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RTS Power Corporation Directors Report, RTS Power Corp Reports by Directors
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RTS Power Corporation
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Board commends the Special Resolution set out at Item No 11 of the
 Notice for approval by the Shareholders.
 
 Dear Shareholders,
 
 Your Directors have the pleasure in presenting their 66th Annual Report
 on the business and operations of your Company and the audited
 Financial Statements of your Company for the year ended March 31, 2014
 :
 
 FINANCIAL RESULTS                                        ( Rs In Lacs)
                                          2013-2014           2012-2013
 
 Total Income                              14290.19            10292.89
 
 Total Expenditure                         14275.49            10600.52
 
 Profit /(Loss) Before Tax                    14.70             (307.63)
 
 Less :
 
 Current Tax                       2.80                     -
 
 Deferred Tax                      0.09        2.89    (97.93)   (97.93)
 
 Profit /(Loss) After Tax                     11.81             (209.70)
 
 Add : Profit Brought Forward                924.68             1134.38
 
 Balance Carried to Reserves & Surplus       936.49              924.68
 
 DIVIDEND
 
 The Board of Directors has not recommended payment of any Dividend for
 the Financial Year 2013- 2014 in view of a very small amount of Profit
 and also considering overall future business prospect of the Company.
 
 OPERATIONAL REVIEW
 
 The total Revenue from Operations of your Company showed a significant
 improvement during the year. The total Revenue from Operations during
 the year was Rs. 142.90 Crores compared to Rs. 102.93 Crores during the
 previous year. This is an improvement by about 39% amidst keen
 competition. Sale of Transformers and Cables & Conductors increased by
 almost 29% and 100 % respectively over that of last year.
 
 This year your Company has made a marginal Profit Before Tax of Rs. 14.70
 Lakhs as against a Loss of Rs. 3.07 Crores in last year inspite of
 continuous abnormal price hike of the major raw materials and cut
 throat competition resulting in lower selling prices. Your company,
 thus, has achieved better results this year despite all odds and
 adverse economic scenario.
 
 However, the profitability achieved is disproportionately low
 considering the substantial increase in Revenue from Operations because
 of factors like lower selling prices, so also the margins and abnormal
 delay in payments by the Company''s Customers resulting in increase in
 Debtors from Rs. 67 crores in last year to Rs. 87 Crores approximately this
 year ( an increase by about Rs. 20 crores) .
 
 Your Company could have saved the Interest Expenses on Bank Borrowings
 of an equivalent amount of Rs. 20 Crores as said above had the Company''s
 Customers paid such amount in time. By this, the Profit of your Company
 would have increased by Rs. 2.60 crores, by saving alone the Bank
 Interest expenses on such overdue amount of Rs. 20 crores .
 
 Your company''s entire manufacturing and repairing activities in Eastern
 India are being carried out in Dhulagori Factory and further expansion
 is going on there on a continuous basis.
 
 FUTURE OUTLOOK
 
 Your Company has been continuously exploring the possibility to develop
 Export market .Its continued effort in this regard was fruitful last
 year when it achieved an Export turnover of Rs. 39 Lakhs to start with .
 This year your Company has made an Export Sales of about Rs. 177 Lakhs ,
 an increase of more than 350% over last year. Your Company expects
 further increase in Export Sales in coming years.
 
 However, mushroom growth and unhealthy competition from various
 Transformer manufacturing Units in unorganized Sector is posing
 problems to organized Sector,like your Company, resulting in under
 utilization of production capacities and therefore, the selling prices
 are under pressure , so as the margins.
 
 Your Company expects that sale of transformers to EPC/ Turnkey
 Contractors may increase this year and there may be a slight
 improvement in payment position by Customer in the current year over
 last year.
 
 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 form an important part of your Company''s
 operational practices.
 
 Your Directors have nothing to report in the matter of Technology
 Absorption since your Company has neither hired nor imported any
 technology from outside sources. Your Company has no Research and
 Development (R&D) Department and has not spent any amount on R&D during
 the Financial Year.
 
 Your Company has achieved increased Export business and Foreign
 Exchange earnings (FOB) during this year was Rs. 177.15 Lacs (increase of
 more than 350% over last year) . The Foreign Exchange outgo during this
 year was as follows:
 
 1. Value of Imports calculated on CIF basis -
 
 Raw Materials Rs. 46.31 Lacs
 
 2. Expenditure in Foreign Currency
 
 Foreign Travelling Rs. 6.60 Lacs
 
 SUBSIDIARY
 
 The Company has a Wholly-owned Subsidiary Company, Blue Nile Projects
 Limited at Hong Kong.  For the Financial Year ended on March 31, 2014,
 being the first year of its operation, the Subsidiary Company has
 incurred a Loss of Rs. 4,16,067/- ( U.S $ 6,941).
 
 CONSOLIDATED FINANCIAL STATEMENT
 
 In terms of the General Circular issued by the Ministry of Corporate
 Affairs , Government of India under Section 212(8) of the Companies
 Act, 1956 the Accounts of the abovesaid Subsidiary Company for the
 Financial Year 2013-2014 and the related detailed information will be
 made available to the Company''s and its Subsidiary Company''s Members
 seeking such information at any point of time and are not attached.
 However, financial information of the Subsidiary Company is disclosed
 in this Annual Report in compliance with the said Circular. Copies of
 the Annual Accounts of the Subsidiary Company will also be kept open
 for inspection by any Member at the Registered Office of the Company
 and of the Subsidiary Company. The Company shall also furnish a hard
 copy of the Accounts of the Subsidiary to any Member on demand. The
 consolidated Financial Statements of the Company and its Subsidiary,
 prepared in accordance with the applicable Accounting Standards and the
 Listing Agreements with the
 
 Stock Exchanges and duly audited by M/s A C Bhuteria & Co., Chartered
 Accountants , Auditors of the Company form a part of this Annual
 Report. The Accounts of the Subsidiary Company are also available on
 the Company''s Website.
 
 DIRECTORS
 
 The Board of Directors consists of a balanced profile of Members
 specializing in different fields that enables it to address the various
 business needs of the Company, while placing very strong emphasis on
 corporate governance.
 
 (a) Existing Independent Directors
 
 The Companies Act 2013 provides for the first time appointment of
 Independent Directors. Sri Sardul Singh Jain (DIN 00013732) and Sri
 Bachhraj Begwani (DIN 03157720) , both being Non Executive Directors of
 the Company, have also been acting as Independent Directors of your
 Company under Clause 49 of the Listing Agreement and have held the
 positions as such for more than 10 (ten) years and almost 4(four) years
 respectively as on April 1,2014.
 
 The Securities and Exchange Board of India (SEBI) has amended Clause 49
 of the Listing Agreement inter alia stipulating the conditions for the
 appointment of Independent Directors by a listed Company.  The
 Companies Act 2013 also stipulates almost the same conditions.
 
 It is proposed to appoint Sri Sardul Singh Jain and Sri Bachhraj
 Begwani as Independent Directors under Section 149 of the Act and the
 amended Clause 49 of the Listing Agreement to hold office for a 5
 (five) years term each.
 
 The Company has received requisite separate Notices in writing from two
 Members along with the deposit of requisite amount under Section 160 of
 the Act proposing the candidatures of each of Sri Sardul Singh Jain and
 Sri Bachhraj Begwani for the offices of Independent Directors of the
 Company.
 
 In the opinion of the Board , both Sri Jain and Sri Begwani possess
 appropriate skill, experience and knowledge in their respective fields
 of specialization in Law, Finance, Management and Taxation.
 
 (b) New Independent Director
 
 Your Company needs one more Independent Director to comply with the Act
 read with the Rules made thereunder and the amended Clause 49 .
 Accordingly, the Board of Directors of the Company appointed in its
 Meeting held on August 14, 2014 Sri Alok Kumar Banthia (DIN 00528159)
 as an additional Director designated as an Independent Director with
 effect from the said date and he shall hold office up to the date of
 the ensuing Annual General Meeting pursuant to the provisions of
 Section 161(1) of the Act and Article 89 of the Articles of Association
 of the Company. The Company has received requisite Notice in writing
 from a Member proposing Sri Alok Kumar Banthia for appointment as an
 Independent Director.
 
 In the opinion of the Board Sri Alok Kumar Banthia possesses
 appropriate skill, experience and knowledge to be an Independent
 Director of the Company.
 
 It is proposed to appoint Sri Alok Kumar Banthia as Independent
 Director under Section 149 of the Act and the amended Clause 49 of the
 Listing Agreement to hold office for an initial period of 5(five) years
 term from the conclusion of the Company''s ensuing Annual General
 Meeting .
 
 In the opinion of the Board both the existing Independent Directors ,
 namely Sri Sardul Singh Jain and Sri Bachhraj Begwani and the proposed
 Independent Director, namely Sri Alok Kumar Banthia fulfill the
 conditions for appointment as independent Directors as specified in the
 Act and the Rules made thereunder and the amended Clause 49 and all of
 them are independent of the Management of the Company and will not be
 liable to retire by rotation.
 
 The Company has received declarations from all the above mentioned
 existing and the proposed Independent Directors of the Company
 confirming that they meet with the criteria of independence as
 prescribed both under Sub-Section (6) of Section 149 of the Act and
 under the amended Clause 49 of the Listing Agreement with the Stock
 Exchanges.
 
 (c ) Woman Director
 
 The Companies Act, 2013 has also introduced for the first time
 appointment of at least one Woman Director by Listed Companies and
 certain class of companies. Accordingly, the Board of Directors of your
 Company in its Meeting held on February 14, 2014 has appointed Smt
 Rachna Bhutoria (DIN 0977628) as an additional Director designated as
 Director with effect from the said date pursuant to the provisions of
 Section 161(1) of the Act and Article 89 of the Articles of Association
 of the Company.  She will hold office up to the date of the ensuing
 Annual General Meeting. The Company has received requisite Notice in
 writing from a Member proposing Smt Rachna Bhutoria for appointment as
 Director.
 
 (d) Retirement of Director by rotation
 
 As per the provisions of Companies Act, 2013 and the Articles of
 Association of the Company Sri Rajendra Bhutoria (DIN 00013637),
 Director of your Company will retire by rotation at the forthcoming
 Annual General Meeting and, being eligible , offers himself for
 re-appointment.
 
 (e) Resignation of Director
 
 Sri Loon Karan Patawari (DIN 00013758) , Independent Director of your
 Company resigned with effect from the close of business on March
 31,2014 due to his old age and ill health.
 
 Your Directors place on record their appreciation of the valuable
 contribution made by him and services received from him during his long
 tenure of office as a Director of your Company.
 
 DIRECTORS '' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956 and, based upon
 representations from the Management, the Board ,to the best of its
 knowledge and belief, confirms that :
 
 I. in the preparation of the Annual Accounts for the year ended March
 31, 2014, the applicable Accounting Standards read with requirements
 set out under Schedule VI to the Companies Act, 1956, have been
 followed and there are no material departures from the same;
 
 II. the Directors have selected such Accounting Policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31,2014 and of the Profit of the Company for
 the year ended on that date;
 
 III. the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 IV. the Directors have prepared the Annual Accounts of the Company on a
 ''going concern'' basis , and
 
 V. the Managing Director and the Chief Financial Officer of the Company
 have furnished the necessary certification to the Board on these
 Financial Statements as required under Clause 49 of the Listing
 Agreements with the Stock Exchanges where the Equity Shares of the
 Company are Listed.
 
 CORPORATE GOVERNANCE
 
 A separate Report on Corporate Governance in format as prescribed in
 the Listing Agreements with
 
 the Stock Exchanges forms a part of the Annual Report of your Company
 and is being attached hereto, along with the Auditors'' Certificate on
 its compliance. A Report on Management Discussion and Analysis is also
 attached herewith.
 
 PUBLIC DEPOSITS
 
 Your Company has not accepted any Deposit within the meaning of Section
 58A of the Companies Act, 1956 and the Rules made thereunder.
 
 LISTING
 
 Your Company''s Shares continue to be listed on Calcutta and Bombay
 Stock Exchanges. Annual Listing Fees of both Bombay Stock Exchange and
 Calcutta Stock Exchange have been paid upto the year 2014-2015.
 
 PARTICULARS OF EMPLOYEES
 
 There is no employee whose particulars are to be given pursuant to
 Section 217(2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975, as amended.
 
 TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
 
 Pursuant to the provisions of Section 205A(5) and 205C of the Companies
 Act, 1956, relevant amounts which remained unpaid or unclaimed for a
 period of seven years have been transferred by the Company, from to
 time to time on due dates, to the Investor Education and Protection
 Fund.
 
 Pursuant to the provisions of Investor Education and Protection Fund
 (Uploading of information regarding unpaid and unclaimed amounts lying
 with companies) Rules, 2012, the Company has uploaded the details of
 unpaid and unclaimed amounts lying with the Company as on September 27,
 2013 (date of last Annual General Meeting) on the Company''s Website
 (www.rtspower.com) and has also filed Form No 5 INV on December 13,
 2013 with Registrar of Companies, West Bengal . Since the abovesaid
 last Annual General Meeting , the Company has also transferred unpaid
 and unclaimed Dividend in respect of Final Dividend 2005-2006 and
 Interim Dividend 2006-2007 to the Investor Education and Protection
 Fund on October 25, 2013 and May 4, 2014 respectively and filed Form
 Nos I with Registrar of Companies, West Bengal following such
 transfers.
 
 AUDITORS AND AUDITORS'' REPORT
 
 M/s. A.C.Bhuteria & Co.,Chartered Accountants, (Firm Registration No
 303105E), Auditors of the Company, retire at the forthcoming Annual
 General Meeting. They , being eligible and qualified to be re-appointed
 , have offered themselves for re-appointment from the conclusion of the
 sixty-sixth Annual General Meeting till the conclusion of sixty-ninth
 Annual General Meeting as per the provisions of the Companies Act, 2013
 read with the Companies (Audit and Auditors) Rules, 2014.
 
 The Notes on Financial Statements of the Company referred to in the
 Auditors'' Report are self— explanatory and do not call for any
 further comments by the Board.
 
 The Auditors'' remarks mentioned in  Other Matter Paragraph  in
 their Report in respect of Consolidated Financial Statements having
 been prepared on the basis of unaudited Financial Statements of the
 Company''s Subsidiary , Blue Nile Projects Limited , Hong Kong , the
 Board would mention that since the Company had to furnish both
 Standalone and Consolidated Financial Results to Stock Exchanges by May
 30, 2014 as per the Listing Agreement, the Consolidated Financial
 Results were prepared and approved by the Board on May 30, 2014 on the
 basis of audited Financial Results of the Company and unaudited
 Financial Results of its Subsidiary.
 
 The audited Financial Statements of the Subsidiary have since been
 received from Hong Kong having no difference between the audited
 Financial Statements and the unaudited Financial Statements based on
 which the Consolidated Financial Statements were so prepared as said
 above.
 
 BRANCH AUDITORS
 
 Your Company has Branch Offices and Units at Jaipur - Rajasthan,
 Barmer- Rajasthan, Agra. - U.P and Dhule- Maharashtra. M/s. Jain
 Shrimal & Co., Chartered Accountants, (Firm Registration No FRN
 001704C) Jaipur, Rajasthan were appointed as the Branch Auditors for
 the Financial Year 2013-2014.
 
 They have given a Certificate confirming that they are duly qualified
 and eligible to be re-appointed as per the provisions of Section 139 of
 the Companies Act, 2013 read with Rule 6 of the Companies (Audit &
 Auditors) Rules, 2014 and have offered themselves for re-appointment .
 
 It is proposed to re-appoint M/s. Jain Shrimal & Co., Chartered
 Accountants, as Branch Auditors for the Jaipur, Barmer, Agra and Dhule
 Branch Offices and Units from the conclusion of Sixty Sixth Annual
 General Meeting (AGM) to Sixty Ninth AGM of the Company as per the
 provisions of the Companies Act, 2013 read with the Companies (Audit
 and Auditors) Rules, 2014.
 
 COST AUDITORS
 
 The Company appointed M/S K.G.Goyal & Associates, Cost Accountants,
 Jaipur, Rajasthan as Cost Auditors of the Company for conducting the
 audit of cost records of the Company for the Financial Year 2013-14 in
 pursuance of the Order No 52/26/CAB/2010 dated January 24, 2012 issued
 by the Ministry of Corporate Affairs, Cost Audit Branch .
 
 They have submitted their Cost Audit Report for the Financial Year
 2012-2013 on November 22, 2013 which has been filed in Form 1-XBRL with
 the Ministry of Corporate Affairs on December 12, 2013.
 
 In view of the Press Release and Notification, both dated June 30,
 2014, issued by the Ministry of Corporate Affairs ,New Delhi ,
 maintenance of cost records and audit thereof is no more necessary for
 your Company effective from April 1, 2014. Accordingly, no Cost Auditor
 has been appointed by your Company for the Financial Year 2014-2015 in
 terms of Section 148 of the Companies Act, 2013, the Companies (Audit
 and Auditors) Rules, 2014 and the Companies (cost records and audit)
 Rules, 2014.
 
 APPRECIATION
 
 Your Directors take this opportunity to express their whole-hearted
 appreciation for the unstinted support and co-operation received from
 Banks, State Electricity Boards, Government and Semi Government
 Authorities, Power Utilities, other customers and Shareholders during
 the year under review.
 
 Your Directors also wish to place on record their deep sense of
 appreciation for the sincere and devoted services that the Executives,
 Staffs and Workers at all levels have rendered to your Company.
 
 Registered Office :         For and on behalf of the Board of Directors
 56, Netaji Subhas Road
 Kolkata - 700001 
 Dated : 14th August, 2014                               S. S. JAIN
                                                          Chairman
Source : Dion Global Solutions Limited
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