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Resonance Specialities Ltd.

BSE: 524218 Sector: Industrials
NSE: N.A. ISIN Code: INE486D01017
BSE 13:25 | 08 Dec 183.40 3.30
(1.83%)
OPEN

185.60

HIGH

187.90

LOW

181.45

NSE 05:30 | 01 Jan Resonance Specialities Ltd
OPEN 185.60
PREVIOUS CLOSE 180.10
VOLUME 2832
52-Week high 254.95
52-Week low 86.10
P/E 16.79
Mkt Cap.(Rs cr) 212
Buy Price 182.10
Buy Qty 56.00
Sell Price 183.40
Sell Qty 88.00
OPEN 185.60
CLOSE 180.10
VOLUME 2832
52-Week high 254.95
52-Week low 86.10
P/E 16.79
Mkt Cap.(Rs cr) 212
Buy Price 182.10
Buy Qty 56.00
Sell Price 183.40
Sell Qty 88.00

Resonance Specialities Ltd. (RESONANCESPECI) - Director Report

Company director report

To

The Members

Resonance Specialties Limited

Your Directors have great pleasure in presenting 32nd Annual Report andFinancial Statements for the financial year ended March 31 2021.

FINANCIAL RESULTS/PERFORMANCE:

The financial performance of the Company for the financial year ended March 31 2021 issummarized below:

Particulars For the year ended 31.03.2021 For the year ended 31.03.2020
(Rs. in Lacs) (Rs. in Lacs)
Total Income 7187.29 5803.14
Profit Before Finance Cost Depreciation Exceptional items and Taxation 1584.00 965.45
Less: Finance cost 29.04 35.43
Depreciation 98.48 91.72
Exceptional items 0 146.20
Profit Before Tax 1456.48 692.10
Taxes including deferred tax 404.07 141.33
Net Profit/(Loss) after tax 1052.41 550.77

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the general reserves out of theprofits available for appropriation.

FINANCIAL STATEMENTS

The financial statements are prepared in accordance with the Indian AccountingStandards (Ind-AS) as prescribed under Section 133 of the Companies Act 2013 read withRule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies (IndianAccounting Standards) Amendment Rules 2016.

CREDIT RATING

CRISIL Ratings has assigned the following ratings to the Company's total bank Loanfacilities of Rs.12 Crores:

Long term Rating

- CRISIL BB+/Stable (Removed from ‘Rating Watch with Developing Implications';Rating Reaffirmed)

Short term Rating

- CRISIL A4+ (Removed from ‘Rating Watch with Developing Implications'; RatingReaffirmed)

COVID -19 PANDEMIC

For the whole of the financial year 2020-21 the coronavirus disease persisted as aglobal pandemic resulting in several countries declaring lockdowns forcing citizens tostay indoors and disruption of economic activities globally.

Being manufacturers and marketers of Active Pharmaceutical Ingredient and otherpyridine derivatives hence provider of essential services and exempted from lockdown themanufacturing and marketing activities of your Company continued with initial challengessuch as disruption in logistics and supply chain manpower availability etc.

Your Company is continuously monitoring the situation closely and has taken/continue totake all the measures to comply with the guidelines issued by the local authorities fromtime to time to ensure the safety of its workforce at manufacturing plants and offices.

However the extent to which the Covid-19 pandemic may impact the Company and itsoperations and financials will depend on the future developments in this regard which ason date is uncertain.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes or commitments affecting the financial position of the Company haveoccurred between the end of the financial year to which financial statements in thisreport relate and the date of this report

SHARE CAPITAL

The paid-up equity share capital of the Company as at March 312021 is Rs.1154.40 lacs.The Company currently has no outstanding shares issued with differential rights sweatequity or ESOS.

During the year under report M/s. Makers Laboratories Ltd. acting in concert withM/s. Kaygee Investments Private Ltd. (acquirers) acquired in aggregate 6262000 equityshares of Rs.10/- each representing 54.24% of the equity capital of the Company fromcompanies belonging to Dr. Atma Bandhu Gupta and his family members promoters of theCompany.

Pursuant to this acquisition the acquirers made an open offer to the publicshareholders of the Company to acquire from them 3001440 equity shares of Rs.10/- each @Rs.55.50 per equity shares under the provisions of SEBI (SAST) Regulations.

Upon completion of this open offer process the acquirers have become the promoters ofthe Company and are now holding 6262201 equity shares of Rs.10/- each representing 54.25% of the equity capital of the Company.

In the Open offer document to the public shareholders it was mentioned that thepromoter shareholders belonging to Dr. Atma Bandhu Gupta family shall be reclassified asthe non-promoter shareholders of the Company in compliance with the provisions of SEBI(LODR) Regulations 2015 as amended from time to time and subject to other regulatoryrequirements as applicable.

Dr. Atma Bandhu Gutpa group of shareholders are currently holding 8.06% of the equityshare capital of the Company and have given an application to the Company for categorizingthem as non-promoter Shareholders.

The said application was favorably considered by the Company's Board of Directors attheir Meeting held on June 3 2021 and the Company is currently in the process of makingnecessary application to BSE Ltd. seeking approval for re-classification of said Promotergroup shareholders as non-promoter Shareholders after seeking the consent of theshareholders in the ensuing AGM.

SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has no subsidiary or joint venture companies. During the financial yearunder report no company has become/ceased to be subsidiary or Joint Venture Company.

RESEARCH & DEVELOPMENT EXPENSES

During the year under report the Company has spent an amount of Rs.14.14 lacs asR&D expenditure (0.2% of the turnover) as against Rs.107.56 lacs spent in the previousfinancial year (1.2% of the turnover).

DIVIDEND

Your Directors are pleased to recommend an equity dividend of Rs.1/- per share (10%)for the financial year under report. The dividend amounting to Rs.115.44 lacs if approvedat the ensuing Annual General Meeting will be appropriated out of the profits of the yearand will be paid on or before September 20 2021.

INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

The unpaid dividend amount for the year 2013-14 is due for transfer to InvestorsEducations. Protection Fund (IEPF) on August 26 2021.

The Company shall transfer to IEPF all the unpaid dividend amount required to be sotransferred on or before the due date for such transfer. The Company shall also transferto IEPF such of the Company's equity shares in respect of which the dividend declared hasnot been paid or claimed for seven consecutive years.

The details of the unpaid/unclaimed dividend for the last seven financial years areavailable on the website of the Company(https://www.resonancesl.com/reports/2021/Data%20for%20 transfer%20to%20IEPF.pdf).

The Company has appointed the Company Secretary as its nodal officer under theprovisions of IEPF.

DIRECTORS

Mr. Ashish Katariya Wholetime Director retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment

Mrs. Archana Yadav (DIN 07335198) was re-appointed as the Independent Director of theCompany for the second consecutive term of 5 years with effect from February 8 2021 andthe necessary resolution in this regard has been passed through the Postal Ballot datedMarch 10 2021.

Mr. Prashant Godha (DIN 00012759) was appointed as an Additional Director by the Boardof Directors at their meeting held on November 10 2020. The shareholders have approvedthe appointment of Mr. Prashant Godha as Non-Executive/Non-Independent Director throughthe Postal Ballot dated March 10 2021.

Mr. Raj Kamal Prasad Verma (DIN 02166789) was appointed as an AdditionalDirector/Independent Director by the Board of Directors at their meeting held on November10 2020. The shareholders have approved the appointment of Mr. Raj Kamal Prasad Verma asDirector/Independent Director for a period of 5 years w.e.f November 10 2020 through thePostal Ballot dated March 10 2021.

During the year Dr. Yaqoob Ali resigned as an Independent Director w.e.f. June 182020 due to personal and unavoidable circumstances. Similarly Dr. Atma Bandhu GuptaManaging Director and Mr. Bishwanath Prasad Agrawal Non- Executive Director resigned asDirectors from the Company due to their pre-occupation and other personal reasons w.e.f.December 212020. The independent director has confirmed that there was no other materialreason other than those provided in the resignation letter. The Board places on record itsappreciation for the services rendered by them during their tenure as Directors of theCompany.

Mr. Ajay Patadia was appointed as Independent Director on June 27 2020 while Mr.Dwarika Agrawal was appointed as Executive Director on July 212020 Appointment of boththese Directors were approved by the shareholders in the AGM held on September 15 2020

Mrs. Archana Yadav Mr. Raj Kamal Prasad Verma and Mr. Ajay Patadia who are independentdirectors have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 and SEBI (LODR)Regulations and there has been no change in the circumstances which may affect theirstatus as independent directors during the year.

None of the directors of the Company are debarred from holding the office of Directorby virtue of any SEBI order or order by any other competent authority.

In the opinion of the Board the independent directors possess appropriate balance ofskills experience and knowledge as required. A brief note on Director retiring byrotation and eligible for reappointment is furnished in the Report on CorporateGovernance annexed herewith.

KEY MANAGERIAL PERSONNEL (KMP)

During the financial year under report the following persons were the Key ManagerialPersonnel of the Company.

Dr. Atma Bandhu Gupta - Managing Director (resigned w.e.f. December 212020)
Mr. Ashish Katariya - Wholetime Director/CEO (appointed as CEO w.e.f. December 212020)
Mr. Dwarika Agrawal - Wholetime Director/CFO (appointed as Director w.e.f. July 212020)
Mrs. Arti Lalwani - Company Secretary (resigned w.e.f. September 14 2020)
Mrs. Minal Bhosale - Company Secretary (appointed w.e.f. September 15 2020)

POLICY ON DIRECTORS' APPOINTMENT REMUNERATION AND OTHER DETAILS

The Nomination and Remuneration Committee has laid down the criteria for Directors'appointment and remuneration including criteria for determining qualifications positiveattributes and independence of a Director. The following attributes/criteria for selectionhave been laid by the Board on the recommendation of the Committee:

• the candidate should posses the positive attributes such as leadershipentrepreneurship industrialist business advisor or such other attributes which in theopinion of the Committee the candidate possess and are in the interest of the Company;

• the candidate should be free from any disqualifications as provided underSections 164 and 167 of the Companies Act 2013;

• the candidate should meet the conditions of being independent as stipulatedunder the Companies Act 2013 and SEBI (LODR)

Regulations 2015 in case of appointment as an independent director; and

• the candidate should posses appropriate educational qualification skillsexperience and knowledge in one or more fields of finance law management salesmarketing administration research corporate governance technical operationsinfrastructure medical social service professional teaching or such other areas ordisciplines which are relevant for the Company's business.

BOARD EVALUATION

The Nomination and Remuneration Committee lays down the criteria for performanceevaluation of independent directors Board of Directors and Committees of the Board. Thecriteria for performance evaluation is based on the various parameters like attendance andparticipation at meetings of the Board and Committees thereof contribution to strategicdecision making review of risk assessment and risk mitigation review of financialstatements business performance and contribution to the enhancement of brand image of theCompany.

The Board has carried out evaluation of its own performance as well as that of theCommittees of the Board and all the Directors.

PROFICIENCY OF DIRECTORS

All the Independent Directors of the Company have registered their names in thedatabase maintained by Indian Institute of Corporate Affairs Manesar Haryana. Those ofthe Independent Directors who are not otherwise exempted shall appear for the commonproficiency test conducted by the said institute within the prescribed time.

REMUNERATION POLICY

The objective and broad framework of the Company's Remuneration Policy is to considerand determine the remuneration based on the fundamental principles of payment forperformance potential and growth. The Remuneration Policy reflects on certain guidingprinciples of the Company such as aligning remuneration with the longer term interests ofthe Company and its shareholders promoting a culture of meritocracy and creating alinkage to corporate and individual performance and emphasising on line expertise andmarket competitiveness so as to attract the talent. The Nomination and RemunerationCommittee recommends the remuneration of Directors and Key Managerial Personnel which isapproved by the Board of Directors subject to the approval of shareholders wherenecessary. The level and composition of remuneration shall be reasonable and sufficient toattract retain and motivate the directors key managerial personnel and other employeesof the quality required to run the Company successfully. The relationship of remunerationto performance should be clear and meet appropriate performance benchmarks. Theremuneration to directors key managerial personnel and senior management personnel shouldalso involve a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals. TheRemuneration Policy is placed on the Company's website at(https://www.resonancesl.com/reports/2017/REMUNERATION%20 POLICY%20OF%20DIRECTORS.pdf).

Information about elements of remuneration package of individual directors is providedin the Annual Return as provided under Section 92(3) of the Companies Act 2013 which isplaced on the website of the Company.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

Details of the familiarisation program of independent directors are disclosed on thewebsite ofthe Company (https://www.resonancesl.com/reports/2021/7.%20Familiarisation%20Programme_2020-21.pdf).

MEETINGS OF THE BOARD AND COMMITTEES THEREOF

This information has been furnished under Report on Corporate Governance which isannexed.

REPORTING OF FRAUDS:

There have been no instances of fraud reported by the Statutory Auditors under Section143 (12) of the Act and Rules framed thereunder either to the Company or to the CentralGovernment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors confirm that:

(a) In the preparation of the annual accounts for the Financial Year ended March312021 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(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 affairs of your Company as at March 312021 and of its profitfor 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 Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;

(d) The Directors have prepared the annual accounts for the Financial Year ended onMarch 31 2021 on a going concern basis;

(e) The Directors have laid down internal financial controls to be followed by yourCompany and that such internal financial controls are adequate and were operatingeffectively. The details of the same forms part of Management Discussion and AnalysisReport; and

(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

As per the requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has complied with the requirements of Corporate Governancein all material aspects.

A report on Corporate Governance (Annexure 1) together with a certificate of itscompliance from the Practising Company Secretary forms part of this report.

FIXED DEPOSITS

Your Company has not accepted any deposits from the public during the year under reviewand as such no amount of principal or interest on deposits from public was outstanding ason the date of the balance sheet

AUDIT COMMITTEE

Details of the Audit Committee along with its constitution and other details areprovided in the Report on Corporate Governance.

AUDITORS AUDIT REPORT AND AUDITED ACCOUNTS

V. R. Bhabhra & Co. Chartered Accountants (Firm Registration No. 112861W) wereappointed as the Statutory Auditors at the 28th Annual General Meeting (AGM) ofthe Company for a term of 4 (Four) years i.e. till the conclusion of 32nd AGMand therefore retire as Auditors at the ensuing Annual General Meeting. Pursuant to theprovisions of Section 139 of the Companies Act 2013 they are not eligible forreappointment

The Board of Directors at their meeting held on June 3 2021 have appointed M/s.Kailash Chand Jain and Co. Chartered Accountants (Firm Registration No. 112318W) as theStatutory Auditors of the Company from the conclusion of the ensuing 32ndAnnual General Meeting and till the conclusion of the 37th Annual GeneralMeeting subject to the approval of the shareholders.

The Auditors' Report for the financial year ended March 312021 read with the notes tothe accounts referred to therein are self-explanatory and therefore do not call for anyfurther comments. There are no qualifications reservations or adverse remarks made by theAuditors.

COST AUDIT

Pursuant to the provisions of Section 148 of the Companies Act 2013 M/s. Poddar &Associates Cost Accountants (Firm Registration. No. 001819) were appointed as the CostAuditors to conduct audit of cost records of the Company for the financial year 2020-21.

The Company has maintained the cost accounts and cost records as specified by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Alok Khairwar & Associates Practising CompanySecretaries were appointed as the Secretarial Auditors for auditing the secretarialrecords of the Company for the financial year 2020-21.

The Secretarial Auditors' Report is annexed hereto. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditors.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to good corporate citizenship. As a part of its corporatesocial responsibility the Company continues to undertake a range of activities includinghealthcare and education to improve living conditions of the needy people. The CSR policyof the Company is placed on the website of the Company (https://www.resonancesl.com/reports/2020/CSR%20Policy.pdf).

During the year under report the Company has supported healthcare and educationalprojects undertaken by a charitable institution.

In accordance with the provisions of Section 135 of the Companies Act 2013 anabstract on Company's CSR activities is furnished as Annexure 2 to this report.

SAFETY ENVIRONMENT AND HEALTH

The Company considers safety environment and health as the management responsibility.Regular employee training programmes are carried out in the manufacturing facility onsafety and environment.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:

The Company has not given any loans or guarantees or made investments in contraventionof the provisions of the Section 186 of the Companies Act 2013. The details of the loansand guarantees given and investments made by the Company are provided in the notes to thefinancial statements.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of Company's business.

The Board has approved a policy for related party transactions which has been uploadedon the website of the Company (http://www.resonancesl.com/pdf/Corporate_Policy/Related_Party_Transactions.pdf).

All the related party transactions are placed before the Audit Committee as well as theBoard for approval on a quarterly basis. Omnibus approval was also obtained from the AuditCommittee on an annual basis for repetitive transactions. Approval of the shareholders isalso obtained wherever necessary in this regard.

Related party transactions are disclosed in the notes to the financial statements.Prescribed Form No. AOC-2 pursuant to clause (h) of subsection (3) of Section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014 is furnished as Annexure 3 tothis report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a statement showingthe names and other particulars of the employees drawing remuneration and other details asset out in the said rules are provided as an Annexure 4 in this annual report. The Companyhad no employee drawing remuneration in excess of the amount as mentioned under Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Thenecessary information in respect of top 10 employees of the Company in terms ofremuneration drawn is furnished in Annexure.

However having regard to the provisions of the first proviso to Section 136(1) of theAct and as advised the Annual Report excluding the aforesaid information underExplanation (2) to the above Rule is being sent to the members of the Company. The saidinformation is available for inspection at the registered office of the Company duringworking hours excluding Saturdays and any member interested in obtaining such informationmay write to the Company Secretary and the same will be furnished on request. The fullAnnual Report including the aforesaid information is available on the Company's websitewww. resonancesl.com.

CODE OF CONDUCT

The Board has laid down a code of conduct for Board members and senior managementpersonnel of the Company. The code also incorporates the duties of independent directorsas laid down in the Companies Act 2013. The said code of conduct is posted on Company'swebsite at (https://www.resonancesl.com/reports/2017/Code%20of%20Conduct%20for%20Board%20Members%20and%20Senior%20Management%20of%20Resonance%20Specialties%20 Limited.pdf ). The Board members andsenior management personnel have affirmed compliance with the said code of conduct. Adeclaration signed by the Wholetime Director/CEO is given at the end of this Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

There is a Whistle Blower Policy in the Company and no personnel has been denied accessto the Chairman of the Audit Committee. The policy provides for adequate safeguardsagainst victimization of persons who use vigil mechanism. The Whistle Blowing Policy isposted on the website of the Company at (https://www.resonancesl.com/reports/investor/reso_vigil%20mechanism%20policy.pdf).

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Prevention of Insider Trading based on the SEBI(Prohibition of Insider Trading) Regulations 2015. The same has been placed on thewebsite of the Company at (https://www.resonancesl.com/reports/2019/Code%20of%20Conduct%20on%20Insider%20Trading%20Policy.pdf).

All the Directors senior management employees and other employees who have access tothe unpublished price sensitive information of the Company are governed by this code.During the year under Report there has been due compliance with the said code of conductfor prevention of insider trading.

CONSTITUTION OF COMMITTEE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulator tribunal or courtthat would impact the going concern status of the Company and its future operations.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the requirements of Section 134 of the Companies Act 2013statement showing particulars with respect to conservation of energy technologyabsorption and foreign exchange earnings and outgo is furnished as Annexure 5 to thisreport.

ANNUAL RETURN

In accordance with the requirements of Section 92 (3) of the Companies Act 2013 andRule 12 (1) of the Companies (Management and Administration) Rules 2014 an Annual Returnin Form MGT- 7 is placed on the website of the Company at weblink (https://www.resonancesl.com/reports/2021/Annual%20Return_20-21.pdf).

SECRETARIAL STANDARDS

The Company has complied with all the applicable Secretarial Standards.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued cooperation andsupport extended to the Company by the bankers. Your Directors also thank the trade andconsumers for their patronage of the Company's products. Your Directors also place onrecord their profound admiration and sincere appreciation of the continued hard work putin by employees at all levels.

For and on behalf of the Board
Archana Yadav
Mumbai Chairman
June 3 2021 DIN: 07335198

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