13(A) In the AGM dated September 12, 2022 , the sub-division of 1 equity share [Face Value Rs.10/- each, fully paid up], into 10 equity shares [Face Value of Re.1/- each fully paid up] was approved. The Board of Directors approved the record date as October 13, 2022 vide circular resolution effected on September 22, 2022.
(b) Terms/rights attached to equity shares:
The Company has one class of Equity shares having a par value of Re. 1/- per share. Each shareholder is eligible for 1 vote per share held. The dividend if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
During the year ended March 31, 2024, the Company has paid final dividend of Rs. 0.2/- per Equity Share of face value of Rs. 1/- each aggregating to Rs 91.89 Lakhs.
Nature and purpose of reserve
(a) Capital Reserve
The Capital reserve represents the amount recognised long back upon takeover of a running manufacturing unit.
(b) Securities premium
Securities Premium reserves is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares, writing off the preliminary expenses in accordance with the provisions of the Companies Act, 2013.
(c) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
(d) General reserve
Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.
(e) Other comprehensive income
Other comprehensive loss of Rs. 1.20 lakhs consists of:
(i) Remeasurement loss on employees defined benefit expenses of Rs. 2.27 lakhs and deferred tax credit thereon of Rs. 0.57 lakhs (ii) Fair value gain arising out of change in fair value of investment in equity shares of Rs. 0.50 lakhs
(c) Secured longterm borrowings of Rs.1,651.25 lakhs (Rs.1,404.05 lakhs) are personally guaranteed by some of the directors of the Company
(d) Current maturities of Term Loans,Vehicle Finance from Bank and Sales Tax Deferral amounting to Rs. 820.56 lakhs (Previous Year Rs. 1,099.48 lakhs) is disclosed under 'Borrowings' (Refer Note 19)
(b) Particulars of security for the secured short-term borrowings:
Nature of Security
The facilities from the consortium banks viz.Bank of India, Standard Chartered Bank, Yes Bank and DBS Bank are secured against hypothecation of stock of raw & packing materials, finished goods, book debts and plant & machineries of the Company on pari passu basis. Further they are collaterally secured against equitable mortgage of factory blocks at Dahanu & Silvassa.
Secured shortterm borrowings of Rs.1,723.63 lakhs (Previous year Rs.477.04 lakhs) are personally guaranteed by some of the promoter directors and collaterally secured by way of (i) Pledge of 57,28,900 equity shares of Re. 1 each/- held by some promoters of the Company (ii) Equitable mortgage of certain residential flats of the promoter directors in favour of the said banks on pari passu basis.
Note : 34 Employee benefit expense
(a) Defined contribution plans:
The amount recognised as expense in respect of defined contribution plans (Contribution to provident fund) aggregate to Rs. 68.89 lakhs (previous year Rs. 73.30 lakhs).
(b) Retirement Benefit - Gratuity:
The employees of the Company are eligible for gratuity in accordance with the payment of gratuity act, and is a defined employee benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under projected unit credit method of acturial valuation.
The following table summaries the components of the employee benefit expenses recognised in the Statement of profit and loss and the amount recognised in the balance sheet for the gratuity provision made under actuarial method.
Statement of Profit and Loss
Net employee benefit expenses recognised in Employee Benefit Expenses
(B) Financial risk management objectives
The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk, credit risk and liquidity risk. The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising foreign exchange forward contracts. Compliance with policies and exposure limits is a part of Internal Financial Controls. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes.
(C) Market risk
The Company's activities expose it primarily to the financial risk of changes in foreign currency exchange rates (see note E below). The Company enters into foreign exchange forward contracts to manage its exposure to foreign currency risk of net imports.
(D) Foreign currency risk management
(i) Exposure in foreign currency -Hedged
The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.
(E) Foreign exchange forward contracts ADHESIVES LTD.
It is the policy ofthe Company to enter into foreign exchange forward contracts to cover foreign currency payments (net of receipts) in USD and EUR.The Company enters in to contracts with terms upto 90 days.The Company's philosophy does not permit any speculative calls on the currency. It is driven by conservatism which guides that we follow conventional wisdom by use of Forward contracts in respect of Trade transactions.
Regulatory Requirements: The Company does alter its hedge strategy in relation to the prevailing regulatory framework.and guidelines that may be issued by RBI, FEDAI or ISDA or other regulatory bodies from time to time.
Mode of taking Cover: Based on the outstanding details of import payable and export receivable (in weekly baskets) the net trade import exposure is arrived at i.e imports - exports = net trade exposures.The net trade import exposure arrived at is netted off with the outstanding forward cover as on date. The forward cover deals are all backed by actual trade underlines and settlement of these contracts on maturity by actual delivery of the hedged currency for settling the underline hedged trade transaction.
(F) Credit risk management
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit rating.The Company's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.
(G) Liquidity risk management
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost effective manner.
(H) Fair value measurements
Some of the Company ' s financial assets and financial liabilities are measured at fair value at the end of each reporting period. This note provides information about those assets and the basis of determination of the fair values in respect thereof.
(ii) The fair value hierarchy:
Level 1: valuation based on quoted market price: financial instruments with quoted prices for identical instruments in active markets that the Company can access at the measurement date.
Level 2: valuation using observable inputs: financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.
Level 3: valuation technique with significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable.
(iii) Financial instruments measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
Note : 40 Disclosure under Amendment to Ind AS 7 regarding impact of non- cash transactions on financial liabilities
Effective April 1, 2017 the Company adopted the amendment to Ind AS 7, which requires the Company to provide disclosure that will enable users of financial statements to evaluate changes in liabilities from financing activities, including changes arising from cash flow and non cash changes. In order to meet this disclosure requirement, the reconciliation between the opening and closing balances for liabilities arising from financing activities in the
Note: 42 (B) Additional Regulatory Information required by Schedule III of The Companies Act, 2013
(i) All immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) are held in the name of the Company.
(ii) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(iii) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets), and Intangible Assets during the year.
(iv) The Company does not hold any investment property during the year and as at the year end.
(v) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The quarterly statements filed by the Company with such banks are generally in agreement with the unaudited books of account and the differences between the quarterly returns and books of account are explainable and not material in nature.
(vi) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.
(vii) There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
(viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(ix) The Company has not advanced or loaned or invested (either from borrowed funds or share permium or any other sources or kind of funds ) to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(x) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(xi) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the IncomeTax Act, 1961).
(xii) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(xiii) There are no loans or advances in the nature of loan granted to promoters, directors, KMPs and the related parties, either severally or jointly with any other person.
(xiv) The Company has not made any investments, provided guarantee or security or granted any advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties during the year.
(xv) There are no layers to the Company as prescribed under clause (87) of section 2 of Act read with the Companies (Restriction on number of Layers) Rules.
(xvi) The Company has not entered into scheme of arrangement during the year.
Note : 43 Contingent Liabilities
There is no contingent liability as on March 31, 2024. ( Previous Year: NIL)
Note : 44 The Board of Directors have recommended a payment of final dividend of Rs. 0.20/- (Twenty paise only) per equity share of face value of Re.1 each for the financial year ended March 31, 2024.
Note : 45 The figures for the previous year have been regrouped or rearranged wherever necessary.
Note : 46 Figures have been rounded off to nearest lakhs.
Note : 47 The financial statements of the Company for the year ended March 31, 2024 were approved for issue by the Board of Directors at their meeting held on May 22, 2024.