fusion fittings i ltd Directors report

Dear Members,

Your Directors have pleasure in presenting the Thirtieth Annual Report together with the Audited Annual Accounts for the financial year ended March 31,2015.

FINANCIAL HIGHLIGHTS

The financial results of your Company for the year ended March 31,2015 and March 31,2014 are set forth below:

(Rs. in lac)

Particulars	Financial Year ended March 31, 2015	Financial Year ended March 31, 2014
Total Revenue	28.51	26.00
Expenses	340.41	6.05
Profit before Interest, Depreciation/, Amortisation & Taxation	(311.90)	19.95
Finance Cost	0.00	0.00
Depreciation and Amortisation expenses	0.00	0.12
Profit/(Loss) before tax	(311.90)	19.82
Less: Provision for taxation
Income Tax for Current Year	-	(3.78)
Income Tax for Prior Years	-	-
Deferred Tax Charge/(Release)	-	.03
Profit/(Loss) after tax	(311.90)	16.08

OPERATIONS

The total income in the Financial Year ended March 31,2015 was Rs. 28.51lac and the loss incurred by the Company was Rs. 311.90 lac as against total income of Rs. 26 lac and Profit after tax of Rs. 16.08 lac in the previous year ended March 31,2014. During the current year, the Company has incurred loss due to heavy loss on sale of investment.

DIVIDEND

As the Company has incurred loss during the financial year ended 31.03.2015, your Directors do not recommend any dividend for the year 2014-15.

SUBSIDIARY

During the period covered under report, the members are aware that the Company after taking the approval of members had sold the entire shareholding in HIQ Power Associates Private Limited, the erstwhile subsidiary of the Company. The Company has no subsidiary as on 31st March 2015.

RISK MANAGEMENT POLICY

The Company has devised and implemented a mechanism for risk management and has developed a Risk Management Policy. The mechanism involves creating a Risk Register, identifying internal and external risks and implementing risk mitigation steps. The updates regarding the same are placed before the meeting of the Board of Directors of the Company on quarterly basis.

DIRECTOR AND KEY MANAGERIAL PERSONNEL

During the period covered under this report Mr. Kul Bhushan Arora and Mr. Sunil Choudhry resigned from the office of Director w.e.f. 12th June 2014 and 5th February 2015 respectively. However during the aforementioned period Mr. Praveen Kumar was appointed as director 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 an Additional Director of the Company w.e.f. 5th February 2015.

However the Board of Directors of the Company has decided to appoint Mr. Praveen Kumar as an Independent Director of the Company and Mr. Perintalmanna Venkatrama Krishna Kumar as 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 an Independent Directors confirming that they meet the criteria of independence as prescribed under 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 by rotation and being eligible he has offered for being appointed as director liable to retire by rotation.

The resolution for appointment and re-appointment of the aforesaid directors have been incorporated in the notice of the forthcoming Annual General Meeting of the company.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually 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 the Board covering various criteria such as degree of fulfilment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders. Feedback was also taken from every director on his assessment of the performance of each of the other Directors.

The Nomination and Remuneration Committee (NRC) then discussed the above feedback received from all the Directors.

Based on the inputs received, the Chairman of the NRC also made a presentation to the Independent Directors at their meeting, summarizing the inputs received from the Directors as regards Board performance as a whole, and of the Chairman. The performance of the non-independent non-executive directors and Board Chairman was also reviewed by them.

Post the meeting of the Independent Directors, their collective feedback on the performance of the Board (as a whole) was discussed by the Chairman of the nRc with the Chairman of the Board. It was also presented to the Board and a plan for improvements was agreed upon.

Every statutorily mandated committee of the Board conducted a self-assessment of its performance and these assessments were presented to the Board for consideration. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

Feedback was provided to the Directors, as appropriate. Significant highlights, learning 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 the Listing Agreement, the NRC is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

In line with this requirement, the Board has adopted the Policy on Board Diversity and Director Attributes, which is reproduced in Annexure-I and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company, which is reproduced in Annexure-II.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the 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 of meetings held are included in the Corporate Governance Report which forms a part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company is not carrying on any manufacturing activity, no particulars required to be furnished under Sub Section (3)(m)of Section 134 of Companies Act ,2013 read with rule 8(3) of Company (Accounts) Rules 2014 relating to energy conservation, technology absorption and the Company has also no transaction relating to foreign exchange earnings and outgo.

PARTICULARS OF EMPLOYEES

The Company did not have any employee drawing salary more than the limit prescribed under in terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules,2014, therefore no particulars is required to be disclosed under the aforementioned provisions.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also not required as the Company does not have any director getting any remuneration or sitting fee and that the Company has also not paid any salary.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were onarm’s length and were in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee of the Board of Directors for their approval. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the Listing Agreement.

The Company has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions. The policy is available on the Company’s website www.fusionfttings.com.

Particulars of Contracts or Arrangements with related parties referred to in section 188(1)of Companies Act, 2013 in the prescribed form AOC -2 is annexed with this report and marked as Annexure-III.

FIXED DEPOSITS

The Company has not invited/accepted any Fixed Deposits during the year, as such, no amount of principal or interest on fixed deposits was outstanding on the date of the Balance Sheet.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of loans, guarantees and investments covered under the provisions of Section 186 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 in Annexure-IV in the prescribed form MGT-9, which forms a part of this report.

AUDITORS

(i) STATUTORY AUDITOR

In accordance with the provisions of Companies Act, 2013, at the Annual General Meeting held 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 accounts for the financial year ending 31st March, 2017.

M/s K. K. Jain & Co., Chartered Accountants, have consented to be the Auditors of the Company, if their appointment is ratified by the members at the Annual General Meeting and have also confirmed that their appointment is as per the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

The Auditors’ report and notes to the financial statements are self explanatory and do not call for any further comments.

(ii) SECRETARIALAUDITOR

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the services of M/s Anjani Kumar & Associates, Company Secretaries, New Delhi to conduct the Secretarial Audit oft he Company for the financial year ended March 31,2015.

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 relevant sections of the Act, a Management Discussion and Analysis Statement, Report on Corporate Governance 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, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was 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 the Chairman 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 attached with this Report.

MANAGEMENT ANALYSIS AND DISCUSSION

Management analysis and discussion for the year under review as stipulated under Clause 49 of Listing agreement is presented in a separate section forming a part of annual report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of Companies Act, 2013, with respect to the Directors’ Responsibility Statement, it is hereby confirmed:-

(i) that in the preparation of the annual accounts for the financial year ended 31 March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended 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 of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(iv) that the directors had prepared the annual accounts for the financial year ended 31 March, 2015 on a going concern basis.

(v) That the directors have laid down internal financial control to be followed by the company and that such internal financial control are adequate and are operating effectively.

(vii) That the directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall under the criteria mentioned under Section 135 of the Act, accordingly the Company has not formed Corporate Social Responsibility Committee.

ACKNOWLEDGEMENT

We place on records our sincere thanks to Government of India, State Governments and concerned Government Authorities/Departments and the Bankers for their cooperation and expect the same in the future.

For and on behalf of the Board of Fusion Fittings (I) Limited

Place: Gurgaon	Praveen Kumar
Date: 2nd September, 2015	DIN: 06720411
	Chairman

ANNEXURE-I: POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES

(Ref.: Board’s Report, Section 8)

1. Objective

1.1 The Policy on Board Diversity (‘the Policy’) sets out the approach to diversity 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 in ensuring an effective board. A mix of executive, independent and other non-executive directors is one important facet of diverse attributes that the company desires. Further, a diverse board representing differences in the educational qualifications, knowledge, experience, gender, age, thought and perspective results in delivering a competitive advantage and a better appreciation of the interests of stakeholders. These differences should be balanced against the need for a cohesive, effective board. All board appointments 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 board composition:

i) Gender diversity:

Having at least one woman director on the Board.

ii) Age

The average age of board members should be in the range of 25 - 70 years.

iii) Competency

The board should have a mix of members with different educational qualifications, knowledge and with adequate experience infinance, accounting, economics, legal and regulatory matters, the environment, green technologies, operations of the Company’s businesses, energy commodity markets and other disciplines related to the Company’s businesses.

iv) Independence

The independent directors should satisfy the requirements of the Companies Act, 2013 (‘the Act’) and the listing agreements in respect of the ‘independence’ criterion.

Additional Attributes

• The directors should not have any other pecuniary relationship with the Company, its subsidiaries,

associates or joint ventures and the company’s promoters, besides sitting fees and commission.

• The directors should not have any of their relatives (as defined in the Act and Rules made there under) as directors or employees or other stakeholders (other than with immaterial dealings) of the company, its subsidiaries, associates or joint ventures.

• The directors should maintain an arm’s length relationship between themselves and the employees of the Company, as also with the directors and employees of its subsidiaries, associates, joint ventures, promoters and stakeholders for whom the relationship with these entities is material.

• The directors should not be the subject of allegations of illegal or unethical behaviour, in their private or professional lives.

• The directors should have ability to devote sufficient time to the affairs of the Company.

3. Role of the Nomination and Remuneration Committee

3.1 The Nomination and Remuneration Committee (‘the NRC’) shall review and assess board composition whilst recommending the appointment or reappointment of independent directors.

4. Review of the Policy

4.1 The NRC will review this policy periodically and recommend revisions to the board for consideration.

ANNEXURE-II: REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

(Ref.: Board’s 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 with trust. 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 Listing Agreement ("Listing Agreement"). In case of any inconsistency between the provisions of law and this remuneration policy, the provisions of the law shall prevail and the company shall abide by the applicable law. While formulating this policy, the Nomination and Remuneration Committee ("NRC") has considered the factors laid down under Section 178(4) of the Act, which are as under:

(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; and

(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"

Key principles governing this remuneration policy are as follows:

• Remuneration for independent directors and non independent non-executive directors

o Independent directors ("ID") and non-independent non executive directors ("NED") may be paid sitting fees (for attending the meetings of the Board and of committees of which they may be members) and commission within regulatory limits.

o Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC and approved by the Board. o Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate directors aligned to the requirements of the Company (taking into consideration the challenges faced by the Company and its future growth imperatives).

o Overall remuneration should be reflective of size of the Company, complexity of the sector/ industry/ company’s operations and the company’s capacity to pay the remuneration.

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 the NRC to the Board based on company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board.

o The NRC will recommend to the Board the quantum of commission for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the 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 director such fair and reasonable expenditure, as may have been incurred by the director while performing his/her role as a director of the Company. This could include reasonable expenditure incurred by the director for attending Board/ Board committee meetings, general 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 retain talented and qualified individuals suitable for every role. Hence remuneration should be:

Market competitive (market for every role is defined as companies from which the company 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/ company’s operations and the company’s capacity to pay.

Consistent with recognised best practices.

Aligned to any regulatory requirements. o In terms of remuneration mix or composition:

The remuneration mix for the MD/ EDs is as per the contract approved by the shareholders. In case of any change, the same would require the approval of the shareholders.

Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience.

In addition to the basic/ fixed salary, the company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimisation, where possible. The company also provides all employees 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 as provided above, the company provides MD/EDs such remuneration by way of commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act.

The specific amount payable to the MD/ EDs would be based on performance as evaluated by the Board or the NRC andapproved by the Board.

The company provides the rest of the employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process 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 remuneration payable 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 for the practice of the profession.

• Policy implementation

The NRC is responsible for recommending the remuneration policy to the Board. The Board is responsible for approving and overseeing implementation of the remuneration policy.