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DIRECTOR'S REPORT

Resonance Specialties Ltd.

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Market Cap. (₹) 46.29 Cr. P/BV 1.75 Book Value (₹) 22.93
52 Week High/Low (₹) 50/18 FV/ML 10/1 P/E(X) 14.45
Bookclosure 14/08/2018 EPS (₹) 2.78 Div Yield (%) 0.00
Year End :2018-03 

DIRECTORS’ REPORT

To,

The Members,

Resonance Specialties Limited.

The directors submit 29th annual report of Resonance Specialties Limited (the “Company” or “RSL”) along with the audited financial statements for the financial year (FY) ended March 31, 2018.

1. Financial Results:

The financial performance of the Company for the year ended March 31, 2018 is summarized as under:

2017-18 Rs, In Lakhs

2016-17 Rs, In Lakhs

Turnover

3596.07

3418.34

Other Operating Income

110.79

83.76

Profit/ (Losses) Before Interest, Depreciation and Taxation

175.45

284.27

Depreciation

114.62

106.00

Exceptional Items

2.60

-

Profit/ (Losses) after taxes including deferred tax

(76.81)

102.64

Balance in P&L account brought forward

658.63

530.99

Balance in the P&L account carried forward to the Balance Sheet

(69.41)

102.64

2. Revenues:

During the year under review, your Company's:

- Total Operational Revenues stood at Rs. 3596.07 lakhs;

- Operational Expenditure was Rs. 3189.29 lakhs;

- Operating Profit (EBITDA) was Rs. 175.45 lakhs;

- Profit before Tax stood at Rs. 3.38 lakhs;

Operational Revenues stood at Rs. 3596.07 lakhs and is increased by 5.20% from last year's turnover of 3418.34 Lakhs, but due to expenditure EBITDA is lowered by 38.28% i.e. for 2017-18 EBITDA is at 175.45 Lakhs compare to last years of 284.27 Lakhs resulting PAT of (76.81) Lakhs for the reporting year 2017-18.

3. Dividend:

As a prudent economic measure and in order to conserve the scarce liquid resources of the Company, the Directors do not recommend any dividend on the equity shares for the year under review.

4. Share Capital:

During the year under review, the Company has not issued nor redeemed any shares; so the share capital stands at par with the last year, which stood at Authorized Share capital at 1500.00 Lakhs divided into 150.00 Lakhs equity shares of 10/- each as on 31st March 2018 and Paid up Share capital at 1154.40 Lakhs. Divided into 115.44 Lakhs equity shares of 10/- each.

5. Directors:

In the Meeting of the Board of Directors held on 14th November, 2017, Mr. Rajnikant Worah, resigned from the post of Director and Chairman W.e.f. 14th November, 2017, and thereafter Dr. Atma Gupta, the Managing Director of the Company was appointed as the chairman for the Board meeting held on 14th November, 2017.

Mr. B. P. Agarwal, Non-Executive Director retires by rotation and, being eligible, offers himself for reappointment at the ensuing Annual General Meeting of the Company. Your Directors recommend his appointment at Item No 2 of the Notice convening the Annual General Meeting.

Pursuant to the provisions of section 149 of the Act, Mr. Laxmi Ratan Daga, Ms. Archana Surendra Yadav, and Mr. Yaqoob Ali, are the independent directors of the Company. All the Independent Director have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

Brief profiles of the Directors proposed to be appointed/ re-appointed; qualification, experience and the names of the Companies in which they hold directorship, membership of the board committees, as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided along with the Notice convening Annual General Meeting.

6. Key Managerial Personnel

Following Persons are the Key Managerial Personnel (KMP) of the Company, Pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

1. Mr. Atma Bandhu Gupta, Chairman and Managing Director.

2. Mr. Satish Chander Mathur, Whole Time Director of the Company

3. Mr. Shital Churi, Chief Financial Officer

4. Ms. Minal Bhosale, Company Secretary

7. No. of Meeting of the Board:

The Board met five times during the financial year, the details of which are given in the Corporate Governance report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

8. Board Committees:

Currently, the Board has three committees: the audit committee, the nomination and remuneration committee, the stakeholder's relationship committee. Also the Independent Director meeting is held once in the year to discuss the overall performance of each Director and board as a whole. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance report section of this Annual Report.

9. Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the going concern status and Company’s Operations in Future

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

10. Reporting of Frauds

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.

11. Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, as amended with respect to the Directors' Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts for the Financial year ended 31st March, 2018, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are made reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2018, and of its profit for the year ended on that date;

c. The Directors have 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 your Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the annual accounts for the financial year ended 31st March, 2018 on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The details of the same forms part of Management discussion and analysis Report;

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given as a separate annexure to this Report.

13. Public Deposits

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

14. Statutory Auditors

V. R. Bhabhara & Co., Chartered Accountants (Registration No.112861W) were appointed by the shareholders at the 28th Annual General Meeting to hold office until the conclusion of 32nd Annual General Meeting subject to ratification by shareholders at each Annual General Meeting. Company has obtained from the Auditors, a certificate as required under Section 139 of the Companies Act, 2013 to the effect that they are eligible to continue as statutory auditor of the Company. The Board considered the matter and thereafter decided that the ratification of the above named Auditors be recommended to the shareholders at the forthcoming Annual General Meeting, on such remuneration, fee and out of pocket expenses as shall be fixed by the board of Directors of the Company in consultation with Auditors.

The observations and comments given in the Auditors Report read together with the notes to the accounts are self-explanatory and hence do not call for any further information and explanation under section 134(3) of the Companies Act, 2013.

15. Secretarial Auditor

Secretarial Audit for the financial year 2017-18 was conducted by Alok Khairwar & Associates, Company Secretaries (COP 12880) in accordance with the provisions of Section 204 of the Companies Act, The Secretarial Auditor's Report is attached to this Report as Annexure III.

The observations and comments given in the Secretarial Audit Report are self-explanatory and hence do not call for any further information and explanation.

16. Particulars of Loans, Guarantees or Investments by the Company

The company has not given any loans or made any investments covered under the provisions of section 186 of the Companies Act, 2013.The Company has also not given any guarantee during the year.

17. Subsidiary Companies

The Company does not have any Subsidiary, Joint venture or Associate Company.

18. Particulars of Contracts or Arrangements with Related Parties:

Sr. Name of the Related Party Particulars of Value of No Contracts/arrangements Transactions in '

1 Avignon Exim Pvt. Ltd. Sale and purchase 3,627,435

2 Avignon Exim Pvt. Ltd. Conversion Charges 7,910,325

3 Vista Organics Pvt. Ltd. Conversion Charges 51,094,918

5 Vista Organics Pvt. Ltd. Purchase of Raw Materials 12,125,820

6 Ushma Investment Pvt. Ltd. Rent 720,000

7 Avignon Chemical Pvt. Ltd. Rent 720,000

8 Vista finance & Leasing Pvt. Ltd. Rent 720,000

9. Usha Gupta Salary 8,00,000

10. Ascent Financial Services - Interest of Mr. L.R. Daga Professional Fees 156,000

11. Ramanand Associates - Interest of Mrs. Archana Surendra Yadav Professional Fees 59,000

12. Y-Chem Consulting Interest of Dr. Yaqoob Ali Professional Fees 236,000

13. Neha Consulting Agency - Interest of Mr. Bishwanath Prasad Agrawal Professional Fees 196,200

14. Bishwanath Prasad Agrawal Professional Fees 105,000

19. Details of Policy Developed and Implemented on its Corporate Social Responsibility Initiatives

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the Company does not fall under the criteria of Section 135 of Companies Act, 2013.

20. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:

The Nomination and Remuneration Committee has laid down a well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration policy recommended by them and approved by Board of Directors.

21. Vigil Mechanism Policy:

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at the website www.resonancesl.com

22. Policy on Documents Retention:

The Company has a policy on Documents Retention and the same has been displayed on the Company's website: www.resonancesl.com

23. Policy on determination of Materiality of events:

The Company has a policy on determination of Materiality of events and the same has been displayed on the Company's website: www.resonancesl.com

24. Adoption of Indian Accounting Standards (Ind AS)

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified applicability of Ind AS (Indian Accounting Standard) to a certain class of Companies. Accordingly, Ind AS was applicable to your Company for the accounting period beginning April 1, 2017 with a transition date on April 1, 2016. Your Company has adopted the Ind AS and the financial statements comply with all aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in the Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 201 6 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) and adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS.

25. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale, and complexity of its operation. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

26. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial control commensurate with the size, scale, and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with Indian Accounting Standards and the Companies Act 2013.

27. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year no complaint has been received.

28. Extract of the Annual Return

An extract of the Annual Return as of 31st March, 2018 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 and forming part of the report is attached separately as Annexure to the Board's Report.

29. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees:

The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration policy recommended by them and approved by Board of Directors which can be accessed by web link http://www. resonancesl.com/ policies.html.

30. The Details of Familiarization Programme arranged for Independent Directors have been disclosed

on website of the Company: The Familiarization Programme for Independent Directors is hosted on the Company's website at investors@resonancesl.com

31. Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel), 2014 has been appended as Annexure ‘I' to this Report. The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

32. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,2014, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ‘II' to the Board's Report hereto and forms part of this report.

33. Industrial

Relations

The industrial relations continued to be generally peaceful and cordial during the year

34. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has during the year under consideration not transferred any sum to IEPF as the dividend was declared for the year 2013-14 and 2014-15, hence it is kept open for the period of 7 years for the Investors to claim the same and it is due for transfer in the year 2021and 2022 respectively

35. Risk management

The Company has a Risk Management Policy which has been adopted by the Board of Directors, currently, the Company's risk management approach comprises:-Governance of Risk Identification of Risk Assessment of Control of Risk. The risks are identified and are discussed by the representatives from various functions. The Board and the Audit Committee provide oversight and review the risk management policy periodically.

36. Corporate Governance Report

A report on the Corporate Governance along with the Certificate from the Company Secretary in practice is separately given in the Annual Report.

37. Acknowledgement

The Board of Directors express their appreciation for the sincere co-operation and assistance of Government Authorities, Bankers, Customers, Suppliers, Business Associates and the efforts put in by all the employees of the Company. The Board of Directors expresses their gratitude to all our valued shareholders for their confidence and continued support to the Company.

For &on behalf of the board of Directors

sd/- sd/-

Mr. Laxmi Ratan Daga Dr. A. B. Gupta

Director Chairman & Managing Director

(DIN: 05211735) (DIN: 00025255)

Place: Mumbai

Dated: 30th May, 2018

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