Notes to Accounts of Nikhil Adhesives Ltd.

Mar 31, 2025

1,11 Provisions, Contingent liabilities, Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past cvcm and it is probable that an outflow of resources will be i equired lo scute ihe obligation in respect of which a
reliable estimate can be made, Provisions arc measured at the presem value of managements best estimate of the expenditure required to settle the present obligations at the end of the reporting
period, f the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, when appropriate, the risks specific to the Lability. When discounting is
used, the changes In the provision due to the passage of time are recognised as a finance cost.

Contingent liabilities are disclosed in the case of;

(a) a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

(bj a present obligation arising from the past events, when no reliable estimate is possible;

(c) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent assets are not recognised but disclosed in the financial statements when an Inflow of economic benefit is probable.

UZ Employee Benefits

Employee benefits include Provident fund, Gratuity fund, and Compensated Leave,

(1) Provident Fund:

The Company contributes to a recognised provident fund which is a defined contribution scheme. The contributions are accounted for on an accrual basis and recognised in the Statement of Profit and
Loss,

(ii) Gratuity;

The employees of the Company are eliglhle for gratuity in accordance with the Payment of Gratuity Act and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the
accounts. The Company''s net obligation m respect of the gratuity benefit is calculated by estimating the amount of future benefit that the employees have earned in return for their service in the current
and prior periods, that benefit is discounted to determine its present value. The present value of the obligation under such benefit plans is determined based on actuarial valuation using the Projected
Unit Credit Method which recognises each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to built up the final obligation, The
obligation is measured at present values of estimated future cash flows, the discounted rates used for determining the present value are based or the market yields on Government Securities as at the
balance sheet date. Actuarial gains and fosses are recognised immerf lately mthe Statement of Profit and Loss.

Notes to the Standalone Financial Statements (Contd.j
(iii) Compensated Leave :

Unutilised leave of staff lapses as at the year end and is not encashable. Accordingly, no provision is made for compensated absences.

1.13 Revenue Recognition
Sale of Goods :

Revenue from sale of products is recognised when the control c?n the goods transferred to the costumer. The performance bifurcation in case of sale of product is satisfied at a point of time r.e. when the
material is shipped to the customer or on delivery to the customers may he specified in the- contract, Gross sales measured at the fair value of the consideration received or receivable and are net of
returns and discounts
Dividend Income :

Dividend income Is recognised when the right to receive is established and there is a reasonable certainty of its collection,

Contract Revenue:

Revenue from goods manufactured under contractual arrangement is recognised on completion of the contractual performance,
interest Income:

Interest income is recognised using the effective interest rate method. The effective interest rate is the rate that exacLly discounts estimated future cash receipts through the expected life of Lhe financial
asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial
instruments (for example, prepayment, extension, call and similar options} but does not consider the expected credit loss.

Insurance compensation :

Compensation in respect of insurance claims is recognised on acceptance basis or when there is reasonable certainty that the ultimate collection will be made.

Others:

Income in respect of other claims and commissions are measured at fair value jnd recognised when there is reasonable certainty that the ultimate collection will be made,

1.14 Income Taxes

Income tax expenses comprise current tax expenses and the net change in the deferred tax asset or liabilities during the year. Current and Deferred tax are recognised in Statement of Profit and Loss,
except when they relate to items that arc recognised in Other Comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive income
or directly inequity respectively.

Current Tax:

Current tax is lhe amount of income taxes payable in respect of taxable profit for a period.

Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.

Management periodically evaluates positions taken in lax returns with respect to situations in which applicable tax regulation is subject to interpretations and establishes provisions where appropriate.

Deferred Tax :

Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and
liabilities and their carrying amount.

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for atl deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it Is
probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced'' to The extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
?efei red tdx asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow
Lhe deferred lax assets to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply In the year when the asset Is realised or liability is settled, based on tax rates (and tax laws) that have been
enacted or substantially enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deterred taxes relate to the same taxable entity
and the same taxation authority.

Presentation of current and deferred tax:

Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Cornprehensive Income, in which case,
lhe current and deferred tax income/ expense are recognized In Other Comprehensive Income

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realtfe
the asset and settle lhe liability simultaneously. In case of deferred tax assets and deferred lax liabilities, the same are offset if [he Company has a legally enforceable right to set off corresponding current
tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.

As per the Appendix to Ind AS 12, the Company needs to assess whether it is probable that a tax authority will accept an uncertain tax tr oatment used Or a treatmtii t Which is being proposed to be used in
its income tax filings.

1.15 Earnings per Share

Basic earnings per share are calculated by dividing the profit after tax or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the
period.

For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to the equity shareholders and the weighted average number of equity shares outstanding during
the period is adjusted to take into account:

* The after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

* Weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive
potential equity shares.

L16 Segment Reporting

The operating segments have been identified on the basis of nature of products and same are accordingly evaluated by the Management of the Company. Company''s operating segments are
‘Manufacturing of Adhesives & Emulsions'' and Trading in Chemicals 6 Others¹. Company accordingly reports its financials under two segments i.e. Manufacturing or Adhesives & Emulsions and Trading In
Chemicals & Others.

1,17 Leases

The Company, at the inception of a contract, assesses whether the contract is a lease or not lease, A contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a time m exchange for a consideration. 1''his policy has been applied to contracts existing and entered into or or after 1 st April 2019.

The Company''s lease asset classes primarily consist of leases For office units in a building. The Company assesses whether n contract contains a lease, at inception of a contract A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right ro control the use of art
identified asset, the Company assesses whether (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the
period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the tease, the Company recognizes a righi-of-use asset f''ROU ) and a corresponding lease liability for ail lease arrangements in which it is a lessee, except for leases with
a term of twelve months or less (short-term leases) and low value teases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-1 me
basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of Lhe lease term. ROD assets and lease liabilities includes these options
when It Is reasonably certain that they will be exercised. The right''Of-use assets are Initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment
losses.

Notes to the Standalone Financial Statements (Contd.)

Rlght-Of-use assets ere depreciated from the commencement date on a straight-line hasis over the shorter of the lease term and useful life of the underling asset, Right of use assets are evaluated for
recoverability whenever events or changes In circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher
of the fair value less cost to sell and the value-in-use] is determined on an individual asset basis unless the asset does not generate cashflows that are largely independent of those from other assets. In
such rases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability Is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit i^:n the lease or, if not readily
determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the
Company changes its assessment if whether it will exercise an extension or a termination option, Lease liability and RGU asset have been separately presented in the Balance Sheet and lease payments
have been classified os financing cash flows.

The Company recognizes the amount of the rc-measurement of lease liability due to reassessment/ modification as an adjustment to the ROU and statement of profit and loss depending upon the nature
of reassessment/mod iff cation. However, lease modification is accounted as separate lease if the modification increases the scope of the lease by adding the right to use one or more underlying assets and
the consideration for lease increases by an amount commensurate with stand-alone price for the increase in the scope,

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

1.1B Foreign exchange transactions
a) Functional and presentation currency

The standalone financial statements are presented in Indian Rupees (INR). which js entity''s functional and presentation Currency,
b} Transactions and Balances

Foreign currency transactions are translated into the functional currency, for initial recognition, using the exchange rates at the date of transactions.

Ail foreign currency denominated monetary assets and liabilities are translated at the exchange rates on the reporting date. Exchange differnces arising on settlement ortranslation of monetary items are
recognised in the Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that aree directly
attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets. Mon-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated,

1*19 Capital WorkdrvProgress

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost rncludes professional fees and, for qualifying
assets, borrowing costs capitalised In accordance with the Company''s accounting policy, Such properties are classified and capitalised to the appropriate categories of Property, Plant and Equipment
when completed and ready for intended use. Depreciation of these assets, on the same bails as other property assets, commences when the assets are ready for their intended use,

1.19 Derivative Financial instruments and hedge accounting

[he Company uses derivative financial instruments, such as forward currency contracts, to hedge its foreign currency risks and interest rate risks respectively. Such derivative financial instruments ere
initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of item being hedged and the type of hedge relationship designated.
Derivatives, are earned as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Forward exchange contracts

The Company enters into forward exchange contracts in nature of currency swaps and interest rate swaps to hedge against its foreign currency exposures relating to the underlying transactions and firm
commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

Exchange differences on such contracts are recognised in the Statement of Profit and Loss rn the period in which the exchange rates change. Any Profit or Loss arising on cancellation or renewal of such
forward exchange contract is also recognised as income or expense for the period.

1.20 Exceptional items

Exceptional items refer to items of income or expense within the income statement from ordinary activities which are non-recurring and are of such Size, nature or incidence that their separate disclosure
Is considered necessary to explain the performance of the Company and to assist users of financial statements in making projections of future financial performance.

1.21 Events after Reporting date

Where everts occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements.
Otherwise, events after the Balance Sheer date of material size or nature are only disclosed.

1.22 Dividend

The Company recognise;, a liability for any dividend declared but not distributed at the end of the reporting period, when the distribution is authorised and the distribution is no longer at the discretion of
the Company on or before the end of the reporting period. As per Corporate laws in India, a distribution is authorized when it Is approved by the shareholders, A corresponding amount is recognised
directly in equity.

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Mar 31, 2024

13(A) In the AGM dated September 12, 2022 , the sub-division of 1 equity share [Face Value Rs.10/- each, fully paid up], into 10 equity shares [Face Value of Re.1/- each fully paid up] was approved. The Board of Directors approved the record date as October 13, 2022 vide circular resolution effected on September 22, 2022.

(b) Terms/rights attached to equity shares:

The Company has one class of Equity shares having a par value of Re. 1/- per share. Each shareholder is eligible for 1 vote per share held. The dividend if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year ended March 31, 2024, the Company has paid final dividend of Rs. 0.2/- per Equity Share of face value of Rs. 1/- each aggregating to Rs 91.89 Lakhs.

Nature and purpose of reserve

(a) Capital Reserve

The Capital reserve represents the amount recognised long back upon takeover of a running manufacturing unit.

(b) Securities premium

Securities Premium reserves is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares, writing off the preliminary expenses in accordance with the provisions of the Companies Act, 2013.

(c) Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(d) General reserve

Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.

(e) Other comprehensive income

Other comprehensive loss of Rs. 1.20 lakhs consists of:

(i) Remeasurement loss on employees defined benefit expenses of Rs. 2.27 lakhs and deferred tax credit thereon of Rs. 0.57 lakhs (ii) Fair value gain arising out of change in fair value of investment in equity shares of Rs. 0.50 lakhs

(c) Secured longterm borrowings of Rs.1,651.25 lakhs (Rs.1,404.05 lakhs) are personally guaranteed by some of the directors of the Company

(d) Current maturities of Term Loans,Vehicle Finance from Bank and Sales Tax Deferral amounting to Rs. 820.56 lakhs (Previous Year Rs. 1,099.48 lakhs) is disclosed under ''Borrowings'' (Refer Note 19)

(b) Particulars of security for the secured short-term borrowings:

Nature of Security

The facilities from the consortium banks viz.Bank of India, Standard Chartered Bank, Yes Bank and DBS Bank are secured against hypothecation of stock of raw & packing materials, finished goods, book debts and plant & machineries of the Company on pari passu basis. Further they are collaterally secured against equitable mortgage of factory blocks at Dahanu & Silvassa.

Secured shortterm borrowings of Rs.1,723.63 lakhs (Previous year Rs.477.04 lakhs) are personally guaranteed by some of the promoter directors and collaterally secured by way of (i) Pledge of 57,28,900 equity shares of Re. 1 each/- held by some promoters of the Company (ii) Equitable mortgage of certain residential flats of the promoter directors in favour of the said banks on pari passu basis.

Note : 34 Employee benefit expense

(a) Defined contribution plans:

The amount recognised as expense in respect of defined contribution plans (Contribution to provident fund) aggregate to Rs. 68.89 lakhs (previous year Rs. 73.30 lakhs).

(b) Retirement Benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the payment of gratuity act, and is a defined employee benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under projected unit credit method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of profit and loss and the amount recognised in the balance sheet for the gratuity provision made under actuarial method.

Statement of Profit and Loss

Net employee benefit expenses recognised in Employee Benefit Expenses

(B) Financial risk management objectives

The Company''s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange forward contracts. Compliance with policies and exposure limits is a part of Internal Financial Controls. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes.

(C) Market risk

The Company''s activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see note E below). The Company enters into foreign exchange forward contracts to manage its exposure to foreign currency risk of net imports.

(D) Foreign currency risk management

(i) Exposure in foreign currency -Hedged

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(E) Foreign exchange forward contracts ADHESIVES LTD.

It is the policy ofthe Company to enter into foreign exchange forward contracts to cover foreign currency payments (net of receipts) in USD and EUR.The Company enters in to contracts with terms upto 90 days.The Company''s philosophy does not permit any speculative calls on the currency. It is driven by conservatism which guides that we follow conventional wisdom by use of Forward contracts in respect of Trade transactions.

Regulatory Requirements: The Company does alter its hedge strategy in relation to the prevailing regulatory framework.and guidelines that may be issued by RBI, FEDAI or ISDA or other regulatory bodies from time to time.

Mode of taking Cover: Based on the outstanding details of import payable and export receivable (in weekly baskets) the net trade import exposure is arrived at i.e imports - exports = net trade exposures.The net trade import exposure arrived at is netted off with the outstanding forward cover as on date. The forward cover deals are all backed by actual trade underlines and settlement of these contracts on maturity by actual delivery of the hedged currency for settling the underline hedged trade transaction.

(F) Credit risk management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating.The Company''s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

(G) Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost effective manner.

(H) Fair value measurements

Some of the Company '' s financial assets and financial liabilities are measured at fair value at the end of each reporting period. This note provides information about those assets and the basis of determination of the fair values in respect thereof.

(ii) The fair value hierarchy:

Level 1: valuation based on quoted market price: financial instruments with quoted prices for identical instruments in active markets that the Company can access at the measurement date.

Level 2: valuation using observable inputs: financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.

Level 3: valuation technique with significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable.

(iii) Financial instruments measured at amortised cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Note : 40 Disclosure under Amendment to Ind AS 7 regarding impact of non- cash transactions on financial liabilities

Effective April 1, 2017 the Company adopted the amendment to Ind AS 7, which requires the Company to provide disclosure that will enable users of financial statements to evaluate changes in liabilities from financing activities, including changes arising from cash flow and non cash changes. In order to meet this disclosure requirement, the reconciliation between the opening and closing balances for liabilities arising from financing activities in the

Note: 42 (B) Additional Regulatory Information required by Schedule III of The Companies Act, 2013

(i) All immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) are held in the name of the Company.

(ii) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(iii) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets), and Intangible Assets during the year.

(iv) The Company does not hold any investment property during the year and as at the year end.

(v) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The quarterly statements filed by the Company with such banks are generally in agreement with the unaudited books of account and the differences between the quarterly returns and books of account are explainable and not material in nature.

(vi) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

(vii) There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(ix) The Company has not advanced or loaned or invested (either from borrowed funds or share permium or any other sources or kind of funds ) to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(x) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(xi) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the IncomeTax Act, 1961).

(xii) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

(xiii) There are no loans or advances in the nature of loan granted to promoters, directors, KMPs and the related parties, either severally or jointly with any other person.

(xiv) The Company has not made any investments, provided guarantee or security or granted any advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties during the year.

(xv) There are no layers to the Company as prescribed under clause (87) of section 2 of Act read with the Companies (Restriction on number of Layers) Rules.

(xvi) The Company has not entered into scheme of arrangement during the year.

Note : 43 Contingent Liabilities

There is no contingent liability as on March 31, 2024. ( Previous Year: NIL)

Note : 44 The Board of Directors have recommended a payment of final dividend of Rs. 0.20/- (Twenty paise only) per equity share of face value of Re.1 each for the financial year ended March 31, 2024.

Note : 45 The figures for the previous year have been regrouped or rearranged wherever necessary.

Note : 46 Figures have been rounded off to nearest lakhs.

Note : 47 The financial statements of the Company for the year ended March 31, 2024 were approved for issue by the Board of Directors at their meeting held on May 22, 2024.

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Mar 31, 2018

Corporate Information

Nikhil Adhesives Ltd("the Company") a Public Limited Company incorporated under the Companies Act, 1956, is listed on the Bombay Stock Exchange. The Company is mainly engaged in the business of manufacturing various types of polymer emulsions and adhesives that are used for different applications. The Company has three manufacturing units located at Dahanu (Maharashtra), Silvassa (Dadra Nagar Haveli) and at Dahej (Gujarat). The company is also engaged in the business of trading in chemicals.

1. Property Plant and Equipment:

The Company has availed the exemption available under lnd AS 101 to continue the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition (April 1,2016).

2. Expected Credit Loss:

Under the Ind AS, impairment allowance has been determined based on expected credit loss (ECL) model. Applying this model, the Company impaired its trade receivables by ? 25,11,199 as on the transition date which has been recognised in retained earnings. The impairment of? 8,72,444 for the year ended March 31, 2017 has been recognised in the Trade Receivables and in the Statement of Profit and Loss.

3. Lease hold land:

Under Previous GAAP, leasehold land was disclosed as part of property, plant & equipment and amortised by way of depreciation. Under Ind AS, the leasehold land is treated as an operating lease and consequently the unamortised portion of upfront payment for the leasehold land has been shown under the head'' Other non-current assets''.

4. Forward Contracts:

Under Previous GAAP, the difference between spot rate and forward rate is amortised over the tenure of the forward contract and premium paid on options were expensed out. Under Ind AS, forward/option contract is required to be accounted at fair value. Accordingly, the company has provided for loss of Rs. 77,110 in the Statement of Profit and Loss for the year ended March 31,2017.

5. Discount

Cash discounts and Trade discounts have been reduced from revenue as per Ind AS, amounting to Rs.17,45,276 & Rs.5,32,21,679 respectively for the year ended March 31,2017, and corresponding expenses have been reduced. This does not affect profit or equity.

6. Security Deposit Paid:

Under Previous GAAP, interest free lease security deposits( that are refundable on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

7. Borrowings:

Under Previous GAAP, transaction cost on borrowings were charged off to expense during availment of loan. Under Ind AS, the transaction cost is to be required to be deducted from the carrying amount of the borrowings on the initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying the Effective Interest Rate method.

8. Investments:

Under Previous GAAP, investment made in equity instruments and mutual funds were classified as long term investments and carried at cost. Under I nd AS these instruments are required to be measured at fair value. Equity instruments are fair valued through other comprehensive income.

9. Other Comprehensive Income:

Under Previous GAAP, the Company has not presented Other Comprehensive Income(OCI) separately. Hence, the Statement of Profit and Loss under previous GAAP has been reconciled with statement of profit and loss and other comprehensive income as per Ind AS.

10. Deferred Tax:

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. As per Ind AS, MAT credit entitlement is to be reduced from the deferred tax liabilities, which under the previous GAAP was shown as advances receivable.

11. Excise duty:

Under the previous GAAP, revenue from sale of products was presented net of excise duty under the head revenue from operations, whereas under Ind AS, revenue from sale of products includes excise duty and the corresponding excise duty expense is presented separately on the face of the statement of profit and loss. However, the change does not affect total.

Note 12: Details of leasing arrangements

Operating Lease: As a Lessee

The company has entered into cancellable operating leases. These lease arrangements are normally renewable on expiry. The lease arrangement can be cancelled either at the option of lessor giving notice for the period ranging from two months to three months or lessee giving two months notice.

Lease payments amounting to Rs. 77,86,136/ -(Previous year Rs. 42,75,540/-) are included in rental expenditure in the Statement of Profit and Loss during the current year.

Note 13: Employee benefit plans

(a) Defined contribution plans;

The amount recognised as expense in respect of Defined Contribution Plans (Contribution to Provident Fund) aggregate to Rs.43,05,146 /- (Previous year Rs.33,42,856 /-).

(b) Retirement benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of Profit and Ixiss and the amount recognised in the Balance sheet for the gratuity provision made under actuarial method.

Statement of Profit and Loss

Net employee benefit expenses recognised in Employee Benefit Expenses (Note No 31)

Notes:

1) The information stated above is in conformity with Indian Accounting Standard 108 "Operating Segments".

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

3) For comparison with previous year, refer Note 42(b)

Notes:

1) The Information stated above is in conformity with Accounting Standard 17 "Segment Reporting* issued by The Institute of Chartered Accountants of India.

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

NOTE 14 : There are no amounts payable to any Micro, Small and Medium Enterprises as identified by the Management from the information available with the Company and relied by Auditors.

NOTE 15: The figures for the previous year have been regrouped or rearranged wherever necessary.

NOTE 16 : Figures have been rounded off to nearest.

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Mar 31, 2015

NOTE 1. Dividend proposed to be distributed to equity shareholders is Nil per share (Previous Year Rs. 0.80 per share).

NOTE 2. Loss on account of Foreign Exchange Fluctuations (Net) was treated as an exceptional item, in the financial year 2013-2014 since the same occured due to exceptionally volatile global market developments during the said reporting period.

NOTE 3. In terms of clause 46A of AS 11 "The Effects of Changes in the Foreign Exchange Rates" as inserted by Notification No. G.S.R. 914(E) dated 29th December, 2011 issued by the Ministry of Corporate Affairs, Government of India, the company has opted to capitalise the foreign exchange differences arising on long term monetary item, in so far as it relates to acquisition of depreciable capital assets, against the cost of such assets and depreciate the said adjustment over the balance life of the asset. Accordingly, the foreign exchange differences of Rs. 31,47,787/-, for the year has been added to the cost of the fixed assets relating to the expansion project at Dahej (Gujarat). (Previous year Rs. 110,95,903/-)

NOTE 4. : The company is liable to pay Income Tax as per provisions of section 115JB of the Income Tax Act for the Financial year 2014-15. Since the same can be recouped against future years income, it has not been charged as Tax expense to the extent it can be recouped.

NOTE 5. DETAILS OF LEASING ARRANGEMENTS

Operating Lease: As a Lessee

The company has entered into cancellable operating leases. These lease arrangements are normally renewable on expiry. The lease arrangement can be cancelled either at the option of lessor giving notice for the period ranging from two months to three months or lessee giving two months notice.

Lease payments amounting to Rs. 4,232,854/-(Previous year Rs. 4,396,380/-) are included in rental expenditure in the Statement of Profit and Loss during the current year.

NOTE 6. EMPLOYEE BENEFIT PLANS

(a) Defined Contribution Plans:

The amount recognised as expense in respect of Defined Contribution Plans (Contribution to Provident Fund) aggregate to 29,76,329/- (Previous year 23,37,020/-).

(b) Retirement Benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of Profit and Loss and the amount recognised in the Balance sheet for the gratuity provision made under actuarial method.

Statement of Profit and Loss Net employee benefit expenses recognised in Employee Benefit Expenses (Note No 25)

NOTE 7. : There are no amounts payable to any Micro, Small and Medium Enterprises as identified by the Management from the information available with the Company and relied by Auditors.

NOTE 8. : The accounts of the Trade Receivables and Trade Payables who have not responded to the Company's request for confirmation of balances, are subject to reconciliation, if any, required.

NOTE 9. : Figures have been rounded off to nearest rupees.

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Mar 31, 2014

NOTE 1 : CONTINGENT LIABILITIES AND COMMITMENTS As at As at Particulars 31 March 2014 31 March 2013

Contingent Liabilities :

Claims against the Company not acknowledged NIL NIL as debts

Guarantees given by the Company''s Banker on 24,183,857 34,994,857 behalf of the Company

NOTE 2 : Dividend proposed to be distributed to equity shareholders is Nil per share (Previous Year Rs. 0.80 per share).

NOTE 3 : Loss on account of Foreign Exchange Fluctuation (Net) has been treated as an exceptional item, since the same has resulted from exceptionally volatile global market developments during the reporting periods.

NOTE 4 : In terms of clause 46A of AS 11 "The Effects of Changes in the Foreign Exchange Rates" as inserted by Notification No. G.S.R. 914(E) dated 29th December, 2011 issued by the Ministry of Corporate Affairs, Government of India, the company has opted to capitalise the foreign exchange differences arising on long term monetary item, in so far as it relates to acquisition of depreciable capital assets, against the cost of such assets and depreciate the said adjustment over the balance life of the asset. Accordingly, the foreign exchange differences ofRs. 110,95,903/-, for the year has been added to the cost of the fixed assets relating to the expansion project at Dahej (Gujarat). (Previous yearRs. 72,58,260/-)

NOTE 5 : The company is liable to pay Income Tax as per provisions of section 115JB of the Income Tax Act for the Financial year 2013-14. Since the same can be recouped against future years income, it has not been charged as Tax expense to the extent it can be recouped.

NOTE 6 DETAILS OF LEASING ARRANGEMENTS

Operating Lease: As a Lessee

The company has entered into cancellable operating leases. These lease arrangements are normally renewable on expiry. The lease arrangement can be cancelled either at the option of lessor giving notice for the period ranging from two months to three months or lessee giving two months notice.

Lease payments amounting to Rs. 4,396,380/-(Previous year Rs. 4,166,079/-) are included in rental expenditure in the Statement of Profit and Loss during the current year.

(a) Defined Contribution Plans:

The amount recognised as expense in respect of Definied Contribution Plans (Contribution to Provident Fund) aggregate to Rs. 23,37,020/- (Previous year Rs. 22,51,219/-).

(b) Retirement Benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of Profit and Loss and the amount recognised in the Balance sheet for the gratuity provision made under actuarial method.

Statement of Profit and Loss

Notes :

1) The Information stated above is in conformity with Accounting Standard 17 "Segment Reporting" issued by The Institute of Chartered Accountants of India.

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

3) For comparison with previous year, refer Note No. 42(b)

Notes :

1) The Information stated above is in confirmity with Accounting Standard 17 "Segment Reporting" issued by The Institute of Chartered Accountants of India.

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

The following details give the information pursuant to Accounting Standard - 18 " Related Party Disclosures"

(a) Name of the Related Parties and Nature of Relationship

Name Nature of Relationship

Umesh J. Sanghavi Promoter Directors and Key Management Personnel (KMP)

Rajendra J. Sanghavi Promoter Directors and Key Management Personnel (KMP)

Tarak J. Sanghavi Promoter Directors and Key Management Personnel (KMP)

Ashok J. Sanghavi Promoter and Relative of Directors

Anita U. Sanghavi Relative of Director

Mrunalini R. Sanghavi Relative of Director

Rekha T. Sanghavi Relative of Director

Vasant Polymers & Chemicals Pvt. Ltd. A Company Significantly Influenced by relatives of KMP.

NOTE 7 : There are no amounts payable to any Micro, Small and Medium Enterprises as identified by the Management from the information available with the Company and relied by Auditors.

NOTE 8 : The accounts of the Trade Receivables and Trade Payables who have not responded to the Company''s request for confirmation of balances, are subject to reconciliation, if any, required.

NOTE 9 : Figures have been rounded off to nearest rupees.

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Mar 31, 2013

NOTE 1 : CONTINGENT LIABILITIES AND COMMITMENTS

As at As at Particulars 31 March 2013 31 March 2012

Contingent Liabilities :

Claims against the Company not acknowledged as debts NIL NIL

Guarantees given by the Company''s Banker on behalf of the Company 34,994,857 1,552,950



NOTE 2 : Dividend proposed to be distributed to equity shareholders is ` 0. 80 per share (Previous Year ` 0.80 per share).

NOTE 3 : Loss/Gain on account of Foreign currency translation (Net) has been treated as an exceptional item, since the same has resulted from exceptionally volatile global market developments during the reporting periods.

NOTE 4 : Pursuant to Notification no. G.S.R.(914)E dated 29th December 2011, issued by MCA, the Company has adjusted exchange differences of ` 72,58,260/- arising on reporting of long term foreign currency monetary items, in so far as they relate to the acquisition of depreciable assets, against the cost of such assets and depreciate the said adjustment over the balance life of the asset.

NOTE 5 : The company is liable to pay Income Tax as per provisions of section 115JB of the Income Tax Act for the Financial year 2012-13. Since the same can be recouped against future years income, it has not been charged as Tax expense to the extent it can be recouped.

NOTE 6 DETAILS OF LEASING ARRANGEMENTS

Operating Lease: As a Lessee The company has entered into cancellable operating leases. These lease arrangements are normally renewable on expiry. The lease arrangement can be cancelled either at the option of lessor giving notice for the period ranging from two months to three months or lessee giving two months notice.

Lease payments amounting to ` 4,166,079/-(Previous year ` 3,310,848/-) are included in rental expenditure in the Statement of Profit and Loss during the current year.

NOTE 7 EMPLOYEE BENEFIT PLANS

(a) Defined Contribution Plans:

The amount recognised as expense in respect of Definied Contribution Plans (Contribution to Provident Fund) aggregate to ` 22,51,219/- (Previous year ` 20,17,993/-).

(b) Retirement Benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of Profit and Loss and the amount recognised in the Balance sheet for the gratuity provision made under actuarial method.

NOTE 8 : There are no amounts payable to any Micro, Small and Medium Enterprises as identified by the Management from the information available with the Company and relied by Auditors.

NOTE 9 : The accounts of the Trade Receivables and Trade Payables who have not responded to the Company''s request for confirmation of balances, are subject to reconciliation, if any, required.

NOTE 10 : Figures have been rounded off to nearest rupees.

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Mar 31, 2011

1. Previous years figures have been regrouped and / or rearranged wherever necessary to make them comparable with current years figures.

2. The accounts of the Sundry Debtors and Creditors who have not responded to the Companys request for confirmation of balances, are subject to reconciliation, if any, required.

13.03.2011 31.03.2010 Particulars Amount(Rs.) Amount(Rs.)

3 (a) Contingent Liabilities NIL NIL

(b) Estimated amount of contracts remaining to be executed on capital NIL NIL account - not provided for.

4 Retirement Benefit - Gratuity

The employees of the Company are eligible for Gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

5. Related Party Disclosures.

The following details give the information pursuant to Accounting Standard - 18 " Related Party Disclosures" issued by The Institute of Chartered Accountants of India.

A) Name of the Related Parties and nature of Relationship

Name Nature of Relationship

List of Related Parties

Umesh J. Sanghavi Promoter Directors and Key Management Personnel (KMP)

Rajendra J. Sanghavi " "

Tarak J. Sanghavi " "

Ashok J. Sanghavi Promoter and Relative of Directors

Anita U. Sanghavi Relative of Director

Mrunalini R. Sanghavi " "

Nikhil U. Sanghavi " "

Vasant Polymers & Chemicals Pvt. Ltd. A Company Significantly Influenced by relatives of KMP.

Zeki Software Solutions Pvt Ltd " "

6. There are no Micro & Small Enterprises, to whom the company owes dues which are outstanding for more than 45 days as at 31/03/2011.This information as required to be disclosed under Micro, Small & Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of the information available to the company

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Mar 31, 2010

1. (a) During the year the company has promoted wholly owned subsidiary company - Sanghavi Logistics Pvt. Ltd. which is yet to commence its business activities.

(b) Previous years figures have been regrouped and / or rearranged wherever necessary to make them comparable with current years figures.

2. The accounts of the Sundry Debtors and Creditors who have not responded to the Companys request for confirmation of balances, are subject to reconciliation, if any, required.

Notes :

1) The Information stated above is in conformity with Accounting Standard 17 "Segment Reporting" issued by The Institute of Chartered Accountants of India.

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

3) For comparison with previous year, refer Note No. 17(b)

4. There are no Micro & Small Enterprises, to whom the company owes dues which are outstanding for more than 45 days as at 31/03/2010.This information as required to be disclose d under Micro, Small & Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of the information available to the company