Nikhil Adhesives Ltd

To The Members of Nikhil Adhesives Limited

The Board of Directors are pleased to present the thirty Eighth Annual Report together with the Audited Accounts for the Financial Year ended 31st March, 2024.

In Financial Year 2023-24 your Company has continued the phase of positive outlook and witnessed the drastic growth and development both in operational as well as in financial segments.

Summary of the Financial Results for the year is as under:

(Rs. In Lakh)

The Board of Directors has recommended a dividend of Re.0.2/- (Rupee Zero point Two only) per equity share of face value of Re. 1/- (Rupee One only) each for the Financial Year ended March 31, 2024 subject to approval of Shareholders.

RESULT OF OPERATIONS

(Rs. In Lakh)

Detailed analysis of the performance of your Company is presented in the Management Discussion and Analysis Report forming part of this Annual Report.

The Company had accepted the deposits amounting to Rs. 1170.40 Lakh from its members during the financial year 2023-24. There has been no default in repayment of deposits or payment of interest during the year. No deposits have been unclaimed as at the end of the year. All the deposits accepted by the Company are in compliance with the requirements of Chapter V of the Companies Act, 2013.

There is no transfer made to reserves during the year.

There was no change in the Authorized and Paid-up Share Capital of the Company during the year. The Authorised Share Capital of the Company is Rs. 5,00,00,000/- (Rupees Five Crore only) divided into 4,95,00,000 (Four Crores Ninety Five Lakh only) Equity Shares of Re. 1 (Rupee One Only) each and

50,000 (Fifty Thousand) 8% Non-Cumulative Redeemable Preference Shares of Rs. 10 (Rupees Ten Only) each.

The Paid-up Share Capital of the Company is Rs. 4,60,49,603 /- (Rupees Four Crore Sixty Lakh Forty- Nine Thousand and Six Hundred Three only) divided into 4,59,43,000 (Four crore Fifty-Nine Lakh Forty- Three Thousand Only) Equity Shares of Re. 1/- (Rupee One) each and 2,13,200 forfeited shares of Rs. 1,06,603/- (One Lakh Six Thousand Six Hundred and Three Only).

Your Company strives to maintain the high Corporate Governance practice and standards. The detail report on the Corporate Governance is given in this Annual Report. The Certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Regulation 34 of SEBI (LODR) Regulations, 2015 is also forms part of the report.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the details of contribution to CSR activities are as follows:

The CSR report is forming part of this attachment in Annexure IV and CSR policy is placed on the website of the Company www.nikhiladhesives.com

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

1. That in the preparation of the annual financial statements for the year ended 31st March, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;
2. That had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
3. That had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. That the annual financial statements have been prepared on a going concern basis;
5. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
6. That the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

The Company's system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives. The Company uses foreign exchange forward contracts to hedge its exposure for movements in foreign exchange rate. The use of this foreign exchange forward contract reduces the risk to the Company. The Company does not use these for trading or speculative purpose. Additionally, the Audit Committee and the Board of Directors provide risk over sight through their review of potential risks which could negatively impact the operations, the proposed budget and plan, the Company's strategic framework and any risks that may negatively impact it. The management is committed to ensure an effective internal control environment commensurate with the size, scale and complexity of the operations, which provides assurance on the efficiency of the Company's operations and safety/security of its assets besides orderly and legitimate conduct of Company's business in the circumstances, which may reasonably be foreseen. The Company has defined organization structure authority levels delegated powers, internal procedures, rules and guidelines for conducting business transactions.

The Company's system and process relating to internal control and procedures for financial reporting have been designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Company's assets that could have a material effect on the financial statements and for preventing and detecting fraud and other irregularities or deliberate miss-statements. Management is responsible for establishing and maintaining adequate disclosure controls and procedures and adequate internal controls over financial reporting with respect to financial statements besides its effectiveness in the context of applicable regulations. The Internal Auditor, the Audit Committee as well as the Board of Directors conduct from time to time an evaluation of the adequacy and effectiveness of the system of internal controls for financial reporting with respect to financial statements.

Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year.

In terms of Sections 149,152 and all other applicable provisions of the Companies Act, 2013, for the purpose of determining the Directors liable to retire by rotation, the Independent Directors are not included in the total number of Directors of the Company. Accordingly, Mr.Tarak Jayantilal Sanghavi (DIN:00519403), Whole Time Director shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as a Whole Time Director of the Company. The details of Directors seeking re-appointment as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given in the notice of the ensuing Annual General Meeting, which is being sent to the Shareholders along with Annual Report.

During the year, Mr.Umesh T Shah resigned as a Chief Financial Officer, Key Managerial Personnel of the Company with effect from 07th July, 2023 and Mrs. Anita Umesh Sanghavi was appointed as Chief Financial Officer, Key Managerial Personnel with effect from 27th September, 2023 in accordance with Section 203 and other applicable provisions of the Companies Act, 2013.

The Board of Directors in its meeting held on 16th May, 2023 appointed Ms.Kinjal Rathod as Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from 16th May, 2023.

During the year, Ms. Kinjal Rathod resigned as Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from 30th March, 2024 .The Board of Directors in its meeting held on 22nd May, 2024 appointed Ms.Beena Khandelwal as Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from the same date i.e 22nd May 2024.

The Board of Directors in its meeting held on 27thSeptember, 2023 accepted resignation of Mr.Naresh Bhuta from Non-Executive Independent Director with effect from 25thSeptember, 2023.

The Members at its Annual General Meeting held on 21st of September, 2023 appointed of Mr. V. Subramanian as Non-Executive Independent Director of the company with effect from 01st July, 2023 pursuant to the provisions of Sections 149, 196, 197, 198 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule IV & V to the Companies Act, 2013.

During the year, Mr. Rabi R. Mishra resigned as Managing Director and Chief Executive Officer with effect from 04th July, 2023. Mr.Umesh T. Shah resigned as a Chief Financial Officer, Key Managerial Personnel of the Company with effect from 07th July, 2023.

The Board of Directors at its meeting held on 10th of July, 2023 accepted the re-designation of Mr.Umesh J. Sanghavi as Chairman and Managing Director of the Company with effect from 10th July, 2023 pursuant to the provisions of Sections 196, 197, 198 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V to the Companies Act, 2013 and any other such sanction(s) as may be necessary and subject to the approval of Shareholders in this forthcoming Annual General Meeting of the Company.

Pursuant to section 161 and other applicable provisions, if any of the Companies Act, 2013, Mr. Jagdish Mali (DIN: 10162796) was appointed as Additional Director (Executive) with effect from 08th August, 2024, by the Board of Directors in their meeting held on 08.08.2024 subject to the approval of Shareholders in this forthcoming Annual General Meeting of the Company.

As on date of this report, the details of the Board of Directors and Key Managerial Personnel are as under;

1. Mr.Umesh J. Sanghavi – Chairman and Managing Director
2. Mr.Rajendra J. Sanghavi – Wholetime Director
3. Mr.Tarak J. Sanghavi – Wholetime Director
4. Mr.Pravin K. Laheri – Independent Director
5. Mrs.Ishita T. Gandhi – Independent Director
6. Ms.Gauri S. Trivedi – Independent Director
7. Mr. V. Subramanian– Independent Director
8. Mrs. Anita U. Sanghavi–Chief Financial Officer
9. Ms.Beena Khandelwal– Company Secretary & Compliance officer
10. Mr. Jagdish Mali- Additional (Executive) Director (w.e.f. 08.08.2024)

The Board of Directors comprises of highly qualified members possessing essential qualifications, skills, expertise and competencies in the areas of Sales & Marketing, Finance and Accounts, Leadership and Governance, Industry Knowledge, General Management and Governance, Relevant Technology which can enable them to take effective decisions in the conduct of the affairs of the Company and enhance the Stakeholders values.

The Company's Board has following committees. The brief of these Committees are given in section of Corporate Governance Report:

1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholder Relationship Committee
4. Corporate Social Responsibility Committee

The Independent Directors of the Company have furnished the declaration that they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015.

During the year under review, 6 Board Meetings were convened and held. The details thereof are given in the Report on Corporate Governance.

As per the Listing Regulations, the Board of Directors of the Company carried out the formal annual performance evaluation of all the Directors and also its self-evaluation process, internally, to assess the skills set and contribution that are desired, recognizing that competencies and experiences evolves over time. The process was conducted by allowing the Board to engage in candid discussions with each Directors with the underlying objective of taking best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated based on structured self-assessment and personal interaction to ascertain feedback on well-defined parameters which, internally, comprised of level of engagement and their contribution to strategic planning and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the Board of Directors also reviewed and discussed the annual performance evaluation of Directors carried out by the Nomination and Remuneration Committee. A statement in detail indicating the manner, in which formal annual evaluation has been made by the Board of Directors, is given in the Report on Corporate Governance which forms a part of the Annual Report.

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a term of reference which internally deals with the manner of selection of the Directors and the Key Managerial Personnel of the Company. The NRC recommends appointment of Director/re-appointment of Managing Director, Whole Time Directors and Independent Directors based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Board's balance of professional experience, background, viewpoints, skills and areas of expertise.

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the Members of the Board and Executive Management. The said policy earmarks the principles of remuneration and ensures a well-balanced and performance related compensation package taking into account Shareholders' interest, industry practices and relevant corporate regulations in India.

The Company has a Vigil Mechanism and Whistle-Blower Policy to deal with instances of fraud and mismanagement, if any, and conducting business with integrity including in accordance with all applicable laws and regulations. The details of the Vigil Mechanism and Whistle Blower Policy are explained in the Report on Corporate Governance and also posted on the website of the Company.

M/s PPV & CO. (FRN: 153929W), Chartered Accountants, has resigned from the office of Statutory Auditors of the Company with effect from 08th August,2024.The Board of Directors of the Company in the Board Meeting held on 08-08-2024 on recommendations of Audit Committee, recommended the appointment of M/s. Jay Shah & Associates, Chartered Accountants (FRN: 135424W) as Statutory Auditors of the Company to fill the Casual Vacancy caused by Resignation of M/s PPV & CO. (FRN: 153929W), Chartered Accountants. The Shareholders are requested to approve appointment of M/s. Jay Shah & Associates, Chartered Accountants (FRN: 135424W) as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting ("AGM") till the conclusion of the 39th

Annual General Meeting to be held in the year 2025 at such remuneration and out of pocket expenses as may be decided by the Board of Directors of the Company. There are no qualifications, reservations or adverse remarks made by Statutory Auditors

The Board of Directors has re-appointed M/s B. F. Modi & Associates, Cost Accountants (Firm Registration No. 100604), as the Cost Auditors for conducting audit of the cost accounts maintained by the Company in respect of the products of the Company covered under the Companies (Cost Records and Audit) Amendment Rules, 2014 and fixed their remuneration based on the recommendation of the Audit Committee. The remuneration payable to the Cost Auditors is subject to ratification by the Shareholders in this Annual General Meeting of the Company.

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the accounts and records are made and maintained.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Shiv Hari Jalan & Co., Company Secretaries were appointed to undertake the Secretarial Audit of the Company for the year ended 31st March, 2024. There are no adverse remarks or observations made by M/s Shiv Hari Jalan & Co. in the Secretarial Audit Report.

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relate and the date of the report.

During the year under report no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

All related party transactions entered into during the financial year under review by the Company are on arm's length basis and in the ordinary course of business. There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions are placed before the meeting(s) of the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the financial year for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/information are placed before the Audit Committee for review and approval on quarterly basis. The Company has developed a Policy on materiality of Related Party Transactions and dealing with Related Party Transactions including the modifications thereof. The Policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website and the same is available at the web link http://www.nikhiadhesives.com

There are no Loans, Guarantees or Investment made during the year in pursuance to Sections 185 and 186 of the Companies Act, 2013.

As required under Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of the ratio of the remuneration of each Director to the median employee's remuneration and such other details as prescribed therein are given in Annexure-II, which is attached here to and forms a part of the Directors' Report.

Extract of Annual Return of the Company is available on the website of the Company viz. www.nikhiladhesives.com

The particulars required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-II, which is attached here to and forms a part of the Directors' Report.

As required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-III which is attached hereto and forms a part of the Director's Report.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
3. The Company has no Subsidiary/JV/Associate Companies during the year.
4. Company does not have any subsidiaries hence Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
5. As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has formed Internal Complaints Committee for various work places to address complaints pertaining to sexual harassment in accordance with the POSH Act.
6. During the year under review there are no shares in the demat suspense account or unclaimed suspense account of the Company.
7. The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
8. The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
9. During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished.
10. The Board of Directors have complied with applicable Secretarial Standards as specified u/s. 118 of Companies Act, 2013.
11. The Company confirms that it has paid the Annual Listing Fees for the year 2024-25 to BSE Ltd where the Company's Shares are listed.
12. During the Financial year no application has been made and no proceeding is pending under the Insolvency and Bankruptcy Code, 2016.
13. During the year under review, there were no instance of one-time settlement with banks or financial institutions and hence the differences in valuation as enumerated under Rule 8(5)(xii) of Companies (Accounts) Rules, 2014, as amended, do not arise.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 124 of the Companies Act, 2013 read with the Investors Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and all the applicable amendments and re-enactments made thereunder, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company in the name of Investor Education and Protection Fund.

During the year under review, no shares or unpaid dividend of last 7 years was due to be transferred to IEPF.

HUMAN RESOURCES

Your directors believe that the key to success of any Company are its employees. Your Company has a team of able and experienced professionals, whose dedicated efforts and enthusiasm has been an integral part of your Company's growth. Your directors would like to place on record their deep appreciation of their continuous effort and contribution to the Company.

CASH FLOW STATEMENT

In conformity with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and requirements of companies Act, 2013 the cash flow statement for the financial year ended 31.03.2024 is annexed here to as a part of the Financial Statements.

DISCLOSURE AS REQUIRED UNDER CLAUSE 5A TO PARA A OF PART A OF SCHEDULE III OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015:

No Agreement were entered pursuant to clause 5A of paragraph A of Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during FY 2023-24 and as on date

For and On behalf of Board of Directors

Sd/-

Umesh J. Sanghavi

Chairman and Managing Director DIN: 00491220

Place: Mumbai Date: 26/08/2024