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Nikhil Adhesives Ltd			Industry : Chemicals


BSE Code:	526159	NSE Symbol:	Not Listed	P/E(TTM):	43.48

ISIN Demat:	INE926C01022	Div & Yield %:	0.16	EPS(TTM):	2.86

Book Value(Rs):	23.3690225	Market Cap ( Cr.):	571.3	Face Value(Rs):	1

Change Company

To The Members of Nikhil Adhesives Limited

The Board of Directors are pleased to present the thirty seventh Annual Report together with the Audited Accounts for the Financial Year ended 31^st March, 2023.

In Financial Year 2022-23 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.

FINANCIAL HIGHLIGHTS:

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

(Rs. In Lakh)

Particulars	31^st March, 2023	31^st March, 2022
Profit Before Depreciation and Tax	2,875.03	3,810.50
Less: Depreciation	520.57	411.22
Profit Before Tax	2,354.46	3,399.28
Less: Provision for Tax
Current Tax	550.26	832.00
Tax adjustment of earlier years	33.44	-
Deferred Tax	66.78	40.87
Profit After Tax	1,703.97	2,526.41

DIVIDEND

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, 2023 subject to approval of Shareholders.

RESULT OF OPERATIONS

(Rs. In Lakh)

Particulars	2022-23	2021-22	%
Sales Turnover	74,346.26	81,374.43	-8.63%
Other Income	47.53	57.37	-17.15%
Operating Profit	2,985.09	3,989.56	-25.17%
Total Comprehensive Income(Net Profit)	1,713.42	2,525.78	-32.16%

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

PUBLIC DEPOSITS

The Company had accepted the deposits amounting to Rs. 186.05 Lakh from its members during the financial year 2022-23. 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.

TRANSFER TO RESERVES

There is no transfer made to reserves during the year.

SHARE CAPITAL

During the year, pursuant to the approval of the shareholders in its 36^th AGM held on 12^th September, 2022, the Company effected 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 13^th October, 2022 vide circular resolution effected on 22.09.2022.

The Authorized and Paid-up Share Capital of the Company after considering the above sub-division is as follows.

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).

CORPORATE GOVERNANCE

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.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

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:

Amount statutorily required to contribute during the year F.Y. 2022-23	Rs. 40,23,783
Actual amount spent as on 31.03.2023	Rs. 38,66,800
Amount unspent as on 31.03.2023	Rs. 1,56,983
Amount spent towards PM CARES Fund within the prescribed time limit of six months of end of financial year as per Companies Act, 2013	Rs. 160,000
Excess amount available for set off in the succeeding financial years	Rs. 3,017

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

DIRECTORS RESPONSIBILITY STATEMENT

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: a. That in the preparation of the annual financial statements for the year ended 31^st March, 2023, 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; b. 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; c. 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; d. That the annual financial statements have been prepared on a going concern basis; e. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. That the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

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

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.

DIRECTORS & KEY MANAGERIAL PERSONNEL

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. Rajendra J. Sanghavi (DIN:00245637), 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.

The Board of Directors in its meeting held on 09^th August, 2022 accepted the resignation of Ms. Rachana Baria from the position of a Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from 12^th August, 2022 and appointed Ms. Khushboo Gulati as Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from 10^th November, 2022 in their Board Meeting held on same day.

During the year, Mr. Anil Gupta resigned as a Chief Financial Officer, Key Managerial Personnel of the Company with effect from 11^th November, 2022 and Mr. Umesh T. Shah was appointed as Chief Financial Officer, Key Managerial Personnel with effect from 10^th November, 2022 in accordance with Section 203 and other applicable provisions of the Companies Act, 2013.

The Board of Directors in its meeting held on 07^th February, 2023 accepted the resignation of Ms. Khushboo Gulati from the position of a Company Secretary and Compliance Officer, Key Managerial Personnel of the Company with effect from 31^st January, 2023.

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

Pursuant to Section 149, 152 read with Schedule IV and other applicable provisions, if any of the Companies Act, 2013 and the Companies (Appointment and Qualifications of Directors) Rules, 2014, and Regulation 17(1A) and other applicable regulation of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 Mr. Subramanian V (DIN: 10162796) was appointed as Independent Directors (Non-Executive) with effect from 01^st July, 2023, by the Board of Directors in their meeting held on 16.05.2023 subject to the approval of Shareholders in this forthcoming Annual General Meeting of the Company pursuant to Regulation 17(1C) of the SEBI (LODR) Regulations, 2015.

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

The Board of Directors at its meeting held on 10^th of July, 2023 accepted the re-designation of Mr. Umesh J. Sanghavi as Chairman and Managing Director of the Company with effect from 10^th 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.

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 (Re-designated as Managing Director w.e.f 10^th July, 2023)

2. Mr. Rajendra J. Sanghavi Wholetime Director

3. Mr. Tarak J. Sanghavi Wholetime Director

4. Mr. Pravin K. Laheri Independent Director

5. Mr. Naresh D. Bhuta Independent Director

6. Mrs. Ishita T. Gandhi Independent Director

7. Ms. Gauri S. Trivedi Independent Director

8. Mr. V. Subramanian Independent Director (appointed w.e.f 01^st July, 2023)

9. Ms. Kinjal Rathod Company Secretary & Compliance officer (appointed w.e.f 16^th May, 2023)

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.

COMMITTEES OF THE BOARD

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

Report:

a. Audit Committee b. Nomination and Remuneration Committee c. Stakeholder Relationship Committee d. Corporate Social Responsibility Committee

DECLARATION BY INDEPENDENT DIRECTORS

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.

MEETINGS OF BOARD AND COMMITTEES

During the year under review, 4 Board Meetings were convened and held. The details thereof are given in the Report on Corporate Governance.

PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS

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.

SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

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, view points, 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.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

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.

STATUTORY AUDITORS

The Shareholders of the Company at the 34^th Annual General Meeting held on 31^st December, 2020, appointed M/s. PPV & CO., Chartered Accountants (Firm Registration No. 153929W) as Statutory Auditors of the Company for a period of 5 years until the conclusion of Annual General Meeting to be held in the year 2025, at such mutually agreed remuneration including out pocket expenses incurred during the audit process. There are no qualifications or adverse remarks in the Auditors' Report.

COST AUDITOR

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.

SECRETERIAL AUDITOR

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 31^stMarch, 2023. There are no adverse remarks or observations made by M/s Shiv Hari Jalan & Co. in the Secretarial Audit Report except three observations as under:

Reply: The Shareholders vide Ordinary Resolution passed through Postal Ballot conducted on 27th March, 2022 approved, the appointment of Ms.Gauri S. Trivedi as an Independent Director of the Company for a period of 5 years with effect from 01st January, 2022. The 99.9977% shareholders who have voted for said resolution have voted in favour of the said resolution.

Subsequently The appointment of Ms. Gauri S. Trivedi (DIN:06502788) as an Independent Director for a period of 5 years was ratified vide special resolution passed at the Annual General Meeting held on 12.09.2022.

2. The Company has not given a public notice by way of advertisement before sending the notice of AGM and copies of the financial statements as required under general circular 2/2022 dated 05.05.2022 read with General Circular 20/2020 dated 05.05.2020.

Reply: The Company has intimated the shareholders with a minor delay of one day post issuance of its Annual Report.

3. Pursuant to regulation 6 (1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, A listed entity shall appoint a qualified company secretary as the compliance officer. During the period from 13-08-2022 to 09-11-2022 and from 01-02-2023 to 15-05-2023, no qualified company secretary was appointed as the compliance officer of the Company. However, the Company has appointed Company Secretary and Compliance officer within a period of 6 months from the date of such vacancy as provided in Section 203 (4) of the Companies Act, 2013.

We assure to comply all the provisions from time to time. The Report of the Secretarial Auditor is given in Annexure-I, which is attached hereto and forms a part of the Directors' Report.

MATERIAL CHANGES AND COMMITMENTS

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.

REGULATORY/COURT ORDERS

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.

RELATED PARTY TRANSACTIONS

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTIONS 185 and 186 OF THE COMPANIES ACT, 2013

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

DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.

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

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

PARTICULARS OF EMPLOYEES

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 not applicable to the Company as there was no employee drawing remuneration to the extent mentioned therein.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, the 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.

GENERAL

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:

a. Issue of equity shares with differential rights as to dividend, voting or otherwise. b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. c. The Company has no Subsidiary/JV/Associate Companies during the year. d. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. e. 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. f. During the year under review there are no shares in the demat suspense account or unclaimed suspense account of the

Company. g. 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. h. 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. i. 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. j. The Board of Directors have complied with applicable Secretarial Standards as specified u/s. 118 of Companies Act, 2013. k. The Company confirms that it has paid the Annual Listing Fees for the year 2023-24 to BSE Ltd where the Company's Shares are listed. l. During the Financial year no application has been made and no proceeding is pending under the Insolvency and Bankruptcy

Code, 2016. m. 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. Accordingly, the unclaimed dividend (final) in respect of the financial year 2015-16 is due for transfer to the IEPF in September, 2023. Shareholders, who have not yet claimed their final dividend for the financial year 2015-16 and/ or for any subsequent financial years, are requested to claim the same from the Company.

During the year under review, no shares on 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.

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 2022-23 and as on date

For and On behalf of Board of Directors

Sd/-

Umesh J. Sanghavi

Chairman and Whole-time Director DIN: 00491220

Place: Mumbai Date: 16^th May, 2023

ANNEXURE- I

SECRETARIAL AUDIT REPORT FORM NO. MR-3

For the Financial year ended 31^stMarch, 2023

[Pursuant to Section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

Nikhil Adhesives Limited

I, Shiv Hari Jalan, Proprietor of Shiv Hari Jalan & Co., Company Secretary in practice have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Nikhil Adhesives Limited (herein after called the "Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31.03.2023complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2023 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992

(‘SEBI Act'):-

(a) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (d) Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;(Not applicable to the company during the review period) (e) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; (f) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021; (Not applicable to the company during the review period) (g) Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not applicable to the company during the period under review) (h) Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable to the company during the review period) (i) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the company during the review period) (j) The Securities and Exchange Board of India (Depositories and Participant) Regulations, 2018; (vi) I further report that based on the explanation given by the management of the Company, there are no other laws that are specifically applicable to the Company.

I have also examined compliance with the applicable clauses of the Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to the following observations:

1. Pursuant to regulation 25(2A) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, The appointment, re-appointment or removal of an independent director of a listed entity, shall be subject to the approval of shareholders by way of a special resolution. However the listed entity has appointed Ms. Gauri S. Trivedi (DIN: 06502788) w.e.f. 01.01.2022 as an Independent Director of the Company for a period of 5 years vide ordinary resolution passed through postal ballot dated 27.03.2022. The listed entity has ratified the appointment of Ms. Gauri S. Trivedi (DIN:06502788) as an Independent Director for a period of 5 years vide special resolution passed at the AGM held on 12.09.2022.

2. The Company has not given a public notice by way of advertisement before sending the notice of AGM and copies of the financial statements as required under general circular 2/2022 dated 05.05.2022 read with General Circular 20/2020 dated 05.05.2020.

3. Pursuant to regulation 6 (1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, A listed entity shall appoint a qualified company secretary as the compliance officer. During the period from 13-08-2022 to 09-11-2022 and from 01-02-2023 to 15-05-2023, no qualified company secretary was appointed as the compliance officer of the Company. However, the Company has appointed Company Secretary and Compliance officer within a period of 6 months from the date of such vacancy as provided in Section 203 (4) of the Companies Act, 2013

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. During the period under review there is no changes in the composition of the Board of Directors took place.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent in advance in accordance with the provisions of Companies Act, 2013 and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

As per the minutes, the decisions at the Board Meetings were taken unanimously.

I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period the Company has following specific actions having major bearing on the

Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines referred to above:

The shareholders of the Company have approved, through ordinary resolution at the Annual General Meeting held on September 12, 2022 for subdivision of equity shares of the Company from face value of 10/- per share to Rs. 1/- per share and consequential amendments through special resolution to the Memorandum of Association of the Company.

For Shiv Hari Jalan & Co. Company Secretaries FRN: S2016MH382700

(Shiv Hari Jalan) Proprietor FCS No: 5703 C.P. No: 4226 PR No. 1576/2021

Place: Mumbai Date: 16.05.2023

UDIN:F005703E000312988

This report is to be read with my letter of even date which is annexed as Annexure ‘A' and forms an integral part of this report.

ANNEXURE A

To,

The Members,

Nikhil Adhesives Limited

A-902, Kaledonia Building, Sahar Road, Opp. Vijay Nagar, Andheri (East), Mumbai - 400069.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the process and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and books of accounts of the company.

4. Where ever required, I have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The Compliance of provision of Corporate and other applicable laws, rules, regulations, standard is the responsibility of management. My examination was limited to the verification of procedure on test basis.

6. The secretarial Audit report is neither an assurance as to the future viability of Company nor of the efficacy of effectiveness with which the management has conducted the affairs of the company.

For Shiv Hari Jalan & Co.

Company Secretaries

FRN: S2016MH382700

(Shiv Hari Jalan)

Proprietor

FCS No: 5703

C.P. No: 4226

PR No. 1576/2021

Place: Mumbai

Date: 16.05.2023

UDIN:F005703E000312988

ANNEXURE- II

DISCLOSURE UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL), RULES, 2014

1. The ratio remuneration of each director to the median remuneration of the employee and percentage increase in remuneration of Directors, CFO and CS:

Sr. No Name	Designation	Remuneration in paid for FY 2022-23 (In Rs.)	Remunerati- on paid for FY 2021-22 (In Rs.)	% increase - in remuneration in the FY 2022-23	Ratio/ times per median of employee remuneration
1 Mr. Umesh J. Sanghavi	Chairman and Whole-time Director	21,52,944	22,31,730	-3.53	6.15
2 Mr. Rabi R. Mishra*	Executive- Managing Director and CEO	1,20,00,000	30,00,000	-	30.75
3 Mr. RajendraJ. Sanghavi	Executive- Whole Time Director	21,52,944	22,05,055	2.36	6.15
4 Mr. Tarak J. Sanghavi	Executive- Whole Time Director	21,52,944	22,05,055	2.36	6.15
5 Mr. Anil P. Gupta*	Chief Financial Officer	32,73,147*	6,12,009	-	-
6 Mr. Umesh Shah*	Chief Financial Officer	21,91,091*	-	-	17.93
7 Ms. Rachana Baria*	Company Secretary& Compliance Officer	1,98,311*	4,51,759	-	-
8 Ms. Khushboo Gulati*	Company Secretary& Compliance Officer	1,24,318*	-	-	-

* Mr. Rabi Mishra was appointed as Wholetime Director and Chief Executive Officer of the Company w.e.f 01.01.2022. The remuneration of Mr. Anil P. Gupta is covered for a period from 01.04.2022 to 11.11.2022, as he resigned as CFO w.e.f. 11.11.2022. The remuneration of Mr. Umesh Shah is for the period from 12.11.2022 to 31.03.2023, as he was appointed as CFO w.e.f. 12.11.2022. The remuneration of Ms. Rachana Baria is covered for the period from 01.04.2022 to 12.08.22 as she resigned as CS w.e.f. 12.08.2022. The remuneration of Ms. Khushboo Gulati is for the period from 10.11.2022 to 31.01.2023.

Median remuneration of employees	Median remuneration of employees	Percentage increase/(decrease)
in FY 2022-23	in FY 2021-22
Rs. 3,90,300	Rs. 3,25,109	20.05

2. No. of permanent employees as on 31st March, 2023: 271 Employees

3. Variation in market capitalisation, PE ratio:

Particulars		As on 31.03.2023			As on 31.03.2022		Percentage Change
Market Capitalisation of the Company		Rs. 4,47,25,51,050			Rs. 3,30,97,33,720		35.13%
PE Ratio	Rs.		26.25	Rs.		13.10		100%
Closing Market share Price (BSE)	Rs.		97.35	Rs. 72.04				35.13%

4. Comparison between average percentile increase and salaries of employees (excluding managerial personnel) and percentile increase in managerial remuneration:

Average percentile increase in salaries of employees other than managerial personnel in FY 2022- 23	Percentile increase in managerial personnel remuneration in FY 2022-23	Justification
29.96%	129.62%	The increase in salaries of managerial personnel remuneration is commensurate with their individual performance attributable to the growth of the Company.

5. The key parameters for any variable component of remuneration availed by Directors: There is no variable component in the remuneration paid to Directors.

6. There is no employees who have received remuneration in excess of the highest paid Director.

7. This is to affirm that the above remuneration is paid as per the Remuneration Policy of the Company.

ANNEXURE- III

DISCLOSURE OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The Information under Section 134(3) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 for the year ended 31^st March, 2023 is given herein below and forms part of the Director's Report.

A. Conservation of Energy:

The Company has a well-structured energy management system in place and regular efforts are made to optimise process parameters and energy conservation. Additionally, while undertaking modernisation and technological upgradation of production facilities, due consideration is also given in selection of plant and equipments which conforms to the best in class energy conservation parameters. The other identified key initiatives for conservation of energy during the year were:

1. The steps taken or impact on conservation of energy:

a. Continuous replacement of incandescent bulbs with compact fluorescent (CFLs) and LED bulbs. These are energy efficient modern alternatives which save energy considerably & helps to reduce energy consumption. b. Replacement and Rewound of Motors, which resulting in conservation of energy. c. Capacities are installed for effective distribution of electricity supply and improve the power factor. The Company has carried out automisation of this system, resulting in better control and improving further power factor. d. Energy also can be saved by better utilisation staff is well trained accordingly. Running of equipments unnecessary also results in wastage of energy. Energy is conserved by stopping the wastage. e. Gardening and plantation to help reducing pollution. f. Upgradation of effluent treatment plant is continued. Treated water is used for washing & cleaning. g. Better utilization of energy and water. h. The Company has installed the solar energy system in its plant at Silvassa. And it has installed the solar water heating system in its plant at Dahej and Dahanu which provides 12KL water in a day with 70 degree Celsius in Dahej Plant and 1KL water in a with 70 degree Celsius at its Dahanu plant. The Company is trying best to expand the capacity from the above limit and also the installation of solar energy and water heating system in other plants of the Company is in process.

2. The Steps taken by the Company for utilising alternate sources of energy:

Alternative energy is any energy source that is an alternative to fossil fuel. Amongst various sources of alternate energy like solar, wind, geothermal, biomass, bio fuels, hydropower etc. Solar power is the most convenient of all which can be made use of by installing solar panels and converting solar energy into electrical energy.

The solar heating system plays a crucial role in protecting the environment. It is reliable, secure and eco friendly.

Management has recognised the advantages of solar power and solar heating systems, and has initiated installation of solar system in its units as mentioned in the point 1(h) which will not only help reduce chemical emission considerably but also reduce power cost.

3. The capital investment on energy conservation equipments:

Rs. 47.32 Lakh was spent on energy conservation equipments.

B. Technology absorption:

1. The efforts made towards technology absorption:

Development of proprietary technology for 100% import substitute Re-dispensible Polymer (RDP) & design of plant to manufacture 12,000 TPA.

2. The benefits derived like product improvement, cost reduction, product development or import substitution etc.:

Improvisation in products quality helps to retain and increase the market share. Product development too helps to reduce cost and sustainability in market. We constantly look for process improvisation at manufacturing level to reduce energy consumption, minimise waste generation and to produce cost effective products in line with environmental policies.

3. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

Not applicable as no technology was imported during the last three years.

4. The expenditure incurred on Research and Development.

Rs. 33.05 Lakh was spent on Research and Development.

C. Foreign Exchange Earnings and Outgo:

For the year under consideration, earnings in the foreign exchange in terms of actual inflows is Rs. 412.58 Lakh and foreign exchange outgo in terms of actual outflows is Rs. 19,610.58 Lakh.

For and Behalf of the Board of Directors

Sd/-

Umesh J. Sanghavi

Chairman and Managing Director DIN: 00491220

Place: Mumbai

Date: 14^th August, 2023

CORPORATE SOCIAL RESPONSIBILITY REPORT

1. Brief outline on CSR Policy of the Company-

The objective of the CSR Policy ("Policy") is to lay down the guiding principles in undertaking various programs and projects by or on behalf of the Company in accordance with the Corporate Social Responsibility ("CSR') within the meaning of Section 135 of the Companies Act, 2013 read with Schedule Vll of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (Rules").

2. Composition of CSR Committee:

Sr. No. Name of Director	Designation/Nature of Directorship	Number of meetings of CSR Committee held during the year	Number of meetings CSR Committee attended during the year
1. Mr. Pravin K. Laheri (Chairman)	Non-Executive Director	1	1
2. Mr. Rajendra J. Sanghavi (Member)	Wholetime Director	1	1
3. Mr. Umesh J. Sanghavi (Member)	Managing Director	1	1
4. Mr. Tarak J. Sanghavi (Member)	Whole Time Director	1	1

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the Board are disclosed on the website of the Company: www.nikhiladhesives.com

4. Provide the executive summary along with web-link(s) of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable: Not Applicable

5. (a) Average net profit of the Company as per Section 135(5): Rs. 22,09,70,848

(b) Two percent of average net profit of the Company as per Section 135(5): Rs. 44,19,417

(c) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Rs. 3,95,634 (d) Amount required to be set off for the financial year, if any: Rs. 3,95,634 (e) Total CSR obligation for the financial year [(b)+(c)-(d)]: Rs. 40,23,783/-

6. (a) Amount spent on CSR Projects other than ongoing projects for the financial year: Rs. 40,26,800

(b) Amount spent in Administrative Overheads: Nil

(d) Total amount spent for the Financial Year [(a)+(b)+(c)]: Rs. 40,26,800 (e) CSR amount spent or unspent for the financial year:

	Amount Unspent (in Rs.)
Total Amount Spent for the Financial Year. (in Rs.)	Total Amount transferred to Unspent CSR Account as per Section 135(6)		Amount transferred to any fund specified under Schedule VII as per second proviso to Section 135(5)
	Amount	Date of Transfer	Name of the Fund	Amount	Date of Transfer
40,26,800	Not Applicable		PM CARES FUND	1,60,000	13/07/2023

(f) Excess amount for set off, if any: Rs. 3,017

Sr. No. Particular	Amount (in Rs.)
(1) (2)	(3)
(i) Two percent of average net profit of the company as per Section 135(5)	Rs. 44,19,417
(ii) Total amount spent for the Financial Year	Rs. 40,26,800
(iii) Excess amount spent for the financial year [(ii)-(i)]	Rs. (3,92,617)
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any	Rs. 3,95,634
(v) Amount available for set off in succeeding financial years [(iii)-(iv)]	Rs. 3,017

7. Details of Unspent Corporate Social Responsibility amount for the preceding three Financial Years:

1 2	3	4	5	6		7	8
Sr No Preceding Financial Year(s)	Amount transferred to Unspent CSR Account under sub-section (6) of	Balance Amount in Unspent CSR	Amount Spent in the Financial Year (in	Amount transferred to a Fund as specified under Schedule VII as per second proviso to sub- section (5) of section 135,		Amount remaining to be spent in succeeding	Deficiency, if any
	section 135(in Rs.)	Account under sub- section (6) of section 135(in Rs.)	Rs)	if any Amount (in Rs)	Date of Transfer	Financial Years (in Rs)
1. FY - 1	NIL
2. FY 2
3. FY - 3

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: Nil If Yes, enter the number of Capital assets created/ acquired: Not Applicable

Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

Sr No Short particulars of the property or asset(s) [including complete address and location of the property]	Pin code of the property or asset(s)	Date of creation	Amount of CSR amount spent	Details of entity/ Authority/ beneficiary of the registered owner
(1) (2)	(3)	(4)	(5)	(6)
				CSR Registration	Name	Registered address
				Number, if
				applicable
N.A.

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/Municipal Corporation/ Gram panchayat are to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the Company has failed to spend two per cent of the average net profit as per section 135(5): Not Applicable

Sd/-	Sd/-
Mr. Umesh Sanghavi	Mr. Pravin K. Laheri
Chairman and Managing Director	Non-Executive- Independent Director
(Member of CSR Committee)	(Chairman of CSR Committee)
DIN: 00491220	DIN: 00499080

INDEPENDENT AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Nikhil Adhesives Limited

1. This certificate is issued in accordance with the terms of engagement letter dated 07-04-2023.

2. We, M/s PPV & CO, Chartered Accountants, the Statutory Auditors of Nikhil Adhesives Limited ("the Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on 31st March, 2023, as stipulated in regulations 17 to 27 and clauses (b) to (i) and (t) of regulation 46(2) and para C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the Listing Regulations).

Managements' Responsibility

3. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations.

Auditor's Responsibility

4. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

5. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company.

6. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the ICAI), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

7. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Opinion

8. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) and (t) of regulation 46(2) and para C, D and E of Schedule V of the Listing Regulations during the year ended 31st March, 2023.

9. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For PPV & CO

Chartered Accountants

Firm Registration No. 153929W

Priyanshi Vakharia

Proprietor

Membership No.: 181834

UDIN: 23181834BGXCSH7651

Place: Mumbai

Date: 16-05-2023