.bseindia.com and Corporate Filling & Dissemination Systems website – www.corpfiling.co.in.

7. SHAREHOLDER'S MEETINGS

Details of the location of the previous three AGMs and the details of the resolutions passed or passed by postal ballot, are as under:

a. Particulars of previous three Annual General Meetings & Special Resolutions passed thereat:

b. No resolution requiring Postal Ballot as recommended under Clause 49 of the Listing Agreement has been placed for shareholders' approval at the meeting.

8. GENERAL SHAREHOLDER INFORMATION

Corporate Identification Number (CIN): L29193MH1995PLC092323

Registered Office: 501, Delta, Technology Street, Hiranandani Gardens, Powai, Mumbai – 400076. Maharashtra, India, Website : www.nitinfire.com, E-mail: [email protected]

• Annual General Meeting

• Financial Calendar(tentative and subject to change)

Financial year : April 1, 2014 to March 31, 2015 for the Financial Year 2014-2015 quarterly un-audited/annual audited results will be announced by:

First quarter : Second week of August, 2014Second quarter : Second week of Novembet, 2014Third quarter : Second week of February, 2015Annual Audited : Second week of May, 2015

• Listing on Stock Exchanges:

The Equity Shares of the Company are listed with National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE).

• Payment of Listing Fee:

Listing Fees for the Financial Year 2014-15, has been paid to the above stock exchanges where the Company's equity shares are listed.

Corporate Filing: Announcements quarterly results shareholding pattern etc. of the Company are regularly filed by the Company

Meeting Year Venue Date Time

AGM

2011

Kamalnayan Bajaj Hall, Bajaj Bhavan, Ground Floor, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai-400 021

August 11, 2011

AGM 2012 Centre for Excellence in Telecom Technology and Management, Conference Hall,Technology Street, Hiranandani Gardens, Powai, Mumbai 400 076

August 11, 2012

10.00a.m.

12.30p.m.

Particulars of Special Resolutions

1. Appointment of Managing Director2. Appointment of an Executive Director3. Further issue of shares

1. Further issue of shares

AGM 2013 Centre for Excellence in Telecom Technology and Management, Conference Hall,Technology Street, Hiranandani Gardens, Powai, Mumbai 400 076

August 13, 2013

3.00 p.m.

1. To Fix remuneration of Managing Director

2. To Fix remuneration of an Executive Director

3. Further issue of shares


34


(` in lacs)

Day and date

Time

Venue

Book closure

Tuesday, September 30, 2014

3.00 p.m.

Centre for Excellence in Telecom Technology and Management (CETTM), Hall ,Technology Street, Hiranandani Gardens, Powai, Mumbai 400 076

Tuesday, September 23, 2014 to Tuesday, September 30, 2014 (both days inclusive)

Exchange Code/trading symbol ISIN NSE NITINFIRE

BSE 532854 NITINFIRE INE489H01020

•

The Chairman and Director and the Chief Financial Officer of the Company have given the annual certification of financial reporting and internal controls to the Board in terms of Clause 49 (V) of the Listing Agreement.

•

A certificate from Mr. Kishor V. Ved, Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance in terms of Clause 49 of the Listing Agreement forms part of this Report.

• Code of Conduct

The Code of Conduct for Directors and Management Personnel ('the Code') as recommended by the Corporate Governance and adopted by the Board is a comprehensive Code applicable to all Directors and management personnel.

A copy of Code of Conduct has been put on the Company's website.

The Code of Conduct has been circulated to all the members of the Board and management personnel and the compliance of the same is confirmed by them annually.

A declaration signed by the Chairman and Director of the Company forms part of this Report.

• Share Transfer System

A shareholder's request is normally attended and a reply is sent within 10-15 days time. The certificates after the transfer of shares are returned within a period of 15 days except in the cases which face problems due to technical reasons. Shares are being transferred and demat option letter in this respect are dispatched within 15 days from the date of receipt as long as the documents are clear in all respects. The Company has not received any request for transfer of shares in physical form.

The Board of Directors has delegated the power of share transfer to the Registrar and Share Transfer Agents (RTA) viz. Bigshare Services Private Limited Mumbai who attends to the same once in a fortnight.

• Investors Service and Grievance Handling Mechanism

All share related transactions viz. transfer transmission transposition nomination dividend change of name/address/signature registration of mandate/power of attorney replacement/split/ consolidation of share certificates/demat/remat of shares issue of duplicate share certificates etc. are being handled by the RTA which performs its functions effectively efficiently and expeditiously.

Investors are requested to correspond directly on all share related matters with Bigshare Services Private Limited at E-2, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai – 400 076 and for any other query to the Company Secretary & Compliance Officer at the Registered Office of the Company at 501, Delta, Technology Street, Hiranandani Gardens, Powai, Mumbai – 400076 and for prompt response shareholders/investors may send correspondences which do not require signature verification for processing through e-mail at [email protected].

The Board of Directors of the Company has constituted a Stakeholders Relationship Committee comprising of Mr. K. K. Jha Mr. S. K. Dheri and Mr. R. M. Nayak directors which, inter alia, approves issue of duplicate certificates and oversees and reviews all matters connected with securities transfers and other processes. The Committee also reviews the redressal of shareholders' complaints related to transfer of shares non receipt of Annual Report non-receipt of dividends etc. The Committee overseas performance of the RTA and recommends measures for overall improvement in the quality of investor services. A summary of investor related transactions and details are also considered by the Board of Directors of the Company.

• Investor Relations

There was 10 complaints received during the year and was attended by the Company. Therefore, no complaints were pending as at March 31, 2014.

• PAN Requirement for Transmission of Shares in Physical Form

Vide SEBI Circular (MRD/DOP/Cir-05/2009 dated May 20, 2009, it shall be mandatory to furnish copy of PAN card to the Company/RTAs in the following cases:

1) Deletion of the name of the deceased shareholder(s) where the shares are held in the name of two or more shareholders2) Transmission of shares to the legal heir(s) where deceased shareholder was the sole holder of shares and3) Transposition of shares –when there is a change in the order of names in which physical shares are held jointly in the names of

two or more shareholders.

In case of mismatch in PAN card details as well as differences in maiden name and current name (in case of married women) of the investors the RTAs can collect the PAN card as submitted by the transferee(s). However, this would be subject to RTAs verifying the veracity of the claim of such transferee(s).

CEO/CFO Certification:

Certificate of Corporate Governance


35


• Change of Address

1) Shareholders are required to inform the Company in writing of any change in their address quoting their folio number for shares in physical form if any

2) Change of address is effected only when the signature of the first registered holder on the request letter matches with the specimen signature recorded with the Company.

3) Change of address for shares held in demat form should be notified only to the concerned Depository Participant (DP).4) Requests for change of address should be accompanied by any address proof like electricity bill telephone bill bank statement

driving license voter ID card etc.5) There can be only one Registered Address for one folio.

• Status of unclaimed and unpaid dividend (` in lacs)

Shareholders whose dividend remains unpaid are requested to claim the same before it is transferred to the Investor and Education and Protection Fund.

• Compulsory De-materialized Trading

As the shareholders are aware the Securities and Exchange Board of India (SEBI) has included equity shares of the Company for compulsory dematerialised trading for all investors with effect from July 24, 2000. The Company has already entered into agreements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable members of the Company to select the depository of their choice for holding and dealing in shares in electronic form. The shareholders may also note that 99.9998969% holding of the Company is in demat form.

• Distribution of Shareholders

Distribution of shareholding as at March 31, 2014:

1


36


March 31, 2008 252.06 0.45 0.18March 31, 2009 378.09 0.86 0.22March 31, 2010 441.11 0.90 0.21March 31, 2011 630.16 0.54 0.09March 31, 2012 882.21 0.80 0.09March 31, 2013 441.11 0.28 0.06

Year ended Amount of dividend Unclaimed and unpaid dividend as at March 31, 2014

% of unclaimed and unpaid dividend

Range (in `)

Number of shareholders

% of shareholders

Number of shares

Amount in ` % of paid up capital

10348

241

144

47

39

16

29

86

10950

94.5023

2.2009

1.3151

0.4292

0.3562

0.1461

0.2648

0.7854

100.0000

4262161

868772

1020198

567422

701125

359435

1068133

210358865

219206111

8524322

1737544

2040396

1134844

1402250

718870

2136266

420717730

438412222

1.9444

0.3963

0.4654

0.2589

0.3198

0.1640

0.4873

95.964

100.0000

Upto 5,000

5,001 -10,000 10,001- 20,000

20,001- 30,000 30,001- 40,000 40,001- 50,000

50,001-100,000 100,001- 99,999,999

Total

Month

High (`) Low ( )` Volume (nos) High ( )` Low ( )`

Share Prices - NSEShare Prices - BSE

Volume (nos)

70.1066.9565.2064.3558.3060.8562.0065.0067.6064.7566.0055.25

58.5058.0057.4048.5051.0052.4053.0054.5557.7056.5052.1550.00

1464863484325

11684472014914573922692843869452446978

3720590108704723376892532192

70.6067.5064.9563.6058.3060.8062.0063.9067.7065.0066.3555.50

58.1557.3057.3549.1050.9552.1552.5555.2057.3556.8053.4050.00

880406692557

13562732380037885237838837

1498384700889

4965628135060557071684829192

Apr-13May-13Jun-13Jul-13Aug-13Sep-13Oct-13Nov-13Dec-13Jan-14Feb-14Mar-14

Shareholding Pattern as at March 31, 2014:

• Price Data

Share prices during the Financial Year 2013-14 at the BSE & the NSE for one equity share as under:

BSE

1


37


Category of shareholders Sr. No.

No. of Shareholders

% of Shareholders

No. of shares held

% of shareholding

1 Promoters Directors & Relatives 13 0.1188 157510799 71.8551

2 Financial Institutions / Banks 2 0.0182 14971 0.0069

3 Employees 6 0.0548 16549 0.0075

4 Foreign Institutional Investors 11 0.1005 30283155 13.8149

5 Bodies Corporate 329 3.0046 6519081 2.9740

6 NRI/OCBs 164 1.4977 1263766 0.5800

7 Trusts 1 0.0091 962 0.0004

8 Clearing Members 103 0.9406 1066003 0.4863

9 Public 10321 94.2557 22530825 10.2784

Total 10950 100.0000 219206111 100.0000

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

Apr-

13

May-

13

Jun-

13

Jul-13Aug-

13

Sep-

13

Oct-

13

Nov-

13

Dec-

13

Jan-

14

Feb-

14

Mar-

14

High `

Low `

NSE

VOLUME In Nos.

• Liquidity:

Shares of the Company are actively traded on NSE and BSE as is evident from the volume of shares indicated in the table containing stock market data and hence ensure good liquidity for the investors.

• Dematerialisation of shares:

Approx 100% of the Equity Shares of the Company have been de-materialised with only 1548 shares being in physical form as at March 31, 2014.

• Outstanding GDRs/ADRs/Warrants or any Convertible Instruments Conversion date and likely impact on equity:

The Company has not issued any GDRs/ADRs/Warrants or any Convertible Instruments. No amounts were outstanding on account of the same as at the date of the Balance Sheet.

• Locations of manufacturing plants:-

1


38


0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

Apr-

13

May-

13

Jun-

13

Jul-13 Aug-

13

Sep-

13

Oct-

13

Nov-

13

Dec-

13

Jan-

14

Feb-

14

Mar-

14

High `

Low `

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Apr-

13

May-

13

Jun-

13

Jul-

13

Aug-

13

Sep-

13

Oct-

13

Nov-

13

Dec-

13

Jan-

14

Feb-

14

Mar-

14

Volume NSE

Volume BSE

A-117, TTC Industrial Area , Pawana Village Navi Mumbai – 400701Maharashtra.

Shed -6, Phase- I Duvada VSEZ, Vishakhapatnam - 530049Andhra Pradesh.

Contact Person Mr. Abhishek Shrivastava, Company Secretary Email: [email protected]

• Registrar & Share Transfer Agents

Our RTAs viz Bigshare Services Private Limited recently launched Gen-Next Investor Interface Module”i'Boss" the most advanced tool to interact with investors. Please login into i'Boss (www.bigshareonline.com] and help them to serve you better."

Address : - Bigshare Services Private Limited

E-2/3 Ansa Industrial EstateSakivihar Road SakinakaAndheri (E) Mumbai - 400 072.

Contact Person: Ms. Rutika Choche Tel No. +91 22 28470652 / 40430200 Fax no. +91 22 28475207 Email - [email protected] - www.bigshareonline.com

•

1


39


MumbaiAugust 14, 2014


Sd/-Nitin M. Shah

Chairman & Director


40


Declaration regarding compliance by the Board Members and the Senior Management personnel with the Company's Code of Conduct

This is to confirm that the Company has adopted a Code of Conduct for its employees including the Managing Director and Executive Directors. In addition the Company has adopted a Code of Conduct for its Non-Executive Directors.

I confirm that the Company has received a declaration of compliance with the Code of Conduct from the senior management of the Company (wherever applicable) in respect of the Financial Year ended March 31 2014. For the purpose of this declaration senior management team means employees in the Executive Vice President cadre and above and the Company Secretary as at March 31 2014.

Sd/-Mumbai Nitin M. ShahAugust 14, 2014 Chairman & Director

CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT

CIN No.: L29193MH1995PLC092323Nominal Capital : Rs.60,35,00,000/-

ToThe Members


I have examined the relevant records of Nitin Fire Protection Industries Limited ('the Company') for the purpose of certifying compliance of the conditions of Corporate Governance under Clause 49 of the Listing Agreement with the BSE Limited and the National Stock Exchange of India Limited for the financial year ended March 31, 2014. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of certification.

The compliance of conditions of Corporate Governance is the responsibility of the Management. My examination was limited to a review of the procedures and implementation thereof. This Certificate is neither an assurance as to future viability of the Company nor the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

On the basis my examination of the records produced, explanations and information furnished, I certify that the Company has complied with all the applicable mandatory conditions of the said Clause 49 of the Listing Agreement.

Sd/-(KISHOR V. VED)Practising Company SecretaryF. C. S. No. 5411 & C. P. No. 4691

Mumbai, August 14, 2014

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

To,

The Members


We, the undersigned in our respective capacities as Chairman & Director and Chief Financial Officer (CFO) of NITIN FIRE PROTECTION INDUSTRIES LIMITED (“the Company”) to the best of our knowledge and belief certify that:

a) We have reviewed the financial statements and the cash flow statement for the year ended on March 31, 2014 and based on our knowledge and belief we state that:

I. these statements do not contain any materially untrue statement or omit any material fact or contain any statement that might be misleading;

II. these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards applicable laws and regulations.

b) We further state that to the best of our knowledge and belief that are no transactions entered into by the Company during the year which are fraudulent illegal or violate the Company's Code of Conduct.

c) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee deficiencies in the design of operation of internal controls, if any, of which we are aware and the steps have been taken or propose to take to rectify these deficiencies, if any.

d) We have indicated to the Auditors and the Audit Committee that:

I. there has not been any significant changes in internal control over financial reporting during the year under reference;

II. there has not been any significant changes in the accounting policies during the year requiring disclosure in the notes to the financial statements; and

III. we are not aware of any material instances during the year of significant fraud and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control systems over the financial reporting.

For Nitin Fire Protection Industries Limited

Sd/- Sd/-Nitin M. Shah Kamlesh GandhiChairman & Director Chief Financial Officer Mumbai, August 14, 2014

41


42


MANAGEMENT DISCUSSION & ANALYSISAnnexure to the Director’s Report

Macroeconomic development:

According to the World Economic Outlook released by the International Monetary Fund (IMF), the world economy is expected to grow to 3.9% in 2015 compared to 3% in 2013. Growth is estimated to be strongest in United States at around 3% in 2015 among the developed nations. With the new government, the Indian economy is expected to revive and there is a lot of expectation for market friendly reforms. The Indian economy is poised to grow at 6.5% in 2015 and move from the stagflation kind of economy. Your team at Nitin Fire Protection Industries Limited is in the position to take the company forward with the growth in Indian and global economy. At the same time we are vigilant about the changes in the economy and prepared to manage headwinds that might arise in unforeseen conditions.

Strong track record:

With long and successful operating history in India your company undertakes large scale fire protection system installation and has completed more than 5000 direct installations and more than 20, 000 indirect installations across India. Your company continues to focus on new technology and product development that can help in saving more lives from fire. This has indeed helped us cater to wider markets in Europe and South East Asia.

Financial Performance

The better management of working cycle has resulted in positive cash flow from operating activities during the year. Debtor’s days has been reduced to 88 days during the period.

During the year, Your Company has delivered a robust year on year growth of 44% in consolidated revenues largely attributing to the success in the Middle East. The consolidated PAT has grown from 614 mn in FY 2013 to 665 mn in FY14 a rise of 8% year on year. The earnings per share was 3.02 in FY14 compared to 2.58 in the same period last year

Opportunities:

Your company would like to continue growing its business without compromising on profitability. With a good understanding of our markets, we shall continue prioritizing our resources to focus on projects where we can leverage our technology and the depth and expertise of our people to add value in the fire protection industry across the globe.

Our aim is to leverage these opportunities by expanding our geographical coverage in these markets, by increasing our presence in new cities, and further penetrate in our existing markets, with high value products.

India is expected to be the fastest growing nations and with the new reforms coming; especially in the real estate and infrastructure sector, there is a great opportunity for your company to fasten its growth pace. With almost three decades of experience your company has established a better footprint in India to match the fire safety standards required by the growing needs from these sectors. The diversified portfolio of products and its regular up gradation has helped your company to add value in markets of UAE, South Asia and Europe.

Most of the cities in India have seen unplanned growth and are surrounded by heavy fire risks. Expansion of industries and construction of high rise buildings have made them more prone to fire. There are cases when it is reported that many of these high-rise buildings don’t have the necessary fire fighting arrangements, which are considered to be very essential from fire safety point of view. To ensure safety of occupants of such buildings the Government is undertaking more stringent actions which shall help us in our holistic intention of protecting more lives.

The fire fighting industry has gained importance in the recent years. Media has also played a vital role in creating more awareness about the frequent fire incidents and how they can be avoided using fire protection devices.

Two factors that gives us confidence for growth, is ‘increasing awareness for protection from Fire’ and ‘threat of huge losses’ if no precautions are taken. Household and corporate both are aware about the aftermath of even the slightest spark and they are not keeping any stone unturned to take necessary precautions for protecting their resources be it – human, financial or physical. The costs due to losses from fire worldwide are estimated at approximately 1% of the global GDP with an increasing tendency.

` `` `

FY2010 FY2011 FY2012 FY2013 FY2014

Revenue ( in mn)`FY2013 FY2014 FY2010 FY2011 FY2012 FY2013 FY2014

PAT ( in mn)`

43


With increase in office space, demand for new technology parks, airports, manufacturing plants and huge townships the growth in the fire protection industry is poised to grow manifold. Your company is in a position to cater to this growing demand.

Future Growth:

Each sector be it education, technology, retail, manufacturing, services, entertainment, pharmaceutical, petrochemical, banking, etc is hungry for growth and all are looking for increasing capacities in their own capabilities which indirectly creates immense room for growth of your company.

Increasing urbanization and industrialization has also garnered attention from environmentalist and regulators towards fire protection. The fire protection industry has the support of the Indian Government and regulatory bodies. Strict rules for fire protection and safety would drive growth for the industry. The Government is expected to come with stringent norms for Fire detection and prevention. Housing societies and commercial complexes are also taking necessary steps to become fire safe and safeguard their localities.

Thus, the industry enjoys support from local bodies, associations and institutions also which would add to the demand pool. With leadership position and expertise in the fire protection, safety and security industry, coupled with the robust industry outlook your Company is well placed to leverage its strengths and utilize the opportunities available in the Indian fire protection industry.

Not only in India, but we also anticipated increase in demand globally. UAE which contributes to 55% of the total revenue of your Company will be hosting the World Expo 2020 in Dubai. There is an intense demand for quality residential and commercial properties in UAE as government incentives including the benefits such as zero per cent tax rate and free zones would draw companies from around the world to establish operations in Dubai. Your Company is positioned to capture the higher growth potential of the growing markets.

Human Resource:

Your Company recognizes the human resource has its most valuable asset. Our organizations success would not have been achievable without the commitment, dedication and passion of our employees. I would like to thank them for their continuous support, efforts, and sacrifices. They have been a great support system and we expect them to guide the company further to greater heights in the years to come. Initiatives in the area of employee engagement and health safety were taken. Training and development programs for employees at all levels were provided to encourage learning, progressing and matching with the organization standards. The organizational work culture continues to attract the best of the talent pool in the industry from India and abroad.

Your Company provides framework to help employees take the right decision in any situation and promote the behaviors that create a culture of trust, respect and integrity. Efforts are made to strengthen employee relations further and manage the diversified talents through progressive HR practices.

Internal Control System:

Your company continues to comply with laws, regulations and policies as per the regulatory guidelines that are applicable. Your company maintains strong compliance and has dedicated Compliance department for ensuring regulatory compliance culture across the organization. The Company emphasizes on regulations regarding protection of property and assets and reporting financial transactions has specified under the law.

The above controls are being reviewed and audited by internal auditors and auditing committees set by the management. All documented policy prescribed guidelines and the various procedures and activities of the company are covered by internal audit system.

The Internal Control System is supplemented by defined risk management programme identifying and mitigating risks which are reviewed by the Board of Directors of the Company.

The internal audit system also audits and examines the orders/ purchasers as well as accounts and financial records.

Vision 2020:

Your company is moving towards its vision of achieving growth in the Global Fire Industry Business.

To achieve this, we are looking at below mentioned routes:

Your company is following the strategy of expanding in new territories, accelerate organic growth by introducing new products and tap inorganic opportunities focusing on core business.

Cautionary Statement:

Certain statement as discussed and mentioned in the Management Discussion & Analysis and elsewhere in the report, constitute forward- looking statements articulated as the management’s expectations for the future business prospects of the Company. Words, and variations of words, such as “expect”, “propose”, “potential”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “continue”, “opportunity”, “project” and similar expression are intended to identify forward-looking statements. However, there are risks and uncertainties associated due to the general macroeconomic conditions in which the Company operates. Also, the factors like nature of the Company’s business, foreign currency fluctuations, regulatory initiatives, tender processes in the Government, Public Sector and other large undertakings, competition etc. are not in the control of the Company. Such uncontrollable factors are crucial for success of the Company’s business plans or predictions, which may cause the actual results to materially differ from the performance or achievements, discussed or implied by such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statements.

INDEPENDENT AUDITORS' REPORT

To the Members of Nitin Fire Protection Industries Limited

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, 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 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 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 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 461,154,781 as at March 31, 2014 (Previous year 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

`

`

`

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44


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;

f. 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.

45


For Haribhakti & Co.Chartered Accountants

FRN No.103523W

Sd/-Sumant Sakhardande

PartnerMembership No.34828

Mumbai May 17, 2014

46


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 21,69,29,179 and the yearend 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.

(e) 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 11,00,000 and the year end balance of loan granted by such party 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) 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.

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47


(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

PartnerMembership No.34828

Mumbai May 17, 2014

Note

Balance Sheet as at March 31, 2014


As at As at March 31, 2014 March 31, 2013

` `

48


A EQUITY AND LIABILITIES1 Shareholders’ funds

Share capital 3 438,412,222 441,105,388 Reserves and surplus 4 1,046,583,788 1,063,113,531

1,484,996,010 1,504,218,919

2 Non-current liabilitiesLong-term borrowings 5 111,657 741,342 Deferred tax liability (net) 6 - 1,000,174 Other long term liabilities 7 218,055 200,000 Long-term provisions 8 1,539,272 526,483

1,868,984 2,467,999 3 Current liabilities

Short-term borrowings 9 2,555,572,072 2,206,370,522 Trade payables 10 265,332,280 340,283,639 Other current liabilities 11 190,256,014 38,079,371 Short-term provisions 12 62,225,604 61,676,845

3,073,385,970 2,646,410,377 Total 4,560,250,964 4,153,097,295

B ASSETS1 Non-current assets Fixed assets

- Tangible assets 13 116,405,781 125,530,740 - Intangible assets 14 753,595 - - Intangible assets under development * 231,795,818 227,503,056 (* Refer Notes 2(a) (iii) and 42)

Non-current investments 15 129,566,758 591,852,575 Deferred tax assets (net) 6 1,781,327 -

Long-term loans and advances 16 78,278,736 97,305,221 558,582,015 1,042,191,592

2 Current assets Inventories 17 940,044,775 757,433,196 Trade receivables 18 1,586,142,381 1,755,484,015 Cash and bank balances 19 339,804,961 530,181,858 Short-term loans and advances 20 663,150,089 59,167,416 Other current assets 21 472,526,743 8,639,218

4,001,668,949 3,110,905,703

Total 4,560,250,964 4,153,097,295 Notes 1 to 49 are an integral part of the Financial StatementsIn terms of our attached report of even date

For Haribhakti & Co. For and on behalf of the Board of DirectorsChartered Accountants

Sumant Sakhardande

Nitin M. Shah Rahul N. Shah

Abhishek Shrivastava PartnerMembership No. 34828

Chairman & Managing Director Whole Time Director

Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-

Firm Registration No. 103523W

Kamlesh Z. GandhiChief Financial Officer

Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Note

Statement of Profit and Loss for the year ended March 31, 2014


2013-14 2012-13` `

49


A Revenue

Revenue from operations 22 4,554,350,576 3,520,391,835

Other operating income-duty drawback - 224,625

Other income 23 12,122,943 108,012,515

Total Revenue 4,566,473,518 3,628,628,975

B Expenses

Cost of materials and components consumed 24 2,294,234,569 1,981,919,388

Purchases of traded goods 25 1,677,919,092 981,535,827

Changes in inventory of stock in trade 26 (43,327,677) 8,822,796

Employee benefits expense 27 83,071,038 68,749,082

Finance costs 28 209,989,673 187,143,673

Depreciation of tangible assets 13 12,260,979 10,518,060

Less: Charged to Revaluation Reserve 701,922 811,198

11,559,057 9,706,862

Amortisation of intangible assets 13 61,405 794,473

11,620,462 10,501,335

Other expenses 29A 150,508,577 150,652,348

Total Expenses 4,384,015,734 3,389,324,450

Profit before tax and exceptional items 182,457,784 239,304,525

Exceptional Items (net) 29B 44,468,257 17,287,641

Profit before tax 137,989,527 222,016,884

Tax expense: (Refer Note 2(f))

- Current tax 26,900,000 53,520,781

- MAT credit entitlement of an earlier year - (7,320,781)

- Tax adjustment of earlier years (net) 4,113,791 1,997,772

- Deferred tax- (credit)(Refer Notes 2(f) and 6) (2,781,501) (1,565,929)

Profit for the year 109,757,237 175,385,041

Earnings per equity share on nominal value of ` 2 (P.Y. `2)

each (Refer Notes 2(j) and 43)

Basic 0.50 0.80

Diluted 0.50 0.80

Number of shares used in computing earnings per share

Basic 220,039,432 220,552,694

Diluted 220,039,432 220,552,694

Notes 1 to 49 are an integral part of the Financial Statements

In terms of our attached report of even date


Sumant Sakhardande




Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-



Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Cash Flow Statement for the year ended March 31, 2014


2013-14 2012-13` `

50


A Cash flow from operating activities

Net profit before taxation and after exceptional items 137,989,527 222,016,884

Adjustments for:

Depreciation* and amortisation 11,620,462 10,501,335

(* Net of transfer from revaluation reserve)

Unrealised foreign exchange difference-net (gain) (7,657,890) (2,261,731)

Interest income (gross) (7,923,036) (9,355,658)

Finance cost 209,989,673 187,143,673

Loss on sale of non- current investments 1,049,575 20,367,389

Bad debts/balances written off 26,939,635 21,132,871

Debts written off in earlier years, Realised (470,843) (5,048,392)

Liability no longer required written back (403,033) (90,014,315)

(Gain)/loss on sale of fixed assets (14,926) 50,205

Dividend income (23,104) (304,085)

Provision for doubtful deposits and advances 1,052,739 -

Provision for gratuity 1,300,675 1,244,042

Provision for doubtful debts 3,678,932 4,262,082

(Write back)/provision of/for diminution in the value of investments (10,963,457) 11,541,928

Operating profit before working capital changes 366,164,929 371,276,227

Adjustments for:

(Increase)/ decrease in value of inventories (182,611,579) 696,808,934

(Increase) in value of trade and other receivables (511,092,586) (985,630,915)

Increase in value of trade and other payables 74,846,946 288,753,347

(Decrease) in working capital (618,857,219) (68,634)

Cash generated from/(used in) operations (252,692,289) 371,207,594

Taxes paid (net of refunds, if any) (36,554,144) (38,824,801)

Net cash generated from/(used in) operating activities (289,246,433) 332,382,793

B Cash flow from investing activities

Purchase of fixed assets (8,283,856) (43,585,409)

(Refund) / payment of advances on capital account 20,094,098 (64,808,165)

Sale of investments 11,044,917 32,029,628

Interest received 7,804,321 10,189,689

(Placement)/proceeds of/on deposits with banks (12,450,899) 28,468,194

Proceeds on sale of fixed assets 55,000 340,001

Dividend income 23,104 304,085

Net cash generated from/(used in) investing activities 18,286,685 (37,061,978)



2013-14 2012-13` `

As at As at

March 31, 2014 March 31, 2013

Notes:

1 Brackets indicate a cash outflow or deduction.

2 Cash and cash equivalents include unclaimed/unpaid dividends amounting to 383,359 ( 356,491) not available for use by the Company.

3 Fixed deposits (pledged) being restricted for its use has been excluded from cash and cash equivalents and grouped under investment activities.

4 Components of cash and cash equivalents (closing):

51

` `


C Cash flow from financing activities

Proceeds from secured long/short term borrowings 458,137,201 409,034,566

Repayment of secured long/short term borrowings (52,088,199) -

Buy back of shares (76,986,186) -

Finance charges (209,184,132) (194,660,307)

Dividends distributed (including corporate dividend tax) (51,580,257) (102,454,011)

Net cash generated from financing activities 68,298,427 111,920,249

Net (decrease) / increase in cash and cash equivalents (202,661,321) 407,241,064

Cash and cash equivalents (opening) 510,429,458 103,188,394

Cash and cash equivalents (closing) 307,768,137 510,429,458

Net increase/(decrease) as disclosed above (202,661,321) 407,241,064

Cash on hand 40,834 196,797

Bank balances:

With banks on:

- Current accounts 307,343,944 428,375,980

- EEFC current accounts in US dollar - 81,500,190

- Fixed deposits 32,203,299 19,752,400

- Unclaimed and unpaid dividend accounts 383,359 356,491

339,971,436 530,181,858

Less: Fixed deposits (pledged towards margin requirements) 32,203,299 19,752,400

307,768,137 510,429,458

Notes 1 to 49 are an integral part of the Financial Statements



Sumant Sakhardande




Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-



Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)


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 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.

2 Accounting policies:

Significant accounting policies are summarised below:

(a) Fixed Assets and capital work in progress

(i) Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is recognised immediately in the Statement of Profit and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

(ii) Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the Management. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit and Loss.

(iii) Capital work in progress (CWIP) & intangible assets under development includes cost of exploratory wells in progress, cost of fixed assets not ready to use and interest on loans attributable to the acquisition of qualifying fixed assets up to the date of their commissioning, if any.


52


(iv) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalised and written off over the estimated useful life of the relevant asset. The written down value of such spares is charged to the Statement of Profit and Loss on issue for consumption.

(b) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/deductions. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. In case of revalued assets, depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to Statement of Profit and Loss. Cost of leasehold land is amortised in proportion to the period of lease. Individual assets costing less than `5,000 are depreciated in full in the year of acquisition.

(ii) Amortisation-intangibles:

Intangible assets are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits are consumed.

Expenditure on computer software is amortised on straight line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each Balance Sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(c) Investments:

Trade investments are investments made to enhance the Company’s business interests. Investments those are readily realisable and intended to be held for not more than a year are classified as "Other Current Assets". All other investments are classified as non-current (long term) investments.

Non-current investments including investments in subsidiaries (profit/loss earned or sustained by subsidiaries is not recognized in the books of account) and an associate are carried at cost and provisions recorded to recognise any declines, other than temporary, in the carrying amount of each investment. Cost of overseas investment comprises the Indian Rupee Value of the consideration paid for the investment.

(d) Inventories:

"Inventories are valued as follows:

Items of inventories are valued at lower of cost, computed on First In First Out basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition. Goods in transit are valued at cost, which represents the costs incurred up to the stage at which the goods are in transit."

(e) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised when the significant risks and rewards of ownership of goods have passed to customers.

(ii) Fixed price contracts: Contract revenue is recognized only to the extent of cost incurred till such time the outcome of the job cannot

53


be ascertained reliably. When the outcome of the contract is ascertained reliably contract revenue is recognized at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date to the total estimated contract costs.

(iii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered.

(iv) Liquidated damages/penalties, if any, are provided based on management’s assessment of the estimated liability, as per contractual terms and/or acceptance.

(v) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(vi) The Company is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in Company’s activities within the prescribed time limit. Accordingly, refund is accrued on sale/consumption of such goods.

(vii)Dividend income is recognised when the right to receive dividend is established.

(f) Taxation:

(i) Tax expense comprises current tax and deferred tax charge or credit.

(a) Current tax is measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions of the Income Tax Act, 1961 prevailing for the relevant assessment year.

(b) Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences, which originate during the tax holiday period but is expected to reverse after such tax holiday period, is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the Balance Sheet date.

(ii) Tax on distributed profits payable is as per the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the profits for the year.

(g) Cash flow statement:

The cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances with banks.

(h) Foreign currency transactions:

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion:

Monetary items are translated at the closing exchange rate as on the date of the Balance Sheet and non-monetary items are reported using the exchange rate that existed on the date of the transaction.

(iii) Exchange differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise and disclosed as a net amount in the financial statements.

54


(i) Employee benefits:

(i) Employee benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the funds are due. The Company has no other obligations other than the contributions payable.

(ii) The present value of the obligation of gratuity is determined based on an actuarial valuation conducted by an independent actuary, using the projected unit credit method. Actuarial gains and losses on such valuation are recognised immediately in the Statement of Profit and Loss. The fair value of plan assets is administered by Life Insurance Corporation of India, is reduced from gross obligation under the defined benefit plan, to recognised the obligation on a net basis value.

(j) Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval of the financial statements by the Board of Directors.

(k) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognised nor disclosed in the financial statements.

(l) Operating leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease period unless another systematic basis is more representative of the time pattern of the users benefit.

(m) Exploration and Development Costs:

The Company follows successful efforts method for accounting of oil & gas exploration and production activities, in respect of its participating interest in un-incorporated joint venture which includes:

(i) Survey costs are recognised as revenue expenditure in the year in which these are incurred.

(ii) Cost of exploratory wells is carried as exploratory wells in progress. Such exploratory wells in progress are capitalised in the year in which the producing property is created or is written off in the year when determined to be dry/abandoned.

(iii) All wells appearing as exploratory wells in progress which are more than two years old from the date of completion of drilling are charged to Statement of Profit and Loss, except those wells which have proved reserves and the development of the fields in which the wells are located has been planned.

55


56

3 Share capital:

Authorised/issued, subscribed and fully paid up:

Number `

`

Number `

`Number Number

Shareholders holding more than 5% of the paid up equity share capital of the Company:

March 31, 2014 As at


Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year's is set out below:

Particulars

As at Particulars March 31, 2013

As at March 31, 2013

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.

Particulars

No. of shares held

% of holding

No. of shares held

% of holding

March 31, 2014 March 31, 2013As at As at


3.1

3.2

3.3

3.4


Authorised:

Equity shares of `2 each 301,750,000 603,500,000 301,750,000 603,500,000

Issued, subscribed and fully paid up:

Equity shares of `2 each 219,206,111 438,412,222 220,552,694 441,105,388 Total 219,206,111 438,412,222 220,552,694 441,105,388

Outstanding at the beginning of the year 220,552,694 441,105,388 220,552,694 441,105,388 Equity shares bought back during the year (Refer Note 3.6) 1,346,583 2,693,166 - - Outstanding at the end of the year 219,206,111 438,412,222 220,552,694 441,105,388

Name of the shareholders Nitin M.Shah 45,089,126 20.57% 45,089,126 20.44%Saroj N. Shah 46,472,725 21.20% 46,472,725 21.07%Rahul N. Shah 14,123,500 6.44% 14,123,500 6.40%Kunal N. Shah 23,004,750 10.49% 23,004,750 10.43%

Particulars Bonus shares Other than cash Shares bought back

2012-13 - - -

2011-12 157,536,989 - -

2010-11 - - -

2009-10 - - -

2008-09 - - -

Aggregate number of bonus shares, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

3.5

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 149,000,000, at a maximum price of 66.60 per equity share, the Company has bought back 1,346,583 equity shares through open market transactions for an aggregate amount of 76,986,186 by utilising Securities Premium Account to the extent of 74,293,020.

`3.6

4 Reserves and surplus:

Particulars


`


`


57

5 Long term borrowings:

Particulars


`


`


Securities Premium Reserve

Balance, beginning of the year 354,314,397 354,314,397

Less :Utilisation towards premium paid on buy back of shares (Refer Note 3.6) 74,293,020 -

Balance, end of the year 280,021,377 354,314,397

Revaluation Reserve


Less: Charged to depreciation of tangible assets (Refer Note 2(b) (i)) 701,922 811,198


General Reserve

As per last Balance Sheet 213,162,174 213,162,174

Surplus in Statement of Profit and Loss


Add: Profit for the year 109,757,237 175,385,041

599,149,754 540,999,642

Less: Proposed dividend of ` 0.20 (P. Y. ` 0.20) per equity share 43,841,222 44,110,539

Corporate dividend tax on proposed dividend 7,450,816 7,496,586

51,292,038 51,607,125


Total 1,046,583,788 1,063,113,531

Secured

From a bank

Vehicle loan (Refer Notes 5.1 & 5.2) 111,657 741,342

Total 111,657 741,342

5.1 Vehicle loans from a bank is secured by the hypothecation of the underlying asset and has a maturity period up to three years.

5.2 Loan is payable in thirty-six installments of ` 56,580 each and carries rate of interest of 10.14% per annum.

6 Deferred tax Assets / (Liabilities) (net):

7 Other long term liabilities:

Particulars


`


`

Particulars


`


`

58


Deferred tax liability on account of:

- Difference in WDV between book and income tax records (A) 2,909,599 3,281,547

Deferred tax asset on account of:

- Employee benefits (1,430,010) (832,691)

- Provision for doubtful debts and advances (3,056,976) (1,448,682)

- Other disallowances U/s 43 B (203,940) -

Sub-total (B) (4,690,926) (2,281,373)

Net Deferred Tax Assets/(Liability) (A) - (B) 1,781,327 (1,000,174)

Opening Balance (1,000,174) 2,566,103

(Credit) for the year (2,781,501) (1,565,929)

Rent and other deposits 218,055 200,000

Total 218,055 200,000

9 Short term borrowings:

Particulars


`


`

Secured

Repayable on demand from banks:

- Cash credit 792,213,198 843,671,712

- Working capital demand loan 170,000,000 150,000,000

Foreign currency loans*@ 1,593,358,874 1,212,698,810

(* buyers line of credit/packing credit facilities availed by the Company)

Total 2,555,572,072 2,206,370,522

8 Long-term provisions:

Particulars


`


`

Provision for gratuity (Refer Notes 2(i) and 27.1) 1,539,272 526,483

Total 1,539,272 526,483

9.1 IDBI Bank Limited:

9.1.1 Primary security: First pari pasu charge on inventory and book debts and entire movable assets of the Company, both present and future.

9.1.2 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 ` 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).

(@ includes premium payable on forward contracts amounting to `23,129,147 (P.Y. `Nil))


59


9.1.3 Credit facilities availed:Working capital loan, stand by letter of credit and other non-fund based facilities.

9.2 Axis Bank Limited:

9.2.1 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.

9.2.2 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 1,712,000,000 (P.Y.` 1,485,000,000).

9.2.3 Credit facilities availedWorking capital loan, stand by letter of credit and other non-fund based facilities.

9.3 Yes Bank Limited:


9.3.2 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 `Nil (P.Y.`430,000,000) and pledge of Nil (P.Y.10,100,000) shares of the Company (belonging to the promoters of the Company).

9.3.3 Credit facilities availed:Working capital loan, stand by letter of credit and other non-fund based facilities.

9.3.4 The facilities as above are fully satisfied on October 9, 2013.

9.4 Bank of Baroda

9.4.1 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.


Personal guarantee of the Managing Director and a Whole Time Director aggregating to 890,000,000 (P.Y. 890,000,000) .

9.4.3 Credit facilities availed:Working capital loan and other non-fund based facilities.

9.5 Dena Bank



Personal guarantee of the Manging Director and a Whole Time Director aggregating to 300,000,000 (P.Y.Nil).

9.5.3 Credit facilities availed:Working capital loan and other non-fund based facilities from September 30, 2013.

10 Trade payables:

10.1

Particulars


`


`

Dues to Micro and Small Enterprises (Refer Note 10.1) 863,086 619,551

Dues to a subsidiary 13,342,156 33,286

Dues to an associate - 4,277,533

Others 251,127,038 335,353,269

Total 265,332,280 340,283,639

Disclosure under the Micro ,Small and Medium Enterprises Development Act, 2006 :Amounts due to Micro and Small Enterprises are disclosed on the basis of and to the extent of information available with the Company regarding status of the suppliers, which are as follows :

Particulars


`


`

1 Principal amount remaining unpaid at the end of the year 641,297 458,303

2 Interest due thereon 60,541 161,248

3 Interest paid during the year - -

4 Interest due and payable ( on the amount which have been paid beyond the appointed

date during the year) - -

5 Interest remaining accrued and unpaid at the end of the year 221,789 161,248

6 Interest due of the previous year 161,248 NA

11 Other current liabilities:

Particulars


`


`

Invoices raised in respect of incomplete contracts 44,512,573 36,301,395

Less: Adjustment against aggregated amount of cost incurred and recognised profit

(less recognised losses) (Refer Note 40) 40,709,176 32,725,819

3,803,397 3,575,576

Current maturity of long-term debt 629,685 565,769

Interest accrued but not due on borrowings 3,328,084 2,522,543

Unpaid dividends* 383,359 356,491

Income received in advance 824,700 759,939

Advances from customers 145,263,493 8,024,356

Other payables:

-Statutory dues (contribution to PF, withholding taxes, etc.) 9,657,258 4,073,343

- Remuneration etc. payable to the managing director - 1,878,754

Salaries and bonus 6,260,643 5,282,280

Expenses payable 20,105,395 11,040,320

Total 190,256,014 38,079,371

(* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund under section 205C of the Act

as at year end)

60


61


12 Short term provisions:

Particulars


`


`

Provision for employee benefits

For gratuity (Refer Notes 2(i) and 27.1) 2,711,216 2,423,330

Provision- Others

For income tax *(Refer Note 2(f)) 640,764 7,554,390

For wealth tax * 85,000 92,000

For proposed dividend 43,841,222 44,110,539

For corporate dividend tax on proposed dividend 14,947,402 7,496,586

Total 62,225,604 61,676,845

(*net of payments, if any)

62



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-

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,240

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-

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,000

6

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-

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,080

2

,589

,920

2

,626

,040

Bui

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,932

-

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20,4

31

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834

22,

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,322

-

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-

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,344

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s 3

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-

-

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,276

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2

,096

,640

4

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,530

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14

15 Non current investments:

No. Particulars As at

March 31, 2013`


`

Note:


63


Investment in equity instruments (Refer Note 2 (c))

(fully paid up, face value of `10 each, unless other wise stated)

1 In subsidiaries -Unquoted, trade

(i) Domestic (wholly owned subsidiary):

10,000 (P. Y. 10,000) of Eurotech Cylinders Private Limited 100,000 100,000

(ii) Foreign (wholly owned subsidiaries):

10 (P. Y. 10) of Nitin Ventures FZE , UAE 110,209,425 110,209,425

Equity Share of 1,000,000 Dhs each

100,000 (P. Y. 100,000) of Nitin Global Pte Limited, Singapore 4,761,000 4,761,000

Ordinary shares, with no par value in SGD

115,070,425 115,070,425

2 In an Associate-Unquoted, trade (extent of holding -- Nil (P. Y. 40%)) - 461,154,781

Nil (P. Y. 2,336,496) - Worthington Nitin Cylinders Private Limited

3 Other Companies-Quoted, others

2,300 (P. Y. 2,300) of Andhra Bank 23,000 23,000

4,183 (P. Y. 4,183) of Aurinpro Solutions Limited 1,290,218 1,290,218

30,134 (P. Y. 48,000) of PFL Infotech Limited 13,761,586 21,920,626

Nil (P. Y. 3,845) of Valecha Engineering Limited - 402,204

Nil (P. Y. 34,847) of Asian Granito Limited - 3,533,249

15,074,804 27,169,297

(Less) : Provision for diminution in the value of Investments (578,471) (11,541,928)

14,496,333 15,627,369

Total 129,566,758 591,852,575

Aggregate book value of unquoted investments 115,070,425 576,225,206

Aggregate book value of quoted investments 15,074,804 27,169,297

Provision for diminution in the value of investments 578,471 11,541,928

Aggregate market value of quoted investments 22,844,589 4,280,138

16 Long Term Loans and Advances:

Particulars


`


`

Unsecured, considered good

Advances on capital account 55,070,852 75,164,950

Fixed deposits having maturity of more than one year from the date of the Balance Sheet* 166,475 -

Advance payments against taxes (net of provision) 17,875,077 19,255,353

Sundry deposits

Considered good 5,166,332 2,884,918

Considered doubtful 1,052,739 -

6,219,071 2,884,918

Less:Provision for doubtful deposits 1,052,739 -

5,166,332 2,884,918

Total 78,278,736 97,305,221

(* pledged with banks for credit facilities availed)

17 Inventories:(Refer Note 2 (d))

Particulars As at

March 31, 2013`


`


18 Trade receivables:

19 Cash and bank balances:

Particulars As at March 31, 2013

`


`


`


`

64


Materials and components 788,518,788 649,234,886

(including materials and components in transit of ` 31,644,871 (P. Y. ` 9,100,667))

Stock-in-trade -traded goods 151,525,987 108,198,310

Total 940,044,775 757,433,196

Outstanding for a period exceeding six months from the date they are due for payment

-Considered good 106,465,435 681,565,093

-Considered doubtful 7,941,014 4,262,082

Others-considered good * 1,479,676,946 1,073,918,923

1,594,083,395 1,755,484,015

Less:Provision for doubtful debts 7,941,014 4,262,082

Total 1,586,142,381 1,755,484,015

Cash and cash equivalents

Cash on hand 40,834 196,797

Balances with banks:

- in current accounts 307,343,944 428,375,980

- Unclaimed and unpaid dividend accounts* 383,359 356,491

- Exchange Earners Foreign Currency (EEFC) current accounts in US dollar - 81,500,190

307,768,137 510,429,458

Other cash and bank balances

- Deposit accounts (maturity period within one year)** 32,036,824 19,752,400

Total 339,804,961 530,181,858

(* earmarked for payment of unpaid dividend only) (** pledged with banks for credit facilities availed)

(* Includes dues from Associate Company ` 271,808 (P.Y. Nil) and Subsidiaries Nil (P.Y 18,795,914))` ` `

20 Short term loans and advances:

Particulars As at

March 31, 2013`


`


65



Loan to subsidiaries (Refer Note 33) 17,351,744 16,153,153

Loans to bodies corporate 120,050,822 36,550,822

Loans and advances to employees/others 4,584,413 3,842,109

Advances to suppliers 511,781,867 2,141,363

Prepaid expenses 9,166,043 464,597

Balances with government authorities:

- VAT refund receivable 215,200 15,372

Total 663,150,089 59,167,416

21 Other current assets:


`


`


Special additional duty incentive (DEPB) 10,969,242 8,355,213

Accrued interest on fixed deposits 402,720 284,005

Equity shares held for sale (face value of ` 10 each) 461,154,781 -

(In an Associate (extent of holding -- 40% (P. Y. Nil)

2,336,496 (P.Y.Nil) - Worthington Nitin Cylinders Private Limited)

Total 472,526,743 8,639,218

22 Revenue from operations:

(Refer Notes 2 (e) (I), (ii) and (iii)) Particulars 2012-13

`2013-14

`

Sale of products 4,535,427,579 3,493,877,921

Sale of services (AMC) 18,922,997 26,513,914

Total 4,554,350,576 3,520,391,835

22.1 Particulars of sale of products:

Particulars 2012-13`

2013-14`

Primarily project related activities 3,095,429,322 2,420,496,477

Cylinders, fire protection, detection equipments etc. 1,439,998,257 1,073,381,444

Total 4,535,427,579 3,493,877,921

22.2 The Company is registered as a small scale entrepreneur under Ministry of Small Scale Industries.Hence, the Company is not liable to

collect and pay excise duty on sale of products.

2012-13`

2013-14`

66


23 Other income:

(Refer Note 2 (e) (v)) Particulars

Interest income on:

- deposits with banks 2,566,007 8,818,863

- loans given 5,311,859 450,000

- overdue trade receivables and others 45,170 86,795

Dividend income on non-current investments- others 23,104 304,085

Rent 288,000 288,000

Surplus/(loss) on sale of assets 14,926 (50,205)

Service charges and other miscellaneous receipts 3,000,000 3,052,270

Liability no longer required written back 403,033 90,014,315

Debts written off in earlier years, Realised 470,843 5,048,392

Total 12,122,943 108,012,515

24 Cost of materials and components consumed:

(Refer Note 2 (e) (vi)) Particulars

Opening inventories 649,234,886 1,337,221,024

Add: Purchases 2,433,518,471 1,293,933,250

3,082,753,357 2,631,154,274

Less: Closing inventories 788,518,788 649,234,886

Total 2,294,234,569 1,981,919,388

24.1 Particulars of materials and components consumed: Particulars

Fire alarm, detection equipments etc. 1,003,727,624 824,082,082

Cylinders 848,407,944 788,407,533

Gases/fire fighting chemicals 160,137,573 104,050,768

Fire fighting equipments 281,961,429 265,379,005

Total 2,294,234,569 1,981,919,388

2012-13`

2013-14`

2012-13`

2013-14`

25 Purchase of traded goods: Particulars

Fire alarm, detection equipments etc. 1,279,413,308 716,521,154

Cylinders etc. 398,505,784 265,014,673

Total 1,677,919,092 981,535,827

2012-13`

2013-14`

2012-13`

2013-14`

26 Changes in inventory of stock in trade:

Particulars

Inventory at the end of the year:

Traded goods 151,525,987 108,198,310

Inventory at the beginning of the year:

Traded goods 108,198,310 117,021,106

Total (43,327,677) 8,822,796

No. Particulars

(i) Defined Contribution Plan:

Company's contribution to provident fund 2,788,404 1,807,592

(ii) Defined Benefit Plans - Gratuity:

a) Liability recognized in the Balance Sheet:

1 Present value of obligation:

Opening balance 6,286,225 5,055,174

Service cost 688,354 642,309

Interest cost 518,614 442,328

Benefit paid from the fund (779,497) (193,013)

Actuarial loss on obligation 799,506 339,427

Closing balance 7,513,202 6,286,225

Less:

2 Fair value of plan assets:*


Expected return on plan assets less loss on investments 290,268 265,986

Actuarial (loss) on plan assets (84,469) 170,574


Employers' contribution 500,000 -


Amount recognized in the Balance Sheet 4,250,488 2,949,813

b) Expenses during the year :

Service cost 688,354 642,309


Expected return on plan assets (290,268) (265,986)

Actuarial loss 883,975 168,853

1,800,675 987,504

c) Actual return on plan assets: 205,799 436,560

d) Break up of plan assets** :

(i) Government of India securities NA NA

(ii) Public securities NA NA

(iii) State government securities NA NA

(iv) Private sector securities NA NA

(v) Others (LIC of India - Insurer Managed Fund) 100% 100%

e) Principal actuarial assumptions :

Rate of discounting 9.31% 8.25%

Expected return on plan assets 8.70% 8.70%

Rate of increase in salaries 7.00% 5.00%

Attrition Rate 2.00% 2.00%

f) Expected contribution for next year 2,711,216 2,423,330

67


2012-13`

2013-14`

27 Employee benefits expense:

Particulars

Salaries, wages and bonus 76,053,540 62,456,186

Contributions to provident fund (Refer Note 27.1) 2,788,404 1,807,592

Contributions to gratuity and other funds 1,947,125 1,777,803

Employees welfare 2,281,969 2,707,501

Total 83,071,038 68,749,082

27.1 As per Accounting Standard 15 “Employee benefits”, the disclosures as defined in the Accounting Standard are given below

2012-13`

2013-14`

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.

68


Experience Adjustments 2013-14 2012-13 2011-12

` ` `

On plan liability loss 140,372 69,434 2,270,755

On plan asset (loss) /gain (84,469) 170,574 (135,896)

Other adjustments 659,134 269,993 221,258

Other disclosures


`


`

Defined benefit obligation 7,513,202 6,286,225

Plan assets 3,262,714 3,336,412

(Deficit) (4,250,488) (2,949,813)


2013-14`

28 Finance costs:

Interest expense 165,569,443 148,357,785

Other borrowing costs 44,420,230 38,785,888

Total 209,989,673 187,143,673

69



2013-14`

29 A Other expenses:

Sub-contract charges and site expenses 14,686,759 19,015,697

Conveyance and travelling 20,188,748 18,283,886

Miscellaneous expenses* 14,834,778 12,945,053

(* includes repairs to machinery ` Nil (P.Y. `22,500))

Rent and lease rent (Refer Note 31) 1,173,611 2,175,642

Repairs - Other assets 10,036,914 6,450,795

Insurance premium 740,083 970,617

Payments to auditors (including service tax) 1,939,285 1,512,384

(Refer Note 29.5)

Legal and professional fees 12,699,620 13,009,962

Donations and charity 3,891,222 6,758,111

Vehicle expenses 2,420,987 1,713,444

Sitting fees to Non Executive Directors 172,000 189,000

Loss on sale of non-current investments-Others (net) 1,049,575 20,367,389

Sales promotion and advertisement 12,151,910 4,775,170

Bad debts written off 26,939,635 21,132,871



Distribution expenses (net) 9,268,255 4,980,172

Rates and taxes* 2,567,901 4,233,030

Survey cost incurred for mineral rights 11,015,624 7,877,043

Total 150,508,577 150,652,348

(* includes wealth tax of 85,000 (P.Y. 92,000))` `


2013-14`

29B Exceptional Items (net):

Loss on foreign currency transactions (net) 55,431,713 5,745,714


Total 44,468,257 17,287,641


2013-14`

29.1 Value of imports calculated on CIF basis:

Materials and components 1,839,702,801 635,711,384

Traded goods 1,476,271,966 931,862,170

Total 3,315,974,767 1,567,573,554

29.2 Value of consumption of imported and indigenous materials and components and percentage to total consumption:

70


Particulars

` % ` %

2013-14 2012-13

Materials and components

Imported at landed cost 1,689,703,760 73.65% 1,417,928,778 71.54%

Indigenously obtained 604,530,809 26.35% 563,990,610 28.46%

Total 2,294,234,569 100.00% 1,981,919,388 100.00%

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.


2013-14`

29.3 Expenditure in foreign currency on account of (on accrual basis):

Travelling 1,729,832 736,492

Financial expenses 27,497,854 17,374,725

License fees/membership and subscription 1,302,899 308,091

Total 30,530,585 18,419,308


2013-14`

29.4 Earnings in foreign exchange (on accrual basis):

Exports sales at FOB (incl. sales to SEZ/EOU units) 3,292,907,587 2,301,502,582

Total 3,292,907,587 2,301,502,582


2013-14`

29.5 Payments to auditors (including service tax):

Statutory audit fees 1,191,016 1,011,240

Limited review fees 438,204 337,080

Other services 224,720 134,832

Out of pocket expenses 85,345 29,232

Total 1,939,285 1,512,384

30 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.

Not later than one year 617,888 617,888

Later than one year and not later than five years 4,074,195 3,726,634

Later than five years 2,051,580 2,413,622

Total 6,743,663 6,758,144

31 Operating lease:

(a) In respect of a property acquired on lease (located at Vishakhapatnam) , the future minimum lease rentals under non-cancellable operating lease are as follows:

March 31, 2014 March 31, 2013

As at

Future minimum lease payments

``

71


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: ` 1,173,611 (P. Y. ` 2,175,642).

(c) Lease rentals are charged on the basis of agreed terms.

32 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.:

Name of the field in a joint venture Description of (Description of job)

interest / Proportion of ownership interest

Incorporation Residence

RJ-ONN-2004/1 Rajasthan Non integrated joint venture

(crude oil block) 11.11%

(P.Y. 11.11%)* India

(*Not applicable as it is an un-incorporated joint venture)

(b)

Country of

The financials of the joint venture as of March 31, 2014 are not available and hence, other disclosures relating to the joint venture have not been given.

32.1 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.

33 Disclosure as per clause 32 of the Listing Agreement:Loans and advances in the nature of loans given to subsidiaries:

As at As at

March 31, 2014 March 31, 2013 2013-14 2012-13` ` ` `

Balance Maximum outstanding

Particulars

(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.

Domestic subsidiary

Eurotech Cylinders Private Limited - - 216,929,179 264,590,844

Foreign subsidiaries

Nitin Ventures FZE 9,021,560 86,457 9,021,560 12,793,987

Nitin Global PTE Limited 8,330,184 16,066,696 16,066,696 16,066,696

Total 17,351,744 16,153,153

34 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 ` 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.

35 Derivative instruments and unhedged foreign currency exposure:

(a) Details of outstanding forward exchange contracts entered into by the Company is as under:

Particulars Amountsoutstanding in

foreign currency

Equivalent INR Amountsoutstanding in

foreign currency

Equivalent INR



72


Receivables:

Non-current investments $ 2,824,000 114,970,425 $ 2,824,000 114,970,425

Trade receivables for exports $ 21,281,119 1,278,991,012 $ 25,283,823 1,375,169,425

Trade receivables for exports - - € 37,725 2,623,540

Advance to a supplier - - € 283 19,716

Advances to suppliers $ 8,524,719 512,333,937 - -

Bank balances - - $ 1,498,460 81,500,190

Payables :

Short term secured borrowings

(buyers line of credit/packing credit facility) $ 26,714,544 1,628,312,781 $ 21,388,248 1,163,291,843


(buyers line of credit) £ 252,941 25,256,108 £ 600,175 49,406,967


(buyers line of credit) € 73,769 6,446,673 - -

Advance from customers $ 2,404,350 144,500,954 - -

Trade payables for imports $ 1,100,210 66,122,412 $ 3,393,922 184,593,048

Trade payables for imports £ 368,983 36,842,863 £ 219,559 18,074,273

Trade payables for imports € 2,655 219,199 € 2,938 204,320

Interest accrued but not due on borrowings € 202 17,644 - -

Interest accrued but not due on borrowings $ 58,854 3,577,312 $ 40,873 2,223,029

Interest accrued but not due on borrowings £ 693 69,190 £ 3,638 299,514


foreign currency


foreign currency

Equivalent INR



Hedging commitments outstanding

Forward cover (for short term borrowings) and

interest thereon $ 5,309,498 341,913,988 Nil Nil


interest thereon € 73,971 6,464,317 Nil Nil

(b) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

36 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.

37

(a)

No

(ii) Transactions with related parties (excluding re-imbursements):

No 2013-14

`

2012-13

`

Particulars

RelationshipName of the related party

Foreign subsidiaries

Related party disclosures:

Parties where control/significant influence exists and/or other related parties with whom transactions (material) have taken place include:

Key Management Personnel (KMP) Represented on the Board

Relatives of KMP's

AssociateUn-incorporated joint venture

Step down foreign subsidiaries

Domestic subsidiaries}

}

73


I Capital transactions

Assets

1 Capital work in progress (net)

Un-incorporated joint venture

Oil Block (RJ-ONN-2004/1) 4,292,762 39,972,832

2 Investment

Foreign subsidiary

Nitin Ventures FZE - 8,001,300

3 Loans given

Domestic subsidiary

Eurotech Cylinders Private Limited 714,150,719 306,450,000

4 Loans received back

Domestic subsidiary


Liabilities

1 Unsecured loans taken

KMP's/NED

Nitin M. Shah - 93,500,000

Rahul N. Shah - 1,200,000

Kunal N. Shah 1,100,000 -

}

Non Executive Director (NED)

1 Eurotech Cylinders Private Limited

2 Nitin Fire Protection Appliances Private Limited

(effective April 20, 2012)

3 Nitin Fire Protection Systems Private Limited

(effective May 3, 2012)

4 Nitin Ventures FZE, UAE

5 Nitin Global Pte Limited, Singapore

6 New Age Company LLC, UAE

7 Firetec Systems Limited, UK (effective April 30, 2013)

8 Oil Block (RJ-ONN-2004/1)

9 Worthington Nitin Cylinders Private Limited (WNCPL)

10 Nitin M. Shah (Chairman and Managing Director)

11 Rahul N. Shah (Whole time Director)

12 Kunal N. Shah (Director)

13 Saroj N. Shah (spouse of Nitin M. Shah)

14 Nitin M. Shah (HUF)

15 Rahul N. Shah (HUF)

16 Reshma N. Shah (daughter of Nitin M. Shah)

}

}

(b) Transactions with related parties (excluding re-imbursements):

No 2013-14

`

2012-13

`

Particulars

74


2 Unsecured loans repaid

KMP's/NED

Nitin M. Shah - 93,500,000



II Revenue transactions

Income

1 Sale of products (net of taxes)

Domestic subsidiary


Foreign subsidiary

New Age Company LLC 1,566,828 -

2 Service charges (net of taxes)

Associate

Worthington Nitin Cylinders Private Limited 3,000,000 3,000,000

Expenditure

1 Purchase of materials and components (net of taxes)

Domestic subsidiary


Associate


2 Rent (net of taxes)

KMP/Relative of a KMP

Nitin M. Shah - 539,328

Saroj N. Shah - 674,160

3 Remuneration*

KMP's

Nitin M. Shah 12,024,000 6,140,657

Rahul N. Shah 40,320 -

4 Interest

KMP


5 Survey cost incurred for mineral rights


Oil Block (RJ-ONN-2004/1) 11,015,624 7,877,043

No 2013-14

`

2012-13

`

Particulars

(b) Transactions with related parties

(* excluding incremental liability for gratuity as employee wise breakup of such liability based on estimation is not ascertainable)

75


III Proposed dividend KMP's/NEDNitin M. Shah 9,017,825 9,017,825 Rahul N. Shah 2,824,700 2,824,700 Kunal N. Shah 4,600,950 4,600,950

Relatives of KMP'sSaroj N. Shah 9,294,545 9,294,545 Nitin M. Shah (HUF) 2,044,200 2,044,200 Rahul N. Shah (HUF) 1,833,954 1,833,954 Reshma N. Shah 1,883,000 1,883,000

IV Standby letter of credit facility providedForeign subsidiaries (incl. a step down foreign subsidiary)Nitin Ventures FZE (including New Age Company LLC) - 38,952,000 Nitin Global Pte Limited - 58,300,000

V Standby letter of credit facility releasedAssociateWorthington Nitin Cylinders Private Limited 160,000,000 -

Foreign subsidiaryNitin Global Pte Limited - 105,800,000

NoMarch 31, 2014

As at

`

Particulars

(c) Amounts outstanding for related parties:

March 31, 2013As at

`

I Assets1 Other current assets/non-current investments(i) Equity Shares

Domestic subsidiary Eurotech Cylinders Private Limited 100,000 100,000

Foreign subsidiaries Nitin Ventures FZE 110,209,425 110,209,425 Nitin Global Pte Limited 4,761,000 4,761,000

AssociateWorthington Nitin Cylinders Private Limited 461,154,781* 461,154,781 (*Other current assets)

(ii) Capital work in progress Un-incorporated joint venture Oil Block (RJ-ONN-2004/1) 231,795,818 227,503,056

2 Trade receivables (net of trade payables)Domestic subsidiary Eurotech Cylinders Private Limited - 18,360,800

AssociateWorhtington Nitin Cylinders Private Limited 271,808 -


NoMarch 31, 2014

As at

`

ParticularsMarch 31, 2013

As at

`


76


3 Foreign subsidiary

Nitin Ventures FZE - 435,114

II Equity and Liabilities

1 Trade payables (net of trade receivables, if any)

Domestic Subsidiary

Eurotech Cylinders Private Limited 13,342,156 -

Step down foreign subsidiary

New Age Company LLC - 33,286

Associate

Worthington Nitin Cylinders Private Limited - 4,277,533

2 Dues (excluding outstanding salary payable, if any)

KMP

Nitin M. Shah - 1,878,754

Relative of a KMP


III Guarantees given

1 Corporate financial guarantees given

Domestic subsidiary


IV Standby letter of credit facility provided

1 Foreign subsidiaries (incl. a step down foreign subsidiary)

Nitin Ventures FZE (including New Age Company LLC) 937,986,714 873,492,158

Nitin Global PTE 305,536,154 350,810,985

2 Associate (limit)

Worthington Nitin Cylinders Private Limited - 160,000,000

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.


77


38 Contingent liabilities not provided for in respect of :*

NoMarch 31, 2014

As at

`


As at

`

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

Estimated amount of contracts remaining to be executed on capital account (net of advances, unsecured and considered good) : ` 275,282,619 (P.Y. 255,369,550)

(* 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.

39 Commitments:

( * in respect of completed and contracts in progress)

41 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 ` 450,000 as maximum penalty pending

disposal of the petitions as on the Balance Sheet date.

40 Disclosure pursuant to AS - 7 ( Revised):

NoMarch 31, 2014

As at

`


As at

`

(a) Contract revenue recognised for the financial year* 3,139,941,895 2,456,797,872

(b) Aggregate amount of contract costs incurred and recognised profit (less recognises losses)

as at end of the financial year for all contracts in progress as at that date 40,709,176 32,725,819

(c) Amount of customer advances outstanding for contracts in progress as at the end of the

financial year Nil Nil

(d) Retention amount due from customers for contracts in progress as at end of the financial

year Nil Nil


78


42 Details of intangible assets under development :

March 31, 2014As at

`


As at

`

Cost of exploratory wells in progress

(pursuant to participating interest in an un-incorporated joint venture) 231,795,818 227,503,056

Total 231,795,818 227,503,056

45 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.

46 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.

47 Sales include manufacturing sales of ` 4,769,789 (P.Y. `4,973,322) and materials and components consumed includes raw materials consumed for manufacturing activites amounting to 4,125,867 (P.Y. 4,326,790).

48 The Company has an investment of 461,154,781 (P.Y. 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.

49 Previous year:Current year’s figures are stated in bold prints and previous years figures are regrouped/restated wherever considered necessary.

Signatures to Notes 1 to 49 of the Financial Statements

For and on behalf of the Board of Directors

Nitin M. Shah Rahul N. Shah Kamlesh Z. Gandhi Abhishek Shrivastava Chairman and Whole time Director Chief Financal Officer Company SecretaryManaging Director

Mumbai, May 17, 2014

43 Earning Per Share (EPS):

March 31, 2014As at

`


As at

`


Amount available for equity share holders 109,757,237 175,385,041

Weighted average number of equity shares (nos.) 220,039,432 220,552,694

Basic EPS 0.50 0.80

Diluted EPS 0.50 0.80

Particulars Sales Value Closing Inventory Opening Inventory

` ` `

Fire alarm, detection equipments etc. 1,051,198,728 107,962,266 81,029,714

Cylinders etc. 388,799,529 43,563,721 27,168,596

Total 1,439,998,257 151,525,987 108,198,310

43 Disclosure of traded goods:

(DIN No.00073232) (DIN No.00073226)

79


CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS OF NITIN FIRE PROTECTION INDUSTRIES LIMITED

To The Board of Directors of Nitin Fire Protection Industries Limited

We have audited the accompanying consolidated financial statements of Nitin Fire Protection Industries Limited (“the Company”) and its subsidiaries (the Company and its subsidiaries constitute “the Group”) which comprise the Consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated financial statements on the basis of separate financial statements and other financial information regarding components that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India; this includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Consolidated 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 Consolidated 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 Consolidated Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated Financial Statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated 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 presentation of the Consolidated Financial Statements that give a true and fair view 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 consolidated 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. 36 to the notes to the Consolidated Financial Statements, no provision has been made by the Company in respect of its dispute with a bank for a claim made by the bank for 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. 37 to the notes to the Consolidated Financial Statements, provision of 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 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.

`

`

`

80


Qualified Opinion

We report that the consolidated financial statements have been prepared by the Company's Management in accordance with the requirements of Accounting Standards (AS) 21, “Consolidated financial statements” and Accounting standard (AS) 27, “Financial Reporting of Interest in Joint Ventures” as notified pursuant to the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate financial statements of Nitin Fire Protection Industries Limited and its subsidiaries (including subsidiaries of subsidiaries).

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries and unaudited financial statements of a foreign subsidiary are as approved by the Board of Directors as mentioned in the 'Other Matters' paragraph below and except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the consolidated 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 Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014; (b) in the case of the Consolidated Statement of Profit and Loss, of the profit for the year ended on that date; and(c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

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 461,154,781 as at March 31, 2014 (Previous year 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.

Other Matters

We did not audit the financial statements of two subsidiaries, whose financial statements reflect total assets of 3,872,961,129 as at March 31, 2014, total revenues of 5,362,247,634 and net cash outflows amounting to 32,760,960 for the year then ended. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of this matter.

We have relied on the unaudited financial statements of a foreign subsidiary, which reflect total assets of 391,385,651 as at March 31, 2014, total revenues of 395,320,606 and net cash inflow amounting to 9,815,791 for the year then ended. The unaudited financial statements as approved by the Board of Directors of the company have been furnished to us by the Management and our opinion in so far as it relates to the amounts included in respect of the said subsidiary is based solely on such approved unaudited financial statements.

` `

`` `

`` `

81


Place: MumbaiDate: May 17, 2014

For Haribhakti & Co.Chartered AccountantsFirm Registration No.103523W

Sd/-Sumant SakhardandePartnerMembership No. 034828

Note

Consolidated Balance Sheet as at March 31, 2014



` `

82


A EQUITY AND LIABILITIES1 Shareholders’ funds

Share capital 4 438,412,222 441,105,388 Reserves and surplus 5 3,272,658,321 2,733,704,448

3,711,070,543 3,174,809,836

2 Non-current liabilitiesLong-term borrowings 6 111,657 741,342 Deferred tax liability (net) 7 - 2,173,873 Other long term liabilities 8 218,055 200,000 Long-term provisions 9 16,887,554 14,538,967

17,217,266 17,654,182

3 Current liabilitiesShort-term borrowings 10 3,923,317,170 3,528,613,292 Trade payables 11 496,242,675 661,819,152 Other current liabilities 12 543,248,675 99,449,442 Short-term provisions 13 70,112,940 72,227,730

5,032,921,460 4,362,109,616 Total 8,761,209,269 7,554,573,634

B ASSETS1 Non-current assets Fixed assets

- Tangible assets 14 565,004,136 467,584,938 - Intangible assets 15 1,197,456,905 1,127,138,952 - Intangible assets under development* 231,795,818 227,503,056 ( * Refer Notes 3 (c ) (iii) and 45)Non-current investments 16 14,496,333 359,781,874 Deferred tax assets (net) 7 124,000 - Long-term loans and advances 17 187,768,250 217,123,010 Trade receivables 18 8,369,799 15,426,111

2,205,015,241 2,414,557,941

2 Current assetsInventories 19 1,774,434,457 1,400,517,275 Trade receivables 20 2,993,204,583 2,634,630,268 Cash and bank balances 21 367,695,268 576,069,656 Short-term loans and advances 22 1,063,314,895 514,388,340 Other current assets 23 357,544,825 14,410,154

6,556,194,028 5,140,015,693 Total 8,761,209,269 7,554,573,634

Notes 1 to 49 are an integral part of the Consolidated Financial StatementsIn terms of our attached report of even date


Sumant Sakhardande




Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-



Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Note

Consolidated Statement of Profit and Loss for the year ended March 31, 2014


2013-14 2012-13` `

83


A Revenue

Revenue from operations 24 10,161,241,813 7,046,900,386

Other operating income-duty draw back - 224,625

Other income 25 18,929,121 182,229,119

Total Revenue 10,180,170,934 7,229,354,130

B Expenses:

Cost of materials and components consumed 26 6,017,641,919 4,045,730,808

Purchases of traded goods 26.1 2,193,668,362 1,650,938,294

Changes in inventories of stock-in-trade 27 3,298,502 (38,826,474)

Employee benefits expense 28 257,996,072 193,508,656

Finance costs 29 305,318,631 254,417,066

Depreciation of tangible assets 14 94,680,311 45,473,451

Less:Charged to Revaluation Reserve 701,922 811,198

93,978,389 44,662,253

Amortisation of intangible assets 14 11,886,010 2,653,751

105,864,399 47,316,004

Other expenses 30 551,936,016 389,461,946

Total Expenses 9,435,723,901 6,542,546,301

Profit before tax and exceptional items 744,447,033 686,807,829

Exceptional Items (net) 31 48,827,537 24,149,306

Profit before tax 695,619,496 662,658,523

Tax expense: (Refer Note 3(i))

- Current tax 28,647,305 56,101,506

- MAT credit entitlement for earlier years - (7,320,781)

- Tax adjustments of earlier years (net) 4,029,211 1,997,772

- Deferred tax- (credit)(Refer Notes 3(i) and 7) (2,297,873) (1,788,057)

Profit after tax 665,240,853 613,668,083

(Less): Share of (loss)-associate - (43,598,190)

Profit attributable to the Group 665,240,853 570,069,893

Earnings per equity share on nominal value of ` 2 (P.Y.` 2) each

(Refer Note 3(m) and 46)

Basic 3.02 2.58

Diluted 3.02 2.58

Number of shares used in computing earnings per share

Basic 220,039,432 220,552,694

Diluted 220,039,432 220,552,694

Notes 1 to 49 are an integral part of the Consolidated Financial Statements



Sumant Sakhardande




Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-



Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Consolidated Cash Flow Statement for the year ended March 31, 2014


2013-14 2012-13` `

84


A Cash flow from operating activities

Net profit before taxation 695,619,496 662,658,522

Adjustments for:

Depreciation* and amortisation 105,864,399 47,316,004

(* Net of transfer from revaluation reserve)

Unrealised foreign exchange difference-net (gain)/loss (10,160,868) 1,455,648

Interest income (gross) (9,529,793) (17,561,827)

Finance cost 305,318,631 254,417,066

Loss on sale of non- current investments (net) 1,049,575 20,367,389

Bad debts/balances written off 31,387,364 21,329,216

Provision for doubtful debts and deposits 6,043,843 56,686,281

Debts written off in earlier years, realised (470,843) (12,589,657)

Liability no longer required written back (1,131,673) (146,200,890)

(Gain) on sale of fixed assets (net) (245,305) (19,240)

Dividend income (23,104) (304,085)

Provision for gratuity and leave encashment 4,586,877 15,256,526


Operating profit before working capital changes 1,117,345,142 914,352,881

Adjustments for:

(Increase)/ Decrease in value of Inventories (373,917,182) 689,726,532

(Increase) in value of trade and other receivables (983,727,353) (914,668,184)

Increase/(decrease) in value of trade and other payables 284,509,652 (242,627,004)

(Decrease) in working capital (1,073,134,883) (467,568,656)

Cash generated from operations 44,210,259 446,784,225

Taxes paid (net of refunds, if any) (33,838,627) (44,600,331)

Net cash from operating activities 10,371,632 402,183,894

B Cash flow from investing activities

Purchase of fixed assets (260,454,270) (344,883,378)

(*includes movement in: advances on capital account/capital work in progress)

Sale of investments 11,044,917 40,030,929

Interest received 9,279,692 18,372,189

(Placement)/proceeds of/on deposits with banks (17,398,576) 30,683,145

Proceeds on sale of fixed assets 285,379 503,463

Dividend income 23,104 304,085

Net cash (used in) investing activities (257,219,755) (254,989,568)



2013-14 2012-13` `


Notes:1 Brackets indicate a cash outflow or deduction. 2 Cash and cash equivalents include unclaimed/unpaid dividends amounting to ` 383,359 (P.Y. ` 356,491) not available for use by the

Parent Company.3 Fixed deposits (pledged) being restricted for its use has been excluded from cash and cash equivalents and grouped under investment

activities.

85

` `


C Cash flow from financing activities

Proceeds from secured short term borrowings 527,105,555 450,589,840

Repayment of secured long term borrowings (92,718,885) (54,142,836)

Proceeds from unsecured short term borrowings (net) 20,106,011 211,245,343

Buy back of shares (76,986,186) -

Finance charges (304,684,605) (254,774,316)

Dividends distributed (including corporate dividend tax) (51,580,257) (102,454,012)

Net cash generated from financing activities 21,241,633 250,464,020

Net increase in cash and cash equivalents (225,606,489) 397,658,346

Cash and cash equivalents, (opening) 551,436,199 153,777,853

Cash and cash equivalents,(closing) 325,829,710 551,436,199

Net increase/(decrease) as disclosed above (225,606,489) 397,658,346

4 Components of cash and cash equivalents (closing):

Cash on hand 1,228,879 742,480

Bank balances:

With banks on:

- Current accounts 324,217,472 468,837,038

- Fixed deposits 42,032,033 24,633,457

- Unclaimed and unpaid dividend accounts 383,359 356,491

- EEFC current accounts in US dollar - 81,500,190

367,861,743 576,069,656

Less:Fixed deposits (pledged towards margin requirements) 42,032,033 24,633,457

325,829,710 551,436,199

Notes 1 to 49 are an integral part of the Consolidated Financial Statements



Sumant Sakhardande




Company Secretary

May 17, 2014Mumbai,

Sd/-

Sd/- Sd/-

Sd/-



Sd/-

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Notes to the Consolidated Financial Statements

1 Particulars of Group components consolidated in the Consolidated Financial Statements (CFS):

(* A step down subsidiary with shareholding through Nitin Venture FZE and consolidated by virtue of control over ownership.)(** A step down subsidiary with shareholding through Nitin Ventures FZE)(@ Not consolidated as these investments are currently held for sale. Hence, equity method of accounting is not followed)(** *Not applicable as it is an unincorporated Joint Venture)Note: During the previous year, Nitin Fire Protection Industries Limited (NFPIL or the ‘Parent Company’) had incorporated two wholly owned domestic subsidiaries viz. Nitin Fire Protection Appliances Private Limited(effective April 20, 2012) and Nitin Fire Protection Systems Private Limited (effective May 3, 2012). As there were no transactions since incorporation, the same are not considered in these CFS and the Parent Company is in the process of applying above subsidiaries for voluntary winding up.

2 (A) The Group and nature of operations:

The Parent Company is a public limited Company and made an initial public offer (‘IPO’) in May 2007. NFPIL’s shares are listed on the Bombay Stock Exchange Limited and the National Stock Exchange Limited and is also the flagship company of the Group, which apart from the Company itself comprises of its subsidiaries (including step down subsidiaries), its interest in a non-integrated un-incorporated joint venture and share of profits in an associate. NFPIL together with its subsidiaries (including step down subsidiaries) are principally engaged in the business 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. NFPIL has also invested in a non-integrated un-incorporated joint venture for crude oil. The associate is in the business of manufacturing high-pressure seamless compressed natural gas (CNG) cylinders. The Group undertakes project related and manufacturing/marketing activities from Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and Uttar Pradesh in India, Abu Dhabi, Dubai, Jabel Ali, Sharjah and Ras Al Khaimah in UAE, Singapore and London in UK.

(B) Basis of preparation of financial statements:

(i) (i) The accompanying CFS have been prepared in accordance with the principles and procedures for the preparation and presentation as laid down under Accounting Standard (AS) - 21 ’Consolidated Financial Statements’ and AS-27 ‘Financial Reporting of Interests in Joint Ventures’ notified under the Companies (Accounting Standards) Rules, 2006 (the ‘Rules’) (as amended) issued by the Central Government in exercise of the power conferred under sub-section (I) (a) of section 642 of the Companies Act, 1956 (the ‘Act’), guidelines issued by the Securities and Exchange Board of India and other relevant pronouncements of the Institute of Chartered Accountants of India (ICAI). For the previous year AS-23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’ was followed. 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 and as stated as above. Management evaluates all recently issued or revised Accounting Standards on an ongoing basis. Reference in these notes to Company or Group shall mean to include any or all of its aforesaid Group components unless otherwise stated.

(ii) The Notes to the CFS are intended to serve as a means of informative disclosure and a guide for better understanding of the Group’s position. Recognising this purpose, the Parent Company has disclosed only such Notes from the individual financial statements,


86


No. Country

of As at As at

incorporation March 31, 2014 March 31, 2013

Proportion of ownership interest (%)Particulars

a Domestic subsidiary

(i) Eurotech Cylinders Private Limited India 100 100

b Foreign subsidiaries (including step down subsidiaries)

(i) Nitin Venture FZE United Arab Emirates (UAE) 100 100

(ii) Nitin Global PTE Ltd. Singapore 100 100

(iii) New Age Company LLC * UAE 49 49

(iv) Firectec Systems Limited** United Kingdom (UK) 100 NA

c Associate

(i) Worthington Nitin Cylinders Private Limited (WNCPL) India @ 40

d Non-integrated un-incorporated joint venture

(i) Oil Block - RJ-ONN-2004/1-Rajasthan *** 11.11 11.11

(field in an non-integrated un-incorporated Joint Venture)

which fairly present the needed disclosures. Practical considerations made it desirable to exclude Notes to the Financial Statements, which in the opinion of the Group’s Management, could be better viewed, when referred from the individual financial statements of the Group.

3 Accounting policies:

Significant accounting policies are summarised below:

(a) Basis of accounting:

(i) The Parent Company maintains its accounts 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 under the Rules 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, guidelines issued by the Securities and Exchange Board of India and other relevant pronouncements of the ICAI.

(ii) The preparation of the CFS in conformity with GAAP requires that the Management of the Group make estimates and assumptions that affect the reported amounts of income and expenses of the year, the reported balances of assets and liabilities and the disclosure relating to contingent assets and liabilities as at the date of the CFS. These estimates are based upon the Management of the Group’s best knowledge of current events and actions. Actual results could differ from these estimates.

(iii) The accounts of the domestic subsidiary and an associate are prepared on the same basis as that of the Parent Company (except that no revaluation of fixed assets is carried out by any of the domestic subsidiary and an associate) and those of the foreign subsidiaries (including step down subsidiaries), have been prepared in compliance with local laws and applicable Accounting Standards.

(b) Principles of Consolidation:

The CFS have been prepared on the following basis:

(i) The CFS of NFPIL and its subsidiaries (including step down subsidiaries), are combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra group balances and transactions and also unrealised profits resulting there from, if any, in accordance with AS-21 ‘Consolidated Financial Statements’. The amount shown in respect of reserves (other than asset revaluation reserve and securities premium) comprises the amount of relevant reserves as per the Balance Sheet of the Parent Company and its share in the post acquisition increase in the relevant reserves of the subsidiaries.

Subsidiaries are those in which the Parent Company directly has an interest of more than one-half of the voting power or otherwise have power to exercise control over the operations. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer consolidated from the date of disposal. The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognised in the Consolidated Statement of Profit and Loss as the profit or loss on disposal of investment in a subsidiary and the results of operations are included in the CFS up to the date of cessation of parent subsidiary relationship.

(ii) The difference between the costs of investments in subsidiaries (including step down subsidiaries) over the net assets at the time of acquisition of shares in the subsidiaries is recognised in the CFS as ‘Goodwill on Consolidation’ and is included under intangibles in the schedule of fixed assets, being an asset in the CFS. The net asset value considered for the purpose of goodwill in respect of trenches of investment, is the value as at the date of the first investment for acquiring the subsidiaries. Net asset value is determined on the basis of book values of assets and liabilities as per the Financial Statements of the subsidiaries as on the date of investment.

(iii) Investments (other than in an associate) are accounted as specified in AS-13 ‘Accounting for Investments’.

(iv) The accounting policy followed for accounting of investment in an Associate for the previous year was as under:

Investment in an associate, where the Parent Company holds more than 20% of the equity is accounted for using the equity method (in the CFS) in accordance with AS-23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’ as per which the share of loss/profit of associates has been deducted/added to the cost of investment. The excess of cost of investment over the proportionate share in equity of an associate as at the date of the acquisition of stake has been identified as goodwill and is included in the carrying amount of the investment of the associate. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the share of net assets of the associate. The Consolidated Statement of Profit and Loss includes the Group's share of profit/loss of the associate. The Company accounts for its share of post-acquisition changes in net assets of associate, after eliminating unrealised profits and losses resulting from transactions between the Parent Company and its associate to the extent of its share, through its Statement of Profit and Loss, to the extent such change is attributable to the associates' Statement of Profit and Loss. An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor an interest in a joint venture.

87


(v) The Financial Statements of the domestic/foreign subsidiaries used in the consolidation are drawn up to the same reporting date as that of the Parent Company i.e. March 31, 2014.

(vi) The Financial Statements of foreign subsidiaries whose operations are considered as integral foreign operations, are recorded in a currency other than of its incorporation as it is acceptable to local government authorities and then translated for incorporation in the CFS in local currency as under:

(a) Fixed assets are converted at the exchange rate prevailing on the date of purchase. Depreciation is accounted at the same exchange rate at which the assets are translated.

(b) Revenue items (except depreciation, opening/closing inventories and income tax) are converted at the simple average of monthly exchange rates prevailing during the year.

(c) Monetary items are converted at the year-end exchange rate.

(d) Non-monetary items (excluding closing inventories) are reported using the exchange rate at the date of the transaction.

(e) Contingent liabilities, if any, are translated at the year-end exchange rate.

Exchange gain or loss arising out of ‘(a) to (d)’ above, is charged and disclosed separately as a net amount in the Consolidated Statement of Profit and Loss.

(vii) The CFS have been prepared using uniform accounting policies for all major transactions and other events in similar circumstances except as stated hereunder:

(1) The Parent Company, foreign subsidiaries and an associate provide depreciation in different methods and at different rates on tangible fixed assets. The Parent Company and foreign subsidiaries provide amortisation at different rates.

(2) Foreign subsidiaries recognize tax assets or liabilities in accordance with the applicable local legislation. Deferred tax assets or liabilities in respect of foreign subsidiaries are not recognised.

(3) The Parent Company and a foreign subsidiary follow different methods for valuation of inventories.

(4) A step down subsidiary provides for gratuity and leave encashment benefits in accordance with the local labour laws. Whereas, the Parent Company provides for gratuity on the basis of an actuarial valuation carried out every year and for compensated leave absences, the same is paid before the close of the year.

It is not practical to adopt uniform accounting policies. As certified by the Management, the proportion of these items vis-à-vis results/assets of the Group is not significant and it has been relied by the auditors.

(viii)Minority interest’s share of net profit for the year of a step down foreign subsidiary is identified and adjusted against the profit after tax of the group. Minority interest, consisting of equity attributable to them on the date of such investments were made by a Group component and movement in their equity since the date of parent subsidiary relationship, has been disclosed in the Consolidated Balance Sheet separately from liability and equity of shareholders of the Parent Company.

(c) Fixed assets and capital work-in-progress:

(i) Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value and are shown separately in the CFS. Any expected loss is recognised immediately in the Consolidated Statement of Profit and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Consolidated Statement of Profit and Loss.

(ii) Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use is considered by the Management. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Consolidated Statement of Profit and Loss.

(iii) Capital work in progress (CWIP) and intangible assets under development includes cost of exploratory wells in progress, cost of fixed assets not ready to use and interest on loans attributable to the acquisition of qualifying fixed assets up to the date of their commissioning, if any.

88


(iv) Machinery spares which can be used only in connection with an item of fixed asset and whose use is not of regular nature are capitalized and depreciated over the estimated useful life of the relevant asset.

(d) Depreciation, amortisation and impairment:

(i) Depreciation-tangibles:

Depreciation on fixed assets held by the Parent Company and a domestic subsidiary is provided on written down value method in accordance with the provisions of Section 205(2) (b) of the Act, in the manner and at the rates specified in Schedule XIV to the Act. Depreciation on additions/deductions is calculated pro rata from/to the number of days of additions/ deductions including incremental costs arising on account of translation of foreign currency liabilities for acquisition of fixed assets. In respect of an asset for which impairment loss is recognised, depreciation is provided on the revised carrying amount of the assets over its remaining useful life except in case of revalued assets where depreciation is computed on such revalued amounts and an appropriate amount transferred from revaluation reserve to Consolidated Statement of Profit and Loss. Individual assets costing less than 5,000 are depreciated in full in the year of acquisition. Cost of leasehold land is amortised in proportion to the period of lease.

(ii) Amortisation-Intangibles:

Intangible assets (Other than for goodwill arising on consolidation of subsidiaries, a step down subsidiary and an associate) are initially measured at cost and amortised so as to reflect the pattern in which the asset’s economic benefits are consumed. Expenditure on computer software is amortised on straight-line method over a period of two years.

(iii) Impairment of assets:

The carrying amounts of fixed assets are reviewed at each Balance Sheet date by the Group to determine if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(e) Goodwill arising on consolidation:

Goodwill arising on consolidation is in respect of acquisition of subsidiaries (including step down subsidiaries) and an associate. In respect of subsidiaries (including step down subsidiaries), goodwill is included under intangibles in the schedule of fixed assets and in respect of an associate; goodwill is included in the carrying amount of the investment of the associate in the schedule of investments. Goodwill arising on acquisition of subsidiaries is amortised over a period of five years and is stated net of amortisation but that arising on acquisition of a step down subsidiary and an associate is not amortised. However, goodwill arising on consolidation (subsidiaries, a step down subsidiary and an associate) is evaluated for impairment annually and whenever events or changes in circumstances indicate that its carrying amount may be impaired, for diminution other than temporary and is stated net of impairment losses, if any.

(f) Investments:

Trade investments are investments made to enhance the Group’s business interests. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as "Other Current Assets".

Long term investments other than in an associate are carried at cost and provisions recorded to recognise any declines, other than temporary, in the carrying amount of each investment. Investment in an associate is accounted for using the equity method in the CFS.

(g) Inventories:

Inventories of the Group are valued as follows:

Items of inventories are valued at lower of cost, computed on First In First Out basis and net realisable value. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition. In case of manufactured inventories and work in progress, cost includes an appropriate share of labour and overheads. Goods in transit are valued at cost, which represents the costs incurred upto the stage at which the goods are in transit.

Provision for obsolescence is made, wherever necessary.

(h) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and it can be reliably measured.

(i) Revenue from domestic sales is recognised on dispatch, which coincides with transfer of significant risks and rewards to

89


customers and stated net of taxes and returns, as applicable. Revenue from exports is recognised when the significant risks and rewards of ownership of goods have passed to customers.

(ii) Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date to the total estimated contract costs.

(iii) Income from services rendered on project related activities is recognised on due dates of the relevant contracts and is exclusive of service tax, wherever recovered and income from management services provided by a foreign subsidiaries is accounted on accrual basis.

(iv) Liquidated damages/penalties, if any, are provided based on Management’s assessment of the estimated liability, as per contractual terms and/or acceptance.

(v) Dividend income on investments is accounted for when the right to receive the payment is established. Other income is accounted on accrual basis as and when the right to receive arises.

(vi) The Group is entitled to refund of Special Additional Duty paid on imported goods traded or consumed in its activities within the prescribed time limit. Accordingly, refund is accrued on sale/consumption of such goods.

(vii) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

(i) Taxation:

1 Indian companies:

(i) Tax expense comprises current tax and deferred tax charge or credit.

Current tax is measured at the amounts expected to be paid to the Tax Authorities in accordance with the provisions of the Income Tax Act, 1961 prevailing for the relevant assessment years.

Deferred tax charge or credit is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax charge or credit is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods in the Consolidated Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet. In respect of deferred tax charge or credit resulting from timing differences which originate during the tax holiday period but is expected to reverse after such tax holiday period, deferred tax charge or credit is recognised in the year in which the timing differences originate using the tax rates and laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets and liabilities pertaining to consolidated entities are not set off against each other as the Parent Company does not have a legal right to do so.

(ii) Tax on distributed profits payable is as per the provisions of Section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as tax on distribution of profits issued by the ICAI and is not considered in determination of the profits for the year.

2 Foreign companies:

Foreign companies recognise tax expenses in accordance with the applicable local laws.

(j) Consolidated cash flow statement:

The consolidated cash flow statement is prepared by the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and presents the cash flows by operating, investing and financing activities of the Group. Cash and cash equivalents presented in the consolidated cash flow statement consists of cash on hand and balances with banks.

(k) Foreign currency transactions and balances:

(Other than those relating to foreign subsidiaries including a step down subsidiaries)

(i) Initial recognition:

Transactions for import/export of goods are recorded at a rate notified by the customs authorities for invoice purposes. Other foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

90


(ii) Conversion:

Monetary items are translated at the year-end exchange rate and non-monetary items are reported using the exchange rate that existed on the date of the transaction.

(iii) Exchange differences:

Exchange differences arising on settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying costs of such assets and the same is disclosed as a net amount in the CFS.

(l) Employee benefits:

1 Indian companies:

(i) Employee benefits in the form of provident and family pension fund are defined contribution schemes and the contributions are charged to the Consolidated Statement of Profit and Loss of the year when the contributions to the funds are due. The Group has no other obligations other than the contributions payable.

(ii) The present value of the obligation of gratuity is determine based on an actuarial valuation carried out by an independent actuary, using the projected unit credit method. Actuarial gains and losses on such valuation are recognised immediately in the Consolidated Statement of Profit and Loss. The fair value of plan assets is administered by Life Insurance Corporation of India, is reduced from gross obligation under the defined benefit plan, to recognised the obligation on a net basis value.

2 Foreign companies:

Provision is made for end-of-service gratuity payable and leave benefit to the employees at the reporting date in accordance with the local labour laws.

(m) Earnings per share:

The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the period are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval of the Financial Statements by the Board of Directors.

(n) Provisions, contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the Notes to the CFS. Contingent assets are neither recognised nor disclosed in the CFS.

(o) Operating leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased asset are classified as operating leases. Operating lease payments are recognised as an expense in the Consolidated Statement of Profit and Loss on a straight line basis over the lease period unless another systematic basis is more representative of the time pattern of the users benefit.

(p) Exploration and Development Costs:

The group follows successful efforts method for accounting of oil and gas exploration and production activities, in respect of its participating interest in un-incorporated joint venture which includes:

(i) Survey costs are recognised as revenue expenditure in the year in which these are incurred.

(ii) Cost of exploratory wells is carried as exploratory wells in progress. Such exploratory wells in progress are capitalised in the year in which the producing property is created or is written off in the year when determined to be dry/abandoned.

(iii) All wells appearing as exploratory wells in progress which are more than two years old from the date of completion of drilling are charged to Statement of Profit and Loss, except those wells which have proved reserves and the development of the fields in which the wells are located has been planned.

91


92

4 Share capital:

Authorised/issued, subscribed and fully paid up:

` `Number Number

Shareholders holding more than 5% of the paid up equity share capital of the Company:


Reconciliation of equity shares outstanding at the beginning and at the end of the reporting year's is set out below:

Particulars


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 Group.

In the event of liquidation of the Group, the holders of equity shares will be entitled to receive remaining assets of the Group, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Particulars

No. of shares held

% of holding

No. of shares held

% of holding

March 31, 2014 March 31, 2013As at As at


4.1

4.2

4.3

4.4


Nitin M.Shah 45,089,126 20.57% 45,089,126 20.44%Saroj N. Shah 46,472,725 21.20% 46,472,725 21.07%Rahul N. Shah 14,123,500 6.44% 14,123,500 6.40%Kunal N. Shah 23,004,750 10.49% 23,004,750 10.43%

Particulars Bonus shares Other than cash Shares bought back

2012-13 - - -

2011-12 157,536,989 - -

2010-11 - - -

2009-10 - - -

2008-09 - - -

Aggregate number of bonus shares, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

4.5

Number ` Number `

March 31, 2014 As at As at

Particulars March 31, 2013

Authorised:

Equity shares of `2 each 301,750,000 603,500,000 301,750,000 603,500,000

Issued, subscribed and fully paid up:

Equity shares of `2 each 219,206,111 438,412,222 220,552,694 441,105,388 Total 219,206,111 438,412,222 220,552,694 441,105,388

Outstanding at the beginning of the year 220,552,694 441,105,388 220,552,694 441,105,388 Equity shares bought back during the year (Refer Note 4.6) 1,346,583 2,693,166 - - Outstanding at the end of the year 219,206,111 438,412,222 220,552,694 441,105,388

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 ` 149,000,000, at a maximum price of ` 66.60 per equity share, the Parent Company has bought back 1,346,583 equity shares through open market transactions for an aggregate amount of ` 76,986,186 by utilising Securities Premium Account to the extent of 74,293,020.

4.6

5 Reserves and surplus:

Particulars


`


`


93


Securities Premium Reserve


Less :Utilisation towards premium paid on buy back of shares (Refer Note 4.6) 74,293,020 -


Revaluation Reserve


Less: Charged to depreciation of tangible assets 701,922 811,198


General Reserve

Balance, as per last year 232,037,174 232,037,174

Capital Reserve

Balance, as per last year 39,104,945 39,104,945

Surplus in Consolidated Statement of Profit and Loss

Balance, beginning of the year 2,102,003,489 1,583,540,721

Add: Profit attributable to the Group 665,240,853 570,069,893

2,767,244,342 2,153,610,614

Less: Proposed dividend of ` 0.20 (P. Y. 0.20) per equity share 43,841,222 44,110,539

Corporate dividend tax on proposed dividend 7,450,816 7,496,586

51,292,038 51,607,125

Balance, end of the year 2,715,952,304 2,102,003,489

Total 3,272,658,321 2,733,704,448

`

6 Long term borrowings:

Particulars


`


`

Secured

From a bank

Vehicle loan 111,657 741,342

Total 111,657 741,342

6.1 Vehicle loan from a bank is secured by the hypothecation of the underlying asset and has a maturity period upto three years.

6.2 Loan is payable in thirty-six installments of ` 56,580 each and carries rate of interest of 10.14% per annum.

7 Deferred tax assets/liability (net):

7.1 Computation of cumulative deferred tax assets or liabilities has not been made in respect of foreign subsidiaries of the Parent Company. In

the opinion of the management, the impact is not material.

94


7.2

Particulars


`


`

Deferred tax liability on account of: (A)

- Difference in WDV between book and income tax records 4,566,926 4,455,246

Sub total (A) 4,566,926 4,455,246

Deferred tax asset on account of: (B)

- Employee benefits 1,430,010 -

- Provision for doubtful debts and advances 3,056,976 -

- Disallowances u/s 43 B of the Income Tax Act, 1961 203,940 2,281,373

Sub total (B) 4,690,926 2,281,373

Net Deferred Tax (Assets)/Liability (A) - (B) (124,000) 2,173,873

Opening Balance (2,173,873) 385,816

(Credit) for the year (2,297,873) (1,788,057)

8 Other long term liabilities:

Particulars


`


`

Rent and other deposits 218,055 200,000

Total 218,055 200,000

9 Long-term provisions:

Particulars


`


`

Provision for gratuity (Refer Note 3(l) (2)) 16,887,554 14,538,967

Total 16,887,554 14,538,967

10 Short term borrowings:

Particulars


`


`

Secured

Loans repayable on demand from banks

- Cash credit 849,778,739 942,497,624

- Working capital demand loan 170,000,000 150,000,000

Foreign currency loans* @ 1,660,015,562 1,212,698,810

2,679,794,301 2,305,196,434

Unsecured

From banks 1,243,522,869 1,173,727,934

Inter corporate deposits - 49,688,924

1,243,522,869 1,223,416,858

Total 3,923,317,170 3,528,613,292

(* includes buyers line of credit availed by some of the Group components)(@ includes premium payable on forward contracts amounting to `12,129,147 (P.Y. ` Nil)

11 Trade payables:

Particulars


`


`


95


Dues to Micro and Small Enterprises (Refer Note 11.1) 863,086 619,551

Dues to an associate - 4,277,533

Acceptances 887,253 7,166,225

Others 494,492,336 649,755,843

Total 496,242,675 661,819,152

10.1 Details of secured loans:

Loans under different categories (referred to above) are secured by way of first/second charge of various assets, guarantees etc. wherever applicable, details of which are as mentioned below:(i) Entire current assets;(ii) Tangible fixed assets viz. buildings, plant and machinery, furniture, fixtures and office equipment’s;(iii) Personal guarantees of some of the Directors of the respective Group Component;(iv) Corporate guarantees of the Parent Company;(v) Equity shares belonging to the promoters of the Parent Company.

10.2 Details of unsecured loans:

a Unsecured loans from banks of 1,243,522,869 (P.Y.`1,173,727,934) represents amounts withdrawn by foreign subsidiaries against standby letter of credit facility availed and is guaranteed by the Parent Company.

b Inter corporate deposit C.Y. Nil (P.Y.` 49,688,924) is secured against pledge of shares of the Parent Company belonging to the Managing Director.

11.1 Disclosure under the Micro ,Small and Medium Enterprises Development Act, 2006 : (Parent Company)Amounts due to Micro and Small Enterprises are disclosed on the basis of and to the extent of information available with the Parent Company regarding status of the suppliers, which are as follows :

Particulars


`


`

1 Principal amount remaining unpaid at the end of the year 641,297 458,303

2 Interest due thereon 60,541 161,248

3 Interest paid during the year - -

4 Interest due and payable ( on the amount which have been paid beyond the appointed

date during the year) - -

5 Interest remaining accrued and unpaid at the end of the year 221,789 161,248

6 Interest due of the previous year 161,248 NA


12 Other current liabilities:

Particulars


`


`

Invoices raised in respect of incomplete contracts 44,512,573 36,301,395

Less: Adjustment against aggregated amount of cost incurred and recognised profit

(less recognised losses) (Refer Note 42) 40,709,176 32,725,819

3,803,397 3,575,576

Current maturity of long-term debt 629,685 834,262

Interest accrued but not due on borrowings 10,869,351 10,235,325

Unpaid dividends* 383,359 356,491

Income received in advance 824,700 759,939

Advances from customers 199,164,930 29,382,594

Book overdraft 252,948,233 -

Other payables:

- Statutory dues (Contributions to PF, witholding taxes etc.) 9,985,396 6,085,990

- Remuneration etc. payable to the Managing Director - 1,878,754

Salaries and bonus 38,992,801 25,392,328

Expenses payable 25,646,823 20,948,183

Total 543,248,675 99,449,442

13 Short term provisions:

Particulars


`


`

Provision for employee benefits

For gratuity (Refer Note 3(l)) 3,236,331 2,423,330

For leave encashment (Refer Note 3(l)) 6,956,572 5,531,283

Provision- Others

For income tax *(Refer Note 3(i)) 1,031,412 12,449,426

For wealth tax* 100,000 216,566

For proposed dividend on equity shares 43,841,223 44,110,539

For corporate dividend tax on proposed dividend 14,947,402 7,496,586

Total 70,112,940 72,227,730

(*net of payments,if any)

96

(* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund under section 205C of the Act

as at year end)

97


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, 201

3

Ad

dit

ion

s D

edu

ctio

ns

As

at

Mar

ch 3

1, 2

014

Upt

o

Apr

il 1

, 201

3A

mor

tisa

tion

ch

arge

for

th

e ye

ar

Up

toM

arch

31,

201

4

Gro

ss b

lock

Acc

um

ula

ted

dep

reci

atio

n

Gro

ss b

lock

Acc

um

ula

ted

am

orti

sati

on

As

at

Mar

ch 3

1, 2

014

As

at

Mar

ch 3

1, 2

013

As

at

Mar

ch 3

1, 2

014

As

at

Mar

ch 3

1, 2

013

Net

blo

ck

Net

blo

ck

Dis

pos

als/

ded

uct

ion

s

Ded

uct

ion

s

` `

Ow

ned

Lan

d -

Fre

ehol

d 4

0,22

2,54

8 -

-

40,

222,

548

-

-

-

-

40,

222,

548

40,

222,

548

Lan

d -

Lea

seho

ld 3

,240

,000

-

-

3,2

40,0

00

613

,960

3

6,12

0 -

6

50,0

80

2,5

89,9

20

2,6

26,0

40

Bui

ldin

gs 3

22,

625,

559

19,

196,

341

-

341

,821

,900

4

5,35

6,57

7 2

4,11

0,15

7 -

6

9,46

6,73

4 2

72,3

55,1

66

277

,268

,982

Pla

nt a

nd e

qui

pm

ents

152,

362,

290

160

,209

,529

-

3

12,5

71,8

19

49,

845,

386

54,

966,

430

-

104

,811

,816

2

07,7

60,0

03

102

,516

,904

Fur

nitu

re a

nd f

ixtu

res

42,

998,

136

636

,883

-

4

3,63

5,01

9 1

7,60

6,59

3 6

,673

,471

-

2

4,28

0,06

4 1

9,35

4,95

5 2

6,36

8,73

4

Off

ice

equi

pm

ents

13,

773,

294

1,5

64,8

94

-

15,

338,

188

10,

242,

897

1,1

07,9

09

-

11,

350,

806

3,9

87,3

82

2,3

71,7

55

Veh

icle

s 5

3,57

3,54

9 9

,962

,291

1

,122

,749

6

2,41

3,09

1 4

0,02

7,67

8 6

,534

,168

1

,082

,675

4

5,47

9,17

1 1

6,93

3,92

0

13,

757,

408

Com

pute

r sy

stem

s 1

1,627

,919

5

69,6

46

-

12,

197,

565

10,

324,

627

780

,312

-

1

1,10

4,93

9 1

,092

,626

1

,273

,207

Cyl

inder

s 3

,276

,000

-

-

3,2

76,0

00

2,0

96,6

40

471

,744

-

2

,568

,384

7

07,6

16

1,1

79,3

60

Tot

al

643

,699

,295

1

92,1

39,5

84

1,1

22,7

49

834

,716

,130

1

76,1

14,3

58

94,

680,

311

1,0

82,6

75

269

,711

,994

5

65,0

04,1

36

467

,584

,938

Pre

vio

us

year

3

62,6

79,5

48

299

,605

,999

1

8,58

6,25

2 6

43,6

99,2

95

148

,742

,935

4

5,47

3,45

1 1

8,10

2,02

8 1

76,1

14,3

58

467

,584

,938

(*ar

isin

g on

con

soli

dati

on o

f a

step

dow

n su

bsid

iary

)(*

*oth

er th

an in

tern

ally

gen

erat

ed)

Ow

ned

Goo

dw

ill*

1,0

40,6

43,2

20

-

-

1,0

40,6

43,2

20

-

-

-

-

1,0

40,6

43,2

20 1

,040

,643

,220

Com

pute

r so

ftw

are*

* 1

04,9

49,0

19

82,

203,

964

6,0

81,6

57

181

,071

,326

1

8,45

3,28

8 1

1,88

6,01

0 6

,081

,657

2

4,25

7,64

1 1

56,8

13,6

85

86,

495,

732

Tot

al

1,1

45,5

92,2

39

82,2

03,9

64

6,0

81,6

57

1,2

21,7

14,5

46

18,

453,

288

11,

886,

010

6,0

81,6

57

24,

257,

641

1,1

97,4

56,9

05 1

,127

,138

,952

Pre

vio

us

year

1,0

57,6

26,3

26

87,

965

,913

-

1

,145

,595

,239

1

5,79

9,53

7 2

,653

,751

-

1

8,45

3,28

8 1

,127

,138

,952

15

16 Non current investments:

No. Particulars As at March 31, 2013

`


`

Note:


98


In subsidiaries

1 Investment in equity instruments (Refer Note 3 (f))

(fully paid up, face value of `10 each, unless other wise stated)

a In an Associate Company-unquoted-trade (Refer Note 35) - 344,154,505

(extent of holding -- Nil (P. Y. 40%))

b In Companies (quoted)-Others

Equity shares of `10 each

2,300 (P.Y.2,300) of Andhra Bank 23,000 23,000

4,183 (P.Y.4,183) of Aurionpro Solutions Limited 1,290,218 1,290,218

30,134 (P.Y.48,000) of PFL Infotech Limited 13,761,586 21,920,626

Nil (P.Y.9,899) of Valecha Engineering Limited - 402,204

Nil (P.Y. 35,000) of Asian Granito Limited - 3,533,249

15,074,804 27,169,297

(Less) : Provision for diminution in the value of Investments (578,471) (11,541,928)

14,496,333 15,627,369

Total 14,496,333 359,781,874

Aggregate book value of unquoted investments - 344,154,505 Aggregate book value of quoted investments 15,074,804 27,169,297 Provision for diminution in the value of investments 578,471 11,541,928 Aggregate market value of quoted investments 22,844,589 4,280,138

17 Long Term Loans and Advances:

Particulars


`


`


Advances on capital account 158,414,159 176,596,200

Fixed deposits having maturity of more than one year from the date of the Balance Sheet* 166,475 -

Advance payments against taxes (net of provision) 24,017,785 34,390,254

Sundry deposits and advances

- Considered good 5,169,832 6,136,556

- Considered doubtful 1,052,739 -

6,222,570 6,136,556

Less: Provision for doubtful deposits and advances 1,052,739 -

5,169,831 6,136,556

Total 187,768,250 217,123,010

(* pledged with banks for credit facilities availed)

18 Trade receivables


`


`


Outstanding for a period exceeding one year from the date they are due for payment 8,369,799 15,426,111

Total 8,369,799 15,426,111


21 Cash and bank balances:


`


`

Cash and cash equivalents

Cash on hand 1,228,879 742,480

Balances with banks in:

Current accounts 324,217,472 468,837,038

- Exchange Earners Foreign Currency (EEFC) current accounts in USD - 81,500,190

- Unclaimed and unpaid dividend accounts* 383,359 356,491

325,829,710 551,436,199

Other cash and bank balances

- Deposit accounts (maturity period within one year)** 41,865,558 24,633,457

Total 367,695,268 576,069,656

(* earmarked for payment of unpaid dividend only) (**deposits aggregating to ` 41,865,558 (P.Y. ` 23,477,837) pldeged with banks for credit facilities availed)

19 Inventories:(Refer Note 3 (g))

Particulars As at

March 31, 2013`


`

Materials and components 1,487,404,758 1,110,189,074

Less: Provision for slow and non moving inventory 24,386,304 24,386,304

1,463,018,454 1,085,802,770

(Includes materials and components in transit of ` 31,644,871 (P. Y. ` 12,267,538))

Stock-in-trade (traded goods) 311,416,003 314,714,505

Total 1,774,434,457 1,400,517,275

20 Trade receivables


`


`

(Unsecured)

Outstanding for a period exceeding six months from the date they are due for payment

-Considered good 435,501,363 942,739,914

-Considered doubtful 119,027,743 114,036,639

Others -considered good 2,557,703,220 1,691,890,354

3,112,232,326 2,748,666,908

Less: Provision for doubtful debts 119,027,743 114,036,639

Total 2,993,204,583 2,634,630,268

99

22 Short term loans and advances:


`


`


Loans and advances to employees and others 249,293,379 238,951,581

Prepaid expenses 28,482,746 10,639,375

Sundry deposits 8,035,367 5,818,222

Loans to bodies corporate 248,542,819 132,942,819

Advances to suppliers 527,558,731 125,685,578

Balances with government authorities:

- VAT refund receivable 1,401,853 350,765

Total 1,063,314,895 514,388,340

23 Other current assets:


`


`


Special additional duty incentive (DEPB) 12,816,306 14,086,236

Accrued interest on fixed deposits 574,019 323,918

Equity shares held for sale (Face value of `10 each) 344,154,500 -

(In an Associate (extent of holding -- 40% (P. Y. Nil)

2,336,496 (P.Y.Nil) - Worthington Nitin Cylinders Private Limited)

Total 357,544,825 14,410,154


100


24 Revenue from operations:

(Refer Note 3(h (i) to (iv)) Particulars 2012-13

`2013-14

`

Sale of products 10,133,644,661 6,899,125,217

Sale of services (AMC) 27,597,152 147,775,169

Total 10,161,241,813 7,046,900,386

2012-13`

2013-14`

25 Other income:

(Refer Note 3(h) (v))

Particulars

Interest income on:

- deposits with banks 2,937,372 9,273,308

- loans given and income tax refund 6,547,251 8,201,724

- over due trade receivables and others 45,170 86,795

Dividend Income on non-current investments- others 23,104 304,085

Rent 2,100,708 1,771,251

Gain on sale of fixed assets (net) 245,305 19,240

Liability no longer required written back 1,131,673 146,200,890

Debts written off in earlier years, realised 470,843 12,589,657

Service charges and other miscellaneous receipts 5,427,695 3,782,169

Total 18,929,121 182,229,119


101


26 Cost of materials and components consumed:

(Refer Note 3 (h) (vi))

Particulars

Materials and Components

Opening inventory 1,110,189,074 1,838,742,080

Add: Purchases (net) 6,394,857,603 3,317,177,802

7,505,046,677 5,155,919,882

Less:Closing inventory 1,487,404,758 1,110,189,074

Total 6,017,641,919 4,045,730,808

2012-13`

2013-14`

26.1 Purchase of traded goods:

Particulars

Fire alarm and detection equipments, control panels and related components/spare parts 1,648,180,339 1,019,611,598

High pressure seamless cylinders 545,488,023 631,326,696

Total 2,193,668,362 1,650,938,294

2012-13`

2013-14`

2012-13`

2013-14`

27 Changes in inventory of stock in trade:

Particulars

Closing inventories

Stock in trade -Traded goods 311,416,003 314,714,505

Opening inventories

Stock in trade -Traded goods 314,714,505 275,888,031

Total 3,298,502 (38,826,474)

2012-13`

2013-14`

28 Employee benefits expense:

Particulars

Salaries, wages and bonus 239,848,279 179,514,312

Contributions to provident fund, gratuity and other funds 13,639,897 7,928,071

Employees welfare 4,507,896 6,066,273

Total 257,996,072 193,508,656

No. Particulars

(i) Defined Contribution Plan:

Company's contribution to provident fund 2,354,365 1,807,592

(ii) Defined Benefit Plans - Gratuity:

(a) Liability recognised in the Balance Sheet:

1 Present value of obligation:


Service cost 688,354 642,309



Actuarial loss on obligation 799,506 339,427


Less:

2 Fair value of plan assets:*


Expected return on plan assets less loss on investments 290,268 265,986

Actuarial gain/(loss) on plan assets (84,469) 170,574


Employers' contribution 500,000 -


Amount recognized in the Balance Sheet 4,250,488 2,949,813

(b) Expenses during the year :

Service cost 688,354 642,309


Expected return on plan assets (290,268) (265,986)

Actuarial (gain)/loss 883,975 168,853

1,800,675 987,504

(c) Actual return on plan assets: 205,799 436,560

(d) Break up of plan assets** :

1 Government of India securities NA NA

2 Public securities NA NA

3 State government securities NA NA

4 Private sector securities NA NA

5 Others (LIC of India - Insurer Managed Fund) 100% 100%

(e) Principal actuarial assumptions :

Rate of discounting 9.31% 8.25%

Expected return on plan assets 8.70% 8.70%

Rate of increase in salaries 7.00% 5.00%

Attrition Rate 2.00% 2.00%

(f) Expected contribution for next year 2,711,216 2,423,330

28.1 As per Accounting Standard 15 “Employee benefits”, the disclosures as defined in the Accounting Standard are given below

(Parent Company):

2012-13`

2013-14`

102


Experienced Adjustments 2013-14 2012-13 2011-12

` ` `

On plan liability loss 140,372 69,434 2,270,755

On plan asset (loss) /gain (84,469) 170,574 (135,896)

Other adjustments 659,134 269,993 221,258

103


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.

Other disclosures


`


`

Defined benefit obligation 7,513,202 6,286,225

Plan assets 3,262,714 3,336,412

(Deficit) (4,250,488) (2,949,813)


2013-14`

29 Finance costs:

Interest expense 254,653,640 185,930,407

Other borrowing costs 50,664,991 68,486,659

Total 305,318,631 254,417,066

104



2013-14`

30 Other expenses:

Sub-contract charges and site expenses 166,584,367 19,046,548

Conveyance and travelling 28,820,386 20,498,964

Miscellaneous expenses* 83,113,180 54,447,410

(* includes repairs to machinery ` Nil (P.Y.`22,500))

Rent and lease rent (Refer Note 34) 32,946,403 31,843,988

Repairs - Other assets 11,987,803 10,546,128

Insurance premium 5,635,784 3,846,415

Payments to auditors (including service tax) 1,939,285 1,512,384

Legal and professional fees 49,968,188 41,255,019

Donations and charities 3,891,222 6,758,111

Vehicle expenses 16,618,730 9,009,332

Sitting fees to Non Executive Directors 172,000 189,000

Sales promotion and advertisement 49,662,306 42,402,667

Bad debts written off 31,387,364 21,329,216



Survey cost incurred for mineral rights 11,015,624 7,877,043

Distribution expenses (net) 14,415,811 10,870,647

Rates and taxes * 3,199,451 4,318,030

Loss on sale of non-current investments-Others 1,049,575 20,367,389

Loss on foreign exchange fluctuation on consolidation (net) 33,484,694 26,657,374

Total 551,936,016 389,461,946

(*includes wealth tax of ` 100,000 (P. Y. ` 177,000))


2013-14`

Loss on foreign currency transactions (net) 59,790,994 12,607,378


Total 48,827,537 24,149,306

31 Exceptional Items:(net)

32 Segment information:

The Group’s activities involve predominantly one business segment i.e. manufacturing fire fighting equipment (gas based and water based

fire extinguishers), providing turnkey solutions including procurement, designing, system integration, commissioning and installation of fire

fighting systems including annual maintenance contracts for fire protection systems which is considered to be within a single business

segment since these are subject to similar risks and returns. Accordingly, the above business activity comprise the primary basis of segmental

information as set out in these CFS, which therefore reflect the information required by AS 17 - Segment Reporting, with respect to primary

segment. The auditors rely upon the above classification of primary segment.

The Group has identified India and rest of the world as geographical segments for secondary segmental reporting. Geographical sales and

services are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognised.

105


32.1 Segment information: Secondary segmental information:


`


`

Segment sales and services

India 2,217,659,665 1,510,619,989

Rest of the world 7,943,582,148 5,536,280,397

Total 10,161,241,813 7,046,900,386

Segment assets

India 2,601,413,278 1,588,245,132

Rest of the world 4,292,111,409 4,373,256,468

Unallocable 1,869,341,909 1,593,072,034

Total 8,762,866,596 7,554,573,634

33 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.:

Name of the field in a joint venture Description of (Description of job)

interest / Proportion of ownership interest

Incorporation Residence

RJ-ONN-2004/1 Rajasthan Non integrated joint venture

(crude oil block) 11.11%

(P.Y.11.11%)* India

(*Country of Incorporation not applicable as it is an un-incorporated joint venture)

(b)

Country of

The financials of the joint venture as of March 31, 2014 are not available and hence, other disclosures relating to the joint venture have not been given.

The joint venture (as above) for oil and gas producing activities is under exploratory phase. Hence, disclosures required viz. net quantities

of the Group’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.

33.1

Not later than one year 617,888 617,888

Later than one year and not later than five years 4,074,195 3,726,634

Later than five years 2,051,580 2,413,622

Total 6,743,663 6,758,144

34 Operating lease:(Parent Company)

(a) In respect of a property acquired on lease, the future minimum lease rentals payable on non-cancellable lease are as follows:

Note: The impact of escalation in lease payments which may arise is not considered due to its uncertainty.

(b) Lease payments recognised in the Consolidated Statement of Profit and Loss:` 32,946,403 (P.Y.`31,843,988)

(C) Lease rentals are charged on the basis of agreed terms.

March 31, 2014 March 31, 2013

As at

Future minimum lease payments

``

106


35 Disclosures in respect of an Associate:

(a) Investment / Other Current Assets:


Worthington Nitin

Cylinders Private Limited

Orignal cost of investment

Face Value

Accumulated (loss)

Carrying amount of investment

Goodwill / Capital Reserve

Name of the Company

No. of equity shares held

`

2,336,496 452,264,534 10 Nil (108,110,029) 344,154,505 (P.Y. 2,336,496) (P.Y. 452,264,534) (P.Y.10) (P.Y.Nil) (P.Y. 108,110,029) (P.Y. 344,154,505)

(b) Group’s share in contingencies and capital commitments for which it is contingently liable:` 9,563,188 (P.Y.`3,099,086)

(c) Group’s share in contingencies for which it is severally liable : Nil (P.Y.` Nil)

36 Financial information of subsidiaries:

Financial information of subsidiaries is as under:

Nitin Ventures FZE, UAE*

Nitin Global PTE Limited, Singapore

Particulars Eurotech Private Limited, India

Cylinders

Share capital 100,000 110,209,425 4,761,000

Reserve and surplus 265,207,969 1,805,717,168 71,116,218

Total assets 568,992,882 3,303,968,246 391,385,650

Total liabilities 568,992,882 3,303,968,246 391,385,650

Investments Nil Nil Nil

Turnover 249,543,964 5,112,703,670 395,320,606

Profit before taxation 3,957,753 542,636,937 11,035,290

Provision for taxation** 1,299,048 Nil 847,305

(**including deferred tax and charge for earlier years)

Profit after taxation 2,658,705 542,636,937 10,187,985

Proposed dividend Nil Nil Nil

(* includes New Age Co. LLC (UAE) and Firetec Systems Limited (UK))

37 Consequent to dilution of equity stake in Worthington Nitin Cylinders Private Limited in December 2010, the Parent Company has taken over the outstanding claim of a derivative contract amounting to 50,133,481 (excluding interest). The Parent 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 Parent 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.

38 During the year, the Registrar of Companies has carried out re-inspection of books of account under section 209 A of the Act of the Parent Company and has issued show cause notices for non -compliance of few sections of the Act. Pursuant to above, the Parent Company has filed petitions with the respective authority for compounding of such offences and based on legal opinion obtained, has provided 450,000 as maximum penalty pending disposal of the petitions as on the Balance Sheet date.

39 Related party disclosures:

(a) Parties where control/significant influence exists and/or other related parties with whom transactions (material) have taken place include:

107


No

1 Oil Block (RJ-ONN-2004/1)

2 Worthington Nitin Cylinders Private Limited

3 Nitin M. Shah (Chairman and Managing Director)

4 Rahul N. Shah (Whole time Director)

5 Kunal N. Shah (Director) (effective May 29, 2011)

6 Saroj N. Shah (spouse of Nitin M. Shah)

7 Nitin M. Shah (HUF)

8 Rahul N. Shah (HUF)

9 Reshma N. Shah (daughter of Nitin M. Shah)

RelationshipName of the related party

Key Management Personnel (KMP) Represented on the Board

Relatives of KMP's

Associate


}

}Non Executive Director (NED)

108


(ii) Transactions with related parties (excluding re-imbursements):

No 2013-14

`

2012-13

`

Particulars

I Capital transactions

Assets

1 Capital work in progress (net)


Oil Block (RJ-ONN-2004/1) 4,292,762 39,972,832

Liabilities

1 Unsecured loans taken

KMP's/NED

Nitin M. Shah - 93,500,000



Unsecured loans repaid

KMP's

Nitin M. Shah - 93,500,000



II Revenue transactions

Income

1 Service charges (net of taxes)

Associate


Expenditure

1 Purchase of materials and components (net of taxes)

Associate


2 Rent (net of taxes)

KMP/relative of a KMP



3 Remuneration*

KMP's

Nitin M. Shah 12,024,000 6,140,657

Rahul N. Shah 40,320 -

4 Interest

KMP


5 Survey cost incurred for mineral rights


Oil Block (RJ-ONN-2004/1) 11,015,624 7,877,043

III Proposed dividend

KMP's/NED

Nitin M. Shah 9,017,825 9,017,825

(b) Transactions with related parties (excluding re-imbursements):

No 2013-14

`

2012-13

`

Particulars

109


Rahul N. Shah 2,824,700 2,824,700

Kunal N. Shah 4,600,950 4,600,950

Relatives of KMP's

Saroj N. Shah 9,294,545 9,294,545

Nitin M. Shah (HUF) 2,044,200 2,044,200

Rahul N. Shah (HUF) 1,833,954 1,833,954

Reshma N. Shah 1,883,000 1,883,000

IV Standby letter of credit facility released

Associate

Worthington Nitin Cylinders Private Limited 160,000,000 -

NoMarch 31, 2014

As at

`

Particulars


March 31, 2013As at

`

I Assets(i) Capital work in progress (net)

Un-incorporated joint venture Oil Block (RJ-ONN-2004/1) 231,795,818 227,503,056

(ii) Non current investment/other current assets Equity Shares

AssociateWorthington Nitin Cylinders Private Limited 344,154,500 344,154,505@ (@ non current investment)

(iii) Trade receivables (net of trade payables, if any)AssociateWorthington Nitin Cylinders Private Limited 271,808 -

II Equity and Liabilities1 Trade payables (net of trade receivables, if any)

AssociateWorthington Nitin Cylinders Private Limited - 4,277,533

2 Dues (excluding outstanding salary payable, if any)KMPNitin M. Shah - 1,878,754

Relative of a KMPSaroj N. Shah - 614,160

III Standby letter of credit facility AssociateWorthington Nitin Cylinders Private Limited - 160,000,000

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 .

(* excluding incremental liability for gratuity as employee wise breakup of such liability based on estimation is not ascertainable)

110


40 The statutory auditor’s of the Parent Company have not audited the financial statements of subsidiaries and an associate.

NoMarch 31, 2014

As at

`


As at

`

i Performance/bid-bond and other guarantees 118,213,465 81,180,164

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 an associate

- Limit - 160,000,000

- Outstanding - 160,000,000

iv Claim not acknowleged as a debt:

- Income Tax demand for A. Y. 2010-2011 - 4,752,314

(* other than attributable to a interest in a joint venture and an associate- Refer Notes 33 and 35)

Note:Contingent liabilities in respect of above matters arising in the ordinary course of business, it is anticipated that no material liabilities will arise.

42 Disclosures pursuant to AS-7 (Revised): (Parent Company)

( * in respect of completed and contracts in progress)

43 Commitments:Estimated amount of contracts remaining to be executed on capital account (net of advances, unsecured and considered good) : 282,073,639 (P.Y. 262,160,570).

41 Contingent liabilities not provided for in respect of: *

NoMarch 31, 2014

As at

`


As at

`

(a) Contract revenue recognised for the financial year * 3,139,941,895 2,456,797,872

(b) Aggregate amount of contract costs incurred and recognised profit (less recognised losses)

as at end of financial year for all contracts in progress as at that date 40,709,176 32,725,819

(c) Amount of customer advances outstanding for contracts in progress as at the end of the

financial year - -

(d) Retention amount due from customers for contracts in progress as at end of the

financial year - -

44 Derivative instruments and unhedged foreign currency exposure:

(a) Details of outstanding forward exchange contracts entered into by the Group is as under:


foreign currency


foreign currency

Equivalent INR



Receivables:

Trade receivables for exports $ 21,281,119 1,278,991,012 $ 25,283,823 1,375,169,425

Trade receivables for exports - - € 37,725 2,623,540

Advances to suppliers - - € 283 19,716

Advances to suppliers $ 8,620,931 518,116,289 $ 170,313 9,263,178

Bank balances - - $ 1,498,460 81,500,190

Payables :


(buyers line of credit/packing credit facility) $ 27,823,644 1,694,969,469 $ 21,388,248 1,163,291,843


(buyers line of credit) £ 252,941 25,256,108 £ 600,175 49,406,967


(buyers line of credit) € 73,769 6,446,673 - -

Advance from a customer $ 2,404,350 144,500,954 - -

Trade payables for imports $ 1,100,210 66,122,412 $ 4,426,192 240,737,491

Trade payables for imports £ 368,983 36,842,863 £ 219,559 18,074,273

Trade payables for imports € 2,655 219,199 € 2,938 204,320

Interest accrued but not due on borrowings $ 60,404 3,670,487 $ 40,873 2,223,029

Interest accrued but not due on borrowings € 202 17,644 - -

Interest accrued but not due on borrowings £ 693 69,190 £ 3,638 299,514


foreign currency


foreign currency

Equivalent INR



Hedging commitments outstanding


interest thereon $ 5,309,498 341,913,988 Nil Nil


interest thereon € 73,971 6,464,317 Nil Nil

(b) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:


111



112


45 Details of intangible assets under development:

March 31, 2014As at

`


As at

`

Cost of exploratory wells in progress

(pursuant to participating interest in an un-incorporated joint venture). 231,795,818 227,503,056

Total 231,795,818 227,503,056

47 In view of book profits being in excess of taxable profits, as per computation of income, the provision for tax for the Parent Company has been made as per MAT under section 115JB of the Income Tax Act, 1961. The Parent Company is entitled to avail credit under section 115JAA (1A) which will be availed as and when due.

48 The Parent Company has an investment of ` 344,154,500 (P.Y. 344,154,500) 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.

49 Previous year:

Pursuant to incorporation of a wholly owned step down subsidiary and re-classification of Parent Company's investment in an Associate from non-current investment to other current assets, previous years figures are not comparable to that extent with those of the current year. Further, current year’s figures are stated in bold prints and previous years/subsidiaries figures are regrouped/restated wherever considered necessary.

Signatures to Notes 1 to 49 of the Consolidated Financial Statements

`

46 Earning Per Share (EPS):

March 31, 2014As at

`


As at

`


Amount available for equity share holders 665,240,853 570,069,893

Weighted average number of equity shares (nos.) 220,039,432 220,552,694

Basic EPS 3.02 2.58

Diluted EPS 3.02 2.58

For and on behalf of the Board of Directors

Nitin M. Shah Rahul N. Shah Kamlesh Z. Gandhi Abhishek Shrivastava Chairman and Whole time Director Chief Financal Officer Company SecretaryManaging Director

May 17, 2014Mumbai,

(DIN No.00073232) (DIN No.00073226)

Name of the Subsidiary Companies Eurotech

Cylinders Private Limited,

Nitin Ventures FZE,

Nitin Global Pte Limited,

India UAE* Singapore

Financial year ended on March 31, 2014 March 31, 2014 March 31, 2014

Date from which they become subsidiary company

April 1, 2005 October 4, 2007 July 23, 2009

Number and face value of shares held by the holding company on the above date

10,000 Equity Shares of

10 Equity Shares of 100,000 Ordinary

10 each DHS 1,000,000each

Shares with no par value

Interest(direct as well as indirect) of the holding company 100% 100% 100%

The net aggregate amount of subsidiary concerns the members of the holding company

companies profit so far as it

Not dealt with in the holding company

For the financial year ended March 31, 2014

2,658,705 542,636,937 10,187,985

For the previous financial years of the subsidiary since they become the holding company's subsidiaries `

companies

1,223,975,286

Dealt with in the holding company

For the financial year ended March 31, 2014 ` Nil Nil Nil

For the previous financial years of the subsidiary companies

since they become the holding company's subsidiaries ` Nil Nil Nil

1

2

3a

3b

4

a

ii

b

ii

Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies for the year ended March 31, 2014

Name of the Subsidiary Company

Sr.No.

Sr.No.

Statement pursuant to exemption recived u/s 212 (8) of the Companies Act, 1956 realting to subsidiaryCompanies Act, 1956 relating to subsidiary companies for the year ended March 31, 2014


113

Eurotech Cylinders Private

Limited,

Nitin Ventures FZE,

Nitin Global Pte Limited,

India UAE* Singapore


253,849,264 60,928,233

1 Share Capital 100,000 110,209,425 4,761,000

$ 2,724,000 $ 100,000

2 Reserve & surplus 265,207,969 1,805,717,168 71,116,218

$ 34,967,141 $ 1,162,521

3 Total Assets 568,992,882 3,303,968,246 391,385,650

$ 60,786,753 $ 6,512,263

4 Total liabilities 568,992,882 3,303,968,246 391,385,650

$ 60,786,753 $ 6,512,263

5 Details of investments Nil Nil Nil

6 Turnover (Total income) 251,150,721 5,117,903,091 401,574,575

$ 84,598,753 $ 6,534,634

7 Profit before taxation 3,957,753 542,636,937 11,035,291

$ 8,816,575 $ 79,035

8 Provision for taxation 1,299,048 Nil 847,305

$ 14,006

9 Profit after taxation 2,658,705 542,636,937 10,187,985

$ 8,816,575 $65,029

10 Proposed dividend Nil Nil Nil

(* includes New Age Co. LLC, UAE & Firetec Systems Limited, UK ) Exchange rate as on March 31, 2014 : 1 USD($) = ` 60.0998

Nitin Fire Protection Industries LimitedRegistered Office : 501, Delta, Technology Street, Hiranandani Gardens, Powai,

Mumbai 400076, Maharashtra, IndiaPhone : +91-22-40457000, Fax NO. +91 22 25701110, Website : www.nitinfire.com,

CIN No.: L29193MH1995PLC092323

To,Bigshare Services Private Limited, (Unit - Nitin Fire Protection Industries Limited), E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai - 400 072

Dear Sirs,

Sub: Payment of Dividend through NECSI hereby consent to have the amount of dividend on my Equity Shares credited through National Electronic Clearing Service (NECS). The particulars are:

1. Folio No. /Client ID. No./DPID.No. (Folio No.given in equity share certificate(s)/customer ID No. given by your DP's)

2. Shareholders Name: Shri/Smt./Kum./M/s.

3. Shareholders Address :

4. Telephone No. 5. Mobile No

6. Particulars of the Bank:

• Bank Name:

• Branch Name and Address:

• Mention the 9 digit- code of the bank and Branch appearing on the MICR cheque issue by the bank:•• Account Type (please √ ) Savings Current Cash Credit

• Account Number (as appearing on the cheque book):

• IFSC Code Number:

7. Date from which the mandate should be effective:

I hereby declare that the particulars given above are correct and complete. If the transaction is delayed or not effected at all for reasons of incomplete or incorrect information, I would not hold the company /Registrars & hare Transfers Agents of the Company responsible. I also undertake to advise any change in the particulars of my account to facilitate updation of records for purpose of credit of dividend amount through NECS Facility.

Place:

Date: Signature of the first/sole shareholder

Note:

1) Please attach the photocopy of a Cheque or a cancelled bank cheque issued by your bank for verifying the accuracy of the code number.2) The Form can be downloaded from the company's website: www.nitinfire.com


For shares held in the physical modePlease complete the form and mail to

please inform respective DPsFor shares held in the electronic mode

FOR KIND ATTENTION OF SHAREHOLDERS

Dear Shareholders,

As per the provisions of Section 88 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014, the Company needs to update its 'Register of Members' to incorporate certain new details, as required under the said provisions. Further, as per the “Green Initiative in the Corporate Governance” initiated by the Ministry of Corporate Affairs (MCA), vide its Circular No. 17/2011 dated 21/04/2011, the Company proposes to send all the notices, documents including Annual Report in electronic form to its members.

We, therefore request you to furnish the following details for updation of Register of Members and enable the Company to send all communication to you through electronic mode:

Folio No.

Name of the Shareholder

Father’s/Mother’s/Spouse’s Name

Address (Registered Office Address in case the Member is a Body Corporate)

E-mail Id

PAN or CIN

UIN (Aadhar Number)

Occupation

Residential Status

Nationality

In case member is a minor, name of the guardian

Date of birth of the Member

(Signature of Member)

Place :

Date :

Kindly submit the above details duly filled in and signed at the appropriate place to the Registrar & Share Transfer Agent of the Company viz. “Bigshare Services Private Limited”, (Unit - Nitin Fire Protection Industries Limited), E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai - 400 072.

The E-mail ID provided shall be updated subject to successful verification of your signature. The members may receive Annual Reports in physical form free of cost by post by making request for the same.

Thanking you, For Nitin Fire Protection Industries Limited

Sd/- Nitin M. Shah

Date: August 14, 2014 Chairman & DirectorPlace: Mumbai



CIN No.: L29193MH1995PLC092323


Please complete the attendance slip and hand it over at the entrance of the Meeting hall.

Please also bring your copy of the enclosed Annual Report.

ATTENDANCE SLIP

I hereby record my presence at the 19th Annual General Meeting of the Company held on Tuesday, September 30, 2014 at 3.00 p.m. at

Centre for Excellence in Telecom Technology and Management (CETTM), Conference Hall, Technology Street, Hiranandani Gardens, Powai,

Mumbai 400 076 India.

Regd Folio No.: / DPID NO:_________________________ No. of shares: ____________

Name of the shareholder (in block capitals) ____________________________________________

Signature of the shareholder or proxy _________________________________________________



CIN No.: L29193MH1995PLC092323


PROXY FORM

[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

TH19 ANNUAL GENERAL MEETING ON EPTEMBER 30, 2014

Name of the member(s):

Name(s) of the Joint holder, if any:

Registered address:

E-mail Id:

Folio No / Client ID / DP ID:

I/We being a member(s) of ………………. Shares of the above named Company hereby appoint:

(1) Name ............................................................................................................................................................................................................

Address ........................................................................................................................................................................................................

Email Id: ................................................................................... Signature ......................................................................... or failing him;

(2) Name ............................................................................................................................................................................................................

Address ........................................................................................................................................................................................................


(3) Name ............................................................................................................................................................................................................

Address ........................................................................................................................................................................................................


thas my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 19 Annual General Meeting of the Company to be held on

and at any adjournment thereof in respect of such resolutions as are indicated overleaf:

S

Tuesday, September 30, 2014, at 3.00 p.m. at Centre for Excellence in Telecom Technology and Management (CETTM), Conference Hall, Technology Street, Hiranandani Gardens, Powai , Mumbai 400 076

Note : This form of proxy in order to be effective, should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the meeting.

ASSENT/DISSENT FORM FOR VOTING ON AGM RESOLUTIONS19TH ANNUAL GENERAL MEETING ON TUESDAY, SEPTEMBER 30, 2014

Description of the Resolution No. of share(s) I/We dissent to the resolution (AGAINST)

5

Number of share(s) held

Registered folio No./DP ID No./Client ID No.*(*Applicable to investors holding shares in dematerialized form)

3.

4.

Ordinary Business

1. Ordinary Resolution for adoption of Audited Financial Statements for the year ended 31st March, 2014 and the Reports of the Directors’ and the Auditors.

2. Ordinary Resolution for declaration of Dividend on Equity Shares for the financial year ended 31st March, 2014.

3. Ordinary Resolution for appointment of a director in place of Mr. Nitin M. Shah, Director, who retires by rotation and being eligible, offers himself for re-appointment.

4 Ordinary Resolution for re-appointment of M/s. Haribhakti & Co., LLP, Chartered Accountants Mumbai (having FRN: 103523W) as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting

Special Business

5 Special Resolution for the appointment of Mr. K. K. Jha as an Independent Director of the Company to hold office as such upto September 29, 2019.

6 Special Resolution for the appointment of Mr. R. M. Nayak as an Independent Director of the Company to hold office as such upto September 29, 2019.

7 Special Resolution for the appointment of Mr. S. K. Dheri as an Independent Director of the Company to hold office as such upto September 29, 2019

8 Ordinary Resolution for appointment of Mr. Rahul N. Shah as Director of the Company

9 Special Resolution for the appointment of Mr. Rahul N. Shah as the Whole-time Director of the Company for a period of 3 years and fix his remuneration

10 Ordinary Resolution for the appointment of Mr. Kunal N. Shah as Director of the Company

I/We hereby exercise my/our vote in respect of the following resolutions to be passed for the business stated in the Notice of the Annual General Meeting dated September 30, 2014 by conveying my/our assent or dissent to the Resolutions by placing a tick ( ) mark at the appropriate box below.

1. Name & Registered Address of Shareholder (IN BLOCK LETTER)

2. Name(s) of Joint holders, if any

Item No.

I/We assent to the resolution

(FOR )



CIN No.: L29193MH1995PLC092323


√

Description of the Resolution No. of share(s) I/We dissent to the resolution (AGAINST)

11 Special Resolution for the appointment of Mr. Kunal N. Shah as the Whole-time Director of the Company for a period of 3 years and fix his remuneration

12 Special Resolution for grant of authority to borrow funds for the business of the Company

13 Special Resolution to accord consent of the members for delay in investment made from monies received under the Initial Public Offer in the year 2007

14 Special Resolution for giving of Loan or guarantee or providing security exceeding 60% of the paid-up share capital, frees reserves & share premium account of the Company

15 Special Resolution for issue of further shares by the Company

16 Ordinary Resolution for approval of remuneration of the Cost Auditors for financial year ending March 31, 2015

17 Special Resolution for creation of charges on the assets of the Company

18 Special Resolution for adoption of new set of Articles of Association of the Company

19 Special Resolution for entering into Related Party Transactions with Eurotech Cylinders Private Limited

20 Special Resolution for entering into Related Party Transactions with New Age LLC, UAE, Step-down subsidiary

21 Special Resolution for entering into Related Party Transactions with Mr. Nitin M. Shah, Director of the Company

22 Special Resolution for entering into Related Party Transactions with Nitin Global Pte. Ltd, Singapore

23 Special Resolution for entering into Related Party Transactions with Nitin Ventures LLC, UAE

24 Special Resolution for entering into Related Party Transactions with Mrs. Saroj N. Shah

25 Special Resolution for entering into Related Party Transactions with Worthington Nitin Cylinders Private Limited

26 Special Resolution for entering into Related Party Transactions with Firetec Systems Limited

Item No.

I/We assent to the resolution

(FOR )

This resolution is to be voted under postal Ballot, in accordance with the provisions of Section 110 of the Companies Act, 2013. Please, vote separately through postal ballot form/e-voting only.





Notes : (i) If you opt to cast your vote by e-voting, there is no need to fill up and sign this form.(ii) Last date for receipt of Assent/Dissent Form: September 29, 2014(6.00 pm)(iii) Please read the instructions carefully before exercising your vote.

(Signature of the shareholder)

Place :

Date :

INSTRUCTIONS

General Instructions

1. Shareholders have option to vote either through e-voting i.e. electronic means or to convey assent/dissent in physical form. If a shareholder has opted for Physical Assent / Dissent Form, then he/she should not vote by e-voting and vice versa.

2. However, in case Shareholders cast their vote through both physical assent/dissent form and e-voting, then vote casted through e-voting shall be considered and voting done by Physical Assent / Dissent Form shall be treated as invalid.

3. The notice of Annual General Meeting is dispatched/e-mailed to the members whose names appear on the Register of Members as on August 22, 2014 and voting rights shall be reckoned on the paid up value of the shares registered in the name of the shareholders as on the said date.

4. Voting through physical assent / dissent form cannot be exercised by a proxy.

Instructions for voting physically in Assent / Dissent Form

1. A Member desiring to exercise vote by Assent / Dissent should complete this Form (no other form or photocopy thereof is permitted) and send it to the Scrutinizer, Mr. Kishor V. Ved, Practising Company Secretary, Mumbai and send the same at their cost to reach the Scrutinizer of the Company at Mr. Kishor V. Ved, Practising Company Secretary, Bigshare Services Private Limited, (Unit - Nitin Fire Protection Industries Limited), E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai - 400 072 on or before the close of working hours i.e. 6.00 p.m. on September 29, 2014. All Forms received after this date will be strictly treated as if the reply from such Member has not been received.

2. This Form should be completed and signed by the Shareholder (as per the specimen signature registered with the Company/ Depository Participants). In case of joint holding, this Form should be completed and signed by the first named Shareholder and in his absence, by the next named Shareholder.

3. In respect of shares held by corporate and institutional shareholders (companies, trusts, societies, etc.), the completed Assent / Dissent Form should be accompanied by a certified copy of the relevant Board Resolution/appropriate authorization, with the specimen signature(s) of the authorized signatory(ies) duly attested.

4. The consent must be accorded by recording the assent in the column 'FOR' or dissent in the column 'AGAINST' by placing a tick mark (√) in the appropriate column in the Form. The assent or dissent received in any other form shall not be considered valid.

5. Members are requested to fill the Form in indelible ink and avoid filling it by using erasable writing medium(s) like pencil.

6. There will be one Assent / Dissent Form for every folio / Client id irrespective of the number of joint holders.

7. A Member may request for a duplicate Assent / Dissent Form, if so required, and the same duly completed should reach the Scrutinizer not later than the date specified under instruction No.1 above.

8. Members are requested not to send any other paper along with the Assent / Dissent Form. They are also requested not to write anything in the Assent / Dissent form except giving their assent or dissent and putting their signature. If any other paper is sent along with the form the same will be destroyed by the Scrutinizer.

9. The Scrutinizer's decision on the validity of the Assent / Dissent Form will be final and binding. Incomplete, unsigned or incorrectly ticked Assent / Dissent Forms will be rejected