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Notes to Accounts of Resonance Specialties Ltd.

Mar 31, 2014

NOTE-1

RESERVE & SURPLUS

d) The Company had revalued its factory land & building and plant & machineries situated at T-140 MIDC, Tarapur on 31st March, 2005 based on the report of the registered valuer. Accordingly, the appreciation/ diminution in the value of fixed assets has been added to/deducted from the value of the respective assets. The net appreciation amounting to Rs. 8,57,77,652 had been credited to Revaluation reserve account, which is being amortized year after year at the prescribed rate of depreciation and net amount is shown in note 4(b) above

NOTE-2 SHORT TERM BORROWING

c) Note on Nature of Security on secured loan

(The above borrowing from Bank is secured by hypothecation of present and future stock of raw material,stock in process and Finished goods and book debts of the company, and further secured by frst charge by way of equitable mortgage of land and building, plant and machineries and all immovable properties of the company situated at T 140 MIDC Tarapur, Dist-Thane and further guaranteed by Managing Director of the company and is repayable on demand)

d) Working capital borrowing carry interest rate of 13.25% per annum

Note -3: Contingent Liabilities:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. NIL-net of advance (Previous year Rs. NIL).

b) Bank Guarantees issued and outstanding on Balance Sheet date: Rs.53,50,000 (Previous year Rs. 6,00,000)

c) Letters of credit outstanding Rs.3,39,72,533 Previous year: Rs.1,39,47,463. Note-31: Disclosure pursuant to the Accounting standard -15 : Employees benefit.

Company adopted the Accounting Standard (AS–15) (Revised 2005) "Employee benefits" efective from April 01, 2007. The Company has classifed the various benefits provided to employees as under:

I Defined Contribution Plans

The Company has recognized the amounts of Provident Fund of Rs.9,34,033 (P.Y. 8,75,428) in profit and Loss Account for the year ended 31st March, 2014:.

II Defined benefit Plans

Contribution to Gratuity Fund (Non Funded Scheme)

In accordance with the Accounting Standard (AS 15) (Revised 2005) actuarial valuation was performed in respect of the aforesaid Defined benefit plans based on the following assumptions:

Note-4. Disclosure pursuant to the Accounting standard -17 : Segment Reporting

The Company has only one segment i.e. ''Chemical Manufacturing''. Therefore, as per Accounting Standard –17 (AS-17) the disclosure under ''Segment Reporting'' is not considered necessary.

Note -5 Reporting on other disclosures

a) The Company has no information as to whether any of its suppliers constitute Micro, Small or Medium Enterprise and therefore, the claims for suppliers and other related data as per the requirement of Micro , Small and Medium Enterprises Development Act, 2006 could not be ascertained.

b) In the opinion of Board, current assets, loan and advances are stated at a value at least equal to the expected value on realisation in the ordinary course of business.

d) Provision for Income Tax has been made considering the benefits available u/s 35 of the Income tax act..

e) The Consumption of the raw material are reported after deducting the cost of material received from third parties for conversion but used by the company for captive use amounting to Rs.1,60,63,577 (P Y Rs. 1,57,92,090.) The conversion charges received, therefore, are also adjusted by the said amount.

ii) Since no commission is payable to Managing Director computation of net profit under section 198 read with section 349 of the Companies Act, 1956 has not been disclosed


Mar 31, 2013

NOTE-1

GENERAL INFORMATION

M/s Resonance Specialties Limited (company) is incorporated under the companies Act 1956, and is listed with Bombay stock exchange, the main activity of company is manufacturing of Pyridine, Picoline, Cynopyridine and derivatives of the same. Bulks drugs and nutritional products are toll converted. In view of multi products manufacturing and fractional distillation in batches, overall average production cycle is around 2 to 4 months from the procurement till the disposal.

NOTE-2

BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principals in India (Indian GAAP). The Company has prepared these financial statement to comply in all material respect with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006.(as amended) and the relevant provisions ofthe Companies Act, 1956. The financial statements have been prepared on an accrual basis and under historical cost convention.

NOTE -3: CONTINGENT LIABILITIES:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. NIL-netof advance (Previous year Rs. NIL).

b) Bank Guarantees issued and outstanding on Balance Sheet date: Rs.6,00,000 (Previous year Rs. 5,00,000)

c) Letters of credit outstanding Rs 1,39,47,463 Previous year: Rs 1,09,07,456).

NOTE-4: DISCLOSURE PURSUANT TO THE ACCOUNTING STANDARD -15 : EMPLOYEES BENEFIT.

Company adopted the Accounting Standard (AS-15) (Revised 2005) "Employee Benefits" effective from April 01, 2007.

The Company has classified the various benefits provided to employees as under:

I Defined Contribution Plans

The Company has recognized the amounts of Provident Fund of Rs. 875428 (P.Y. 596771) in Profit and Loss Account for the year ended 31st March, 2013:

II Defined Benefit Plans

Contribution to Gratuity Fund (Non Funded Scheme)

In accordance with the Accounting Standard (AS 15) (Revised 2005) actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:

NOTE-5. DISCLOSURE PURSUANT TO THE ACCOUNTING STANDARD -17 : SEGMENT REPORTING

The Company has only one segment i.e. ‘Chemical Manufacturing''. Therefore, as per Accounting Standard -17 (AS-17) the disclosure under ‘Segment Reporting'' is not considered necessary.

NOTE -6 REPORTING ON OTHER DISCLOSURES

a) The Company has no information as to whether any of its suppliers constitute Micro, Small or Medium Enterprise and therefore, the claims for suppliers and other related data as per the requirement of Micro, Small and Medium Enterprises Development Act, 2006 could not be ascertained.

b) In the opinion of Board, current assets, loan and advances are stated at a value at least equal to the expected value on realisation in the ordinary course of business.

c) During the year the company had carried out development of certain process technology for efficient commercial production in its approved R&D facilities at Tarapur and incurred an amount of Rs. 28,66,587/- (P.Y. 57,37,609/-) as Research & Development expenditure which have been accounted as follows :

The Company developed Certain process technologies over a period of time, and on successful completion, the same we capitalised as ‘intangible assets'' for an amount of Rs. 39,83,475/-.

d) Provision for Income Tax has been made considering the benefits available u/s 35 of the Income tax act.

e) The Consumption of the raw material are reported after deducting the cost of material received from third parties for conversion but used by the company for captive use amounting to Rs. 1,57,92,090 (P Y Rs. 1,00,24,201.) The conversion charges received, therefore, are also adjusted by the said amount.


Mar 31, 2012

GENERAL INFORMATION

M/s Resonance Specialties Limited (company) is incorporated under the companies Act 1956, and is listed with Bombay stock exchange, the main activity of company is manufacturing of Pyridine, Picoline, Cynopyridine and derivatives of the same. Bulks drugs and nutritional products are toll converted. In view of multi products manufacturing and fractional distillation in batches, overall average production cycle is around 2 to 4 months from the procurement till the disposal.

BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principals in India (Indian GAAP). The Company has prepared these financial statement to comply in all material respect with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006.(as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under historical cost convention.

a) Terms/ rights attached to equity shares

1. The Company has only one class of shares referred to as equity shares having a par valueof Rs 10/-.Each holder of equity shares is entitled to one vote per share.

2. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders

d)The Company had revalued its factory land & building and plant & machineries situated at T-140 MIDC, Tarapur on 31st March, 2005 based on the report of the registered valuer. Accordingly, the appreciation/ diminution in the value of fixed assets has been added to/deducted from the value of the respective assets. The net appreciation amounting to Rs 85,777,652 had been credited to Revaluation reserve account, which is being amortized year after year at the prescribed rate of depreciation and net amount is shown in note 4(b) above

c) Note on Nature of Security on secured loan

(The above borrowing from Bank is secured by hypothecation of present and future stock of raw material, stock in process and Finished goods and book debts of the company, and further secured by first charge by way of equitable mortgage of land and building, plant and machineries and all immovable properties of the company situated at T 140 MIDC Tarapur, Dist-Thane and further guaranteed by Managing Director of the company and is repayable on demand)

d) Working capital borrowing carry interest rate of 16% per annum

There was a fire on 14th February, 2011 at the factory premises which resulted in destruction of some of the plant & Machineries including the materials. The company had lodged a claim for the loss of the same in previous year. The loss of material of Rs 18,20,427 and Fixed assets of Rs 28,31,857 are net of insurance claim of Rs 24,81,825/-i.e Rs 12,95,272 for material and Rs 11,86,553/-for assets.

NOTE-1: CONTINGENT LIABILITIES:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. NIL -net of advance (Previous year Rs 3,05,664).

b) Bank Guarantees issued and outstanding on Balance Sheet date: Rs 5.00,000 (Previous year Rs 5,00,000)

c) Letters of credit outstanding Rs 1,09,07,456 (Previous year: Rs 3,17,16,026).

NOTE-2: DISCLOSURE PURSUANT TO THE ACCOUNTING STANDARD -15 : EMPLOYEES BENEFIT.

Company adopted the Accounting Standard (AS-15) (Revised 2005) "Employee Benefits" effective from April 01, 2007.

The Company has classified the various benefits provided to employees as under:

I Defined Contribution Plans

The Company has recognized the amounts of Provident Fund of Rs 5,96,771 (P.Y. 3,32578) in Profit and Loss Account for the year ended 31st March, 2012:

NOTE-3. DISCLOSURE PURSUANT TO THE ACCOUNTING STANDARD -17 : SEGMENT REPORTING

The Company has only one segment i.e. 'Chemical Manufacturing'. Therefore, as per Accounting Standard -17 (AS- 17) the disclosure under 'Segment Reporting' is not considered necessary.

* Purchases & Sales figures mentioned above include amount of High Seas Purchases & High seas Sales respectively and inclusive of duties & Taxes.

** Conversion charges are net off material supplied for Conversion..

Remarks:a) Related parties are as identified by the management and relied upon by the auditors

b) Reimbursement of expenses in normal course of business are not considered hereinabove.

NOTE -4 REPORTING ON OTHER DISCLOSURES

a) The Company has no information as to whether any of its suppliers constitute Micro, Small or Medium Enterprise and therefore, the claims for suppliers and other related data as per the requirement of Micro , Small and Medium Enterprises Development Act, 2006 could not be ascertained.

b) In the opinion of Board, current assets, loan and advances are stated at a value at least equal to the expected value on realisation in the ordinary course of business.

Pending Completion of development of some of those process technologies, the company continued to carry over the total amount of ' 39,83,475 (P. Y Rs 39,83,475/-) in R&D Work in progress under the head 'Capital Work in Process' in view of the fact that the intangible assets so developed will generate future economic benefit by way of improvement in yield and efficiency of those products. The following are the movements in the R& D Capital Work in Progress:

d) No Provision for Income Tax is made in view of loss.

e) The Consumption of the raw material are reported after deducting the cost of material received from third parties for conversion but used by the company for captive use amounting to Rs 1,00,24,201 (PY Rs 202,98,608.) The conversion charges received, therefore, are also adjusted by the said amount.

f) Value of Import and indigenous Raw Material, Stores and Spare consumed.

ii) Since no commission is payable to Managing Director computation of net profit under section 198 read with section 349 of the Companies Act, 1956 has not been disclosed j) Previous year's figures

Till the year 2011, the Company was using pre revised schedule VI to the Companies Act, 1956 for the preparation of its financial statement. During the year ended on 31st March 2012, the revised schedule VI notified under the Companies Act, 1956 has become applicable to the Company. The Company has reclassified previous year's figures to conform to this year's classification. The adoption of the revised Schedule VI does not impact recognition and measurement principles followed by the Company for the preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements.


Mar 31, 2010

1) Contingent Liabilities:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs 2,902,752 net of advance (Previous year Rs 3,435,529).

b) Bank Guarantees issued and outstanding on Balance Sheet date is Rs 22,18,710 (Previous year Rs 2,268,710)

c) Letters of credit outstanding Rs 35,72,1460 (Previous year: Rs 287,15,788).

d) Claims against the Company, not acknowledged as debts ? Nil. (Previous year Rs 7,651,603).

2) The Company has no information as to whether any of its suppliers constitute Micro, Small or Medium Enterprise and therefore, the claims for suppliers and other related data as per the requirement of Micro , Small and Medium Enterprises Development Act, 2006 could not be ascertained.

3) In the opinion of Board, current assets, loan and advances are stated at a value at least equal to the expected value on realisation in the ordinary course of business.

4) a) The Company had revalued its factory land & building and plant & machineries situated at T-140 MIDC, Tarapur on 31st March, 2005 based on the report of the registered valuer. Accordingly, the appreciation/ diminution in the value of fixed assets has been added to/ deducted from the value of the respective assets. The net appreciation amounting to Rs 85,777,652 had been credited to Revaluation reserve account, which is being amortized year after year at the prescribed rate of depreciation and net amount is shown in schedule 2 of the annexed accounts.

b) During the year 2005-06, the company has improved the reaction parameters and upgraded the distillation of the products. Based on the report of the registered valuer, such intricate/ sophisticate Technology was valued at Rs 25,000,000 which had been added to fixed assets under the head Intangibles and credited to the Revaluation reserve, which was being amortized year after year at the prescribed rate of depreci -ation. In order to Comply with AS-26 the same has been reversed and Un-amortized value of Rs 1,75,00,000 was debited to revaluation reserve

5) During the year the company had carried out development of certain process technology for efficient commercial production in its approved R&D facilities at Tarapur and incurred an amount of Rs 13,194,182 (P. Y. Rs 10,497,158) as Research & Development expenditure which have been accounted as follows :

6) (a) Provision for Income Tax has been made in the annexed accounts after considering the benefits u/s 35(2AB) of the Income Tax Act, 1961.

(b) As regards R& D expenses covered u/s 35(2AB) of the Income Tax Act, the company is complying with the statutory requirement by regularly submitting the periodical statement to the prescribed authority i.e. Department of Scientific and Industrial Research (DSIR).

7) Related Party Disclosures:

The names of the related parties, key management personnel, the nature of their transactions and their values are given herein below: a) Particulars of Related Parties

NAME OF RELATED PARTY NATURE OF RELATIONSHIP

i) Vista organics Private Ltd. Associate Company

ii) Avignon Exim Private Ltd. Associate Company

iii) Vista Finance & Leasing Private Ltd. Associate Company

iv) Avignon Chemicals Private Ltd. Associate Company

v) Ushma Investments Private Ltd. Associate Company

vi) Ushma Technologies Private Ltd Associate Company

b) Key Management Personnel

NAME OF RELATED PARTY NATURE OF RELATIONSHIP

Dr Atma Gupta Managing director

8) Segment Reporting

The Company has only one segment i.e. Chemical Manufacturing. Therefore, as per Accounting Standard -17 (AS-17) the disclosure under Segment Reporting is not considered necessary.

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