To The Members of Nikhil Adhesives Limited
The Board of Directors are pleased to present the thirty sixth AnnualReport together with the Audited Accounts for the Financial Year ended 31stMarch 2022.
In Financial Year 2022-23 your Company has continued the phase ofpositive outlook and witnessed the drastic growth and development both in operational aswell as in financial segments.
Summary of the Financial Results for the year is as under:
(Rs. In Lakh)
|Particulars ||31st March 2022 ||31st March 2021 |
|Profit Before Depreciation and Tax ||Rs. 3810.50 ||Rs. 2463.60 |
|Less: Depreciation ||Rs. 411.22 ||Rs. 345.99 |
|Profit Before Tax ||Rs. 3399.28 ||Rs. 2117.61 |
|Less: Provision for Tax || || |
|Current Tax ||Rs. 832.00 ||Rs. 525.00 |
|Deferred Tax ||Rs. 40.87 ||Rs. 27.20 |
|Profit After Tax ||Rs. 2526.41 ||Rs. 1565.41 |
The Board of Directors has recommended a dividend of Re. 2/- (Rupee Twoonly) per equity share of face value of Rs. 10/- (Rupee Ten only) each for the FinancialYear ended March 31 2022 subject to approval of Shareholders.
RESULT OF OPERATIONS
(Rs. In Lakh)
|Particulars ||2021-22 ||2020-21 ||% |
|Sales Turnover ||Rs.81373.69 ||Rs.49100.55 ||65.73% |
|Other Income ||Rs.58.11 ||Rs. 28.94 ||100.82% |
|Operating ||Rs. 3989.56 ||Rs. 2784.31 ||.29% |
|Profit || || || |
|Total Comprehensive Income (Net Profit) ||Rs.2525.78 ||Rs.1567.27 ||61.16% |
Detailed analysis of the performance of your Company is presented inthe Management Discussion and Analysis Report forming part of this Annual Report.
During the year your Company accepted deposits amounting to Rs. 474.15Lakh from its members. There has been no default in repayment of deposits or payment ofinterest during the year. No deposits have been unclaimed as at the end of the year. Allthe deposits accepted by the Company are in compliance with the requirements of Chapter Vof the Companies Act 2013.
TRANSFER TO RESERVES
There is no transfer made to reserves during the year.
There was no change in the Authorized and Paid-up Share Capital of theCompany during the year.
The Authorised Share Capital of the Company is Rs. 50000000/-(Rupees Five Crore only) divided into Rs. 4950000 (Forty-Nine Lakh and Fifty Thousand)Equity Shares of Rs. 10/- (Rupees Ten) each and Rs. 50000 (Fifty Thousand) 8% PreferenceShares of Rs. 10/- (Rupees Ten) each.
The Paid-up Share Capital of the Company is Rs. 46049603 /- (RupeesFour Crore Sixty Lakh Forty-Nine Thousand and Six Hundred Three only) divided intoRs.4594300 (Forty-Five Lakh Ninety-Four Thousand and Three Hundred) Equity Shares of Rs.10/- (Rupee Ten) each and Rs. 21320 Forfeited Shares amounting of Rs. 106603/- (OneLakh Six Thousand Six Hundred and Three Only).
Your Company accepting the strong Corporate Governance and strives tomaintain the highest Corporate Governance practice and standards. The detail report on theCorporate Governance is given in this Annual Report. The Certificate from the auditors ofthe Company regarding compliance of the conditions of Corporate Governance as stipulatedunder Regulation 34 of SEBI (LODR) Regulations 2015 is also forms part of the report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Board noted that accordance with the provisions of Section 135 ofthe Companies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules2014. The Company is statutorily required to contribute Rs. 2417166 amounts towards CSRfor the financial year 2021-22 after set off of excess amount of Rs. 99774 spent in thefinancial year 2020-21 Out of the said amount the Company spent Rs.2812800 during thefinancial year ended 31st March 2022. The Company has spent an excess ofRs.395634 during the 2021-22. The CSR report is forming part of this attachment inAnnexure IV and CSR policy is placed on the website of the Companywww.nikhiladhesives.com.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:
a. That in the preparation of the annual financial statements for theyear ended 31st March 2022 the applicable accounting standards read withrequirements set out under Schedule III to the Companies Act 2013 have been followed andthere are no material departures from the same;
b. That had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
c. That had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. That the annual financial statements have been prepared on a goingconcern basis; e. That proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;
f. That the systems to ensure compliance with the provisions of allapplicable 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 withreference to the financial statements and risk management is embedded in the businessprocess by which the Company pursues its objectives. The Company uses foreign exchangeforward contracts to hedge its exposure for movements in foreign exchange rate. The use ofthis foreign exchange forward contract reduces the risk to the Company. The Company doesnot use these for trading or speculative purpose. Additionally the Audit Committee andthe Board of Directors provide risk over sight through their review of potential riskswhich could negatively impact the operations the proposed budget and plan theCompany?s strategic framework and any risks that may negatively impact it. Themanagement is committed to ensure an effective internal control environment commensuratewith the size scale and complexity of the operations which provides assurance on theefficiency of the Company?s operations and safety/security of its assets besidesorderly and legitimate conduct of Company?s business in the circumstances which mayreasonably be foreseen. The Company has defined organization structure authority levelsdelegated powers internal procedures rules and guidelines for conducting businesstransactions.
The Company?s system and process relating to internal control andprocedures for financial reporting have been designed to provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof Company?s assets that could have a material effect on the financial statements andfor preventing and detecting fraud and other irregularities or deliberate miss-statements.Management is responsible for establishing and maintaining adequate disclosure controlsand procedures and adequate internal controls over financial reporting with respect tofinancial statements besides its effectiveness in the context of applicable regulations.The Internal Auditor the Audit Committee as well as the Board of Directors conduct fromtime to time an evaluation of the adequacy and effectiveness of the system of internalcontrols for financial reporting with respect to financial statements.
Industrial relations remained cordial throughout the year. YourDirectors recognize and appreciate the sincere and hard work loyalty dedicated effortsand contribution of all the employees in the growth and performance of the Company duringthe year.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In terms of Sections 149 152 and all other applicable provisions ofthe Companies Act 2013 for the purpose of determining the Directors liable to retire byrotation the Independent Directors are not included in the total number of Directors ofthe Company. Accordingly Mr. Tarak J. Sanghavi (DIN:00519403) Whole Time Director shallretire by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-appointment as a Whole Time Director of the Company. The details ofDirectors seeking re-appointment as required under Regulation 36(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are given in the notice of theensuing Annual General Meeting which is being sent to the Shareholders along with AnnualReport.
Pursuant to Section 149 152 read with Schedule IV and other applicableprovisions if any of the Companies Act 2013 and the Companies (Appointment andQualifications of Directors) Rules 2014 and Regulation 17(1A) and other applicableregulation of the SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015Mr. Pravin K. Laheri (DIN: 00499080) and Mr. Naresh D. Bhuta (DIN: 01610043) wereappointed as Independent Directors (Non-Executive) with effect from 01st April2021 by passing the Special Resolutions through Postal Ballot conducted on 26.03.2021being the last of the Meeting.
Pursuant to 196 197 198 and 203 and other applicable provisions ofthe Companies Act 2013 if any read with Schedule V to the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 17 (1C)and other applicable provisions of the SEBI (Listing Obligations and DisclosureRequirements)
Regulations 2015 the Company appointed Mr. Rabi R. Mishra (DIN:02888975) as Wholetime Director and Chief Executive Officer of the Company with effectfrom 01st January 2022 which is approved by the Shareholders by passing anOrdinary Resolution through Postal Ballot was conducted on 27.03.2022 as being the last ofthe Meeting.
The Board of Director in its meeting held on 17th December2021 appointed Ms. Gauri S. Trivedi (DIN: 06502788) as an Additional Director with effectfrom 01st January 2022 and also approved her appointment as an IndependentDirector from the same date which was subject to the approval of the Shareholders. TheShareholders given their approval for the appointment of Ms. Gauri S. Trivedi as anIndependent Director through Postal Ballot conducted on 27.03.2022 being the last of themeeting.
The Board of Directors in its meeting held on 17th December2021 appointed Mr. Umesh J. Sanghavi Managing Director as a Chairman of the Companydesignated as Chairman and Managing Director from the subsequent meetings.
During the year Mrs. Anita U. Sanghavi resigned as a Chief FinancialOfficer Key Managerial Personnel of the Company with effect from 18thFebruary 2022 and Mr. Anil P. Gupta was appointed as Chief Financial Officer KeyManagerial Personnel with effect from 18th February 2022 in accordance withSection 203 and other applicable provisions of the Companies Act 2013.
Further as on date of this report the Board of Directors in itsmeeting held on 09th August 2022 approved the change in designation of Mr. R.R. Mishra from Wholetime Director and Chief Executive Officer to Managing Director andChief Executive Officer of the Company with effect from 01st September 2022.In consequent to the change in designation of Mr. R. R. Mishra as above the Board ofDirectors approved the Change in designation of Mr. Umesh J. Sanghavi from Chairman andManaging Director to Chairman and Wholetime Director designated as ExecutiveChairman? with effect from 01st September 2022 the change in designationof the said Directors is subject to the approval of the Shareholders of the Company inthis forthcoming Annual General Meeting of the Company.
The Board of Directors in its meeting held on 09th August2022 accept the resignation of Ms. Rachana Baria from the position of a Company Secretaryand Compliance Officer Key Managerial Personnel of the Company with effect from 12thAugust 2022.
As on date of this report the details of the Board of Directors andKey Managerial Personnel are as under;
1. Mr. Umesh J. Sanghavi Chairman and Managing Director
2. Mr. R. R. Mishra Wholetime Director and Chief ExecutiveOfficer
3. Mr. Rajendra J. Sanghavi Wholetime Director
4. Mr. Tarak J. Sanghavi Wholetime Director
5. Mr. Pravin K. Laheri Independent Director
6. Mr. Naresh D. Bhuta Independent Director
7. Mrs. Ishita T. Gandhi Independent Director
8. Ms. Gauri S. Trivedi Independent Director
9. Ms. Rachana Baria Company Secretary & Compliance officer(till 11th August 2022) 10. Mr. Anil P. Gupta Chief Financial Officer
The Board of Directors comprises of highly qualified members who arepossessed with the essential qualifications skills expertise and competencies in theareas of Sales & Marketing Finance and Accounts Leadership and Governance IndustryKnowledge General Management and Governance Relevant Technology which can enable them totake effective decisions in the conduct of the affairs of the Company and enhance theStakeholders values.
COMMITTEES OF THE BOARD
The Company?s Board has following committees. The brief of theseCommittees are given in section of Corporate Governance Report:
a. Audit Committee;
b. Nomination and Remuneration Committee;
c. Stakeholders Relationship Committee.
d. Corporate Social Responsibility Committee
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have furnished the declarationthat they meet the criteria of Independence as provided in Section 149(6) of the CompaniesAct 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations 2015.
MEETINGS OF BOARD AND COMMITTEES
During the year under review 6 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 Companycarried out the formal annual performance evaluation of all the Directors and also itsself-evaluation process internally to assess the skills set and contribution that aredesired recognizing that competencies and experiences evolves over time. The process wasconducted by allowing the Board to engage in candid discussions with each Directors withthe underlying objective of taking best possible decisions in the interest of the Companyand its stakeholders. The Directors were individually evaluated based on structuredself-assessment and personal interaction to ascertain feedback on well defined parameterswhich internally comprised of level of engagement and their contribution to strategicplanning 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 theannual performance evaluation of Directors carried out by the Nomination and RemunerationCommittee. A statement in detail indicating the manner in which formal annual evaluationhas been made by the Board of Directors is given in the Report on Corporate Governancewhich forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation ofNomination and Remuneration Committee (NRC) has adopted a term of reference whichinternally deals with the manner of selection of the Directors and the Key ManagerialPersonnel of the Company. The NRC recommends appointment of Director/re-appointment ofManaging Director Whole Time Directors and Independent Directors based on theirqualifications expertise positive attributes and independence in accordance withprescribed provisions of the Companies Act 2013 and rules framed there under. The NRC inaddition to ensuring diversity of race and gender also considers the impact the appointeewould have on Board?s balance of professional experience background view pointsskills and areas of expertise.
The Board of Directors in consonance with the recommendation ofNomination and Remuneration Committee has also adopted the Remuneration Policy for theMembers of the Board and Executive Management. The said policy earmarks the principles ofremuneration and ensures a well balanced and performance related compensation packagetaking into account Shareholders? interest industry practices and relevant corporateregulations in India.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism and Whistle-Blower Policy to dealwith instances of fraud and mismanagement if any and conducting business with integrityincluding in accordance with all applicable laws and regulations. The details of the VigilMechanism and Whistle Blower Policy are explained in the Report on Corporate Governanceand also posted on the website of the Company.
The Shareholders of the Company at the 34th Annual GeneralMeeting held on 31st December 2020 appointed M/s. PPV & CO. CharteredAccountants (Firm Registration No. 153929W) as Statutory Auditors of the Company for aperiod of 5 years until the conclusion of Annual General Meeting to be held in the year2025 at such remuneration including the out pocket expenses incurred during the auditprocess which will be mutually agreed between the Board of Directors and the Auditor.
There are no qualifications or adverse remarks in the Auditors Report.
The Board of Directors has re-appointed Messrs B. F. Modi &Associates Cost Accountants (Firm Registration No. 100604) as the Cost Auditors forconducting audit of the cost accounts maintained by the Company in respect of the productsof the Company covered under the Companies (Cost Records and Audit) Amendment Rules 2014and fixed their remuneration based on the recommendation of the
Audit Committee. The remuneration payable to the Cost Auditors issubject 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 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Messrs D. M. Zaveri & Co. Company Secretaries were appointed to undertake theSecretarial Audit of the Company for the year ended 31stMarch 2022. There areno adverse remarks or observations made by Messrs D. M. Zaveri & Co. in theSecretarial Audit Report except one observation i.e. there was a delay of 1 day inPublication of financial results in newspaper for the quarter ended 30thJune2021 which is required to be publish within 48 hours of Conclusion of Board Meeting asper Regulation 47 (1) and (3) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
Due to outbreak of COVID 19 pandemic and consequential lockdown therehas been a nominal delay in the aforesaid compliance by the Company.
The Report of the Secretarial Auditor is given in Annexure-I which isattached hereto and forms a part of the Directors? Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statement relate and the date of the report.
During the year under report no significant and material orders werepassed by the regulators or courts or tribunals impacting the going concern status andCompany?s operations in future.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial yearunder review by the Company are on arm?s length basis and in the ordinary course ofbusiness. There are no material significant related party transactions made by the Companywith Promoters Directors Key Managerial Personnel or other designated persons which mayhave a potential conflict with the interest of the Company at large. All related partytransactions are placed before the meeting(s) of the Audit Committee for approval. Prioromnibus approval of the Audit Committee is obtained for the financial year for thetransactions which are of a foreseen and repetitive in nature. The statement givingdetails of all related party transactions entered into pursuant to the omnibus approvaltogether with relevant documents/information are placed before the Audit Committee forreview and approval on quarterly basis. The Company has developed a Policy on materialityof Related Party Transactions and dealing with Related Party Transactions including themodifications thereof. The Policy on materiality of Related Party Transactions and dealingwith Related Party Transactions as approved by the Board is uploaded on the Company?swebsite and the same is available at the web link http://www.nikhiadhesives.com.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTIONS 185 and186 OF THE COMPANIES ACT 2013
There are no Loans Guarantees or Investment made during the year inpursuance to Sections 185 and 186 of the Companies Act 2013.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIALPERSONNEL 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 theratio of the remuneration of each Director to the median employee?s remuneration andsuch other details as prescribed therein are given in Annexure-II which is attached hereto and forms a part of the Directors? Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is available on the website ofthe Company viz. www.nikhiladhesives.com.
PARTICULARS OF EMPLOYEES
The particulars required pursuant to Section 197 of the Companies Act2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are not applicable to the Company as there was no employee drawingremuneration to the extent mentioned therein.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
As required under Section 134 (3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 the information on Conservation ofEnergy Technology Absorption and Foreign Exchange Earnings and Outgo are given inAnnexure-III which is attached hereto and forms a part of the Director?s Report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
a. Issue of equity shares with differential rights as to dividendvoting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
c. The Company has no Subsidiary/JV/Associate Companies during theyear.
d. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
e. As per the requirement of the Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 ("POSH Act") andRules made thereunder the Company has formed Internal Complaints Committee for variouswork places to address complaints pertaining to sexual harassment in accordance with thePOSH Act.
f. During the year under review there are no shares in the dematsuspense account or unclaimed suspense account of the Company.
g. The Company has not issued any sweat equity shares during the yearunder review and hence no information as per provisions of Section 54(1)(d) of the Actread with Rule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
h. The Company has not issued any equity shares under Employees StockOption Scheme during the year under review and hence no information as per provisions ofSection 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital andDebenture) Rules 2014 is furnished.
i. During the year under review there were no instances ofnon-exercising of voting rights in respect of shares purchased directly by employees undera scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (ShareCapital and Debentures) Rules 2014 is furnished.
j. The Board of Directors have complied with applicable SecretarialStandards as specified u/s. 118 of Companies Act 2013.
k. The Company confirms that it has paid the Annual Listing Fees forthe year 2022-23 to BSE Ltd where the Company?s Shares are listed.
l. During the Financial year no application has been made and noproceeding is pending under the Insolvency and Bankruptcy Code 2016. m. During the yearunder review there were no instance of one-time settlement with banks or financialinstitutions and hence the differences in valuation as enumerated under Rule 8(5)(xii) ofCompanies (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 2013read with the Investors Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 and all the applicable amendments and re-enactments madethereunder all shares in respect of which dividend has not been paid or claimed for sevenconsecutive years or more shall be transferred by the Company in the name of InvestorEducation and Protection Fund.
During the year under review there is no unpaid dividend is requiredto be transferred to the Investor Education and Protection Fund Authority the Companytransferred the Dividend on Shares of Rs. 95482.5 of f.y. 2020-21 to IEPF as per Section124(6) of the Companies Act 2013.
Your Directors believe that the key to success of any Company are itsemployees. Your Company has a team of able and experienced professionals whose dedicatedefforts and enthusiasm has been an integral part of your Company?s growth. YourDirectors would like to place on record their deep appreciation of their continuous effortand contribution to the Company.
|For and On behalf of Board of Directors |
|Umesh J. Sanghavi |
|Chairman and Managing Director |
|DIN: 00491220 |
|Place: Mumbai |
|Date: 09th August 2022 |