Fusion Fittings (I) Ltd.
|BSE: 531760||Sector: Others|
|NSE: N.A.||ISIN Code: INE284L01019|
|BSE 00:00 | 04 Mar||Fusion Fittings (I) Ltd|
|NSE 05:30 | 01 Jan||Fusion Fittings (I) Ltd|
Fusion Fittings (I) Ltd. (FUSIONFITTINGS) - Director Report
Company director report
Your Directors have pleasure in presenting the Thirtieth Annual Report together withthe Audited Annual Accounts for the financial year ended March 312015.
The financial results of your Company for the year ended March 312015 and March312014 are set forth below:
(Rs. in lac)
The total income in the Financial Year ended March 312015 was Rs. 28.51lac and theloss incurred by the Company was Rs. 311.90 lac as against total income of Rs. 26 lac andProfit after tax of Rs. 16.08 lac in the previous year ended March 312014. During thecurrent year the Company has incurred loss due to heavy loss on sale of investment.
As the Company has incurred loss during the financial year ended 31.03.2015 yourDirectors do not recommend any dividend for the year 2014-15.
During the period covered under report the members are aware that the Company aftertaking the approval of members had sold the entire shareholding in HIQ Power AssociatesPrivate Limited the erstwhile subsidiary of the Company. The Company has no subsidiary ason 31st March 2015.
RISK MANAGEMENT POLICY
The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The mechanism involves creating a Risk Registeridentifying internal and external risks and implementing risk mitigation steps. Theupdates regarding the same are placed before the meeting of the Board of Directors of theCompany on quarterly basis.
DIRECTOR AND KEY MANAGERIAL PERSONNEL
During the period covered under this report Mr. Kul Bhushan Arora and Mr. SunilChoudhry resigned from the office of Director w.e.f. 12th June 2014 and 5th February 2015respectively. However during the aforementioned period Mr. Praveen Kumar was appointed asdirector to fill the casual vacancy caused by the resignation of Mr. Sunil Choudhry w.e.f.5th February 2015 and Mr. Perintalmanna Venkatrama Krishna Kumar was appointed as anAdditional Director of the Company w.e.f. 5th February 2015.
However the Board of Directors of the Company has decided to appoint Mr. Praveen Kumaras an Independent Director of the Company and Mr. Perintalmanna Venkatrama Krishna Kumaras director liable to retire by rotation in the forthcoming Annual General Meeting.
The Company has received declarations from Mr. Praveen Kumar to appoint him as anIndependent Directors confirming that they meet the criteria of independence as prescribedunder the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.
In the forthcoming Annual General Meeting Mr. Chander Bhan Wadhwa is retiring byrotation and being eligible he has offered for being appointed as director liable toretire by rotation.
The resolution for appointment and re-appointment of the aforesaid directors have beenincorporated in the notice of the forthcoming Annual General Meeting of the company.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUALDIRECTORS
Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement the Boardhas carried out an annual evaluation of its own performance performance of the Directorsindividually as well as the evaluation of the working of its Committees.
The following process was adopted for Board Evaluation:
Feedback was sought from each Director about their views on the performance of theBoard covering various criteria such as degree of fulfilment of key responsibilitiesBoard structure and composition establishment and delineation of responsibilities tovarious Committees effectiveness of Board processes information and functioning Boardculture and dynamics quality of relationship between the Board and the Management andefficacy of communication with external stakeholders. Feedback was also taken from everydirector on his assessment of the performance of each of the other Directors.
The Nomination and Remuneration Committee (NRC) then discussed the above feedbackreceived from all the Directors.
Based on the inputs received the Chairman of the NRC also made a presentation to theIndependent Directors at their meeting summarizing the inputs received from the Directorsas regards Board performance as a whole and of the Chairman. The performance of thenon-independent non-executive directors and Board Chairman was also reviewed by them.
Post the meeting of the Independent Directors their collective feedback on theperformance of the Board (as a whole) was discussed by the Chairman of the nRc with theChairman of the Board. It was also presented to the Board and a plan for improvements wasagreed upon.
Every statutorily mandated committee of the Board conducted a self-assessment of itsperformance and these assessments were presented to the Board for consideration. Areas onwhich the Committees of the Board were assessed included degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.
Feedback was provided to the Directors as appropriate. Significant highlightslearning and action points arising out of the evaluation were presented to the Board.
REMUNERATION POLICY FOR THE DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and Clause 49(IV)(B)(1) of theListing Agreement the NRC is responsible for formulating the criteria for determiningqualification positive attributes and independence of a Director. The NRC is alsoresponsible for recommending to the Board a policy relating to the remuneration of theDirectors Key Managerial Personnel and other employees.
In line with this requirement the Board has adopted the Policy on Board Diversity andDirector Attributes which is reproduced in Annexure-I and Remuneration Policy forDirectors Key Managerial Personnel and other employees of the Company which isreproduced in Annexure-II.
COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority. The following substantive Committees constituted bythe Board function according to their respective roles and defined scope:
(a) Audit Committee
(b) Nomination and remuneration committee
(c) Stakeholders Relationship committee
The details pertaining to composition of committees terms of reference and number ofmeetings held are included in the Corporate Governance Report which forms a part of thisreport.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Since the Company is not carrying on any manufacturing activity no particularsrequired to be furnished under Sub Section (3)(m)of Section 134 of Companies Act 2013read with rule 8(3) of Company (Accounts) Rules 2014 relating to energy conservationtechnology absorption and the Company has also no transaction relating to foreign exchangeearnings and outgo.
PARTICULARS OF EMPLOYEES
The Company did not have any employee drawing salary more than the limit prescribedunder in terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel)Rules2014 therefore no particulars is required to be disclosed under the aforementionedprovisions.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are also not required as the Companydoes not have any director getting any remuneration or sitting fee and that the Companyhas also not paid any salary.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year wereonarms length and were in the ordinary course of business. All Related PartyTransactions were placed before the Audit Committee of the Board of Directors for theirapproval. The Audit Committee has granted omnibus approval for Related Party Transactionsas per the provisions and restrictions contained in the Listing Agreement.
The Company has formulated a policy on materiality of Related Party Transactions andalso on dealing with Related Party Transactions. The policy is available on theCompanys website www.fusionfttings.com.
Particulars of Contracts or Arrangements with related parties referred to in section188(1)of Companies Act 2013 in the prescribed form AOC -2 is annexed with this report andmarked as Annexure-III.
The Company has not invited/accepted any Fixed Deposits during the year as such noamount of principal or interest on fixed deposits was outstanding on the date of theBalance Sheet.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the schedules to the financial statements.
EXTRACT OF ANNUAL RETURN
As provided under section 92(3) of the Act the extract of Annual Return is given inAnnexure-IV in the prescribed form MGT-9 which forms a part of this report.
(i) STATUTORY AUDITOR
In accordance with the provisions of Companies Act 2013 at the Annual General Meetingheld on 30th September 2014 the shareholders had appointed M/s K. K. Jain & Co.Chartered Accountants as Statutory Auditors of the Company for a period of 3 years i.e.upto the conclusion of 32nd Annual General Meeting to be held for the adoption of accountsfor the financial year ending 31st March 2017.
M/s K. K. Jain & Co. Chartered Accountants have consented to be the Auditors ofthe Company if their appointment is ratified by the members at the Annual General Meetingand have also confirmed that their appointment is as per the provisions of Section 141 ofthe Companies Act 2013 and Rule 4 of Companies (Audit and Auditors) Rules 2014.
The Auditors report and notes to the financial statements are self explanatoryand do not call for any further comments.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s Anjani Kumar & Associates Company SecretariesNew Delhi to conduct the Secretarial Audit oft he Company for the financial year endedMarch 312015.
The Secretarial Audit Report (in Form MR-3) is attached as Annexure-V to this Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges and relevantsections of the Act a Management Discussion and Analysis Statement Report on CorporateGovernance and Auditors Certificate are included in the Annual Report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers)Rules 2014 and Clause 49 of the Listing Agreement theBoard of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the samewas hosted on the website of the Company.
This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee hasbeen denied access to theChairman of the Audit Committee and that no complaints were received during the year.
Brief details about the policy are provided in the Corporate Governance Report attachedwith this Report.
MANAGEMENT ANALYSIS AND DISCUSSION
Management analysis and discussion for the year under review as stipulated under Clause49 of Listing agreement is presented in a separate section forming a part of annualreport.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of Companies Act 2013 withrespect to the Directors Responsibility Statement it is hereby confirmed:-
(i) that in the preparation of the annual accounts for the financial year ended 31March 2015 the applicable accounting standards had been followed along with properexplanation relating to material departures;
(ii) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company for the financial yearended 31 March 2015 and of the profit or loss of the Company for that period;
(iii) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities;
(iv) that the directors had prepared the annual accounts for the financial year ended31 March 2015 on a going concern basis.
(v) That the directors have laid down internal financial control to be followed by thecompany and that such internal financial control are adequate and are operatingeffectively.
(vii) That the directors have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and are operatingeffectively.
CORPORATE SOCIAL RESPONSIBILITY
The Company does not fall under the criteria mentioned under Section 135 of the Actaccordingly the Company has not formed Corporate Social Responsibility Committee.
We place on records our sincere thanks to Government of India State Governments andconcerned Government Authorities/Departments and the Bankers for their cooperation andexpect the same in the future.
For and on behalf of the Board of Fusion Fittings (I) Limited
ANNEXURE-I: POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES
(Ref.: Boards Report Section 8)
1.1 The Policy on Board Diversity (the Policy) sets out the approach todiversity on the Board of Directors (the Board) of Fusion Fittings (I) Limited(the company).
1.2 The company recognizes that diversity at board level is a necessary requirement inensuring an effective board. A mix of executive independent and other non-executivedirectors is one important facet of diverse attributes that the company desires. Furthera diverse board representing differences in the educational qualifications knowledgeexperience gender age thought and perspective results in delivering a competitiveadvantage and a better appreciation of the interests of stakeholders. These differencesshould be balanced against the need for a cohesive effective board. All boardappointments shall be made on merit having regard to this policy.
2. Attributes of Directors
2.1 The following attributes need to be considered in considering optimum boardcomposition:
i) Gender diversity:
Having at least one woman director on the Board.
The average age of board members should be in the range of 25 - 70 years.
The board should have a mix of members with different educational qualificationsknowledge and with adequate experience infinance accounting economics legal andregulatory matters the environment green technologies operations of the Companysbusinesses energy commodity markets and other disciplines related to the Companysbusinesses.
The independent directors should satisfy the requirements of the Companies Act 2013(the Act) and the listing agreements in respect of theindependence criterion.
The directors should not have any other pecuniary relationship with the Companyits subsidiaries
associates or joint ventures and the companys promoters besides sitting fees andcommission.
The directors should not have any of their relatives (as defined in the Act andRules made there under) as directors or employees or other stakeholders (other than withimmaterial dealings) of the company its subsidiaries associates or joint ventures.
The directors should maintain an arms length relationship betweenthemselves and the employees of the Company as also with the directors and employees ofits subsidiaries associates joint ventures promoters and stakeholders for whom therelationship with these entities is material.
The directors should not be the subject of allegations of illegal or unethicalbehaviour in their private or professional lives.
The directors should have ability to devote sufficient time to the affairs ofthe Company.
3. Role of the Nomination and Remuneration Committee
3.1 The Nomination and Remuneration Committee (the NRC) shall review andassess board composition whilst recommending the appointment or reappointment ofindependent directors.
4. Review of the Policy
4.1 The NRC will review this policy periodically and recommend revisions to the boardfor consideration.
ANNEXURE-II: REMUNERATION POLICY FOR DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
(Ref.: Boards Report Section 8)
The philosophy for remuneration of directors Key Managerial Personnel("KMP") and all other employees of Fusion Fittings (I) Limited("company") is based on the commitment of fostering a culture of leadership withtrust. The remuneration policy is aligned to this philosophy.
This remuneration policy has been prepared pursuant to the provisions of Section 178(3)of the Companies Act 2013 ("Act") and Clause49(IV)(B)(1) of the Equity ListingAgreement ("Listing Agreement"). In case of any inconsistency between theprovisions of law and this remuneration policy the provisions of the law shall prevailand the company shall abide by the applicable law. While formulating this policy theNomination and Remuneration Committee ("NRC") has considered the factors laiddown under Section 178(4) of the Act which are as under:
(a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
(c) remuneration to directors key managerial personnel and senior management involvesa balance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals"
Key principles governing this remuneration policy are as follows:
Remuneration for independent directors and non independent non-executivedirectors
o Independent directors ("ID") and non-independent non executive directors("NED") may be paid sitting fees (for attending the meetings of the Board and ofcommittees of which they may be members) and commission within regulatory limits.
o Within the parameters prescribed by law the payment of sitting fees and commissionwill be recommended by the NRC and approved by the Board. o Overall remuneration (sittingfees and commission) should be reasonable and sufficient to attract retain and motivatedirectors aligned to the requirements of the Company (taking into consideration thechallenges faced by the Company and its future growth imperatives).
o Overall remuneration should be reflective of size of the Company complexity of thesector/ industry/ companys operations and the companys capacity to pay theremuneration.
o Overall remuneration practices should be consistent with recognised best practices.
o Quantum of sitting fees may be subject to review on a periodic basis as required.
o The aggregate commission payable to all the NEDs and IDs will be recommended by theNRC to the Board based on company performance profits return to investors shareholdervalue creation and any other significant qualitative parameters as may be decided by theBoard.
o The NRC will recommend to the Board the quantum of commission for each director basedupon the outcome of the evaluation process which is driven by various factors includingattendance and time spent in the Board and committee meetings individual contributions atthe meetings and contributions made by directors other than in meetings.
o In addition to the sitting fees and commission the Company may pay to any directorsuch fair and reasonable expenditure as may have been incurred by the director whileperforming his/her role as a director of the Company. This could include reasonableexpenditure incurred by the director for attending Board/ Board committee meetingsgeneral meetings court convened meetings meetings with shareholders/ creditors/management site visits induction and training (organised by the company for directors)and in obtaining professional advice from independent advisors in the furtherance of his/her duties as a director.
Remuneration for managing director ("MD")/ executive directors("ED")/ KMP/ rest of the employees
o The extent of overall remuneration should be sufficient to attract and retaintalented and qualified individuals suitable for every role. Hence remuneration should be:
Market competitive (market for every role is defined as companies from which thecompany attracts talent or companies to which the company loses talent).
Driven by the role played by the individual.
Reflective of size of the company complexity of the sector/ industry/companys operations and the companys capacity to pay.
Consistent with recognised best practices.
Aligned to any regulatory requirements. o In terms of remuneration mix orcomposition:
The remuneration mix for the MD/ EDs is as per the contract approved by theshareholders. In case of any change the same would require the approval of theshareholders.
Basic/ fixed salary is provided to all employees to ensure that there is a steadyincome in line with their skills and experience.
In addition to the basic/ fixed salary the company provides employees with certainperquisites allowances and benefits to enable a certain level of lifestyle and to offerscope for savings and tax optimisation where possible. The company also provides allemployees with a social security net (subject to limits) by covering medical expenses.
The company provides retirement benefits as applicable.
In addition to the basic/ fixed salary benefits perquisites and allowances asprovided above the company provides MD/EDs such remuneration by way of commissioncalculated with reference to the net profits of the company in a particular financialyear as may be determined by the Board subject to the overall ceilings stipulated inSection 197 of the Act.
The specific amount payable to the MD/ EDs would be based on performance asevaluated by the Board or the NRC andapproved by the Board.
The company provides the rest of the employees a performance linked bonus. Theperformance linked bonus would be driven by the outcome of the performance appraisalprocess and the performance of the company.
Remuneration payable to Director for services rendered in other capacity
The remuneration payable to the Directors shall be inclusive of any remunerationpayable for services rendered by such director in any other capacity unless:
a) The services rendered are of a professional nature.
b) The NRC is of the opinion that the director possesses requisite qualification forthe practice of the profession.
The NRC is responsible for recommending the remuneration policy to the Board. The Boardis responsible for approving and overseeing implementation of the remuneration policy.