Corporate Information

Nikhil Adhesives Ltd("the Company") a Public Limited Company incorporated under the Companies Act, 1956, is listed on the Bombay Stock Exchange. The Company is mainly engaged in the business of manufacturing various types of polymer emulsions and adhesives that are used for different applications. The Company has three manufacturing units located at Dahanu (Maharashtra), Silvassa (Dadra Nagar Haveli) and at Dahej (Gujarat). The company is also engaged in the business of trading in chemicals.

1. Property Plant and Equipment:

The Company has availed the exemption available under lnd AS 101 to continue the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition (April 1,2016).

2. Expected Credit Loss:

Under the Ind AS, impairment allowance has been determined based on expected credit loss (ECL) model. Applying this model, the Company impaired its trade receivables by ? 25,11,199 as on the transition date which has been recognised in retained earnings. The impairment of? 8,72,444 for the year ended March 31, 2017 has been recognised in the Trade Receivables and in the Statement of Profit and Loss.

3. Lease hold land:

Under Previous GAAP, leasehold land was disclosed as part of property, plant & equipment and amortised by way of depreciation. Under Ind AS, the leasehold land is treated as an operating lease and consequently the unamortised portion of upfront payment for the leasehold land has been shown under the head' Other non-current assets'.

4. Forward Contracts:

Under Previous GAAP, the difference between spot rate and forward rate is amortised over the tenure of the forward contract and premium paid on options were expensed out. Under Ind AS, forward/option contract is required to be accounted at fair value. Accordingly, the company has provided for loss of Rs. 77,110 in the Statement of Profit and Loss for the year ended March 31,2017.

5. Discount

Cash discounts and Trade discounts have been reduced from revenue as per Ind AS, amounting to Rs.17,45,276 & Rs.5,32,21,679 respectively for the year ended March 31,2017, and corresponding expenses have been reduced. This does not affect profit or equity.

6. Security Deposit Paid:

Under Previous GAAP, interest free lease security deposits( that are refundable on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

7. Borrowings:

Under Previous GAAP, transaction cost on borrowings were charged off to expense during availment of loan. Under Ind AS, the transaction cost is to be required to be deducted from the carrying amount of the borrowings on the initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the interest expense by applying the Effective Interest Rate method.

8. Investments:

Under Previous GAAP, investment made in equity instruments and mutual funds were classified as long term investments and carried at cost. Under I nd AS these instruments are required to be measured at fair value. Equity instruments are fair valued through other comprehensive income.

9. Other Comprehensive Income:

Under Previous GAAP, the Company has not presented Other Comprehensive Income(OCI) separately. Hence, the Statement of Profit and Loss under previous GAAP has been reconciled with statement of profit and loss and other comprehensive income as per Ind AS.

10. Deferred Tax:

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. As per Ind AS, MAT credit entitlement is to be reduced from the deferred tax liabilities, which under the previous GAAP was shown as advances receivable.

11. Excise duty:

Under the previous GAAP, revenue from sale of products was presented net of excise duty under the head revenue from operations, whereas under Ind AS, revenue from sale of products includes excise duty and the corresponding excise duty expense is presented separately on the face of the statement of profit and loss. However, the change does not affect total.

Note 12: Details of leasing arrangements

Operating Lease: As a Lessee

The company has entered into cancellable operating leases. These lease arrangements are normally renewable on expiry. The lease arrangement can be cancelled either at the option of lessor giving notice for the period ranging from two months to three months or lessee giving two months notice.

Lease payments amounting to Rs. 77,86,136/ -(Previous year Rs. 42,75,540/-) are included in rental expenditure in the Statement of Profit and Loss during the current year.

Note 13: Employee benefit plans

(a) Defined contribution plans;

The amount recognised as expense in respect of Defined Contribution Plans (Contribution to Provident Fund) aggregate to Rs.43,05,146 /- (Previous year Rs.33,42,856 /-).

(b) Retirement benefit - Gratuity:

The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts for accrued gratuity under Projected Unit Credit Method of acturial valuation.

The following table summaries the components of the employee benefit expenses recognised in the Statement of Profit and Ixiss and the amount recognised in the Balance sheet for the gratuity provision made under actuarial method.

Statement of Profit and Loss

Net employee benefit expenses recognised in Employee Benefit Expenses (Note No 31)

Notes:

1) The information stated above is in conformity with Indian Accounting Standard 108 "Operating Segments".

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

3) For comparison with previous year, refer Note 42(b)

Notes:

1) The Information stated above is in conformity with Accounting Standard 17 "Segment Reporting* issued by The Institute of Chartered Accountants of India.

2) The Business Segment is the Primary Segment of the Company and there is no geographical segment having differing risk and returns.

NOTE 14 : There are no amounts payable to any Micro, Small and Medium Enterprises as identified by the Management from the information available with the Company and relied by Auditors.

NOTE 15: The figures for the previous year have been regrouped or rearranged wherever necessary.

NOTE 16 : Figures have been rounded off to nearest.