DIRECTORS' REPORT To, The Members, Resonance Specialties Limited Your Directors have pleasure in presenting the 26th Annual Report along with the Audited Statements of Account of your Company for the financial year ended 31st March, 2015 2. Review of operations The Company had reported turnover of Rs.3800.62 lakhs for the year ended March 31, 2015 as against Rs. 4529.90 lakhs in the previousyear, showing decrease of over 16.10%. The Company has generated net profit of Rs.127.58 lakhs as against net profit of Rs.102.59 lakhs in the previous year. 3. Dividend on Equity Shares The Board of Directors of the Company recommend, for consideration of shareholders at the 26th Annual General Meeting, payment of dividend of 5 % (Rs. 0.50/- per Share) on the Equity Shares of the face value of Rs. 10/- each for the year ended 31st March 2015. The Dividend paid during the previous year was 5% (Rs. 0.50/- Per Share). 4. Directors: The Board of Directors vide their resolution dated 13th February, 2015 appointed Dr. Gurpur Ganesh Pai as an Additional Dirset ctor in the category of Independent Non executive Director of the Company and vide resolution dated March 31st 2015 appointed Ms. Urvi A. Gupta as an Additional Director in the category of Non-Executive Director of the Company. Dr. Gurpur Ganesh Pai and Ms. Urvi A. Gupta hold office up to the date of the ensuing Annual General Meeting of the Company and are eligible for appointment. The Board of Directors in the meeting held on 06th August, 2015 has on recommendation of remuneration and nomination committee, consider and approved the re-appointment of Dr. A.B Gupta whose tenure completes on 31st August, 2015 for a period of 3 years with effect from 01st September, 2015 to 31st August, 2018, subject to approval of members in AGM. Your directors recommend the regularization of appointment of Dr. Gurpur Ganesh Pai and Ms. Urvi A Gupta, details of the proposal for of Dr. Gurpur Ganesh Pai and Ms. Urvi A. Gupta and for reappointment of Dr. A. B. Gupta are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 26th Annual General Meeting. Mr. B. N Agrawal is liable to retire by rotation at the ensuing Annual General Meeting of the company and being eligible, offers himself for reappointment. The directors recommend his reappointment as director of the company. Board of Directors vide their resolutions dated 13th February, 2015 appointed Mr. Dwarika Agrawal pursuant to section 203(1) of the Companies Act, 2013 and Rule 8 of the Companies (Appointment & Remuneration of Key Managerial Personnel) Rules, 2014 as Chief Financial Officer of the Company classified as Key Managerial Personnel. All the appointments of Directors of the company are in compliance with the provisions of Section 164 of the Companies Act, 2013. All independent directors have given the declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act,2013 and clause 49 of the listing Agreement. The relevant details of the above Directors are given in the Corporate Governance Report attached herewith. 5. No of Meetings of The Board: The details of the number of meetings of the board held during the financial year 2014-15 forms part of the Corporate Governance Report. 6. Other Committees: The composition of all the Committee Meetings and its meetings during the financial year 2014-15 forms part of the Corporate Governance Report. 7. 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 During the year, there are no significant and material orders passed by the Regulators/courts that would impact the going concern status of the company and its future operations 8. Directors' Responsibility Statement u/s 134 (5) of the Companies Act, 2013 Pursuant to the provisions of Section 134 (5) of Companies Act, 2013, as amended, with respect to the Directors' Responsibility Statement, it is hereby confirmed that: a) In the preparation of the accounts for the financial year ended 31st March,2015, the applicable Accounting Standards have been followed along with 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 reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March,2015 and of the profit and loss of the Company for the year ended 31st March,2015; 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 for safeguarding the assets of the 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, 2015 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. 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. 9. Management Discussion and Analysis Management Discussion and Analysis Report for the year under review as required under Clause 49 of the Listing Agreement, is given as a separate annexure to this Report 10. Exports Export including deemed export are at Rs. 2290.57 Lacs compared to Rs. 2448.40 Lacs in the previous years. The Company is exploring newer market for its nutritional products and of value added Pyridine derivatives. 11. Future Prospects Due to heavy competition and adverse forex prices, the Company is exploring alternate raw material to manufacture its basic products to sustain the profitability. In case of some of the value added products of the Company, catalyst are being developed to manufacture the products at lower cost. There are few competitors in the world but the demand for some of our products is limited. The Company is making all the efforts to develop new applications of its products and is confident of substantially expanding the market in near future. Nutraceuticals market is growing and more particularly in India and other third world countries. Further, new products with better margins are also being developed using novel technology. 12. Research and Development The Research and development is an integral component of commercial exploitation of the products and processes. Your Company is knowledge based entity with focus on the customer needs. The strength of Resonance stands at its R&D centre where products and processes are created to meet regulatory standards and to address the needs of the consumer at large. The Company is making major investments in R&D facilities at Tarapur which is approved by the Govt. of India to improve upon the competitiveness of our manufacturing products and processes. The Company continues to conduct R&D work related to the: - Development of improved catalyst for the better yields of products; - Improvement in technology of value added products; - New products using novel technologies are being developed. 13. Deposits During the year the Company has not accepted deposits from the Shareholders and others and that the Company has complied with the provisions of section 73 of the Companies Act, 2013 and the rules made there under. 14. Statutory Auditors M/s. V. R. Bhabhara & Co., Chartered Accountants (Registration No.112861W), were appointed as Statutory Auditors at the last Annual General Meeting till the conclusion of 28th Annual General Meeting of the company (subject to ratification of the appointment by the members at every AGM). They are eligible to continue as Statutory Auditors for the financial year 2015-2016. Your Board recommends ratification of their appointment as the Statutory Auditors at the ensuing Annual General Meeting. 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 Mr. V M Kundalia, Company Secretary in Practice were appointed as Secretarial Auditor for the financial year 2014-15 The Secretarial Auditor, in his Secretarial Audit Report for financial year 2014-15 have drawn the attention by informing that company could not comply with certain provisions and requirements. In connection with the same management herewith give the explanation as follow: a) With respect to Trading Window Closure Company has complied with SEBI (Prohibition of Insider trading Regulation), 1992 and closed the trading window for all the Promoters, officers and Designated Employees (including Directors) of the Company at the time of declaration of all the Unaudited / Audited financial results (including quarterly, half-yearly and annually) and during declaration of dividend for the financial year 2014-15. Accordingly, none of the Promoters, Directors, Designated Employees has done any dealings in the securities of the Company during the trading window closure period, but inadvertently the company could not intimate to BSE in compliance to its circular vide no DCS/COMP/ 14 /2013-14 dated February 03, 2014. b) With respect to compliance under clause 20 of the listing agreement company has complied by sending intimation to stock exchange after closure of the board meeting within prescribed time by permitted mode, further under clause 19 of the Listing Agreement company has unintentionally could not send prior intimation about recommendation of dividend, as the board after reviewing of financial position of the company and keeping in mind the future prospects, took overwhelmingly decision by recommending dividend to the shareholders. c) With reference to the related party transactions under section 188 of the Companies Act, 2013 and other applicable clauses of the listing agreement all transactions / arrangement entered by company with related party were done after consent of the board, further transactions which were entered with related party were in ordinary course of business and at arm's length price. d) With reference to online fillings of documents with BSE Limited in terms of BSE Circular dated 8th February, 2013, Company has been timely intimating to stock exchange as per the requirement by E-mail / fax, further company has already initiated with online filling of the documents with BSE Limited. e) With reference to failure of intimation regarding appointment of Mr. Dwarika Agrawal (CFO) to Stock Exchange, inadvertent lapse took place due to transition ofthe HOD. Further company has already initiated with the process of filing of relevant forms with ROC. f) With reference to the unavailability of the copy of the certain quarterly compliance company has taken serious view of all the minor lapses incurred as mentioned in the report by the secretarial auditor and strictly implemented a system to ensure the timely compliance. g) With respect to the transferring fund to dividend company has complied with the all the provisions of the companies Act, 2013 with respect to the declaration and the payment of dividend during the audit period, inspite of concern person was on leave company has transferred funds to separate dividend accounts within five working days from the date of declaration of dividend. Further the management confirmed that there was no deferment in the payment of dividend to shareholders and Dividend Distribution Tax (DDT) The Management has taken the note of various minor lapses taken up in secretarial audit report by the secretarial auditor, Now the management has taken relevant steps to adapt the system inorder to strictly implement and ensure timely compliance with all the applicable provisions of the companies Act, 2013, Listing Agreement such as making all required notices, intimations, disclosures, announcements, Quarterly / half yearly filing with the Exchanges, ROC, Income Tax and other concerned Authorities etc and company is started moving towards its objective of high corporate governance. 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 did also not given any guarantee during the year. 18. Details of Policy Developed and Implemented by the Company 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. 19. Policy on Directors' Appointment and Remuneration Including Criteria for Determining Qualifications, Positive Attributes, Independence of a Director, Key Managerial Personnel And other Employees The Board shall have minimum 3 and maximum 12 directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a director on the Board. The company shall have such persons on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of Association and Articles of Association of the Company and all other statutory provisions and guidelines as may be applicable from time to time. Composition of the Board shall be in compliance with the requirements of Clause 49 of the Listing Agreement of the Stock Exchange. Except for the Managing and whole Time Director no other directors are paid remuneration, but are paid only sitting fees and profession fees for professional services rendered. The MD is paid remuneration as approved by the Shareholders but is not paid any sitting fees. MD, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company. All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields. 20. Establishment of Vigil Mechanism The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in force. The policy was approved on 14th August, 2014. This Policy inter alia provides a direct access to a Whistle Blower to the Chief Financial Officer on his dedicated email-ID info@resonancesl.com The Whistle Blower Policy covering all employees and directors is hosted on the Company's website at <http://www.resonancesl.com/policies.html> 21. Policy on Related Party Transactions of the Company The Company has a policy on Related Party Transaction and the same has been displayed on the Company's website: <http://www.resonancesl.com/policies.html> 22. The Details in respect of adequacy of Internal Financial Controls The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134 (5) (e) of the Companies Act, 2013. For the year ended 31st March, 2015, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations; wherein controls are in place and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Company's operation. 23. 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. The following is a summary of sexual harassment complaints received and disposed off during each Calendar year: • No. of complaints received: Nil • No. of complaints disposed off: Nil 24. Extract of the Annual Return An extract of the Annual Return as of 31st March, 2015 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 A. 25. A Statement Indicating the Manner in which formal Annual Evaluation has been made by the board of its own Performance and that of its Committees and Individual Directors; 1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feedback forms for evaluation of the Board, Independent Directors and Chairman. 2. Independent Directors at a meeting without anyone from the non-independent directors and management, considered/ evaluated the Board's performance, performance of the Chairman and other non-independent Directors. 3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors. 26. The Details of Familiarization Programme arranged for Independent Directors have been disclosed on website of the Company and are available at the following link: The Familiarization Programme for Independent Directors is hosted on the Company's website at <http://www>. resonancesl.com/policies.html 27. Secretarial Audit Report Pursuant to the requirements of the Companies Act, 2013, the Company has appointed Mr. Vicky Kundaliya, Practicing Company Secretaries (COP 10989) as the Secretarial Auditor for financial year 2014-2015 whose report of 30th May, 2015 is attached separately to this report as Annexure "B". 28. 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 'C' hereto and forms part of this report. 29. Employees The relations between the Company and its employees continue to be cordial. There were no employees during the year drawing remuneration more than prescribed ceiling under Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. 30. 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. 31. 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 Dr. A. B. Gupta Managing Director) DIN no:-00025255 Place: - Mumbai Dated: - 30th May, 2015 |