Directors Report of Nikhil Adhesives Ltd.

Mar 31, 2018

The Board of Directors are pleased to present the Thirty Second Annual Report together with the audited Accounts for the financial year ended 31^st March 2018.

In Financial Year 2017-18 your company has continued the phase of positive outlook and optimism in the country due to government policies which had resulted in an overall improvement in the economic outlook. Even though the global economy remained lukewarm due to several factors your company has nevertheless improved its profitability.

FINANCIAL HIGHLIGHTS:

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

Particulars	Financial Year 2017-lfi	Financial Year 2016-17
Gross Profit Before Depreciation and Tax	609.36	454.18
Less:- Depreciation	176.04	148.75
Profit Before Tax	433.32	305.43
Less:- Provision tor Taxation
Current Tax	130.00	77.00
Deferred Tax	17.68	24.33
Profit After Tax	285.64	204.10

DIVIDEND

The Board of Directors has recommended prorata dividend of Rs. 1/- (Rupee One only)per equity share of face value of Rs. 10/- (Rupee Ten only) for the Financial Year ended March 31, 2018 subject to the approval of share holders.

RESULT OF OPERATIONS

Particulars	2017-18	2016-17	%
Gross Sales Turnover	34508	29489	17.02
Net Sales Turnover	33561	26512	26.59
Other Income	69	8	762.50
Operating Profit	610	454	34.36
Net Profit	286	205	39.51

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 deposits at the beginning of the financial year were 231.50 Lakhs.

During the year, your Company accepted deposits amounting to 225.50 Lakhs from its members .As at 31 March, 2018, the amount of deposits stood at Rs. 438.35 Lakhs. There has been no default in repayment of deposits or payment of interest during the year. All the deposits accepted by the Company are in compliance with the requirements of Chapter V of the Companies Act, 2013.

CORPORATE GOVERNANCE

The Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director conforming compliance by all the Board Members and Senior Management Personnel with Company''s Code of Conduct, Joint Certification by the Managing Director and CFO to the Board and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Board at meeting held on 14th February 2018 noted that accordance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014.The Company is statutorily not required to contribute any amount towards CSR for the financial year 2017-18. Accordingly the company has not undertaken any CSR activities during the year under review.

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 March 31, 2018, 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 such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2018and the profit of the Company for the year ended on that date;

c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of 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

In terms of Section(s) 149,152 and all other applicable provisions of the Companies Act, 2013, for the purpose of determining the directors liable to retire by rotation, the Independent Directors are not included in the total number of directors of the Company. Accordingly, Mr. Tarak J. Sanghavi(DIN:00519403), Director shall retire by rotation at the ensuring Annual General Meeting and being eligible, has offered himself for re-appointment as a Director of the Company.

The details of Directors seeking re-appointment Mr. Tarak J. Sanghavi as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given in the notice of the ensuring Annual General Meeting, which is being sent to the shareholders along with Annual Report.

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.

MEETINGS OF BOARD AND COMMITTEES

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

PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS

The Listing Agreement, 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 Director 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 terms of reference which internally deals with the manner of selection of Directors and the Key Managerial Personnel of the Company. The NRC recommends appointment of Director /appointment to re-appointment of Managing Director based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Board''s balance of professional experience, background, viewpoints, skills and areas of expertise.

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

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

M/s.PHD & Associates, Chartered Accountants (Firm Registration-No.lll236W), were appointed as Statutory Auditors to hold office until the conclusion of the ensuing Annual General Meeting of the Company.

In the 29th AGM. Messrs PHD & Associates who were functioning as Auditors of the Company for five consecutive years, the Board of Directors unanimously had agreed to the recommendation of the Audit Committee and had appointed Messrs PHD & Associates as Statutory Auditors of the Company for another term of 5 (five) years from the conclusion of that Annual General Meeting (29th AGM) till the conclusion of fifth consecutive Annual General Meeting. In accordance with the first proviso of Section 139(1) of the Companies Act, 2013 the appointment of the Auditors is to be ratified by members at every Annual General Meeting. The Auditors have confirmed their eligibility to the effect that the ratification of their appointment, if made, would be within the prescribed limits of the Companies Act,2013 and that they are not disqualified for such appointment.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs D. M. Zaveri& Co., Company Secretaries were appointed to undertake the Secretarial Audit of the Company for the year ended 31 March, 2018. The Report of the Secretarial Auditor is given in Annexure-I, which is attached hereto and forms a part of the Directors’ Report.

There are no qualifications or adverse remarks by the Statutory Auditors or the Secretarial Auditors, save and except the observation that a sum of ? 1,13,569 which was required to be transferred to the Investor Education and Protection Fund (Fund) by the Company in the month of October, 2017, is pending transfer. The management is taking necessary steps to comply with the transfer of the said amount to the Fund.

COST AUDITORS

The Board of Directors has appointed Messrs B. F. Modi & Associates, Cost Accountants, as 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 Cost Auditors is subject to ratification by the shareholders in the ensuing Annual General Meeting of the Company.

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 were on an 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 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. 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 linkhttp://www.nikhiadhesives.com

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of Loans, Guarantees and Investment in pursuance to Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

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

An Extract of Annual Return as per Section 92(3) of the Companies Act, 2013 is given in Annexure- III, which is attached here to and forms a part of the Directors'' Report.

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-IV which is attached hereto and forms a part of the Directors’ 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. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

e. During the year under review, there were no cases filed or reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,2013.

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.

ACKNOWLEDGEMENT

The Board desires to place on record its grateful appreciation for the excellent assistance and co-operation received from the Government Authorities and continued support extended to the Company by the bankers, investors, suppliers and esteemed customers and other business associates. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.

For and On Behalf of the Board of Directors

Place: Mumbai Rajendra J. Sanghavi

Date: 30th May 2018 Chairman

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Mar 31, 2015

The Board of Directors is pleased to present the Twenty Ninth Annual Report together with the Audited Accounts for the financial year ended 31 st March 2015.

FINANCIAL HIGHLIGHTS:

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

(Rs. in 000's)

Financial Year Financial Year 2014 - 2015 2013 - 2014

Gross Profit Before Depreciation and Tax 23,534 27,884

Less :- Depreciation 18,153 24,176

Profit Before Tax 5,381 3,708

Less :- Provision for Taxation - -

Current Tax - -

Deferred Tax 1,579 1,059

Profit After Tax 3,802 2,649

Add :- Balance Brought Forward 22,973 20,324

Profits Available For Distribution 26,775 22,973

Balance Carried Forward to Balance Sheet 26,775 22,973

DIVIDEND

In view of low profits after tax for the financial year 2014 -15, your Directors express their inability to declare any dividend.

RESULT OF OPERATIONS

The Financial Year 2014-2015 ushered a phase of positive outlook and optimism in the country due to decisive political mandate, which resulted in an overall improvement in the economic outlook. However, the global economy remained lukewarm mainly due to sharp fall in the commodity prices particularly crude oil. This coupled with volatility in foreign exchange market, affected the profitability of your company.

During the financial year 2014-15 ,the sales turnover of your company has increased from Rs.25826 lakhs to Rs.28355 lakhs registering growth of 9.79%.Other income for the year is Rs.33 lakhs as against Rs.18 lakhs for the previous year. The operating profit before depreciation and tax is Rs.235.34 lakhs compared to Rs.278.84 lakhs in the previous year registering 15.60% decrease due to forex losses and volatility in raw material prices.

The net profit after depreciation and tax is improved to Rs.38.02 lakhs compared to Rs.26.49 lakhs for the previous year. Net profit of Rs.38.02 lakhs for the current year is after providing for deferred tax of Rs.15.79 lakhs.

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

SUBSIDIARY COMPANY

During the year under report, M/s Sanghavi Logistics Private Limited ceased to be the subsidiary of the company.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any Public Deposits and there were no unclaimed deposits or interest thereon as on 31st March, 2015.

CORPORATE GOVERNANCE

Pursuant to Clause49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director confirming compliance by all the Board Members and Senior Management Personnel with Company's Code of Conduct, Joint Certification by the Managing Director and CFO to the Board and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Board at its meeting held on 14th February, 2015 noted that in accordance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014.The company is statutorily not required to contribute any amount towards CSR for the financial year 2014-15. Accordingly the company has not undertaken any CSR activities during the year under review.

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 March 31, 2015, 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 such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and the profit of the Company for the year ended on that date;

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of 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 and option contracts to hedge its exposure to movements in foreign exchange rate. The use of this foreign exchange forward and option contracts reduces the risk /cost 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

In terms of Section(s) 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 , Shri. R.J. Sanghavi (DIN: 00245637 ), Director shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as a Director of the Company.

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Ishita Gandhi (DIN:071337098 ) was appointed as an Additional Director in the category of Non-executive Independent Director w.e.f. 28th March, 2015 and she holds office as such up to the date of ensuing Annual General Meeting. Smt. Ishita Gandhi is not disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013. The Company has received requisite notice in writing from a member proposing her candidature as an Independent Director at the ensuing Annual General Meeting. Your Board based on the recommendation of the Nomination and Remuneration Committee recommends appointment of Smt. Ishita Gandhi as Independent Director not liable to retire by rotation for a period of 5years with effect from 28 March, 2015.

The details of Directors/Managing Director seeking appointment/re-appointment as required under Clause 49 of the Listing Agreement with Stock Exchanges are given in the Notice of the ensuing Annual General Meeting, which is being sent to the shareholders along with Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of your Company have individually and severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013 affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act ,2013 and Clause 49 of the Listing Agreement with stock exchanges. Based on the declaration(s) of Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have full filled the conditions as specified in the Companies Act, 2013 rules made thereunder as well as relevant provisions of Clause 49 of the Listing Agreement with stock exchange.

KEY MANAGERIAL PERSONNEL

During the year under review the Board of Directors on the recommendation of the Nomination and Remuneration Committee appointed Mr. Yogendra.A.Nakre as Chief Financial Officer of the company.

MEETINGS OF BOARD AND COMMITTEES

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

PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS

Pursuant to the Provisions of the Companies Act, 2013 and as stipulated under Clause 49 of the Listing Agreement, the Board of Directors of the Company carried out the formal annual performance evaluation of all the Directors and also its self-evaluation process, interalia, 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 Director 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, interalia, 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 IRREMUNERATION

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, interalia, deals with the manner of selection of Directors and the Key Managerial Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director 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.

AUDITORS

Messrs PHD & Associates, Chartered Accountants (Firm Registration No. 111236W), were appointed as Statutory Auditors to hold office until the conclusion of the ensuing Annual General Meeting of the Company. Since Messrs PHD & Associates have been functioning as Auditors of the Company since last five consecutive years, the Board of Directors unanimously agreeing to the recommendation of the Audit Committee, further recommends re-appointment of Messrs PHD & Associates as Statutory Auditors of the Company for another term of 5 (five) years from the conclusion of the ensuing Annual General Meeting

(29 th AGM) till the conclusion of fifth consecutive Annual General Meeting (34 th AGM) hereafter, subject to ratification by shareholders in every Annual General Meeting, which is in accordance with the provisions of Section 139 read together with other provisions of Chapter X of the Companies Act, 2013 and the Rules made there under. A certificate has been received from them to the effect that their appointment as Auditors, if made, would be in accordance to the provisions of Section 139 and 141 of the Companies Act, 2013 and rules framed thereunder.

The Board of Directors has appointed Messrs B.F. Modi and Associates, Cost Accountants, as 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 Cost Auditors is subject to ratification by the shareholders in the ensuing Annual General Meeting of the Company.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs V. A. Vakharia & Associates, Company Secretaries were appointed to undertake the Secretarial Audit of the Company for the year ended 31 st March, 2015. There are no adverse remarks or observations made by Messrs V A Vakharia & Associates in the Secretarial Audit Report except for the non appointment of the Company Secretary by the company, required as per the provisions of Section 203 of the Companies Act, 2013 The Report of the Secretarial Auditor is given in Annexure-I, which is attached hereto and forms a part of the Directors' Report.

The Company is in the process of appointing a Company Secretary.

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 were on an 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 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. 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 SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of Loans, Guarantees and Investment in pursuance to Section 186 of the Companies Act,2013 are given in the Notes to the Financial Statements.

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 employees 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

An Extract of Annual Return as per Section 92(3) of the Companies Act, 2013 is given in Annexure- III, which is attached here to and forms a part of the Directors' Report.

PARTICULARS OF EMPLOYEES

The particulars required pursuant to Section197 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 Directors 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. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

e. During the year under review, there were no cases filed or reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

The Board desires to place on record its grateful appreciation for the excellent assistance and co-operation received from the Government Authorities and continued support extended to the Company by the bankers, investors, suppliers and esteemed customers and other business associates. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.

On Behalf of the Board of Directors

Place : Mumbai (Rajendra J. Sanghavi)

Date : 30th May 2015 Chairman

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Mar 31, 2014

The Members of Nikhil Adhesives Limited

The Board of Directors is pleased to present the Twenty Eighth Annual Report together with the Audited Accounts for the financial year ended 31st March 2014.

FINANCIAL HIGHLIGHTS:

Summary of the Financial Results for the year on Standalone basis is as under: -

(Rs in 000''s)

Financial Year Financial Year 2013-2014 2012-2013

Gross Profit Before Depreciation and Tax 27884 32248

Less :- Depreciation 24176 17481

Profit Before Tax 3708 14767

Less :- Provision for Taxation

Current Tax - -

Deferred Tax 1059 9110

Profit After Tax 2649 5657

Add:- Balance Brought Forward 20324 18313

Profits Available For Distribution 22973 23970

Appropriation

Proposed Dividend Including Dividend Tax - 3646

Transfer to General Reserve - -

Carried Forward to Balance Sheet 22973 20324

22973 23970

DIVIDEND

In view of substantially lower profits after tax for the financial year 2013 - 14, your Directors express their inability to declare dividend.

RESULT OF OPERATIONS (STANDALONE)

The Financial Year 2013-2014 was yet another challenging year both domestically, and globally. Amidst challenging business environment, slowdown in economic growth and forex market volatility which continued throughout 2013-14, your company endeavored to achieve the projected business targets during the reporting period.

The sales turnover of your company has increased from ''19987 lacs to Rs.25826 lacs registering growth of approx 29.21 %. Other income for the year is Rs. 18 lacs as against Rs. 2 lacs for the previous year. The operating

profit before depreciation and tax is Rs. 278.84 lacs compared to Rs.322.48 lacs in the previous year registering about 13% decrease due to forex losses. The net profit after depreciation and tax is Rs. 26.49 lacs compared to Rs. 56.57 lacs for the previous year. Net profit of Rs. 26.49 lacs for the current year is after providing for deferred tax of Rs. 10.59 lacs. Reduction in net profit for the current year is primarily due to foreign currency fluctuation loss & higher depreciation attributable to the expansion project at Dahej.

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

SUBSIDIARY COMPANY & CONSOLIDATED ACCOUNTS

In 2009, the company had invested in a wholly owned Subsidiary Company, Sanghavi Logistics Pvt. Ltd. The subsidiary company has not yet commenced its business activities. In accordance with Accounting Standard (AS-21) as well as clause 32 of the Listing Agreement, Consolidated financial statements are provided in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The company will make available the Annual Accounts of the subsidiary company to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company. Summary of the financial statements of the subsidiary company, pursuant to Section 212(8) of the Companies Act, 1956, forms part of the financial statements.

DEPOSITS

During the year the Company has accepted Public Deposits of Rs. 83.26lacs within the meaning of Section 58A of the Companies Act 1956. The outstanding Public Deposits as at the Balance Sheet date are Rs. 195.27 lacs.

INSURANCE

The Company''s assets being buildings, plant & machinery and stocks are adequately insured.

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

The particulars required under section 217(1) (e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure to this report.

PARTICULARS OF EMPLOYEES

None of the employees has been paid remuneration exceeding the amount specified under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence the disclosure requirement under the above section is not applicable.

DIRECTORS

Pursuant to section 152 of the Companies Act, 2013, Mr.Tarak J Sanghavi, Director of the Company retires by rotation and being eligible, offers himself for re-appointment.

As per the provisions of the Companies Act,2013, Independent Directors are required to give a declarion that they meet the criteria of Independence in the first Board Meeting in which they participate as Director and thereafter at the first meeting of the Board in each Financial Year. Accordingly, existing Directors of the Company, Mr.M.M.Vora, Mr.H.S.Kamath and Mr.S.R.Sanghavi have declared their status of independence as per the criteria laid down u/s 149(6) of the Companies Act, 2013. The Board of Directors on recommendation of Nomination and Remuneration Committee has perused their declarations and has found them to be meeting

the criteria of independence. Further, in view of the experience and expertise relevant to the Company''s operations, your Directors have deemed it prudent to recommend to the Shareholders at the ensuing Annual General Meeting their appointment as Independent Directors, not liable to retirement by rotation pursuant to the provisions of Section 149, 1 52 read with Schedule IV and other applicable provisions of the Companies Act, 2013.

In compliance with the Clause 49(IV)(G) of the Listing Agreement, brief resume of the Directors, their expertise and other details of Directors proposed to be appointed /re - appointed are provided in the Corporate Governance Report. Appropriate resolutions for appointment / re-appointment of the Directors are being placed for approval of the members at the ensuing Annual General Meeting.

Mr.A.P.Singh ceases to be a Director of the Company w.e.f 28th August, 2013 due to his demise. The Board of Directors sincerely acknowledges his efforts and places on record its deep sense of appreciation of valuable contribution made by him.

AUDITORS

The Auditors of the Company M/s. PHD & Associates, Chartered Accountants, holds office until the conclusion of the ensuing Annual General Meeting. The Company has received a written consent and a certificate from the Auditors to the effect that their re-appointment, if made, would be in accordance with the provision of the Companies Act, 2013.

COST AUDITORS AND COST AUDIT REPORT

The Board of Directors at their meeting held on 30th May 2013, has appointed M/s. B. F. Modi &Associates, as the cost Auditors, to conduct the audit of cost records for the year 2013-2014.

COMPLIANCE CERTIFICATE

As required by Proviso to Section 383A of the Companies Act, 1956, a copy of the Compliance Certificate is attached to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state that:-

- in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- they have selected such accounting policies and applied them consistently and made judgments 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 th e end of the financial year and of the profit of the company for that period;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company continues to comply with the requ irements of the Listing Agreement entered into with Bombay Stock Exchange Ltd. where your Company''s shares are listed. Pursuant to the Clause 49, your Company has laid down risk minimization procedures pertaining to key areas of your Company''s operations and the same shall be reviewed periodically by the Board of Directors. Your Company has also adopted a Code of Conduct for its Board Members and Senior Management Personnel and the same has been posted on your Company''s website. All the Directors and the Senior Management Personnel of your Company have affirmed compliance with the said Code of Conduct. The CEO/CFO certification signed by the Managing Director pursuantto clause

49(V) of the Listing Agreement was placed before the Board of Directors at their meeting. The Management Discussion and Analysis and a report on Corporate Governance are included as a part of the Directors'' Report. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

EMPLOYEES RELATIONS

The relations with employees remained very cordial during the year under review. Your Directors appreciate the efficient and devoted services rendered by the executives, staff and the workers.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks for support and co-operation received from Company''s bankers, Bank of India, Standard Chartered Bank and Yes Bank Ltd. Your Directors also acknowledge with gratitude the co-operation received from various Government Authorities and other agencies.

On Behalf of the Board of Directors

Place: Mumbai R. J. Sanghavi Date : 30th May 2014. Chairman

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Mar 31, 2013

To The Members of Nikhil Adhesives Limited

The Board of Directors is pleased to present the Twenty Seventh Annual Report together with the Audited Accounts for the financial year ended 31st March 2013.

FINANCIAL HIGHLIGHTS:

Summary of the Financial Results for the year on Standalone basis is as under: -

(Rs.in 000''s)

Financial Year Financial Year 2012- 2013 2011- 2012

Gross Profit Before Depreciation and Tax 32248 23069

Less :- Depreciation 17481 11562

Profit Before Tax 14767 11507

Less :- Provision for Taxation

Current Tax 5100

Deferred Tax 9110 (1341) Profit After Tax 5657 7748

Add :- Balance Brought Forward 18313 14961

Profits Available For Distribution 23970 22709

Appropriation

Proposed Dividend Including Dividend Tax 3646 3621

Transfer to General Reserve 775

Carried Forward to Balance Sheet 20324 18313

23970 22709





DIVIDEND

The Board has pleasure in recommending a dividend of 8% i.e. ` 0.80 per equity share for the financial year ended 31st March 2013. The proposed dividend will absorb a sum of ` 36.46 Lacs including tax on dividend.

RESULT OF OPERATIONS (STANDALONE)

The Financial Year 2012-2013 was yet another challenging year both globally and domestically. Amidst several challenges, your company endeavored to achieve the projected business targets under exceptional global market developments during the reporting period.

The sales turnover of your company has increased from `18002 lacs to `19987 lacs registering growth of approx 11.03 %. Other income for the year is ` 2 lacs as against ` 10 lacs for the previous year. The operating profit before depreciation and tax is ` 322.48 lacs compared to `230.69 lacs in the previous year registering about 40% increase due to contribution from new unit at Dahej. The net profit after depreciation and tax is ` 56.57 lacs compared to ` 77.48 lacs for the previous year. Net profit of ` 56.57 lacs for the current year is after providing for deferred tax of ` 91.10 lacs. Reduction in net profit for the current year is primarily due to foreign currency translation loss.

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

SUBSIDIARY COMPANY & CONSOLIDATED ACCOUNTS

In 2009, the company had invested in a wholly owned Subsidiary Company, Sanghavi Logistics Pvt. Ltd. The subsidiary company has not yet commenced its business activities. In accordance with Accounting Standard (AS-21) as well as clause 32 of the Listing Agreement, Consolidated financial statements are provided in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The company will make available the Annual Accounts of the subsidiary company to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company. Summary of the financial statements of the subsidiary company, pursuant to Section 212(8) of the Companies Act, 1956, forms part of the financial statements.

DEPOSITS

During the year the Company has accepted Public Deposits of ` 98.79 lacs within the meaning of Section 58A of the Companies Act 1956. The outstanding Public Deposits as at the Balance Sheet date are ` 212.85 lacs.

INSURANCE

The Company''s assets being buildings, plant & machinery and stocks are adequately insured.

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

The particulars required under section 217(1) (e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure to this report.

PARTICULARS OF EMPLOYEES

None of the employees has been paid remuneration exceeding the amount specified under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence the disclosure requirement under the above section is not applicable.

AUDITORS

The Auditors, PHD & Associates, Chartered Accountants, retire at the ensuring Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

COST AUDITORS AND COST AUDIT REPORT

Pursuant to the directives of the Central Government under provisions of Section 233 B of the CompaniesAct,1956, the company is in the process of appointing Cost Auditors to conduct cost audit relating to products manufactured by the company. The cost audit report will be filed with the Central Government as per timelines.

COMPLIANCE CERTIFICATE

As required by Proviso to Section 383A of the Companies Act, 1956, a copy of the Compliance Certificate is attached to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state that:-

in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

they have selected such accounting policies and applied them consistently and made judgments 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;

they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company continues to comply with the requirements of the Listing Agreement entered into with Bombay Stock Exchange Ltd. where your Company''s shares are listed. Pursuant to the Clause 49, your Company has laid down risk minimization procedures pertaining to key areas of your Company''s operations and the same shall be reviewed periodically by the Board of Directors. Your Company has also adopted a Code of Conduct for its Board Members and Senior Management Personnel and the same has been posted on your Company''s website. All the Directors and the Senior Management Personnel of your Company have affirmed compliance with the said Code of Conduct. The CEO/CFO certification signed by the Managing Director pursuant to clause 49(V) of the Listing Agreement was placed before the Board of Directors at their meeting. The Management Discussion and Analysis and a report on Corporate Governance are included as a part of the Directors'' Report. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

EMPLOYEES RELATIONS

The relations with employees remained very cordial during the year under review. Your Directors appreciate the efficient and devoted services rendered by the executives, staff and the workers.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks for support and co-operation received from Company''s bankers, Bank of India, Standard Chartered Bank and Yes Bank. Your Directors also acknowledge with gratitude the co-operation received from various Government Authorities and other agencies.

On Behalf of the Board of Directors

Place : Mumbai R. J. Sang havi

Date : 30th May 2013. Chairman

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Mar 31, 2011

The Board of Directors is pleased to present the Twenty Fifth Annual Report together with the Audited Accounts for the financial year ended 31st March 2011.

FINANCIAL HIGHLIGHTS:

Summary of the Financial Results for the year on Standalone basis is as under: -

(Rs. in 000’s) Particulars Financial Year Financial Year 2010- 2011 2009 – 2010

Gross Profit Before Depreciation and Tax 48762 46979

Less :- Depreciation 11188 9634

Profit Before Tax 37574 37345

Less :- Provision for Taxation

Current Tax 13800 12000

Fringe Benefit Tax - -

Deferred Tax (896) 2175

Tax Adjustments for earlier years - 472

Profit After Tax 24671 22698

Add :- Balance Brought Forward 13216 8467

Profits Available For Distribution 37887 31165

Appropriation

Proposed Dividend Including Dividend Tax 5426 5449

Transfer to General Reserve 17500 12500

Carried Forward to Balance Sheet 14961 13216

37887 31165

DIVIDEND

The Board has pleasure in recommending a dividend of 12% i.e. Rs. 1.20 per equity share for the financial year ended 31st March 2011. The proposed dividend will absorb a sum of Rs.54.26 lakhs including tax on dividend.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs.175 Lacs to the General Reserve and an amount of Rs.149.60 Lacs is proposed to be retained in the Profit & Loss Account.

RESULT OF OPERATIONS (STANDALONE)

The Financial year ended 2010-11 was a year of improved performance and consolidation for your company. Even though the global and national economic scenario posed several challenges, your Company has made the best of the available opportunities and resources for growth.

The sales turnover of your company has increased from Rs. 12916 lacs to Rs. 14208 lacs registering growth of approx 10%. Other income for the year is Rs. 42 lacs as against Rs. 4 lacs for the previous year. The operating profit before depreciation and tax is Rs. 487.63 lacs compared to 469.79 lacs in the previous year registering about 4% increase due to stability in foreign currency market and better realizations for the Company’s products. The profit after depreciation and tax is Rs. 246.71 lacs compared to Rs.226.98 lacs for the previous year. Detailed analysis of the performance of your Company is presented in the Management Discussion and Analysis Report forming part of this Annual Report.

SUBSIDIARY COMPANY & CONSOLIDATED ACCOUNTS

Last year the company had invested in a wholly owned Subsidiary Company, Sanghavi Logistics Pvt. Ltd. The subsidiary company has not yet commenced its business activities. In accordance with Accounting Standard (AS- 21) as well as clause 32 of the Listing Agreement, Consolidated financial statements are provided in the Annual Report. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Accounts and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The company will make available the Annual Accounts of the subsidiary company to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company.

DEPOSITS

During the year the Company has accepted Public Deposits of Rs. 125.15lacs within the meaning of Section 58A of the Companies Act 1956. The outstanding Public Deposits as at the Balance Sheet date are Rs.125.05lacs.

INSURANCE

The Companys assets being buildings, plant & machinery and stocks have been adequately insured.

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

The particulars required under section 217(1) (e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure to this report.

PARTICULARS OF EMPLOYEES

None of the employees has been paid remuneration exceeding the amount specified under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence the disclosure requirement under the above section is not applicable.

AUDITORS

The Auditors, PHD & Associates, Chartered Accountants, retire at the ensuring Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

COMPLIANCE CERTIFICATE

As required by Proviso to Section 383A of the Companies Act, 1956, a copy of the Compliance Certificate is attached to this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state that:-

- in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- they have selected such accounting policies and applied them consistently and made judgments 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;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company continues to comply with the requirements of the Listing Agreement entered into with Bombay Stock Exchange Ltd. where your Company’s shares are listed. Pursuant to the Clause 49, your Company has laid down risk minimization procedures pertaining to key areas of your Company’s operations and the same shall be reviewed periodically by the Board of Directors. Your Company has also adopted a Code of Conduct for its Board Members and Senior Management Personnel and the same has been posted on your Company’s website. All the Directors and the Senior Management Personnel of your Company have affirmed compliance with the said Code of Conduct. The CEO/CFO certification signed by the Managing Director pursuant to clause 49(V) of the Listing Agreement was placed before the Board of Directors at their meeting. The Management Discussion and Analysis and a report on Corporate Governance are included as a part of the Directors’ Report. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

EMPLOYEES RELATIONS

The relations with employees remained very cordial during the year under review. Your Directors appreciate the efficient and devoted services rendered by the executives, staff and the workers.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks for support and co-operation received from Companys bankers, Bank of India, Standard Chartered Bank and Barclays Bank PLC. Your Directors also acknowledge with gratitude the co-operation received from various Government authorities and other agencies.

On Behalf of the Board of Directors

R. J. Sanghavi Chairman

Place: Mumbai Date : 30th May 2011.

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Mar 31, 2010

The Board of Directors is pleased to present the Twenty Fourth Annual Report together with the Audited Accounts for the financial year ended 31st March 2010.

FINANCIAL HIGHLIGHTS:

Summary of the Financial Results for the year on Standalone basis is as under: -

(Rs. in 000s)

Financial Year Financial Year

2009 - 2010 2008 - 2009

Gross Profit Before Depreciation and Tax 46979 23709

Less - Depreciation 9634 9830

Profit Before Tax 37345 13879

Less :- Provision for Taxation

Current Tax 12000 4900

Fringe Benefit Tax - 475

Deferred Tax 2175 (239)

Tax Adjustments for earlier years 472 -

Profit After Tax 22698 8743

Add :- Balance Brought Forward 8467 7369

Profits Available For Distribution 31165 16112

Appropriation

Proposed Dividend Including Dividend Tax 5449 3645

Transfer to General Reserve 12500 4000

Carried Forward to Balance Sheet 13216 8467

31165 16112

DIVIDEND

The Board has pleasure in recommending a dividend of 12% i.e. Rs. 1.20 per equity share for the financial year ended 31st March 2010. The proposed dividend will absorb a sum of Rs.54.49 lakhs including tax on dividend.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 125 Lacs to the General Reserve and an amount of Rs. 132.16 Lacs is proposed to be retained in the Profit & Loss Account.

RESULT OF OPERATIONS (STANDALONE)

Despite the global slowdown, the Indian economy grew by 7.40% during 2009-10, as against 6.70% for the previous year, supported by the Governments stimulus package.Revival in consumption boosted the industrial and service sector in the economy. The manufacturing sector made a significant contribution to the growth of Indian economy.

The sales turnover (net of VAT / Sales Tax and Excise Duty) of your company has increased from Rs . 10258 lacs to Rs. 12038 lacs registering growth of 17.35%. Other income from operations for the year is Rs. 142 lacs as against Rs. 185 lacs for the previous year. The operating profit before depreciation and tax is Rs. 469.79 lacs compared to 237.09 lacs in the previous year registering 98% increase due to stability in foreign currency market and better realizations for the Companys products. The profit after depreciation and tax is Rs. 226.98 lacs compared to Rs. 87.43 lacs for the previous year.

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

SUBSIDIARY COMPANY

During the year the Company has invested in a wholly owned Subsidiary Company Sanghavi Logistics Pvt. Ltd., which is yet to commence its business activities. The Subsidiary Company is expected to commence its Logistics business towards the end of the current financial year. In accordance with the Accounting Standard (AS-21) as well as Clause 32 of the Listing Agreement, Consolidated financial statements are provided in the Annual Report. As required under Section 212 of the Companies Act, 1956, audited accounts of the Subsidiary Company for the year ended on 31st March 2010, Auditors and Directors Reports thereon are also included in the Annual Report. Statement under Section 212 of the Companies Act, 1956, is attached to this report.

DIRECTORS

Shri. A. P. Singh was appointed as an additional Director effective 29th May, 2010. In terms of Section 260 of the Companies Act 1956 he should hold office only upto the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing his candidature for the office of Director liable to retire by rotation.

Mr. R. J. Sanghavi & Mr. S. R. Sanghavi retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Appropriate resolutions for their re-appointment are being placed before you for your approval at the ensuing Annual General Meeting. As stipulated under Clause 49 of the Listing Agreement of the Bombay Stock Exchange Ltd., brief resume of the aforesaid Directors, their directorship in other Companies and other information have been detailed in the Corporate Governance Section of this report. Your Directors recommend their re-appointment as Directors of your Company.

DEPOSITS

During the year the Company has not accepted any Public Deposits within the meaning of Section 58A of the Companies Act 1956. Also there are no outstanding Public Deposits as at the Balance Sheet date.

INSURANCE

The Companys assets being buildings, plant & machinery and stocks have been adequately insured.

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

The particulars required under section 217(1) (e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure to this report.

PARTICULARS OF EMPLOYEES

None of the employees has been paid remuneration exceeding the amount specified under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence the disclosure requirement under the above section is not applicable.

AUDITORS

The present Auditor, Mr . Dhiren V. Vakharia, Proprietor of D.V.Vakharia & Company, Chartered Accountants, has become a partner of M/s PHD & Associates, Chartered Accountants, Mumbai – 400 069 and hence expressed unwillingness for re-appointment in his proprietary concern.

The Company has received Special Notice as required under Section 225 of the Companies Act, 1956, proposing the appointment of M/s PHD & Associates, Chartered Accountants, Mumbai – 400 069, as the Statutory Auditors of the Company. As required, M/s PHD & Associates, Chartered Accountants, have forwarded a certificate to the Company stating that the appointment, if made, will be within the limits specified in the Sub-Section (1B) of Section 224 of the Companies Act, 1956. Further, they have confirmed that they are not disqualified from being appointed as Auditors under Section 226 of the Companies Act, 1956. It is, therefore, proposed to appoint M/s PHD & Associates, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company. The necessary resolution seeking your approval for appointment of Statutory Auditors has been incorporated in the Notice convening the Annual General Meeting.

COMPLIANCE CERTIFICATE

As required by Proviso to Section 383A of the Companies Act, 1956, a copy of the Compliance Certificate is attached to this report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state that:-

- in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- they have selected such accounting policies and applied them consistently and made judgments 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;

- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company continues to comply with the requirements of the Listing Agreement entered into with Bombay Stock Exchange Ltd. where your Companys shares are listed. Pursuant to the Clause 49, your Company has laid down risk minimization procedures pertaining to key areas of your Companys operations and the same shall be reviewed periodically by the Board of Directors. Your Company has also adopted a Code of Conduct for its Board Members and Senior Management Personnel and the same has been posted on your Companys website. All the Directors and the Senior Management Personnel of your Company have affirmed compliance with the said Code of Conduct. The CEO/CFO certification signed by the Managing Director pursuant to clause 49(V) of the Listing Agreement was placed before the Board of Directors at their meeting. The Management Discussion and Analysis and a report on Corporate Governance are included as a part of the Directors Report. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

EMPLOYEES RELATIONS

The relations with employees remained cordial during the year under review. Your Directors appreciate the efficient and devoted services rendered by the executives, staff members and the workers.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks for support and co-operation received from Companys bankers, Bank of India, Standard Chartered Bank and Barclays Bank PLC. Your Directors also acknowledge with gratitude the co-operation received from various Government authorities and other agencies.

On Behalf of the Board of Directors

Place : Mumbai R. J. Sanghavi

Date : 29th May 2010. Chairman