Auditor Report of HP Adhesives Ltd.

Mar 31, 2025

We have audited the Standalone financial statements of HP
Adhesives Limited ("the Company"), which comprise the
Balance sheet as at 31^st March 2025, and the statement
of profit and loss (including other comprehensive income),
statement of Changes in Equity and statement of Cash
Flows for the year then ended, and notes to the Standalone
financial statements, including a summary of the material
accounting policies and other explanatory information.

In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
Standalone financial statements give the information
required by the Companies Act, 2013 ("Act") in the manner
so required and give a true and fair view in conformity with
the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31^st March 2025, and its
profit and other comprehensive income, changes in equity
and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under section 143(10) of the Act.
Our responsibilities under those SAs are further described in
the Auditor’s Responsibilities for the Audit of the Standalone
financial statements section of our report. We are
independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of

India together with the ethical requirements that are relevant
to our audit of the Standalone financial statements under
the provisions of the Act and the Rules thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We
believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our opinion on the
financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
Standalone financial statements for the financial year
ended 31 March 2025. These matters were addressed in the
context of our audit of the Standalone financial statements
as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the
matter is provided in that context.

We have determined the matters described below to be the
key audit matters to be communicated in our report. We
have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the Standalone financial
statements section of our report, including in relation to these
matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the
risks of material misstatement of the financial statements.
The results of our audit procedures, including the procedures
performed to address the matters below, provide the
basis for our audit opinion on the accompanying financial
statements.

Key Audit Matters	How Our Audit Addressed the Key Audit Matter
A. Inventory (Refer to Note-2.6 for details of the Accounting Policies of inventories and Note-10 of Notes to Standalone financial statements for relevant disclosures of inventories)
• The net carrying value of inventory as on 31st March, 2025 is 24.68 % of Total Assets of the Company. • Volatility in Price of Raw Material which is dependent upon various domestic & Global market conditions. • Complexity in Calculation of Inventory Consumption & Costing involving methodology. Inventory consumption is calculated using SKU-specific formulas developed by management. These formulas are confidential & business sensitive. The formulas are applied outside of an accounting environment, maintained & tracked using standalone on consolidated bases using Excel spreadsheets.	Our Audit Procedure In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • Obtaining methodology of management in integration of inventory with finance module and assessing the design, implementation and operating effectiveness of management’s key internal controls relating to physical verification of inventories by the management and assessed its consistency with prior years. • Conducted analytical reviews of input-output ratios, material yield trends, and gross margins across key SKUs.

Key Audit Matters	How Our Audit Addressed the Key Audit Matter
• Valuation of WIP & Finished goods involves auditor’s judgment in evaluating the use of manual spreadsheets instead of an automated ERP solution, coupled with SKU-wise traceability and detailed documentation, that limits the audit trail and controls creating risk in cost allocation and valuation Hence, we determined the Valuation of Inventory as a key audit matter.	• Performance of test of details through sample selection of Stores as part of the inventory verification program, including verification of inventory from floor to documentary evidence and vice versa, followed by physical verification of Inventory lying on Factory Floor & Tin Plant on sample basis subsequent to year end and performed the roll back procedure. • In respect of Stock held at various warehouses/depots, obtained direct confirmation of the inventory held by them at the year end. • Evaluating the Valuation policy established by management, including compliance with the applicable accounting standard along with the appropriateness of the disclosure in the standalone financial statements is in accordance with the applicable financial reporting framework. • For Valuation, we have test checked samples of the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value. • We have relied upon the above procedures and management’s representation to conclude thereon.
B. Trade Receivables & ECL Provision: (Refer to Note-12 of Notes to Standalone financial statements for relevant disclosures of Trade Receivables)
• Trade receivables and other amounts recoverable comprise a significant portion of the current financial assets. As at March 31, 2025 trade receivables aggregate ''4,177.75 lakhs (net of provision for expected credit losses of '' 522.13 lakhs) and represents 18.36% of the Total value of Company’s Assets. • In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for re¬ measurement and recognition of impairment loss for Financial Assets as on each reporting period. • The complexity in calculation of ECL is mainly related to calculations performed for different type of Customer and with different recovery period for different categories of customers along with significant risk due to the pervasive nature of these balances to the financial statements, and the importance of cash collection with reference to the working capital management of the business. Accordingly, we determined audit of trade receivables & ECI as the key audit matter	Our Audit Procedure • Assessed the design and implementation of key controls around the monitoring of recoverability. • Discussed with the management regarding the level and ageing of trade receivables, along with the justification for calculation of provisioning for expected credit loss on receivables it impact on current year profit’s with regards to its appropriateness of receivables provisioning by assessing recoverability with reference to amount received in respect of trade receivables. • Analysing the aging schedule of trade receivable, past collection, records, methodology used management, industry boom and concentration of customers’ credit risk along with sample balance confirmations. • We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation and tested the controls around data extraction and validation. • Audited disclosures included in the Ind AS Standalone financial statements in respect of movement of expected credit losses.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL
STATEMENTS AND AUDITOR''S REPORT THEREON

The Company’s Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in the Management
Discussion and Analysis, Board’s Report including Annexures
to Board’s Report, Corporate Governance and Shareholder’s
Information, but does not include the Standalone financial
statements and our auditor’s report thereon.

Our opinion on the Standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other
information and, in doing so, consider whether such other
information is materially inconsistent with the Standalone
financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If, based

on the work we have performed, we conclude that there is
a material misstatement of this other information; we are
required to report that fact. We have nothing to report in this
regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE STANDALONE
FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to the
preparation of these Standalone financial statements that
give a true and fair view of the financial position, financial
performance including other comprehensive income, cash
flows and changes in equity of the Company in accordance
with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) specified
under section 133 of the Act read with relevant rules issued
thereunder.

This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and
prudent; and the design, implementation and maintenance
of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the Standalone financial statements that give
a true and fair view and are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, management is
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless Management either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.

The Board of Directors is responsible for overseeing the
Company’s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the Standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditors ''report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements. As part of an audit in accordance
with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also -

• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal
financial controls System in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to
continue as a going concern.

If we conclude that a material uncertainty exists, we
are required to draw attention in our auditors’ report
to the related disclosures in the Standalone financial
statements or if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditors’
report. However future events or conditions may cause
the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and
content of the AS financial statements, including the
disclosures, and whether the Standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the
Standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the Standalone financial

iv) (a) The Management has represented that,
to the best of its knowledge and belief,
no funds (which are material either
individually or in the aggregate) have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in
any other person or entity, including
foreign entity ("Intermediaries"), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, whether, 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 on behalf of the Ultimate
Beneficiaries;

(b) The Management has represented,
that, to the best of its knowledge and
belief, no funds (which are material
either individually or in the aggregate)
have been received by the Company
from any person or entity, including
foreign entity ("Funding Parties"), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, whether, 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;

(c) Based on the audit procedures that
have been considered reasonable
and appropriate in the circumstances,
nothing has come to our notice that
has caused us to believe that the

statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope of
our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in
the standalone financial statements.

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit. We also provide those charged
with governance with a statement that we have complied
with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors’
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS

(!) As required by the Companies (Auditor’s Report) Order,
2020 (the "Order") issued by the Central Government
in terms of Section 143(11) of the Act, we give in
"Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order.

(2) As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit,

b) In our opinion, proper books of account as required
by law have been kept by the Company so far as
it appears from our examination of those books
except for the matters stated in paragraph (i)(vi)
below on reporting under Rule 11 (g);

c) The Balance Sheet, the Statement of Profit
and Loss including the Statement of Other
Comprehensive Income, the Cash Flow Statement
and Statement of Changes in Equity dealt with by
this Report are in agreement with the books of
account.

d) In our opinion, the aforesaid Ind AS Standalone
financial statements comply with the Indian
Accounting Standards specified under Section
133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations
received from the directors as on 31 March, 2025
taken on record by the Board of Directors, none of
the directors is disqualified as on 31 March, 2025
from being appointed as a director in terms of
Section 164(2) of the Act;

f) The modification relating to the maintenance of
accounts and other matters connected therewith
are as stated in the paragraph (b) above on
reporting under Section 143(3)(b) and paragraph
(i)(vi) below on reporting under Rule 11 (g);

g) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in "Annexure B". Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company’s
internal financial controls with reference to
standalone financial statements.

h) In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the year/period is in accordance with the
provisions of section 197 read with Schedule V to
the Act to extent applicable.

i) With respect to the other matters to be included in
the Auditor’s report in accordance with Rule 11 of
the Companies (Audit and Auditor’s) Rules, 2014
as amended, in our opinion and to the best of our
information and according to the explanations
given to us:-

i) The Company has disclosed the impact of
pending litigation on its financial position in
its Financial Statements- Refer Note No.39
to the Financial Statements.

ii) The Company did not have any material
foreseeable losses on long term contracts
including derivative contracts.

iii) There were no amounts which required to
be transferred to the Investor Education and
Protection Fund by the Company.

representations under sub-clause (i)
and (ii) of Rule 11 (e), as provided under
(a) and (b) above, contain any material
misstatement.

v) As stated in note 48 to the accompanying
standalone financial statements :

• No dividend has been proposed/
declared by the company during the
year.

• The final dividend proposed in the
previous year, declared and paid by
the Company during the year is in
accordance with Section 123 of the Act,
as applicable.

vi) Based on our examination which includes
test checks, the company has accounting
software for maintaining its Books of
Accounts which has a feature of recording
Audit trail (Edit log) facility and the same
has been operated throughout the year
for the relevant transactions recorded in
the software except for other software
used by company to maintain payroll and
inventory records as described in Note 61
to the financial statements. Further, during
the course of our audit we did not come
across any instance of the audit trail feature
being tampered with and the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.

For Priya Choudhary & Associates LLP

Chartered Accountants
(FRN- 011506C/C400307)

Vaibhav Choudhary

(Partner)
M. No.: 407543
Place: Bhilwara (Raj.)

Date: 13/05/2025
UDIN: 25407543BMRJMQ6010

---

Mar 31, 2024

We have audited the financial statements of HP Adhesives Limited ("the Company"), which comprise the Balance sheet as at 31^st March 2024, and the statement of profit and loss (including other comprehensive income), statement of Changes in Equity and statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of the material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 ^st March 2024, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together

with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended 31 March 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matters	How Our Audit Addressed the Key Audit Matter
A. Inventory (Refer to Note-2.6 for details of the Accounting Policies of inventories and Note-10 of Notes to Financial Statements for relevant disclosures of inventories)
• The net carrying value of inventory as on 31st March, 2024 is 24.11 % of Total Assets of the Company. • Volatility in Price of Raw Material which is dependent upon various domestic & Global market conditions. • Complexity in Calculation of Inventory Consumption & Costing due to numerous Finished grades SKUs and partial integration of Inventory & Finance Module. • Valuation of WIP & Finished goods involves significant management’s judgment and estimates. Hence, we determined the Valuation of Inventory as a key audit matter.	Our Audit Procedure In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • Obtaining methodology of management in integration of inventory with finance module and assessing the design, implementation and operating effectiveness of management’s key internal controls relating to physical verification of inventories by the management. • Evaluation of the Inventory Consumption & Costing methodology involving high degree of reliance on management’s estimate as complexity & confidentially of manufacturing formulas & numerous SKU’s.

	• Performance of test of details through sample selection of Stores as part of the inventory verification program, including verification of inventory from floor to documentary evidence and vice versa, followed by physical verification of Inventory lying on Factory Floor & Tin Plant on sample basis subsequent to year end and performed the roll back procedure.
	• In respect of Stock held at various warehouses/depots, obtained direct confirmation of the inventory held by them at the year end.
	• Evaluating the Valuation policy established by management, including compliance with the applicable accounting standard along with the appropriateness of the disclosure in the standalone financial statements is in accordance with the applicable financial reporting framework.
	• For Valuation, we have test checked samples of the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value.
B. Trade Receivables & ECL Provision:
(Refer to Note-12 of Notes to Financial Statements for relevant disclosures of Trade Receivables)
• Trade receivables and other amounts recoverable	Our Audit Procedure
comprise a significant portion of the current financial assets of the Group. As at March 31,2024 trade receivables aggregate '' 3,648.02 lakhs (net	• Assessed the design and implementation of key controls around the monitoring of recoverability.
of provision for expected credit losses of '' 626.13	• Discussed with the management regarding the level and
lakhs) and represents 18.44% of the Total value of	ageing of trade receivables, along with the justification for
Company’s Assets. • In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for re-	re-calculation of provisioning for excepted credit loss on receivables it impact on current year profit’s with regards to its appropriateness of receivables provisioning by assessing recoverability with reference to amount received in respect of
measurement and recognition of impairment loss for Financial Assets as on each reporting period.	trade receivables.
• During the year company has re-estimated	• Analysing the aging schedule of trade receivable, past collection, records, methodology used management, industry
ECL provisions considering the trend of trade receivables under different ageing bracket and different customer segment. The effect of such	boom and concentration of customers’ credit risk along with sample balance confirmations.
accounting estimate is applied prospectively and is	• We evaluated the reasonableness of the Management
expected to have an effect in future periods also for	estimates by understanding the process of ECL estimation
which estimation is impracticable.	and tested the controls around data extraction and validation.
• The complexity in calculation of ECL is mainly	• Tested the Revised ECL model, including assumptions and
related to calculations performed for different type	underlying computation.
of Customer and with different recovery period	• Audited disclosures included in the Ind AS financial
for different categories of customers along with	statements in respect of movement of expected credit
significant risk due to the pervasive nature of these balances to the financial statements, and the importance of cash collection with reference to the working capital management of the business.	losses.
• Accordingly, we determined audit of trade receivables & ECL as the key audit matter.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Corporate Governance and Shareholder’s Information, but does not include the financial statements and our auditor’s report thereon. The other information as identified above is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company’s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors ''report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also -

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls System in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the AS financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

(!) As required by the Companies (Auditor’s Report) Order, 2020 (the "Order") issued by the Central Government

in terms of Section 143(11) of the Act, we give in

"Annexure A" a statement on the matters specified in

paragraphs 3 and 4 of the Order.

(2) As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit,

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in paragraph (i)(vi) below on reporting under Rule 11(g);

c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations received from the directors as on 31 March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2024 from being appointed as a director in terms of Section 164(2) of the Act;

f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph (b) above on reporting under Section 143(3)(b) and paragraph (i)(vi) below on reporting under Rule 11(g);

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

h) I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year/period is in accordance with the provisions of section 197 read with Schedule V to the Act to extent applicable.

i) With respect to the other matters to be included in the Auditor’s report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014 as amended, in our opinion and to the best of our information and according to the explanations given to us:-

i. The Company has disclosed the impact of pending litigation on its financial position in its Financial Statements- Refer Note No.39 to the Financial Statements.

ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts.

iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that,

to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

v. As stated in note 48 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2024 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

vi. Based on our examination which includes test checks, the company has accounting software for maintaining its Books of Accounts which has a feature of recording summarized Audit trail (Edit log) facility and the same has been operated throughout the year for the relevant transactions recorded in the software except for other software used by company to maintain payroll and inventory records as described in Note 61 to the financial statements. Wherever Audit trail is enabled, no instances of Audit trail feature being tampered with was noted in respect of above software. Further as per proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 as applicable from April 1, 2024, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024.

For Priya Choudhary & Associates LLP

Chartered Accountants (FRN-011506C/C400307)

Vaibhav Choudhary

(Partner) M. No.: 407543 Place: Bhilwara (Raj.)

Date: 14/05/2024 UDIN: 24407543BKBLXA4095

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Mar 31, 2023

ADHESIVES LIMITED Report on the Audit of the Financial Statements

OPINION

We have audited the financial statements of HP Adhesives Limited ("the Company"), which comprise the Balance sheet as at 31^st March 2023, and the statement of profit and loss (including other comprehensive income), statement of Changes in Equity and statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 ^st March 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended 31 March 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matters	How Our Audit Addressed the Key Audit Matter
A. Inventory (Refer to Note-2.6 for details of the Accounting Policies of inventories and Note-10 of Notes to Financial Statements for relevant disclosures of inventories)
• The net carrying value of inventory as on 31st March, 2023 is 24 % of Total Assets of the Company • Volatility in Price of Raw Material which is dependent upon various domestic & Global market conditions. • Complexity in Calculation of inventory consumption due to numerous Finished SKUs and partial integration of Inventory & Finance Module. • Valuation of WIP & Finished goods involves significant management’s judgment and estimates. Hence, we determined the Valuation of Inventory as a key audit matter.	Our Audit Procedure In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • Obtaining methodology of management in integration of inventory with finance module and assessing the design, implementation and operating effectiveness of management’s key internal controls relating to physical verification of inventories by the management. • Evaluationof the inventoryconsumption& costing methodology and valuation policy established by management, including compliance with the applicable accounting standard. • Verification of the determination of net realisable value of inventories at end on a representative sample basis involving high degree of reliance on management’s estimate. • In respect of stocks lying at depots at the year-end, written confirmations have been obtained.

	• Observed a Sample verification of consumption formulas related to different SKU’s along with of inventory count procedures to assess compliance with Company’s policy along with comparison of the sample quantities, we counted to the quantities recorded.
B. Trade Receivables & ECL Provision: (Refer to Note-11 of Notes to Financial Statements for relevant disclosures of Trade Receivables)
• Trade receivables and other amounts recoverable comprise a significant portion of the current financial assets of the Group. As at March 31, 2023 trade receivables aggregate Rs.3,725.44 lakhs (net of provision for expected credit losses of Rs. 523.50 lakhs) and represents 20.18% of the Total value of Company’s Assets. • In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for re-measurement and recognition of impairment loss for Financial Assets as on each reporting period. The Company has analysed the trend of trade receivables under different ageing bracket for last two years (previously 5 years) and re-calculated credit loss rate basis such ageing. • The complexity in calculation of ECL is mainly related to calculations performed for different type of Customer and with different recovery period for different categories of customers along with significant risk due to the pervasive nature of these balances to the financial statements, and the importance of cash collection with reference to the working capital management of the business. • Accordingly, we determined audit of trade receivables & ECL as the key audit matter.	Our Audit Procedure • Assessed the design and implementation of key controls around the monitoring of recoverability. • Discussed with the management regarding the level and ageing of trade receivables, along with the justification for re-calculation of provisioning for excepted credit loss on receivables it impact on current year profit’s with regards to its appropriateness of receivables provisioning by assessing recoverability with reference to amount received in respect of trade receivables. • Analysing the aging schedule of trade receivable, past collection, records, methodology used management, industry boom and concentration of customers’ credit risk along with sample balance confirmations. • We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation and tested the controls around data extraction and validation. • Tested the Revised ECL model, including assumptions and underlying computation. • Audited disclosures included in the Ind AS financial statements in respect of movement of expected credit losses.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON

The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Corporate Governance and Shareholder’s Information, but does not include the financial statements and our auditor’s report thereon. The other information as identified above is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness

of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company’s financial reporting process.

AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors ''report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also -

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls System in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the AS financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS

(!) As required by the Companies (Auditor’s Report) Order,

2020 (the "Order") issued by the Central Government

in terms of Section 143(11) of the Act, we give in

"Annexure A" a statement on the matters specified in

paragraphs 3 and 4 of the Order.

(2) As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit,

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books,

c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations received from the directors as on 31 March 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year/period is in accordance with the provisions of section 197 read with Schedule V to the Act to extent applicable.

h) With respect to the other matters to be included in the Auditor’s report in accordance with Rule 11 of

the Companies (Audit and Auditor’s) Rules, 2014 as amended, in our opinion and to the best of our information and according to the explanations given to us:-

i. The Company has disclosed the impact of pending litigation on its financial position in its Financial Statements- Refer Note No.38 to the Financial Statements.

ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts.

iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that,

to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i)

and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. No dividend has been proposed/declared or paid by the company during the year.

For Priya Choudhary & Associates LLP

Chartered Accountants (FRN- 011506C/C400307)

Vaibhav Choudhary

(Partner) M.No.: 407543 Place: Bhilwara(Raj) Date: May 12, 2023 UDIN: 23407543BGXISK4140