Your Directors have pleasure in presenting the 72nd Annual Report on the business andoperations of your Company together with the audited Financial Statements for the yearended March 312020 :
|Financial Results and State of Affairs || || ||(Rs. in Lakhs) |
| ||Financial Year ended March 31 2020 (Standalone) ||Financial Year ended March 31 2019 (Standalone) ||Financial Year ended March 31 2020 (Consolidated) |
|Revenue from Operations ||11227 ||25171 ||11162 |
|Other Income ||202 ||735 ||201 |
|Profit Before Depreciation Finance Costs Exceptional items and Tax Expenses ||862 ||2433 ||791 |
|Less : Depreciation/Amortization/Impairment ||250 ||213 ||250 |
|Profit Before Finance Costs Exceptional items and Tax Expenses ||612 ||2220 ||541 |
|Less : Finance Costs ||285 ||1423 ||285 |
|Profit Before Exceptional Items and Tax Expenses ||327 ||797 ||256 |
|Add/Less : Exceptional Items ||0 ||0 ||0 |
|Profit Before Tax Expense ||327 ||797 ||256 |
|Less : Tax Expenses || || || |
|Current Tax ||188 ||258 ||188 |
|Add : Deferred Tax Charge/Credit ||(1047) ||(11) ||(1047) |
|Profit for the year ||1186 ||550 ||1115 |
|Other Comprehensive Income (Net of Tax) ||34 ||9 ||34 |
|Total ||1220 ||559 ||1149 |
Material Changes and commitments if any affecting financial position of the Companyfrom the end of the Financial Year and till the date of this Report
No material changes and commitments affecting the financial position of your Companyoccurred between the end of the Financial Year of your Company to which the FinancialStatements relate and the date of this Report.
Further it is confirmed that there has been no change in the nature of business ofyour Company.
The Company has a Paid up Share Capital of Rs. 9.17 Crores as on March 312020.
There has been no change in the Authorized Share Capital of your Company which remainsat Rs. 22 Crores.
Your Company has neither issued Shares with differential voting rights nor grantedStock Options nor Sweat Equity Shares.
Your Company has not made any buy-back of its own Equity Shares.
The Board of Directors has proposed to retain the entire amount of Profit of Rs. 12.20Crores for expansion and further growth of your Company and therefore has notrecommended payment of any Dividend.
Consequent to outbreak of COVID 19 which has been declared a pandemic by World HealthOrganisation (WHO) Government of India and State Governments had declared lockdowneffective from March 25 2020 which has affected business in general. Your Company'sprimary source of revenue is from manufacturing and selling of Electrical Goods-Transformers Cables etc. Your company's operation have been affected due to loss ofproduction suspension of the operation disruption in supply chain increase in creditperiod in respect of customer dues and non-availability of personnel during lockdown andvarious other facilities affecting the overall liquidity due to blockage of funds ininventories receivables etc. The production has started gradually from May 2020 in allplants of your company.
Your Company has considered internal and external information while finalizing variousestimates and taking assumptions in relation to its Financial Statements preparation uptothe date of approval of the Financial Statements by the Board of Directors and no materialimpact of COVID-19 on the financial performance interalia including the carrying value ofvarious current and non-current assets or on the going concern assumptions of the Companyis expected to arise.
The Company's Unit at Dhulagori was marginally damaged due to the severe cycloneAmphan. Necessary claim has been made with the Insurance company and the claim amount hasbeen received.
Your Company presents its seventy second operational performance for the Financial Year2019-2020.
Net Revenue from Operations for the year was Rs. 112 crores as compared to Rs. 252crores in the previous year resulting in a decrease of 55.55%. Profit Before Tax also sawa decrease of 58.97 % to Rs. 3.27 crores as against Rs. 7.97 crores in the previous year.The carried forward profit increased by 118.25 % to Rs. 12.20 crores over Rs. 5.59 croresin the previous year due to a deferred tax add back of. Rs. 10.47 crores.
This drastic fall in revenue of the company is primarily due to the completion of mostcentral funded schemes such as DDUGY and SAUBHAYA. At the same time the financial postionof State Owned Utilities as well as many large and mid sized EPC companies continue toremain very poor. This situation has been made worse due to the Covid 19 lockdown.Therefore under the current market scenario your company will continue to remainselective in its order booking and shall remain prudent in its external borrowings.
To enable your Company to expand its portfolio of products and services a Wholly -ownedSubsidiary Reengus Wires Private Limited has been formed for manufacture of galvanizedsteel wires and strips. This will help your Company to diversify its product range as wellas diversify its customer profile. The commercial production of the plant has alreadycommenced.
The Indian economy faces various headwinds and along with the impact of COVID 19 insuch a situation has badly impacted industry at all levels.Your Company remains verycautious. Opportunities for growth remain very few in the present scenario. Payments riskscontinue to remain high.
As has been the policy of Your Company it has focused on improving its Balance Sheetand these efforts have borne fruit. Non-current borrowings have further come down from Rs.0.51 Crores to Rs. 0.35 Crores. Current borrowings have seen a huge reduction and are downfrom Rs. 30.55 Crores to only Rs. 6.32 crores. A reduction of almost 80%. This augur'swell for the company. Finance Cost has come down from Rs. 14.22 crores to Rs. 2.85 crores.The management is committed to the growth of the Company without relying on excessiveborrowings. Given the huge reduction in debt your company has become Net Debt Free (Thevalue of investments cash and cash equivalents and Bank Balances are now more than theborrowings of the company).
The Trade Payables continue to come down and have further reduced from Rs. 45.32 Croresto Rs. 20 Crores. These are all healthy signs for your Company.
Your Company remains focused by targeting profitable segments. Demand for yourCompany's products remain moderate.
Under the current scenario given the impact of Covid 19 on the economy remainingunclear it is very difficult to fully asses the impact on the business of your company.However your company remains confident given the strength of the business wide range ofproducts and strong Balance Sheet once normalcy comes back to the economy your companywill be able to capitalize on growth opportunities and bounce back to higher growth.
Key Financial Ratios
In accordance with SEBI (Listing Obligations & Disclosure Requirements) (Amendment)Regulations 2018 the Company is required to give details of significant changes (i.e.change of 25% or more as compared to the immediately previous Financial Year) in keysector-specific financial ratios including Debtors Turnover Inventory Turnover InterestCoverage Ratio Current Ratio Debt Equity Ratio Operating Profit Margin (%) and NetProfit Margin (%) and details of any change in Return on Net Worth as compared to theimmediately previous Financial Year
|Ratio ||Financial Year 2019-2020 ||Financial Year 2018-2019 |
|Current Ratio ||2.73 ||1.65 |
|Interest Coverage Ratio ||2.15 ||1.56 |
|Inventory Turnover Ratio ||3.84 ||6.81 |
|Net Profit Margin ||10.56 ||2.22 |
|Operating Profit Margin ||5.45 ||8.82 |
|Return on Net Worth ||9.46 ||11.45 |
|Debtors Turnover Ratio ||1.97 ||2.75 |
|Debt Equity Ratio ||0.40 ||1.67 |
The Current ratio has improved significantly by better control and management ofcurrent assets
The Interest coverage ratio has also improved on account of lower finance cost.
The Inventory turnover ratio has decreased due to lower turnover
The Net Profit margin has increased due to higher deferred tax credit during theyear
The decrease in Operating Profit Margin is on account of lower PBT
Return on Net Worth has reduced due to lower profits
Debtors turnover ratio has reduced on account of lower sales
Debt Equity Ratio has improved due to reduction in borrowings of the Company.
During the year your Company has received its Credit ratings from Brickwork RatingsIndia Private Limited. The Company improved its long term Bank facility Credit rating fromBB+ to BBB- and its short term Bank facilities Credit rating from A 4 to A3.
The revision in the ratings assigned to the Bank facilities of the Company takes intoaccount significant growth in the scale of operations during Financial Year 2018-2019 aswell as comfortable gearing profile profitability margin and the experience of thepromoters .
The letter containing the credit ratings is available in the Company's CorporateWebsite www.rtspower.com and can be accessed under the head Investor Relations'.
Your Company has not accepted any Deposit within the meaning of Sections 73 and 76 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. No amounton account of principal or interest on deposits frompublic was outstanding as on March312020.
No loan or deposit has been taken or accepted from any Director of your Company.
Energy Conservation Technology Absorption & Foreign Exchange Earnings and Outgo
Monitoring and control of consumption of sources of energy like power oil etc.continued to be a priority area of your Company. Energy conservation procedures also forman important part of your Company's operational practices. No alternative sources ofenergy has so far been utilized. There is no capital investment during the year underreview on energy conservation equipment.
Your Director have nothing to report in the matter of Technology Absorption since yourCompany has neither hired nor imported any technology from outside sources.
Your Company has no Research and Development (R&D) Department and has not spent anyamount on R& D during the Financial Year.
Your Company had an Export turnover of Rs. 672.93 Lakhs lower than that of theprevious year. This was mainly on account of non-availability of foreign currency in someof the exporting countries.
The Foreign Exchange outgo during this year was as follows:
Expenditure in Foreign Currency
|Foreign Travelling ||Rs. 13.78 Lakhs |
Particulars of Loans given investments made guarantees given and securities provided
The Company has neither given any Loan and Guarantee nor provided any security in termsof Section 186 of the Companies Act 2013.
The details of investments made by your Company during the Financial Year 2019-2020 areprovided in Financial Statements of this Annual Report.
Indian Accounting Standards
Your Company has adopted Indian Accounting Standards (Ind- AS) with effect from April1 2017. Financial Statements for the year ended March 31 2020 have been prepared inaccordance with Ind-AS notified under the Companies (Indian Accounting Standards) Rules2015 (as amended) read with Section 133 and other applicable provisions of the CompaniesAct 2013.
Policy and Particulars of Related Party Transactions
All transactions entered into with the related parties during the Financial Year endedMarch 312020 were in the ordinary course of business and on an arm's length basis andwithout any conflict of interest in accordance with the provisions of the Companies Act2013 and SEBI Regulations 2015.
Moreover there were no materially significant related party transactions during theFinancial Year which were in conflict with the interest of the Company. During the yearthe Company has not entered into any contract/arrangement/transaction with any relatedparties which could be considered material in accordance with the Policy of the Company onmateriality of the related party transactions. There being no material' relatedparty transactions as defined under Regulation 23 of Listing Regulations no details needto be disclosed in Form AOC-2 in that regard.
All such contracts/arrangements/transactions with any related parties were placedbefore the Audit Committee and Board for their approval. Prior omnibus approval of theAudit Committee/ Board is obtained on an annual basis which is reviewed and updated onquarterly basis.
A Statement in summary form of transactions with related parties in the ordinary courseof business has been periodically placed before the Audit Committee and the Board ofDirectors for its approval before entering into such transactions or making any amendmentthereto during the year under review.
For the current Financial Year 2020-2021 the Audit Committee has given omnibusapproval of related party transactions to be entered into by the Company on the basis ofcriteria laid down by it and approved by the Board of Director.
The Audit Committee reviews on a quarterly basis the details of related partytransactions entered into by the Company pursuant to each of the omnibus approval given byit. All such related party transactions for which omnibus approval has been given by theAudit Committee has also been subsequently approved by the Board for the current FinancialYear 2019-2020.
In line with the amendments in SEBI (LODR) (Amendment) Regulations 2018 during theyear the Policy was reviewed by the Board of Directors. The Policy for related partytransactions has been uploaded on the Company's corporate website www.rtspower.com and canbe accessed under the head Investor Relations'. The Policies on materiality ofrelated party transactions and dealing with related party transactions as approved by theBoard may be accessed on the Company's corporate website at the link www.rtspower.com andcan be accessed under the head Investor Relations'.
Your Directors draw attention of the Members to Note No. 45 to the Financial Statementswhich sets out details of related party disclosures.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Companies Act 2013 and InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 (IEPFRules')(including any statutory modification(s)/ reenactment(s)/amendment(s) thereof for the time being in force) the dividend whichremains unclaimed/unpaid for a period of seven (7) years from the date of transfer to theunpaid dividend account of the Company is required to be transferred to the InvestorEducation and Protection Fund Authority (IEPF') established by the CentralGovernment.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has no unpaid and unclaimed amounts lying with the Company as on September 302019 (date of its last Annual General Meeting) as all unpaid and unclaimed amounts hadalready been transferred under Sub section (2) of Section 125 of the Act and the IEPF(Accounting Audit Transfer and Refund) Rules2016 .
Since the last Annual General Meeting the Company does not have any unpaid andunclaimed Dividend to be transferred under Sub section (2) of Section 125 of the Act andthe IEPF (Accounting Audit Transfer and Refund)Rules 2016.
Mr. Sandip Gupta Company Secretary of the Company acts as Nodal Officer of theCompany. The detail of the Nodal Officer is available in the Company's Corporate Websitewww.rtspower.com and can be accessed under the head Investor Relations.'
Transfer of Equity Shares in respect of Unclaimed Dividend to Investor Education andProtection Fund (IEPF) Demat Account
The IEPF Rules also mandates companies to transfer the Shares in respect of whichdividend has not been paid/claimed by the Shareholders for seven (7) consecutive years ormore to the Demat Account created by the IEPF Authority.
Further in compliance with the provisions laid down in IEPF Rules the Company hadsent notices subsequent reminders and also advertised in the newspaper seeking actionfrom Shareholders who have not claimed their dividends for seven (7) consecutive years ormore.
Accordingly till the Financial Year ended March 312011 the year in which the Companyhad last declared dividend the Company had transferred Equity Shares on which Dividendremained unclaimed for a period of seven (7) years to the Demat Account of the IEPF.
It may please be noted that no claim shall lie against the Company in respect ofShare(s) transferred to IEPF pursuant to the said Rules.The voting rights in respect ofthe above Equity Shares are frozen until the rightful owner claims the Equity Shares. Allcorporate benefits on such Shares in the nature of Bonus Shares Split Shares Rightsetc.shall be credited to Unclaimed Suspense Account' as applicable for a period of7 years and thereafter be transferred in line with the provisions of the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 read with Section 124(5) and Section 124(6) of the Companies Act 2013.
However the Shareholders are entitled to claim their Shares including all thecorporate benefits accruing on such Shares if any from the IEPF Authority by submittingan online application in Form IEPF-5 and sending a physical copy of the Form IEPF-5 dulysigned by all the joint shareholders if any as per the specimen signature recorded withthe Company along with requisite documents enumerated in the Form IEPF-5 to the Company'sRTA. The Rules and Form IEPF-5 as prescribed for claiming back the Shares are availableon the website of the IEPF i.e. on www.iepf.gov.in.
The Statement containing details of Name Address Folio No. Demat Account No. and No.of shares transferred to IEPF Demat Account is made available on Company's websitewww.rtspower.com. The Shareholders are therefore encouraged to verify their records andclaim their dividends and Shares if not claimed.
Subsidiary Joint Venture and Associate Company
As on 31 March 2020 the Company has one Wholly-owned Subsidiary Reengus Wires PrivateLimited (CIN U36997WB 2019PTC234547)incorporated during the year on October 30 2019.
There are no associate companies or joint venture companies within the meaning ofSection 2(6) of the Act.
The Company has prepared a Consolidated Financial Statement of the Company and itsWholly-owned Subsidiary Reengus Wires Private Limited in the form and manner as that ofits own duly audited by M/s. Lodha& Co. the statutory auditors in compliance withthe applicable Accounting Standards and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended by the SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018 (hereinafter referred to as theSEBI Listing Regulations.')
The Consolidated Financial Statements for the year 2019-20 form a part of the AnnualReport and Accounts and shall be laid before the Members of the Company at the AGM whilelaying its financial statements under Sub-section (2) of the said Section.
Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of theCompanies (Accounts) Rules 2014 a statement containing the salient features of thefinancial statements of the Company's subsidiaries in Form AOC-1 is attached to thefinancial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiary are available on the website of theCompany at www.rtspower.com and can be accessed under the head Investor Relations'.
The Company does not have any material subsidiary in the immediately precedingaccounting year. However as per Regulation 16 of the SEBI Listing Regulations asamended the Company has adopted the policy for determining material' subsidiarieswhich states that a material' subsidiary means a subsidiary whose income or networth exceeds 10% of the consolidated income or net worth respectively of the Company andits subsidiaries in the immediately preceding accounting year.
Accordingly a Policy on material subsidiaries' was formulated by the AuditCommittee of the Board of Directors of the Company and the same is also posted on theCompany's website and may be accessed at the link www.rtspower.com.
Board of Directors Board meetings and Key Managerial Personnel
(a) Composition of Board of Directors
The Board of Directors (the Board) of your Company consists of a balanced profile ofMembers specializing in different fields that enables the Board to address the variousbusiness needs of your Company while placing very strong emphasis on corporategovernance.
(b) Appointment /Resignation of Director
There was no change in Director of your Company during the year under review.
However Mr. Siddharth Bhutoria (DIN 00609233) was appointed as Whole time Director ofthe Company in the Board Meeting held on July13 2020 with effect from July 152020subject to the approval of the membets in the ensuing Annual General Meeting of theCompany.
(c) Independent Directors
Your Company has at present two Independent Directors namely Mr. Sardul Singh Jain(DIN 00013732) and Mr. Alok Kumar Banthia (DIN 00528159) which meets the requirements ofboth the Companies Act 2013 (the Act) and the Rules made thereunder as well as theprovisions contained in Regulation 17(b) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referredto as Listing Regulations'). They are not liable to retire by rotation.
Your Company has received necessary declarations from the above mentioned IndependentDirectors under Section 149(7) of the Act confirming that they meet the criteria ofindependence as prescribed both under Sub-Section(6) of Section 149 of the Act and underRegulation 16(b) of the Listing Regulations.
Pursuant to the provisions of the Companies Act the Members at the 71st Annual GeneralMeeting of the Company held on September 30 2019 had re-appointed Mr. Sardul Singh Jain(DIN 00013732) and Mr. Alok Kumar Banthia (DIN 00528159) as Independent Directors to holdoffice for five consecutive years with effect from October 12019. As such none of theindependent Directors need to be re-appointed in this ensuing Annual General Meeting.
(d) Retirement of Director by rotation
As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Ram Lal Saini (DIN03534117) Director of your Company will retire by rotationat the forthcoming Annual General Meeting. However he has not offered himself forre-appointment.
The Board expresses deep gratitude for his valuable advices during his long tenure asDirector.
As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Ms. Rachna Bhutoria (DIN00977628) Director of your Company will retire byrotation at the forthcoming Annual General Meeting and being eligible offers herself forre-appointment.
A Resolution seeking Members' approval for her re-appointment forms a part of theNotice convening the Seventy Second Annual General Meeting.
(e) Meetings of the Board and its Committees
The number and dates of Meetings of the Board and its Committees thereof and theDirector present therein have been given in the Report on Corporate Governance attachedherewith.
(f) Separate Meetings of Independent Directors
As per stipulation in Clause VII of the Code for Independent Director in Schedule IV ofthe Companies Act 2013 and as per Regulation 25(3) of the Listing Regulations separateMeetings of the Company's Independent Directors was held on October 212019 and January242020 without the attendance of Non-Independent Director and members of the Managementto review inter alia the performance of Non-Independent Directors and the Board as wholeas per the criteria formulated by the Nomination and Remuneration Committee for evaluationof performance of Directors and Board of Directors. They also assessed the qualityquantity and timeliness of "ow of information between the Company Management and theBoard that is necessary for the Board to effectively and reasonably perform their duties.
In addition to these formal Meetings interaction outside the Board Meetings also takeplace between the Chairman and Independent Directors.
(g) Performance Evaluation of Independent Directors
The performance evaluation of Independent Directors was done by the entire Board ofDirector as required under Regulation 17(10) of the Listing Regulations and as perstipulation in Clause VIII of the Code for Independent Director in Schedule IV of theCompanies Act 2013 in its Meeting held on June 4 2020 excluding the IndependentDirector being evaluated as per the criteria formulated by the Nomination and RemunerationCommittee (NRC) for evaluation of performance of Independent Director . On the basis ofthe report of performance evaluation by the Board it shall be determined by NRC whetherto extend or to continue the term of appointment of Independent Director.
(h) Annual Evaluation of Board its Committees and Individual Director
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations the Boardhas carried out an annual evaluation of its own performance of each Board Memberindividually as well as the working of its Committees .
The manner in which the evaluation was carried out was as follows:
The Nomination and Remuneration Committee of your Company formulated and laid downcriteria for Performance Evaluation of the Board (including Committees) and every Director(including Independent Director) pursuant to the provisions of Section 134 Section 149read with Code of Independent Director (Schedule IV) and Section 178 of the Companies Act2013 and Regulation 19(4) read with Part D of Schedule II of Listing Regulations coveringinter-alia the following parameters namely:
Board Evaluation - degree of fulfillment of key responsibilities; Board culture anddynamics.
Board Committee Evaluation - effectiveness of Meetings; Committee dynamics. IndividualDirector Evaluation (including IDs) - contribution at Board Meetings /Committee Meetings.
Further the Chairman and Managing/Whole-time Director are evaluated on key aspects oftheir roles which include inter- aliaeffective leadership to the Board and adequateguidance to the Management team respectively.
Based on these criteria the performance of the Board various Board Committees viz.Audit CommitteeStakeholders' Relationship Committee and Nomination and RemunerationCommittee and Individual Directors(including Independent Director) was evaluated by theBoard and found to be satisfactory.
During the year under review the Independent Directors of your Company reviewed theperformance of Non-Independent Director and Chairman of the Company taking into accountthe views of Executive Director and Non-Executive Director.
Further the Independent Directors hold unanimous opinion that the Chairman and otherNon-Independent Director including Managing Director and Whole-time Director bring tothe Board abundant knowledge in their respective fields and are experts in theirrespective areas. Besides they are efficient dynamic matured and practical and havesufficient knowledge of the Company.
The Board as a whole is an integrated balanced and cohesive platform where diverseviews are expressed and discussed when required with each Director bringing professionaldomain knowledge to the table. All Directors are participative interactive andcommunicative.
The Chairman has abundant knowledge experience skills and understanding of theBoard's functioning possesses a mind for detail is meticulous to the core and conductsthe Meetings with poise and maturity.
The information flow between the Company's Management and the Board is complete timelywith good quality and sufficient quantity.
The following Policies of the Company are attached herewith marked as Annexure C'and Annexure D' which have also been placed on the Company's corporate websitewww.rtspower.com under the head Investor Relations':
(i) Policy for selection of Directors and determining Director's independence And
(ii) Remuneration Policy for Director Key Managerial Personnel and other employees.
(i) Change in Key Managerial Personnel
There was no change in Key Managerial Personnel during the year.
Mr. Sharad Bhutoria resigned as Chief Executive Officer of the Company with effect fromJuly 13 2020 due to his other engagements.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 (the Act')and based upon representations from the Management the Board to the best of itsknowledge and belief confirms that:
a. in the preparation of the Annual Accounts for the year ended March 312020 theapplicable Accounting Standards have been followed and there are no material departuresfrom the same;
b. the Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affair of the Company as at March 312020 and of the Profit ofthe Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the Annual Accounts of the Company on a goingconcern' basis ;
e. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively ; and
f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Declaration by Independent Directors and Statement on compliance of Code of Conduct
Your Company confirms that necessary declaration with respect to independence has beenreceived from all the Independent Directors of the Company and that the IndependentDirectors have complied with the Code for Independent Director prescribed in Schedule IVto the Act.
The Independent Directors also confirm that they are not aware of any circumstance orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgment and without anyexternal influence and that they are independent of the management.
Maximum tenure of Independent Director
The maximum tenure of Independent Director is in accordance with the Companies Act2013 and Regulation 25(2) of the SEBI Listing Regulations.
Formal letter of appointment to Independent Directors
The Company had issued a formal letter of appointment to Independent Directors in themanner as provided in the Companies Act 2013. As per Regulation 46(2) of the SEBI ListingRegulations the terms and conditions of appointment of Independent Directors are placedon the Company's Corporate Website www.rtspower.com and can be accessed under the headInvestor Relations.'
The Audit Committee of the Board of Director constituted in terms of Regulations ofthe Listing Regulations and Section 177 of the Companies Act 2013 read with Rule 6 of theCompanies (Meetings of Board and its Powers) Rules 2014 has been functioning in yourCompany for a long time.
As on the close of business on March 31 2020 the Audit Committee comprised of twoNon-Executive Independent Directors Mr. Sardul Singh Jain and Mr. Alok Kumar Banthia andone Executive Non-Independent Director Mr. Rajendra Bhutoria Vice Chairman &Whole-time Director of your Company.
Mr. Sardul Singh Jain is the Chairman of the Committee who also chaired the AnnualGeneral Meeting of your Company held on September 30 2019.
All the Members of the Committee are financially literate and have accounting orrelated financial management expertise.
The Company's Accounts personnel and representatives of the statutory Auditors as wellas Internal Auditors and Cost Auditors are invitees in most of the Meetings of the AuditCommittee.
Mr. Sandip Gupta Company Secretary acts as the Secretary of the Committee.
All recommendations of the Audit Committee were duly accepted by the Board and therewere no instances of any disagreements between the Committee and the Board.
The Company is committed to maintain the highest standards of corporate governance andadhere to the related requirements set out in the Listing Regulations.
A separate Report on Corporate Governance in format as prescribed in Part C of ScheduleV under Regulation 34(3) of the Listing Regulations with Additional ShareholderInformation along with the Auditors' Certificate thereon form a part of the Annual Reportof your Company and is being attached hereto marked as Annexure- A'.
All Board Members and Senior Management Personnel have affirmed compliance with theCode of Conduct for the Financial Year 2019-20. A declaration to this effect signed by theManaging Director of the Company is contained in this Annual Report.
The Managing Director and CFO have certified to the Board the financial statements andother matters as required under Regulation 17(8) of the Listing Regulations.
Certificate from the Practicing Company Secretary regarding compliance of conditions ofCorporate Governance is annexed to this Report.
Management Discussion & Analysis
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Report on Management Discussion and Analysis is alsoattached herewith marked as Annexure -B'.
Extract of Annual Return
Pursuant to Section 92 and 134(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management & Administration) Rules 2014 the extract of the Annual Returnin Form MGT 9 is enclosed marked as Annexure E'.
Statutory Auditors and Auditors' Report Statutory Auditors
Members at the Sixty Ninth Annual General Meeting of the Company (AGM) held onSeptember 112017 had approved the appointment of M/s Lodha & Co.CharteredAccountants (FRN 301051E) as statutory Auditors of the Company for a period of five yearscommencing from the conclusion of Sixty Ninth Annual General Meeting (AGM) held onSeptember 112017 till the conclusion of 74th AGM of the Company to be held in the year2022.
In terms of the provisions relating to Statutory Auditors forming part of the CompaniesAmendment Act 2017 notified on May 7 2018 ratification of appointment of StatutoryAuditors at every AGM is no more a legal requirement. Accordingly the Notice conveningthe ensuing AGM does not carry any Resolution on ratification of appointment of StatutoryAuditors.
However M/s Lodha& Co. Chartered Accountants has confirmed that they areeligible to continue as Statutory Auditors of the Company to audit the books of accountsof the Company for the Financial Year ending March 31 2021 and accordingly M/s Lodha&Co. Chartered Accountants will continue to be the Statutory Auditors of the Company forthe Financial Year ending March 312021.
Report of Statutory Auditors
The Notes on Financial Statements of the Company referred to in the Auditors' Report(both Standalone and Consolidated) are self-explanatory and do not call for any furthercomments by the Board. The Auditors' Report (both Standalone and Consolidated) do notcontain any qualification reservation adverse remark or disclaimer.
Pursuant to the provisions of Section 143(12) of the Companies Act2013 the Auditorshave not reported any incident of fraud to the Audit Committee during the year underreview.
Internal Auditors and their Report Internal Auditors
Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts)Rules 2014 the Board has reappointed on the recommendation of the Audit Committee M/sK.S. Bothra & Co Chartered Accountants (FRN 304084E) as Internal Auditors of yourCompany to conduct Internal Audit of the functions and activities of your Company for theFinancial Year 2020-2021.
Report of Internal Auditors
During the Financial Year 2019-2020 no material or serious observation has beenreceived from the Internal Auditors of the Company for inadequacy or ineffectiveness ofsuch internal controls.
Cost Auditors and their Reports Cost Auditors
The Company is required to maintain cost records as specified by the Central Governmentunder sub-section(1) of Section 148 of the Act and the rules framed thereunder andaccordingly the Company has made and maintained such cost accounts and records.
The Company has received written consent of the Cost Auditors that the appointment willbe in accordance with the applicable provisions of the Act and the rules framedthereunder.
In terms of Section 148 of the Companies Act2013 read with the Companies (Audit andAuditors) Rules 2014 and the Companies (Cost Records and Audit) Amendment Rules 2014 theBoard of Directors of your Company on the recommendation of the Audit Committee hasappointed M/s K. G. Goyal & Associates (FRN 000024) as Cost Auditors of your Companywith due information to the Central Government by way of fling the prescribed Form No CRA2 on June17 2020 for conducting audit of cost records of your Company for the FinancialYear 2020-2021 subject to ratification of their remuneration as approved by the Board onthe recommendation of the Audit Committee by the Members of the Company in its ensuingAnnual General Meeting.
Members are requested to consider the ratification of the remuneration payable to M/sK.G.Goyal & Associates (FRN 000024) as set out in the Notice of the 72nd AGM of theCompany.
Report of Cost Auditors
For the Financial Year ending March 312019 the due date of filing the Cost AuditReport submitted by M/s K.G.Goyal & Associates Cost Auditors was September 302019which was extended by Ministry of Corporate Affairs vide its Circular dated October242019 to December 312019 and the same was filed with MCA on Decemberll 2020 in XBRLmode.
Secretarial Auditors and their Report Secretarial Auditors
In terms of Section 204 of the Act and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014the Board has appointed Mr. Manoj Prasad ShawProprietor of M/s Manoj Shaw & Co. Practicing Company Secretary (FCS No 5517 C.P. No4194) to conduct Secretarial Audit for the Financial Year 2020-2021.
Report of Secretarial Auditors
The Secretarial Audit Report for the Financial Year ended March 312020 in theprescribed Form No MR3 is annexed herewith pursuant to Section 204(1) of the CompaniesAct 2013 and Rule 9 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 marked as Annexure F' to this Report.
Reporting of Frauds by Auditors
During the year under review the Statutory Auditors Cost Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsofficers or employees to the Audit Committee under Section 143(12) of the Companies Act2013 details of which needs to be mentioned in this Report.
Policy on Preservation of Documents
In accordance with Regulation 9 of SEBI Regulations 2015 the Company has framed aPolicy on Preservation of Documents approved by the Board of Directors of the Company.
The Policy is intended to define preservation of documents and to provide guidance tothe executives and employees working in the Company to make decisions that may have animpact on the operations of the Company. It not only covers the various aspects onpreservation of the documents but also the safe disposal/destruction of the documents.The Policy has been uploaded on the Company's corporate website www.rtspower.com and canbe accessed under the head Investor Relations .
Policy on Determination of Materiality for Disclosures and Archival Policy
In accordance with Regulation 30 of SEBI Regulations 2015 the Company has framed aPolicy on determination of materiality for disclosures to disclose events or informationwhich in the opinion of the Board of Directors of the Company are material.
Further the Company has an Archival Policy in line with the requirements of SEBIRegulations to ensure that information relating to the Company is adequately disclosed onits corporate website www.rtspower.com and can be accessed under the head InvestorRelations' as required by law.
Particulars of Employees and Remuneration
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1)of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended by the Companies (Appointment andRemuneration of Managerial Personnel) Amendment Rules 2016 (the Rules) are provided inAnnexure G'.
Further the information as required pursuant to Rule 5(2) and 5(3) of the said Rulesalso forms a part of this Annual Report. However as per the proviso to Section 136(1) ofthe Act this Annual Report is being sent to all the Members of the Company excluding theabovesaid information. The said information is available for inspection by Members at theCompany's Registered Office during working hours upto the date of the Annual GeneralMeeting. Any Member interested in obtaining such information may also write to the CompanySecretary at the Registered Office of the Company.
A Vigil Mechanism which also incorporates a Whistle Blower Policy in terms of theListing Regulations has been established for Directors Employees and Stakeholders toreport their genuine concerns about unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct or ethics policy or grievances in accordancewith the provisions contained in Section 177 of the Companies Act 2013 read with Rule 7of The Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of theListing Regulations. Such Vigil Mechanism provides for adequate safeguards againstvictimization of Directors Employees and Stakeholders who avail of the Vigil Mechanismand also provides for direct access to the Chairman of the Audit Committee in appropriateor exceptional cases.
The Audit Committee as formed above oversees the Vigil Mechanism and should any ofthe Members of the Committee have a conflict of interest in a given case they shouldrecuse themselves and the others on the Audit Committee would deal with the matter onhand.
Details in this regard have been disclosed in the Company's corporate websitewww.rtspower.com and can be accessed under the head Investor Relations'.
Corporate Social Responsibility Policy
In accordance with Section 135 of the Act and the rules made thereunder the Company hasin place a Corporate Social Responsibility Policy in line with Schedule VII of theCompanies Act 2013 as prescribed in the Companies (Corporate Social ResponsibilityPolicy) Rules 2014.The annual Report on CSR Activities is furnished in "AnnexureH" forming part of this Director ' Report.
The CSR Policy has been hosted in the Company's website at the link www.rtspower.comand can be accessed under the head Investor Relations'.
Risk Management Policy
Keeping in view of the nature of industry in which your Company is engaged yourCompany has all along been conscious of the risks associated with the nature of itsbusiness. Senior Management personnel carry out risk identification risk assessment risktreatment and risk minimization procedures for all functions of the Company which areperiodically reviewed on an ongoing basis and Board Members are informed about all thesefrom time to time to ensure that executive management controls risk through means of aproperly defined framework. The Board of Directors is overall responsible for framingimplementing and monitoring the Company's systems for risk management.
The Board of Directors also oversees that all the risks that the organization facessuch as strategic financial credit marketing liquidity security property goodwillIT legal regulatory reputational and other risks have been identified and assessed andexecutive management keeps a vigil on such risks so that it can be addressed properly assoon as possibility of occurrence of any one of such risks arises.
Compliance with Secretarial Standards on Board and General Meetings
The Company has in place proper systems and processes to ensure compliance with theprovisions of the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and such systems are adequate and operating effectively.
Adequacy of Internal Financial Controls with reference to the Financial Statements
Your Company has in all material respects an adequate internal financial controlsystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
Your Company's internal control structure showed no reportable material weakness.
Significant and material orders passed by Regulators or Courts or Tribunal
No significant and/or material orders have been passed by Regulator(s) or Court(s) orTribunal(s) impacting the going concern status of the Company and its business operationsin future.
Prevention of Sexual Harassment at Workplace
Your Company has zero tolerance policy in case of sexual harassment at workplace and iscommitted to provide a healthy environment to each and every employee of the Company. TheCompany has in place Policy for Prevention and Redressal of Sexual Harassment' inline with the requirements of Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (hereinafter referred as the said Act') andRules made there under.
Your Directors state that during the year under review there was no case filedpursuant to The Sexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013.
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 72nd Annual General Meeting of theCompany are sent to all Membeis whose e-mail addresses are registered with the Company/Depository Participant(s).
Your Directors wish to place on record their deep sense of appreciation for thecommitted services by all the employees of the Company. They have displayed commendablesincerity in rallying together as a great team while meeting the recent challenges of anunprecedented scale.
They would also like to place on record their whole-hearted appreciation for thecontinued and unstinted co-operation and support received by the Company during the yearunder review from BankersState Electricity Boards Government and Semi GovernmentAuthorities Power Utilities other customers vendors and Shareholders.