PROSPECTUS
Dated: December 20, 2021

Please read section 32 of the Companies Act, 2013
Book-Building Offer

hee

HP ADHESIVES LIMITED

(ur Company was originally formed as a partnership firm under the name and style of “MIs. .P, Intemational” pursuant to a deed of partnership dated January 01, 1987. Mis. HP International was therealler converted into a private
limited company “HP Adhesives Private Limited” on May 07, 2019, pursuant tothe provisions of Chapter XI ofthe Companies Act. Subsequently, our Company has been converted into a public limited company and the name of
‘our Company changed to “HP Adhesives Limited” pursuant to a special resolution passed atthe Extra-Ordinary General Meeting of our Company Held on June 23, 2021 and afresh Cerificate of Incorporation dated July 01, 2021
Issued by the RoC. For details in relation tothe change in our Registered of our Company, see “History and Certain Corporate Mautrs” beginning on page 175 ofthis Prospects.
Registered Office: 11, Unique House, Chakala Cross Road, Andheri East, Mumbai ~ 400 099, Maharashtra, India, Telephone: 022 68196300; +91-8097520674
‘Contact Person: Jyoti Nikunj Chawla, Company Secretary and Compliance Officer; E-mail investors@hpadhesives.com; Website: www.hpadhesives.com
Corporate Identity Number: U24304MH2019PLC325019,
Oe OT
INITIAL PUBLIC OFFER OF UP TO 45,97,200" EQUITY SHARES OF FACE VALUE OF ¢ 10 EACH (“EQUITY SHARES") OF HP ADHESIVES LIMITED (“COMPANY") FOR CASH AT A PRICE OF £274/-
PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF @ 264/- PER EQUITY SHARE) (“OFFER PRICE”) AGGREGATING UP TO 2 12,596.33 LAKHS COMPRISING A FRESH ISSUANCE OF UP TO
41,40,000 EQUITY SHARES AGGREGATING UP TO £ 11,343.60 LAKHS BY OUR COMPANY (“FRESH ISSUE") AND AN OFFER FOR SALE OF UP TO 457,200 EQUITY SHARES AGGREGATING UP TO
1,252.73 LAKHS BY ANJANA HARESH MOTWANI (“SELLING SHAREHOLDER”) AND SUCH EQUITY SHARES OFFERED BY THE SELLING SHAREHOLDER, THE “OFFERED SHARES") (SUCH
OFFER BY THE SELLING SHAREHOLDER, THE “OFFER FOR SALE” AND TOGETHER WITH THE FRESH ISSUE, THE “OFFER”). THE OFFER WOULD CONSTITUTE 25.02% OF THE POST- OFFER
PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. *Subjec othe finalization of basis of alloument
‘THE FACE VALUE OF EQUITY SHARES IS @ 10 EACH. THE OFFER PRICE IS 27.4 TIMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINIMUM BID LOT WERE,
DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDER, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGER AND WERE ADVERTISED IN ALL EDITIONS OF FINANCIAL
EXPRESS, JANSATTA AND MUMBAI EDITION OF NAVSHAKTI (WHICH ARE WIDELY CIRCULATED ENGLISH DAILY NEWSPAPERS, HINDI DAILY NEWSPAPERS AND MARATHI DAILY
NEWSPAPERS, MARATHI BEING THE REGIONAL LANGUAGE OF MAHARASHTRA, WHERE OUR REGISTERED OFFICE IS LOCATED), AT LEAST TWO WORKING DAYS PRIOR TO THE BID/
OFFER OPENING DATE AND WERE MADE AVAILABLE TO BSE LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE", AND TOGETHER WITH BSE, THE “STOCK
EXCHANGES") FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.

“The Offer was made i terms of Rule 19(2\@) of the Securities Contracts (Regulation) Rules, 1957, as amended (SCRR), read with Regulalion 31 of the SEBI ICDR Regulations. The Offer was made through the Book Building
s in terms of Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 75% ofthe Offer was available for allocation ona proportionate basis to Qualified Institutional Buyers (*QIBS and such portion, the “QIB.
). Our Company and the Promoter Selling Shareholder, in consultation with the BRLMS, allocated up to 60% ofthe QIB Portion to Anchor Investors ona discretionary basis (“Anchor Investor Portion”), out of which one-
third was reserved for domestic Mutual Funds only, subject to valid Bids received from domestic Mutual Funds at or above the price at which allocation is made to Anchor Investors ("Anchor Investor Allocation Price”), in
accordance with the SEBI ICDR Regulations. Further, 5% of the balance Equity Shares shall be added tothe QIB Portion (excluding the Anchor Investor Portion) (“Net QIB Portion”) was available for allocation on a proportionate
basis to Mutual Funds only, and the remainder of the Net QIB Portion was availabe for allocation on a proportionate bass to all QIB Bidders, including Mutual Funds, subject to valid Bids being recelved from them ator above
the Offer Price. Further, not more than 15% of the Offer was available for allocation on a proportionate bass to Non-Insttutional Bidders and not more than 10% of the Offer was available for allocation to Retail Individual Bidders
ln accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at or above the Otfer Price. All potential Bidders (except Anchor Investors) were mandatoily required to utilise the Application
‘Supported by Blocked Amount “ASBA") process by providing details of thet respective ASBA accounts and UPI ID in ease of RIBSs using the UPI Mechanism, as applicable, pursuant co which their corresponding Bld Amount
\was blocked by the Self Certified Syndicate Banks (“SCSBs") or by the Sponsor Bank under the UPI Mechanism, a the case may be, tothe extent ofthe respective Bid Amounts. Anchor Investors were not permitted to participate
In the Offer through the ASBA Process. For further details, see “Oiler Procedure” beginning on page 335 of this Prospectus.

 

 

   

    

 

 

 

 

 

 

   

    

 

 

 

 

 

 

SS
“Tis being the first public issue of Equity Shares of our Company, there has been no formal market for the Equity Shares, The face value of each Equity Share is € 10. The Floor Price, Cap Price and Offer Price (determined and
justified by our Company and the Selling Shareholder in consultation with the Book Running Lead Manager, in accordance with the SEBI ICDR Regulations, and on the basis of the assessment of market demand for the Equity
Shares by way of the Book Building Process as stated in “Basis for Offer Price” beginning on page 125 should not be taken to be indicative ofthe market price of the Equity Shares after the Equity Shares are listed. No assurance
can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will beaded after listing.

 

 

 

 

 

Bass

 

Tnvestments in equity and equty-related securities involve a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing thelr investment. Bidders are advised to read the risk
factors carefully before taking an investment decision in the Ofer. For taking an investment decision, Bidders must rly on their own examination of our Company and the Ofer, including the risks involved, The Equity Shares i
the Offer have neither been recommended, nor approved by the Securities and Exchange Board of India ("SEBI’), nor does SEBI guarantee the accuracy or adequacy ofthe contents ofthis Prospectus. Specific atention of the Bidders
Js invited to “Risk Factors” beginning on page 28 of this Prospectus

 

    

SSeS SSS SY
de all reasonable inquires, accepts responsibilty for and confirms that his Prospectus contains al information with regard 1o our Company and the Offer, which is material in the context of the Offer, that,
ed in this Prospectus is true and correct in all material aspects and isnot misleading in any material respect, thatthe opinions and intentions expressed herein are honestly held and that there are no other facts,
the omission of which makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Funher, the Selling Shareholder, accepts responsibility
{for and contirms only statements expressly made by it in this Prospectus solely in relation to itself and the Offered Shares and assumes responsibility that such statements are true and corvect in all material respects and not misleading
In any material respect. The Selling Shareholder assumes no responsibility for any other statements including, inter alla, any of the statements made by or relating to our Company or in relation to our business in this Prospectus

 

 

‘Our Company, baving 2
the information cs

 

 

LISTING
“The Equity Shares offered through te Red Herring Prospectus are proposed to be Usted on the Stock Exchanges. Our Company has received “in-prineiple’ approvals (rom BSE and NSE for the listing of the Equity Shates pursuant
to letters dated August 09, 2021 and September 03, 2021, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be National Stock Exchange of India Limited. A copy of the Prospectus and the Prospectus
shall be delivered tothe Registrar of Companies, Mumbai (“RoC”) for filing in accordance under Section 26(4) and Section 32 ofthe Companies Act, For deals of the material Contracts and documents were available for inspection
from the date of the Red Herring Prospectus up to the Bid'Offer Closing Date, see “Material Contracts and Documents for Inspection” beginning on page 390 ofthis Prospectus,

 

 

 

     

 

 

  

 

 

 

PREC REO
UNISTONE
UNISTONE CAPITAL PRIVATE LIMITED BIGSHARE SERVICES PRIVATE LIMITED
A/305, Dynasty Business Park 1st Floor, Bharat Tin Works Building,
Andheri-Kurla Road, Andheri East, Opp. Vasant Oasis, Makwana Road,
Mumbai — 400 059 Marol, Andheri (East), Mumbai 400 059, India
‘Telephone: +91 9820057533 Telephone: 022-62638200; Facsimile: 022-63638280
Email: mb@unistonecapital.com Email: ipo@bigshareonline.com;
Investor grievance email: compliance@unistonecapital.com Investor grievance email: investor@bigshareonline.com
Contact Person: Mr. Brijesh Parekh Contact Person: Mr. Ashish Bhope
Website: www.unistonecapital.com Website: www. bigshareonline.com
SEBI registration number: INM000012449 SEBI Registration Number: INRO00001385,
CIN: U65999MH2019PTC330850 CIN: U99999MH1994PTCO76534U6
Ea
BID/OFFER OPENED ON* WEDNESDAY, DECEMBER 15, 2021
BID/OFFER CLOSED ON* FRIDAY, DECEMBER 17, 2021

 

 

 

The Anchor Investor Bidding Date was one Working Day prior to the Bid/Offer Opening Date ie. on Tuesday, December 14, 2021
This page has been intentionally left blank
TABLE OF CONTENTS

SECTION I -GENERAL....

DEFINITIONS AND ABBREVIATIONS ........
CURRENCY CONVENTIONS, CURRENCY OF PRESENTATION, USE OF FINANCIAL,
INFORMATION, INDUSTRY AND MARKET DATA.
FORWARD LOOKING STATEMENT!
OFFER DOCUMENT SUMMARY ....

 

 

 
 
 

SECTION II —- RISK FACTORS......

 

SECTION III: INTRODUCTION.

  
 
 
 
  
 
 

THE OFFER.
SUMMARY OF FINANCIAL INFORMATION
GENERAL INFORMATION...
CAPITAL STRUCTURE .
OBJECTS OF THE OFFER
BASIS FOR OFFER PRICE ..
STATEMENT OF SPECIAL TAX BENEFIT:

SECTION IV —- ABOUT THE COMPANY...

 

INDUSTRY OVERVIEW .
OUR BUSINESS .....

KEY INDUSTRY REGULATIONS AND POLICIES...
HISTORY AND CERTAIN CORPORATE MATTERS
OUR MANAGEMENT .
OUR PROMOTER AND PROMOTER GROUP
OUR GROUP COMPANIES...
DIVIDEND POLICY......

 

 

 
 
 
 
 

SECTION V - FINANCIAL INFORMATION ...

 

RESTATED FINANCIAL STATEMENTS .. -
OTHER FINANCIAL INFORMATION .. . 274
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS...
FINANCIAL INDEBTEDNESS ..

 

 

 

SECTION VI - LEGAL AND OTHER INFORMATION...

 

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ..
GOVERNMENT AND OTHER APPROVALS......
OTHER REGULATORY AND STATUTORY DISCLOSURES

  
 

SECTION VII - OFFER RELATED INFORMATION...

TERMS OF THE OFFER.....
OFFER STRUCTURE
OFFER PROCEDURE
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES......

SECTION VIII - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION...
SECTION IX - OTHER INFORMATION...

 

 
 

 

 

 

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
DECLARATION.....

 
P

SECTION I -GENERAL
DEFINITIONS AND ABBREVIATIONS

This Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates
or implies, shall have the meaning as provided below. References to any legislation, act, regulation, rules,
guidelines or policies shall be to such legislation, act, regulation, rules, guidelines or policies as amended,
supplemented or re-enacted from time to time, and any reference to a statutory provision shall include any
subordinate legislation framed from time to time under that provision.

The words and expressions used in this Prospectus but not defined herein shall have, to the extent
applicable, the same meaning ascribed to such terms under the SEBI ICDR Regulations, the Companies
Act, 2013, the SCRA, the Depositories Act and the rules and regulations framed thereunder.
Notwithstanding the foregoing, the terms used in “Industry Overview”, “Key Regulations and Policies”,

“Statement of Special Tax Benefits”, “Restated Financial Statements”, “Basis for Offer Price”,
“Outstanding Litigation and Material Developments”, “Offer Procedure” and “Main Provisions of
Articles of Association” beginning on pages 132, 170, 128, 202, 125, 293, 335 and 361 respectively shall
have the meaning ascribed to them in the relevant section.

   

Conventional or General Terms

 

 

Term Description
“our | Company”, “the} HP Adhesives Limited, a public limited company incorporated under the Companies Act,
Company”, “the Issuer” | 2013 and having its registered office at 11, Unique House, Chakala Cross Road, Andheri
East, Mumbai — 400 099, Maharashtra, India

 

‘we’, “us” or “our” Unless the context otherwise indicates or implies, refers to our Company

 

 

 

 

Company Related Terms

 

 

 

 

 

 

 

 

Term Description

Administrative office 213, Unique House, Chakala Cross Road, Andheri East, Mumbai — 400 099, Maharashtra,
India

“Articles of Association” | Articles of Association of our Company, as amended

or “AoA”

Audit Committee Audit committee of our Board, constituted in accordance with the applicable provisions
of the Companies Act, 2013 and as described in “Our Management” on page 179 of this
Prospectus

“Auditors” or MIs. Priya Choudhary & Associates, LLP, the statutory auditors of our Company

“Statutory Auditors”

“Board” or Board of directors of our Company or a duly constituted committee thereof

“Board of Directors”

Chairperson Chairperson of our Company, Mrs. Anjana Haresh Motwani

Chartered Engineer M/s. Orbit Consultants and Valuers

 

Company Secretary and | Company secretary and compliance officer of our Company, Ms. Jyoti Nikunj Chawda
Compliance Officer

 

CRISIL Report Report titled “Assessment of Adhesives and Sealants market in India” dated November
2021 (the “CRISIL Research”) prepared and issued by CRISIL Limited. The CRISIL
Report is available on the website of our Company at https:/www.hpadhesives.com

 

 

 

 

 

 

Director(s) Directors on our Board

Equity Shares Equity shares of face value of 710/- each of our Company
Executive Director Executive director on our Board

Independent Directors Independent directors on our Board

 

 
 

Term

_ P

 

IPO Committee

IPO Committee of our Board comprising of Mrs. Anjana Haresh Motwani, Mr. Karan
Haresh Motwani and Mr. Rajendra Kumar Jain

 

“Key Managerial
Personnel” or “KMP”

Key managerial personnel of our Company shall have the meaning as set out under
Regulation 2(1)(bb) of the SEBI ICDR Regulations as described in “Our Management —
Key Managerial Personnel” on page 191 of this Prospectus

 

Managing Director

Managing director of our Company, Mr. Karan Haresh Motwani

 

 

 

“Memorandum of | Memorandum of Association of our Company, as amended

Association” or “MoA”

Nomination and | Nomination and remuneration committee of our Company, constituted in accordance with
Remuneration the applicable provisions of the Companies Act, 2013 and as described in “Our
Committee Management” on page 179 of this Prospectus.

Promoters The promoters of our Company namely, Mrs. Anjana Haresh Motwani and Mr. Karan

Haresh Motwani. For further details, see “Our Promoters and Promoter Group” on page
195 of this Prospectus

 

Promoter Group

Persons and entities constituting the promoter group of our Company in terms of
Regulation 2(1)(pp) of the SEBI ICDR Regulations, as disclosed in “Our Promoters and
Promoter Group” on page 195 of this Prospectus

 

 

Companies” or “RoC”

Registered Office 11, Unique House, Chakala Cross Road, Andheri East, Mumbai — 400 099, Maharashtra,
India
“Registrar of | Registrar of Companies, Maharashtra at 100, Everest, Marine Drive, Mumbai — 400 002,

Maharashtra

 

“Restated Financial
Statements" or “Restated
Financial Information”

Restated financial statements of our Company as at and for the six months period ended
September 30, 2021 and September 30, 2020 and financial years ended March 31, 2021,
March 31, 2020 and March 31, 2019 comprising of the restated summary statement of
assets and liabilities as at September 30, 2021, September 30, 2020, March 31, 2021,
March 31, 2020 and March 31, 2019, the restated summary statements of profit and loss
and the restated summary statement of cash flows for the six months period ended
September 30, 2021 and September 30, 2020 and financial years ended March 31, 2021,
March 31, 2020 and March 31, 2019, together with the summary statement of significant
accounting policies, and other explanatory information thereon derived from audited
financial statements as at and for the audited financial statements as at and for the six
months period ended September 30, 2021 and September 30, 2020 and financial year
ended March 31, 2021 prepared in accordance with Ind AS and audited financial
statements as at and for the year ended March 31, 2020 and March 31, 2019 prepared in
accordance with IGAAP and restated in accordance with the SEBI ICDR Regulations and
the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the
ICAI, as amended from time to time

 

Selling Shareholder

Mrs. Anjana Haresh Motwani

 

Shareholders

Shareholders of our Company from time to time

 

Stakeholders’
Relationship Committee

Stakeholders’ relationship committee of our Company, constituted in accordance with the
applicable provisions of the Companies Act, 2013 and as described in “Our Management”
on page 179 of this Prospectus.

 

 

Offer Related Terms

 

Term

Description

 

Acknowledgement Slip

The slip or document issued by the relevant Designated Intermediary to a Bidder as
proof of registration of the Bid cum Application Form

 

“Allot” or “Allotment”
or“Allotted”

Unless the context otherwise requires, allotment of the Equity Shares pursuant to the Fresh
Issue and transfer of the respective portion of the Offered Shares pursuant to the Offer for
Sale to the successful Bidders

 

Allotment Advice

 

 

A note or advice or intimation of Allotment sent to the successful Bidders who have been
or are to beAllotted the Equity Shares after the Basis of Allotment has been approved by
the Designated Stock Exchange

 

 
P

 

Term

Description

 

Allottee

A successful Bidder to whom the Equity Shares are Allotted

 

Anchor Investor

A Qualified Institutional Buyer, who applied under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations and this
Prospectus and who had Bid for an amount of at least 310 crore

 

Anchor Investor
Allocation Price

The price at which Equity Shares will be allocated to Anchor Investors in terms of the
Prospectus and the Prospectus, which will be decided by our Company and the Selling
Shareholder, in consultation with the Lead Manager during the Anchor Investor Bid/ Offer
Period

 

Anchor Investor
Application Form

The application form used by an Anchor Investor to make a Bid in the Anchor Investor
Portion and which will be considered as an application for Allotment in terms of the
Prospectus and Prospectus

 

Anchor Investor Bid/
Offer Period

One Working Day prior to the Bid/ Offer Opening Date, on which Bids by Anchor
Investors shall be submitted and allocation to the Anchor Investors shall be completed

 

Anchor Investor Offer
Price

The final price at which Equity Shares will be Allotted to Anchor Investors in terms of the
Prospectus and the Prospectus, which price will be equal to or higher than the Offer Price,
but not higher than the Cap Price.

The Anchor Investor Offer Price will be decided by our Company and the Selling
Shareholder in consultation with the Lead Manager

 

Anchor Investor
Portion

Up to 60% of the QIB Portion, which may be allocated by our Company and the Selling
Shareholder in consultation with the Lead Manager, to Anchor Investors on a discretionary
basis in accordance with the SEBI ICDR Regulations.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the Anchor
Investor Allocation Price, in accordance with the SEBI ICDR Regulations

 

Application Supported
by Blocked Amount or
“ASBA”

An application, whether physical or electronic, used by ASBA Bidders to make a Bid and
authorizing an SCSB to block the Bid Amount in the ASBA Account and which includes
applications made by RIBs using the UPI Mechanism where the Bid Amount was blocked
upon acceptance of UPI Mandate Request by RIBs using the UPI Mechanism

 

 

 

 

ASBA Account A bank account maintained with an SCSB by an ASBA Bidder, as specified in the ASBA
Form submitted by ASBA Bidders for blocking the Bid Amount mentioned in the relevant
ASBA Form and includes the account of an RIB which was blocked upon acceptance of a
UPI Mandate Request made by the RIBs using the UPI Mechanism

ASBA Bid A Bid made by an ASBA Bidder

ASBA Bidders All Bidders except Anchor Investors

ASBA Form An application form, whether physical or electronic, used by ASBA Bidders to submit

Bids, which was considered as the application for Allotment in terms of the Red Herring
Prospectus and Prospectus

 

Banker(s) to the Offer

Collectively, Escrow Collection Bank(s), Public Offer Bank(s), Sponsor Bank(s) and
Refund Bank(s), as the case may be

 

Basis of Allotment

Basis on which Equity Shares will be Allotted to successful Bidders under the Offer as
described in “Offer Procedure” beginning on page 335 of this Prospectus

 

Bid

An indication to make an offer during the Bid/ Offer Period by a Bidder (other than an
Anchor Investor) pursuant to submission of the ASBA Form, or during the Anchor Investor
Bid/ Offer Period by an Anchor Investor, pursuant to submission of the Anchor Investor
Application Form, to subscribe to or purchase the Equity Shares at a price within the Price
Band. The term “Bidding” shall be construed accordingly

 

 

Bid Amount

 

The highest value of optional Bids indicated in the Bid cum Application Form and, in the
case of RIBs Bidding at the Cut off Price, the Cap Price multiplied by the number of Equity
Shares Bid for by such RIBs and mentioned in the Bid cum Application Form and payable

 

 
 

Term

e
Description

 

by the Bidder or blocked in the ASBA Account of the ASBA Bidder, as the case may be,
upon submission of the Bid.

 

Bid cum Application
Form

Anchor Investor Application Form or the ASBA Form, as the context requires

 

Bid Lot

50 Equity Shares and in multiples of 50 Equity Shares thereafter

 

Bid/ Offer Closing Date

Except in relation to any Bids received from the Anchor Investors, the date after which the
Designated Intermediaries will not accept any Bids, being December 17, 2021 which shall
be notified in all editions of Financial Express, an English national daily newspaper, all
editions of Jansatta, a Hindi national daily newspaper and Mumbai edition of Navshakti, a
Marathi newspaper, Marathi being the regional language of Maharashtra, where our
Registered Office is located, each with wide circulation.

Our Company and the Selling Shareholder, in consultation with the Lead Manager, may
consider closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/ Offer
Closing Date in accordance with the SEBI ICDR Regulations. In case of any revision, the
extended Bid/ Offer Closing Date shall also be notified on the websites of the Lead
Manager and at the terminals of the Syndicate Members and communicated to the
Designated Intermediaries and the Sponsor Bank, which shall also be notified in an
advertisement in the same newspapers in which the Bid/ Offer Opening Date will be
published, as required under the SEBI ICDR Regulations

 

Bid/ Offer Opening
Date

Except in relation to any Bids received from the Anchor Investors, the date on which the
Designated Intermediaries shall start accepting Bids, being December 15, 2021 which shall
be published in all editions of Financial Express, an English national daily newspaper, all
editions of Jansatta, a Hindi national daily newspaper and Mumbai edition of Navshakti, a
Marathi newspaper, Marathi being the regional language of Maharashtra, where our
Registered Office is located, each with wide circulation

 

Bid/ Offer Period

Except in relation to Anchor Investors, the period between the Bid/ Offer Opening Date
and the Bid/ Offer Closing Date, inclusive of both days, during which Bidders can submit
their Bids, including any revisions thereof, in accordance with the SEBI ICDR Regulations,
provided that such period shall be kept open for a minimum of three Working Days.

Our Company and the Selling Shareholder, in consultation with the Lead Manager, may
consider closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/ Offer
Closing Date in accordance with the SEBI ICDR Regulations

 

Bidder

Any investor who makes a Bid pursuant to the terms of the Prospectus and the Bid cum
Application Form and unless otherwise stated or implied, includes an Anchor Investor

 

Bidding Centres

The centres at which the Designated Intermediaries accepted the Bid cum Application
Forms, i.e., Designated Branches for SCSBs, Specified Locations for the Syndicate, Broker
Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated CDP
Locations for CDPs

 

Book Building Process

Book building process, as provided in Schedule XIII of the SEBI ICDR Regulations, in
terms of which the Offer is being made

 

“Book Running Lead
Manager” or “BRLM”
or “Lead Manager”

The book running lead manager to the Offer namely, Unistone Capital Private Limited

 

Broker Centres

The broker centres notified by the Stock Exchanges where Bidders could submit the ASBA.
Forms to a Registered Broker.

The details of such Broker Centres, along with the names and the contact details of the
Registered Brokers are available on the respective websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)

 

 

“CAN”

 

Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who will
be allocated the Equity Shares, on or after the Anchor Investor Bid/ Offer Period

 

 
 

Term

e
Description

 

Cap Price

The higher end of the Price Band, above which the Offer Price and the Anchor Investor
Offer Price will not be finalised and above which no Bids will be accepted

 

Cash Escrow and

Agreement dated November 30, 2021 entered amongst our Company, the Selling

 

Sponsor Bank Shareholder, the Lead Manager, the Banker(s) to the Offer and Registrar to the Offer for,

Agreement inter alia, collection of the Bid Amounts from Anchor Investors, transfer of funds to the
Public Offer Account and where applicable, refunds of the amounts collected from
Bidders, on the terms and conditions thereof

Client ID The client identification number maintained with one of the Depositories in relation to

demat account

 

“Collecting Depository
Participant” or “CDP”

A depository participant as defined under the Depositories Act, 1996 registered with SEB]
and who is eligible to procure Bids from relevant Bidders at the Designated CDP Locations
in terms of the SEBI circular number CIR/CFD/POLICYCELL/11/2015 dated November
10, 2015 issued by SEBI as per the list available on the websites of BSE and NSE, as
updated from time to time

 

Cut-off Price

The Offer Price, finalised by our Company and the Selling Shareholder, in consultation
with the Book Running Lead Manager, which shall be any price within the Price Band.

Only Retail Individual Bidders Bidding in the Retail Portion are entitled to Bid at the Cut-
off Price. QIBs (including the Anchor Investors) and Non-Institutional Bidders are not
entitled to Bid at the Cut- off Price.

 

Demographic Details

Details of the Bidders including the Bidders’ address, name of the Bidders’ father/ husband,
investor status, occupation, bank account details and UPI ID, wherever applicable

 

Designated Branches

Such branches of the SCSBs which collected the ASBA Forms, a list of which was
available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes or at such
other website as may be prescribed by SEBI from time to time

 

Designated CDP
Locations

Such locations of the CDPs where Bidders can submit the ASBA Forms. The details of
such Designated CDP Locations, along with names and contact details of the Collecting
Depository Participants eligible to accept ASBA Forms are available on the respective
websites of the Stock Exchanges (www.bseindia.com and www.nseindia.com), as updated
from time to time

 

Designated Date

The date on which funds from the Escrow Account(s) are transferred to the Public Offer
Account(s) or the Refund Account(s), as appropriate, and the relevant amounts blocked in
the ASBA Accounts are transferred to the Public Offer Account(s) and/ or are unblocked,
as applicable, in terms of the Prospectus and Prospectus, after finalization of the Basis of
Allotment in consultation with the Designated Stock Exchange, following which the
Equity Shares may be Allotted to successful Bidders in the Offer

 

Designated
Intermediary(ies)

In relation to ASBA Forms submitted by RIBs (not using the UPI mechanism) by
authorising an SCSB to block the Bid Amount in the ASBA Account, Designated
Intermediaries shall mean SCSBs.

Inrelation to ASBA Forms submitted by RIBs where the Bid Amount will be blocked upon
acceptance of UPI Mandate Request by such RIB using the UPI Mechanism, Designated
Intermediaries shall mean Syndicate, sub-syndicate/ agents, Registered Brokers, CDPs,
SCSBs and RTAs.

In relation to ASBA Forms submitted by QIBs and Non-Institutional Bidders, Designated
Intermediaries shall mean Syndicate, Sub-Syndicate/ agents, SCSBs, Registered Brokers,
the CDPs and RTAs

 

 

Designated RTA
Locations

 

Such locations of the RTAs where Bidders could submit the ASBA Forms to RTAs. The
details of such Designated RTA Locations, along with names and contact details of the
RTAs eligible to accept ASBA Forms are available on the respective websites of the Stock
Exchanges (www.bseindia.com and www.nseindia.com), as updated from time to time

 

 
P

 

 

 

 

Term Description

Designated Stock | The National Stock Exchange of India

Exchange

“Draft Red Herring | The draft red herring prospectus dated July 18, 2021 issued in accordance with the SEBI
Prospectus” or | ICDR Regulations, which does not contain complete particulars of the price at which the
“DRHP” Equity Shares will be Allotted and the size of the Offer, including any addenda or

corrigenda thereto
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or

invitation under the Offer and in relation to whom the Bid cum Application Form and the
Red Herring Prospectus will constitute an invitation to subscribe to or to purchase the
Equity Shares

 

Escrow Account(s)

The account(s) to be opened with the Escrow Collection Bank and in whose favour the
Anchor Investors will transfer money through NACH/ direct credit/ NEFT/ RTGS in
respect of the Bid Amount when submitting a Bid

 

Escrow Collection

Bank

Bank(s) which are clearing member(s) and registered with SEBI as banker(s) to an issue
under the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994
and with whom the Escrow Account(s) will be opened, in this case being ICICI Bank
Limited

 

First Bidder or Sole
Bidder

Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision
Form and in case of joint Bids, whose name shall also appear as the first holder of the
beneficiary account held in joint names

 

Floor Price

Lower end of the Price Band, subject to any revision(s) thereto, not being less than the face
value of Equity Shares, at or above which the Offer Price and the Anchor Investor Offer
Price will be finalized and below which no Bids will be accepted

 

Fresh Issue

Initial public offer of up to 41,40,000 Equity Shares for cash at a price of  274/- per Equity
Share (including a share premium of % 264/- per equity share) aggregating to = 11,343.60
Lakhs

 

 

Fugitive Economic | An individual who is declared a fugitive economic offender under Section 12 of the
Offender Fugitive Economic Offenders Act, 2018
“General Information | The General Information Document for investing in public issues prepared and issued in

Document” or “GID”

accordance with the SEBI circular number CIR/CFD/DIL/12/2013 dated October 23, 2013,
notified by SEBI and updated pursuant to the SEBI circular number
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, the SEBI circular number
CIR/CFD/DIL/1/2016 dated January 1, 2016, the SEBI circular number
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016, the SEBI circular number
SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018, the SEBI circular number
SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, the SEBI circular number
SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, the SEBI circular number
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019, the SEBI circular number
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, the SEBI circular
number SEBI/HO/CFD/DIL1/CIR/P/2020/37 dated March 17, 2019, and the SEBI circular
number SEBI/HO/CFD/DIL2/CIR/P/2020 dated March 30, 2020 as amended from time to
time. The General Information Document shall be available on the websites of the Stock
Exchanges and the Book Running Lead Manager

 

 

Monitoring Agency ICICI Bank Limited
Monitoring Agency Monitoring Agency Agreement dated November 30, 2021, entered between our Company
Agreement and the Monitoring Agency

 

Mutual Fund Portion

5% of the Net QIB Portion, or 1,72,395 Equity Shares which shall be made available for
allocation to Mutual Funds only, subject to valid Bids having been received at or above the
Offer Price

 

Net Offer

The Offer

 

 

Net Proceeds

 

Proceeds of the Fresh Issue less our Company’s share of the Offer expenses. For further
details regarding the use of the Net Proceeds and the Offer expenses, see “Objects of the
Offer” beginning on page 94 of this Prospectus.

 

 

 
 

Term

e
Description

 

Net QIB Portion

The portion of the QIB Portion less the number of Equity Shares Allocated to the Anchor
Investors

 

“Non-Institutional
Bidders” or “Non-
Institutional Investors”

All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for Equity
Shares for an amount of more than 2 200,000 (but not including NRIs other than Eligible
NRIs)

 

Non-Institutional
Portion

Portion of the Net Offer being not more than 15% of the Net Offer consisting of 6,89,580
Equity Shares which will be made available for allocation on a proportionate basis to Non-
Institutional Bidders, subject to valid Bids having been received at or above the Offer Price

 

Non-Resident

Person resident outside India, as defined under FEMA and includes a non-resident Indian,
FVCIs and FPIs

 

 

Offer The Offer comprises of a Fresh Issue of up to 41,40,000 Equity Shares aggregating to
11,343.60 Lakhs and an Offer for Sale of up to 4,57,200 Equity Shares aggregating to
1,252,73 Lakhs

Offer Agreement Offer Agreement dated July 15, 2021 entered amongst our Company, the Selling

Shareholder and the Book Running Lead Manager, pursuant to which certain arrangements
have been agreed to in relation to the Offer

 

Offer for Sale

The offer for sale of up to 4,57,200 Equity Shares aggregating to = 1,252.73 Lakhs by the
Selling Shareholder in the Offer

 

Offer Price

The final price at which Equity Shares will be Allotted to ASBA Bidders in terms of the
Prospectus. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor
Offer Price, which was decided by our Company and the Selling Shareholder, in
consultation with the Book Running Lead Manager, in terms of the Prospectus.

The Offer Price was decided by our Company and each of the Selling Shareholder, in
consultation with the Book Running Lead Manager, on the Pricing Date in accordance with
the Book Building Process and the Prospectus.

 

Offer Proceeds

The proceeds of the Fresh Issue which shall be available to our Company and the proceeds
of the Offer for Sale which shall be available to the Selling Shareholder. For further
information about use of the Offer Proceeds, see “Objects of the Offer” beginning on page
94 of this Prospectus

 

Offered Shares

Up to 4,57,200 Equity Shares aggregating to = 1,252.73 Lakhs being offered by the Selling
Shareholder in the Offer for Sale

 

Price Band

Price band of a minimum price of = 262/- per Equity Share (Floor Price) and the maximum
price of % 274/- per Equity Share (Cap Price).

The Price Band and the minimum Bid Lot size for the Offer will be decided by our
Company and the Selling Shareholder in consultation with the Lead Manager, and will be
advertised, at least two Working Days prior to the Bid/ Offer Opening Date, in all editions
of Financial Express, an English national daily newspaper, all editions of Jansatta, a Hindi
national daily newspaper and Mumbai edition of Navshakti, a Marathi daily newspaper,
(Marathi being the regional language of Maharashtra, where our Registered Office is
located), each with wide circulation and shall be made available to the Stock Exchanges
for the purpose of uploading on their respective websites

 

Pricing Date

The date on which our Company and the Selling Shareholder, in consultation with the Book
Running Lead Manager, will finalise the Offer Price

 

 

 

Prospectus The prospectus to be filed with the RoC on or after the Pricing Date in accordance with
Section 26 of the Companies Act, 2013, and the SEBI ICDR Regulations containing, inter
alia, the Offer Price, the size of the Offer and certain other information, including any
addenda or corrigenda thereto

Public Offer Account Bank account to be opened with the Public Offer Bank, under Section 40(3) of the

 

Companies Act, 2013 to receive monies from the Escrow Account(s) and ASBA Accounts
on the Designated Date

 

 
 

Term

e
Description

 

Public Offer Bank

A bank which is a clearing member and registered with SEBI as a banker to an issue and
with which the Public Offer Account will be opened, in this case being ICICI Bank Limited

 

QIB Portion

The portion of the Net Offer (including the Anchor Investor Portion) being at least 75% of
the Net Offer consisting of 34,47,900 Equity Shares which shall be available for allotment
to QIBs (including Anchor Investors), subject to valid Bids being received at or above the
Offer Price or Anchor Investor Offer Price (for Anchor Investors)

 

“Qualified Institutional
Buyers” or “QIBs” or
“QIB Bidders”

Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI ICDR
Regulations

 

Red Herring Prospectus
or RHP

Red Herring Prospectus to be issued in accordance with Section 32 of the Companies Act,
2013 and the provisions of the SEBI ICDR Regulations, which will not have complete
particulars of the Offer Price and the size of the Offer, including any addenda and
corrigenda thereto. The Red Herring Prospectus will be filed with the RoC at least three
Working Days before the Bid/ Offer Opening Date and will become the prospectus upon
filing with the RoC after the Pricing Date

 

Refund Account

Account to be opened with the Refund Bank, from which refunds, if any, of the whole or
part of the Bid Amount to the Bidders shall be made

 

Refund Bank

Banker(s) to the Offer and with whom the Refund Account(s) will be opened, in this case
being ICICI Bank Limited

 

Registered Brokers

Stock brokers registered with SEBI and the stock exchanges having nationwide terminals,
other than the members of the Syndicate and eligible to procure Bids in terms of the SEBI
circular number CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

 

Registrar Agreement

Agreement dated July 7, 2021 entered by and amongst our Company, the Selling
Shareholder and the Registrar to the Offer, in relation to the responsibilities and obligations
of the Registrar pertaining to the Offer

 

“Registrar and Share
Transfer Agents” or
“RTAs”

Registrar and share transfer agents registered with SEBI and eligible to procure Bids from
relevant Bidders at the Designated RTA Locations as per the list available on the websites
of BSE and NSE, and the UPI Circulars

 

“Registrar to the Offer”
or “Registrar”

Bigshare Services Private Limited

 

“Retail Individual
Bidder(s)” or “RIB(s)”

Individual Bidders, who have Bid for the Equity Shares for an amount not more than
%200,000 in any of the bidding options in the Offer (including HUFs who applied through
their Karta and Eligible NRIs)

 

Retail Portion

Portion of the Net Offer being not more than 10% of the Offer consisting of 4,59,720 Equity
Shares which shall be available for allocation to Retail Individual Bidders (subject to valid
Bids having been received at or above the Offer Price)

 

Revision Form

Form used by the Bidders to modify the quantity of the Equity Shares or the Bid Amount
in any of their Bid cum Application Forms or any previous Revision Form(s), as applicable.

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their Bids
(in terms of quantity of Equity Shares or the Bid Amount) at any stage. Retail Individual
Bidders could revise their Bids during the Bid/ Offer Period and withdraw their Bids until
Bid/ Offer Closing Date.

 

 

Self-Certified
Syndicate Bank(s) or
SCSB(s)

 

The list of SCSBs notified by SEBI for the ASBA process is available at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, or at such
other website as may be prescribed by SEBI from time to time. A list of the Designated
SCSB Branches with which an ASBA Bidder (other than a RII using the UPI Mechanism),
not bidding through Syndicate/ Sub Syndicate or through a Registered Broker, RTA or
CDP may submit the Bid cum Application Forms, is available at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=3
4, or at such other websites as may be prescribed by SEBI from time to time.

 

 
 

Term

e
Description

 

In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the
Syndicate, the list of branches of the SCSBs at the Specified Locations named by the
respective SCSBs to receive deposits of Bid cum Application Forms from the members of
the Syndicate is _ available on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=

35) and updated from time to time. For more information on such branches
collecting Bid cum Application Forms from the Syndicate at Specified Locations, see the
website of the SEBI at

https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedF pi=yes&intmld=3
5 as updated from time to time.

Tn accordance with SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28,
2019 and SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019,
Retail Individual Investors Bidding using the UPI Mechanism could apply through the
SCSBs and mobile applications whose names appears on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedF pi=yes&intmld=
40) and
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=
43) respectively, as updated from time to time.

 

Share Escrow Agent

The share escrow agent to be appointed pursuant to the Share Escrow Agreement namely,
Bigshare Services Private Limited

 

Share Escrow
Agreement

Share Escrow Agreement to be entered amongst our Company, the Selling Shareholder and
the Share Escrow Agent in connection with the transfer of the respective portion of Offered
Shares by the Selling Shareholder and credit of such Offered Shares to the demat account
of the Allottees in accordance with the Basis of Allotment

 

Specified Locations

Bidding Centres where the Syndicate could accept Bid cum Application Forms

 

Sponsor Bank

ICICI Bank Limited, being a Banker to the Offer, appointed by our Company to act as a
conduit between the Stock Exchanges and NPCI in order to push the mandate collect
requests and/ or payment instructions of the RIBs using the UPI Mechanism and carry out
other responsibilities, in terms of the UPI Circulars

 

Syndicate Agreement

Syndicate Agreement to be entered amongst our Company, the Selling Shareholder, the
Book Running Lead Manager, the Registrar and the Syndicate Member(s), in relation to
collection of Bids by the Syndicate

 

“Syndicate” or
“Members of the
Syndicate” or

“Syndicate Members”

Intermediaries registered with SEBI who are permitted to accept bids, applications and
place orders with respect to the Offer, in this case being Rikhav Securities Limited

 

 

 

Underwriters Unistone Capital Private Limited

Underwriting Underwriting Agreement to be entered amongst our Company, the Selling Shareholder and

Agreement the Underwriter(s) on or after the Pricing Date but prior to filing of the Prospectus with the
RoC

UPI Unified payments interface which is an instant payment mechanism, developed by NPCI

 

 

UPI Circulars

 

SEBI circular number SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018,
SEBI circular number SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, SEBI
circular number SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, SEBI circular
number SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019, SEBI circular number
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, SEBI circular number
SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020,
SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021, SEBI circular no.
SEBI/HO/CFD/DIL1/CIR/P/2021/47 dated March 31, 2021, SEBI circular no.
SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021 and any subsequent circulars or
notifications issued by SEBI in this regard

 

 
P

 

Term

Description

 

UPIID

ID created on the UPI for single-window mobile payment system developed by the NPCI

 

UPI Mandate Request

A request (intimating the RIB by way of a notification on the UPI linked mobile application
and by way of an SMS on directing the RIB to such UPI linked mobile application) to the
RIB initiated by the Sponsor Bank to authorize blocking of funds on the UPI application
equivalent to Bid Amount and subsequent debit of funds in case of Allotment.

Tn accordance with SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28,
2019 and SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019,
Retail Individual Investors Bidding using the UPI Mechanism may apply through the
SCSBs and mobile applications whose names appear on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&int
mld=40) and
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=
43) respectively, as updated from time to time.

 

UPI Mechanism

The bidding mechanism that was used by RIBs in accordance with the UPI Circulars to
make an ASBA Bid in the Offer

 

Wilful Defaulter

A company or person, as the case may be, categorized as a wilful defaulter by any bank or
financial institution or consortium thereof, in accordance with the guidelines on wilful
defaulters issued by the RBI and includes any company whose director or promoter is
categorized as such

 

Working Day

 

 

All days on which commercial banks in Mumbai are open for business provided however,
with reference to (a) announcement of Price Band and (b) Bid/Offer Period, the term
Working Day shall mean all days, excluding Saturdays, Sundays and public holidays, on
which commercial banks in Mumbai are open for business and (c) the time period between
the Bid/ Offer Closing Date and the listing of the Equity Shares on the Stock Exchanges,
“Working Day” shall mean all trading days of the Stock Exchanges, excluding Sundays
and bank holidays, as per circulars issued by SEBI

 

Technical/ Industry Related Terms or Abbreviations

 

 

 

 

 

 

 

 

Term Description

ACP Aluminium Composite Panel

Applier A person who applies our products including plumbers, carpenters, masons and glazing
contractors

FRP Fiber-reinforced plastic

CAGR Compounded Annual Growth Rate (as a %): (End Year Value/ Base Year Value) ‘ (1/No. of
years between Base year and End year) —1 [4 denotes ‘raised to’]

Capital Employed Capital employed is calculated as total assets less current liabilities less CWIP less new office
premise under renovation, plus borrowings under current liabilities, current maturities of
long-term debts and lease liabilities under current liabilities

cPVC Chlorinated polyvinyl chloride

CWIP Capital work-in-progress

 

Debt to Equity

Debt to equity is calculated as borrowings under non-current liabilities plus current maturities
of long- term debts plus borrowings under current liabilities, divided by total equity

 

 

 

 

 

 

 

EBITDA EBITDA is calculated as restated profit for the year/ period, plus total tax expenses,
exceptional items, finance costs and depreciation and amortization expenses

EBITDA Margin EBITDA Margin is the percentage of EBITDA divided by revenue from operations.

Gross Margin Gross Margin is calculated as revenue from operations less Material Cost.

Iso International Organization for Standardization

KLPA Kilo liters per annum

 

10

 

 
a

 

Term

Description

 

Material Cost

Material Cost is calculated as cost of raw material and components consumed plus purchase
of traded goods, decrease/ (increase) in inventories of finished goods and traded goods, and
excise duty on sale of goods.

 

 

 

MRP Maximum Retail Price
MT Metric tonnes
MTPA Metric tonnes per annum

 

Non- GAAP Measure(s)

Non-GAAP measures comprises EBIT, EBITDA, EBITDA Margin, Material
Cost, Adjusted Material Cost, Gross Margin, Adjusted Gross Margin, Other
Operating Expenses, Capital Employed, Return on Capital Employed, Return on
Equity, Debt to Equity, PAT Margin, CAGR and others.

For a reconciliation of these Non-GAAP Measures, see “Management’s
Discussion and Analysis of Financial Condition and Results Of Operations — Non-
GAAP Measures” on page 275 of this Prospectus.

 

Other Operating Expenses

Other operating expenses is calculated as other expenses less freight and forwarding
charges and advertisement and sales promotion expenses.

 

 

 

 

 

 

 

 

 

 

 

PAT Margin PAT Margin is calculated as restated profit for the year/ period divided by total income,
represented as a percentage.

PPE Property, plant and equipment

PTFE Polytetrafluoroethylene

PVA Polyvinyl acetate

PVC Polyvinyl chloride

ROCE Return on Capital Employed is calculated as EBIT divided by Capital Employed.

ROE Return on equity is calculated as restated profit for the year/ period divided by total equity.

ROU Right to use assets

SKU Stock keeping unit

Sq. ft. Square feet

Sq. mtrs. Square metres

 

Total Borrowings

Total borrowings is calculated as borrowings under non-current liabilities, plus current
maturities of long-term debts, plus borrowings under current liabilities

 

uPVC

Unplasticized Polyvinyl Chloride

 

Conventional and General Terms or Abbreviations

 

 

 

 

 

 

 

Term Description
%/ Rs./ Rupees/ INR Indian Rupees
AIFs Alternative Investments Funds
AGM Annual general meeting
AY Assessment Year
BSE BSE Limited
Category I AIF AIFs who are registered as “Category I Alternative Investment Funds” under the SEBI AIF

Regulations

 

Category II AIF

AIFs who are registered as “Category II Alternative Investment Funds” under the SEBI AIF
Regulations

 

Category III AIF

AIFs who are registered as “Category III Alternative Investment Funds” under the
SEBI AlFRegulations

 

 

 

 

Category I FPIs FPIs who are registered as “Category I Foreign Portfolio Investors” under the SEBI FP1
Regulations
CDSL Central Depository Services (India) Limited

 

11

 
a

 

Term

Description

 

CFO

Chief Financial Officer

 

CIN

Corporate Identity Number

 

Companies Act or
Companies Act, 2013

Companies Act, 2013, along with the relevant rules framed thereunder

 

COVID-19/ Novel
Coronavirus

Coronavirus disease 2019, a respiratory illness caused by the Novel Coronavirus and a
public health emergency of international concern as declared by the World Health
Organization on January 30,2020 and a pandemic on March 11, 2020

 

Companies Act, 1956

Companies Act, 1956, along with the relevant rules framed thereunder

 

CST

Central Sales Tax

 

 

 

 

 

 

 

 

 

 

 

 

 

CST Act Central Sales Tax Act, 1956

DC Deputy Commissioner

Depositories NSDL and CDSL

Depositories Act Depositories Act, 1996

DIN Director Identification Number

DP or Depository A depository participant as defined under the Depositories Act

Participant

DP ID Depository Participant’s Identification

DPIUT Department for Promotion of Industry and Internal Trade, Ministry of Commerce and
Industry, Government of India (formerly known as the Department of Industrial Policy and
Promotion)

EGM Extraordinary General Meeting

EPS Earnings Per Share

FDI Foreign direct investment

FDI Policy Consolidated Foreign Direct Investment Policy notified by the DPIIT by way of circular
bearing number DPIIT file number 5(2)/2020-FDI Policy dated October 15, 2020 effective
from October 15, 2020

FEMA, The Foreign Exchange Management Act, 1999, read with rules and regulations there under

 

FEMA Non-debt
Instruments Rules/
FEMA Rules

Foreign Exchange Management (Non-debt Instruments) Rules, 2019

 

FEMA Regulations

The Foreign Exchange Management (Non Debt Instruments) Rules, 2019, the Foreign
Exchange Management (Mode of Payment and Reporting of Non Debt Instruments)
Regulations, 2019 and the Foreign Exchange Management (Debt Instruments) Regulations,
2019, as applicable

 

Financial Year/ Fiscal/

Unless stated otherwise, the period of 12 months ending March 31 of that particular year.

 

 

 

 

 

 

Fiscal Year/ FY

FIR First information report

FPI(s) Foreign portfolio investors as defined under the SEBI FPI Regulations

FVCI(s) Foreign venture capital investors as defined and registered under the SEBI FVCI
Regulations

GAAR General Anti-Avoidance Rules

Gazette Gazette of India

GDP Gross domestic product

 

Gol or Government or
Central Government

Government of India

 

GST

Goods and Services Tax

 

 

 

 

IBC The Insolvency and Bankruptcy Code, 2016
ICAI The Institute of Chartered Accountants of India
HUF Hindu Undivided Family

HNI High Net worth Individual

 

 

Ind AS/ Indian
Accounting Standards

 

Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read
with the Companies (Indian Accounting Standards) Rules, 2015, as amended

 

12

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Description

India Republic of India

Indian GAAP/ IGAAP Accounting standards notified under Section 133 of the Companies Act, 2013 read with
Companies (Accounting Standards) Rules 2006 and the Companies (Accounts) Rules, 2014
in so far as they apply to our Company, as amended

IPC The Indian Penal Code, 1860

IPO Initial public offering

IRDAI Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

IT Act The Income Tax Act, 1961

MCA Ministry of Corporate Affairs

MICR Magnetic Ink Character Recognition

MVAT Maharashtra Value Added Tax

MVAT Act Maharashtra Value Added Tax Act, 2002

 

Mutual Funds

Mutual funds registered under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N/A/ N.A./ NA Not applicable

NAV Net Asset Value

NEFT National Electronic Funds Transfer

NPCI National Payments Corporation of India

NRI Person resident outside India, who is a citizen of India or a person of Indian origin, and shall
have themeaning ascribed to such term in the Foreign Exchange Management (Deposit)
Regulations, 2016 oran overseas citizen of India cardholder within the meaning of Section
7(A) of the Citizenship Act, 1955

NRE Account Non-resident external rupee account

NRO Account Non-resident ordinary account

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

NSF NSF International

OCB or Overseas A company, partnership, society or other corporate body owned directly or indirectly to the

CorporateBody extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of
beneficial interest isirrevocably held by NRIs directly or indirectly and which was in
existence on October 3, 2003 and immediately before such date had taken benefits under
the general permission granted to OCBs under FEMA. OCBs are not allowed to invest in
the Offer

p.a. Per annum:

P/E Price/earnings

P/E Ratio Price to Earnings ratio

PAN Permanent Account Number

PAT Profit after tax

 

Pollution control laws

Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of
Pollution) Act, 1981 and Hazardous and Other Wastes (Management and Transboundary
Movement) Rules, 2016

 

 

 

 

 

 

 

 

 

RBI The Reserve Bank of India

RBI Act The Reserve Bank of India Act, 1934

Regulation S Regulation S under the U.S. Securities Act

RTGS Real Time Gross Settlement

Rule 144A, Rule 144A under the U.S. Securities Act

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992

 

SEBI AIF Regulations

Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012

 

SEBI BTI Regulations

Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994

 

 

SEBI FPI Regulations

 

Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019

 

13

 
a

 

Term

Description

 

SEBI FVCI Regulations

Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations,
2000

 

SEBI ICDR Regulations

Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018

 

SEBI Listing
Regulations/ SEBI
LODR Regulations

Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015

 

SEBI Merchant
Bankers Regulations

Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992

 

SEBI SBEB Regulations

Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014

 

SEBI VCF Regulations

Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 as
repealed pursuant to the SEBI AIF Regulations

 

State Government

The government of a state in India

 

Stock Exchanges

BSE and NSE

 

STT.

Securities transaction tax

 

Takeover Regulations

Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011

 

TAN

Tax deduction account number

 

U.S. Securities Act

U.S. Securities Act of 1933

 

U.S./USA/United States

United States of America

 

USD or US$

United States Dollars

 

 

VCFs

 

Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF
Regulations

 

14

 
P

CURRENCY CONVENTIONS, CURRENCY OF PRESENTATION, USE OF FINANCIAL,
INFORMATION, INDUSTRY AND MARKET DATA

Certain Conventions

All references in this Prospectus to “India” are to the Republic of India and its territories and possessions
and all references herein to the “Government”, “Indian Government”, “GOI”, “Central Government”
or the “State Government” are to the Government of India, central or state, as applicable. All references
to the “U.S.”, “US”, “U.S.A” or “United States” are to the United States of America and its territories
and possessions.

Unless otherwise specified, any time mentioned in this Prospectus is in Indian Standard Time (“IST”).
Unless indicated otherwise, all references to a year in this Prospectus are to a calendar year.

Unless the context requires otherwise, all references to page numbers in this Prospectus are to the page
numbers of this Prospectus.

Financial Data

Unless otherwise stated or context requires otherwise, the financial information and financial ratios
included in this Prospectus have been derived from our Restated Financial Information as at and for the
six months period ended September 30, 2021 and 2020 and Fiscals 2019, 2020 and 2021, prepared in
accordance with Ind AS. The Restated Financial Statements have been examined by our Statutory
Auditor in accordance with the Companies Act and relevant rules framed thereunder and restated under
the SEBI ICDR Regulations. As at and for the six months period ended September 30, 2021 and 2020
and Fiscals ended March 31, 2019, 2020 and 2021, our Company did not have any subsidiary and,
consequently, the Restated Financial Statements included in this Prospectus have been prepared on a
standalone basis.

We have prepared our Restated Financial Statements for the six months period ended September 30,
2021 and 2020 and Financial Years ended March 31, 2019, 2020 and March 31, 2021 in accordance
with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013, read
with the Companies (Indian Accounting Standards) Rules, 2015 and restated in accordance with the
SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised 2019),
issued by the ICAI. For further information, see “Financial Information” beginning on page 202 of this
Prospectus.

Our Company’s Financial Year commences on April 01* and ends on March 31% of the next year.
Accordingly, all references in this Prospectus to a particular Financial Year, Fiscal or Fiscal Year, unless
stated otherwise, are to the 12 months period ended on March 31* of that particular year.

There are significant differences between Ind AS, Indian GAAP, US GAAP and IFRS. Our Company
does not provide reconciliation of its financial information to IFRS or US GAAP. Our Company has not
attempted to explain those differences or quantify their impact on the financial data included in this
Prospectus and it is urged that you consult your own advisors regarding such differences and their impact
on our Company’s financial data. Accordingly, the degree to which the financial information included in
this Prospectus will provide meaningful information is entirely dependent on the reader’s level of
familiarity with Indian accounting policies and practices, the Companies Act, Ind AS, the Indian GAAP
and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies
and practices on the financial disclosures presented in this Prospectus should, accordingly, be limited.

15
P

For risks relating to significant differences between Ind AS, Indian GAAP and other accounting
principles, see Risk Factor No. 62 “Significant differences exist between Ind AS and other accounting
principles, such as Indian GAAP, U.S. GAAPand IFRS, which investors may be more familiar with and
may consider material to their assessment of our financial condition.” beginning on page 59 of this
Prospectus.

Unless the context requires otherwise, any percentage amounts (excluding certain operational metrics),
as set forth in “Risk Factors”, “Our Business” and “Management's Discussion and Analysis of
Financial Condition and Results of Operations” beginning on pages 28, 150 and 275 respectively, and

elsewhere in this Prospectus have been calculated on the basis of the Restated Financial Information.

Currency and Units of Presentation

All references to

e “Rupees” or “2” or “INR” or “Rs.” are to Indian Rupee, the official currency of the Republic of India;
and

e “USD” or “US$” are to United States Dollar, the official currency of the United States.

Except otherwise specified, our Company has presented certain numerical information in this
Prospectus in “Lakh” units.

However, where any figures that may have been sourced from third-party industry sources are expressed
in denominations other than Lakhs, such figures appear in this Prospectus in such denominations as
provided in the respective sources.

In this Prospectus, any discrepancies in any table between the total and the sums of the amounts listed
are due to rounding off. All figures in decimals, including percentage figures, have been rounded off to
the second decimal.

Exchange Rates

This Prospectus contains conversion of certain other currency amounts into Indian Rupees that have
been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be
construed as a representation that these currency amounts could have been, or can be converted into
Indian Rupees, at any particular rate or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate
between the Rupee and the US$:

 

 

(in Rs.
Currency As on September | As on March 31, | As on March 31, | As on March 31,
30, 2021 2021 2020 2019
us$* 74.25 73.50 75.39 69.17

 

 

 

 

 

 

 

*Source: www.rbi.org.in and www. fbil.org.in

In case the RBI reference rate is not available on a particular date due to a public holiday, exchange
rates of the previous working day have been considered.

Industry and Market Data

Unless stated otherwise, industry and market data used in this Prospectus has been obtained or derived
from publicly available information as well as various industry publications and sources. These

16
ay

publications typically state that the information contained therein has been obtained from sources
believed to be reliable but their accuracy and completeness are not guaranteed and their reliability
cannot be assured. Accordingly, no investment decisions should be made based on such information.
The data used in these sources may have been reclassified by us for the purposes of presentation. Data
from these sources may also not be comparable.

The extent to which the market and industry data used in this Prospectus is meaningful depends on the
reader’s familiarity with and understanding of the methodologies used in compiling such data. There
are no standard data gathering methodologies in the industry in which we conduct our business and
methodologies and assumptions may vary widely among different industry sources.

Such data involves risks, uncertainties and numerous assumptions and is subject to change based on
various factors including those discussed in chapter titled “Risk Factors” on page 28 of this Prospectus.
Accordingly, investment decisions should not be based solely on such information.

In accordance with the SEBI Regulations, we have included in the chapter “Basis for Offer Price” on page
125, information pertaining to the peer group companies of our Company. Such information has been
derived from publicly available data of the peer group companies. Accordingly, no investment decision
should be made solely on the basis of such information. Such industry sources and publications are also
prepared based on information as at specific dates and may no longer be current or reflect current trends.
Industry sources and publications may also base this information on estimates and assumptions that may
prove to be incorrect. Such data involves risks, uncertainties and numerous assumptions and is subject to
change based on various factors, including those disclosed in “Risk Factors” beginning on page 28 of
this Prospectus.

17
ay

regulations, may adversely affect our business, financial condition, results of operations and
prospects.

For details regarding factors that could cause the actual results to differ from the expectations, please
refer to the chapter titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” beginning on pages 28, 150 and 275 respectively
of this Prospectus. By their nature, certain market risk disclosures are only estimates and could be
materially different from what actually occurs in the future. As a result, actual gains or losses could
materially differ from those that have been estimated.

We cannot assure Bidders that the expectations reflected in these forward-looking statements will prove
to be correct. Given these uncertainties, Bidders are cautioned not to place undue reliance on such
forward-looking statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as of the date of this Prospectus
and are not a guarantee of future performance. These statements are based on the management’s beliefs
and assumptions, which in turn are based on currently available information. Although we believe the
assumptions upon which these forward-looking statements are based are reasonable, any of these
assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect. Our Company, our Directors, the Selling Shareholder, members of the
Syndicate or any of their respective affiliates or advisors do not have any obligation to, and do not
intend to, update or otherwise revise any statements reflecting circumstances arising after the date
hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come
to fruition.

In accordance with SEBI ICDR Regulations, our Company and the BRLM will ensure that investors in
India are informed of material developments from the date of the Prospectus until the time of the grant
of listing and trading permission by the Stock Exchanges for the Offer.

In accordance with requirements of SEBI and as prescribed under applicable law, each of the Selling
Shareholder shall ensure that the Bidders in India are informed of material developments, in relation to
statements and undertakings specifically undertaken or confirmed by it in relation to itself and its
respective portion of the Offered Shares in this Prospectus until the time of the grant of listing and
trading permission by the Stock Exchanges. Only statements and undertakings which are specifically
confirmed or undertaken by each Selling Shareholder, as the case may be, in this Prospectus shall be
deemed to be statements and undertakings made by such Selling Shareholder.

19
ay

FORWARD LOOKING STATEMENTS

This Prospectus contains certain “forward-looking statements”. These forward-looking statements

generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,

“estimate”, “intend”, “objective”, “plan’”’, “propose”, “project”, “will”, “will continue”, “will pursue”

or other words or phrases of similar import. Similarly, statements that describe our Company’s
strategies, objectives, plans or goals are also forward-looking statements.

All forward-looking statements are subject to risks, uncertainties, expectations and assumptions about
us that may vary, some or all of which could cause actual results to differ materially from those
contemplated by the relevant forward- looking statement. All statements in this Prospectus that are not
statements of historical fact are ‘forward — looking statements’.

Actual results may differ materially from those suggested by forward-looking statements due to risks
or uncertainties associated with expectations relating to and including, regulatory changes pertaining to
the industries in India in which we operate and our ability to respond to them, our ability to successfully
implement our strategy, our growth and expansion, technological changes, our exposure to market risks,
general economic and political conditions in India which have an impact on its business activities or
investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in
interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the
financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in
competition in the industries in which we operate.

Certain important factors that could cause actual results to differ materially from our Company’s
expectations and assumptions include, but are not limited to, the following:

1. General economic and business conditions in the markets in which we operate and in the local,
regional and national economies;

2. Uncertainty of the continuing impact of the COVID-19 pandemic on our business and operations;
3. Engagement in a highly competitive business and a failure to effectively compete;

4. Inability to identify or effectively respond to evolving preferences, expectations or trends in a timely
manner, and a failure to derive the desired benefits from our product development efforts;

5. Changes in technology and our ability to manage any disruption or failure of our technology systems;
6. Our ability to attract and retain qualified personnel;

7. Changes in political and social conditions in India, the monetary and interest rate policies, inflation,
deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

8. The performance of the financial markets in India and globally;
9. Market fluctuations and industry dynamics beyond our control;
10. Changes in foreign exchange rates or other rates or prices;

11. Inability to collect our dues and receivables from, or invoice our unbilled services to, our customers,
our results of operations;

12. Changes in domestic and foreign laws, regulations and taxes and changes in competition in our
industry;

13. Termination of clients/ works contracts without cause and with little or no notice or penalty;

14. Inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals or
non- compliance with and changes in, safety, health and environmental laws and other applicable

18
P

OFFER DOCUMENT SUMMARY

The following is a general summary of the terms of the Offer. This summary should be read in
conjunction with, and is qualified in its entirety by, the more detailed information appearing
elsewhere in this Prospectus, including “Risk Factors”, “Objects of the Offer”, “Our Business”,
“Industry Overview”, “Financial Information” “Outstanding Litigation and Material Developments”,
“Main Provisions of Articles of Association” and “Offer Procedure” beginning on pages 28, 94, 150,
132, 202, 293, 361 and 335, respectively.

Primary business of our Company

We are a fast-growing multi-product, multi-category consumer adhesives and sealants company. We
manufacture a wide range of consumer adhesives and sealants products such as PVC, cPVC and uPVC
solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket
shellac, other sealants and PVC pipe lubricant which are sold across India, through an extensive
distribution network of distributors, and exported also to several countries, through network of
distributors and direct customers. We also manufacture these products for select third-parties on order
basis. Apart from the above products, we also provide ancillary products like ball valves, thread seal
and other tapes and FRP products for drainage and architectural solutions that are distributed along with
our products to the end- customers through our distribution network.

Industry in which our Company operates

The domestic adhesives and sealants market is broadly categorised into 1) industrial and 2) consumer
and bazaar adhesives. The industrial segment caters to B2B industries such as packaging, footwear,
paints, automotive, etc. The retail segment caters to industries such as furniture/woodwork, building
construction, arts and craft, electrical fittings, etc. PVC adhesives, also known as PVC solvent cement
are adhesives, which are used for joining PVC pipes. The process is similar to welding, since it melts
two pieces of PVC pipes into a single piece. A PVC adhesive consists of PVC resin, a solvent, and
methyl ethyl ketone — which breaks the top layer of the pipes and fittings to be joined together. The
single largest application of PVC adhesives is in the PVC pipes industry, where it is widely used to join

pipes.

Promoters of our Company

The Promoters of our Company are Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani.

 

 

 

 

Size of the Offer
Offer Up to 45,97,200 Equity Shares aggregating to = 12,596.33 Lakhs
of which
Fresh Issue” Up to 41,40,000 Equity Shares aggregating to = 11,343.60 Lakhs
Offer for Sale Up to 4,57,200 Equity Shares aggregating to = 1,252.73 Lakhs by
the Selling Shareholder

 

 

 

 

(1) The Offer has been authorized by resolution of our Board dated July 05, 2021 and the Fresh Issue has
been authorized by a special resolution of our Shareholders, dated July 06, 2021.

(2) The Equity Shares being offered by the Selling Shareholder have been held for a period of at least one
year immediately preceding the date of this Prospectus with the SEBI and are eligible for being offered
for sale pursuant to the Offer in terms of the SEBI ICDR Regulations. The Selling Shareholder has
consented to participate in the Offer for Sale pursuant to its consent letter dated July 05, 2021 and has

20
consented to offer up to 4,57,200 Equity Shares in the Offer for Sale. For details of authorizations received
for the Offer for Sale, see “Other Regulatory and Statutory Disclosures” on page 313.

Objects of the Offer:

The proceeds of the fresh issue are to be utilized for financing the following objects:

 

 

 

 

Rs. in Lakhs,

1, Funding capital expenditure for existing and proposed 2,550.86
expansion

2. Funding the incremental working capital requirement of our 5,400.00
Company

2. General corporate purpose 1,723.50

Total 9,674.36

 

 

 

 

 

Aggregate pre-Offer shareholding of the Promoter and Promoter Group members

Promoters 1,35,67,335 95.31%
Promoter Group NIL N.A.

 

 

 

 

 

 

Financial Information:

The following table sets forth summary financial information derived from the restated Financial
Statements, prepared in accordance with Ind AS and the Companies Act for the six months period ended
September 30, 2021 and 2020, Financial Years ended March 31, 2019, March 31, 2020 and March 31,
2021.

 

 

 

 

 

 

(Rs. in lakhs)
Share Capital 1,423.49 1,300.00 1,300.00 1,300.00 | 1,300.00
Net Worth 3,756.08 560.49 1,265.89 248.44 | 1,466.23
Total Income 7,273.23 4,674.89 12,387.96 9,790.75 | 8,797.64
Profit’ (loss) 310.24 293.42 1,005.97 (467.05) | 400.07
after tax
Basic and 2:20% 2.26 7.74 (3.59) 3.08
Diluted EPS (in
Rs.)
Net asset value 26.39 2.26 9.74 1.91 11.28
per share (in Rs.)
Total borrowings 2,973.81 3,394.11 4,220.44 3,461.05 | 2,358.33

 

 

 

 

 

 

 

 

*Not annualised
P

The restated Financial Statements for the six months period ended September 30, 2021 and 2020 and
Financial Years ended March 31, 2019, March 31, 2020 and March 31, 2021 referred to above are
presented under “Financial Information” on page 202 of this Prospectus.

Auditor Qualifications which have not been given effect to in the restated Financial Statements

No reservations, qualifications and adverse remarks have been made by our Auditors in their reports
which have not been given effect to in the restated Financial Statements for the six months period ended
September 30, 2021 and 2020 and Financial Years ended March 31, 2019, March 31, 2020 and March
31, 2021.

Outstanding Litigations:

A summary of outstanding tax proceedings involving our Company, Directors and Promoters as on the
date of this Prospectus is provided below.

 

 

 

 

 

 

Sr. No Outstanding Litigations Number of Financial implications to the
_— Cases extent quantifiable (Rs. in
lakhs)
1 Filed against our Company 7 178.77
2 Filed by our Company 3 1095.00
3 Filed against our Directors 2 0.60
4 Filed against our Promoters 1 tes
5. Filed by our Promoters 1 Not quantifiable

 

 

 

 

 

 

The amounts mentioned above may be subject to additional interest/ penalties being levied by the
concerned authorities for delay in making payment or otherwise. The amount of interest/ penalties that
may be levied is unascertainable as on date of this Prospectus. For further details regarding these tax
proceedings, please refer to chapter titled ‘Outstanding Litigations and Material Developments’ on page
293 of this Prospectus.

Risk Factors

An investment in Equity Shares involves a high degree of financial risk. You should carefully consider
all information in this Prospectus, including the risks described below, before making an investment in
our Equity Shares. The risk factors set forth below do not purport to be complete or comprehensive in
terms of all the risk factors that may arise in connection with our business or any decision to purchase,
own or dispose of the Equity Shares. The section addresses general risks associated with the industry in
which we operate and specific risks associated with our Company. For further details, please refer to
chapter titled “Risk Factors” on page 28 of this Prospectus.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Company or a present obligation that arise from past
events where it is either not probable that an outflow of resources will be required to settle the obligation
or a reliable estimate of the amount cannot be made.

As of September 30, 2021, our Company had the following contingent liabilities:

22
I Contingent Liabilities

wy

(Rs. in Lakhs)

 

 

 

 

 

 

 

 

Letter of comfort issued to banks :
Claim against the company not acknowledged as debt
@ Tax matter dispute under appeal (MVAT & CST)* 144.30
(ii) Income Tax matter dispute under appeal (AY 14-15) 2.70
(iii) Others — Uncrystallized effect of Bank Guarantees given 51.25
by company to DC, Central Excise Anti-evasion wing,
Mumbai*
(iv) Demand raised against short duty paid Under Sec. 2.06
11A(10) of Central Excise Act, 1944 (Appeal Filed In
Tribunal , Appeal No. E/86416/2021)
Total 200.31

 

 

 

* Amount paid under protest Rs. 15.87 Lacs included in Other Non-current Assets

* Company has already settled the Excise duty dues under Sab Ka Vishwas Scheme in FY 2019-20.

IL. Commitments

a in _

 

 

 

 

 

1. Estimated amount of Contracts remaining to be -
executed on Capital account and not provided for

(i) Towards Property, Plant & Equipment 286.97

(ii) Towards Intangible Assets :

Total 286.97

 

 

 

For further details, please see the “Annexure XXIX — Restated Contingent Liabilities and Commitments”

under the chapter “Restated Financial Statements” on page 255 of this Prospectus.
Related Party Transactions:

a

Following are the details of related party transactions for the six months period ended September 30, 2021 and Fiscals 2021, 2020 and 2019 as disclosed in
the Restated Financial Statements:

(Rs. in lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Nature of Transa ‘Amount Transa ‘Amount Amount Amount
Relat Transaction Transa Amoun ctions Receivabl ctions Receivabl Transacti Receivab Transa Receivab
ionsh ctions t For the e/ For the e/ ons For le/ ctions le/
ip For the Receiv Period (payable) Period (payable) the (payable) For the (payable)

Period able/ Ended as at 30th Ended as at 31st Period as at 31st Period as at 31st
Ended (payabl 30th Sept 2020 31st March Ended March Ended March
30th e) as at Sept, March, 2021 31st 2020 31st 2019
Sept, 30th 2020 2021 March, March,
2021 Sept 2020 2019
2021

HP Direc Business 417.29 598.71 - 20.10 109.52 62.13 449.16 154.05 -

compo | tor is Transactions - Sale

SITES Partn

LLP. er

Business 183.22 -

Transactions - Sale

of Assets

Business 78.61 396.57 612.19 154.07
Transactions -

Purchase

Rental Services 6.00 6.00 13.00 165.00
Given

Job-Work Services - 148.72 346.76 -
Given

ANJAN Direc Loan Taken 163.39 , 193.45 (199.05) 938.84 (786.41) 1,338.46 (523.54) 100.22 (4,307.92)

A tor

MOTW Loan Repaid 949.80 499.44 675.77 814.92 114.23

ANI Interest On - - - - 117.62

Partners Capital

Share of Profits - - - - 125.31
Remuneration Paid 17.30 2.00 14.60 20.00 10.10
Rent Paid 30.00 - - -

Bonus Paid - - 401 -

KARAN | _ Direc Loan Taken 750.09 - 0.14 (165.26) 166.58 (164.91) 807.11 (167.10) 47.40 (640.57)

MOTW tor

ANI Loan Repaid 915.00 4.67 168.76 640.01 51.97

Interest On - - - - 57.27
Partners Capital

 

24

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Nature of ‘Transa ‘Amount Transa ‘Amount ‘Amount ‘Amount
Relat Transaction Transa Amoun ctions Receivabl ctions Receivabl Transacti Receivab Transa Receivab
ionsh ctions t For the e/ For the e/ ons For le/ ctions le/
ip For the Receiy Period (payable) Period (payable) the (payable) For the (payable)

Period able/ Ended as at 30th Ended as at 31st Period as at 31st Period as at 31st
Ended (payabl 30th Sept 2020 31st March Ended March Ended March
30th e) as at Sept, March, 2021 Bist 2020 31st 2019
Sept, 30th 2020 2021 March, March,
2021 Sept 2020 2019
2021
Share of Profits - - - - 41.77
Remuneration Paid 38.45, 3.00 21.90 30.00 40.00
Rent Paid 30.00 - - -
Bonus Paid - - 6.02 -

NIDHI Direc Interest. Paid on - (1.55) - (66.24) - - 18.14 (183.74) aL14 (342.27)

MOTW tor Unsecured Loans

ANI Daug
hter

Loan Taken - 75.00 286.00 756.41 1,106.50
Loan Repaid - 469.74 572.68 805.36
Salary Paid 13.80 9.00 21.60 4.00

HP Direc Business - - 75.27 A772 63.20 75.27 - 142.14

TRADI tor Transactions - Sale

NG Prop.

Firm
Business - - - 132.50 17.54
Transactions -
Purchase

HP Direc Business - - - 21.97 - 28.40

SALES tor Transactions - Sale

CORPO Prop.

RATIO Firm

N Business - - - 21.97

Transactions -
Purchase

HP Direc Business - - 22.17 - - - - 21.40

MARKE | tor Transactions - Sale

TING Daug Business - - - - 71.30
hter Transactions
Prop. Purchase
Firm

HP Direc Business - - - : - - - - 1.80 (3.60)

PLASTI tor Transactions - Rent

C HUF | Fathe Paid

(HARES

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 
a

 

 

 

 

 

 

 

 

 

 

 

 

Name Nature of Transa ‘Amount ‘Transa ‘Amount ‘Amount ‘Amount
Relat | Transaction Transa_ | Amoun tions Receivabl ctions | Receivabl | Transacti Receivab Transa Receivab
ionsh tions t | Forthe e/ | Forthe e/ ons For le/ ctions le/
ip For the Receiv Period (payable) Period (payable) the | (payable) For the (payable)

Period able / Ended as at 30th Ended as at 31st, Period | asat 31st Period as at 31st
Ended | (payabl 30th Sept 2020 Bist March Ended March Ended March
30th e) as at Sept, March, 2021 31st 2020 31st 2019
Sept, 30th 2020 2021 March, March,
2021 Sept 2020 2019
2021

H T

MOTW HUF

ANI

HUE)

HP Direc Toan Taken ' zi : > > 7 = > 5.50 >

een | ae Loan Repaid z = - = 5.50

(KARA

N

HARES

H

MOTW

ANI

HUF)

ADVAN | Direc Business Bal 18.67 1.36 13.74 3.14 15.52 7 = 5.27 897

CE tor Transactions - Sale

SOLVE | Prop.

NT Firm

ADHESI

VES

Business - - - 951
Transactions
Purchase

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For details of related party transactions of our Company, as per the requirements under Ind AS 24 ‘Related Party Disclosures’ for the six months period ended
September 30, 2021 and 2020 and Financial Years ended March 31, 2019, March 31, 2020 and March 31, 2021, please see “Annexure- XXV — Related Party
Transaction” under the chapter “Restated Financial Statements” on page 202 of this Prospectus.

26
a

Financing Arrangements

There have been no financing arrangements whereby the Promoters, members of the Promoter Group,
our Directors and their relatives have financed the purchase, by any other person, of securities of our
Company other than in the normal course of the business of the financing entity during the period of six
months immediately preceding the date of the Prospectus.

Weighted average price

The weighted average price at which Equity Shares were acquired by our Promoters in the last one year
is set forth in the table below:

     

Mrs. Anjana Haresh Motwani 5,67,335

 

Average Cost of Acquisition

The average cost of acquisition per Equity Share by our Promoters is set forth in the table below:

Mrs. Anjana Haresh Motwani 71,97,335 22.97
Mr. Karan Haresh Motwani 63,70,000 10.00

 

 

 

 

 

 

Pre- IPO Placement

Our Company, in consultation with the BRLM, may consider a pre-IPO placement. Any amount raised
from the pre-IPO placement will not be reduced from the Fresh Issue.

Issue of Equity Shares for consideration other than cash in the last one year

Our Company has not issued Equity Shares for consideration other than cash during the last one year
immediately preceding the date of filing the Prospectus.

Split/ consolidation of Equity Shares in the last one year

Our Company has not split/ consolidated equity shares during the last one year immediately preceding
the date of filing the Prospectus.

27
wy

SECTION II - RISK FACTORS

An investment in equity shares involves a high degree of risk. Prospective investors should carefully
consider all the information in this Prospectus, including the risks and uncertainties described below,
before making an investment in theEquity Shares. The risks and uncertainties described below are not the
only ones relevant to us or our Equity Shares, theindustry in which we operate or to India. Additional risks
and uncertainties, not currently known to us or that we currentlydo not deem material may also adversely
affect our business, results of operations, cash flows and financial condition. Ifany of the following risks,
or other risks that are not currently known or are not currently deemed material, actually occur, our
business, results of operations, cash flows and financial condition could be adversely affected, the price
of ourEquity Shares could decline, and investors may lose all or part of their investment. To the extent the
COVID-19 pandemicadversely affects our business and financial results, it may also have the effect of
heightening many of the other risks described in this section. In order to obtain a complete understanding
of our Company and our business, prospective investors should read this section in conjunction with “Our
Business”, “Industry Overview”, “Management's Discussion and Analysis of Financial Condition and
Results of Operations” and “Restated Financial Statements” beginning on pages 150, 132, 149 and 202,
respectively, of this Prospectus, as well as the other financial and statistical and other information
containedin this Prospectus. In making an investment decision, prospective investors must rely on their
own examination of our Company and our business and the terms of the Offer including the merits and
risks involved.

Prospective investors should consult their tax, financial and legal advisors about the particular
consequences of investing in the Offer. Unless specified or quantified in the relevant risk factors below,
we are unable to quantify the financial or other impact of any of the risks described in this section.
Prospective investors should pay particular attention to the factthat our Company is incorporated under
the laws of India and is subject to a legal and regulatory environment, which may differ in certain
respects from that of other countries.

This Prospectus also contains certain forward-looking statements that involve risks, assumptions,
estimates and uncertainties. Our actual results could differ from those anticipated in these forward-
looking statements as a result of certain factors, including the considerations described below and
elsewhere in this Prospectus. For further information,see “Forward-Looking Statements” on page 18
of this Prospectus.

Unless otherwise indicated or the context otherwise requires, the financial information included herein
is based on or derived from our Restated Financial Statements included in this Prospectus. For further
information, see “Restated Financial Statements” beginning on page 202 of this Prospectus. Unless the

context otherwise requires, in this section, references to “we”, “us”, “our”, “our Company”, or “the
Company” refers to HP Adhesives Limited.

Unless otherwise indicated, industry and market data used in this section has been derived from the
report titled “Assessment of the Adhesives and Sealants market in India” dated November 2021 (the
“CRISIL Research”) prepared and issued by CRISIL Limited commissioned by us. Unless otherwise
indicated, all financial, operational, industry and other related information derived from the CRISIL
Research Report and included herein with respect to any particular year refers to such information for
the relevant calendar year.

28
RISKS RELATING TO OUR BUSINESS

1. Our proposed capacity expansion plans relating to our manufacturing facility are subject to the
risk of unanticipated delays in implementation and cost overruns.

We have made and intend to continue making investments to expand the capacity of our manufacturing
facility to aid our growth efforts and expand our presence. We intend to use a part of the Net Proceeds
towards expansion of our manufacturing facility at Village Narangi, Raigad, Maharashtra. For further
information, see “Our Business — Proposed Expansion Plans” and “Objects of the Offer” on pages 161 and
94.

Our expansion plans remain subject to the potential problems and uncertainties including cost overruns or
delays. Problems that could adversely affect our expansion plans include labour shortages,increased costs
of equipment or manpower, inadequate performance of the equipment and machinery installed in our
manufacturing facility, delays in completion, defects in design or construction, the possibility of
unanticipated futureregulatory restrictions, delays in receiving governmental, statutory and other regulatory
approvals, incremental pre- operating expenses, taxes and duties, interest and finance charges, working
capital margin and other external factors which may not be within the control of our management. There
can be no assurance that the proposed capacity additions and expansions will be completed as planned or
on schedule, and if they are not completed in a timely manner, or at all, our budgeted costs may be
insufficient to meet our proposed capital expenditure requirements. If our actual capital expenditures
significantly exceed our budgets, or even if our budgets were sufficient to cover these projects, we may not
be able to achieve the intended economic benefits of these projects, which in turn may materially and
adversely affect our financial condition, results of operations, cash flows, and prospects. There can be no
assurance that we will be able to complete the aforementioned expansion and additions in accordance with
the proposed schedule of implementation and any delay could have an adverse impact on our growth,
prospects, cash flows and financial condition.

The proposed expansion by setting up an additional unit will require us to obtain various approvals, which
are routinein nature. In addition to such pending approvals, we may also need to apply for certain additional
approvals required for the proposed expansion. There can be no assurance that we will be able to obtain
these registrations and approvals in a timely manner or at all. Further, in the event of any unanticipated delay
in receiptof such approvals, the proposed schedule implementation and deployment of the Net Proceeds
may be extended or may vary accordingly.

2s The continuing impact of the COVID-19 pandemic on our business and operations is uncertain
and it may be significant and continue to have an adverse effect on our business, operations and
our future financial performance.

The World Health Organization declared the novel coronavirus disease (“COVID-19”) outbreak a Public
Health Emergency of International Concern on January 30, 2020, and a pandemic on March 11, 2020. The
rapid and diffused spread of COVID-19 and global health concerns relating to this pandemic have had a
severe negative impact on, among other things, financial markets, liquidity, economic conditions and trade
and could continue to do so or could worsen for an unknown period of time, that could in turn continue to
have a material adverse impact on our business, cash flows, results of operations and financial condition,
including liquidity and growth. The Company’s average monthly net sales during the financial year 2019-
20 have been in the range of Rs.750.00 Lakhs to Rs. 900.00 lakhs, however with the onset of the Covid-19
pandemic, our Company experienced a fall in the revenue in the month of April 2020 and May 2020 to Rs.
67.00 lakhs and Rs. 650.00 Lakhs respectively. The same impacted the profitability of our Company as
there was minimal change in the fixed cost of the Company. Further, production activities at our
manufacturing facility were halted during the period March 22, 2020 to April 16, 2020 which resulted in
our production capacity being unutilized for the said period. The average monthly collection from our
debtors which is generally in the range of Rs. 1000.00 lakhs to Rs. 1100.00 lakhs experience a decline as
we could receive only Rs.210.00 lakhs and Rs. 967.00 lakhs in the months of April and May, 2020

29
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respectively. The average period for realization of receivables also increased from around 60-70 days to
about 90 days in the month of April 2020 due to the impact of Covid-19. The extent to which the COVID-
19 outbreak impacts our business, cash flows, results of operations and financial condition will depend on
future developments, including the timeliness and effectiveness of actions taken or not taken to contain and
mitigate the effects of COVID-19 both in India and internationally, which are highly uncertain and cannot
be predicted. There is currently substantial medical uncertainty regarding COVID-19. A rapid increase in
severe cases and deaths where measures taken by governments fail or are lifted prematurely, may cause
unprecedented economic disruption in India and in the rest of the world. The scope, duration and frequency
of such measures and the adverse effects of COVID- 19 remain uncertain and are likely to be severe.

On March 14, 2020, India declared COVID-19 as a “notified disaster” and imposed a nationwide lockdown
on March 24, 2020. While progressive relaxations have since been granted for movement of goods and
people and cautious re- opening of businesses and offices, lockdowns may be re- introduced in the future.
On account of the nationwide lockdown, operations at our manufacturing facility were suspended. This
resulted in a decrease in sale of our products particularly during the month of April 2020 and May 2020 on
account of government restrictions imposed and additionally on account of cost control measures
implemented by our distributors and end-customers. We also experienced disruptions in supply chain and
inventory management, as well as delays in orders and payments. In particular, some of our purchase orders
were cancelled and/ or deferred by our distributors. While we restarted manufacturing operations at our
manufacturing facility with the progressive relaxation of the lockdown, we are required to implement
additional safety measures, such as, regular temperature checks, regular sanitization, and compulsory use
of masks and hand sanitization, and limited workforce. We have monitored and considered the impact of
known events arising from the COVID-19 pandemic including with respect to our liquidity and going
concern, recoverable values of property, plant and equipment, intangible assets and the net realisable value
of other assets. The management has assessed and concluded that there is no additional impact on account
of COVID-19 which is required to be recognised in the Restated Financial Statements. However, we will
continue to closely monitor the impact that COVID-19 may have on our business, financial condition,
liquidity and results of operations. Adverse effects of the COVID-19 pandemic may also significantly
increase the effect of the aforementioned factors affecting our results of operations.

The impact of the pandemic on our business, operations and future financial performance has included and

may include the following:

e temporary shutdown of our manufacturing facilities or sales depots due to government restrictions;

e decrease in sales of our products, particularly in the first half of Fiscal 2021 including on account of
cost controlmeasures implemented by our distributors and/ or end-customers;

e inability to utilize our workforce including because of travel or government restrictions, such as stay at
home orders, or illness of our employees due to COVID-19 and associated quarantining requirements,
which resulted in a slowdown in our operations;

e disruptions to our supply chain in terms of raw material sourcing due to temporary closure of the
facilities of suppliers, and delivery of finished products due to transportation restrictions;

e delays or indefinite postponement in the future of our proposed expansion plans/ product development
activities;

e delays in orders or delivery of orders, and if prolonged may negatively impact our cash conversion
cycle andability to convert our backlog into cash;

e inability to collect full or partial payments from distributors due to deterioration in liquidity,
including financial distress experienced by distributors;

e inability in the future to access debt and equity capital on acceptable terms, or at all;

e inability in the future to comply with the covenants in our credit facilities and other financing
agreements, which could result in events of default and the acceleration of repayment; and

e potential negative impact on the health of our employees, particularly if a significant number of them
are afflicted by COVID-19, resulting in a deterioration in our ability to ensure business continuity
during this disruption.

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Any resulting financial impact due to the above cannot be reasonably estimated at this time. In addition,
we cannot predict the impact that the COVID-19 pandemic will have on our distributors, suppliers and
other business partners, and each of their financial conditions; however, any material effect on these parties
could adversely impact us. As a result of these uncertainties, the impact may vary significantly from that
estimated by our management from time to time, and any action to contain or mitigate such impact, whether
government- mandated or opted by us, may not have the anticipated effect or may fail to achieve its intended
purpose altogether. Existing insurance coverage may not provide protection or coverage for any costs that
may arise from all such possible events. For further information, see “Management’s Discussion and
Analysis on the Financial Conditions and Results of Operations - Auditor’s Observations” on page 275 of
this Prospectus.

Further, we generate a major part of our revenue in India. The effects of COVID-19 in India may be of a
greater magnitude, scope and duration than those experienced to date in other countries. To the extent that
the COVID-19 pandemic adversely affects our business and operations, it may also have the effect of
heightening many of the other risks described in this “Risk Factors” section.

3. Our ability to grow our business depends on our relationships with our distributors and the
community of appliers and any adverse changes in these relationships, or our inability to enter
into new relationships and thereby expand our distribution network, could negatively affect our
business and results of operations.

Our business is dependent on the decisions and actions of our distributors which is determined by our ability
to maintain and strengthen our relationships and arrangements with existing distributors as well as our
ability to establish and maintain relationships with new distributors. In addition, as distributors and end-
customers are also influenced by appliers, our business is also dependent on the relationships we share with
the community of appliers. Our relationship with our distributors and appliers is dependent to a large extent
on our ability to regularly meet their requirements, including by introducing products with greater
marketability, price competitiveness, efficient and timely product deliveries, and consistent product quality.
In the event we are unable to meet such requirements in the future, it may result in decrease in orders or
cessation of business from affected distributors and appliers. In addition, failure to provide distributors with
sufficient inventories of our products may result in lesser sales of our products compared to the demand.
There are also a number of factors relating to our distributors and appliers beyond our control that might
result in the termination of our arrangement or the loss of a distributor or applier relationship, including
change in preferences of our distributors or appliers as well as a demand for price reductions. Further, the
deterioration of the financial condition or business prospects of these distributors could affect their ability
to maintain inventory and thus reduce demand for our products and could result in a significant decline in
the revenues we derive from such distributors. Adverse changes in our relationships with our distributors
and appliers, or the inability to develop newproducts for existing distributors or appliers or to successfully
establish relationships with new distributors or appliers, could therefore limit our business prospects, which
could adversely affect our financial performance. Please also see Risk Factor No. 24“ — We are in the
process of expanding our operations and establishing a network of distributor in regions where we do not
have a significant presence and prior experience. Any failure to expand into these new regions could
adversely affect our sales, financial condition, result of operations, and cash flows.” on page 43 of this
Prospectus.

We may also face disruptions in the delivery of our products for various reasons beyond our control,
including poor freight forwarding of our products, transportation bottlenecks, natural disasters, infectious
disease outbreaks such as the COVID-19 pandemic and labour issues, which could lead to deliveries being
delayed or lost, resulting in insufficient inventories at distributor outlets. If we fail to deliver products to
distributors in a timely manner, or if our distributors fail to adhere to the terms of our arrangements, our
business and results of operations may be adversely affected.

31
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4, We do not enter into long-term arrangements with our distributors and any failure to continue
our existing arrangements could negatively affect our business and results of operations.

We sell all our products through our distributor network. We presently do not have any long-term or
exclusive arrangements with any of our distributor and we cannot assure you that we will be able to sell the
quantities we have historically supplied to such distributors. In the event our competitors’ products offer
better margins to such distributors or otherwise incentivizes them, there can be no assurance that our
distributors will continue to promote our products or place orders with us. Most of our transactions with
our distributors are typically on a purchase order basis without any commitment for a fixed volume of
business. There can also be no assurance that our distributors will renew their arrangements with us on
current or similar terms, or at all. Further, our distributors could change their business practices or seek to
modify the terms that we have customarily followed with them, including in relation to their payment terms.
While we negotiate product prices and payment terms with our distributors, in the event our distributors
alter their requirements, it could have a material adverse effect on our business growth and prospects,
financial condition, results of operations, and cash flows. In addition, our distributors may also cancel
purchase orders at short notice or without notice, which could have an impact on our inventory
management. Termination of any of the above mentioned arrangements or frequent cancellation of purchase
orders could have a material adverse effect on our business, financial condition, results of operations, and
cash flows.

Further, in the event our distributors experience any delays in placing orders with us, do not effectively
market our products, or if they prefer to market the products of our competitors, it could have a material
adverse effect on our business growth and prospects, financial condition, results of operations and cash
flows. Our inability to maintain ourexisting distribution network could have a material adverse effect on our
sales, business growth and prospects, resultsof operation, financial condition and cash flows. Further, the
performance of our distributors, their sales network and theirability to expand their businesses are crucial to
the future growth of our business and directly affect our sales volume and profitability. If any of the
distributors fails to distribute our products in a timely manner, or at all, or if our relationshipswith distributors
are adversely affected, our profitability could be materially and adversely affected.

5. Under-utilization of our manufacturing capacities and an inability to effectively utilize our
expanded manufacturing capacities could have an adverse effect on our business, future
prospects and future financial performance.

As of March 31, 2021, we own and operate one manufacturing facility in Village Narangi, Raigad,
Maharashtra with an aggregate estimated installed production capacity of 6,098.82 KLPA for solvent
cement, 2,491.20 MTPA for other adhesives and 783.36 MTPA for sealants. Our ability to maintain our
profitability depends on our ability to optimize the product mix to support high-margin products and
products with consistent long-term demand; and the demand and supply balance of our products in the
principal and target markets. In particular, the level of our capacity utilization can impact our operating
results. Capacity utilization is also affected by our product mix and the demand and supply balance.

Our capacity utilization levels are dependent on our ability to carry out uninterrupted operations at
manufacturing facility, the availability of raw materials, industry/ market conditions, as well as by the
product requirements of, and procurement practice followed by, our distributors. In the event we face
prolonged disruptions at our facilities including due to interruptions in the supply of water, electricity or as
a result of labour unrest, or are unable to procure sufficient raw materials, we would not be able to achieve
full capacity utilization of our current manufacturing facility, resulting in operational inefficiencies which
could have a material adverse effect on our business and financial condition. Further, we have made certain
investments for the expansion of our manufacturing capacity in the past and intend to use a part of the Net
Proceeds towards expansion of our manufacturing facility located in Village Narangi, Raigad, Maharashtra.
Our proposed expansion plans are based on demand forecasts that are subject to various assumptions:
including product trends in the industry, inventory management at distributor outlets, weather conditions
and seasonality in the industry, and end-customer spending preferences, that are based on prevailing

32
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economic conditions. Adequate utilization of our expanded capacities is therefore subject to various factors
beyond our control and in case of oversupply in the industry or lack of demand, we may not be able to
utilise our expanded capacities efficiently. The success of any capacity expansion and expected return on
investment on capital invested is subject to, among other factors, the ability to procure requisite regulatory
approvals in a timely manner; recruit and ensure satisfactory performance of personnel to further grow our
business; and the ability to absorb additional infrastructure costs and develop new expertise and utilize the
expanded capacities as anticipated. Please also see Risk Factor No. 16 “Our funding requirements and
proposed deployment of the Net Proceeds are based on management estimates and may be subject to change
based on various factors, some of which are beyond our control” and Risk Factor No. 1 “Our proposed
capacity expansion plans relating to our manufacturing facilities are subject to the risk of unanticipated
delays in implementation and cost overruns” on pages 39 and 29, respectively, of this Prospectus.

In Fiscals 2019, 2020 and 2021, our overall capacity utilization for solvent cement was 54%, 57% and 51%,
respectively, for other adhesives was 7,48%, 20.74 % and 34.30%, respectively and for sealants was 7,71%,
38.08% and 52.92%, respectively. For further information, see “Our Business - Capacity and Capacity
Utilization” on page 160 of this Prospectus. These rates are not indicative of future capacity utilization
rates, which is dependent on various factors, including demand for our products, availability of raw
materials, our ability to manage our inventory and improve operational efficiency. Under-utilizationof our
manufacturing capacities over extended periods, or significant under-utilization in the short-term, could
materially and adversely impact our business, growth prospects and future financial performance.

6. We do not have long-term agreements with our suppliers for raw materials and an inability to
procure the desired quality, quantity of our raw materials in a timely manner and at reasonable
costs, or at all, may have a material adverse effect on our business, results of operations,
financial condition and cash flows.

Our ability to remain competitive, maintain costs and profitability depend, in part, on our ability to source
and maintain a stable and sufficient supply of raw materials at acceptable prices. Our major raw materials
include solvents, resins and other additives. For further information, see “Our Business — Procurement of
Raw Materials” beginning on page 162 of this Prospectus. We depend on external suppliers for all the raw
materials required and typically purchase raw materials on a purchase order basis and place such orders
with them in advance on the basis of our anticipated requirements. As a result, the success of our business
is significantly dependent on maintaining good relationships with our raw material suppliers. The absence
of long-term supply contracts subjects us to risks such as price volatility caused by various factors such as
commodity market fluctuations, currency fluctuations, climatic and environmental conditions, production
and transportation cost, changes in domestic as well as international government policies, and regulatory
and trade sanctions. Some portion of our raw materials are also imported. As a result, we continue to remain
susceptible to the risks arising out of raw material price fluctuations as well as import duties, which could
result in a decline in our operating margins. If we cannot fully offset the increase in raw material prices
with increase in the prices for our products, we will experience lower margins, which in turn may have a
material adverse effect on our results of operations, financial condition, and cash flows. In the absence of
such contracts we are also exposed to the risk of unavailability of certain raw materials in desired quantities
and qualities, in a timely manner or at all.

Although we have not faced significant disruptions in the procurement of raw materials in the past, the
COVID-19 pandemic temporarily affected our ability to source raw materials from certain vendors who
were unable to transport raw materials to us. There can thus, be no assurance that in future we will be able
to procure the required quantities and quality of raw materials commensurate with our requirements. In
Fiscals 2019, 2020 and 2021 and six months periods ended September 30, 2021 and 2020, the cost of raw
materials and components consumed represented 65.34%, 65.13%, 68.74%, 72.77% and 68.08%
respectively, of our revenue from operations. There can also be no assurance that a particular supplier will
continue to supply us with raw materials in the future. Any delay in supplying finished products to
distributors in accordance with the terms and conditions of the purchase orders, such as delivery within a
specified time, as a result of delayed raw material supply, could result in the distributor refusing to accept

33
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our products, which may have an adverse effect on our business and reputation. Further, we cannot assure
you that we will be able to enter into new or renew our existing arrangements with suppliers on terms
acceptable to us, which could have an adverse effect on our ability to source raw materials in a commercially
viable and timely manner, if at all, which may impact our business and profitability.

Further, as we generally have short-term arrangements for supply of our products to distributors, we rely
on historical trends and other indicators to purchase the required quantities of raw materials. We, therefore,
run the risk of purchasing more raw materials than necessary, which could expose us to risks associated
with prolonged storage of some of these materials, and materially affect our results of operations.
Conversely, if our distributors place orders for greater quantities of products compared to their historical
requirements, we may not be able to adequately source the necessary raw materials in a timely manner and
may not have the required available manufacturing capacity to meet such demand. In addition, if all or a
significant number of our suppliers for any particular raw material are unable or unwilling to meet our
requirements or our estimates fall short of the demand, we could suffer shortages or significant cost
increases. Continued supply disruptions could exert pressure on our costs, and we cannot assure you that
all or part of any increased costs can be passed along to our distributors in a timely manner or at all, which
could negatively affect our business, overall profitability and financial performance.

Te We have incurred borrowings from commercial banks and an inability to comply with repayment
and other covenants in our financing agreements could adversely affect our business and
financial condition.

We have entered into agreements with banks for short-term and long-term borrowings. As of March 31,
2021 and as of September 30, 2021, we had Total Borrowings (consisting of borrowings under non-current
liabilities, current maturities of long-term debts and borrowings under current liabilities) of = 4,220.44
Lakhs and Rs. 2973.81 lakhs, respectively, which comprises of secured loans from ICICI Bank and
IndusInd Bank, unsecured loans from our Promoters and vehicle loans. Certain agreements that we have
entered into contain restrictive covenants, including requirements that we obtain consent from the lenders
prior to undertaking certain matters such as availing fresh credit facility, giving fresh loans and advances,
opening/ maintaining new bank accounts issuing corporate guarantee etc. Any failure to service such
indebtedness, or otherwise perform any obligations under such financing agreements may lead to a
termination of one or more of our credit facilities or incur penalties and acceleration of payments under
such credit facilities, which may adversely affect our business and financial condition.

Further, we are required to, among other obligations, comply with certain financial covenants including
maintaining the prescribed inventory margins, insurance covers on the hypothecated properties and lien
creation. Our hypothecated assets comprise of our stock of raw materials, semi-finished and finished goods,
consumable stores and spares and such other movable current assets including book debts, bills whether
documentary or clean, outstanding monies, receivables, both present and future. There can be no assurance
that we will be able to comply with these financial or other covenants or that we will be able to obtain
consents necessary to take the actions that we believe are required to operate and grow our business. Any
fluctuations in the interest rates may directly impact the interest costs of such loans, and affect our business,
financial condition, results of operations and prospects. Our ability to make repayments and refinance our
indebtedness will depend on our continued ability to generate cash from our future operations. We may not
be able to generate enough cash flow from operations or obtain enough capital to service our debt. For
further information including in relation to hypothecated properties, please see “Financial Indebtedness”
beginning on page 291 of this Prospectus.

Any failure to comply with the conditions and covenants in our financing agreements that is not waived by
our lenders or guarantors or otherwise cured could lead to a termination of our credit facilities, foreclosure
on our assets, acceleration of all amounts due under such facilities or trigger cross-default provisions under
certain of our other financing agreements, any of which could adversely affect our financial condition and
our ability to conduct and implement our business plans.

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8. We intend to utilise a portion of the Net Proceeds for funding our capital expenditure
requirements. We are yet to place orders for such capital expenditure machinery.

We intend to utilise a portion of the Net Proceeds for funding capital expenditure for expansion of the
production capacity towards purchase of machinery, equipment and utilities at our manufacturing facility
at Village Narangi, Raigad. While we have obtained quotations from different vendors in relationto the
major machinery and equipment required for funding such capital expenditure, we are yet to place orders
for such machinery and equipment. Accordingly, orders worth = 2,308.10 Lakhs, which constitute 94.84%
of the total estimated costs in relation to expansion of the production capacities at Village Narangi, Raigad
are yet to be placed. There can be no assurance that we will be able to place orders for such machinery and
equipment in a timely manner or at all. Further, in the event of any delay in placement of such orders, the
proposedschedule implementation and deployment of the Net Proceeds may be extended or may vary
accordingly.

3, Fluctuation in the prices of petro-chemicals which are affected by the prices of crude oil may
affect our ability to price our products competitively.

The raw materials we use in our manufacturing process are primarily sourced from third party suppliers.
Our raw materials include solvents, resins and other additives that are manufactured using derivatives of
crude oil. Prices of these principal raw materials are subject to changes in the prices of crude oil and other
petrochemical intermediates which are linked to international prices and are susceptible to significant
volatility from time to time. As a result, we continue to remain susceptible to the risks arising out of raw
material price fluctuations and in particular fluctuation of crude oil prices which could result in declining
operating margins. While the variation in the price of such raw materials is typically passed on to the
customer, our inability to do so in the future could adversely affect our ability to price our products
competitively. Please also see the Risk Factor No. 6, “— We do not have long- term agreements with our
suppliers for raw materials, and an inability to procure the desired quality, quantity of our raw materials in
a timely manner and at reasonable costs, or at all, may have a material adverse effect on our business, results
of operations, financial condition, and cash flows.” on page 33 of this Prospectus.

10. We have had negative cash flows in the past and it is possible that we may experience negative
cash flows in the future.

The table below sets forth selected information from our statements of cash flows in the periods indicated
below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rs. in Lakhs)
Particulars For the year ended March 31,
Six months; 2021 2020 2019
period
‘Ended Sep
30, 2021
et cash (used in)/ generated from operating (743.97) 2152.92) 283.70, 228.90}
factivities
et cash (used in)/ generated from investing (1,622.70) (409.36) (358.90)|
activities (845.40)
et cash (used in)/ generated from financing 1,574.57| (522.77) 10.37 142.69)
factivities
et increase/ (decrease) in cash and cash (14.80) 7.46 (115.30) 12.74
equivalents
fas and Cash Equivalents at the beginning of the 83.10) 75.65, 190.95) 178.21
eriod
{Cash and Cash Equivalents at the end of the 68.30) 83.11 75.65] 190.95)
eriod

 

 

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For further details please refer chapters titled “Restated Financial Statements” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 202 and
275 respectively.

11. Our Company has incurred losses in the past.

Our Company has incurred a loss of Rs. 467.05 Lakhs in the Financial Year 2019-20. During the said
Financial Year, our Company had incurred an aggregate loss of INR 743.71 Lakhs due to exceptional item
of settling tax claims/ disputes under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and
Maha VAT Amnesty Scheme. There can be no assurance that our Company will not incur losses in the
future or that there will not be an adverse effect on our Company’s reputation or business as a result of such
losses.

For further details please refer chapter titled “Restated Financial Statements” beginning on page 202 of this
Prospectus.

12. We are required to obtain, renew or maintain certain statutory and regulatory permits and
approvals required to operate our business and if we fail to do so in a timely manner or at all
and our business, financial conditions, results of operations, and cash flows may be adversely
affected.

Our operations are subject to government and statutory regulations and we are required to obtain and
maintain several permits, consents and regulations and approvals under central, state and local government
tules for operating our business generally for our manufacturing facility and depots. While we believe that
we have obtained the necessary and material approvals, licenses, registrations and permits from the relevant
authorities, there could be instances where we may not have applied, obtained or applied with a delay for
certain requisite approvals applicable to us. For instance, we did not have the necessary consents to establish
or operate our manufacturing facility at Village Narangi, Raigad, Maharashtra under the pollution control
laws prior to July 2015, registration under Employees’ State Insurance Act prior to January 2021, etc.
Further, we may have breached certain limits as permitted in the approvals, licenses, registrations or permits
previously obtained. For instance, we have breached the production limit by 260 MT per month, 300 MT
per month and 350 MT per month on an average, during the Fiscals 2019, 2020 and 2021 respectively.
While we usually stay within the limits, we cannot assure you that no action will be taken against us for
such breach. Penalties may be levied against our Company for the breach of limits which may adversely
affect the financial position of our Company. We also need to apply for renewal, from time to time, of some
of such approvals, licenses, registrations and permits, which expire or seek fresh approvals, as and when
required, in the ordinary course of our business. While we generally apply for the renewal of approvals in
a timely manner, we cannot assure that such approvals will be issued or granted to us in a timely manner,
or at all. If we do not receive such approvals or are not able to renew the approvals in a timely manner, our
business and operations may be adversely affected. Further, there may also be delay in applying for renewal
or receiving the grant of such approval due to COVID-19 pandemic.

There can be no assurance that the relevant authority will issue an approval or renew expired approvals
within the applicable time period or at all. Any delay in receipt or non-receipt of such approvals, licenses,
registrations and permits could adversely affect our related operations. Further, under such circumstances,
the relevant authorities may initiate penal action against us, restrain our operations, impose fines/ penalties
or initiate legal proceedings for our inability to renew/obtain approvals in a timely manner or at all.

The approvals required by us are also subject to numerous conditions including, among others, quantum of
raw materials to be used, fire and safety measures, etc. Further, in some cases, consent of relevant
authorities is required in case there is any modification/ alteration/ change in product mix. The conditions
and the obligation to renew the approval or license at regular intervals are also prescribed in such approvals
and licenses. We cannot assure you that the approvals, licenses, registrations and permits issued to us will not
be suspended or cancelled or revoked in the event of non-compliance or alleged non-compliance with any terms

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or conditions thereof, or pursuant to any regulatory action. We have not, in the past, taken consents and
registration as required under the applicable environmental laws and Contract Labour (Regulation and
Abolition) Act, 1970. We cannot assure you that non-compliances will not occur in the future or that we
may not be subject to any penalties in relation to such non-compliances which may affect our profitability,
business, financial condition and results of operations. If there is any failure by us to comply with the
applicable regulations or if the regulations governing our business are amended, we may incur increased
costs, be subject to penalties, have our approvals and permits revoked or suffer a disruption in our
operations, any of which could adversely affect our business, financial conditions, results of operations,
and cash flows.

13. A significant portion of our domestic sales are derived from the western zone and any adverse
developments in this market could adversely affect our business.

Set forth below is certain information on our geography-wise domestic revenue from operations for the
periods indicated:

 

 

 

 

 

 

 

 

Zone Break-up of total domestic revenue from operations (%)
Six months period ended) _ Fiscal 2021 Fiscal 2020 Fiscal 2019
September 30, 2021
est 53.65%} 47.03%| 50.20% 53.98%
South 20.14%} 24.13% 23.49% 23.17%
orth 18.10% 22.01% 20.47% 17.54%
[East 8.11%| 6.83%| 5.83% 5.31%
(Total 100.00%| 100.00%| 100.00% 100.00%|

 

 

 

 

 

 

*The revenue considered for the above information is before Sales Returns and Turnover Discount.

We have historically derived a significant portion of our revenue from sales in the western zone. In Fiscal
2021 and six months period ended September 30, 2021 the revenue generated from sales in western zone
represented 47.03% and 53.65% respectively of our revenue from domestic sales. Accordingly, any
materially adverse social, political or economic development, natural calamities, civil disruptions,
regulatory developments or changes in the policies of the state or local government in this region could
adversely affect our manufacturing and distribution activities, result in modification of our business strategy
or require us to incur significant capital expenditure, whichwill in turn have a material adverse effect on
our business, financial condition, results of operations, and cash flows. Further, our sales from this region
may decline as a result of increased competition, regulatory action, pricing pressures, fluctuations in the
demand for or supply of our products or services, or the outbreak of an infectious disease such as COVID-
19. Our failure to effectively react to these situations or to successfully introduce new products or services
in these markets could adversely affect our business, prospects, results of operations, financial condition,
and cash flows. The occurrence of, or our inability to effectively respond to, any such events or effectively
manage the competition in the region, could have an adverse effect on our business, results of operations,
financial condition, cash flows and future business prospects.

14. Information relating to the installed manufacturing capacity and capacity utilization of our
manufacturing facility included in this Prospectus are based on various assumptions and
estimates and future production and capacity may vary.

Information relating to the installed manufacturing capacity and capacity utilization of our manufacturing
facilities included in this Prospectus are based on various assumptions and estimates of our management
that have been takeninto account by an independent chartered engineer in the calculation of the installed
manufacturing capacity of, and actual productions volumes at, our manufacturing facility. The assumptions
and estimates include the standard capacity calculation practices of the adhesives and sealants industry after
examining the period during which the manufacturing facility operated in a year, expected operations,
availability of raw materials, downtime resulting from scheduled maintenance activities, unscheduled
breakdowns, as well as expected operational efficiencies, and taking into account the number of working

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days in a year, number of days in a month, number of shifts in a day, and average number of batches per
day. Actual manufacturing capacity, production levels and utilization rates may therefore vary from the
information of our manufacturing facilities included in this Prospectus or from the historical installed
manufacturing capacity information of our manufacturing facilities depending on the product type.
Accordingly, undue reliance should not be placed on our historical installed capacity information for our
existing facilities included in this Prospectus.

15. Our inability to collect receivables from our distributors or default in payment by them could
result in the reduction of our profits and affect our cash flows.

Our operations involve extending credit for extended periods of time to our distributors in respect of our
products and consequently, we face the risk of non-receipt of these outstanding amounts in a timely manner
or at all, particularly in the absence of long-term arrangements with our distributors. While we have not
adopted any credit policy, we typically operate on pre-sanctioned credit limits with distributors and cannot
guarantee that our distributors will not default on their payments. Our inability to collect receivables from
our distributors in a timely manner or at all in future, could adversely affect our working capital cycle and
cash flows. In Fiscals 2019, 2020 and 2021 and six months periods ended September 30, 2020 and 2021,
our trade receivables were = 2240.84 Lakhs, = 1979.85 Lakhs, % 2286.61 Lakhs, = 1937.71 Lakhs and =
2880.79 Lakhs respectively, which represented 25.63%, 20.73%, 19.35%, 43.13% (not annualised) and
40.85% (not annualised) of our revenues for such periods respectively. Macroeconomic conditions could also
result in financial difficulties, including insolvency or bankruptcy for our distributors and as a result could
cause distributors to delay payments to us, request modifications to their payment arrangements, that could
increase our receivables or affect our working capital requirements, or default on their payment obligations
to us. During the Fiscals 2019, 2020 and 2021 and six months period ended September 30, 2020 and 2021,
our bad debts were 101.29 Lakhs, = 1.88 Lakhs, = 2.05 Lakhs, = 1.95 Lakhs and = 59.77 Lakhs respectively.
An increase in bad debts or in defaults by our distributors may compel us to utilize greater amounts of our
operating working capital and result in increased interest costs, thereby adversely affecting our results of
operations and cash flows.

16. Our funding requirements and proposed deployment of the Net Proceeds are based on
management’s estimates and may be subject to change based on various factors, some of which
are beyond our control.

Our funding requirements and deployment of the Net Proceeds are based on internal management’s
estimates based on current market conditions and have not been appraised by any bank or financial
institution. Our funding requirements may be subject to change based on various factors which are beyond
our control. While we intend to deploy the Net Proceeds towards the Objects from listing of the Equity
Shares pursuant to the Offer till FYE 2024, as more particularly disclosed in the section titled “Objects of
the Offer” on page 94 of this Prospectus, the actual deployment of funds will depend on a number of factors
including market conditions, our Board’s analysis of economic trends and business requirements,
competitive landscape, as well as general factors affecting our results of operations, financial condition and
access to capital. We cannot assure you that the deployment of Net Proceeds will take place within the
aforesaid period, as currently intended. Depending upon the above factors, we may have to reduce or extend
the deployment period for the stated Objects beyond the estimated period, at the discretion of our
management. For further details, see “Objects of the Offer” beginning on page 94 of this Prospectus.

17. Our Company, its Promoters and Directors are party to certain legal proceedings. Any adverse
outcome in such proceedings may have an adverse impact on our reputation, business, financial
condition, results of operations and cash flows.

Our Company, Promoters and Directors are currently involved in certain legal proceedings in India which

are pending at different levels of adjudication before the concerned authority/ forum, details whereof are as
follows:

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Sr. Outstanding Litigations No. of | Financial
No. Outstanding implications to the
Matters extent quantifiable
(Rs. in Lakhs)*

 

1._| Against our Company

a.__Tax Proceedings
i. Direct Tax 1 2.70
ii. Indirect Tax 6 176.27

 

 

 

 

 

2. | By our Company
a. Civil Proceedings 1 1,095.00
b. Criminal Proceedings 2 Not ascertainable

 

 

 

 

3._| Against our Directors (other than Promoters)

a. Tax Proceedings
i. Direct tax proceeding 2 0.60

 

 

 

 

4, | Against our Promoter
a. Tax Proceedings
i, Direct Tax 1 1.25

 

 

 

 

5. | By our Promoter
a._Criminal Proceedings 1 Not ascertainable

 

 

 

 

 

 

 

* To the extent quantifiable, excluding interest and penalty thereon.

We cannot assure you that these proceedings will be decided in favour of our Company, Promoters or
Directors, as the case may be. Any adverse decision in such proceedings may render us liable to penalties
and may have a material adverse effect on our reputation, business and financial condition. Additionally,
during the course of our business we are subject to risk of litigation in relation to contractual obligations,
employment and labour law related, personal injury and property damage, etc.

For further information, please see “Outstanding Litigation and Other Material Developments” beginning
on page 293 of this Prospectus.

18. We may not be able to identify or effectively respond to evolving preferences, expectations or
trends in a timely manner, and a failure to derive the desired benefits from our product
development efforts may impact our competitiveness and profitability.

The success of our business depends in part on our ability to anticipate, identify and respond promptly to
evolving trends in demographics and preferences, customer expectations, needs and demands, and develop
new/ products to meet these requirements. Our success is dependent on our ability to identify and respond
to the economic, social, and other trends that affect demographic and end- customer preferences in a variety
of our adhesives categories.

We cannot assure you that our future product development initiatives will be successful or be completed
within the anticipated period or budget, or that our newly developed or improvised products will achieve
wide market acceptancefrom our distributors. Even if these products have been successfully developed,
there is no guarantee that they will be accepted by our distributors and achieve anticipated sales targets in
a profitable manner, which may affect our ability to grow our network of distributors and gain market share.
In addition, there can be no guarantee that the time and effort that we spend in developing these products
would be beneficial to our Company. This could also adversely affect our ability to pursue our growth
strategy of continuing to develop niche and products to grow our market share. Further, we cannot assure

39
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you that our existing or potential competitors will not develop products that are similar or superior to our
products. It is often difficult to estimate the time to market new products and there is a substantial risk that
we may have to abandon a potential product that is no longer commercially viable, even after we have
invested significant resources in the development of such product. If we fail in our product launching
efforts, our business, prospects, financial condition, results of operations, and cash flows may be materially
and adversely affected. Further, we have collaborated with third parties in the past to support some of our
processes which relations have ended recently. The termination of such relationships may affect the
acceptance of our products which may adversely affect our business operations, revenues and cash flows.

Further, as we continue to grow our business by expanding our products, brand offerings and our geographic
reach, maintaining quality and consistency may be more difficult and there can be no assurance that the
distributors’ confidencein our brand will not diminish. Failure or any delay on our part to identify such
trends, to align our business successfully and maintain quality could negatively affect our brand image, our
relationship with our distributors, the rate of growth of our business, our market share and our prospects.

19. Inability to protect, strengthen and enhance our existing brand could adversely affect our
business prospects and financial performance.

Our business reputation and the brands under which we sell products are critical to the success of our
business. While we have been making consistent efforts to strengthen the brands, various factors, some of
which are beyond our control, are critical for maintaining and enhancing our brand, and if not managed
properly, may negatively affect our brand and reputation. These include our ability to effectively manage
the quality of our products; increase brand awareness among existing and potential dealers and end-
customers; adapt our advertising and promotion efforts to emerging industry standards; and protect the
intellectual property related to our brand. Please also see Risk Factor No. 26 “We may not be able to
adequately protect or continue to use our intellectual property. In addition, the use of our brands or similar
trade names by third parties could have a material adverse effect on our business growth and prospects,
financial condition, results of operations and cash flows.” on page 44.

Our success in marketing our existing and new products depends on our ability to adapt to a rapidly
changing marketing and media environment, including our increasing reliance on direct promotional
initiatives. There can be no assurance that our marketing efforts will be successful in maintaining our brand
and its perception with distributors and/ or result in increased sales in the future. Also, we may not
necessarily increase or maintain our sales promotion spends in proportion to our growth in the future, which
may result in limited marketing initiatives. Our inability to adapt to evolving marketing trends at the same
pace as our competitors may adversely affect our ability to effectively compete in terms of our brand equity.

Our brands could also be negatively impacted if we fail to maintain our established standards of service, or
if our products fail to meet the expectation of our distributors and appliers that distribute and use our
products. Any allegations of deterioration in product quality even when false or unfounded, could tarnish
the image of our brands and may cause our distributors, appliers and end-customers to choose other
competing products. Any negative publicity regarding us, our brands, our products or the adhesives industry
generally could adversely affect our reputation and our results of operations. In addition, counterfeit
products, product defects, and ineffective promotional activities are all potential threats to the image and
potency of our brand. Our failure to develop, maintain and enhance our brand may result in decreased
revenue and loss of customers, and in turn adversely affect our reputation, business, financial condition,
results of operations, and cash flows.

20. We engage in a highly competitive business and any failure to effectively compete could have
a material adverse effect on us.

The Indian consumer adhesives market is primarily dominated by Pidilite Industries Ltd. that has an

aggregate market share of 60-65%, as the industry presents significant entry barriers (Source: CRISIL
Research). These market entry barriers include the development of an extensive distribution network

40
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through long-term relationships with distributors as well as significant marketing costs and the
establishment of a distinct brand to gain product acceptance. We compete on the basis of the strength of
our products, distribution network and brand recognition. As a result, to remain competitive in our markets,
we must continuously strive to manufacture products, expand our distribution network, enhance our brand
and improve our operating efficiencies.

Each product category has several organised as well as unorganised players, with organised players
commanding over 75% of the market (Source: CRISIL Research). Our competitors, therefore, also include
companies that have established their presence in specific regions. These competitors may limit our
opportunity to increase our market share as a result of a stronger distributor network in such regions and
may also compete with us on pricing of products. We may also face competition from new entrants in the
market, who may be leveraging the goodwill generated from their other businesses to gain market share in
the adhesives industry. Similarly, consolidation in the Indian adhesives industry and an increase in the
number of larger competitors may also adversely affect our results of operations. As adhesives
manufacturers consolidate and become larger, they gain access to a larger base of distributors and appliers,
resulting in greater competition, which may lead to lower margins and adversely affect our results of
operations.

Some of our competitors may have larger business operations, may be diversified with operations across
India, may have greater financial resources than we do, may have access to a cheaper cost of capital and
may be able to produce adhesives more efficiently or invest larger amounts of capital into their businesses
in terms of strengthening their brands and expanding their distribution networks. Our business could be
adversely affected if we are unable to compete with our competitors and sell adhesives at competitive prices.
For example, if any of our competitors strengthens their brand and caters to the markets we are present in
through products, our business and results of operations could be adversely impacted. Our competitors may
also introduce new and more competitive products and strengthen their supply chain management, make
strategic acquisitions or establish relationships among themselves or with third parties, including appliers/
distributors of our products, thereby increasing their ability to address the needs of our target customers.
An inability to effectively compete in terms of branding, providing competitive and products or services or
expand into new markets, could have a material negative effect on our business, financial condition and
growth prospects.

21. Our Restated Financial Statements disclose certain contingent liabilities which if materialize,
may adversely affect our business, financial condition, cash flows and results of operation.

As of September 30, 2021, our contingent liabilities as per Ind AS 37 - Provisions, Contingent Liabilities
and Contingent Assets, were as follows:

Contingent Liabilities
(Rs. in Lakhs)

 

 

 

 

 

 

 

 

Sr. No. Particulars As at
September
30, 2021
1. Letter of comfort issued to banks -
2; Claim against the company not acknowledged as debt
@ Tax matter dispute under appeal (MVAT & CST)* 144.30
(ii) Income Tax matter dispute under appeal (AY 14-15) 2.70
(iii) Others — Uncrystallized effect of Bank Guarantees given by company to 51.25
DC, Central Excise Anti-evasion wing, Mumbai*
(iv) Demand raised against short duty paid Under Sec. 11A(10) of Central 2.06
Excise Act, 1944 (Appeal Filed In Tribunal , Appeal No. E/86416/2021)
Total 200.31

 

 

 

 

 

*Amount paid under protest Rs. 15.87 Lacs included in Other Non-current Assets
# Company has already settled the Excise duty dues under Sab Ka Vishwas Scheme in FY 2019-20.

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Commitments
(Rs. in Lakhs)
Sr.No. | Particulars As at September 30, 2021

ds Estimated amount of Contracts remaining to be executed -

on Capital account and not provided for
(i) Towards Property, Plant & Equipment 286.97
(ii) Towards Intangible Assets -
Total 286.97

 

 

 

 

 

If a significant portion of these liabilities materialize, it could have an adverse effect on our business,
financial condition, results of operations, and cash flows. For further information on our contingent
liabilities as per Ind AS 37, see “Restated Financial Statements — Annexure XXIX — Restated Contingent
Liabilities and Commitments” beginning on page 255 of this Prospectus.

22. Any unscheduled or prolonged disruption of our manufacturing operations could materially and
adversely affect our business, financial condition, results of operations and cash flows.

Any unscheduled or prolonged disruption of our manufacturing operations, including power failure, fire
and unexpected mechanical failure of equipment, obsolescence, labour disputes, strikes, lock-outs,
earthquakes and other natural disasters, industrial accidents or any significant social, political or economic
disturbances, or infectious disease outbreaks such as the COVID-19 pandemic, could reduce our ability to
manufacture our products and adversely affect sales and revenues from operations in such period. The
production activities at our manufacturing facility were halted during the period March 22, 2020 to April
16, 2020 which resulted in our production capacity being unutilized for the said period. The occurrence of
any such incidents could also result in a destruction of certain assets and adversely affect our results of
operations. Any such disruption may interrupt our operations, which may interfere with manufacturing
process, requiring us to either stop our operations or repeat activities that may involve additional time and
increase our costs. In particular, due to the COVID-19 pandemic, operations at our manufacturing facility
were temporary suspended in the month of April 2020 owing to the lockdown imposed by the Government,
and we subsequently resumed operations in a phased manner in May 2020. Further, in the first quarter of
Fiscal 2022 there were market disruptions due to restrictions imposed by state governments on account of
COVID-19 which impacted our revenues. Our distributors rely on the timely delivery of our products and
our ability to provide an uninterrupted supply of our products is critical to our business. Although we take
precautions to minimize the risk of any significant operational problems at our manufacturing facilities, our
distributor relationships, business, financial condition, results of operations and cash flows, may be
adversely affected by any disruption of operations at our manufacturing facilities, including due to any of
the factors mentioned above.

Disruptions in our manufacturing operations could delay production or require us to temporarily cease
operations at our manufacturing facilities. We may be subject to manufacturing disruptions due to
contraventions by us of any of the conditions of our regulatory approvals, which may require our
manufacturing facilities to cease, or limit, production until the disputes concerning such approvals are
resolved. As regulatory approvals are site specific, we may be unable to transfer manufacturing activities
to another location immediately. Similarly, there is no assurance that those of our manufacturing facilities
unaffected by an interruption will have the capacity to increase their output to manufacture products for the
affected manufacturing facilities, to the extent that all outstanding orders will be fulfilled in a timely
manner. In the event of prolonged interruptions in the operations of our manufacturing facilities, we may
have to make alternate arrangements for supplies and products in order to meet our production
requirements, which could affect our profitability.

42
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23. We are dependent on third-party transportation providers for the supply of raw materials and
delivery of our finished products.

Our success depends on the supply and transport of the various raw materials required for our
manufacturing facilities and of our finished products from our manufacturing facilities to our depots and
further to our distributors, which are subject to various uncertainties and risks. We use third-party freight
and transportation providers for the delivery of our products to distributors. We maintain marine cargo open
insurance policy to cover any damage to our products during transit. Transportation strikes, if any, could
have an adverse effect on supplies and deliveries to and from our distributors and suppliers. Further, on
account of the COVID-19 pandemic, our manufacturing operations were shut down and our third-party
transportation providers’ operations were also closed during the lockdown imposed by the Government.

In addition, raw materials and finished products may be lost or damaged in transit for various reasons
including occurrence of accidents or natural disasters. There may also be a delay in delivery of raw materials
and products which may also affect our business and results of operations negatively. Our average stock of
finished goods for the Fiscals 2019, 2020 and 2021 and six months periods ended September 30, 2020 and
2021 was Rs. 437.65 Lakhs, Rs. 801.09 Lakhs, Rs. 1356.50 Lakhs, Rs. 977.54 Lakhs and Rs. 1690.96
Lakhs respectively and raw material for the Fiscals 2019, 2020 and 2021 and six months periods ended
September 30, 2020 and 2021 was Rs. 655.27 Lakhs, Rs. 821.28 Lakhs, Rs. 1058.63 Lakhs, Rs. 901.77
Lakhs and Rs. 1421.38 Lakhs respectively. In the event we fail to maintain a sufficient volume of raw
materials and delivery of such materials to us is delayed, we may be unable to meet distributor orders in a
timely manner or at all, which could result in the distributor’s inability to meet end-customer orders. Any
such inability may result in loss of sales opportunities that our competitors may capitalize on, thereby
adversely affecting our business, financial condition, results of operations and cash flows. Any
compensation received from insurers or third-party transportation providers may be insufficient to cover
the cost of any delays and will not repair damage to our relationships with our affected distributors We may
also be affected by an increase in fuel costs, as it will have a corresponding impact on freight charges levied
by our third-party transportation providers. Our freight and forwarding charges were = 27.42 Lakhs, = 28.94
Lakhs, = 53.75 Lakhs, = 12.46 Lakhs and = 37.46 Lakhs in Fiscal 2019, 2020 and 2021 and six months
periods ended September 30, 2020 and 2021 respectively. This could require us to expend considerable
resources in addressing our distribution requirements, including by way of absorbing these excess freight
charges to maintain our selling price, which could adversely affect our results of operations or passing these
charges on to our customers, which could adversely affect demand for our products.

24, Our business is working capital intensive. If we experience insufficient cash flows from our
operations or are unable to borrow to meet our working capital requirements, it may materially
and adversely affect our business and results of operations.

Our business requires significant amount of working capital primarily as a considerable amount of time
passes between purchase of raw materials and collection of receivables post sales to customers. As a result,
we are required to maintain sufficient stock at all times in order to meet manufacturing requirements as well
as extend credit period to customers as per the industry practice, thus increasing our storage and working
capital requirements. Consequently, there could be situations where the total funds available may not be
sufficient to fulfil our commitments and hence we may need to incur additional indebtedness in the future,
or utilize internal accruals to satisfy our working capital needs. Our future success depends on our ability to
continue to secure and successfullymanage sufficient amounts of working capital. Further, our ability to
arrange financing and the costs of capital of such financing are dependent on numerous factors, including
general economic and capital market conditions and the effect of events such as the COVID-19 pandemic,
credit availability from banks, investor confidence, the continued success of our operations and other laws
that are conducive to our raising capital in this manner. For instance, as a result of the COVID-19 pandemic,
some of our distributors had requested for modifications to their payment terms, which temporarily
increased our cash flow requirements.

43
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As we pursue our growth plan, we may be required to raise additional funds by incurring further
indebtedness or issuing additional equity to meet our capital expenditures in the future. If we experience
insufficient cash flows or are unable to borrow funds on a timely basis, or, at all, to meet our working capital
and other requirements, or to payour debts, it could materially and adversely affect our business and results
of operations. Management of our workingcapital requirements involves the timely payment of, or rolling
over of, our short-term indebtedness and securing new and additional loans on acceptable terms, or re-
negotiation of our payment terms for, our trade payables, collection of trade receivables and preparing and
following accurate and feasible budgets for our business operations. If we are unable to manage our working
capital requirements, our business, results of operations, financial condition,and cash flows could be
materially and adversely affected. There can be no assurance that we will be able to effectively manage our
working capital. Should we fail to effectively implement sufficient internal control procedures and
management systems to manage our working capital and other sources of financing, we may have
insufficient capital to maintain and grow our business and we may breach the terms of our financing
agreements with banks, face claims under cross-default provisions and be unable to obtain new financing,
any of which would have a material adverse effect on our business, results of operations, financial condition,
and cash flows. For furtherinformation on the working capital facilities currently availed of by us, see
“Financial Indebtedness” beginning on page 291 of this Prospectus.

25. We are in the process of expanding our operations and establishing a network of distributors in
regions where we do not have a significant presence or prior experience. Any failure to expand
into these new regions could adversely affect our sales, financial condition, result of operations
and cash flows.

In order to cater to the growing market demand for our products and expand our presence across India, we
are in the process of deepening our presence in rural and semi-urban regions of the states where we have
been present for a considerable period. We may not possess the same level of familiarity with the economic
condition, distributor network, end-customer base and commercial operations in the new regions we
propose to enter into and therefore, we will be initially exposed to a degree of risk in realization and volume
of sales. There can be no assurance that our expansion plans in these new regions will be successful, as our
competitors may have more established brands, more experience in trends and deeper relationships with
distributors in these regions. Further, having limited or no presence in such new regions as compared to
some of our competitors, may lead to lower product pricing due to lack of brand presence and higher
expenditure on brand building. As a result, it may be more expensive for us to manufacture and/ or distribute
adhesives in these new regions and it may take longer to reach expected sales and profit levels than
anticipated, which could affect the viability of these operations or our overall profitability. There can be no
assurance that our products will gain market acceptance or meet the particular requirements of distributors
and customers in these new markets and regions. If we do not successfully establish our operations,
reputation and brand image in this these new markets and regions, our sales, financial condition, results of
operations and cash flows could be materially and adversely affected.

26. Our Company’s logo and some other trademarks were not registered as on December 03, 2021.
However, applications for registration our trademarks have been filed with the trademarks
authority. We may be unable to adequately protect our intellectual property and/ or be subject to
claims alleging breach of third-party intellectual property rights.

As on December 03, 2021, we had 22 applications pending under the Trademarks Act, 1999 to register our
brands in the name of our Company with the trademark authority out of which 11 were objected and hence,
we do not enjoy the statutory protections accorded to registered logo and brands. These applications are at
different stages of approval and some of them have been marked as objected by the relevant authority.

Pome
Further, we have 22 trademarks including our logo ‘ Se *y STRONG WELD a * BP STRONG FIX 8

 

and other brands which have been registered in the name of our Company and M/s. HP
International. We have initiated appropriate steps for getting some of such registered trademarks transferred
a

/ transmitted from M/s. HP International in favour of our Company. Out of the trademarks owned by us,
one trademark namely ‘Neobond’ under class 1 is disputed. Further, in the past 13 of our applications have
been rejected out of which 4 have been re-applied. We cannot assure you that our applications for
registration / transfer / transmission of our logo and brands will be granted by the relevant authorities in a
timely manner or at all. Our logo and other brands are significant to our business and operations. The use
of our logo or other brands by third parties could adversely affect our reputation which could, in turn,
adversely affect our business and results of operations. In the event our application is rejected by
trademarks registry, our business, financial condition results of operation and cash flows would be
adversely affected. Obtaining, protecting and defending intellectual property rights can be time consuming
and expensive and may require us to incur substantial costs, including the diversion of the time and
resources of management and technical personnel.

Further, while we endeavour to ensure that we comply with the intellectual property rights of others, there
can be no assurance that we will not face any intellectual property infringement claims brought by third
parties that may require us to introduce changes to our operations. Any claims of infringement, regardless
of merit or resolution of such claims, could force us to incur significant costs in responding to, defending
and resolving such claims and may divert the efforts and attention of our management and personnel away
from our business. We could be required to pay third party infringement claims. In such cases, our financial
conditions and business operations may be adversely impacted.

27. We may not be able to adequately protect or continue to use our intellectual property. In addition,
the use of our brands or similar trade names by third parties could have a material adverse effect
on our business growth and prospects, financial condition, results of operations and cash flows.

We currently sell our products in India through a network of distributors, who further distribute our products
to the end-use customers. We primarily sell our adhesive products under our brand labels inter alia “HP”
and “Strong Weld”. We have registered certain trademarks in India (in the name of M/s. HP International)
and may apply for further registrations in the future. The registration of intellectual property including
trademarks is a time-consuming process and there can be no assurance that any registration applications we
may pursue will be successful and that such registration will be granted to us. If we fail to register the
appropriate intellectual property, or our efforts to protect relevant intellectual property prove to be
inadequate, the value attachedto our brand and proprietary property could deteriorate, which could have a
material adverse effect on our business growth and prospects, financial condition, results of operations and
cash flows.

In particular, the use of “HP” or “Strong Weld” or similar trade names by third parties may result in
confusion among our customers and we are exposed to the risk that entities in India and elsewhere could
pass off their products as our products, including spurious or imitation or look-alike products. For example,
other manufacturers imitating our brands, and packaging design and material selling spurious products may
adversely affect sale of our products, resulting in a decrease in market share due to a decrease in demand
for our products. Such imitation or spurious products may not only result in loss of sales but also adversely
affect the reputation of our brand and consequently our future sales and results of operations. In addition, a
few of the products that we resell are manufactured by third-parties that also affix the logo of our brands
on such products. As we engage with these third-party manufacturers, there can be no assurance that such
third-parties will not misuse the “HP” brand or affix it on products not authorized by us. In the event of
such unauthorized use, we may be compelled to pursue legal action for the protection of our brand and
intellectual property, which may divert our attention and resources thereby affecting our business
operations.

Further, we protect most of our intellectual property including product and process improvements by
relying on trade secret laws and confidentiality agreements. Our efforts to protect our intellectual property
may not be adequate. Unauthorized parties may infringe upon or misappropriate our services or proprietary
information. While our domain names cannot be copied, we may be unable to renew registration of our
domain names and other parties could create an alternative domain name resembling ours that could be

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passed off as our domain name. In addition, despite our efforts to comply with the intellectual property
rights of others, we cannot determine with certainty whether we are infringing any existing third-party
intellectual property rights which may force us to alter our processes, obtain additional licenses or cease
significant portions of our operations. We may also be susceptible to claims from third- parties asserting
infringement and other related claims. Regardless of their merits, such claims could materially and
adversely affect our relationships with current or future distributors, result in costly litigation, delay or
disrupt provision of services, divert management’s attention and resources, subject us to significant
liabilities, require us to enter into royalty or licensing agreements or require us to cease certain activities.
Any of the foregoing could materially and adversely affect our business, financial condition, results of
operations and cash flows.

28. Stringent environmental, health and safety laws and regulations or stringent enforcement of
existing environmental, health and safety laws and regulations may result in increased liabilities
and increased capital expenditures.

Our operations are subject to environmental, health and safety and other regulatory and/ or statutory
requirements in the jurisdictions in which we operate. We are subject to various national, state, municipal
and local laws and regulations concerning environmental protection in India. Non-compliance with these
Jaws and regulations could expose us to civil penalties, criminal sanctions and revocation of key business
licenses. Environmental laws and regulations in India are becoming more stringent and the scope and extent
of new environmental regulations, including their effect on our operations, cannot be predicted with any
certainty. In case of any change in environmental or pollution regulations, we may be required to invest in,
among other things, environmental monitoring, pollution control equipment and emissions management.

As a consequence of unanticipated regulatory or other developments, future environmental and regulatory
related expenditures may vary substantially from those currently anticipated. We cannot assure you that our
costs of complying with current and future environmental laws and other regulations will not adversely
affect our business, results of operations, financial condition, or cash flows. In addition, we could incur
substantial costs, our products could be restricted from entering certain markets and we could face other
sanctions, if we were to violate or become liable under environmental laws or if our products become non-
compliant with applicable regulations. Our potential exposure includes fines and civil or criminal sanctions,
third-party property damage or personal injury claims and clean-up costs. The amount and timing of costs
under environmental laws are difficult to predict.

29. Our manufacturing activities are dependent on the delivery of adequate and uninterrupted
supply of electrical power at a reasonable cost. Any shortage or any prolonged interruption or
increase in the cost of power could adversely affect our business, result of operations, financial
conditions and cash flows.

Adequate and cost effective supply of electrical power is critical to our operations. We have our
manufacturing facility in Village Narangi, Raigad, Maharashtra which depends on the delivery of an
adequate supply of electrical power. We rely upon diesel generator sets to ensure continuity of operations
in case of power outage. There have been no major instances of power failure in the last three years save
and except the loss of power for two consecutive days in June 2020 on account of the cyclone Nisarg which
however did not have any material impact on our financials. For further details, see “Our Business —
Manufacturing Facility” on page 160 of this Prospectus. There can be no assurance that electricity supplied
to our existing manufacturing facility will be sufficient to meet our requirements or that we will be able to
procure adequate and uninterrupted power supply in the future at a reasonable cost. If the per unit cost of
electricity is increased by the state electricity board our power cost will increase. An interruption in or
limited supply of electricity may result in suspension of our manufacturing operations. A prolonged
suspension in production could materially and adversely affect our business, financial condition, results of
operations or cash flows.

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30. Inability to meet the quality standard norms prescribed by the central and state governments
could result in the sales of our products being banned or suspended or becoming subject to
significant compliance costs, which could have a material adverse effect on our business growth
and prospects, results of operations, financial condition, and cash flows.

The quality of the products being manufactured by us is open to independent verification by agencies of
the central and state governments, or various other regulatory authorities. Regulatory authorities including
authorities under the Legal Metrology Act, 2009, may carry out inspection of our premises, plant,
equipment, machinery, manufacturing or other processes and sample checks on any material or substance
in relation to our product at short notice or without notice. The government authorities could impose fines
or issue us show cause notices if the samples are not in conformity with the prescribed quality norms.
Failure on our part to adhere to the quality norms prescribed by the government agencies could lead to
recall of those batches and/ or the products in the relevant state, or we may be liable to pay a penalty. Any
such order passed by the governmental authorities could generate adverse publicity about our Company
and our products, which could have a material adverse effect on our business growth and prospects,
financial condition, results of operations and cash flows.

31. Improper storage, processing and handling of raw materials and finished products may cause
damage to our inventory leading to an adverse effect on our business, results of operations and
cash flows.

Our inventory primarily consists of raw materials including solvents, resins and other additives and finished
products. Our raw materials, manufacturing processes and finished products are susceptible to evaporation,
contamination and rusting (of tin containers), if not appropriately stored, handled and processed, which
may affect the quality of the finished product. In the event such a contamination is detected at the facility
during quality checks, we may be required to repair the storage vessels and discard the batches resulting in
a temporary suspension of manufacturing activities and lower capacity utilizations, which could materially
and adversely affect our business, financial condition, results of operations, or cash flows. Improper storage
may also result in higher than usual spoilage of inventory due to adverse weather conditions or longer than
usual storage periods, which may also require us to incur additional expenses in replacing that portion of
the inventory and/ or incur additional expenses in maintenance and improvement of our storage
infrastructure, which may adversely affect our profit margins.

32. Our inability to effectively manage our growth or to successfully implement our business plan and
growth strategycould have an adverse effect on our business, results of operations, financial
condition and cash flows.

While we have experienced significant growth and have expanded our operations extensively over the
years, we cannot assure you that our growth strategy will continue to be successful or that we will be able
to continue to expand further, or at the same rate. The success of our business will depend greatly on our
ability to effectively implement our business and growth strategy. Our growth strategy includes growing
our product portfolio, strengthening our brand, deepening our penetration in existing markets and
expanding our presence in select new territories and expanding our manufacturing capacities. For further
information, see “Our Business — Strategies” beginning on page 150 of this Prospectus.

Our success in implementing our growth strategies may be affected by our ability to identify new market
opportunities, develop products, increase our existing network of distributors and ability to adapt to changes
in the Indian or international regulatory environment applicable to us. Many of these factors are beyond our
control and there can be no assurance that we will succeed in implementing our strategy. Any change in
government policies and regulations including any ban imposed on a particular product by the respective
governments, or any duties, pre-conditions or ban imposed by countries from where we source certain raw
materials may have an adverse impact on our operations. In addition, there may be delays in the anticipated
timing of activities related to such growth initiatives, strategies and operating plans; increased difficulty
and cost in implementing these efforts; and the incurrence of other unexpected costs associated with

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operating the business. Any of these factors could adversely impact our results of operations. If, for any
reason, the benefits we realize are less than our estimates or the implementation of these growth initiatives,
strategies and operating plans adversely affect our operations or cost more or take longer to effectuate than
we expect, or if our assumptions prove inaccurate, our results of operations may be materially adversely
affected. Please also see the Risk Factor No. 1 “Our proposed capacity expansion plans relating to our
manufacturing facilities are subject to the risk of unanticipated delays.” on page 29of this Prospectus.

33. We may be subject to unionization, work stoppages or increased labour costs, which could
adversely affect our business and results of operations.

Our industry is labour intensive. The success of our operations depends on availability of labour and
maintaining a good relationship with our workforce. As of September 30, 2021, we employed 364
employees across our manufacturing facility and registered and other offices. We have one trade union
registered under the Trade Unions Act, 1926. In the past three years, we have experienced one labour
dispute with the Trade Union which was amicably resolved through mediation. Further, we do not have any
formal policy for redressal of labour disputes. Although we have not experienced any major interruption to
our operations as a result of labour disputes in the recent past, there can be no assurance that we will not
experience any such disruption in the future as a result of disputes or disagreements with our work force,
which may adversely affect our ability to continue our business operations. We may also have to incur
additional expense to train and retain skilled labour. We are also subject to a number of stringent labour
Jaws that protect the interests of workers, including legislation that imposes financial obligations on
employers upon retrenchment. There can be no assurance that we will not experience labour unrest in the
future, which may delay or disrupt our operations. Any labour unrest including labour disputes, strikes and
lock-outs, industrial accidents, experienced by us could directly or indirectly prevent or hinder our normal
operating activities and, if not resolved in a timely manner, could lead to disruptions in our operations. In
the event of any prolonged delay or disruption our business, results of operations and financial condition
could be materially and adversely affected.

34, There have been some instances of delayed filing/ incorrect filings in the past with the Registrar
of Companies which may attract penalties.

There have been some instances of delayed filing/ incorrect filings in the past with the Registrar of
Companies including Form MSME, Form MGT-14, Form PAS-3, which may attract penalties. For instance,
in one of the forms for return of allotment filed with RoC, we have wrongly recorded the consideration as
‘other than cash’ instead of ‘cash’. We are in process of taking effective steps to rectify the said error.

Although, no regulatory action or penalty has been taken/ levied on the Company for such delays/ defaults,
however, it cannot be assured that no such regulatory action or penalty will be taken/ levied in the future.
Further, we cannot assure you that such non-compliances will not occur in the future. Therefore, if the
concerned authorities impose monetary penalties on us or take certain punitive actions against our Company
or its directors / officers in relation to the same, our business and financial condition could be adversely
affected.

35. Our inability to accurately forecast demand or price for our products and manage our inventory
may adversely affect our business, results of operations, financial condition and cash flows.

Our business depends on our estimate of the demand for our products from distributors. We estimate
demand for our products based on market projections and past sales. If we overestimate demand, we may
purchase more raw materials and manufacture more products than required. If we underestimate demand,
we may manufacture fewer quantities of products than required, which could result in delayed or non-
fulfilment of purchase orders resulting in loss of distributors, goodwill and business. If we under stock one
or more of our products, we may not be able to obtain additional units in a timely manner, which could also
adversely affect our goodwill and results of operations. In addition, if our products do not achieve
widespread acceptance or our distributors change their procurement preferences, we may be required to

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incur significant inventory markdowns or may not be able to sell the products at all, which would affect
our business, results of operations and financial condition. As such, our inability to accurately forecast
demand for our products and manage our inventory may have an adverse effect on our business, results of
operations, cash flows and financial condition.

36. We may be subject to significant risks and hazards when operating and maintaining our
manufacturing facilities, for which our insurance coverage might not be adequate.

As of March 31, 2021, we operated one manufacturing facility in India. We generally perform scheduled
and unscheduled maintenance and operating and other asset management services. We also sub-contract
certain maintenance services to third-parties who may not perform their services adequately. Manufacturing
adhesives involves handling of certain chemicals which, if not handled properly, can be hazardous. In
addition to natural risks such as earthquake, flood, lightning, cyclones and wind, other hazards, such as fire,
structural collapse and machinery failure are inherent risks in our operations. They can cause significant
personal injury or loss of life, severe damage to and destruction of property, plant and equipment and
contamination of, or damage to, the environment and may result in the suspension of operations. The
occurrence of any one of these events may result in our being named as a defendant in lawsuits asserting
claims for substantial damages, including for cleanup costs, personal injury and property damage and fines
and/ or penalties.

We maintain an amount of insurance protection that we consider adequate including insurance policy
covering fire, damage to buildings, plant and machinery, stocks (raw materials and finished goods), vehicles
and policy covering damage to stocks at our depots. We may not have identified every risk and further may
not be insured against every risk because such risks are either uninsurable or not insurable on commercially
acceptable terms, including operational risk that may occur and the occurrence of an event that causes losses
in excess of the limits specified in our policies, or losses arising from events or risks not covered by
insurance policies such as COVID-19 and other pandemics, or due to the same being inadequate, could
materially harm our cash flows, financial condition and future results of operations. However, we cannot
provide any assurance that our insurance will be sufficient or effective under all circumstances and against
all hazards or liabilities to which we may be subject. In addition, our insurance coverage expires from time
to time. We apply for the renewal of our insurance coverage in the normal course of our business but we
cannot assure you that such renewals will be granted in a timely manner, at acceptable cost or at all. Our
insurance cover for property, plant and equipment, and inventory, as of March 31, 2021 and September 30,
2021 was % 4780 Lakhs and % 5630.49 Lakhs respectively, while our gross block of property, plant and
equipment and inventory as of March 31, 2021, was = 2236.79 Lakhs and % 3239.69 Lakhs respectively
and as of September 30, 2021 was % 2083.02 Lakhs and % 3369.53 Lakhs respectively, and our total assets
(including all current and non-current assets) were = 8977.89 Lakhs and = 10491.04 Lakhs as of March 31,
2021 and September 30, 2021 respectively. Consequently, our insurance cover as a percentage of gross
block of property, plant and equipment, and inventory, was 87.28% and 96.84%, and our insurance cover
as a percentage of total assets (including all current and non-current assets) was 53.24% and 53.66%, as of
March 31, 2021 and September 30, 2021 respectively. To the extent that we suffer loss or damage, or
successful assertion of one or more large claims against us for events for which we are not insured, or which
exceeds our insurance coverage, or where our insurance claims are rejected, the loss would have to be borne
by us and our results of operations, financial performance and cash flows could be adversely affected. For
further information on our insurance arrangements, see “Our Business — Insurance” beginning on page 166
of this Prospectus.

37. Restrictions on import of raw materials may adversely impact our business and results of
operations.

We currently import a certain portion of our raw materials. Raw material imports are regulated by certain
specific laws and regulations that permit concerned authorities to stop any import if it is deemed that the
chemicals proposed to be imported may cause major accidents. While some raw materials we import are
hazardous in nature, we cannot assure you that such regulations will not be made applicable to us or that

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such regulations will not evolve into more stringent regulations, which would place onerous requirements
on us and consequently restrict our ability to import raw materials. While we have not in the recent past
experienced any challenges in importing such materials, we cannot assure you that we will not experience
any such challenges in the future. In the event we are unable to import these materials, there can be no
assurance that we will be successful in identifying alternate suppliers for raw materials or we will be able
to source the raw materials at favourable terms in a timely manner or at all. Any change in law or applicable
governmental policies relating to imports, change in international geo-political situations, restriction on
import of raw materials could have an adverse effect on our ability to deliver products to our distributors,
business and results of operations.

38. Some of our manufacturing facility, offices and depots are located on licensed or rented or
leasehold premises. If these leave and license or leasehold or rent agreements are terminated or
not renewed on terms acceptable to us, it could have a material adverse effect on our business,
financial condition, results of operations and cash flows.

Our Registered Office, administrative office and manufacturing facility are located on premises that we
have taken on rental/ leasehold/ leave and license basis from our Promoters. In addition, some of our depots
are also located on rental premises. Our factory land is owned by our Promoters and the structures standing
thereon are in the name of our Company. We typically enter into rent/ lease/ leave & licence agreements of
varying terms for our depots with an option to renew such term. The factory land has been taken by our
Company on leave and license basis for a tenure of 36 months with an option to renew for a further period
of 24 months. We may not be able to renew or extend these agreements at commercially acceptable terms,
or at all. Further, we may be required to re-negotiate rent or other terms and conditions of such agreements.
We may also be required to vacate the premises at short notice as prescribed in the lease agreements, and
we may not be able to identify and obtain possession of an alternate location, in a short period of time.
Occurrence of any of the above events may have a material adverse effect on our business, results of
operations, financial condition, and cash flows. Further, any adverse impact on the ownership rights of our
landlords may impede our effective future operations. Further, our leave and license and rent agreements
shall expire in due course and in case of non-renewal of our licenses or rent agreements or if such
agreements are renewed on unfavorable terms and conditions, we may be forced to procure alternative
space. We do not have any right to buy the land first and may also face the risk of being evicted in the event
of any dispute or if our landlords allege a breach on our part of any terms under these leave and license/
rent agreements and there is no assurance that we will be able to identify suitable locations to re-locate our
operations.

39. Certain agreements may be inadequately stamped or may not have been registered or may not
have necessary disclosure as a result of which our operations may be adversely affected.

A few of our agreements such as those relating to immovable properties, may not be stamped adequately
or registered or may not have the necessary disclosures. The effect of inadequate stamping is that the
document is not admissible as evidence in legal proceedings and parties to that agreement may not be able
to legally enforce the same, except after paying a penalty for inadequate stamping. The effect of non-
registration of documents required to be registered, is that such document will not have any effect on the
property or be eligible to be received as evidence in legal proceedings. Any potential dispute due to non-
compliance of local laws relating to stamp duty and registration may adversely impact the operations of our
Company.

40. We are dependent on our Promoters, Directors, and a number of key managerial personnel, and
the loss of or our inability to attract or retain such persons could adversely affect our business,
results of operations, financial condition, and cash flows.

We are dependent on our Promoters, Directors and key managerial personnel for setting our strategic

business direction and managing our business. Certain of our Promoters, being Directors of our Company
and several of our key managerial personnel have extensive experience in the adhesives sector. Our ability

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to meet continued success and future business challenges depends on our ability to attract, recruit and retain
experienced, talented and skilled professionals. Without a sufficient number of skilled employees, our
operations and manufacturing quality could suffer. Our experienced sales team has also developed a number
of distributor relationships that would be difficult to replace. Our attrition rate at the manufacturing facility
was 93%, 93%, 167% and 22% for the FY 2019, 2020 and 2021 and six months period ended September
30, 2021, respectively which is primarily in the labour category and for the employees at registered office,
administration office, depots and those part of the sales team it was 20%, 26%, 27% and 18% in the FY
2019, 2020 and 2021 and six months period ended September 30, 2021 respectively. We may experience
similar attrition rates in the future. A significant increase in the attrition rate among skilled employees could
decrease our operating efficiency and productivity and could lead to a decline in the profitability of our
Company. Competition for qualified technical personnel and operators as well as sales personnel with
established distributor relationships is intense, both in retaining our existing employees and when replacing
or finding additional suitable employees. If we cannot hire additional qualified personnel or retain them,
our ability to expand our business will be impacted.

We may also be required to increase our levels of employee compensation more rapidly than in the past to
remain competitive in attracting and retaining suitable employees. The loss of the services of our key
personnel or our inability to recruit or train a sufficient number of experienced personnel or our inability to
manage the attrition levels in different employee categories may have an adverse effect on our financial
results and business prospects.

41. An inability to renew quality accreditations in a timely manner or at all, or any deficiencies in
the quality of our products may give rise to product liability claims and adversely affect our
business prospects and financial performance.

We obtain and maintain quality certifications and accreditations from independent certification entities and
also comply with prescribed specifications and standards of quality approved by the Government in
connection with the products we manufacture. Such specifications and standards of quality is an important
factor in the success and wide acceptability of our products. If we fail to comply with applicable quality
standards or if the relevant accreditation institute or agency declines to certify our products, or if we are
otherwise unable to obtain such quality accreditations in the future, in a timely manner or at all, our business
prospects and financial performance will be materially and adversely affected.

Further, if our products are alleged or found to be defective, we may be subject to product liability claims.
There could be instances in which our products do not meet the specifications. We have from time to time
encountered certain claims with respect to the quality of our products. While we have not been required to
recall our products and have resolved these claims amicably, we may be subject to product liability claims
and litigation for compensation in the future which could result in substantial and unexpected expenditure
and could materially and adversely affect our cash flow and operating results. Further, there can be no
assurance that we will be able to successfully defend such claims. If any such claims against us are
ultimately successful, we could be required to pay substantial damages, which could materially and
adversely affect our business, financial condition, results of operations and cash flows. Moreover, product
failures or defects and any complaints or negative publicity, could result in a decrease in our sales. Even if
certain of the product defects are attributable to raw materials supplied by our suppliers, we cannot
guarantee that we would be able to recover all or part of the damages by claiming against our suppliers.

42. Some of our records are not traceable.

In the past, certain statutory records and registers required to be maintained by our Company have not been
maintained in the manner as required under various applicable laws including the environmental laws,
labour laws and certain other industry specific laws. Despite conducting searches of our internal records,
we have not been able to trace the registers and documents required to be maintained under the Employees’
State Insurance Act, Employees’ Provident Fund Act, Professions Tax Act, Minimum Wages Act, Payment

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of Wages Act, Contract Labour Regulations, Payment of Bonus Act and other labour laws for the periods
prior to April 2020.

Further, we cannot assure you that our Company has maintained the statutory records in the proper manner
or at all, in the past, as required under the Factories Act, Industrial Disputes Act. While no legal proceedings
or regulatory action has been initiated against our Company in relation to such statutory records as of the
date of this Prospectus, we cannot assure you that such legal proceedings or regulatory actions will not be
initiated against our Company in future. Although no regulatory action/ litigation is pending against us in
this regard, we cannot assure you that we will not be subject to penalties imposed by regulatory authorities
in this respect.

43. Fluctuations in the average selling prices of adhesives could adversely affect our business,
financial condition, results of operations and cash flows.

The average selling prices of our products may be subject to fluctuations depending on the market
conditions. The average selling prices of our products are affected by the general market conditions, such
as pricing by competition and raw material costs, which could have an impact on the businesses of our
distributors and, in turn, their demand for our products. An inflexible pricing policy may result in reduction
in sales because of reduced price competitiveness. While, we have not experienced any material fluctuation
in our average selling prices, we cannot assure you that we will not experience declining average selling
prices for our products or that our average selling prices can remain at the same level in the future. A decline
in the average selling prices for our products could adversely affect our business and financial condition,
operating results, and cash flows.

44, Any downgrading of our credit rating by a domestic or international credit rating agency may
increase interest rates for our future borrowings, which would increase our cost of borrowings,
and adversely affect our ability to borrow on a competitive basis.

Care Ratings Limited has on November 12, 2021 assigned CARE BBB-; Outlook: Stable rating for the
long-term bank facilities and CARE A3 rating for the short-term bank facilities of our Company.

Our credit rating may be downgraded in the future due to various factors, including factors which may be
outside our control. Any future downgrade of our credit ratings may increase interest rates for refinancing
our borrowings, which would increase our cost of borrowings, and may have an adverse effect on our future
issuances of debt and our ability to borrow on a competitive basis. Further, any downgrade in our credit
ratings may also trigger an event of default or acceleration of repayment of certain of our borrowings. If
any of these risks materialise, it could have a material adverse effect on our business, reputation, results of
operations and financial condition.

45. Uncertainty regarding the manufacturing industry, housing and other real estate market,
economic conditions and other factors beyond our control could adversely affect demand for our
products and services, our costs of doing business and our financial performance.

Our financial performance depends significantly on the manufacturing industries, on the stability of the real
estate, as well as general economic conditions, including changes in gross domestic product. Adverse
conditions in or uncertainty about these markets or the economy could adversely impact our end-customers’
confidence or financial condition, causing them to determine not to purchase home improvement products
and services or delay purchasing or payment for those products and services. The state of the credit markets,
including mortgages and consumer credit and other conditions beyond our control, could further adversely
affect demand for our products and services, our costs of doing business and our financial performance.
Any slowdown in these industries and economy is a major risk for the adhesives industry.

46. We have in this Prospectus included certain Non-GAAP Measures and certain other industry
measures related to our operations and financial performance. These Non-GAAP Measures and

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industry measures may vary from any standard methodology that is applicable across the Indian
adhesives industry, and therefore may not be comparable with financial or industry related
statistical information of similar nomenclature computed and presented by other companies.

Certain Non-GAAP Measures and certain other industry measures relating to our operations and financial
performance have been included in this Prospectus. We compute and disclose such Non-GAAP Measures
and such other industry related statistical information relating to our operations and financial performance
as we consider such information to be useful measures of our business and financial performance, and
because such measures are frequently used by securities analysts, investors and others to evaluate the
operational performance of Indian adhesives manufacturing companies, many of which provide such Non-
GAAP Measures and other industry related statistical and operational information. Such supplemental
financial and operational information is therefore of limited utility as an analytical tool, and investors are
cautioned against considering such information either in isolation or as a substitute for an analysis of our
audited financial statements as reported under applicable accounting standards disclosed elsewhere in this
Prospectus.

These Non-GAAP Measures and such other industry related statistical and other information relating to our
operations and financial performance may not be computed on the basis of any standard methodology that
is applicable across the industry and are not measures of operating performance or liquidity defined by
generally accepted accounting principles, and therefore may not be comparable to financial measures and
industry related statistical information of similar nomenclature that may be computed and presented by
other manufacturing companies. For further information, see “Management’s Discussion and Analysis of
Financial Condition and Results of Operations - Non-GAAP Measures” beginning on page 275 of this
Prospectus.

47. Our Promoters will continue to retain majority shareholding in the Company after the Offer,
which will allow them to exercise significant influence over us and potentially create conflicts of
interest.

As on date of this Prospectus, our Promoters hold approximately 95.31% of the pre- Offer paid-up Equity
Share capital of our Company and will continue to hold 71.35% of the post- Offer paid-up Equity Share
capital of our Company. Accordingly, our Promoters will continue to exercise significant influence over
our business policies and affairs and all matters requiring shareholders’ approval, including the composition
of our Board, the adoption of amendments to our certificate of incorporation, the approval of mergers,
strategic acquisitions or joint ventures or the sales of substantially all of our assets, and the policies for
dividends, lending, investments and capital expenditures. This concentration of ownership also may delay,
defer or even prevent a change in control of our Company and may make some transactions more difficult
or impossible without the support of these stockholders. The interests of the Promoters as our controlling
shareholder could conflict with our interests or the interests of its other shareholders. Our Promoters shall
abide by the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and
protect the interest of the Company. However, in case of any conflict of interest our Promoters shall keep
the interest of the Company first over their personal interest, we cannot assure you that the Promoters will
act to resolve any conflicts of interest in our favour.

48. Any failure or disruption of our information technology systems could adversely impact
our business and operations.

Our business is dependent upon increasingly complex and interdependent information technology systems,
including internet-based systems, to support business processes as well as internal and external
communications. For instance, we have implemented an accounting and CRM software across our offices
and manufacturing facility, to handle sales, purchase, inventory and financial reporting. The complexity of
our computer systems may make us potentially vulnerable to breakdown, malicious intrusion and computer
viruses. Our Company does not have any formal data security policy. While we have not experienced any
disruptions to our information technology systems in the past or breach in Company’s database in last three

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years, we cannot assure you that we will not encounter disruptions in the future. Any such disruption may
result in the loss of key information or disruption of our business processes, which could adversely affect
our business and results of operations. In addition, our systems are potentially vulnerable to data security
breaches, whether by employees or others that may expose sensitive data to unauthorized persons.

49. Changes in technology may affect our business by making our manufacturing facility or
equipment less competitive.

Our profitability and competitiveness are to a certain extent dependent on our ability to respond to
technological advances and emerging industry standards and practices on a cost-effective and timely basis.
Changes in technology may make newer generation manufacturing equipment more competitive than ours
or may require us to make additional capital expenditures to upgrade our manufacturing facility. Our
inability to continue to invest in new and more advanced technologies and equipment, may result in our
inability to respond to emerging industry standards and practices in a cost-effective and timely manner that
is competitive with other adhesives manufacturing companies and other methods of manufacturing. The
development and implementation of such technology entails technical and business risks. We cannot assure
you that we will be able to successfully implement new technologies or adapt our processing systems to
emerging industry standards. If we are unable to adapt in a timely manner to changing market conditions
or technological changes, our business and financial performance could be adversely affected.

50. We may undertake strategic acquisitions or investments, which may prove to be difficult to
integrate and manage or may not be successful.

In the future, we may consider making strategic acquisitions of other adhesive manufacturing companies
or other companies whose resources, capabilities and strategies are complementary to and are likely to
increase our product portfolio and expand our distribution network. We may also enter into strategic
alliances or joint ventures to explore such opportunities or make significant investments in entities that we
do not control to capitalize on such business opportunities and there can be no assurance that such strategic
alliances, joint ventures or investments will be successful.

It is also possible that we may not identify suitable acquisition or investment candidates or that if we do
identify suitable candidates, we may not complete those transactions on terms commercially acceptable to
us or at all. The inability to identify suitable acquisition targets or investments or the inability to complete
such transactions may adversely affect our competitiveness or our growth prospects.

If we acquire another company we could face difficulty in integrating the acquired operations. In addition,
the key personnel of the acquired company may decide not to work for us. These difficulties could disrupt
our ongoing business, distract our management and employees and increase our expenses. There can be no
assurance that we will be able to achieve the strategic purpose of such acquisition or operational integration
or our targeted return on investment.

51. We have issued Equity Shares at prices that may be lower than the Offer Price in the last 12
months,

We have issued and allotted (i) 11,77,642 Equity Shares on rights basis on May 07, 2021; and (ii) 57,305
Equity Shares on rights basis on June 10, 2021, at prices which may be lower than the Offer Price. For
further details, please see “Capital Structure — Notes to the Capital Structure — Equity Share capital history
of our Company” beginning on page 82 of this Prospectus.

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52. We have in the past entered into related party transactions and may continue to do so in the
future, which may potentially involve conflicts of interest with the equity shareholders.

We have in the past entered into transactions with certain enterprises over which our Directors have a
significant influence. While we believe that all such transactions have been conducted on an arm’s length
basis, we cannot assure you that we might have obtained more favourable terms had such transactions been
entered into with unrelated parties.

Our Promoters shall abide by the provisions of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and protect the interest of the Company and in case of any conflict of interest, shall keep
the interest of our Company first over their personal interest. For further information on our related party
transactions, please see “Restated Financial Statement — Related Party Transactions” beginning on page
202 of this Prospectus. We cannot assure you that any such future transactions, individually or in the
aggregate, will always be in the best interests of our minority shareholders and will not have an adverse
effect on our business, results of operations, cash flows and financial condition.

53. Industry information included in this Prospectus has been derived from an industry report
commissioned by us for such purpose. There can be no assurance that such third-party
statistical, financial and other industry information is either complete or accurate.

We have availed the services of an independent third-party research agency, CRISIL Limited, to prepare
an industry report titled “Assessment of the Adhesives and Sealants market in India” dated November 2021,
for purposes of inclusion of such information in this Prospectus. This report is subject to various limitations
and based upon certain assumptions that are subjective in nature. Although we believe that the data may be
considered to be reliable, the accuracy, completeness and underlying assumptions are not guaranteed and
dependability cannot be assured. We have taken reasonable care in the reproduction of the information.
Further, there is no assurance that such information is stated or compiled on the same basis or with the same
degree of accuracy as may be the case elsewhere. In addition, statements from such third parties that involve
estimates are subject to change, and actual amounts may differ materially from those included in this.
Prospectus.

54, If we are subject to any frauds, theft, or embezzlement by our employees, suppliers, contractors
or distributors, it couldadversely affect our reputation, results of operations, financial condition
and cash flows.

Our operations may be subject to incidents of theft. We may also encounter some inventory loss on account
of employee/ contractor/ distributor/ vendor fraud, theft, or embezzlement. Although we have set up various
security measures in our manufacturing facility such as deployment of security guards and operational
processes such as periodic stock taking, there can be no assurance that we will not experience any fraud,
theft, employee negligence, loss in transit or similar incidents in the future, which could adversely affect
our reputation, results of operations, financial condition, and cash flows.

55. We face foreign exchange risks that could adversely affect our results of operations and cash
flows.

We have foreign currency payables for supply of certain raw materials and equipment and are therefore,
exposed to foreign exchange risk between the Indian Rupee and U.S. Dollars and other foreign currencies,
if applicable. There can be no assurance that we will be able to avoid the effect of any adverse fluctuations
in the value of the Indian Rupee against other relevant foreign currencies. Any significant fluctuation in the
value of the Indian Rupee against such currencies may adversely affect our results of operations. Any
appreciation of foreign currencies against the Indian Rupee may result in reduction of our margins and
consequently have an adverse effect on business and result of operations.

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56. Certain Promoters, also being the executive Directors of our Company, hold Equity Shares in
our Company and are therefore interested in the Company’s performance in addition to their
remuneration and reimbursement of expenses.

Certain of our Promoters, also being the executive Directors of our Company, are interested in our
Company, in addition to their remuneration or benefits and reimbursement of expenses, to the extent of
their shareholding in our Company. Our Promoters shall abide by the provisions of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and protect the interest of the Company.
However, in case of any conflict of interest our Promoters shall keep the interest of our Company first over
their personal interest, we cannot assure you that they will exercise their rights as shareholders to the benefit
and best interest of our Company. Our Promoters and Directors may take or block actions with respect to
our business which may conflict with the best interests of our Company or that of minority shareholders.
For further information on the interest of our Promoters and Directors of our Company, other than
reimbursement of expenses incurred or remuneration or benefits, please see the chapters titles “Our
Management” and “Our Promoters and Promoter Group” beginning on pages 179 and 195, respectively, of
this Prospectus.

57. Our ability to pay dividends in the future will depend on our earnings, financial condition,
working capital requirements, capital expenditures and restrictive covenants of our financing
arrangements.

We have not declared dividend in the past. For further information, see “Dividend Policy” on page 201 of
this Prospectus. Our ability to pay dividends in the future will depend on our earnings, financial condition,
cash flow, working capital requirements, capital expenditure and restrictive covenants of our financing
arrangements. The declaration and payment of dividends will be recommended by the Board of Directors
and approved by the Shareholders, at their discretion, subject to the provisions of the Articles of Association
and applicable law, including the Companies Act. We may retain all future earnings, if any, for use in the
operations and expansion of the business. As a result, we may not declare dividends in the foreseeable
future. Any future determination as to the declaration and payment of dividends will be at the discretion of
our Board in accordance with the dividend distribution policy adopted by our Board on July 07, 2021 and
will depend on factors that our Board deems relevant, including among others, our Company’s profitability,
capital requirements, financial commitments and requirements, including business and expansions plans,
applicable legal restrictions and any other financing arrangements. We cannot assure you that we will be
able to pay dividends in the future. Accordingly, realization of a gain on Shareholders’ investments will
depend on the appreciation of the price of the Equity Shares. There is no guarantee that our Equity Shares
will appreciate in value.

 

RISKS RELATI TO INDIA
58. Financial instability in other countries may cause increased volatility in Indian financial
markets.

The Indian market and the Indian economy are influenced by economic and market conditions in other
countries, including conditions in the United States, Europe and certain emerging economies in Asia.
Financial turmoil in Asia, Russia and elsewhere in the world in recent years has adversely affected the
Indian economy. Any worldwide financial instability may cause increased volatility in the Indian financial
markets and, directly or indirectly, adversely affect the Indian economy and financial sector and us.
Although economic conditions vary across markets, loss of investor confidence in one emerging economy
may cause increased volatility across other economies, including India. Financial instability in other parts
of the world could have a global influence and thereby negatively affect the Indian economy. Financial
disruptions could materially and adversely affect our business, prospects, financial condition, results of
operations and cash flows. Further, economic developments globally can have a significant impact on our
principal markets. Concerns related to a trade war between large economies may lead to increased risk
aversion and volatility in global capital markets and consequently have an impact on the Indian economy.

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Following the United Kingdom’s exit from the European Union (“Brexit”), there remains significant
uncertainty around the terms of theirfuture relationship with the European Union and, more generally, as to
the impact of Brexit on the general economic conditions in the United Kingdom and the European Union
and any consequential impact on global financial markets. For example, Brexit could give rise to increased
volatility in foreign exchange rate movements and the value of equity and debt investments.

In addition, China is one of India’s major trading partners and there are rising concerns of a possible
slowdown in the Chinese economy as well as a strained relationship with India, which could have an
adverse impact on the trade relations between the two countries. In response to such developments,
legislators and financial regulators in the United States and other jurisdictions, including India,
implemented a number of policy measures designed to add stability to the financial markets. However, the
overall long-term effect of these and other legislative and regulatory efforts on the global financial markets
is uncertain, and they may not have the intended stabilizing effects. Any significant financial disruption
could have a material adverse effect on our business, financial condition, results of operation, and cash
flows. These developments, or the perception that any of them could occur, have had and may continue to
have a material adverse effect on global economic conditions and the stability of global financial markets,
and may significantly reduce global market liquidity, restrict the ability of key market participants to
operate in certain financial markets or restrict our access to capital. This could have a material adverse
effect on our business, financial condition, results of operations, and cash flows, and reduce the price of the
Equity Shares.

59. The occurrence of natural or man-made disasters or outbreak of global pandemics, such as the
COVID-19 pandemic, could adversely affect our results of operations, cash flows and financial
condition. Hostilities, terroristattacks, civil unrest and other acts of violence could adversely
affect the financial markets and our business.

The occurrence of natural disasters, including cyclones, storms, floods, earthquakes, tsunamis, tornadoes,
fires, explosions, infectious disease outbreaks such as the COVID-19 pandemic and man-made disasters,
including acts of terrorism and military actions, could adversely affect our results of operations, cash flows
or financial condition. Terrorist attacks and other acts of violence or war in India or globally may adversely
affect the Indian securities markets. In addition, any deterioration in international relations, especially
between India and its neighbouring countries, may result in investor concern regarding regional stability
which could adversely affect the price of the Equity Shares. In addition, India has witnessed local civil
disturbances in recent years and it is possible that future civil unrest as well as other adverse social,
economic or political events in India could have an adverse effect on our business. Such incidents could
also create a greater perception that investment in Indian companies involves a higher degree of risk and
could have an adverse effect on our business and the market price of the Equity Shares.

60. Political, economic or other factors that are beyond our control may have an adverse effect on
our business and results of operations.

The Indian economy and its securities markets are influenced by economic developments and volatility in
securities markets in other countries. Investors’ reactions to developments in one country may have adverse
effects on the market price of securities of companies located elsewhere, including India. Adverse economic
developments, such as rising fiscal or trade deficit, in other emerging market countries may also affect
investor confidence and cause increased volatility in Indian securities markets and indirectly affect the
Indian economy in general. Any of these factors could depress economic activity and restrict our access to
capital, which could have an adverse effect on our business, financial condition, results of operations, and
cash flows, and reduce the price of our Equity Shares. Any financial disruption could have an adverse effect
on our business, future financial performance, shareholders’ equity and the price of our Equity Shares.

We are dependent on domestic, regional and global economic and market conditions. Our performance,

growth and market price of our Equity Shares are and will be dependent to a large extent on the health of
the economy in which we operate. There have been periods of slowdown in the economic growth of India.

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Demand for our products may be adversely affected by an economic downturn in domestic, regional and
global economies. Economic growth in the countries in which we operate is affected by various factors
including domestic consumption and savings, balance of trade movements namely export demand and
movements in key imports, global economic uncertainty and liquidity crisis, volatility in exchange currency
rates, and annual rainfall which affects agricultural production. Consequently, any future slowdown in the
Indian economy could harm our business, results of operations, financial condition, and cash flows. Also,
a change in the government or a change in the economic and deregulation policies could adversely affect
economic conditions prevalent in the areas in which we operate in general and our business in particular
and high rates of inflation in India could increase our costs without proportionately increasing our revenues,
and as such decrease our operating margins.

61. Majority of our revenue is derived from business in India and a slowdown in economic growth
in India could cause our business to suffer and could adversely affect our results of operations.

We derive a majority of our revenue from our operations in India, accordingly, our performance and the
growth of our business are necessarily dependent on the health of the overall Indian economy. A slowdown
in the Indian economy could adversely affect the policy of the Government of India towards our industry,
which may in turn adversely affect our financial performance and our ability to implement our business
strategy.

The Indian economy’s growth momentum took a back seat in Fiscals 2020 and 2021 as compared to
previous years on account of the pandemic COVID-19. According to the Indian Central Statistics
Organization, India’s real GDP growth decreased from 4.2% in the Financial Year 2020 to -7.3% in the
Financial Year 2021. As per various sources, the Indian economy has slowed further in Fiscal 2021. The
Indian economy is also influenced by economic and market conditions in other countries, particularly
emerging market conditions in Asia. A loss of investor confidence in other emerging market economies or
any worldwide financial instability may adversely affect the Indian economy, which could materially and
adversely affect our business and results of operations and the market price of the Equity Shares. Any
slowdown in the Indian economy or future volatility in global markets could increase in our borrowing
costs, result in freeze in lending generally, thereby adversely affecting our business. Additionally, an
increase in trade deficit, a downgrading in India’s sovereign debt rating or a decline in India’s foreign
exchange reserves could negatively affect interest rates and liquidity, which could adversely affect the
Indian economy and our business. Any downturn in the macroeconomic environment in India could also
adversely affect our business, results of operations, financial condition, cash flows and the trading price of
the Equity Shares.

Further, India’s economy could be adversely affected by a general rise in interest rates, adverse weather
conditions affecting agriculture, commodity and energy prices as well as various other factors. A slowdown
in the Indian economy could adversely affect the policy of the Government of India towards our banking
and finance industry, which may in turn adversely affect our financial performance and our ability to
implement our business strategy.

India has from time to time experienced instances of social, religious and civil unrest and hostilities between
neighbouring countries. Military activity or terrorist attacks in the future could influence the Indian
economy by disrupting communications and making travel more difficult and such political tensions could
create a greater perception that investments in Indian companies involve higher degrees of risk. Events of
this nature in the future, as well as social and civil unrest within other countries in Asia, could influence the
Indian economy. A number of countries in Asia, including India, as well as countries in other parts of the
world, are susceptible to contagious diseases and, for example, have had confirmed cases of diseases such
as the highly pathogenic H7N9, H5N1 and H1N1 strains of influenza in birds and swine and more recently,
the COVID-19 virus.

Other factors which may adversely affect the Indian economy are scarcity of credit or other financing in
India, resulting in an adverse impact on economic conditions in India and scarcity of financing of our

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developments and expansions; volatility in, and actual or perceived trends in trading activity on India’s
principal stock exchanges; changes in India’s tax, trade, fiscal or monetary policies, like political instability,
terrorism or military conflict in India or in countries in the region or globally, including in India’s various
neighbouring countries; occurrence of natural or man-made disasters; infectious disease outbreaks or other
serious public health concerns; prevailing regional or global economic conditions, including in India’s
principal export markets; and other significant regulatory or economic developments in or affecting India.

62. Significant differences exist between Ind AS and other accounting principles, such as Indian
GAAP, U.S. GAAP and IFRS, which investors may be more familiar with and may consider
material to their assessment of our financial condition.

Our Restated Financial Statements as at and for the six months period ended September 30, 2021 and
September 30, 2020 and financial year ended March 31, 2021 have been derived from our audited financial
statements as at and for the six months period ended September 30, 2021 and September 30, 2020 and year
ended March 31, 2021 prepared in accordance with Ind AS, and our audited financial statements as at and
for the years ended March 31, 2020 and March 31, 2019 prepared in accordance with Indian GAAP and
restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note.

Ind AS differs in certain significant respects from Indian GAAP, IFRS, U.S. GAAP and other accounting
principles with which prospective investors may be familiar in other countries. If our Restated Financial
Statements were to be prepared in accordance with such other accounting principles, our results of
operations, cash flows and financial position may be substantially different. Prospective investors should
review the accounting policies applied in the preparation of our Restated Financial Statements and consult
their own professional advisers for an understanding of the differences between these accounting principles
and those with which they may be more familiar. Any reliance by persons not familiar with Indian
accounting practices on the financial disclosures presented in this Prospectus should be limited
accordingly.

63. If there is any change in laws or regulations, including taxation laws, or their interpretation,
such changes may significantly affect our financial statements.

Any change in Indian tax laws could have an effect on our operations. Any future amendments may affect
our benefits such as exemption for income earned by way of dividend from investments in other domestic
companies and units of mutual funds, exemption for interest received in respect of tax free bonds, and long-
term capital gains on equity shares if withdrawn by the statute in the future, and the same may no longer be
available to us. Any adverse order passed by the appellate authorities/ tribunals/ courts would have an effect
on our profitability.

In addition, we are subject to tax related inquiries and claims. We may be particularly affected by claims
from tax authorities on account of income tax assessment, service tax, past claims of central excise, state
VAT, and GST that combines taxes and levies by the central and state governments into one unified rate of
interest with effect from July 1, 2017. For further information on litigations arising out of such claims, see
“Outstanding Litigation and Other Material Developments” beginning on page 293 of this Prospectus.

Further, the Government of India has announced the union budget for Fiscal 2022, pursuant to which the
Finance Act, 2021 (“Finance Act”), wherein a few sections have become effective from April 01, 2021
and the remaining shall come into force as and when may be notified by the Central Government, has
introduced various amendments. As such, there is no certainty on the impact that the Finance Act, 2021
may have on our business and operations or on the industry in which we operate. In addition, unfavourable
changes in or interpretations of existing, or the promulgation of new laws, rules and regulations including
foreign investment laws governing our business, operations and group structure could result in us being
deemed to be in contravention of such laws or may require us to apply for additional approvals. We may
incur increased costs relating to compliance with such new requirements, which may also require
management time and other resources, and any failure to comply may adversely affect our business, results

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of operations and prospects. Uncertainty in the applicability, interpretation or implementation of any
amendment to, or change in, governing law, regulation or policy, including by reason of an absence, or a
limited body, of administrative or judicial precedent may be time consuming as well as costly for us to
resolve and may affect the viability of our current business or restrict our ability to grow our business in
the future.

We cannot predict whether any new tax laws or regulations impacting our services will be enacted, what
the nature and impact of the specific terms of any such laws or regulations will be or whether, if at all, any
Jaws or regulations would have an adverse effect on our business.

64. Under Indian law, foreign investors are subject to investment restrictions that limit our ability
to attract foreign investors, which may adversely affect the trading price of the Equity Shares.

Under foreign exchange regulations currently in force in India, transfer of shares between non-residents
and residents are freely permitted (subject to certain restrictions), if they comply with the pricing guidelines
and reporting requirements specified by the RBI. If the transfer of shares, which are sought to be transferred,
is not in compliance with such pricing guidelines or reporting requirements or falls under any of the
exceptions referred to above, then a prior regulatory approval will be required. Further, unless specifically
restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and
without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for
making such investment. The RBI and the concerned ministries/ departments are responsible for granting
approval for foreign investment. Additionally, shareholders who seek to convert Rupee proceeds from a
sale of shares in India into foreign currency and repatriate that foreign currency from India require a no-
objection or a tax clearance certificate from the Indian income tax authorities.

In addition, pursuant to the Press Note No. 3 (2020 Series), dated April 17, 2020, issued by the DPIIT,
which has been incorporated as the proviso to Rule 6(a) of the FEMA Rules, investments where the
beneficial owner of the Equity Shares is situated in or is a citizen of a country which shares land border
with India, can only be made through the Government approval route, as prescribed in the Consolidated
FDI Policy dated October 15, 2020 and the FEMA Rules. These investment restrictions shall also apply to
subscribers of offshore derivative instruments. We cannot assure you that any required approval from the
RBI or any other governmental agency can be obtained with or without any particular terms or conditions
or at all.

We cannot assure investors that any required approval from the RBI or any other governmental agency can
be obtained on any particular terms or at all. For further information, see “Restrictions on Foreign
Ownership of Indian Securities” on page 359.

65. A downgrade in ratings of India, may affect the trading price of the Equity Shares.

Our borrowing costs and our access to the debt capital markets depend significantly on the credit ratings of
India. Any adverse revisions to India’s credit ratings for domestic and international debt by international
rating agencies may adversely impact our ability to raise additional financing and the interest rates and
other commercial terms at which such financing is available, including raising any overseas additional
financing. A downgrading of India’s credit ratings may occur, for example, upon a change of government
tax or fiscal policy, which are outside our control. This could have an adverse effect on our ability to fund
our growth on favorable termsor at all, and consequently adversely affect our business and financial
performance and the price of the Equity Shares.

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66. Adverse geopolitical conditions such as increased tensions between India and China, could
adversely affect our business, results of operations, financial condition and cash flows.

Adverse geopolitical conditions such as increased tensions between India and China resulting in any
military conflict in the region could adversely affect our business and operations. Such events may lead to
countries imposing restrictions on the import or export of products or raw materials, among others, and
affect our ability to procure raw materials required for our manufacturing operations. We could also be
affected by the introduction of import tariffs in India, or in the countries to which we export our products,
or changes in trade agreements between countries.

67. Investors may not be able to enforce a judgment of a foreign court against us, our Directors, the
Book Running Lead Manager or any of their directors and executive officers in India
respectively, except by way of a law suit in India.

We are incorporated under the laws of India and all of our Directors and Key Managerial Personnel reside
in India. All of our assets are also located in India. Where investors wish to enforce foreign judgments in
India, they may face difficulties in enforcing such judgments. India exercises reciprocal recognition and
enforcement of judgments in civil and commercial matters with a limited number of jurisdictions. In order
to be enforceable, a judgment obtained in a jurisdiction which India recognises as a reciprocating territory
must meet certain requirements of the Civil Procedure Code, 1908 (the “CPC”).

India is not a party to any international treaty in relation to the recognition or enforcement of foreign
judgments. Recognition and enforcement of foreign judgments is provided for under Section 13, 14 and
Section 44A of the CPC on a statutory basis. Section 44A of the CPC provides that where a certified copy
of a decree of any superior court, within the meaning of that Section, obtained in any country or territory
outside India which the government has by notification declared to be in a reciprocating territory, may be
enforced in India by proceedings in execution as if the judgment had been rendered by a district court in
India. However, Section 44A of the CPC is applicable only to monetary decrees and does not apply to
decrees for amounts payable in respect of taxes, other charges of a like nature or in respect of a fine or other
penalties and does not apply to arbitration awards (even if such awards are enforceable as a decree or
judgment).

A judgment of a court of a country which is not a reciprocating territory may be enforced in India only by
a suit upon the judgment under Section 13 of the CPC, and not by proceedings in execution. Section 13 of
the CPC provides that foreign judgments shall be conclusive regarding any matter directly adjudicated upon
except:

(i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the
judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings
that the judgment is founded on an incorrect view of international law or refusal to recognize the law of
India in cases to which such law is applicable; (iv) where the proceedings in which the judgment was
obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; and/ or (vi)
where the judgment sustains a claim founded on a breach of any law then in force in India. The suit must
be brought in India within three years from the date of judgment in the same manner as any other suit filed
to enforce a civil liability in India.

It cannot be assured that a court in India would award damages on the same basis as a foreign court if an
action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments
if it views the amount of damages awarded as excessive or inconsistent with Indian practice. A party seeking
to enforce a foreign judgment in India is required to obtain prior approval from the RBI to repatriate any
amount recovered pursuant to the execution of such foreign judgment.

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68. If inflation were to rise in India, we might not be able to increase the prices of our products at a
proportional rate in order to pass costs on to our clients thereby reducing our margins.

Inflation rates in India have been volatile in recent years, and such volatility may continue in the future.
India has experienced high inflation in the recent past. Increased inflation can contribute to an increase in
interest rates and increased costs to our business, including increased costs of transportation, wages, raw
materials and other expenses relevant to our business.

High fluctuations in inflation rates may make it more difficult for us to accurately estimate or control our
costs. Any increase in inflation in India can increase our expenses, which we may not be able to adequately
pass on to our clients, whether entirely or in part, and may adversely affect our business and financial
condition. In particular, we might not be able to reduce our costs or entirely offset any increases in costs
with increases in prices for our products. In such case, our business, results of operations, cash flows and
financial condition may be adversely affected.

Further, the Government has previously initiated economic measures to combat high inflation rates, and it
is unclear whether these measures will remain in effect. There can be no assurance that Indian inflation
levels will not worsen in the future.

69. Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may have an
adverse effect on the value of our Equity Shares, independent of our operating results.

On listing, our Equity Shares will be quoted in Indian Rupees on the Stock Exchanges. Any dividends in
respect of our Equity Shares will also be paid in Indian Rupees and subsequently converted into the relevant
foreign currency for repatriation, if required. Any adverse movement in currency exchange rates during the
time taken for such conversion may reduce the net dividend to foreign investors. In addition, any adverse
movement in currency exchange rates during a delay in repatriating the proceeds from a sale of Equity
Shares outside India, for example, because of a delay in regulatory approvals that may be required for the
sale of Equity Shares may reduce the proceeds received by Shareholders. For example, the exchange rate
between the Indian Rupee and the U.S. dollar has fluctuated substantially in recent years and may continue
to fluctuate substantially in the future, which may have an adverse effect on the returns on our Equity
Shares, independent of our operating results.

RISKS RELATE

 

TO THE OFFER AND THE E!

 

ITY SHARES

70. Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under
Indian law and thereby may suffer future dilution of their ownership position.

Under the Companies Act, a company having share capital and incorporated in India must offer its holders
of equity shares pre-emptive rights to subscribe and pay for a proportionate number of equity shares to
maintain their existing ownership percentages before the issuance of any new equity shares, unless the pre-
emptive rights have been waived by adoption of a special resolution. However, if the laws of the jurisdiction
where the investors are located in do not permit them to exercise their pre-emptive rights without our filing
an offering document or registration statement with the applicable authority in such jurisdiction, the
investors will be unable to exercise their pre-emptive rights unless we make such a filing. If we elect not to
file a registration statement, the new securities may be issued to a custodian, who may sell the securities
for the investor's benefit. The value the custodian receives on the sale of such securities and the related
transaction costs cannot be predicted. In addition, to the extent that the investors are unable to exercise pre-
emption rights granted in respect of the Equity Shares held by them, their proportional interest in us would
be reduced.

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FAs Rights of shareholders of companies under Indian law may be more limited than under the laws
of other jurisdictions.

Our Articles of Association, composition of our Board, Indian laws governing our corporate affairs, the
validity of corporate procedures, directors’ fiduciary duties, responsibilities and liabilities, and
shareholders’ rights may differ from those that would apply to a company in another jurisdiction.
Shareholders’ rights under Indian law may not be as extensive and wide-spread as shareholders’ rights under
the laws of other countries or jurisdictions. Investors may face challenges in asserting their rights as
shareholder in an Indian company than as a shareholder of an entity in another jurisdiction.

72. Any future issuance of Equity Shares may dilute your shareholding and sale of Equity Shares
by the Promoters may adversely affect the trading price of the Equity Shares.

We may be required to finance our growth, whether organic or inorganic, through future equity offerings.
Any future equity issuances by us, including a primary offering, may lead to the dilution of investors’
shareholdings in our Company. Any future equity issuances by us (including under an employee benefit
scheme) or disposal of our Equity Shares by the Promoters or any of our other principal shareholders or
any other change in our shareholding structure to comply with minimum public shareholding norms
applicable to listed companies in India or any public perception regarding such issuance or sales may
adversely affect the trading price of the Equity Shares, which may lead to other adverse consequences
including difficulty in raising capital through offering of our Equity Shares or incurring additional debt.
There can be no assurance that we will not issue further Equity Shares or that our existing shareholders
including our Promoters will not dispose of further Equity Shares after the completion of the Offer (subject
to provisions of the applicable laws) or pledge or encumber their Equity Shares. Any future issuances could
also dilute the value of shareholder’s investment in the Equity Shares and adversely affect the trading price
of our Equity Shares. Such securities may also be issued at prices below the Offer Price. We may also issue
convertible debt securities to finance our future growth or fund our business activities. In addition, any
perception by investors that such issuances or sales might occur may also affect the market price of our
Equity Shares.

73. Investors will not be able to sell immediately on an Indian stock exchange any of the Equity
Shares they purchase in the Offer.

The Equity Shares will be listed on the Stock Exchanges. Pursuant to applicable Indian laws, certain actions
must be completed before the Equity Shares can be listed and trading in the Equity Shares may commence.
Investors’ book entry, or ‘demat’ accounts with depository participants in India, are expected to be credited
within one working day of the date on which the Basis of Allotment is approved by the Stock Exchanges.
The Allotment of Equity Shares in this Offer and the credit of such Equity Shares to the applicant’s demat
account with depository participant could take approximately five Working Days from the Bid Closing
Date and trading in the Equity Shares upon receipt of final listing and trading approvals from the Stock
Exchanges is expected to commence within six Working Days of the Bid Closing Date. There could be a
failure or delay in listing of the Equity Shares on the Stock Exchanges. Any failure or delay in obtaining
the approval or otherwise commence trading in the Equity Shares would restrict investors’ ability to dispose
of their Equity Shares. There can be no assurance that the Equity Shares will be credited to investors’ demat
accounts, or that trading in the Equity Shares will commence, within the time periods specified in this risk
factor. We could also be required to pay interest at the applicable rates if allotment is not made, refund
orders are not dispatched or demat credits are not made to investors within the prescribed time periods.

74, Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity
Shares.

Under the current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an

Indian company are generally taxable in India. A securities transaction tax (“STT”) is levied both at the
time of transfer and acquisition of the equity shares (unless exempted under a prescribed notification) and

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collected by an Indian stock exchange on which equity shares are sold. Any gain realised on the sale of
equity shares held for more than 12 months, which are sold using any other platform other than on a
recognised stock exchange and on which no STT has been paid, are subject to long term capital gains tax
in India. Such long term capital gains exceeding = 100,000 arising from the sale of listed equity shares on
the stock exchange are subject to tax at the rate of 10% (plus applicable surcharge and cess). Unrealized
capital gains earned on listed equity shares up to January 31, 2018 continue to be tax exempt in such cases.
Further, STT will be levied on and collected by an Indian stock exchange if the equity shares are sold on a
stock exchange. With respect to capital gains arising in an off-market sale, long term capital gains are
subject to tax at the rate of 10% (plus applicable surcharge and cess) without the exemption of = 100,000.
Short-term capital gains, arising from the sale of such equity shares on a stock exchange would be subject
to tax at the rate of 15% (plus applicable surcharge and cess), while short term capital gains arising in an
off-market sale would be subject to tax at a higher rate of 40% (plus applicable surcharge and cess) in the
case of foreign companies and 30% (plus applicable surcharge and cess) in the case of other non-resident
taxpayers.

The Finance Act, 2019 amended the Indian Stamp Act, 1899 with effect from July 1, 2020 and clarified
that, in the absence of a specific provision under an agreement, the liability to pay stamp duty in case of
sale of securities through stock exchanges will be on the buyer, while in other cases of transfer for
consideration through a depository, the onus will be on the transferor. The stamp duty for transfer of
securities other than debentures, on a delivery basis is specified at 0.015% and on a non-delivery basis is
specified at 0.003% of the consideration amount. As such, there is no certainty on the impact that the
Finance Act, 2019 may have on our Company’s business and operations.

Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less will be
subject to short term capital gains tax in India. In cases where the seller is a non-resident, capital gains
arising from the sale of the equity shares will be partially or wholly exempt from taxation in India in cases
where the exemption from taxation in India is provided under a treaty between India and the country of
which the seller is resident. Additionally, the Finance Act, 2020 does not require dividend distribution tax
to be payable in respect of dividends declared, distributed or paid by a domestic company after March 31,
2020, and accordingly, such dividends would not be exempt in the hands of the shareholders, both resident
as well as non-resident. Historically, Indian tax treaties do not limit India’s ability to impose tax on capital
gains. As a result, residents of other countries may be liable for tax in India as well as in their own
jurisdiction on a gain upon the sale of the equity shares.

Our Company cannot predict whether any tax laws or other regulations impacting it will be enacted, or
predict the nature and impact of any such laws or regulations or whether, if at all, any laws or regulations
would have a material adverse effect on our Company’s business, financial condition, results of operations
and cash flows.

75. The requirements of being a publicly listed company may strain our resources.

We are not a publicly listed company and have not, historically, been subjected to the increased scrutiny of
our affairs by shareholders, regulators and the public at large that is associated with being a listed company.
As a listed company, we will incur significant legal, accounting, corporate governance and other expenses
that we did not incur as an unlisted company. We will be subject to the Listing Regulations which will
require us to file audited annual and unaudited quarterly reports with respect to our business and financial
condition. If we experience any delays, we may fail to satisfy our reporting obligations and/or we may not
be able to readily determine and accordingly report any changes in our results of operations as promptly as
other listed companies. Further, as a publicly listed company, we will need to maintain and improve the
effectiveness of our disclosure controls and procedures and internal control over financial reporting,
including keeping adequate records of daily transactions. In order to maintain and improve the effectiveness
of our disclosure controls and procedures and internal control over financial reporting, significant resources
and management attention will be required. As a result, our management’s attention may be diverted from
our business concerns, which may adversely affect our business, prospects, financial condition, results of

64
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operations, and cash flows. In addition, we may need to hire additional legal and accounting staff with
appropriate experience and technical accounting knowledge, but we cannot assure you that we will be able
to do so ina timely and efficient manner.

76. Our Equity Shares have never been publicly traded and may experience price and volume
fluctuations following the completion of the Offer, an active trading market for the Equity
Shares may not develop, the price of our Equity Shares may be volatile and you may be unable
to resell your Equity Shares at or above the Offer Price or at all.

Prior to the Offer, there has been no public market for our Equity Shares, and an active trading market may
not develop or be sustained after the Offer. Listing and quotation does not guarantee that a market for our
Equity Shares will develop or, if developed, the liquidity of such market for the Equity Shares. The Offer
Price of the Equity Shares is proposed to be determined through a book building process. This price will be
based on numerous factors, as described in the section “Basis for Offer Price” beginning on page 125. This
price may not necessarily be indicative of the market price of our Equity Shares after the Offer is completed.
You may not be able to re-sell your Equity Shares at or above the Offer price and may as a result lose all
or part of your investment.

Our Equity Shares are expected to trade on NSE and BSE after the Offer, but there can be no assurance that
active trading in our Equity Shares will develop after the Offer, or if such trading develops that it will
continue. Investors may not be able to sell our Equity Shares at the quoted price if there is no active trading
in our Equity Shares.

There has been significant volatility in the Indian stock markets in the recent past, and the trading price of
our Equity Shares after this Offer could fluctuate significantly as a result of market volatility or due to
various internal or external risks, including but not limited to those described in this Prospectus. The market
price of our Equity Shares may be influenced by many factors, some of which are beyond our control,
including:

- the failure of security analysts to cover the Equity Shares after this Offer, or changes in the
estimates of our performance by analysts;

- the activities of competitors and suppliers;

- future sales of the Equity Shares by us or our shareholders;

- investor perception of us and the industry in which we operate;

- our quarterly or annual earnings or those of our competitors;

- developments affecting fiscal, industrial or environmental regulations;

- the public’s reaction to our press releases and adverse media reports; and

- general economic conditions.

A decrease in the market price of our Equity Shares could cause you to lose some or all of your investment.

TT: Future sales of Equity Shares by our Promoter may adversely affect the market price of the
Equity Shares.

After the completion of the Offer, our Promoter will own, directly, more than 71% of our outstanding
Equity Shares. Upon expiry of the lock-in period provided under the SEBI ICDR Regulations, our Promoter
will be eligible to sell part or all of the Equity Shares held by it. Future sales of a large number of the Equity
Shares by our Promoter, either in one sale or over a series of sales, could adversely affect the market price
of the Equity Shares. Similarly, the perception that any such primary or secondary sale may occur could
adversely affect the market price of the Equity Shares. No assurance may be given that our Promoter will
not dispose of, pledge or encumber their Equity Shares in the future, or that the market price of the Equity
Shares will not be adversely affected by any such disposal, pledge or encumbrance of their Equity Shares.

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78. QIBs and Non- Institutional Investors are not permitted to withdraw or lower their Bids (in terms
of quantity of Equity Shares or the Bid amount) at any stage after submitting a bid, and Retail
Individual Investors are not permitted to withdraw their Bids after bid/offer closing date.

Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are required to block the
Bid amount on submission of the Bid and are not permitted to withdraw or lower their Bids (in terms of
quantity of equity shares or the Bid amount) at any stage after submitting a Bid. Similarly, Retail Individual
Investors can revise or withdraw their Bids at any time during the bid/ offer period and until the Bid/ offer
closing date, but not thereafter. While we are required to complete all necessary formalities for listing and
commencement of trading of the Equity Shares on all Stock Exchanges where such Equity Shares are
proposed to be listed, including Allotment, within six Working Days from the Bid/ Offer Closing Date or
such other period as may be prescribed by the SEBI, events affecting the Investors’ decision to invest in
the Equity Shares, including adverse changes in international or national monetary policy, financial,
political or economic conditions, our business, results of operations, cash flows or financial condition may
arise between the date of submission of the Bid and Allotment. We may complete the Allotment of the
Equity Shares even if such events occur, and such events may limit the Investors’ ability to sell the Equity
Shares Allotted pursuant to the Offer or cause the trading price of the Equity Shares to decline on listing.
Therefore, QIBs and Non-Institutional Investors will not be able to withdraw or lower their bids following
adverse developments in international or national monetary policy, financial, political or economic
conditions, our business, results of operations, cash flows or otherwise between the dates of submission of
their Bids and Allotment.

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SECTION III: INTRODUCTION

THE OFFER

The following table summarizes the Offer details:

 

Offer of Equity Shares

45,97,200* Equity Shares aggregating to = 12,596.33 Lakhs

 

of which:

 

(i) Fresh Issue!

41,40,000* Equity Shares aggregating to = 11,343.60Lakhs

 

di) Offer for Sale

4,57,200* Equity Shares aggregating to % 1,252.73 Lakhs by the
Selling Shareholder

 

The Offer consists of:

 

A) QIB Portion?

Not less than 34,47,900* Equity Shares

 

of which:

 

Anchor Investor Portion

20,68,700* Equity Shares

 

Net QIB Portion (assuming the Anchor Investor
Portion is fully subscribed)

13,79,200* Equity Shares

 

of which:

 

Available for allocation to Mutual Funds only
(5% of the Net QIB Portion)

1,72,395* Equity Shares

 

Balance of QIB Portion for all QIBs including
Mutual Funds

12,06,765* Equity Shares

 

B) Non-Institutional Portion®

Not more than 6,89,580* Equity Shares

 

C) Retail Portion®

Not more than 4,59,720* Equity Shares

 

 

Pre-Offer and post-Offer Equity Shares

 

 

Equity Shares outstanding prior to the Offer

1,42,34,947 Equity Shares

 

Equity Shares outstanding after the Offer

1,83,74,947* Equity Shares

 

 

Utilisation of Net Proceeds

 

See “Objects of the Offer” beginning on page 94 of this
Prospectus for details regarding the use of proceeds from the
Fresh Issue. Our Company will not receive any proceeds from the
Offer for Sale.

 

 

“subject to the finalization basis of allotment.

(1) The Fresh Issue has been authorised

by our Board of Directors and our Shareholder pursuant to

the resolutions passed at their meetings dated July 05, 2021 and July 06, 2021 respectively.

(2) The Selling Shareholder has confirmed and approved its participation in the Offer for Sale as set

 

 

out below:
Sr. Selling Shareholder Number of Equity | Date of board Date of consent
No. Shares offered in resolution letter
the Offer for Sale
i Mrs. Anjana Haresh Motwani 4,57,200 July 05, 2021 July 05, 2021

 

 

 

 

 

 

 

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(3) Subject to valid Bids being received at or above the Offer Price, undersubscription, if any, in any

category, except in the QIB Portion, would be allowed to be met with spill-over from any other
category or combination of categories of Bidders at the discretion of our Company and the Selling
Shareholder, in consultation with the Lead Manager, and the Designated Stock Exchange, subject
to applicable laws. In case of under-subscription in the Offer, subject to receipt of minimum
subscription for 90% of the Fresh Issue, compliance with Rule 19(2)(b) of the SCRR and allotment
of at least 75% of the Net Offer to QIBs, Equity Shares shall be allocated in the manner specified
in the section “Terms of the Offer” beginning on page 326.
Allocation to all categories, except Anchor Investors and Retail Individual Bidders shall be made
on a proportionate basis. The allocation to each Retail Individual Bidder shall not be less than the
minimum Bid Lot, subject to availability of Equity Shares in the Retail Portion and the remaining
available Equity Shares, if any, shall be allocated on a proportionate basis.

(4) Our Company and the Selling Shareholder may, in consultation with the Lead Manager, allocated
up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the
SEBI ICDR Regulations. The QIB Portion was accordingly reduced for the Equity Shares allocated
to Anchor Investors. One-third of the Anchor Investor Portion was reserved for domestic Mutual
Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the
Anchor Investor Allocation Price. In the event of under-subscription or non-Allotment in the
Anchor Investor Portion, the remaining Equity Shares shall be added to the Net QIB Portion. 5%
of the QIB Portion (excluding Anchor Investor Portion) was available for allocation on a
proportionate basis to Mutual Funds only, and the remainder of the QIB Portion (excluding Anchor
Investor Portion) shall be available for allocation on a proportionate basis to all QIB Bidders
(other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or
above the Offer Price. In the event the aggregate demand from Mutual Funds is less than as
specified above, the balance Equity Shares available for Allotment in the Mutual Fund Portion will
be added to the QIB Portion and allocated proportionately to the QIB Bidders (other than Anchor
Investors) in proportion to their Bids. For details, see “Offer Procedure” beginning on page 335.

Allocation to all categories, except the Anchor Investor Portion and the Retail Portion, shall be made on
a proportionate basis subject to valid Bids having being received at or above the Offer Price, as
applicable. The allocation to each Retail Individual Bidder shall not be less than the minimum Bid Lot,
subject to availability of Equity Shares in the Retail Portion and the remaining available Equity Shares,
if any, may be allocated on a proportionate basis. For further details, please see “Offer Procedure” on
page 335 of this Prospectus.

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Particulars Annexure As at As at As at As at 31st As at 31st
30th 30th 31st March, March,
Sept, Sept, March, 2020** 2019 **
2021 2020 2021
Lease Liabilities xl 141.21 37.85 24.24 38.75 5.49
Trade payables
(i) Total outstanding dues of micro
enterprises and small enterprises x 1,338.24 625.79 396.01 - -
(ii) Total outstanding dues of creditors
other than micro and small
enterprises x 1,276.92 805.35 2,193.02 1,526.79 1,457.36
Other financial liabilities Xl 446.69 837.62 1,422.48 277.97 71.60
Other current liabilities Xl 142.59 161.58 127.30 8.32 245.37
Provisions xl 53.78 e 141.66 s 6.90
Current tax liabilities (net) XI 162.11 54.48 135.07 - -
Total current liabilities 5,486.30 4,889.99 6,723.61 5,180.09 4,040.07
TOTAL LIABILITIES 6,734.96 5,555.24 7,712.00 5,432.69 4,205.51
TOTAL EQUITY AND LIABILITIES 10,491.04 6,115.73 8,977.89 5,681.12 5,671.74
Significant accounting policies and
Key accounting estimates and
judgements Iv (A)
See accompanying notes to the
financial statements IV(B) - XXXI(H)

 

** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019

70

 
SUMMARY OF FINANCIAL INFORMATION

oP

 

 

 

 

 

 

 

 

 

 

 

 

 

RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES ANNEXURE I
(in Lakh)
Particulars Annexure As at As at As at As at 31st As at 31st
30th 30th 31st March, March,
Sept, Sept, March, 2020** 2019 **
2021 2020 2021
ASSETS
Non-current assets
Property, plant and equipment Xi 1,696.49 934.17 1,865.82 950.41 874.82
Capital work-in-progress 1,085.69 124.18 652.03 119.91 -
Right of Use Assets xill 476.33 62.33 38.26 114.94 3.13
Goodwill
Other intangible assets xill 19.19 19.31 17.18 14.76 0.51
Financial assets
Other financial assets XIV 69.04 53.45 39.71 88.53 33.24
Deferred tax asset (net) 129.81 246.78 171.98 242.69 165.81
Other non-current assets XIV 15.88 15.88 15.88 15.88 150.44
Total non-current assets 3,492.43 1,456.10 2,800.85 1,547.10 1,227.95
Current assets
Inventories XV 3,369.53 2,052.46 3,239.69 1,852.03 1,452.38
Financial assets
Investments
Trade receivables XVI 2,880.79 1,937.71 2,286.61 1,979.85 2,240.84
Cash and cash equivalents XVII 68.30 102.07 83.10 75.65 190.95
Loans XVIII 108.71 124.73 116.65 122.51 82.29
Current tax assets (net) XVII - - - 15.30 292.66
Other current assets XVIII 571.29 442.66 450.97 88.69 184.67
Total current assets 6,998.61 4,659.63 6,177.03 4,134.03 4,443.79
TOTAL ASSETS 10,491.04 6,115.73 8,977.89 5,681.12 5,671.74
EQUITY AND LIABILITIES
EQUITY
Equity share capital Vv 1,423.49 1,300.00 1,300.00 1,300.00 1,300.00
Other equity vl 2,332.58 (739.51) (34.12) (1,051.56) 166.23
Total equity 3,756.08 560.49 1,265.88 248.44 1,466.23
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings Vil 805.76 525.34 854.69 77.72 104.98
Lease Liabilities IX (C) 337.16 24.15 14.52 73.61 5.08
Other non current liabilities = = = = =
Provisions 1X (B) 105.75 115.76 119.18 101.26 55.38
Total non-current liabilities 1,248.66 665.25 988.39 252.59 165.44
Current liabilities
Financial liabilities
Borrowings Xl 1,924.76 2,367.33 2,283.83 3,328.26 2,253.35

 

 

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RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS ANNEXURE-II
(in Lakh)
Particulars ‘Annexure Six Six For the For the For the
Month Month Year Year Year
Period Period Ended Ended Ended
ended ended 31st 31st 31st
Sept Sept March, March, March,
30th, 30th, 2021 2020 ** 2019 **
2021 2020
INCOME
Revenue from operations xix 7,051.58 4,492.92 11,816.16 9,547.93 8,741.75
Other income XX 221.65 181.97 571.80 242.82 55.89
Total 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
EXPENSES
Cost of Material Consumed XXxI 4,337.20 3,127.40 9,708.36 6,588.30 6,063.06
Changes in inventories of finished goods
(including stock-in-trade) and work-in-progress 36 70407 (69.33) (1,586.07) | (369.78) (350.90)
Employee benefits expenses XXII 774.76 626.45 1,473.58 1,269.33 938.04
Other expenses XXIV 632.83 382.97 1,023.41 1,610.95. 1,277.35
Total 6,538.85 4,067.49 10,619.29 9,098.80 7,927.55
Earning before Interest, Tax, Depreciation and 734.38 607.40 1,768.67 691.95 870.09
Amortisation (EBITDA)
Finance costs Xxill 172.41 110.89 255.31 294.68 390.64
Depreciation and amortisation expense xill 141.00 104.34 190.34 189.62 73.54
Total 313.40 215.23 445.65 484.30 464.18
Profit / (Loss) before exceptional items and tax 420.98 392.17 1,323.02 207.66 405.91
Exceptional items : - : 743.71 -
Profit / (Loss) before tax 420.98 392.17 1,323.02 (536.06) 405.91
Tax expense
Current tax XXVIL (77.04) (104.78) (250.22) - -
Deferred tax (expense) / income IX (A) (33.69) 6.03 (66.84) 69.00 (5.84)
Total 110.73) (98.75) (317.06) 69.00 (5.84)
Profit / (Loss) for the year 310.24 293.42 1,005.96 (467.05) 400.07
Other comprehensive income
(A) Items that will not be reclassified to profit or
loss
(i) Re-measurement gains / (losses) on defined
benefit plans 33.68 7.68 15.35, (21.39) 10.13
(ii) Income tax relating to items that will not be
reclassified to profit or loss (8.48) (1.93) (3.86) 5.38 (3.13)
Total amount not to be re-classified to profit or
loss (Net of tax) 25.21 5.74 11.49 (16.00) 7.00
(8) Items that will be reclassified to profit or loss - - - - -
Other comprehensive income for the year, net of
tax 25.21 5.74 11.49 (16.00) 7.00
Total comprehensive income for the year vl 335.45, 299.17 1,017.45 (483.06) 407.07
Earnings per Equity Share
Basic Earnings / (loss) per Equity Share 2.22 2.26 7.74 (3.59) 3.08
(not annualised for period ended 30 Sept 2021
and 30 Sept 2020)
Diluted Earnings / (loss) per Equity Share 2.22 2.26 7.74 (3.59) 3.08
Significant accounting policies and Key
accounting estimates and judgements IV (A)
See accompanying notes to the financial 1V(B) -
statements XXXiI(H)

** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019

71

 
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HP ADHESIVES LIMITED
RESTATED SUMMARY STATEMENT OF CASH FLOW ANNEXURE-III
(in Lakh)
Particulars Six Six For the For the For the
Month Month Year Year Year
Period Period Ended Ended Ended
ended ended 31st 31st 31st
Sept Sept March, March, March,
30th, 30th, 2021 2020** 2019 **
2021 2020
Cash flow from operating activities
Net profit / (loss) before taxation 420.98 392.17 1,323.03 (536.07) 405.91
Adjustments for:
Depreciation and amortization expenses 141.00 104.34 190.33 189.62 73.54
Finance cost 172.41 110.89 255.31 294.68 390.64
Operating Profit / (Loss) before working capital 734.38 607.40 1,768.67 (51.77) 870.09
changes
Changes in working capital
(Decrease)/ increase in trade payables 26.13 (95.65) 1,062.24 69.43 126.49
Decrease/ (increase) in inventories (129.83) (200.43) (1,387.66) (399.65) (653.05)
Decrease/ (increase) in trade (594.18) 42.14 (306.76) 260.99 50.35
receivables
(Decrease)/ increase in other current financial (536.19) 509.29 1,129.99 206.37 25.53
liabilities
(Decrease)/ increase in other current and non
financial liabilities 15.29 153.26 118.97 (237.05) 177.89
(Decrease)/ increase in provisions (40.58) 76.65 310.00 22.97 11.90
Decrease/ (increase) in loans 7.95 (2.22) 5.86 (40.22) (27.24)
Decrease/ (increase) in other current and non
current financial assets - 15.30 48.82 (55.29) (25.69)
Decrease/ (increase) in other current and non
current non financial assets (149.65) (318.89) (362.29) 230.54 (192.36)
Other Equity Adjustments (0.24) 12.89 - - -
Cash generated from operating activities (666.93) 799.72 2,387.84 6.34 363.91
Income tax paid (77.04) | (104.78) (234.92) 277.36 (134.96)
Net cash generated from operating activities (A) (743.97) 694.95 2,152.92 283.70 228.95
Cash flow from Investing activities
Payment for property, plant and equipment (1,000.67) (44.32) (1,640.28) (399.37) (354.26)
and intangible assets
Proceeds from sale/ disposal of property,
plant and equipment. 155.27 - - - -
Interest received . . 17.58 (9.99) (4.64)
Net cash used in Investing activities (B) (845.40) (44.32) (1,622.70) (409.36) (358.90)
Cash flow from Financing activities
Proceeds from Issue of Share Capital 2,154.98 - - - -
Proceeds from long-term borrowings (48.93) 447.61 776.97 (27.26) (44.46)
Proceeds from Contribution to Partners (Net) * = a & (742.61) 167.49
Proceeds / (Repayment) of borrowings from relate
parties - - (874.40) $32.43 342.27
Movement in short-term borrowings from (359.07) (960.93) (170.03) 542.78 68.03
banks (net)

72

 
a

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Six Six For the For the For the
Month Month Year Year Year
Period Period Ended Ended Ended
ended ended 31st 31st 31st
Sept Sept March, March, March,
30th, 30th, 2021 2020** 2019 **
2021 2020
Finance Cost (172.41) (110.89) (255.31) (294.68) (390.64)
Net Cash used in Financing Activities (C) 1,574.57 (624.21) (522.77) 10.37 142.69
Net increase in cash and cash equivalents (14.80) 26.42 7.46 (115.30) 12.74
(A+B+C)
Cash and cash equivalents at the beginning of the 83.10 75.65 75.65 190.95 178.21
year
Cash and cash equivalents at the end of the year 68:30 102,07 83.10 262 90:95
Cash and cash equivalents comprise
Balances with banks
On current accounts 26.94 58.27 58.40 49.55 123.57
Fixed deposits with maturity of less than 3 21.87 27.52 10.39 6.11 49.64
months
Gashionhand 19.50 16.28 14.30 19.99 17.74
Total cash and cash equivalents at end of the 68.30 102.07 83.10 75.65 190.95
year

 

 

 

 

** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019

 

73

 
we

GENERAL INFORMATION

Our Company was originally formed as a partnership firm under the name and style of “M/s. H.P.
International” pursuant to a deed of partnership dated January 01, 1987, as amended and restated from
time to time. M/s. HP International was thereafter converted into a private limited company “HP
Adhesives Private Limited” on May 07, 2019, pursuant to the provisions of Chapter XXI of the
Companies Act. Subsequently, our Company has been converted into a public limited company and the
name of our Company changed to “HP Adhesives Limited” pursuant to a special resolution passed at the
Extra-Ordinary General Meeting of our Company held on June 23, 2021 and a fresh Certificate of
Incorporation dated July 01, 2021 issued by the RoC. The Corporate Identity Number of our Company is

U24304MH2019PLC325019.

For details of changes in registered offices of our Company, please refer to the section titled "History and
Certain Corporate Matters" beginning on page 175 of this Prospectus.

11, Unique House, Chakala Cross Road, Andheri East, Mumbai —
400 099, Maharashtra, India.
Telephone: 022 — 68196300; +91-8097520674

Website: www.hpadhesives.com
Email id: investors@hpadhesives.com

 

 

 

213, Unique House, Chakala Cross Road, Andheri East, Mumbai —
400 099, Maharashtra, India.
Telephone: 022 — 68196300

 

Survey No. 7/14/A/1, 7/14/B/1, 7/14/B/2, Village Narangi, Taluka
Khalapur, District Raigad, Maharashtra — 410203.

 

May 07, 2019

 

325019

 

U24304MH2019PLC325019

 

Company Limited by Shares

 

Indian Non-Government Company

 

100, Everest, Marine Drive, Mumbai — 400 002, Maharashtra, India.
Phone: 022 — 22812627/ 22020295/ 22846954

Fax: 022 — 22811977

Email Id: roc.mumbai@mca.gov.in

 

National Stock Exchange of India Limited

 

Offer Opens on: Wednesday, December 15, 2021
Offer Closes on: Friday, December 17, 2021

 

Ms. Jyoti Nikunj Chawda

HP Adhesives Limited

11 Unique House, Chakala Cross Road, Andheri East, Mumbai —
400 099, Maharashtra, India.

Telephone: 022 — 68196300; +91-8097520674

Website: www.hpadhesives.com

Email id: cs@hpadhesives.com

 

 

Mr. Mihir Suresh Shah

HP Adhesives Limited

11 Unique House, Chakala Cross Road, Andheri East, Mumbai —
400 099, Maharashtra, India.

Telephone: 022 - 28388906

Email id: cfo@hpadhesives.com

 

74

 
Board of Directors

Our Company’s Board comprises of the following Directors:

 

 

 

 

 

 

 

Name, Nature of Directorship and DIN Age Residential Address

Anjana Haresh Motwani 65 13, Udadhi Tarang, Juhu Road, Juhu,
Executive Director & Chairperson years Mumbai — 400 049, Maharashtra, India.
DIN: 02650184

Karan Haresh Motwani 36 12/A, Udadhi Tarang, Juhu Tara Road,
Managing Director years Next to J.W Marriot, Juhu, Mumbai — 400
DIN: 01710775 049, Maharashtra, India.

Surendra Kumar Mehta 58 Flat No. 701, Tirupati Balaji Towers,
Independent Director years Sarojini Road, Santacruz (West), Mumbai-
DIN: 09211358 400054.

Ajeet Anant Walavalkar 65 Kumar Peninsula CHS, Baner-Pashan Link
Independent Director years Road, Near HDFC Bank, Pashan, Pune-
DIN: 09226644 411021, Maharashtra, India

Rajendra Kumar Jain 55 5-A-25, R.C. Vyas Colony, Bhilwara -
Independent Director years 311001, Rajasthan, India.

DIN: 00144095

 

 

 

 

For further details of the Board of Directors, please refer to the section titled "Our Management"
beginning on page 179 of this Prospectus.

DETAILS OF KEY INTERMEDIARIES PERTAINING TO THIS OFFER AND OUR COMPANY

 

 

Book Running Lead Manager Registrar to the Offer
Unistone Capital Private Limited Bigshare Services Private Limited
A/ 305, Dynasty Business Park Address: 1 Floor, Bharat Tin Works Bldg,
Andheri-Kurla Road, Andheri East, Mumbai — Opp. Vasant Oasis, Makwana Road, Marol,
400 059 Andheri (East), Mumbai-400 059, Maharashtra,
Telephone: +91 9820057533 India.
Email: mb@unistonecapital.com Telephone: 022-62638200
Investor grievance email: Facsimile: 022 62638280
compliance@unistonecapital.com Email: ipo@bigshareonline.com
Contact Person: Mr. Brijesh Parekh Investor grievance email:
Website: www.unistonecapital.com investor@bigshareonline.com
SEBI Registration number: INM000012449 Contact Person: Mr. Ashish Bhope
CIN: U65999MH2019PTC330850 Website: www.bigshareonline.com

SEBI Registration Number: INR000001385
CIN: U99999MH1994PTC076534

 

 

 

Legal Advisor to the Offer Statutory & Peer Reviewed Auditors
M/s Alliance Law M/s. Priya Choudhary & Associates LLP
Address: 801, 8" Floor, Raheja Centre, HO Office: 10/54, Amar Bhawan, Punjabi Gali,
Free Press Journal Marg, Nariman Point, Bhopal Gunj, Bhilwara — 311 001, Rajasthan
Mumbai- 400 021, Maharashtra, India. Branch Office: 404, Sneh Sarovar CHS, Marol
Telephone: +91 22-2204 0822/23/24 Military Road, Andheri (E), Mumbai — 400 059
E-mail: info@alliancelaw.in Telephone: 01482 - 226414

E-mail: capriyachoudhary@gmail.com/

vaichoudhary@gmail.com

Contact Person: Mr. Vaibhav Choudhary
Firm Registration No.: 011506C/ C400307
Peer Review Number: 013168

 

 

 

75
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Share Escrow Agent Public Offer Bank/ Banker to the Offer/
Refund Banker

Bigshare Services Private Limited ICICI Bank Limited
Address: 1* Floor, Bharat Tin Works Bldg, Opp. Address: Capital Market Division, 1st Floor,
Vasant Oasis, Makwana Road, Marol, Andheri 122, Mistry Bhavan, Dinshaw Vachha Road,
(East), Mumbai-400 059, Maharashtra, India. Backbay Reclamation, Churchgate, Mumbai —
Telephone: 022-62638200 400020
Fax: 022 62638299 Telephone: 022- 66818911/23/24
E-mail: ipo@bigshareonline.com Fax: 022- 22611138
Website: www.bigshareonline.com E-mail: sagar.welekar@icicibank.com
Contact Person: Mr. Babu Rapheal C. Website: www.icicibank.com
SEBI Cert Registration No: INR000001385 Contact Person: Mr. Sagar Welekar
CIN No.: U99999MH1994PTC076534 SEBI Cert Registration No: INBI00000004

Syndicate Member Sponsor Bank
Rikhav Securities Limited ICICI Bank Limited
Address: B/35, Matruchhaya, 4th floor, S.N. Address: Capital Market Division, 1st Floor,
Road, Mulund (W), Mumbai- 80 122, Mistry Bhavan, Dinshaw Vachha Road,
Telephone: 022-25935353 Backbay Reclamation, Churchgate, Mumbai —
Fax: 022-25935300 400020
E-mail: info@rikhav.net Telephone: 022- 66818911/23/24
Website: www.rikhav.net Fax: 022- 22611138
Contact Person: Mr. Hitesh Lakhani E-mail: sagar.welekar@icicibank.com
SEBI Cert Registration No: INZ000157737 Website: www.icicibank.com
CIN No.: U99999MH1995PLC086635 Contact Person: Mr. Sagar Welekar

Banker to our Company Banker to our Company

IndusInd Bank Limited ICICI Bank Limited
Address: 701-801, Solitaire Corporate Park, 167, | Address: 6° Floor, Ackruti Centre Point,
Guru Hargovindji Marg, Andheri (East), Mumbai | Kondivita, MIDC, Andheri (E), Mumbai — 400
— 400 093 069
Telephone: 022 - 66412265 Telephone: +91 9594950268
Fax: 022 - 66412224 E-mail: shah.anujshalin@icicibank.com
E-mail: sanjayb.verma@indusind.com Website: www.icicibank.com
Website: www.indusind.com Contact Person: Mr. Anuj Shah
Contact Person: Mr. Sanjay Verma

 

 

Other Advisor to the Company

 

 

Acquizon Advisory Private Limited

Address: B 606, Satellite Gazebo, B.D. Sawant Marg, Andheri East, Mumbai — 400 099
Telephone: 91-9820348614

E-mail: deepak@acquizon.com

Contact Person: Deepak Ladha

 

 

Changes in Auditors during last three Financial Years

There has been no change in the Auditor in last three financial years preceding the date of this Prospectus.
Investor grievances

Investors may contact the Company Secretary and Compliance Officer and/ or the Registrar to the Offer in
case of any pre- Offer or post- Offer related problems, such as non-receipt of Allotment Advice, credit of

Allotted Equity Shares in the respective beneficiary account, or Refund Orders.

All grievances relating to the Offer may be addressed to the Registrar to the Offer, giving full details such
as name, address of the Bidder, number of Equity Shares applied for, the Bid amount paid on submission

76
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of the Bid cum Application Form and the bank branch or collection center where the application was
submitted.

All grievances in relation to the application through ASBA process may be addressed to the Registrar to
the Offer, with a copy to the relevant Designated Intermediary with whom the ASBA Form was submitted,
giving details such as the full name of the sole or First Applicant, ASBA Form number, Applicants’ DP
ID, Client ID, PAN, number of Equity Shares applied for, date of submission of ASBA Form, address of
Bidder, the name and address of the relevant Designated Intermediary, where the ASBA Form was
submitted by the Bidder, ASBA Account number in which the amount equivalent to the Bid Amount was
blocked. Further, the Bidder shall enclose the Acknowledgment Slip from the Designated Intermediaries
in addition to the documents or information mentioned hereinabove.

All grievances relating to the UPI mechanism may be addressed to the Registrar to the Offer with a copy
to the relevant Sponsor Bank or the member of the Syndicate if the Bid was submitted to a member of the
Syndicate at any of the Specified Locations, or the Registered Broker if the Bid was submitted to a
Registered Broker at any of the Brokers Centres, as the case may be, quoting the full name of the sole or
first Bidder, Bid cum Application Form number, address of the Bidder, Bidder’s DP ID, Client ID, PAN,
number of Equity Shares applied for, date of Bid-cum-Application Form, name and address of the member
of the Syndicate or the Designated Branch or the Registered Broker or address of the RTA or address of
the DP, as the case may be, where the Bid was submitted, and the UPI ID of the UPI ID Linked Bank
Account in which the amount equivalent to the Bid Amount was blocked.

All grievances relating to Bids submitted through the Registered Broker and/ or a Stock Broker may be
addressed to the Stock Exchanges with a copy to the Registrar to the Offer.

Filing of Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus with Board and the
Registrar of Companies

A copy of the Draft Red Herring Prospectus has been filed electronically on the SEBI’s online portal and
emailed at cfddil@sebi.gov.in, in accordance with the instructions issued by the SEBI, in relation to
“Easing of Operational Procedure — Division of Issues and Listing - CFD” dated March 27, 2020 and has
also been uploaded electronically through the SEBI Intermediary Portal at https://siportal.sebi.gov.in, in
accordance with SEBI circular bearing reference SEBI/HO/CFD/DIL1/CIR/P/2018/011 dated January 19,
2018.

A copy of the Red Herring Prospectus, along with the material contracts and documents required to be filed
under Section 32 of the Companies Act, 2013 has been delivered for registration to the RoC and a copy of
this Prospectus to be filed under Section 26 of the Companies Act, 2013 is being delivered for registration
to the RoC at Registrar of Companies, Mumbai at 100, Everest, Marine Drive, Mumbai — 400 002,
Maharashtra, India.

Statement of inter se allocation of Responsibilities for the Offer

Since Unistone Capital Private Limited is the sole Book Running Lead Manager to this Offer and all the
responsibilities relating to the co-ordination and other activities in relation to the offer shall be performed
by it and hence, a statement of inter se allocation of responsibilities is not applicable.

Designated Intermediaries

Self-Certified Syndicate Banks (SCSBs)

The list of banks that have been notified by SEBI to act as the SCSBs under the SEBI (Bankers to an
Issue) Regulations, 1994 for the (i) ASBA process is provided on the website of SEBI at

https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34 or
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35, as

 

 

77
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applicable, or such websites as updated from time to time, and (ii) in relation to ASBA (through UPI
Mechanism), a _ list of which is available on the website of SEBI at
https://sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40 and updated from
time to time. For details of the list of branches of the SCSBs named by the respective SCSBs to receive
the ASBA Forms from the Designated Intermediaries and as updated from time to time, please refer to
the above-mentioned link.

 

Applications through UPI in the Offer can be made only through the SCSBs mobile applications (apps)
whose name appears on the SEBI website. A list of SCSBs and mobile application, which, are live for
applying in public issues using UPI mechanism is appearing in the “list of mobile applications for using
UPI in public issues” displayed on the SEBI website. The said list shall be updated on the SEBI website.

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the Syndicate, the list
of branches of the SCSBs at the Specified Locations named by the respective SCSBs to receive deposits
of Bid cum Application Forms from the members of the Syndicate is available on the website of the
SEBI (http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=35) and
updated from time to time. For more information on such branches collecting Bid cum Application
Forms from the members of Syndicate at Specified Locations, see the website of the SEBI
(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35) .

 

 

Self Certified Syndicate Banks eligible as Sponsor Banks for UPI

The list of Self Certified Syndicate Banks eligible as sponsor banks for UPI Mechanism, including details
such as name and contact details, are provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=41 , or such other
websites as updated from time to time.

 

Registered Broker

Bidders can submit ASBA Forms in the Offer using the stock broker network of the stock exchange, i.e.
through the Registered Brokers at the Broker Centres. The list of the Registered Brokers, including details
such as postal address, telephone number and e-mail address, is provided on the websites of the Stock
Exchanges at https://www.bseindia.com/ and https://www.nseindia.com, as updated from time to time.

Registrar to the Offer and Share Transfer Agents

The list of the RTAs eligible to accept application forms at the Designated RTA Locations, including
details such as address, telephone number and e-mail address, are provided on the website of BSE and
NSE at https://www.bseindia.com/Static/PublicIssues/RtaDp.aspx and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated
from time to time.

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details
such as name and contact details, are provided on the websites of BSE and NSE at
https://www.bseindia.com/Static/PublicIssues/RtaDp.aspx and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, or such
other websites as updated from time to time.

 

 

The list of branches of the SCSBs named by the respective SCSBs to receive deposits of the application
forms from the Designated Intermediaries will be available on the website of the SEBI (www.sebi.gov.in)
and updated from time to time.

78
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Experts

Our Company has received written consent dated November 27, 2021 from our Statutory and the Peer
Review Auditor namely, M/s. Priya Choudhary and Associates LLP, Chartered Accountants, to include
their name as required under Section 26(1)(a)(v) of the Companies Act, 2013 in this Prospectus and as an
"Expert" as defined under Section 2(38) of the Companies Act, 2013, in respect of the reports of the
Statutory Auditors on the Restated Financial Statements dated November 27, 2021, and the Statement of
Possible Tax Benefits dated November 27, 2021 included in this Prospectus and such consent has not
been withdrawn as on the date of this Prospectus. The term ‘expert’ and consent thereof, does not represent
an expert or consent within the meaning under the U.S. Securities Act.

Our Company also has received written consent dated November 20, 2021, from the independent
chartered engineer namely, M/s. Orbit Consultants and Valuers, to include their name in this Prospectus
and as an “expert” as defined under Section 2(38) of the Companies Act, 2013, to the extent and in his
Capacity as a chartered engineer, in relation to his certificate dated September 15, 2021 certifying the
capacity utilisation of the manufacturing facility at Village Narangi, Raigad, Maharashtra and such
consent has not been withdrawn as on the date of this Prospectus.

Brokers to the Offer

All members of the recognized stock exchanges would be eligible to act as Brokers to the Offer.

Credit Rating

As the Offer is of Equity Shares, credit rating is not required.

Trustees

As the Offer is of Equity Shares, the appointment of trustees is not required.

Debenture Trustees

As the Offer is of Equity Shares, the appointment of Debenture trustees is not required.

IPO Grading

No credit agency registered with SEBI has been appointed in respect of obtaining grading of the Offer.

Monitoring Agency

Our Company will appoint a monitoring agency prior to the filing of the Prospectus in accordance with
Regulation 41 of SEBI ICDR Regulations.

Appraising Entity

None of the purposes for which the Net Proceeds are proposed to be utilized have been financially
appraised by any banks or financial institution.

79
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ay
BOOK BUILDING PROCESS

The book building, in the context of the Offer, refers to the process of collection of Bids on the basis of
the Red Herring Prospectus within the Price Band, which will be decided by our Company, in consultation
with the Selling Shareholder and the BRLM, and advertised in all editions of Financial Express, the
English national newspaper and all editions of Jansatta, the Hindi national newspaper and Mumbai edition
of Navshakti, Marathi newspaper, (Marathi being the regional language of Maharashtra where our
Registered Office is located), each with wide circulation, at least two working days prior to the Bid/ Offer
Opening Date. The Offer Price shall be finalized after the Bid/ Offer Closing Date. The principal parties
involved in the Book Building Process are:

All Bidders (except Anchor Investors) shall mandatorily participate in the Offer only through the
ASBA process. Pursuant to the UPI Circulars, Retail Individual Bidders may also participate in
this Offer through UPI in the ASBA process. In accordance with the SEBI ICDR Regulations, QIBs
bidding in the QIB Portion and Non-Institutional Bidders bidding in the Non-Institutional Portion
are not allowed to withdraw or lower the size of their Bids (in terms of the quantity of the Equity
Shares or the Bid Amount) at any stage. Retail Individual Bidders can revise their Bids during the
Bid/ Offer Period and withdraw their Bids until the Bid/ Offer Closing Date.

Each Bidder by submitting a Bid in Offer, will be deemed to have acknowledged the above
restrictions and the terms of the Offer.

Our Company will comply with the SEBI ICDR Regulations and any other directions issued by
SEBI in relation to this Offer. In this regard, our Company has appointed the BRLM to manage
this Offer and procure Bids for this Offer. The Book Building Process is in accordance with
guidelines, rules and regulations prescribed by SEBI and are subject to change from time to time.
Bidders are advised to make their own judgement about an investment through this process prior
to submitting a Bid.

The process of Book Building is in accordance with the guidelines, rules and regulations prescribed
by SEBI under the SEBI ICDR Regulations and the Bidding Processes are subject to change from
time to time. Investors are advised to make their own judgment about investment through this
process prior to submitting a Bid in this Offer.

Bidders should note that this Offer is also subject to obtaining (i) final approval of the RoC after the
Prospectus is filed with the RoC; and (ii) final listing and trading approvals from the Stock Exchanges,
which our Company shall apply for after Allotment.

For further details, please refer to the chapters titled “Terms of the Offer” “Offer Structure” and “Offer
Procedure” beginning on pages 326, 332 and 335, respectively of this Prospectus.

Illustration of Book Building Process and the Price Discovery Process

For an illustration of the Book Building Process and the price discovery process, please refer to the chapter
titled “Offer Procedure” on page 335 of this Prospectus.

Withdrawal of the Offer

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Manager, reserve
the right not to proceed with the Fresh Issue, and each of the Selling Shareholder reserves the right not to
proceed with the Offer for Sale, in whole or in part thereof, to the extent of their respective portion of the
Offered Shares, after the Bid/ Offer Opening Date but before the Allotment. In such an event, our
Company would issue a public notice in the newspapers in which the pre-Offer advertisements were
published, within two days of the Bid/ Offer Closing Date or such other time as may be prescribed by
SEBI, providing reasons for not proceeding with the Offer. The Book Running Lead Manager, through

80
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the Registrar to the Offer, shall notify the SCSBs and the Sponsor Bank (in case of RIBs using the UPI
Mechanism), to unblock the bank accounts of the ASBA Bidders and the Escrow Collection Bank to
release the Bid Amounts to the Anchor Investors, within one Working Day from the date of receipt of
such notification. Our Company shall also inform the same to the Stock Exchanges on which the Equity
Shares are proposed to be listed.

Notwithstanding the foregoing, this Offer is also subject to obtaining (i) the final listing and trading
approvals of the Stock Exchanges, which our Company shall apply for after Allotment; and (ii) filing of
the Prospectus with the RoC. If our Company or the Selling Shareholder, in consultation with the Book
Running Lead Manager withdraw the Offer after the Bid/ Offer Closing Date and thereafter determine
that they will proceed with public offering of the Equity Shares, our Company shall file a fresh draft red
herring prospectus with SEBI and the Stock Exchanges.

Underwriting

After the determination of the Offer Price and allocation of Equity Shares, but prior to the filing of the
with the RoC, our Company and the Selling Shareholder(s) intend to enter into the Underwriting
Agreement with the Underwriters for the Equity Shares. Pursuant to the terms of the Underwriting
Agreement, the obligations of each of the Underwriters are several and are subject to certain conditions
specified therein.

The Underwriting Agreement is dated December 20, 2021. The Underwriters have indicated their
intention to underwrite the following number of Equity Shares:

 

 

 

Name, Address, Telephone, Fax, and Email Indicated Amount % of the total
of the Underwriters number of | Underwritten Offer size
Equity Shares a Underwritten
to be
Underwritten
Unistone Capital Private Limited 11,49,300 3,149.08 25.00

A/305, Dynasty Business Park, Andheri Kurla
Road, Andheri East, Mumbai — 400 059,
Maharashtra

 

 

 

 

The above-mentioned is indicative underwriting and will be finalised after determination and finalisation
of the Basis of Allotment and subject to the provisions of the SEBI ICDR Regulations.

In the opinion of the Board of Directors, the resources of the above-mentioned Underwriters are
sufficient to enable them to discharge their respective underwriting obligations in full. The
abovementioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or
registered as brokers with the Stock Exchange(s). Our Board of Directors, at its meeting held on
December 20, 2021, has accepted and entered into the Underwriting Agreement on behalf of our
Company.

Allocation among the Underwriters may not necessarily be in proportion to their underwriting
commitment. Notwithstanding the above table, the Underwrites shall be severally and not jointly
responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them.
In the event of any default in payment, the respective Underwriter, in addition to other obligations
defined in the Underwriting Agreement, will also be required to procure subscribers or subscribe to
Equity Shares to the extent of the defaulted amount in accordance with and subject to the terms of the
Underwriting Agreement. The underwriting arrangement stated above shall not apply to the applications
by the ASBA Bidders in the Offer, except for ASBA Bids procured by any member of the Syndicate.

81

 
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e
CAPITAL STRUCTURE

Our Equity Share capital before the Offer and after giving effect to the Offer, as at the date of this

Prospectus, is set forth below:
(@ in Lakhs except the share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

sr Ageregate | Vive at
No. Particulars Nominal
° Value oe
Price)
I. Authorized share capital?
2,00,00,000 Equity Shares of 710.00 each 2,000.00 _
Il. Issued, subscribed and paid-up share capital prior to
the Offer
1,42,34,947 Equity Shares of =10.00 each 1,423.49 --
II. Present Offer in terms of the Prospectus
Fresh Issue of up to 41,40,000 Equity Shares of 710.00 414.00 11,343.60
each at a price of % 274/- per Equity Share“
Offer for Sale of up to 4,57,200 Equity Shares 210.00 45.72 1,252.73
each at a price of = 274/- per Equity Share®
IV. Issued, subscribed and paid-up share capital after to
the Offer
1,83,74,947 Equity Shares of = 10.00 each 1,837.49
Vv. Securities premium account
Before the Offer 2031.49
After the Offer 12,961.09

 

 

 

© To be finalized upon determination of Offer Price

© For details of the changes in the authorized share capital of our Company, please refer to chapter
titled "History and Certain Corporate Matters" beginning on page 175 of this Prospectus.

© As on the date of this Prospectus, there are no partly paid-up Equity Shares of our Company and there
is no share application money pending for allotment.

© The Fresh Issue has been authorized pursuant to a resolution of our Board of Directors dated July 05,
2021 and by special resolution passed under Section 62(1) (c) of the Companies Act, 2013 at the Extra
Ordinary General Meeting of the members held on July 06, 2021.

©) The Equity Shares being offered by the Selling Shareholder have been held for a period of at least one
year immediately preceding the date of filing this Prospectus with SEBI, and accordingly, are eligible
for being offered for sale pursuant to the Offer in terms of the SEBI ICDR Regulations. For details of
authorizations received for the Offer for Sale, see “Other Regulatory and Statutory Disclosures”
beginning on page 313.

82
1. Notes on Capital Structure

The following table sets forth the history of the equity share capital history of our Company

   

 

  

 

 

 

 

 

 

 

 

 

 

 

Upon 10,000 Subscripti 10,000 1,00,000

Incorporation on to the
MoA “)

August 8, 2019 | 1,29,90,000 10; 10 |Cash | Rights 1,30,00,000 | 13,00,00,000
issue®)

May 7, 2021 11,77,642 10 | 174.50 | Cash Rights 1,41,77,642 | 14,17,76,420
issue ©

June 10, 2021 57,305 10 | 174.50 | Cash | Rights 1,42,34,947 | 14,23,49,470
issue”

Total 1,42,34,947

 

 

A, Initial subscribers to the MoA subscribed 10,000 Equity Shares of face value of €10/- each as per

the details given below:

 

 

 

 

Ts Anjana Motwani 5,100
2. Karan Motwani 4,900
Total 10,000

 

 

 

B. Rights issue of 1,29,90,000 Equity Shares of face value of 710/- each at a price of % 10/- each as per

the details given below:

 

 

 

 

ts Anjana Motwani 66,24,900
2. Karan Motwani 63,65,100
Total 1,29,90,000

 

 

 

C. Rights issue of 11,77,642 Equity Shares of face value of 710/- each at a price of % 174.50/- each as

per the details given below:-

 

 

 

 

 

 

 

 

T Anjana Motwani 5,67,335,
2. Jitendra Rasiklal Sanghavi 57,306
3. Paresh Lavjibhai Mehta 4,58,452
4. Brijesh Jitendra Parekh HUF 51,570
5. Deepak Ghanshyam Ladha 37,249
6. Suresh Raichand Shah 5,730

Total 11,77,642

 

 

 

83

 
3. Shareholding Pattern of our Company

The table below presents the current shareholding pattern of our Company as on the date of this Prospectus.

“i

(Face value of Equity Shares of #10 each)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VII= XI=VIlI+
I I Til IV VI IV+V+VI VHI Ix Ix XID XIII XIV
(A) | Promoters & | 2 1,35,67,33 | - 1,35,67,33 | 95.31 | 1,35,67,335 | 1,35,67,335 | 95.31 95.31% 1,35,67,33
Promoter 5 5 % % 5
Group
(B) | Public 7 6,67,612__ | - 6,67,612 | 4.69% | 6,67,612 6,67,612 4.69% 4.69% 6,67,612
(C) | Non- - -
Promoter-
Non-Public

 

 

 

85
a

D. Rights issue of 57,305 Equity Shares of face value of 10/- each at a price of % 174.50/- each as per
the details given below:

 

 

 

 

IT. Nimesh Shambhulal Joshi 34,383
2. Sumit Bilgaiyan 22,922
Total 57,305

 

 

 

In respect of the rights issues of the Company as disclosed under 1 (B), (C) and (D) above, save and
except Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani, the other allottees are not related
to the promoters.

2. As on the date of this Prospectus, our Company does not have any preference share capital.

3. Details of Equity Shares issued for consideration other than cash:

Our Company has not made any issues of Equity Shares for consideration other than cash as on the date
of this Prospectus.

1. No Equity Shares have been allotted pursuant to any scheme of arrangement approved under Section
391-394 of the Companies Act, 1956 or section 230-234 of the Companies Act, 2013.

2. Our Company has not issued any shares pursuant to employee stock option scheme.

4. Issue of Equity Shares at a price lower than offer price in the last one (1) year

Except as disclosed below, our Company has not made issue of specified securities at a price which may
be lower than the Offer Price during the preceding one (1) year before the date of filing of this Prospectus:

May 07, 2021 11,77,642 10 174.50 Rights Issue Please refer to
table 1 (C)
above

 

June 10, 2021 57,305 10 174.50 Rights Issue Please refer to
table 1 (D)
above

 

 

 

 

 

 

 

 

84
i

{

 

(ch

Shares - - - - - =
underlying
DRs

 

(C2)

Shares held
by Emp.
Trusts

 

 

 

Total 9 (1,42,34,947

1,42,34,947 | 100.00

 

 

 

 

 

 

 

1,42,34,947

 

1,42,34,947

 

100.00

 

 

100.00

 

 

1,42,34,947

 

 

 

*As on date of this Prospectus, one (1) Equity Share holds one (1) vote.

AWe have only one class of Equity Share of face value of % 10/- each.

**All Pre-IPO equity shares of our Company will be locked-in from the date of listing as mentioned above.

Our Company will file the shareholding pattern of our Company, in the form prescribed under Regulation 31 of the SEBI LODR Regulations, one day prior
to the listing of the Equity shares. The Shareholding pattern will be uploaded on the website of BSE and NSE before commencement of trading of such

Equity Shares.

86
4. The list of the shareholders of the company holding 1% or more of the paid-up share capital

aggregating to 80% or more of the paid-up share capital of the company:

a, As on the date of the Prospectus:

 

 

 

 

 

 

 

 

1. Anjana Motwani 71,97,335 50.56
2. Karan Motwani 63,70,000 44.75
Total 1,35,67,335 95.31

b. Ten (10) days prior to the date of the Prospectus:

 

 

 

 

 

Ts Anjana Motwani 71,97,335 50.56
2. Karan Motwani 63,70,000 44.75
Total 1,35,67,335 95.31

 

 

 

2

One (1) year prior to the date of the Prospectus:

 

 

 

 

 

 

 

 

Anjana Motwani 66,30,000 51.00
2s Karan Motwani 63,70,000 49.00
Total 1,30,00,000 100.00

d. Two (2) year prior to the date of the Prospectus:

 

 

 

 

 

 

 

 

i. Anjana Motwani 5,100 51.00
2. Karan Motwani 4,900 49.00
Total 10,000 100.00

5. Other than as disclosed in this chapter, our Company has not made any public issue or rights issue

of any kind or class of securities since its incorporation.

a

Our Company does not have any proposal or intention to alter the equity capital structure by way
of split/ consolidation of the denomination of the Equity Shares, or the issue of securities on a
preferential basis or issue of bonus or rights or further public issue of securities or qualified
institutions placement within a period of six (6) months from the date of opening of the Offer.
However, if business needs of our Company so require, our Company may alter the capital
structure by way of split/ consolidation of the denomination of the Equity Shares/ issue of Equity
Shares on a preferential basis or issue of bonus or rights or public or preferential issue of Equity
Shares or any other securities during the period of six (6) months from the date of opening of the
Offer or from the date the application moneys are refunded on account of failure of the Offer,
after seeking and obtaining all the approvals which may be required.

87
ii. Details of Lock—in of Equity Share capital:

a) Promoters’ Contribution locked-in for three years

Pursuant to Regulation 14 and 16 of the SEBI ICDR Regulations, an aggregate of at least 20% of the Post-
Offer Equity Share Capital of our Company held by our Promoters shall be considered as Promoters’
Contribution ("Promoters’ Contribution") and shall be locked-in for a period of three (3) years from the
date of Allotment. The lock-in of the Promoters’ Contribution would be created as per applicable law and
procedure and details of the same shall also be provided to the Stock Exchanges before listing of the Equity
Shares.

All Equity Shares held by our Promoters are eligible for Promoters’ Contribution, pursuant to Regulation
15 of the SEBI ICDR Regulations.

Our Promoters have consented to the inclusion of such number of the Equity Shares held by them, in
aggregate, as may constitute 20% of the post-Offer Capital of our Company as Promoters’ Contribution
and have agreed not to sell or transfer or pledge or otherwise dispose of in any manner, the Promoters’
Contribution, for a period of three years from the date of allotment in the Offer.

The below Equity Shares proposed to form part of Promoters’ Contribution subject to lock-in shall not be
disposed of/ sold/ transferred by our Promoters during the period starting from the date of filing this
Prospectus with the Stock Exchanges until the date of commencement of the lock-in period.

Accordingly, Equity Shares aggregating to 20% of the post-Offer capital of our Company, held by our
Promoters shall be locked-in for a period of three (3) years from the date of Allotment in the Offer as
follows:

 

 

 

 

Karan Haresh Motwani
August 08, 36,85,400 10 10 | Rights Issue 20.05 | 3 years
2019
Total 36,85,400 20.05

 

 

 

 

 

 

 

 

*Assuming full subscription to the Offer

The Promoters’ Contribution have been brought into the extent of not less than the specified minimum lot
and from the persons defined as ‘promoters’ under the SEBI ICDR Regulations.

The Equity Shares that are being locked are eligible for computation of Promoters’ Contribution under
Regulation 15 of the SEBI ICDR Regulations. In this respect, we confirm the following:

89
7. Capital build-up of Promoters’ shareholding, Promoters’ contribution and Lock-in:

i. Build-up of Promoters’ shareholdings.

As on the date of this Prospectus, our Promoters, Mrs. Anjana Haresh Motwani and Mr. Karan
Haresh Motwani collectively hold 1,35,67,335 Equity Shares, which constitutes 95.31% of the
Pre-Offer issued, subscribed and paid-up Equity Share Capital of our Company. None of the
Equity Shares held by our Promoters is subject to any pledge.

1. Anjana Haresh Motwani

   

 

 

 

May 07, 5,100 Subscriber

2019 to MOA

August 08, | 66,24,90 10 10 | Cash Rights Issue | 46.54 | 36.05
2019 0

May 07, | 5,67,335 10 174.50 | Cash Rights Issue 3.97 3.09
2021

Total 71,97,335 50.55 | 39.17

 

 

 

 

 

 

 

 

 

 

2. Karan Haresh Motwani

 

 

May 07, 4,900 10 10 | Cash Subscriber 0.03 0.03
2019 to MOA

August 08, | 63,65,10 10 10 | Cash Rights 44.71 | 34.64
2019 0 Issue

Total 63,70,000 44.75 | 34.67

 

 

 

 

 

 

 

 

 

 

* All the Equity Shares held by our Promoters were fully paid up as on the respective dates of
acquisition of such Equity Shares.

** Cost of acquisition excludes Stamp Duty

Our Promoters have confirmed to our Company and the Book Running Lead Manager that the Equity
Shares held by our Promoters have been financed from their personal funds and no loans or financial
assistance from any bank or financial institution has been availed of by them for such purpose.

As on the date of this Prospectus, our Promoters do not hold any preference shares in our Company.
ii)

iii)

iv)

vi)

b)

9)

that the minimum Promoters’ Contribution does not consist of Equity Shares acquired during the

preceding three years, which have been acquired for consideration other than cash and revaluation of
assets or capitalization of intangible assets is involved in such transaction;

that the minimum Promoters’ Contribution does not consist of Equity Shares acquired during the
preceding three years, resulting from a bonus issue by utilization of revaluation reserves or unrealized
profits of the Company or from bonus issue against Equity Shares which are ineligible for minimum
promoters’ contribution;

that the minimum Promoters’ Contribution may not consist of Equity Shares acquired during the one
(1) year immediately preceding the date of this Prospectus at a price lower than the price at which the
Equity Shares are being Offered to the public in the Offer;

No equity shares have been issued to our promoters upon conversion of a partnership firm during
the preceding one year at a price less than the Offer price;

that the Equity Shares held by our Promoters which are offered for minimum Promoters’ Contribution
are not subject to any pledge or any other form of encumbrance whatsoever; and all the Equity Shares
of our Company held by the Promoters are dematerialized;

The Equity Shares offered for Promoters’ Contribution do not consist of Equity Shares for which
specific written consent has not been obtained from the Promoters for inclusion of its subscription in
the Promoters’ Contribution subject to lock-in.

Details of Equity Shares Locked-in for one (1) year

In addition to the 20% of the fully diluted post-Offer shareholding of our Company held by our
Promoters and locked in for three years as specified above, in terms of Regulation 16 of the SEBI
ICDR Regulations, the entire pre-Offer Equity Share capital of our Company will be locked-in for a
period of one year from the date of Allotment, except for the Equity Shares sold pursuant to the Offer
for Sale and any other categories of shareholders exempt under Regulation 17 of the SEBI ICDR
Regulations, as applicable.

The shares which are in dematerialized form shall be locked-in by the respective depositories. The
details of lock-in of the Equity Shares shall also be provided to the Designated Stock Exchange before
the listing of the Equity Shares.

Other requirements in respect of lock-in

In terms of Regulation 21 of the SEBI ICDR Regulations, locked-in Equity Shares for one (1) year
held by our Promoters may be pledged only with scheduled commercial banks or public financial
institutions or a systematically important non-banking finance company or a housing finance
company as collateral security for loans granted by such banks or public financial institutions,
provided that such pledge of the Equity Shares is one of the terms of the sanction of the loan. Equity
Shares locked-in as Promoters’ Contribution for 3 years under Regulation 16(a) of the SEBI ICDR
Regulations may be pledged only if in addition to fulfilling the aforementioned requirements, such

90
a

loans have been granted to the Issuer Company or its subsidiary(ies) by such banks or financial
institutions for the purpose of financing one or more of the objects of the Offer.

Provided that such lock-in shall continue pursuant to the invocation of the pledge and such transferee
shall not be eligible to transfer the specified securities till the lock-in period stipulated in these
regulations has expired.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by Promoters and
locked-in as per Regulation 16 may be transferred to another Promoter or any person of the Promoter
group or a new Promoter and the Equity Shares held by persons other than the Promoters and locked-
in in terms of Regulation 17, may be transferred to any other person holding Equity Shares which are
locked-in along with the Equity Shares proposed to be transferred, subject to the continuation of the
lock-in in the hands of transferees for the remaining period and compliance with the SEBI Takeover
Regulations and such transferee shall not be eligible to transfer them until the lock-in period stipulated
in the SEBI ICDR Regulations has expired. However, it should be noted that the offered shares which
will be transferred by the respective Selling Shareholder in the Offer for Sale shall not be subject to
lock-in.

d) We further confirm that our Promoters Contribution of 20% of the post-Offer Equity Share capital

does not include any contribution from Alternative Investment Fund, Foreign Venture Capital
Investors, Scheduled Commercial Banks, Public Financial Institutions or Insurance Companies
registered with Insurance Regulatory and Development Authority of India.

e) Lock-in of the Equity Shares to be allotted, if any, to the Anchor Investors

Any Equity Shares allotted to Anchor Investors shall be locked-in for a period of 30 days from the
date of Allotment.

 

 

 

8. As on the date of this Prospectus, our Company has nine (9) shareholders.
9. The average cost of acquisition of or subscription of shares by our Promoters is set forth in the
table below:
Sr. Name of the Promoters No. of Shares | Average cost of Acquisition (Rs.
No. held Per share)
1. Anjana Motwani 71,97,335 22.97
2. Karan Motwani 63,70,000. 10.00

 

 

 

 

10. Details of the pre and post-Offer shareholding of our Promoters and Promoter group is as below:

 

 

 

 

 

 

 

 

 

 

Pre-Offer Post-Offer
Particulars Number of Equity | Percentage Number of | Percentage (%)
Shares (%) holding Equity Shares | holding

Promoters

Anjana Motwani 71,97,335 50.56% 67,40,135 36.68
Karan Motwani 63,70,000 44.75% 63,70,000 34.67
Total (A) 1,35,67,335 95.31% 1,31,10,135 71.35,
Promoter Group

N.A Nil Nil Nil Nil

 

 

 

 

 

91
a

 

 

 

 

 

Pre-Offer Post-Offer
Particulars Number of Equity | Percentage Number of | Percentage (%)
Shares (%) holding Equity Shares | holding
Total (B) Nil Nil Nil Nil
Total (A+B) 1,35,67,335 95.31% 1,31,10,135 71.35,

 

 

 

 

 

11.

Except as stated below, none of our Promoters, members of our Promoter group or our directors or
their immediate relatives have sold or purchased, or financed the sale or purchase of, Equity Shares
by any other person during the six (6) months immediately preceding the date of this Prospectus.

 

 

 

Sr. | Name of allottees Number of Equity Date of Nature of
No. Shares Transaction Transaction
1. Anjana Motwani 5,67,335 May 07, 2021 Purchase

 

 

 

 

 

12.

13.

14,

15.

16.

17.

18.

19.

20.

There are no financing arrangements whereby the Promoters, members of our Promoter Group, the
Directors of our Company and their relatives have financed the purchase by any other person of
securities of the Issuer during the period of 6 (six) months immediately preceding the date of filing
the Prospectus.

Our Company, our Directors, our Promoters and the BRLM have not entered into any buy-back and/
or standby and/ or similar arrangements for the purchase of Equity Shares of our Company, offered
through this draft offer document, from any person.

All Equity Shares transferred pursuant to the Offer will be fully paid-up at the time of Allotment.

Except Brijesh Parekh HUF holding 51,570 equity shares, the BRLM and its associates do not hold
any Equity Shares in our Company as on the date of filing of this Prospectus. The BRLM and its
affiliates may engage in the transactions with and perform services for our Company in the ordinary
course of business or may, in the future, engage in investment banking transactions with our Company,
for which they may receive customary compensation.

We have not granted any options or issued any shares under any scheme of employee stock option or
employees stock purchase in the preceding three (3) years and we do not intend to allot any Equity
Shares to our Employees under ESOS/ ESOP scheme from proposed Offer.

As on the date of filing of this Prospectus, there are no outstanding warrants, options or rights to
convert debentures, loans or other instruments, financial instruments or any other rights which would
entitle Promoters or any shareholders or any other person any option to acquire our Equity Shares after
this Initial Public Offer.

An applicant cannot make an application more than the number of Equity Shares being issued through
this Offer, subject to the maximum limit of investment prescribed under relevant laws applicable to

each category of investors.

Company may do pre-IPO placement in the period commencing from submission of this Prospectus
until the Equity Shares to be issued pursuant to the Offer have been listed.

In case of over-subscription in all categories the allocation in the Offer shall be as per the requirements
of Regulation 49 of SEBI ICDR Regulations.

92

 

 
21,

22.

23.

24,

25,

26.

27.

28.

29.

30.

31.

32.

33.

34.

None of our Equity Shares have been issued out of revaluation reserve created out of revaluation of
assets.

An over-subscription to the extent of 1% of the Offer can be retained for the purpose of rounding off
to the nearest integer during finalizing the allotment, subject to minimum allotment, which is the
minimum application size in this Offer. Consequently, the actual allotment may go up by a maximum
of 1% of the Offer, as a result of which, the post-Offer paid up capital after the Offer would also
increase by the excess amount of allotment so made. In such an event, the Equity Shares held by the
Promoters and subject to 3 years lock- in shall be suitably increased; so as to ensure that 20% of the
post Offer paid-up capital is locked in.

Subject to valid Bids being received at or above the Offer Price, under-subscription, if any, in any
category except the QIB Portion, would be allowed to be met with spill-over from other categories or
a combination of categories at the discretion of our Company and the Selling Shareholder in
consultation with the Lead Manager and the Designated Stock Exchange.

The unsubscribed portion in any reserved category, if any, may be added to any other reserved
category.

There are no Equity Shares against which depositories receipts have been issued.

At any given point of time there shall be only one denomination of the Equity Shares, unless otherwise
permitted by law.

As per RBI regulations, OCBs are not allowed to participate in this Offer.
Our Company has not raised any bridge loans against the proceeds of the Offer.

Our Company shall comply with such disclosure and accounting norms as may be specified by stock
exchange, SEBI and other regulatory authorities from time to time.

Our Promoters and Promoter Group will not participate in this Offer, except to the extent of the Offer
for Sale.

This offer is being made through Book Building method.

The BRLM, our Company, our Directors, our Promoters, our Promoter Group and/ or any person
connected with the Offer shall not offer any incentive, whether direct or indirect, in the nature of
discount, commission, and allowance, or otherwise, whether in cash, kind, services or otherwise, to any
Applicant, for making an Application.

There are no safety net arrangements for this public offer.

We shall ensure that transactions in Equity Shares by the Promoters and members of the Promoter

Group, if any, between the date of registering the Prospectus with the RoC and the Offer Closing Date
will be reported to the Stock Exchanges within 24 hours of such transactions being completed.

93
OBJECTS OF THE OFFER
The Offer comprises a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholder.
Offer for Sale
The Selling Shareholder will be entitled to their portion of the proceeds of the Offer for Sale after
deducting their proportion of Offer related expenses and relevant taxes thereon. Our Company will not
receive any proceeds from the Offer for Sale and the proceeds received from the Offer for Sale will not
form part of the Net Proceeds.
The Fresh Issue

Requirement of Funds

The proceeds from the Fresh Issue less our Company’s share of the Offer related expenses, is estimated
to be = 9,674.36 Lakhs (the “Net Proceeds”).

Our Company proposes to utilize the Net Proceeds towards funding of the following objects:

1. Funding the working capital requirements of our Company.

2. Funding capital expenditure for expansion of production capacity at the existing manufacturing
facility at Village Narangi, Raigad, Maharashtra and at the additional unit having a proposed
construction area admeasuring about 4,532.57 sq. mtrs. (built-up) area on the adjacent plot

(“Proposed Expansion”):

e to expand our existing installed capacities for the existing product lines; and
e to enable us to also add new products to our existing product portfolio.

3. General corporate purposes.

(Collectively, referred to herein as the “Objects”)

The main objects clause of our Memorandum of Association and the objects incidental and ancillary to
the main objects enables us to undertake the activities for which funds are being raised in the Offer. The

existing activities of our Company are within the objects clause of our Memorandum of Association.

Additionally, we believe that the listing of Equity Shares will enhance our Company’s corporate image,
brand name and create a public market for our Equity Shares in India.

Proceeds from the Fresh Issue

The details of the proceeds from the Fresh Issue are set out in the following table:

 

 

 

 

 

(& in Lakhs)
Particulars Estimated amount
Gross Proceeds from the Fresh Issue 11,343.60*
(Less) Issue related expenses in relation to the Fresh Issue* 1,669.24
Net Proceeds 9,674.36*

 

 

 

*Subject to finalisation of Basis of Allotment.

94
*Other than (i) the listing fees, which will be solely borne by our Company; all Offer related expenses
will be shared, upon successful completion of the Offer, between our Company and the Selling
Shareholder on a pro-rata basis, in proportion to the Equity Shares issued and allotted by our Company
in the Fresh Issue and the Offered Shares sold by the Selling Shareholder in the Offer for Sale,
respectively.

Utilization of Net Proceeds

The Net Proceeds are proposed to be used in the manner set out in in the following table:

 

 

 

 

 

(@ in Lakhs)
Sr. Particulars Estimated amount
No.
ds Funding capital expenditure for the Proposed Expansion 2,550.86
2 Funding the incremental working capital requirements of our 5,400.00
Company
3. General corporate purposes 1,723.50*

 

 

 

 

*Shall be disclosed on finalization of Offer Price. The amount utilised for general corporate purposes
shall not exceed 25% of the Gross Proceeds of the Fresh Issue.

Proposed schedule of implementation and deployment of Net Proceeds

We propose to deploy the Net Proceeds for the aforesaid purposes in accordance with the estimated
schedule of implementation and deployment of funds set forth in the table below:

 

 

 

 

 

 

 

(& in Lakhs)
Sr. Particulars Total Amount to | Estimated Deployment of Net Proceeds
No. estimated | be funded | Fiscal 2022 | Fiscal 2023 | Fiscal 2024
cost from the
Net
Proceeds
1 Funding capital
expenditure for | 5 663.000 | 2,550.86 942.89 1,225.90 382.07
the Proposed
Expansion
2. Funding the
incremental
working capital 5,400.00 5,400.00 1,600.00 2,000.00 1,800.00
requirements of
our Company
3. General
corporate 1,723.50 1,723.50 1,723.50 Nil Nil
purposes ®
TOTAL 9,786.50 9,674.36 4,266.39 3,225.90 2,182.07

 

 

 

 

 

 

 

 

(1) Total estimated cost, excluding GST, in respect of the Proposed Expansion as per renewed quotes
received from vendors.

(2) As on November 22, 2021, our Company has already deployed an amount equivalent to 36.70 lakhs
towards this object as certified by M/s. Priya Choudhary & Associates LLP, our Statutory Auditors
vide certificate dated November 23, 2021. The amount expensed by our Company shall be recouped
from the Net Proceeds.

95
(3) The difference/ remaining amount of 112.15 lakhs towards the total estimated cost (i.e. cost in
addition to the amount being utilized from the Net Proceeds) will be funded from internal accruals by
our Company.

(4) To be finalized upon determination of the Offer Price and updated in the Prospectus prior to filing

with the RoC. The amount utilised for general corporate purposes shall not exceed 25% of the Gross
Proceeds.

The funding requirements, the deployment of funds and the intended use of the Net Proceeds as described
herein are based on our current business plan, management estimates, current and valid quotations from
vendors, and other commercial and technical factors. However, such funding requirements and
deployment of funds have not been verified by the Book Running Lead Manager or appraised by any
bank or financial institution.

We may have to revise our funding requirements and deployment on account of a variety of factors such
as our financial and market condition, business and strategy, competition, negotiation with vendors,
variation in cost estimates on account of factors, including changes in design or configuration of the
machines/equipment, incremental raw material expenses and other external factors such as changes in
the business environment and interest or exchange rate fluctuations, which may not be within the control
of our management. Consequently, the funding requirements of our Company are subject to revisions in
the future at the discretion of our management. This may entail rescheduling or revising the planned
expenditure and funding requirements, including the expenditure for a particular purpose at the discretion
of our management, subject to compliance with applicable laws. While we intend to deploy the Net
Proceeds towards the Objects from listing of the Equity Shares pursuant to the Offer till FYE 2024, the
actual deployment of funds will depend on a number of factors as stated above. We cannot assure you
that the deployment of Net Proceeds will take place within the aforesaid period, as currently intended.
Depending upon the above factors, we may have to reduce or extend the deployment period for the stated
Objects beyond the estimated period, at the discretion of our management. In the event of any shortfall
of funds for the activities proposed to be financed out of the Net Proceeds as stated above, our Company
may re-allocate the Net Proceeds to the activities where such shortfall has arisen, subject to compliance
with applicable laws. Further, in case of a shortfall in the Net Proceeds or cost overruns, our management
may explore a range of options including utilising our internal accruals or seeking debt financing. Our
historical capital expenditure may not be reflective of our future capital expenditure plans.

In the event of the estimated utilisation of the Net Proceeds in a scheduled Fiscal being not undertaken
in its entirety, the remaining Net Proceeds shall be utilised in subsequent Fiscals, as may be decided by
our Company, in accordance with applicable laws. If the actual utilisation towards any of the Objects is
lower than the proposed deployment such balance will be used for future growth opportunities including
funding other existing objects of the Fresh Issue, if required and towards general corporate purposes to
the extent that the total amount to be utilised towards general corporate purposes will not exceed 25% of
the Gross Proceeds from the Fresh Issue in accordance with the SEBI ICDR Regulations. For details on
risks involved, see Risk Factor No. 38“ — Our funding requirements and proposed deployment of the Net
Proceeds are based on management estimates and may be subject to change based on various factors,
some of which are beyond our control” on page 38 of this Prospectus.

Means of finance

The funding requirements for all Objects are proposed to be entirely funded from the Net Proceeds.
Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance
through verifiable means towards 75% of the stated means of finance. The fund requirements, the
deployment of funds and the intended use of the Net Proceeds as described herein are based on our

96
a

current business plan, management estimates, and other commercial and technical factors. We may have
to revise our funding requirements and deployment on account of a variety of factors such as our financial
and market condition, business and strategy, competition and interest or exchange rate fluctuations and
other external factors, which may not be within the control of our management.

Details of the Objects

The details of the Objects are set out below:

1. Funding the incremental working capital requirements of the Company

We fund the majority of our working capital requirements in the ordinary course of our business from
our internal accruals, net worth, financing from banks and financial institutions and unsecured loans from
Promoters. As on September 30, 2021, the outstanding amount under the fund based working capital

facilities of our Company was = 1702.52 Lakhs. For further details, please refer to the chapter titled
“Financial Indebtedness” beginning on page 291 of this Prospectus.

Our Company’s existing working capital requirement and funding on the basis of Restated Financial
Statements for Fiscal 2020 and for Fiscal 2021 are as stated below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rs in lakhs)

Particulars Fiscal 2020 Fiscal 2021
Current Assets
Cash and Cash Equivalents 75.65 83.10
Trade Receivables 1,979.85 2,286.61
Inventories 1,852.03 3,239.69
Other Current Assets including Loans and Advances 226.50 567.62
Total (A) 4,134.02 6,177.02
Current Liabilities
Trade Payables 1,526.79 2,589.04
Other Financial and Current Liabilities including Provisions 269.98 768.83
Total (B) 1,796.77 3,357.87
Net Working Capital (A)-(B) 2,337.25 2,819.15
Existing Funding Pattern-
Working capital funding from banks 2,096.1 2,031.42
Internal Accruals 241.18 787.73

 

 

 

 

Basis of estimation of working capital requirements

Our Company requires additional working capital on account of the estimated increase in sales across
our product portfolio of adhesives and sealants. As per our business strategies, such estimates can be
attributed to an increase in demand of our products from our distribution network as well as from the
expansion of our distribution network. In line with the increase in sales, we aim to offer a reasonable
credit period to the distributors. Further, the purchase of some of our key raw materials are on advance
payment basis. Thus, to support the expected increase in sales, our Company needs to maintain adequate
working capital to build inventory of raw materials and finished goods as well as be able to offer
favourable terms to our customers. Funding our incremental working capital requirements from the Issue

97
Proceeds will enable the Company to negotiate favourable terms with the suppliers leading to savings in

raw material costs as well as by offering reasonable credit to our customers, achieving revenue growth,
resulting in an increase in profitability.

The Board of Directors of our Company pursuant to its resolution at its meeting dated July 14, 2021 has
approved the working capital requirements of our Company. The details of our Company’s estimated
and projected working capital requirements for the Fiscal 2022, Fiscal 2023 and Fiscal 2024 for funding
of the same are as provided in the table below:

(Rs. in Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Fiscal 2022 Fiscal 2023 Fiscal 2024
(Estimated) (Projected) | (Projected)

Current Assets
Cash and Cash Equivalents 250.00 500.00 750.00
Trade Receivables 3,226.23 4,823.44 6,700.20
Inventories 3,953.83 5,336.42 6,810.55
Other Current Assets including Loans and
Advances 688.26 1,029.00 1,429.38
Total (A) 8,118.31 11,688.86 15,690.13
Current Liabilities
Trade Payables 2,433.12 2,890.56 3,714.85
Other Financial and Current Liabilities including
Provisions 917.50 1,341.64 1,852.02
Total (B) 3,350.62 4,232.20 5,566.87
Net Working Capital (A)-(B) 4,767.69 7,456.66 10,123.26
Working capital funding from banks 2,031.42 2,031.42 2,031.42
Incremental working capital requirement: 1,948.54 2,688.97 2,666.60
Funding from Net IPO Proceeds 1,600.00 2,000.00 1,800.00
Internal accruals 348.54 688.97 866.60

 

 

 

 

 

Note: Based on the management certificate dated July 15, 2021 certifying the working capital
requirements of the Company.

Our Company proposes to utilize upto %5,400.00 lakhs from the Net Proceeds towards funding our
incremental working capital requirements. In addition to the working capital funding from Banks, our
Company expects that the funding pattern for incremental working capital requirements for Fiscals 2022,
2023 and 2024 will comprise of Net Proceeds and internal accruals.

 

 

 

 

Holding Period Levels
(In days)
Particulars Holding Holding Holding Holding Holding
Level for Level Level for Level for Level for
Fiscal for Fiscal Fiscal Fiscal
2020 Fiscal 2022 2023 2024
2021 (Estimated) | (Projected) | (Projected)
Current Assets
Inventories 102 135 130 120 110

 

 

 

 

 

 

 

98
a

 

 

 

 

 

Particulars Holding Holding Holding Holding Holding
Level for Level Level for Level for Level for
Fiscal for Fiscal Fiscal Fiscal
2020 Fiscal 2022 2023 2024
2021 (Estimated) | (Projected) | (Projected)
Trade Receivables 76 71 75 75 75
Current Liabilities
Trade Payables 84 108 80 65 60

 

 

 

 

 

 

Justification for “Holding Period” levels

The justifications for the holding levels mentioned in the table above are provided below:

 

Assets- Current Assets

 

Inventories

Inventory levels are maintained by our Company depending upon the demand
scenario and delivery schedules. Our historical inventory days (calculated as
closing inventory on balance sheet date divided by Cost of Goods sold over
no. of days in the reporting period i.e. 365 days ) were 102 days as on March
31, 2020 and 135 days as on March 31, 2021. We have anticipated that going
forward our inventory holding levels will stabilize in Fiscal 2022 to 130 days
and continue the downward trend on account of better inventory management
to 120 days in Fiscal 2023 and 110 days in Fiscal 2024.

 

Trade Receivables

Our Company gives credit facility to its customers in the normal course of
business. Our outstanding Trade Receivables (calculated as closing trade
receivables divided by Net sales from operations over no. of days in reporting
period i.e 365 days) were 76 days in Fiscal 2020 and 71 days in Fiscal 2021.
Going forward, we anticipate providing credit period to our customers for 75
days each for Fiscal 2022, 2023 and 2024 as we continue to expand our
operations and grow our business.

 

Liabilities—Current

Liabilities

 

 

Trade Payables

Our Trade Payable days are derived from Restated financial statements
(calculated as Closing Trade Payables as on balance sheet date divided by cost
of goods sold over no. of days in reporting period i.e 365 days)). They were
84 days in Fiscal 2020 and 108 days in Fiscal 2021. We have assumed trade
payables period of 80 days, 65 days and 60 days for the Fiscals 2022, 2023
and 2024 we intend to prune our creditor days going ahead and negotiate better
pricing terms from creditors by purchasing Materials and availing limited
credit from them.

 

 

2. Funding capital expenditure for the Proposed Expansion

 

 

According to the CRISIL Report, India’s consumer adhesives industry is expected to clock 9-10% CAGR
between fiscals 2021 and 2026 driven by economic recovery and growth in end-user industries. In
particular, demand is expected to recover in fiscal 2022, growing at 14-15% on-year, on a low base of
fiscal 2021, as the Indian economy recovers from the impact of the pandemic. Overall, growth of the
consumer adhesives industry is expected to moderate and log a CAGR of ~8% between fiscals 2022 and
2026. Leveraging our experience and expertise, we seek to capitalize on these growth opportunities and
intend to expand our existing manufacturing facility situated at Survey No. 7, Hissa No. 14(1)B(1),
14(1)B(2), 14(1)A, Village Narangi, Raigad in Maharashtra (the “Existing Facility”) and at additional

99
A) Machinery, Equipment, Automation, etc.

a

Our Company proposes to acquire machineries at a total estimated cost of about = 2,366.98 lakhs of which 22,284.02 lakhs shall be utilized from
the Net Proceeds. We have identified the type of plant and machinery to be purchased for the proposed manufacturing unit and obtained quotations
from different vendors for the total estimated cost, and are yet to place order for 95.33% of the plant and machinery worth % 2,256.46 lakhs.

The detailed list of machinery, equipment and Automation to be purchased by our Company is provided below:

 

 

 

 

 

No. of Per Unit Cost Date of
gitees Estimate as Total Cost applica Quotatio
Sr. Description as be Pe Quotation | Estimate as per ble Name of Location |2 relied |Validity of Payment Terms | Delivery
No. per Quote Tech in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
IP d (Excluding (Excluding taxes) the cost
= taxes) estimate
SOLVENT CEMENT
Hexa 40 %
mide 15 Based Advance 8 to 10
Twin Shaft 18 Agro Khopoli, Nov on with PO, wanda
Ts Solvent 3 13,35,000 40,05,000 % Tech Maharas emb Marke 30% WIP,
Mixers- 2KL Incorp htra er t Steel balance wes
oratio 2021 Price 30% before
n dispatch
20%
Automatic advance
Four Head 15 with PO,
9,
aud Bbie 18 GMP Ahmeda Nov 14 assim 12to
ae 3 13,75,000 41,25,000 Mach bad, emb Januar 14
Filling % P ‘ Proforma
Machine With ro Gujarat er y2022 Invoice weeks
2021 ”
Servo Motor, 10% after 1
2. PLC And HM month from
delivery
20%
Flameproof 15 advance
Main Panel 18 GMP Ahmeda Nov 14 with PO, 12to
(ELP) near 3 2,50,000 7,50,000 % Mach bad, emb Januar 70% 14
Filling ° Pro Gujarat er y2022 against weeks
Machine 2021 Proforma
Invoice,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101
unit having a proposed construction area admeasuring about 4,532.57 sq. mtrs. (built-up) area on the
adjacent plot situated at Survey No. 7/18, Village Narangi, Raigad, Maharashtra (the “Additional Unit”).
The machinery, equipment and utilities to be purchased shall be used for increasing the production
capacities of our existing products PVC, cPVC and uPVC Solvent Cement, Synthetic Rubber Adhesive,

PVA Adhesives, Silicone Sealant, Gasket Shellac, PVC pipe Lubricants and also to commence the
manufacture of Epoxy Adhesives and Spray Paint.

As of March 31, 2021, our Existing Facility had an installed production capacity of 6,098.82 kilo litres
per annum (KLPA) for solvent cement and 3,274.56 MTPA for other adhesives and sealants. In addition
to the above, we propose to expand by setting up an Additional Unit to build new capabilities to support
the production of our product portfolio. The combined installed production capacity from Existing
Facility and Additional Unit is proposed to be increased to 8,265.60 KLPA of solvent cement and
11,908.40 MTPA of other adhesives and sealants by end of Fiscal 2024.

Given below are some of the material approvals which are required for the proposed Additional Unit
with their current status:

a) License for expansion under the Factories Act, 1948: To be applied

b) Consent to establish under Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention
and Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management and
Transboundary Movement) Rules, 2016 for manufacturing Silicon Sealant upto 150 MT/ month:
Obtained

c) Consent to Operate under the Water (Prevention & Control of Pollution) Act 1981, Air (Prevention
& Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management and
Transboundary Movement) Rules, 2016 : Applied

The Company shall apply for the pending approvals for the Proposed Expansion, if any, as and when
required in the due course of time. For further details on our strategy on such proposed expansion, see
“Our Business —Strategies — Expansion of manufacturing facility” on page 154 of this Prospectus.

Estimated Costs

The total estimated cost of the Proposed Expansion is 22,663.00 lakhs. Our Board in its meeting dated
July 14, 2021 approved amount of %2,550.86 Lakhs for funding the proposed expansion from the Net
Proceeds. This cost has been estimated by our management in accordance with our business plan, current
and valid quotations from vendors and other commercial and technical factors. No second-hand or used
machinery/ equipment are proposed to be purchased out of the Net Proceeds. However, such total
estimated cost and related fund requirements have not been appraised by any bank or financial institution.

The detailed break-down of the funds to be utilized from the Net Proceeds towards the estimated cost is
set forth below:

 

 

 

 

 

 

 

(@ in Lakhs)
Particulars Amount
Machinery, Equipment, Automation, etc. 2,284.02
Utilities 45.09
Fire and Safety Equipment 100.27
Contingency 121.47
Total 2,550.86

 

 

 

100
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote jin Rs, In INR Quotation in Rs. . Vendor ‘ocation upon for Quotation ‘ayment Terms | Denvery
p urcha ‘i 5 GST Ps
P d (Excluding (Excluding taxes) the cost
se taxes) estimate
10% after 1
month from
delivery
20%
advance
15 wine:
Yo
Transfer Gear 18 EME Ahmeda noe 14 against a0
3. 3 68,000 2,04,000 Mach bad, emb Januar 14
Pump % P 5 Proforma
ro Gujarat er y2022 Invoi weeks
2021 invoice,
10% after 1
month from
delivery
20%
advance
15 wine:
Air Operated 18 GMP Ahmeda Nov 14 a inst 12 to
4. Diaphram 3 75,000 2,25,000 % Mach bad, emb Januar P = 14
Pump ° Pro Gujarat er y2022 ag ae weeks
2021 invoice,
10% after 1
month from
delivery
20%
advance
i we
Turn Table 6 GMP Ahmeda Nov 14 against 12 to
5. GMP 3 1,50,500 4,51,500 % Mach bad, emb Januar Decforma 14
Model”36" Pro Gujarat er y2022 Tavoi weeks
2021 invoice,
10% after 1
month from
delivery

 

 

102

 
a

 

 

 

 

 

 

No. of Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote «jin Rs. In INR Quotation in Rs. < Vendor cation upon for Quotation SYREN PETES PEHNETY
p urcha ‘i 5 GST Ps
P d (Excluding (Excluding taxes) the cost
Se taxes) estimate
20%
advance
Automatic 15 wasp
Single Head 18 GMP Ahmeda Nov 14 a lack 12 to
6. Screw 6 4,75,000 28,50,000 % Mach bad, emb Januar P - 14
Capping ° Pro Gujarat er y2022 potonma weeks
Machine 2021 invoice,
10% after 1
month from
delivery
20%
advance
i =
Flameproof 18 GMP Ahmeda Nov 14 a lack 12to
for capping 6 2,10,000 12,60,000 % Mach bad, emb Januar P - 14
machine ° Pro Gujarat er y2022 ae nea weeks
2021 invoice,
10% after 1
month from
delivery
Sticker Tula i? 17 50%
Laballey 18 Engin MIDC Nov Dece advance, 16 to
Le Machi 3 20,00,000 60,00,000 9 eering a emb mber balance 18
sehine s Pvt. Mumbai er 2021 50% before weeks
120BPM ' -
Ltd. 2021 dispatch
Coding Dotsm
Machine- ark 15
Hitachi Inkjet 18 Syste Bhayand Nov 14 100% 3t04
8. Printer UX 3 1,70,000 5,10,000 % ms er, Dist. emb Januar advance oe
with India Thane er y2022 with PO
Conveyor-AC Pvt 2021
Motor Driven Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

103
a

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per ‘PP Name of A nrelied |Validity of
be f. ae ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
Dotsm
ark 15
Bottom 18 Syste Bhayand Nov 14 100% 3104
9. Coding 3 2,15,000 6,45,000 % ms er, Dist. emb Januar advance weeks
Conveyor ° India Thane er y2022 with PO
Pvt 2021
Ltd.
Carton sealing 50%
Machine ee Ghia Ney 15 advance,
10. TS-900TB 18 z P Dece 50% 2-3
ae 3 1,79,000 5,37,000 facturi ar, emb :
With 3 % . mber against weeks
: ng Mumbai er
Tapping 2021 proforma
Co. 2021 ei
Head. Invoice
Fully Eagle 15 15 100%
UW Automatic PP 18 Manu Ghatkop Nov Dace payment 2
* Box Strapping 3 2,65,000 7,95,000 facturi ar, emb against
4 : % mber weeks
Machine with ng Mumbai er 2021 proforma
PLC Control Co. 2021 Invoice
40% with
9)
SCL’SS' Fully Epos
Automatic SCLA 13 dispatch
Double head ss 12 P
12 Linear tube 18 Machi Kalyan, Noy Januar and balance 12
” a; 1 20,84,000 20,84,000 Maharas emb 10% earlier
filling % nery y weeks
‘ htra er f - after
machine for Pvt. 2022 i ;
: 2021 installation
Aluminum Ltd.
tube or
months of
dispatch
7 16 50% with
13. WIMCO 18 oe a Noy Dece BO and 12
. Carton-r - 120 1 29,00,000 29,00,000 ay * emb balance
% Limit Maharas mber weeks
PAC- TC ed ira er 2021 50% before
2021 dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

104
a

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per ‘PP Name of A nrelied |Validity of
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
Prismt
ech Of ew
a | | sexi
tg: SCADA 1 2:45,00.0 2,45,00,000 1 mB Ney emb Dece balance 10.
00 % Soluti Mumbai mber weeks
er 50% before
ons 2021 .
2021 delivery
Pvt
Ltd
Tem 16 50%
Heavy Duty ” Nov 16 advance,
1D. Racking 1 | 28,80,000 28,80,000 48 | india | Dombivi | mb | Januar balance 6
% Techn li, Thane y 9 weeks
System ologie er 2022 50% before
e 2021 dispatch
Toyot
a
Toyota Mater 13 13 30%
16 Internal 18 ial Pune, Nov Dee advance,bal 1to2
* Combustion 1 14,94,000 14,94,000 % Handl Maharas emb aber ance 70% month
Engine 2 ing htra er 2021 before s
Forklift Truck India 2021 dispatch
Pvt.
Ltd.
tiftm 16 70%
LIFTMAN . wie Nov 15 advance,bal
12. Fully Electric 1 5,85,000 5,85,000 8 India Dombivi | gmp | Janus ance 30% 6
% Techn li, Thane weeks
Stacker- 6m Blbsie er y2022 before
_ 2021 dispatch
Dispatch
Kamal . 08
18. vehicle- 18 Navi 100% 2
TATA 1012 2 21,02,000 42,04,000 % Motor Mumbai July NA advance weeks
LPT s 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

105
 

a

 

 

 

 

 

 

No. of Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote «jin Rs. In INR Quotation in Rs. < Vendor cation upon for Quotation SYREN PETES PEHNETY
y urcha ; ; GST .
P d (Excluding (Excluding taxes) the cost
Se taxes) estimate
Hexa 40%
Blending mide 15 Based Advance
19 Vessel- WIP 18 Agro Khopoli, Nov on With PO, 8 to 10
. tank with 8 6,83,000 54,64,000 % Tech Maharas emb Marke 30% WIP, leg
Gear Box ° Incorp htra er t Steel balance wee
Motor- 2KL. oratio 2021 Price 30% before
n dispatch
20%
15 advance,
20, Packing 18 GMP Ahmeda Nov 14 70% before 6t08
. Conveyer 11 95,500 10,50,500 % Mach bad, emb Januar dispatch, weeks
Belt- 8ft Pro Gujarat er y2022 10% after a
2021 month from
delivery
Gandh 15
Electro i Nov 16 75%
21. Hydraulic 18 Auto Malad, Dece advance,
RDL Series 2 2,45,000 4,90,000 % matio Mumbai ems mber 25% before a
Dock Lever ns Pvt 2021 2021 dispatch
Ltd
Jaina
Josts make m 15 TARE
Hydraulic Engin a Nov 14 100% :
22. Hand Pallet 4 16,500 66,000 : eering pare emb Januar advance ey
truck (HPT)- 2 & er y2022 with PO Stock
2.5MT Servic 2021
es
Hexa 40 %
Horizontal mide 15 Based Advance
23. Storage Tank 18 Agro Khopoli, Nov on With PO, 6t08
. 6 14,55,000 87,30,000 Tech Maharas emb Marke 30% WIP,
for RM- 20 % weeks
KL Incorp htra er t Steel balance
oratio 2021 Price 30% efore
n dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

106
 

oP

 

 

 

 

 

No. of Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote «jin Rs. In INR Quotation in Rs. < Vendor cation upon for Quotation ‘ayment Terms | Denvery
p urcha ‘i 5 GST Ps
P d (Excluding (Excluding taxes) the cost
se taxes) estimate
SILICON SEALANT
Fosha
n
Golde
wil 30%
i
24. Dispersing im Way, ; 13 advance, 90
Power Misce 3 62,25,000 1,86,75,000 po Intelli China July NA balance days
rt gent 2021 70% before
Equip dispatch
ment
Ga,
Ltd
Fosha
n
Golde
" 30%
25, Hydraulic Im Wie 13 advance, 90
. Discharge 2 18,00,000 36,00,000 po Intelli China July NA balance dave
Extruder rt 2021 70% before y
gent dispatch
Equip
ment
Co.,
Ltd
Automatic
Cartridge ae
Filling TIC 16 30 30%
26. Machine with Im Indust | Nov Nove advance, 60
Volumetric 3 34,65,000 1,05,15,000 po . China emb balance
Dosing rt mes er amber 70% before days
. Co. 2021 .
Cylinder & Li H 2021 dispatch
. imit
Hydraulic ed
Drum Presser

 

 

 

 

 

 

 

 

 

 

 

 

 

107
 

 

 

 

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per a Name of a nrelied |Validity of i
No. per Quote jin Rs, In INR Quotation in Rs. . Vendor Ca upon for |Quotation Fe Cae |
. urcha Se 5 GST
P sed (Excluding (Excluding taxes) the cost
taxes) estimate
Toyot
a
Toyota Mater 13 13 30%
27 Internal 18 ial Pune, Nov Date advance, 1to2
. Combustion 1 14,94,000 14,94,000 % Handl Maharas emb bar balance month
Engine ° ing htra er 2021 70% before s
Forklift Truck India 2021 dispatch
Pvt.
Ltd.
Josts make Jaina 15
Electric Engin Nov 16 100%
28. Operated 18 8 Borivali, Dece 2 6to8
1 6,49,500 6,49,500 eering : emb advance
Stand-On % Mumbai mber ‘ weeks
& er with PO
Stacker- Servic 2021 2021
1.7mt/6M es
Jaina
Josts make m 15
29. Hydraulic 18 Engin Borivali, Noy sais LOO" ane
* Hand Pallet 4 16,500 66,000 % eering Manibal emb advance me
truck (HPT)- 2 & er nfo? with PO Stock
2.5MT Servic 2021
es
tiftm 16 we 50%
30. Heavy Duty 18 India Dombivi Hoy: Januar advance; 6to8
. Racking 15 21,60,000 32,40,000 ‘ emb balance
% Techn li, Thane y, 5 weeks
System Blbsie er, 2022 50% before
_ 2021 dispatch
RUBBER LUBRICANT
: Hexa r 40 % 8 to 12
PVC pipe Fi Khopoli, 15 Based z
Bly Lubricant 2 4,25,000 8,50,000 a8 tide Maharas_ | Nov on sdvanice ‘worldn
Vessel- 500L * Agro htra emb Marke wit FO, §
Tech 30% WIP, weeks

 

 

 

 

 

 

 

 

108

 
 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per PP Name of a nrelied |Validity of .
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
Incorp er t Steel balance
oratio 2021 Price 30%
n before
dispatch
20%
Automatic 15 14 advance,
32. Two Head 18 GMP Ahmeda Nov Sania 70% before 8 to 10
* Liquid Bottle 3 7,40,000 22,20,000 0) Mach bad, emb dispatch,
ae % ‘ y weeks
Filling Pro Gujarat er 2022 10% after a
Machine 2021 month from
delivery
20%
Flameproof 15 14 advance,
Control panel 18 GMP Ahmeda Nov Sania 70% before 8 to 10
on separate 3 2,10,000 6,30,000 0) Mach bad, emb dispatch,
% ‘ y weeks
stand near Pro Gujarat er 2022 10% after a
Machine. 2021 month from
delivery
RUBBER ADHESIVE
Hexa 0%
: Advance
‘ mide ‘ " Based With PO, 8 to 10
33, Twin Shaft 18 Agro Khopoli, Nov on 30% WIP. adda
. Solvent 2 13,35,000 26,70,000 Tech Maharas emb Marke .
: % balance g
Mixers- 2KL Incorp htra er t Steel
, 3 30% weeks
oratio 2021 Price
if before
dispatch
Hexa
i 40 %
Blending ae Khopoli Nee Ba Advance 8 to 10
ae VesseL Wie 6 6,83,000 40,98,000 18 | Tech | Maharas | emb | Marke WikEO, workin
with Gear Box % 30% WIP, g
Incorp htra er t Steel
Motor- 2KL. 2 balance weeks
oratio 2021 Price
a 30%

 

 

 

 

 

 

 

 

 

 

 

 

109

 
a

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per PP Name of a nrelied |Validity of .
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote uecha ae Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
Pied | Excluding (Excluding taxes) the cost
taxes) estimate
before
dispatch
20%
Automatic 15 advance,
Two Head 14 70% before
i GMP Ahmeda Nov ‘
35. , Viscous 1 8,75,000 8,75,000 18 Mach bad, eae Januar dispatch, 8to 10
Liquid Bottle % i y 10% after a weeks
anes Pro Gujarat er
Filling 2022 month from
: 2021
machine date of
delivery
20%
dvance,
Flameproof 15 a °
Control panel 18 GMP Ahmeda Nov inter we efore 8to 10
on separate 1 2,10,000 2,10,000 Mach bad, emb patch.
% i y 10% after a weeks
stand near Pro Gujarat er
‘ 2022 month from
Machine. 2021
date of
delivery
Prismt
ech er
Packi 17 17 50% with
36. 1,40,00,0 18 ng Navi Hoy: Dece Pond 8 to 10
. SCADA 1 a 1,40,00,000 ‘ emb balance
00 % Soluti Mumbai mber weeks
er 50% before
ons 2021 F
2021 delivery
Pvt
Ltd
Liftm .
Heavy Duty = Doinbivi ie 15 advance
37. racking 1 21,60,000 21,60,000 18) India wi emb | Januar balance Gto.8
% Techn Maharas y, y weeks
system leale Tite er, 2022 50% before
2 2021 dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

110
a

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per ‘PP Name of A nrelied |Validity of
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
Josts make Jaina
Electric m 1 16
Engin says Nov 100%
38. Operated 2 6,49,500 12,99,000 18) ering | Borivali, emb Dece advance 6108
Stand-On % Mumbai mber ‘ weeks
& er with PO
Stacker- Servic 2021 2021
1.7mt/6M
es
Jaina
Josts make m 15
39 Hydraulic 18 | EPs" | Borivali Noy sais LOO" ane
. Hand Pallet 1 16,500 16,500 eering 4 emb advance y
% Mumbai y 3 Ex-
truck (HPT)- & er 2022 with PO Steck
2.5MT Servic 2021
es
40 %
Hexa
; Advance
Horizontal aa Khopoli Ney — With PO,
> 9
2. Storage Tank 4 14,55,000 58,20,000 18) Tech | Maharas | emb | Marke | 30% WIP, Gro8
for RM- 20 % balance weeks
Incorp htra er t Steel
KL i = 30%
oratio 2021 Price
iS before
dispatch
PVA ADHESIVE
Hexa 0%
‘Volume mide 15 Based Advance
Rubber Agro Khopoli Nov or With PO, 8 to 12
: 7 5 s
at: Sahel 4 14,25,000 57,00,000 18) Tech | Maharas | emb | Marke | 3% WIP, | workin
Vessel with % balance g
Incorp htra er t Steel
Gear Box coratid 2021 Price 30% weeks
Motor- 4KL. n before
dispatch
42 SS304 18 Hexa Khopoli, 15 Based 40 % 8 to 12
° Blending 6 7,94,000 47,64,000 % mide Maharas Nov on Advance wonkda
Vessel -WIP ° Agro htra emb Marke With PO,

 

 

 

 

 

 

 

 

 

 

 

 

 

111
a

 

 

 

 

 

No. of [Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote «jin Rs. In INR Quotation in Rs. < Vendor cation upon for Quotation SYREN PETES PEHNETY
p urcha ‘i 5 GST Ps
P d (Excluding (Excluding taxes) the cost
Se taxes) estimate
with Gear Box Tech er t Steel 30% WIP, g
Motor 4kl Incorp 2021 Price balance weeks
oratio 30%
n before
dispatch
20%
advance
Automatic 15 with PO,
9,
43. a eee, ig | GMP | Abmeda: | Nov Januar agains 8 to 10
ra 1 7,40,000 7,40,000 Mach bad, emb
Liquid Bottle % Pro Cui y Proforma weeks
a \jarat er :
Filling 2021 2022 Invoice,
machine 10% after a
month from
delivery
20%
advance
Flameproof 15 14 wine:
Control panel 18 GMP Ahmeda Nov Januar against 8to 10
on separate 1 2,10,000 2,10,000 % Mach bad, emb P = k
stand near ° Pro Gujarat er y poroma ‘weeks
Machine 2021 2022 Invoice,
10% after a
month from
delivery
60%
Select advance,
Ag Motor Packa “ i balance
= in, lov Yo
cs ‘Vertical BES 2 13,50,000 27,00,000 18 fnschi Thane emb | Januar against A012
Machine- % weeks
pouch filling nery er y2021 Proforma
line Pvt. 2021 Invoice
Ltd. before
dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

 

112
a

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as be Pe Quotation | Estimate as per ee Name of Location | relied [Validity of Payment Terms | Deliver
No. per Quote archi in Rs. In INR | Quotation in Rs. GsT Vendor upon for |Quotation y very)
P aa “| (Excluding (Excluding taxes) the cost
taxes) estimate
60%
advance
Jaina payment
Josts make m 15 with PO
Electric Engin Nov 4 and balance
45. Operated 1 6,49,500 6,49,500 18 eering Borivali, emb Januar 40% 6to8
Stand-On % Mumbai y . weeks
Stacker- & x 2022 oeest
L7mv/6M Servic 2021 proforma
. es invoice
(prior to
dispatch)
Jaina
Josts make m 15
46 Hydraulic 18 Engin | Borivali, Nov Januar 100% nels
. Hand Pallet 1 16,500 16,500 eering 2 emb ° y
% Mumbai y advance Ex
truck (HPT)- & er 2022 StI
2.5MT Servic 2021
es
40%
Hexa
; Advance
Horizontal aa Khopoli Ney — With PO,
> 9
ba Storage Tank 2 14,55,000 29,10,000 18) Tech | Maharas | emb | Marke | 30% WIP, Gro8
for RM- 20 % balance weeks
KL Incorp htra er t Steel 30%
oratio 2021 Price
iS before
dispatch
Hexa a0%
; Advance
Horizontal aoe Khopoli Nee Ba With PO,
> 9
eB. | Storage Tank 2 9,45,000 18,90,000 18 | Tech | Maharas | emb | Marke | 30% WIP, Sto8
for RM- 10 % balance weeks
KL Incorp htra er t Steel 30%
oratio 2021 Price
A before
dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

113
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per ‘PP Name of A nrelied |Validity of
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
SHELLAC
ie 15 advance
Royal Grease Royal Ahmeda Nov 20
Ae. Lubrication 1 2,35,000 2,35,000 18) Engin bad, emb | Januar Wh PO; workin
Jaw Crusher wi eerin: Gujarat er y balance days
8 u 2022 | 60% before | 8 °9¥
2021 .
dispatch
16 50%
50. sounHead 18 Dyn Goregao Nov 45. advance, 2.3
. Shellac Fillin 1 5,25,000 5,25,000 % Enter n, emb Januar balance weeks
Machine 8 ° rises Mumbai er y2022 50% before
P 2021 dispatch
EPOXY
40 %
Hexa
; Advance
. mide . 8 Bast With PO, 8 to 10
51 Twin Shaft 18 Agro Khopoli, Nov on 30% WIP. workin
. Solvent 3 13,35,000 40,00,000 Tech Maharas emb Marke ,
. % balance g
Mixers- 2KL Incorp htra er t Steel
. : 30% weeks
oratio 2021 Price
i before
dispatch
40 %
Unive Advance
ial 16 15 With PO,
52 Unsaturated 18 Engin Nov Sania 50% after 3
" Polyester 1 60,00,000 60,00,000 % ait Mumbai emb supply, month
Resin Plant mM S ae er nfo? balance s
a 2021 10% after
commissio
ning
Automatic 20%
GMP Ahmeda 15 14
2. your nes’ 7 15,50,000 1,08,50,000 18 | Mach bad, Nov | Januar acvance: 61010
VISCOUS % x 70% weeks
eG Pro Gujarat emb y2022 :
Liquid Bottle against

 

 

 

 

114

 
a

 

 

 

 

 

 

 

No. of Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote jin Rs, In INR Quotation in Rs. . Vendor ‘ocation upon for Quotation ‘ayment Terms | Denvery
p urcha ‘i 5 GST Ps
P d (Excluding (Excluding taxes) the cost
se taxes) estimate
Filling er Proforma
Machine With 2021 Invoice,
Servo Motor, 10% after a
PLC And HM month from
delivery
20%
advance,
Flameproof 15 14 70%
Main Panel 18 GMP Ahmeda Nov Sania against 8 to 10
(ELP) near 7 2,50,000 17,50,000 % Mach bad, emb Proforma i
Fillin; mM Pro Gujarat er y Invoice, ues
ne v 2022 ”
Machine 2021 10% after a
month from
delivery
40% with
SCL’SS' Fully PO, 50%
Automatic SCLA 13 before
Double head Ss Nov 12 dispatch
54. Linear tube 18 Machi Dece and balance 12
filling 2 20,84,000 41,68,000 % nery Kalyan ent mber 10% after weeks
machine for Pvt. 2021 2021 installation
Aluminum Ltd. or within 2
tube months of
dispatch
“ 16 50% with
55 WIMCO 18 ‘wie Antam Nov nes PO and 4
* Carton-r - 120 1 29,00,000 29,00,000 % Limi % emb balance month
imit Maharas mber
PAC- TC a hha er 2021 50% before s
2021 dispatch
Prismt 17 16 50% with
ech F Nov PO and
56. SCADA 1 185.00. 1,55,00,000 18) packi Navi | emb Dece balance Bold
00 % Mumbai mber 9 weeks
ng er 2021 50% before
Soluti 2021 dispatch

 

 

 

 

 

 

 

 

 

 

 

 

 

115
a

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per PP Name of a nrelied |Validity of .
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
ons
Pvt
Ltd
Liftm 16
Heavy Duty an Dombivi Nov 15 50%
57. 3 18 India li, Januar advance, 6to8
a 1s 21,60,000 32,40,000 % Techn Maharas oa y 50% before weeks
ologie htra 2021 2022 dispatch
s
Josts make Jaina
; m 15
Electric Engin Nov 15
58. Operated 18 2 Borivali, Dece 100% 6to8
Stand-On A 6,49,500 6,49,500 % eering Mumbai emb mber advance weeks
& er
Stacker- Servic 2021 2021
1.7mt/6M
es
40 %
Hea Advance
Blending mide 15 Based 5
. With PO, 8 to 10
59. Vessel- WIP 18 Agro Khopoli, Nov on 30% WIP. wanda
. tank with 6 6,83,000 40,98,000 Tech Maharas emb Marke ,
% balance g
Gear Box Incorp htra er t Steel 309% weeks
Motor- 2KL oratio 2021 Price °
A before
dispatch
Jaina
Josts make m 15
, 14 Immed
Hydraulic Engin «it Nov o ;
ON: Hand Pallet 3 16,500 49,500 18 | eering | Bodvall, emb | Januar 1007 iately/
% Mumbai y advance Ex-
truck (HPT)- & er 2022 Stock
2.5MT Servic 2021
es
5 Hexa Khopoli, 15 Based 40%
OL _fonmne i 3 14,55,000 43,65,000 s mide | Maharas | Nov on Advance be :
8 ® Agro htra emb__| Marke With PO,

 

 

 

 

 

 

 

 

 

 

 

 

 

116
 

 

 

 

 

 

 

 

 

 

 

 

 

No. of [Per Unit Cost Date of
ines Ay Estimate as Total Cost applica Quotatio
Sr. Description as per Quotation | Estimate as per ‘PP Name of A nrelied |Validity of
be f. Aa ble Location ~ Payment Terms | Delivery
No. per Quote arch in Rs. In INR | Quotation in Rs. GST Vendor upon for |Quotation
P sed | (ExCluding (Excluding taxes) the cost
taxes) estimate
for RM- 20 Tech er t Steel 30% WIP,
KL Incorp 2021 Price balance
oratio 30%
n before
dispatch
40 %
Hexa
; Advance
Horizontal aa Khopoli Ney — With PO,
> 9
b2 Stores tame 2 9,45,000 18,90,000 Ba Tech Maharas | emb | Marke SOWIE, E08
for RM- 10 % balance weeks
Incorp htra er t Steel
KL @ a 30%
oratio 2021 Price
i before
dispatch
SPRAY PAINT
Tipco 16 15 40%
High Speed Engin Nov advance
83. Disperser- 3 3,00,000 9,00,000 18 | eering Delhi emb | Ja" | and balance | 4°06
- % y weeks
Mixer Work er 2022 60% before
s 2021 dispatch
Tipco 16 40%
Engin Nov 1S advance
G4. Paint Filling 4 3,00,000 12,00,000 18 | cering Delhi emb | 7898 | andbalance | 416
Machine % y weeks
Work er 2022 60% before
s 2021 dispatch
16 15 50%
Aspire . Nov advance
65. zAerosol 1 8,05,000 8,05,000 18 | Indust Navi | emb Dece | and balance ae
Filling Lines % ss Mumbai mber days
ries er 2021 50% before
2021 shipment
Liftm Dombivi 15 50%
Heavy Duty ¢ 08
66. . 18 an li, Januar advance, 6to8
Rae 1 14,40,000 14,40,000 % India Maharas iy y 50% before weeks
y Techn htra 2022 dispatch

 

 

 

 

 

 

 

 

117

 
 

a

 

 

 

 

 

 

 

No. of Per Unit Cost Date of
Nines t0 Estimate as Total Cost applica Quotatio
Sr. Description as b per Quotation | Estimate as per bl Name of Lotati nrelied |Validity of P: tT Deli
No. er Quote «jin Rs. In INR Quotation in Rs. < Vendor cation upon for Quotation SYREN PETES PEHNETY
y urcha ; ; GST .
P d| (Excluding (Excluding taxes) the cost
Se taxes) estimate
ologie
s
Hexa 40 %
Heiizatital mide 16 Based Advance
67. Storge tank 18 Agro Khopoli, Nov on With PO, 6t08
* 2 9,45,000 18,90,000 Tech Maharas emb Marke 30% WIP,
for RM- 10 % weeks
KL Incorp htra er t Steel balance
oratio 2021 Price 30% before
n dispatch
Subje
Maxel 17 ct to 80%
68 SS 304 18 1 Nov steel advance 30 to
* Vessel- WIP 6 1,20,150 7,20,900 % Engin Mumbai emb marke and balance 40
Tanks 500 kgs ee er t 20% before days
2021 chang dispatch
e
Jaina
69. Tale 18 Engin Borivali ie J 14 100% pene
‘ Hand Pallet 3 16,500 49,500 . eering Mab zu emb eae ° ley
Yo umbai y advance Ex-
truck (HPT)- & er 2022 Stock
2.5MT Servic 2021
es
TOTAL 23,66,98,400

 

 

 

 

 

 

 

 

 

 

 

 

*The above costs are exclusive of GST and installation & commissioning charges. Further, packing and other ancillary charges shall be additional
as per actuals.
**The cost of machinery provided by the vendor is in USD. The amount has been converted into the nearest whole Indian Rupee at the exchange
rate of = 75= 1 USD since the last available rate on www. fbil.org.in is of = 74.35= 1 USD on November 15, 2021 for the purpose of disclosure of
the selected items in this Prospectus. There may be a fluctuation in the exchange rate between the Indian Rupee and the USD rate and accordingly

such transactions may affect the final funding requirements and deployment of the Net Proceeds.

Note: As on November 22, 2021, our Company has already deployed an amount equivalent to %31.41 lakhs towards the purchase of Machinery, Equipment,
Automation, etc. as certified by M/s. Priya Choudhary & Associates LLP, our Statutory Auditors vide certificate dated November 23, 2021. This amount

118
expended by our Company shall be recouped from the Net Proceeds. The difference/ remaining amount of 782.96 lakhs towards the total estimated cost (ie.,
cost in addition to the amount being utilized from the Net Proceeds) will be funded from internal accruals by our Company.

B) Utilities
Our Company has estimated the requirement of the following utilities with a total estimated cost of 366.59 Lakhs of which 245.09 Lakhs shall be

utilized from the Net Proceeds. We have identified the utilities for the proposed expansion and obtained quotations from vendors for the total
estimated cost, and are yet to place orders for 77.55% of the utilities worth 751.64 lakhs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No. Date
of
a Quota
uni Per Unit Total s Vali
ts Cost Cost Gow dity
Sr. Description 4 : ‘ relied :
to Estimate Estimate Name of Locati of Deli
No as per GST upon Payment Terms
Quote be as per as per Vendor on for Quo very
pu Quotatio Quotatio th tatio
rch | ninINR | nin INR . n
cost
ase tima
d est
te
ELGI make
Compressor
Sen 14 14 40 % advance
receveuand Mumb Nove Dece balance against a8
1 micro air 1 692,500 692,500 18% ELGi . gain wee
dryer) ai mber, mber proforma invoice ks
* 2021 2021 prior to dispatch
Capaci-y -
15KW-
22KW
DG S-T-
500 KVA.
OU ewe! - 14 14 30% alongwith 3 to
500 kVA, Poweric B 1 N D PO 4
2 SILENT 1 2,650,000 | 2,650,000 18% a angal ove ece oy ont
Diesel Limited ore mber, mber 70% against PI wee
: 2021 2021 before dispatch ks
Generating
Set with
CPCB II)

 

119

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date
e ;
uni Per Unit Total ote Vali
S Descripti ts Cost Cost lied dity
m ee to Estimate Estimate Name of Locati rene of Deli
No as per be as per as per GST Vendor on upon Quo Payment Terms very
Quote for a
pu Quotatio Quotatio the tatio
rch nin INR nin INR n
cost
rs estima
te
As 30% Advance of
NON IBR applic u u the basic ex-
Steam ble at Th N D works price, 50
3 Boiler 1 1,023,906 | 1,023,906 | “4 erm | Pune eve oe balance 70%
j the Limited mber, mber z Days
Capacity- . with full taxes
time of 2021 2021 ;
850kg/hr against proforma
deliver eee
invoice.
AtoZ Andhe 14 14 5to
Chiller- 10 Refriger ri, Nove Dece 6
9, ? 9)
4 TR 1 425,000 425,000 18% ation Mumb mbey; miber 100% advance sie
Service ai 2021 2021 ks
Air Cooled Mec | mT | Nove | vece | So¥Adance, | 3
9, ii 5
iF SCVS 300 1 372,500 372,500 18% mngnee Mombi mber, infer’ ae a Bs
KVA ai 2021 | 2021 B
9) am
moe Deltron Vasai, 13 e ue aoe 5 a
6 Orne 1 1,495,000 | 1,495,000 18% Electrica. | Mahar July, ve pees won
r- ig aghitia 2021 ust 70%, before ing
1000KVA 2021 dispatch days
TOTAL 6,658,906

 

Note: As on November 22, 2021, our Company has already deployed an amount equivalent to € 5.29 lakhs towards the purchase of Utilities as certified by M/s.
Priya Choudhary & Associates LLP, our Statutory Auditors vide certificate dated November 23, 2021. This amount expended by our Company shall be recouped
from the Net Proceeds. The difference/ remaining amount of 21.50 lakhs towards the total estimated cost (i.e. cost in addition to the amount being utilized from
the Net Proceeds) will be funded from internal accruals by our Company.

There is no impact of GST on the aforesaid quotations as the Company shall be able to avail Input Tax Credit for the GST. Further, competitive quotes were
received from other vendors for some of the equipment listed above.

120

 
printing and stationery expenses, advertising and marketing expenses and all other incidental and
miscellaneous expenses for listing the Equity Shares on the Stock Exchanges.

Other than (i) the listing fees, which will be solely borne by our Company; all Offer related expenses
will be shared, upon successful completion of the Offer, between our Company and the Selling
Shareholder on a pro-rata basis, in proportion to the Equity Shares issued and allotted by our Company
in the Fresh Issue and the Offered Shares sold by the Selling Shareholder in the Offer for Sale,
respectively. Any expenses paid by our Company on behalf of the Selling Shareholder in the first
instance will be reimbursed to our Company, by the Selling Shareholder to the extent of its proportion
of Offer related expenses, directly from the Public Offer Account.

In the event the Offer is not successfully completed and/or withdrawn and/or abandoned, all such cost
and expenses will be shared, between our Company and the Selling Shareholder in proportion to the
Equity Shares proposed to be issued and allotted by our Company in the Fresh Issue and the Offered
Shares proposed to be sold by the Selling Shareholder in the Offer for Sale respectively . The estimated
Offer related expenses are as under:

 

Asa % of the Asa % of the

 

 

 

 

 

 

Estimated expenses total total
Expenses a :
(in Lakhs) estimated :
Offer size
expenses

Fees payable to BRLM
(including underwriting 1,566.00 84.48 12.43
brokerage and selling
commission)
Advertising and marketing 12.28 0.66 0.10
expenses
Fees payable to the Legal and
other Advisors to the Offer 0.00 Bue O06
Fees to the Registrar to the 20.00 1.08 0.16
Offer
Fees payable to the Regulators 86.39 466 0.69
including stock exchange
Printing and stationary 10.00 0.54 0.08

 

Brokerage and selling
commission and_ bidding
charges for members of the 17.00 0.92 0.13
Syndicate, registered brokers,
RTAs and CDPs‘”)

 

Commission/ processing fees
to SCSBs and Banker to the
Offer and fee payable to the 41.00 2.21 0.33
Sponsor Bank for bids made
by RIBs using UPI®*)

 

 

Miscellaneous 31.00 1.67 0.25
Total estimated Offer 1,853.67 100.00 14.72
expenses

 

 

 

 

 

 

1. Selling commission payable to the members of the Syndicate, CDPs, RTA and SCSBs (for the bid
cum application forms directly procured from investors), on the portion for RIIs and NIIs, would
be as follows:

122
Cc)

D)

All of the abovementioned quotations received from the vendors are valid as on the date of this
Prospectus. Our Company has received quotations from different vendors for machinery, equipment
and utilities but no orders have been placed for such machinery, equipment, automation and utilities.
Further, we have not entered into any definitive agreements with any of these vendors, thus there can
be no assurance that the same vendors would be engaged to eventually supply the machinery,
equipment, automation and utilities at the same costs. Any additional costs due to an increase in the
costs of machinery, equipment, automation and utilities, shall be paid by our Company from its internal
accruals.

The quantity of the machinery, equipment, automation and utilities to be purchased is based on the
estimates of our management. Our Company shall have the flexibility to deploy the machinery,
equipment and utilities, according to the business requirements and internal estimates of the same,
which are dynamic and may evolve with the passage of time and based on the estimates of our
management. The actual mode of deployment has not been finalised as on the date of this Prospectus.
For further details, see Risk Factor No. 6 “We intend to utilise a portion of the Net Proceeds for funding
our capital expenditure requirements. We are yet to place orders for such capital expenditure
machinery.” on page 33 of this Prospectus.

Fire and Safety Equipment

Our Company has assumed purchase of fire and safety equipment worth =100.27 lakhs (exclusive of
GST at the rate of 18%) based on purchases in the past and inquiries made. A quotation for Fire Safety
Material Supply has been received from vendor, City Fire & Safety Services, Navi Mumbai,
Maharashtra for =102.62 lakhs (exclusive of GST at the rate of 18%) dated November 13, 2021 valid
for 60 days.

Contingency

We have created a provision for contingency of 7121.47 Lakhs, which is approximately 5% of total
cost of the Proposed Expansion, to cover related packing, ancillary charges, taxes, levies and other
duties, as applicable, and any increase in the estimated cost.

General Corporate Purposes

Our Company proposes to deploy the balance Net Proceeds aggregating to = 1,723.50 Lakhs towards
general corporate purposes, subject to such utilisation not exceeding 25% of the Gross Proceeds of the
Fresh Issue, in compliance with SEBI ICDR Regulations. Our Company intends to deploy the balance
Net Proceeds, if any, for general corporate purposes, subject to above mentioned limit, as may be
approved by our management, including but not restricted to, the following: strategic initiatives,
meeting expenses incurred by our Company and strengthening of our manufacturing and R&D
capabilities, brand building and strengthening of marketing activities, and ongoing general corporate
exigencies or any other purposes as approved by the Board subject to compliance with the necessary
regulatory provisions

The quantum of utilization of funds towards each of the above purposes will be determined by our
Board of Directors based on the permissible amount actually available under the head “General
Corporate Purposes” and the business requirements of our Company, from time to time. We, in
accordance with the policies of our Board, will have flexibility in utilizing the Net Proceeds for general
corporate purposes, as mentioned above.

Offer Related Expenses
The total expenses of the Offer are estimated to be approximately = 1,853.68 lakhs. The Offer related
expenses primarily include fees payable to the Book Running Lead Manager and legal advisor, fees

payable to the Auditors, brokerage and selling commission, underwriting commission, commission
payable to Registered Brokers, RTAs, CDPs, SCSBs’ fees, Sponsor Bank’s fees, Registrar’s fees,

121
Portion for RIIs 0.35% “ (exclusive of GST)
Portion of NIIs 0.15% “ (exclusive of GST)

A Percentage of the amounts received against the Equity Shares Allotted (i.e. the product of the
number of Equity Shares Allotted and the Offer Price)

The selling commission payable to the SCSBs will be determined on the basis of the bidding
terminal id as captured in the bid book of BSE or NSE. Further, the Members of Syndicate, RTAs
and CDPs will be entitled to bidding charges of = 10/- (plus applicable GST) per valid ASBA
Form. The terminal from which the Bid has been uploaded will be taken into account in order to
determine the total bidding charges payable to the relevant RTA/CDP. In case the total bidding
charges payable exceeds Rs. 2.00 million, the amount payable would be proportionately
distributed based on the number of valid applications such that the total processing charges
payable does not exceed Rs. 2.00 million (Based on valid Bid cum Application Forms).

No additional processing/uploading charges shall be payable by our Company and the Selling
Shareholder to the SCSBs on the applications directly procured by them.

2. SCSBs would be entitled to a processing fee of = 10/- (plus GST) for processing the Bid cum
Application Forms procured by the members of the Syndicate, Registered Brokers, RTAs or the
CDPs and submitted to SCSBs. In case the total processing charges payable exceeds Rs. 1.00
million, the amount payable would be proportionately distributed based on the number of valid
applications such that the total processing charges payable does not exceed Rs. 1.00 million (Based
on valid Bid cum Application Forms).

3. Processing fees for applications made by Retail Individual Investors using the UPI Mechanism
would be as follows:

 

 

RTAs / CDPs/ Registered Brokers & 10 per valid Bid cum Application Form (plus
applicable taxes)*

Sponsor Bank & 8 per valid Bid cum Application Form (plus applicable
taxes)

The Sponsor Bank shall be responsible for making
payments to third parties such as the remitter bank, the
NPCI and such other parties as required in connection
with the performance of its duties under applicable SEBI
circulars, agreements and other Applicable Laws.

*In case the total processing charges payable under this head exceeds Rs. 1.50 million, the
amount payable would be proportionately distributed based on the number of valid applications
such that the total processing charges payable does not exceed Rs. 1.50 million

 

 

 

 

The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism may be
released to the remitter banks (SCSBs) only after such banks provide a written confirmation on compliance with
SEBI Circular No: SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 02, 2021 read with SEBI Circular No:
SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021.

Bridge Financing

Our Company has not raised any bridge loans from any bank or financial institution as on the date of
this Prospectus, which are proposed to be repaid from the Net Proceeds.

Interim Use of Funds

123
Pending utilization of the Net Proceeds for the Objects described above, our Company shall
temporarily deposit the funds in one or more Scheduled Commercial Banks included in the Second
Schedule of Reserve Bank of India Act, 1934.

In accordance with Section 27 of the Companies Act, 2013, our Company confirms that, it shall not
use the funds from the Net Proceeds pending utilization, for any investment in equity and/or real estate
products and/or equity linked and/or real estate linked products.

Monitoring Utilization of Funds

Our Company has appointed ICICI Bank Limited as the monitoring agency in accordance with
Regulation 41 of the SEBI ICDR Regulations. Our Board and the monitoring agency will monitor the
utilisation of the Net Proceeds, and submit the report required under Regulation 41(2) of the SEBI
ICDR Regulations.

Our Company will disclose the utilisation of the Net Proceeds under a separate head in our balance
sheet along with the relevant details, for all such amounts that have not been utilised. Our Company
will indicate investments, if any, of unutilised Net Proceeds in the balance sheet of our Company for
the relevant fiscals subsequent to receipt of listing and trading approvals from the Stock Exchanges.

Pursuant to Regulation 32(3) of the SEBI Listing Regulations, our Company shall, on a quarterly basis,
disclose to the Audit Committee the uses and applications of the Net Proceeds. On an annual basis, our
Company shall prepare a statement of funds utilised for purposes other than those stated in this
Prospectus and place it before the Audit Committee and make other disclosures as may be required
until such time as the Net Proceeds remain unutilised. Such disclosure shall be made only until such
time that all the Net Proceeds have been utilised in full. The statement shall be certified by the statutory
auditor of our Company.

Furthermore, in accordance with Regulation 32(1) of the SEBI Listing Regulations, our Company shall
furnish to the Stock Exchanges on a quarterly basis, a statement indicating (i) deviations, if any, in the
actual utilisation of the proceeds of the Fresh Issue from the objects of the Fresh Issue as stated above;
and (ii) details of category wise variations in the actual utilisation of the proceeds of the Fresh Issue
from the objects of the Fresh Issue as stated above. This information will also be published in
newspapers simultaneously with the interim or annual financial results and explanation for such
variation (if any) will be included in our Director’s report, after placing the same before the Audit
Committee.

Variation in Objects

In accordance with Section 13(8) and Section 27 of the Companies Act, 2013 and applicable rules, our
Company shall not vary the Objects of the Offer without our Company being authorised to do so by
the Shareholders by way of a special resolution through postal ballot. In addition, the notice issued to
the Shareholders in relation to the passing of such special resolution (the “Postal Ballot Notice”) shall
specify the prescribed details as required under the Companies Act and applicable rules. The Postal
Ballot Notice shall simultaneously be published in the newspapers, one in English and one in the
vernacular language of the jurisdiction where the Registered Office is situated. Our Promoters or
controlling Shareholders will be required to provide an exit opportunity to such Shareholders who do
not agree to the proposal to vary the Objects, at such price, and in such manner, as may be prescribed
by SEBI, in this regard.

Other Confirmations

Except to the extent of the proceeds received pursuant to the Offer for Sale by the Selling Shareholder,
none of our Promoters, Directors, KMPs or Promoter Group will receive any portion of the Offer
Proceeds and there are no material existing or anticipated arrangements or transactions in relation to
utilization of the Net Proceeds with our Promoters, Directors, KMPs or Promoter Group.

124
 

 

 

 

 

Financial Year ended RoNW
FY 2019-20 (188.00)%
FY 2018-19 27.29%
Weighted Average (18.38) %
Six-month period ended September 30, 2021 (not annualized) 8.30%

 

 

 

 

Return on average net worth (%) = Profit/(loss) for the year from operations, divided by Net Worth.
Net Worth means the aggregate value of the paid-up share capital of our Company and all reserves
created out of profits and securities premium account, net of pre-offer expenses, derived from the
restated statement of assets and liabilities of our Company in the Restated Financial Statements.

IV. Net asset value per Equity Share (face value of = 10 each)

Net Asset Value per Equity Share derived from the Restated Financial Statements:

 

 

 

 

 

 

 

 

 

 

 

Particulars* Amount (in Rs. )
Net Asset Value per Equity Share as of March 31, 2021 9.74
Net Asset Value per Equity Share as of September 30, 2021 26.39
NAV post-Issue
At the lower end of the price band of = 262/- 79.47
At the upper end of the price band of = 274/- 82.18
Offer price per share 274

 

 

 

Net Asset Value per Equity Share has been calculated as net worth divided by number of equity shares
at the end of the year. Total no of shares taken to calculate the NAV is after taking into consideration
Bonus

Note: Net Asset Value has been calculated as per the following formula:
NAV = Net worth excluding preference share capital and revaluation reserve
Outstanding number of Equity shares outstanding during the year / period

Offer Price per Equity Share will be determined on conclusion of the Book Building Process.

V. Comparison with listed industry peer:

Following is the comparison with our peer companies listed in India:

 

For the year ended March 31, 2021

 

 

 

 

 

Name of the - Dilut P/E Returnon | NAV per
Company eee Leta ae ed_ | (based on | average net Equity
®@ (in Cr) @ EPS | Diluted worth Share (%)
@_| EPs)? | (%)® “
HP Adhesives 10 118.16 7.74 7.74 35.40 79.00 9.74
Limited
Peer Group
Pidilite
Industries 10 7,293.00 22.26 | 22.24 81.28 20.22 114.78
Limited

 

 

 

 

 

 

 

 

 

Source: All the financial information for listed industry peers mentioned above is on a consolidated
basis sourced from the Annual Reports of the respective company for the year ended March 31, 2021.

Notes:

1. Revenue from operations has been sourced from the audited standalone financial results
of the respective company for the year ended March 31, 2021.

126
BASIS FOR OFFER PRICE

The Price Band, Floor Price and Offer Price will be determined by our Company and the Selling
Shareholder, in consultation with the BRLM, on the basis of assessment of market demand for the
Equity Shares offered through the Book Building Process and on the basis of the quantitative and
qualitative factors described below. Investors should also refer to “Our Business”, “Risk Factors”,
“Restated Financial Statements” and “Management's Discussion and Analysis of Financial
Position and Results of Operations” on pages 150, 28, 202 and 275, respectively, of this Prospectus
to have an informed view before making an investment decision.

 

Qualitative factors

Some of the qualitative factors which form the basis for computing the Offer Price are:

¢ Wide product portfolio addressing the needs of varied customers across the industry.
e Experienced Promoters with strong management team having domain knowledge;
Extensive Sales and distribution network

Strategically located manufacturing facilities

¢ Improving operational efficiency

For further details, see “Our Business -Competitive Strengths” on page 150 of this Prospectus.

Quantitative factors

Some of the information presented below relating to our Company is derived from the Restated
Financial Statements.

Some of the quantitative factors which may form the basis for calculating the Offer Price are as follows

I. Basic and diluted earnings per share (“EPS”)

 

 

 

 

 

 

 

 

Fiscal Basic and Diluted EPS ( %)
FY 2020-21 7.74
FY 2019-20* (3.59)*
FY 2018-19 3.08
Weighted Average 3.19
Six-month period ended September 30, 2021 (not annualized) 2.22

 

 

* In order to settle disputed excise tax demand of Rs, 1,405.82 Lakhs for the period January 2012 to July 2015
and aggregate disputed sales tax demand of Rs. 116.41 Lakhs for Assessment Years 2012-13 and 2013-14, our
Company paid a sum of Rs. 688.17 Lakhs towards Sabka Vishwas Legacies Dispute Resolutions Scheme and Rs.
55.54 Lakhs towards Mahavat Amnesty Scheme, 2019, respectively and thereby has incurred an aggregate
expenditure of Rs. 743.71 Lakhs in FY 2019-20. Thus, there was negative EPS for the said period.

II. Price/Earning (“P/E”) ratio in relation to Price Band of % 262/- to = 274/- per Equity Share:

 

 

P/E at the lower end of P/E at the higher end of the
Particulars the Price Band Price Band
(number of times) (number of times)
Based on basic EPS for Fiscal 2021 33.85 35.40

 

 

 

 

 

III. Return on Net Worth (““RoNW”)

Derived from the Restated Financial Statements:

 

Financial Year ended RoNW
FY 2020-21 79.00%

 

 

 

 

 

125
2. _ P/E Ratio has been computed based on the closing market price of equity shares on the BSE on
March 31, 2021 divided by the Diluted EPS.

3. RoNW is computed as net profit after tax (excluding other comprehensive income) divided by
the closing net worth. Net worth has been computed as sum of share capital and reserves and
surplus.

4. NAV is computed as the closing net worth divided by the closing outstanding number of equity
shares.

Investors should read the above mentioned information along with “Risk Factors”, “Our Business”,
Management Discussion and Analysis of Financial Position and Results of Operations” and “Financial
Information” on pages 28, 150, 275 and 202, respectively, to have a more informed view. The trading
price of the Equity Shares could decline due to the factors mentioned in the “Risk Factors” and you
may lose all or part of your investments.

127
STATEMENT OF SPECIAL TAX BENEFITS

To,

The Board of Directors

HP Adhesives Limited

Regd Office : 11, Unique House, Chakala Road,
Andheri (East), Mumbai-99

cc:

Unistone Capital Private Limited
A/305, Dynasty Business Park,
Andheri-Kurla Road, Andheri East,
Mumbai — 400 059

Dear Sir(s):
Sub: Proposed initial public offering of equity shares of Rs. 10/- each (“the Issue”) of M/s HP
Adhesives Limited (“the Company”)

We report the enclosed statement in Annexure 1 & 2 (together “The Annexures”), prepared by M/s
HP Adhesives Limited herein referred as “The Company”, states the possible direct tax benefits
available to the Company and to its shareholders under the Income-tax Act, 1961 presently in force in
India. Several of these benefits are dependent on the Company or its shareholders fulfilling the
conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company
or its shareholders to derive the stated tax benefits is dependent upon their fulfilling such conditions,
which based on business imperatives the Company faces in the future, the Company may or may not
choose to fulfil.

The benefits discussed in the enclosed annexure are not exhaustive. This statement is only intended to
provide general information to the investors and is neither designed nor intended to be a substitute for
professional tax advice. In view of the individual nature of the tax consequences and the changing tax
laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax
implications arising out of their participation in the Public issue. Neither are we suggesting nor
advising the investor to invest money based on this statement.

We do not express any opinion or provide any assurance as to whether:

a) the Company or its shareholders will continue to obtain these benefits in future; or
b) the conditions prescribed for availing the benefits have been/would be met with.

The contents of the enclosed statement are based on information, explanations and representations
obtained from the Company and on the basis of our understanding of the business activities and
operations of the Company.

We also consent to the references to us as “Experts” under section 26 of the Companies Act to the
extent of the certification provided hereunder and included in the Draft Red Herring Prospectus, Red
Herring Prospectus and Prospectus of the Company or in any other documents in connection with the
Public issue.

We hereby give consent to include this statement of Special tax benefits as per management workings
assumption's in the Draft Red Herring Prospectus, Red Herring Prospectus and Prospectus and in any
other material used in connection with the Public issue.

Yours sincerely,

For Priya Choudhary & Associates LLP
Chartered Accountants

(FRN- 011506C/C400307)

Vaibhav Choudhary

(Partner)

(M.No. 407543)

Place: Mumbai (Mah)

Date: 27/11/2021.

128
ANNEXURE 1 TO THE STATEMENT OF SPECIAL TAX BENEFITS AVAILABLE TO THE
COMPANY AND ITS SHAREHOLDERS UNDER THE APPLICABLE TAX LAWS IN INDIA

Under the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’), as amended by the Finance Act
2020, applicable for Financial Year 2020-21 relevant to Assessment Year 2021-22.

1. This Annexure sets out only the possible special tax benefits available to the Company and the
shareholders under the current Income-tax Act, 1961 i.e. the Act as amended by the Finance Act,
2020 applicable for the Financial Year 2020-21 relevant to the Assessment Year 2021-22,
presently in force in India.

2. This Annexure covers only certain relevant direct tax law benefits and does not cover any indirect
tax law benefits or benefit under any other law.

3. Special tax benefits available to the Company under the Act
3.1. Lower corporate tax rate under Section 115BAA of the Act

Section 115BAA of the Act has been inserted by the Taxation Laws (Amendment) Act, 2019 (“the
Amendment Act, 2019”) w.e.f. April 1, 2020 (assessment year) granting an option to domestic
companies to compute corporate tax at a reduced rate of 25.168% (22% plus surcharge of 10%
and cess of 4%), provided such companies do not avail the following deductions/exemptions:

1. Deduction under the provisions of section 10AA (deduction for units in Special Economic
Zone;

ll. Deduction under clause (iia) of sub-section (1) of section 32 (Additional depreciation);

il. | Deduction under section 32AD or section 33AB or section 33ABA (Investment allowance
in backward areas, Investment deposit account, site restoration fund);

Iv. Deduction under sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or
sub-section (2AA) or sub-section (2AB) of section 35 (Expenditure on scientific research);

v. Deduction under section 35AD or section 35CCC (Deduction for specified business,
agricultural extension project);

vi. Deduction under section 35CCD (Expenditure on skill development)
vu. Deduction under any provisions of Chapter VI-A other than the provisions of section
80JJAA or Section 80M;
vill. No set off of any loss carried forward or depreciation from any earlier assessment year, if
such loss or depreciation is attributable to any of the deductions referred from clause I) to
VII) above; and

1x. No set off of any loss or allowance for unabsorbed depreciation deemed so under section
724A, if such loss or depreciation is attributable to any of the deductions referred from clause
I) to VIII) above.

xX. In case a company opts for section 115BAA of the Act, provisions of Minimum Alternate
Tax “MAT” under section 115JB of the Act would not be applicable and MAT credit of
the earlier year(s) will not be available for set-off.

XI. The option needs to be exercised on or before the due date of filing the tax return. option
once exercised, cannot be subsequently withdrawn for the same or any other tax year.

The Company has opted to apply section 115BAA of the IT Act for the assessment year 2021-
2022. The effective tax rate for the Company was 27.82%, however after availing the benefit under
Section 115BAA of the Income tax Act, 1961 the same is reduced to 25.168%. If the Company had
decided not to opt under section 115BAA of the Income tax Act, 1961, the profit after tax would
have been lower by Rs.26.37 Lakhs for the FY 2020-21 (as computed on the taxable income)

3.2. Deductions from Gross Total Income - Section 80 JJAA of the Act - Deduction in respect of employment
of new employees

Subject to fulfilment of prescribed conditions, the Company is entitled to claim deduction, under
the provisions of Section 80JJAA of the Act, of an amount equal to thirty per cent of additional

129
employee cost (relating to specified category of employees) incurred in the course of business in
the previous year, for three assessment years including the assessment year relevant to the previous
year in which such employment is provided.

Since, the Company has not claimed any deduction under section 80 JJAA of the Income Tax Act,
1961, it has not incurred any expenses towards claiming the said deduction.

4. Special tax benefits available to Shareholders
There are no special tax benefits available to the Shareholders of the Company for investing
inthe shares of the Company.

5. NOTES:

5.1. This Annexure sets out only the possible tax benefits available to the company and the
shareholders under the current Income Tax Act, 1961 i.e the Act as amended by the Finance
Act, 2020 applicable for Financial year 2020-21 relevant to the Assessment year 2021-22,
presently in force in India.

5.2. No assurance is given that the revenue authorities/courts will concur with the views expressed
herein. Our views are based on the existing provisions of law and its interpretation, which are
subject to changes from time to time. We do not assume responsibility to update the views
consequent to such changes. We shall not be liable to any claims, liabilities or expenses
relating to this assignment except to the extent of fees relating _to this assignment, as finally
judicially determined to have resulted primarily from bad faith or intentional misconduct. We
will not be liable to any other person in respect of this statement.

5.3. The above statement covers only certain special tax benefits under the Act, read with the
relevant rules, circulars and notifications and does not cover any benefit under any other law
in force in India. This statement also does not discuss any tax consequences, in the country
outside India, of an investment in the shares of an Indian company.

5.4. The above statement of possible special tax benefits is as per the current direct tax laws
relevant for the assessment year 2021-22. Several of these benefits are dependent on the
Company or its shareholders fulfilling the conditions prescribed under the relevant provisions
of the Tax Laws.

5.5. The Company has already excised the said option during the AY 2020-21.

5.6 The option once exercised cannot be subsequently withdrawn for the same or any other
Financial Year.

For:-
HP Adhesives Limited

Mihir Suresh Shah
Chief Financial Officer

Place: Mumbai
Date: November 27, 2021

130
ANNEXURE 2 TO THE STATEMENT OF SPECIAL TAX BENEFITS AVAILABLE TO THE
COMPANY AND ITS SHAREHOLDERS UNDER THE APPLICABLE TAX LAWS IN INDIA.

Outlined below are the possible special tax benefits available to the Company and its Shareholders
under the Central Goods and Services Tax Act, 2017 / the Integrated Goods and Services Tax Act,
2017 and applicable State Goods and Services Tax Act, 2017 (“GST Acts”), the Customs Act, 1962
(“Customs Act’) and the Customs Tariff Act, 1975 (“Tariff Act”), as amended by the Finance Act
2020 applicable for the Financial Year 2020-21 (unless otherwise specified), presently in force in India.

1. Special indirect tax benefits available to the Company
There are no special tax benefits available to the Company under GST law and any other laws
mentioned above.

2. Special tax benefits available to Shareholders

The Shareholders of the Company are not entitled to any special tax benefits under indirect tax laws
3. Notes:

3.1 This Annexure sets out only the possible special tax benefits available to the Company and its Shareholders
under the Central Goods and Services Tax Act, 2017 / the Integrated Goods and Services Tax Act, 2017 and
applicable State Goods and Services Tax Act, 2017 (“GST Acts”), the Customs Act, 1962 (“Customs Act”) and
the Customs Tariff Act, 1975 (“Tariff Act”), as amended by the Finance Act 2020 applicable for the Financial
Year 2020-21 (unless otherwise specified), presently in force in India.

3.2 This Annexure is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences,
the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific
tax implications arising out of their participation in the Proposed IPO.

3.3 This annexure covers only indirect tax laws benefits and does not cover any income tax law benefits or benefit
under any other law.

3.4 These comments are based upon the provisions of the specified indirect tax laws, and judicial interpretation
thereof prevailing in the country, as on the date of this Annexure.

3.5 No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our
views are based on the existing provisions of law and its interpretation, which are subject to changes from time

to time. We do not assume responsibility to update the views consequent to such changes.

For HP Adhesives Limited

Mihir Suresh Shah
Chief Financial Officer

Place: Mumbai
Date: November 27, 2021

ey
SECTION IV —- ABOUT THE COMPANY
INDUSTRY OVERVIEW

The information in this section is derived from the report titled “Assessment of the adhesives and
sealants markets” dated November 2021 (the “CRISIL Research”) prepared and issued by CRISIL
Limited, commissioned by us. Unless specified otherwise, all information in this section has been
derived from the CRISIL Limited. Industry sources and publications generally state that the
information contained therein has been obtained from sources generally believed to be reliable, but
that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability
cannot be assured. The data may have been re-classified by us for the purposes of presentation.
Accordingly, investment decisions should not be based on such information. You should read the entire
Prospectus, including the information contained in the sections titled “Risk Factors” and “Restated
Financial Statements” and related notes beginning on page 28 and 202 respectively of this Prospectus.

OVERVIEW OF THE INDIAN ECONOMY
Review of GDP growth

GDP shrank 7.3% in fiscal 2021

With a population of over ~1.4 billion and GDP of Rs 135 trillion in fiscal 2021, as per the estimates
of National Statistical Office (NSO), India is the sixth largest economy in the world. The country has
favourable demographics with the largest working population; ~67% of the total population in working
age group of 15-64 years as on fiscal 2019 (Source: World Bank data indicators). In fact, India’s
working population is more than total population of countries such as Russia, Brazil and the United
States (US). Going forward, the working population is expected to increase further in the long run,
thereby driving consumption and growth.

Fiscal 2021’s fourth quarter GDP growth estimate is at 1.6%, having turned positive in the second half
of the year. GDP by 7.3% for fiscal 2021 as per the NSO’s provisional estimates, a consequence of
economic slowdown led by the pandemic. Despite the mild recovery, the Indian economy is still
damaged due to the fierce second wave in the first quarter of fiscal 2022 that led to localised lockdowns
in most states.

Nuances of GDP growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change © L lf | _ GDP | 8 82 7.268 40 -7.3—
Agricultur Private x
° 06 #63 5 29 43 3.6 consumpti 74 73/74 81 55 -91
on |
Governme
Industry 9.8 68 62 84 -18 -5.6 mt .| 68 |122| 15 |92|79| 33
consumpti
on
Manufactu a Fixed
ring 12879 59 | 69 | -24 | -7.2 investmen 5.2 1019.3 10 54 | -108
Ses | 13.8 13 | 5.1 | 13 25 “8.5 | Exports 56 5 47 125. 3.3 | -5.0 |
Equaryings

 

Services 9.6 0 755 81 75 | 73-81

s s_| 9.6 5_| 8.1 >| 7.3 | Imports | -5.9 4 | 17.6 15.4 -0.8 | -13.6
Source: Central Statistics Office (CSO), CEIC, CRISIL Research

Slight rebound in the second half
132
India’s GDP rebounded in the second half of fiscal 2021, up 0.5% and 1.6% on-year in the third and
fourth quarters, respectively.

Though the economy shrank as a whole in fiscal 2021, agriculture/ allied activities, electricity, gas,
water supply and other utility services expanded. Contact-intensive trade, hotels, the transport and
communication sector, and broadcasting services were hit the most and de-grew through the fiscal.
Construction, a labour-intensive sector, was severely hit in the first half, but rebounded in the second
half. Consequently, the pandemic pushed gross value added (GVA), the supply-side measure of the
economy, of most sectors back by more than a year. GVA growth printed at -6.2%.

The situation remains grim. Dispersion of Covid-19 cases in the first quarter of fiscal 2022 reminds us
of the September 2020 peak. But there is one critical difference: the number of cases appears to have
exceeded the peak by over 4x, highlighting the enormous burden and reinstatement of lockdowns and
restrictions. The impact is evident in high-frequency indicators, which continued to weaken in May.

The first half of fiscal 2022 will be supported by a base effect, though materially clouded by the
pandemic’s spread. Global growth and acceleration in vaccinations will support growth. However,
continuation of the second wave and possible future waves ascribe a downside risk to CRISIL
Research’s forecast of 9.5% domestic real GDP growth in fiscal 2022.

Our key projections

GDP growth (%) 8.0 8.2 72 6.8 42 a7 9.5
CPI (%, average) 49 45 3.6 3.4 48 6.2 5.3
CAD/GDP (%) -1.1 -0.7 -1.8 -2.1 0.9 Acs: 1.2
Exchange rate (Rs/$ 67 65.9 65 69.5 74.4 72.8 75.0
March-end)
10-year G-sec yield (%,
March-end) Leo 6.8 7.6 TS 6.2 6.2 6.5
F: Forecast

Source: CSO, Reserve Bank of India (RBI) and CRISIL estimates; CPI: Consumer Price Index; CAD: current
account deficit; G-sec: government security

Lower rupee volatility with rising forex reserves

India’s forex reserves swelled ~106%, at ~6.8% compound annual growth rate (CAGR) in the past twelve years,
to $576 billion by fiscal 2021-end from $279 billion. Higher forex reserves have helped the Reserve Bank of
India (RBI) rein in currency volatility, since it provides a cushion during uncertain market events. For instance,
the rupee remained relatively stable during several periods of uncertainties triggered by events such as Grexit,
Brexit and a hike in interest rates by the US Federal Reserve (Fed). However, reserves came under pressure in
fiscal 2019 owing to a meltdown in emerging market currencies, led by the Turkish lira, and the apex bank’s
intervention in the derivative currency markets to arrest the rupee’s slide. Again, recently in fiscal 2021, the
rupee was under pressure due to the rising load of pandemic cases in India. Further, in April 2021, the exponential
spread of the cases led to the domestic currency averaging 74.5/USD, depreciating 2.4% on-month from
72.8/USD in March 2021. Concerns over growth arising from the second wave and subsequent state-announced
lockdowns affected the exchange rate.

133
Rising forex reserves reined in currency volatility

 

600

st
Fa
iy

500 |

400

300 +

200 +

100 -

  

rill

Fy10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

mmm Foreign Reserves ($ Billion) ©—O—$/Rs Average

~
3

2
=

 

Source: RBI, CRISIL Research
CPI inflation under input-price pressure

Inflation based on Consumer Price Index (CPI) crossed the upper limit of the RBI’s target 2-6% range
and averaged 6.2% in fiscal 2021. In April 2021, CPI moderated to 4.3% from 5.5% in the previous
month, largely on account of a high base (inflation had risen to 7.2% on-year in April 2020). On a
seasonally-adjusted basis, CPI inflation rose 0.6% on-month in April, with the rise broad-based across
food, fuel and core inflation. Going forward, CRISIL Research expects CPI to moderate to 5.3% this
fiscal, compared with 6.2 in fiscal 2021, driven by lower food inflation. Brent crude is expected to
average $58-63 per barrel in calendar year 2021, which will not only raise fuel inflation, but also keep
core inflation high through elevated costs.

Yield on the 10-year government security (G-sec) averaged 6.07% in April 2021, 13 basis points (bps)
lower on-month owing to the RBI’s continuous effort to leverage innovative measures to keep bond
yields benign in the pandemic-hit economy. In its April 2021 policy review meeting, the central bank
announced a new instrument, G-SAP (Government-Securities Acquisition Programme), to help ease
supply pressure. CRISIL Research expects the 10-year G-sec yield to rise to 6.5% in March 2022,
given that supply pressures could have a bearing on yields once the RBI starts normalising liquidity.

CPI inflation (%, y-o-y)

 

6.2
ir 49 5.3

| FY13 FY14 Fy15 FY16 FY17 FY18 Fy19 FY20 FY21E FY22P
Source: CSO, CRISIL Research

 

134
Interest rates trend down

—— Repo rate (%) - MCLR 6 month (%) ——Bank credit growth (y-o-y %)

7.19

 

CRNWAHDONDO
rs

oes Se es fe fF eB BG eB eG eS He we ae
¥ FY - F F Yq YU FG FR F¥ ¥ QV GQ

SS = * ° oO
& 38 8 €@ § 32 8 &¢ 8 86 8&8 & @ &€ 8
5 uw = < S 5 z oO ° z a Ss a = <

Source: RBI, CRISIL Research

With several fundamental factors expected to trend in the right direction coupled with measures
initiated by the government, India’s long-term growth potential is expected to be healthy.

Raising the long-term potential

Reviving private consumption, lowering banks’ non-performing assets (NPA), improving the
investment climate and many such steps are critical to support domestic economic growth. Few steps
taken by the government in this regard are detailed below:

Post pandemic policies to revive the economy: The Indian government has initiated multiple measures to revive
the economy from the pandemic stress including SIDBI schemes for special liquidity support for micro, small
and medium enterprises (MSMEs); state compensation schemes; and increase in the threshold of default under
Section 4 of the Insolvency and Bankruptcy Code (IBC). These are short-term measures, but are likely to support
long-term growth as the economy recovers from the pandemic.

Union Budget 2021-22: The growth-centric and expansionary Union Budget 2021-22 focuses on improving
India’s mid-term growth trajectory. Some of the key announcements include:

Recapitalising public sector banks: The RBI proposed to infuse Rs 20,000 crore into state-owned banks
in fiscal 2022, given the increase in NPAs and slack credit demand.

Cleaning up bank books: The government announced the formation of an asset management company
and an asset reconstruction company to resolve stressed assets of public sector banks to consolidate,
manage and dispose stressed assets.

Reforms in manufacturing: Earlier, through the Atmanirbhar Bharat package, the government had
provided a boost to the manufacturing sector via the Production Linked Incentive (PLI) scheme. As
much as Rs 1.97 lakh crore is expected to be spent over the next five years in sectors such as electronics,
automobiles/auto components, pharmaceutical, telecom and textiles to enhance domestic
manufacturing capacities. The budget further announced customs duty rationalism, with a focus on
MSMEs .

Roadmap for public sector investment: The budget also pushed for infrastructure creation by
augmenting funds for the flagship National Infrastructure Pipeline and laying down a roadmap by
increasing capital expenditure, monetising assets and developing instruments for infrastructure
financing.

135
ey

Global Innovation Index ranking

 

Brazil POE) COTE) South Africa
2014 61 49 76 29 Oa
2015 70 48 81 29 60
2016 69 43 66 25 54
2017 69 45 60 22 57
2018 64 43 63 10 65
2019 66 46 52 14 63
2020 62 47 48 14 60
2021 of, 45 46 12 61

Source: Global Innovation Index by Cornell, INSEAD, WIPO, CRISIL Research

Monetary policy: The RBI’s Monetary Policy Committee (MPC) has decided to take an
accommodative stance for ‘as long as necessary’ to mitigate the impact of the pandemic, while
ensuring inflation remains within the target range going forward. In its June 4 meeting, the MPC
retained the rates, with the repo rate at 4%, reverse repo rate at 3.35% and marginal standing facility
at 4.25%. The RBI also announced more bond purchases under GSAP, one tranche for the current
quarter, and higher purchases for the second quarter of fiscal 2022. In addition, the RBI allowed
extension of the moratorium on term loan equated monthly instalments (EMIs) by a total of six months,
till August 31, 2020

Passage of key bills: The government has passed several key bills over the past few fiscals — the
Companies (amendment) Bill, 2020, which seeks to lower the penalties and peruse the need to
decriminalise some offences by making recommendations to the central government; the Banking
Regulation (amendment) Bill, 2020, which strives to amend the act with regards to cooperative banks;
and the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019, which aims at streamlining
issues of troubled companies, protect corporate debtors and prevent unnecessary revocation of
insolvency proceedings under the IBC

Boost infrastructure: After a sharp slowdown in the Indian economy in fiscal 2021 due to the
pandemic, infrastructure investments are expected to grow 17-20% in fiscal 2022, driven by
government push to roads, railways and urban transport

Manufacturing thrust: The government has made some progress in improving labour market
efficiency through programmes such as Skilling India and Make in India. The sector has shown strong
resilience despite the recent lockdowns and remained above the 50 expansion mark. However, the
reform process has been gradual in the manufacturing sector

Consumption growth: Given favourable demographics and rising disposable income, a burgeoning
middle class population is expected to help recover and eventually boost consumption growth in India.
However, keeping in mind the pandemic’s impact, inflation and interest rates need to be in check to
support consumption

Development of the financial markets: To develop the financial markets, the government has
instituted steps such as Jan Dhan Yojana, a better monetary policy framework, and passage of the
Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. Further, the Securities and
Exchange Board of India (SEBI) approved the framework for business trusts in India -- real estate
investment trusts (REITs) and infrastructure investment trusts (InvITs) framework, both of which are
new asset classes for investors. While REIT allows monetisation of real estate assets, InvIT helps
promoters monetise their completed infrastructure projects (having concessionaire/development
agreement). In the budget, the government approved 100% foreign direct investment (FDI) for
insurance intermediaries and increased FDI limit in the sector to 74% from 49%. This step, along with

136
the emerging digital gold investment options and the platform for infra-debt financing, will help
deepen the domestic financial markets

Digitalisation: The government has been quick to board the technology bandwagon with its Digital
India programme, which aims to speed up financial inclusion and deliver government services
electronically by increasing internet connectivity and improving online infrastructure. Digitisation and
digitalisation will create an efficiency-led growth spurt over the medium term. In its 2021-22 budget,
the government announced certain initiatives in the digital space, including building a world-class
fintech hub at Gandhinagar’s GIFT City, conducting first-ever digital census, and allocation of Rs 1.15
lakh crore for railway digitization.

Amid these reforms, India’s economic growth is currently recovering and is expected to pick up, after having

dropped 7.3% in fiscal 2021, as four drivers — people learning to live with the new normal, flattening of the
Covid-19 affliction curve, rollout of vaccinations, and investment-focused government spending — converge.

OVERVIEW OF INDIA’S ADHESIVES AND SEALANTS MARKET

Domestic market review

The Rs 134-136 billion (fiscal 2021) domestic adhesives and sealants market is broadly categorised
into 1) industrial and 2) consumer and bazaar adhesives. The industrial segment caters to B2B
industries such as packaging, footwear, paints, automotive, etc. The retail segment caters to industries
such as furniture/woodwork, building construction, arts and craft, electrical fittings, etc.

Market-wise split of adhesives (fiscal 2021)

   
 

Consumer/bazaar_“|
40-42%

—— Industrial
58-60%

Source: CRISIL Research

The adhesives and sealants market clocked 8-9% CAGR between fiscals 2015 and 2020, driven by
growth in major end-user industries such as packaging, construction, electronics and woodworking.
Construction investments logged 4-5% CAGR during the period, driven by an increase in spending on
roads, railways and urban infrastructure. Moreover, the industry reflected healthy growth (7-8%
CAGR) in the packaging segment. However, the adhesives market stagnated in fiscal 2021 because of
the pandemic, de-growing at 1-2% CAGR to Rs 134-136 billion. Fortunately, the decline was restricted
thanks to growth in food packaging and e-commerce industries, which catered to people forced to stay
at home and ordered online. Moreover, redecorating spend increased, leading to higher usage of
consumer and bazaar adhesives in the furniture market.

Our report focusses on the consumer adhesives market.

The Rs 53-55 billion (fiscal 2021) consumer adhesives industry clocked 8-10% CAGR between fiscals
2015 and 2020, driven by the rapidly growing furniture industry with booming real estate and rising
income levels leading to an increased demand for interiors. Increased investment in building

137

ay
construction investment also contributed to its growth. The woodwork segment is the largest end-user
for consumer adhesives, constituting ~55% of fiscal 2021 revenue. The market de-grew 1-2% in fiscal
2021, due to the pandemic-led reduced construction activity. However, the decline was restricted due
to increased demand from the furniture segment due to work from home, which led to higher demand
for home furniture. However, the economy recovered in the second half of fiscal 2021, leading to a
rise in demand from end-user industries. The consumer adhesives market is expected to recover in
fiscal 2022, following an expected GDP growth of 9.5% on-year and consequent recovery in
infrastructure and construction activity.

Industry-wise split of consumer adhesives (fiscal 2021)

Others
13%

  
  
  
 

Electricals and
electronics
8%

Foam and
Mattresses

8% Wood and wood

work, furniture
53%

Building
construction
18%

Others include Stationary/ arts and crafts, non-structural adhesion, and footwear
Source: CRISIL Research

The industry can be further classified based on technology into water-borne, solvent-borne, reactive
and hot melt adhesives. PVA (poly vinyl acetate), a water-borne adhesive, dominates the market (26-

28% of revenue) due to growing application in woodwork and furniture industry.

Product-wise split of consumer adhesives (fiscal 2021)

Consumer adhesives market (100%)

 

 

r 1
Water borne (26-28%) Solvent borne (31-33%) Reactive (41-43%)

 

 

Source: CRISIL Research

Among solvent-borne adhesives, PVC solvent cement is used for joining PVC pipes in the irrigation
and building construction segments. SBR (styrene butadiene rubber) is used as a sprayable adhesive
for foam and mattress applications. Chloroprene rubber has a wide range of applications from wood
working to leather to foam applications, forming 12-14% of the market.

138

wa
Reactive adhesives are dominated by epoxy adhesives (15-17%). These also find application in the
furniture, woodworking and tiling industries, and are used for their water and heat resistance along
with durability. These are also used in the electrical, electronics and automotive space. Cyanoacrylates
(FevikKwik) are used for bonding plastics, metal and rubber components. These are used in moulded
furniture, signboards and a wide range of industrial applications. Silicone sealants (12-14% of the
consumer adhesives market) are liquid adhesives. These create strong adhesive bonds resistant to
chemicals, moisture and weathering, and are widely used for basic household repairs and areas around
the sink or any piping due to their water-resistant nature.
Types of consumer and bazaar adhesives and their key applications
Water-borne
PVA adhesives
Woodworking, furniture, handicraft, paper labelling and wallpaper installations
Renato
PVC solvent cement/ adhesive
PVC pipe sealing for drinking water and sewer systems, drainage and ventilation systems, and
irrigation
SBR
Foam and mattress

Chloroprene rubber

Leather, foam and woodworking

BCP Cel hod
Epoxy adhesives

Furniture, woodworking , wood, metal, ceramic, marble, glass and rubber
Cyanoacrylates

Plastics, moulded furniture and rubber
Silicone

Drought proofing, doors and windows frames, wall crack fixing, air-conditioner
systems sealing and sanitary sealing
Source: CRISIL Research

 

Consumer adhesives market to clock 9-10% CAGR between fiscals 2021 to 2026

India’s consumer adhesives industry is expected to clock 9-10% CAGR between fiscals 2021 and 2026 driven
by economic recovery and growth in end-user industries. In particular, demand is expected to recover in fiscal
2022, growing at 14-15% on-year, on a low base of fiscal 2021, as the Indian economy recovers from the impact
of the pandemic. Overall, growth of the consumer adhesives industry is expected to moderate and log a CAGR
of ~8% between fiscals 2022 and 2026.

139
Consumer adhesives market on growth path

(Rs bn)
te te 84-86
S/o
(2%) 1a 18
RQ pai 63
. se se 54- so eS 53-55
[ :
FY15 FY20 FY21 FY22 FY26

Source: CRISIL Research
PVA dominates the consumer adhesives market

PVA continues to dominate in terms of its application in the furniture market. However, chloroprene
rubber has also gained significance in wood and joinery applications due to lower prices and faster
drying properties. Thus, we expect rapid growth in demand for chloroprene rubber close at the heels
of healthy growth in the furniture market. However, PVA will continue to dominate the market at least
till fiscal 2026, due to stronger bonding strength. Growing awareness of environmental friendliness of
water-based adhesives has led to the sustenance of PVA demand.

The silicone sealants segment is also expected to witness healthy growth driven by rising construction
investments and their wide application in sanitary ware and household repairs owing to superior
properties.

Healthy growth in the pipes and fittings market due to rising construction activity, coupled with rapid
increase in irrigation spends and replacement of metal pipes will drive demand for PVC solvent
cements.

Product-wise demand growth in consumer adhesives

 

 

 

 

 

 

 

 

PVA adhesives 7-9% Rising wooden furniture market
PVC solvent cement/adhesive 9-11% Growth in construction, irrigation spending,
replacement of metal pipes with PVC pipes
Growth in foams and mattress demand, due to
-139 ,
our eee rising demand for furniture
Chloroprene rubber 8-10% Rising preference in wood working and foam
P ° application
. Rising demand due to strong adhesion and a
Epoxy adhe ile wide range of applications in various surfaces
A wide range of applications in wood, plastic,
99)
Cyanoacrylates 73% metal, fabric and ceramics
a Rising construction usage and increasing
129
eon aaa applications in sanitary fittings repairs
Overall adhesives 8-10%

 

 

 

 

Source: CRISIL Research

140
Key demand drivers
Rising demand for wooden furniture to drive demand

India’s furniture market makes use of multiple types of adhesives, including PVA, SBR, chloroprene
rubber, cyanoacrylates and epoxy. The industry is expected to be driven by several factors, which are
contingent to parameters, such as growing urbanisation, increasing inclination towards more modular
and compact furniture, and rising demand for durable and hybrid furniture. All these factors are
expected to positively impact the growth of the furniture and thereby the consumer adhesives markets
in the near term.

Increased customer brand awareness and modern style requirements, coupled with rising player
collaboration through online channels, are expected to support demand. The wooden furniture is no
longer restricted to demand for dewans, backless sofas or chairs. Consumers today are looking for the
finest range of latest international designs and trends for not just the living room, but also for kids’
rooms, study rooms, home offices, outdoor areas and others. Thus, the furniture industry is now
witnessing an expansion in its demand not just for utility purposes, but more as a style quotient for
homes, offices and retail spaces.

Despite furniture demand coming to a standstill in the first quarter of fiscal 2021, due to the nation-
wide lockdown, the industry has already bounced back and reached pre-pandemic demand levels by
January 2021, driven by work-from-home and online classes of children. The pandemic made it
necessary for everyone to stay inside their homes to prevent the spread of the virus, which led to a
boom in household furniture demand. Several corporates helped their employees in setting up work-
from-home stations by providing allowances. Similarly, online classes pushed parents to set up proper
study tables for their children. This also led to an increase in online sales of furniture as people chose
to stay home due to the fear of the virus. The trend is expected to continue as companies consider
pivoting towards hybrid work models and increased acceptance of work-from-home. Overall, the
industry grew, albeit at a slower pace of 2-3% on-year in fiscal 2021.

Furthermore, CRISIL Research expects demand for wooden furniture to be driven by the anticipated
growth in affordable housing, commercial construction, rising income levels, desire for better standard
of living, favourable working-age population to influence spending, nuclearisation of families,
growing urban population, and better credit availability and increasing penetration of plastic money.
Demand is expected to be further propelled by the initiatives of PMAY (Pradhan Mantri Awas Yojana)
for increasing rural households.

CRISIL Research estimates demand for wooden furniture to expand at a CAGR of 10-12% between
fiscals 2021 and 2026.

Wood furniture market outlook (Rs billion)

(Rs
9-11% CAGR 10-12% CAGR

1400 1240-1270
1200 oan ett, So
1000 =e aaa 870

800 700-730 720-750

600 230-260

400

200

0
FY15 FY20 FY21 FY22P FY26P

P: Projected; Source: CRISIL Research

141
Demand for electronics to witness a sharp growth of 19-24% CAGR

The electronics industry uses adhesives for various applications, including conformal coatings,
protecting terminal electrodes, bonding of surface mount devices, among many others.

The electronics industry is one of the fastest-growing industries in India and, as per the Ministry of
Electronics and IT, the market size of the industry is Rs 4,950-5,000 billion as of fiscal 2021. The

industry is expected to grow at a strong pace of 19-24% over the medium term.

Outlook on electronics industry in India

Rs bn.
( ) CAGR: 23% CAGR: 19-24%
12,500-13,500
22le0
__-7%
——~~6,050-6,100
5,335 4,950-5,000
= H O U
FY15 FY20 FY21E FY22P FY26P

Source: Ministry of Electronics & IT, CRISIL Research
Infrastructure and increasing spending on building construction to drive construction activity

The construction industry makes use of adhesives and sealants across various applications, such as
flooring and carpets, tile insulation, garage doors, resilient flooring, wall covering, pre-finish panels,
perimeters of doors, drywall, lamination, and fixed window frames, among others. These applications
primarily make use of three types of adhesives and sealants namely, epoxy, silicone and
cyanoacrylates.

The industry is expected to grow at a medium pace, due to the government’s push for the sector. The
government has introduced multiple policies to boost the National Infrastructure Pipeline (NIP) and
the Affordable Rental Housing Complex (ARHC) scheme, along with Housing for All and other
investments in the industrial segment in a renewed push to the sector under the Atmanirbhar Bharat
programme. CRISIL Research expects the investments in the construction sector to grow ata CAGR
of 4-6% over the medium term.

Moreover, increasing demand from the real-estate sector and rising irrigation spending are expected to
drive the demand for PVC-solvent cement.

Increasing demand for non-hazardous, green and sustainable adhesives
Demand for bio-based / green adhesives, such as starch and lignin, is increasing rapidly, as consumers
are starting to realise the adverse effects of petroleum-based products. Consequently, manufacturers

are spending huge amounts of capital for research and development of such adhesives.

Currently, hybrid adhesives are being increasingly used by end-user industries of adhesives, as they
are considered to be green and sustainable alternatives for solvent-based adhesives.

142
Peer comparison

The consumer adhesives market is primarily dominated by Pidilite Industries, commanding 60-65% of
the market. However, each product category has several organised as well as unorganised players, with
organised players commanding over 75% of the market. The following table shows the various players
present in different product segments:

Product portfolios of some of the key players

Pidilite Industries and Astral Adhesives are present across all consumer adhesive categories, including
PVA, PVC solvent cement, SBR, chloroprene rubber, epoxy, cyanoacrylates and silicone, while the
rest of the players have presence across 2-3 categories only.

AN OVERVIEW OF INDIA’S PVC (POLYVINYL CHLORIDE) ADHESIVES MARKET

PVC adhesives, also known as PVC solvent cement, are adhesives, which are used for joining PVC
adhesives. The process is similar to welding, since it melts two pieces of PVC into a single piece. A
PVC adhesive consists of PVC resin, a solvent, and methyl ethyl ketone — which breaks the top layer
of the pipes and fittings to be joined together. The single largest application of PVC adhesives is in the
PVC pipes industry, where it is widely used to join pipes.

Plastic pipes are made of different types of polymers. The four key types are unplasticised polyvinyl
chloride (u-PVC), which represents 72-76% of industry demand by volume, chlorinated polyvinyl
chloride (CPVC) — 13-15%, HDPE — 6-8% and polypropylene (PPR) — 4-5%. Composite pipes, which
have a mix of metal and plastic layers, are also used for similar applications.

Types and applications of plastic pipes in fiscal 2021

 

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Coy Secu ere ra)
Perey HUE ISG Peay . Ly
ecu
Industrial

Industrial Lash ee
ications
eS ae phen ae
eee

 

 

 

 

PVC adhesives are used for joining u-PVC and CPVC pipes. There are three broad product categories
in the PVC adhesives market -PVC, u-PVC and CPVC, based on the category of pipe they are used
for. Similar to PVC pipes, the PVC adhesives business is a largely B2C business, where the key
customers are appliers, including contractors/plumbers, which are in charge of installing and fixing the
pipes and fittings at a particular site.

143
Domestic market review

The size of the Indian PVC adhesives market was Rs 6.81 billion as of fiscal 2020 while in fiscal 2021,
the market de-grew by ~9% to Rs 6.2 billion on account of demand slump as a result of Covid-19 pandemic.
The market has grown at around 10% CAGR, in line with the rapid growth in the plastic pipes segment,
which grew at a healthy CAGR of 10-11% over fiscals 2015 to 2020, reaching about Rs 330-340
billion. Industry growth was driven by rising demand from the construction and irrigation sectors. In
the construction space, increasing investments in water supply and sanitation (WSS) projects,
substitution of metal pipes with polymer pipes, and replacement demand propelled adhesive offtake.
Initiatives such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Accelerated Irrigation Benefits
Programme (AIBP), and Command Area Development and Water Management (CADWM)
Programme fuelled the use of PVC pipes, and hence PVC adhesives in the irrigation sector.

Additionally, the industry received a boost from the government’s Atal Mission for Rejuvenation and
Urban Transformation (AMRUT) scheme, which is aimed at providing basic services such as WSS
and ensuring every household has access to a tap with assured water supply and a sewerage connection.
As a result, demand for soil, waste and rain, and drainage pipes was robust. Among several variants of
plastic pipes available in the market, demand for u-PVC and CPVC, in particular, has been rising, due
to affordability, high quality and durability.

PVC Adhesives market by end-use in fiscal 2021

 

Others...
Sewerage
10-15%

 
   

Irrigation | Others, Pipes

46-49%  1-3% and
fittings,
97-99%

WSS and
Plumbing
36-40%

 

 

Others include PVC boards, sheets etc.
Source: CRISIL Research

In fiscal 2021, the PVC adhesives demand declined 9-11%, due to lower offtake from the plastic pipes
industry, amid the economic slowdown driven by the Covid-19 pandemic. Construction spending
across infrastructure sub-sectors shrank sharply in fiscal 2021, due to the pandemic, as supply chains
got disrupted and labourers employed at construction sites migrated back to their hometowns. This has
indeed affected demand for PVC pipes from the urban infrastructure space. However, urban housing
and infra segment aided recovery of demand in the third and fourth quarters of the fiscal. Infrastructure
and urban housing started seeing green shoots of recovery from October 2020 and saw a smart recovery
in the seasonally strong construction period of December to March 2021, because of improving
government spending coupled with a recovery in real estate, leading to robust demand growth.

Among product types, u-PVC and PVC adhesives have the largest share, accounting for more than
80% of the market, while the balance demand comes from the CPVC adhesives segment.

144
PVC Adhesives market by product type in fiscal 2021

CPVC adhesives
15-20%

   

u-PVC and PVC
adhesives
80-85%

Source: CRISIL Research
Key growth drivers
Plastic pipes, especially CPVC, has been gaining prominence in the past decade

In the past decade, one of the most important changes in the pipes industry was the large-scale shift
from metals to polymer-based pipes in most applications. This was especially true in the case of
plumbing and piping applications in the construction industry. This evolution has allowed for greater
research and development in specialised products by organised players for specific applications with
the development of polymers, such as CPVC for hot and coldwater plumbing, firefighting and
transportation of industrial fluids. The CPVC segment, which poses technological barrier to entry, has
also given branded players an opportunity to increase their market share. Until then, u-PVC dominated
the plastic pipes industry with several unorganised players posing stiff competition to branded players.

Low per-capita consumption of PVC

India has a very low per-capita PVC consumption of about 2.4 kg, compared with the global average
of 6 kg. We expect the per-capita consumption to rise and move closer to the global average, driving
PVC consumption.

Per capita PVC consumption across various countries

India MN 2.4 (ks)
South Africa EE 3.8
Brazil EE 7.3
Japan 3.7
Russia (ER 9.8
China SN 10.3
USA «12.7
South Korea SIN 14.7
SE
oO 5 10 15 20 25 30 35 40
Source: CRISIL Research

145
Progress of key metro projects as of fiscal 2021

Metro projects Status
Work for 3 lines in advanced stages, 5
Mumbai more lines under imipementation, total 14
lines approved
Pune First 2 phases on track, 3rd phase to be
awarded on PPP
Delhi Phase 3 almost complete, phase 4 — 3 out
of 6 corridors approval received
Phase 1 ext. line to begin soon, phase 2
oe yet under planning
Ht bad mene Phase 2 in proposal!
Phase 1 completed, phase 2 under
Bangalore
construction

Apart from the above-mentioned cities, metro lines are current under construction in Agra, Nagpur, Ahmedabad,
Kanpur, Navi Mumbai, and Patna.
Source: CRISIL Research

In fiscal 2017, the government launched the Smart Cities Mission to transform 100 cities in the country.
The project had an approved budget of Rs 480 billion over five years. The scheme focuses on providing
adequate and clean water supply, sanitation, solid waste management, efficient transportation,
affordable housing for the poor, power supply, robust IT connectivity, e-governance, safety and security
of citizens, health, and education. The selected cities were given a Central government assistance of Rs
2 billion in the first year and promised Rs 1 billion in each of the next four years, with a matching
contribution from the state governments.

Real estate sector

Real estate is a key end-user sector for PVC pipes in India. Over the past few years, demand in the real
estate sector has been sluggish. Developers had to delay giving possession of projects due to various
reasons, including approval delays and financial issues. The government passed the Real Estate
(Regulation and Development) Act in 2016 that put in place a regulatory system for the sector to boost
the confidence of customers. Moreover, The Pradhan Mantri Awas Yojana-Urban (PMAY-U), a scheme
coming under the Housing for All by 2022 programme, witnessed healthy construction over past three
fiscals, particularly in fiscals 2019 and 2020.

Substitution and replacement demand

Plastic pipes have several advantages over metal pipes. For instance, raw materials used in
manufacturing plastic pipes are derivatives of crude oil. Hence, prices of plastic pipes are correlated to
crude oil prices. The fall in crude oil prices has comparatively lowered raw material prices, and, thus,
plastic-pipe prices over fiscals 2015 to 2021. Superior real estate properties and low prices have
accelerated the substitution of metal pipes by plastic pipes. The increase in the availability of raw
materials (PVC, PE and PPR), following the commissioning of new petrochemical facilities in India
will further support the plastic-pipes industry. Another factor driving long-term demand is the
replacement of older pipes with plastic pipes.

Within the plastic pipes industry, CRISIL Research expects demand for PVC adhesives to be driven by
increasing application of CPVC pipes.

147
Investments in end-user segments to drive demand for PVC pipes and adhesives

Plastic pipes are primarily used in irrigation and WSS projects. Major demand sources are public-
sector projects undertaken by the Central, state and municipal bodies. Key growth drivers of PVC are
discussed below.

Among factors that will boost PVC demand, the topmost is increased spending by state governments
and municipal corporations to improve accessibility of water for a burgeoning population. Second
comes the heightened government thrust on irrigation, urban infrastructure and real estate. The Central
government has launched various schemes to support these three sectors. They include:

= PMKSY in the irrigation sector

= Jawaharlal Nehru National Urban Renewal Mission (JNNURM), AMRUT, Swachh Bharat
Mission and Smart Cities Mission in the urban infrastructure sector

= Housing for All scheme in the real estate sector

Apart from these, an increase in private sector investments, primarily in the real estate sector, will also
boost demand. CRISIL Research expects demand for plumbing pipes and fittings to grow, with
construction picking up pace in metros and tier-II and -III cities.

Irrigation

The irrigation sector is the key end-user segment for plastic pipes, accounting for 46-49% of demand.
Of India’s 160 million hectare (ha) of cultivated land, a little less than 50% is irrigated. Investment in
the sector is expected to increase in the next five years, due to the push from state governments to
increase irrigation penetration. However, in fiscal 2021, CRISIL Research expects investments to
decline 8-12%, as states divert funds towards healthcare and other social sectors due to the pandemic.
In fiscal 2022, the investment is expected to rise 10-15%, led by states such as Maharashtra, Karnataka
and Madhya Pradesh, whose need to increase irrigation coverage is urgent. Construction spending in
irrigation will rise to Rs 3.7 lakh crore over fiscals 2021-2025 from Rs 3.1 lakh crore during fiscals
2016 to 2020.

Urban infrastructure

Investments in urban infrastructure declined 8-12% in fiscal 2021, as the pandemic has resulted in lower
spending due to a loss of man days amid the lockdown, diversion of state funds to meet social and
healthcare spending and labour migration. In fiscal 2022, the investment is expected to rise 15-20%, as
the deferred projects of fiscal 2021 kick off and the government focusses on schemes, such as Swachh
Bharat Mission, Jal Jeevan Mission, AMRUT and metro projects, a bulk of which were under
implementation and have achieved financial closure. Over fiscals 2021 to 2025, CRISIL Research
expects urban infrastructure to see Rs 2.9 lakh crore of spending, a 1.35x increase from the previous
five fiscals. Half of the amount is expected to be in WSS projects, driven primarily by state governments
and through Central government-sponsored programmes, such as Jal Jeevan mission, AMRUT and
Swachh Bharat Mission.

After WSS, metro construction will attract the most investment in urban infrastructure development.
CRISIL Research estimates that spending in metro rail will increase 1.3 times to Rs 1 lakh crore over
the next five years. The bulk of these projects are under construction and have achieved financial
closure. The lockdown and migration of labour drove investment lower in fiscal 2021. However, the
projects that were deferred this fiscal are expected to restart in the next fiscal. A number of projects
announced and being implemented by various state governments will drive the medium-term growth of
the sector. A new metro rail policy was announced in the Union Budget for fiscal 2018, which is
expected to attract the private sector into the segment.

146
Demand for PVC adhesives to be driven by rapid growth in plastic pipes industry

CRISIL Research expects PVC adhesives market to grow at a 9-11% CAGR between fiscals 2021 and
2026, due to increasing demand from the plastic pipes market. The market is expected to recover in
fiscal 2022, growing at 16-17% on-year, due to an economic recovery after Covid-19 and the
consequent rise in construction activity, which will lead to demand increase for pipes and fittings.

Outlook on PVC adhesives market in India

 

(Rs. Billion)
6at To74
4n
FYts FY20 FyY2t FY2Z2F FY2GP

P: Projected Source: CRISIL Research

In particular, the CPVC adhesives segment is expected to witness the maximum growth during fiscals
2021 to 2026, as CPVC pipes in India are still at a nascent stage and have huge potential due to factors,
such as longevity, fire resistance, corrosion- and lead-free nature, and the ability to withstand high
temperatures.

u-PVC adhesive demand will be driven by growth in the u-PVC pipes business, growing at an 8-10%
CAGR between fiscals 2021 and 2026. These pipes find application in agriculture and plumbing for
potable water supply and sewerage. Continuous replacement of galvanised iron pipes with these pipes
has supported healthy demand growth in the past. Features such as affordability and longer life
compared with metal pipes have aided this segment. Government initiatives, such as AIBP (Accelerated
Irrigation Benefits Programme), also provide growth potential.

Overall, the share of the CPVC segment is expected to increase to around 15% from the current levels.

Expected growth in PVC adhesives by segment

(Rs. BaBon)

>

an
coclont

ae

re

Se
Fv22P FY26P

uPYC and PVC =C-PVC

P: Projected Source: CRISIL Research

148
Peer comparison

Even while the PVC adhesives market is at an early-growth stage, competition has been growing with
new companies entering the market. However, the organised sector dominates on the back of the
increased brand awareness of end users.

The market has both core manufacturers and pipes and fittings players who have entered the PVC
adhesive manufacturing space. While leading manufacturers include HP Adhesives Ltd., Astral
Adhesives, and Ashirvad Pipes Pvt. Ltd., the latter category has Prince Pipes, Apollo Pipes, Jain
Irrigation, and Supreme Industries, among others. However, these players manufacture very small
volumes as compared with core manufacturers. Though the market is dominated by organised players,
there are a large number of unorganised players who cater to small contractors and plumbers looking
for low-cost products.

HP Adhesives Ltd. is the largest manufacturer, having 14-16% market share followed by Astral
Adhesive with a share of 11-13%. Both players offer a wide range of solvent cements for various types
of plastic pipes and fittings. Pidilite Limited and Ashirvad Pipes Pvt. Ltd. are also among the major
manufacturers of PVC adhesives in the Indian market.

Product portfolios of some of the key players

Below is the product profile of the key players in the segment:
Key players and their product offerings

HP Adhesives Ltd PVC: Stongweld 300, 304, 305, 311, 317, 319 (for 4-18 inch
diameter pipes), HP Regular Duty Clear cement (for all pipes
up to 12 inch diameter)
u-PVC: 904, 905, Aqua Plus, 911, 917, Gold (for 4-18 inch
diameter pipes)

CPVC: Gold Yellow, 914 Heavy Duty (for 2-12 inch diameter
pipes)

Astral Ltd Weld-On 705 (industrial grade for 4-6 inch diameter pipes),
Weld-On 500 CPVC, Weld-On 100 u-PVC, Solvobond (for
smaller pipes and PVC components), Amrow u-PVC (drainage
pipes), Plastiweld (for pipes that can withstand up to 60 degrees
Celsius), Truzo CPVC

Ashirvad Pipes Pvt Ltd One Step UPVC Blue Medium Solvent Cement, Purple Primer
Solvent Cement, Ashirvad FlowGuard-Plus® CPVC, 2 Step
CPVC Solvent Cement Orange Coloured, UGD Solvent
cement, SWR Solvent cement

Prince Pipes and Fittings Ltd Superfit PVC Pipe adhesive tubes (25-100 ml), bottles (25 ml-
litre), can (5 litres), tins (50 ml-1 litre)

Jain Irrigation Systems Ltd Perma Fix Solvent cement for u-PVC pipes available in 10 ml
to 5 litres packaging

Supreme Industries Ltd Silbond PVC (regular medium and heavy bodied solvent
cement, Silbond CPVC (Medium and heavy-bodied solvent
cement)

Source: Company, CRISIL Research

Pipe manufacturers such as Supreme Industries, Prince Pipes and Jain Irrigation have a smaller share in
the PVC adhesive market, while adhesive manufacturers such as HP Adhesives Ltd., Astral Adhesive
and Ashirvad Pipes enjoy brand awareness and loyalty because of their long-standing presence. The
pipe manufacturers are trying to gain market share by leveraging their established network of
distributors and dealers.

149
As of September 30, 2021, we are operating out of our manufacturing facility located at Village
Narangi, Raigad (Maharashtra) which is a multi- product manufacturing facility. Our manufacturing
facility is strategically located in close proximity to Jawaharlal Nehru Port Trust (JNPT) from where
we receive our supply of imported raw materials as well as from where we export to international
market. During the FY 2020-21, we have sold our products in 21 countries namely, Bahrain,
Bangladesh, Ghana, Greece, Iraq, Kuwait, Mauritius, Nepal, Nigeria, Oman, Philippines, Qatar,
Republic of Malawi, Saudi Arabia, Taiwan, Turkey, UAE, Uganda, UK, USA and Yemen. Export to
these countries was halted during the month of April 2020 due to nationwide lockdown imposed on
account of the COVID-19 pandemic. We intend to expand our manufacturing capacity at Village
Narangi, Raigad, Maharashtra to cater to the growing demand for several product categories. For
further information, see “Our Business — Proposed Expansion Plans” and “Objects of the Offer”
beginning on pages 161 and 94, respectively.

The table below sets forth certain key operational and financial metrics for the periods indicated:

(@ in Lakhs, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Fiscal 2019 Fiscal 2020 | Fiscal 2021 Six months
ended
September 30,
2021
Revenue 8,741.75 9,547.93 11,816.16 7,051.58
EBITDA 870.09 691.95 1,768.67 734.38
EBITDA margin 9.95% 7.3% 14.97% 10.41%
Restated profit for the year 400.07 (467.05) 1005.97 310.24
Restated profit for the year as 4.57% (4.89) % 8.51% 4.40%
% of Revenue (PAT margin)
Capital employed 3890.51 3,803.21 4,992.25 5,503.23
ROCE (%) 20.5% 12.1% 31.6% 10.8%*
ROE (%) 27.3% (188.0)% 79.5% 8.3%*
Debt-to-Equity ratio 1.61 13.93 3.33 0.79

 

 

*Not annualised
Strengths

Consistently growing company with established brand presence

Our Company has grown from a single product to a multi- product adhesives company with sales
across India (through pan-India distribution network) and also in international markets. Our revenue
from operations has grown from INR 355.96 Lakhs in Fiscal 2010 to INR 11,816.16 Lakhs in Fiscal
2021, registering a CAGR of 37.5% in last 11 years. Over the years, our Company’s brands “HP” and
“Strong Weld” in PVC adhesives product category have gained increasing acceptance on account of
high product quality and efficient pricing. Despite Fiscal 2021 being impacted by COVID-19, our
revenue from operations have grown by 23.75% between Fiscal 2020 to Fiscal 2021. This brand image
has enabled us to introduce newer product categories through the existing distribution network initially
and then to a larger customer base with an established goodwill. Increasing acceptance in newer
product categories due to high quality and efficient pricing has further established Company’s brand
reputation.

Wide Product Portfolio and multiple SKUs

When we started our business activities, we only had one product category i.e. PVC, cPVC and uPVC
solvent cement. Over last few years, we have expanded our product portfolio to multiple product
categories including silicone sealants, synthetic rubber adhesives, PVA adhesives and other sealants.
Having a wide portfolio of product categories enables us to cross-sell to a large customer base (which,
in our case, are majorly distributors) who in-turn reach out to large number of retail counters for serving
the appliers and eventual end-customer. Having a wide product portfolio also enables our Company to

151

a
OUR BUSINESS

Some of the information in this section, including information with respect to our business plans and
strategies, contain forward-looking statements that involve risks and uncertainties. You should read
“Forward-Looking Statements” on page 18 for a discussion of the risks and uncertainties related to
those statements and also “Risk Factors”, “Restated Financial Statements” and “Management's
Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 28,
202 and 275, respectively, for a discussion of certain factors that may affect our business, financial
condition or results of operations. Our actual results may differ materially from those expressed in or
implied by these forward looking statements. Unless otherwise indicated or the context otherwise
requires, the financial information included herein is based on or derived from our Restated Financial
Statements included in this Prospectus. For further information, see “Restated Financial Statements”

beginning on page 202. Unless the context otherwise requires, in this section, references to “we”,
“us”, “our”, “our Company” or “the Company”, refers to HP Adhesives Limited. Unless otherwise
indicated, industry and market data used in this section has been derived from the report titled
“Assessment of Adhesives and Sealants market in India” dated November 2021 (the “CRISIL
Research”) prepared and issued by CRISIL Limited commissioned by us in connection with the Offer.
Unless otherwise indicated, all financial, operational, industry and other related information derived
from the CRISIL Research report and included herein with respect to any particular year refers to

such information for the relevant calendar year.

Overview

We are a fast-growing multi-product, multi-category consumer adhesives and sealants company. For
our largest product category — PVC solvent cement, we are amongst the leading manufacturing
companies in India in the consumer/ bazaar segment of the adhesive industry. (Source: CRISIL
Research).

We manufacture a wide range of consumer adhesives and sealants such as PVC, cPVC and uPVC
solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket
shellac, other sealants and PVC pipe lubricant which are sold across India, through an extensive
distribution network of distributors, and exported also to several countries, through network of
distributors and direct customers. We also manufacture these products for select large PVC pipe
manufacturing companies under co-branding or private label on order basis. Apart from the above
products, we also sell ancillary products like ball valves, thread seal and other tapes and FRP products
for drainage and architectural solutions that are distributed along with our products to the end-
customers through our distribution network.

The aforesaid adhesives and sealant products have applications in multiple industries such as plumbing
and sanitary, drainage and water distribution, general purpose building/ construction and interior
operations as well as for glazing operations, woodwork, footwear, automotive, foam-furnishing and
other varied industries.

We have a robust business model aimed at consistently expanding our product portfolio by introducing
new product categories as well as SKUs to cater to multiple end-use applications which are sold
through our distribution network across India. With strict focus on product quality and long-standing
track record in the distributor network, we have an established brand image which helps us in
penetrating new product categories. We constantly engage with our distributor network through
marketing and promotional activities and also conduct a range of activities such as distributor meets,
retailer meets and plumber and carpenter meets which leads to promotion of our product brands. As of
September 30, 2021, our distribution network comprised of 4 depots situated in Delhi, Kolkata,
Bengaluru and Indore and more than 750 distributors who cater to more than 50,000 dealers in India.
Our sales team works closely with our distributors and end- appliers to obtain their insights and
feedback about the upcoming trends in the industry which enables us to formulate an effective strategy
for product development, sales, marketing and pricing.

150
efficiently compete with larger adhesive players in the market who also have a wide product offering.
Our constant efforts are focused towards continuously identifying market demands and introducing
relevant products with high quality. For the six months period ended September 30, 2021 and financial
year ended on March 31, 2021, PVC, cPVC and uPVC solvent cement generated revenues of INR
4,334.23 Lakhs and INR 8,443.65 Lakhs respectively which represents about 60.64% and 70.44%
respectively of our total sales. Silicone sealants, introduced in the year 2019, contributed
approximately 9.17% and 7.99% of the total revenue for the six months period ended September 30,
2021 and financial year ended on March 31, 2021 respectively. PVA adhesives and synthetic rubber
adhesives, introduced in the year 2018, together contributed about 7.25% and 5.33% of the total
revenue for the six months period ended September 30, 2021 and financial year ended on March 31,
2021 respectively.

Within each product category, we have multiple SKUs in terms of grades, pack sizes for various
applications thereby enabling us to meet the needs of diverse customer base. In PVC, cPVC and uPVC
solvent cement, we have 295 SKUs. Similarly in silicone sealants, we have 16 SKUs. In PVA
adhesives, we have 75 SKUs. Our wide range of SKUs from 10 ml tubes to 200 litre drums help us
cover both small jobs as well as project applications.

Focusing on multiple end-user industries

We have over the last few years introduced new product categories which have diverse end-use
applications. Initially when we started with PVC adhesives, we were primarily dependent on the PVC
and cPVC pipes industry (irrigation, plumbing and water transport) for its growth. Subsequently, we
have now established a good presence in silicone sealants, which has helped us to diversify into more
end-user industries such as automobiles, electronic devices and appliances, glass and glazing, external
weather sealing, general interior sealing, bathroom and sanitary, uPVC door and window industry,
ACP panel industry, wood working (in case of PVA adhesives) and furniture, footwear, handicrafts,
automotive, PVC flooring, AC ducting, upholstery, foam- mattresses, non-woven and thermal
insulation leather, (in case of synthetic rubber adhesives). This expansion has facilitated a diversified
product portfolio and has helped us create demand for our adhesives and sealants across various end-
user industries.

Diversified customer-base

Extensive distribution network across India catering to customers

We have established our distribution network strategically over the last several years to meet our goals.
Our distributors cater to retailers who, in turn, make the product available for end-users (typically
plumbers, carpenters, masons, glazing contractors, etc). Our sales team services the retail network
through the distributors by making regular visits. For the financial year ended on March 31, 2021 and
six months period ended on September 30, 2021, out of our total revenue from operations, our sales to
distributors was about INR 8,573.79 Lakhs and INR 5,293.21 Lakhs respectively which represents
71.52% and 74.06% respectively of our total sales. We have more than 750 distributors and no
distributor constitutes more than 5% of our total sales in Fiscal 2021 and six months period ended
September 30, 2021. Top 10 distributors contributed not more than 20% of total sales in Fiscal 2021
and six months period ended September 30, 2021. Our distributors are also spread across the country
having presence in 23 states and 4 union territories.

Established presence in International markets

It is our Company’s philosophy to develop and manufacture good quality products. This has helped
our Company to develop and grow the exports business consistently. Our Company has received the
prestigious NSF International certification in the year 2011. NSF is considered as a benchmark of
quality and safety for products linked to drinking water distribution. Our customers in international
markets are primarily from Middle East and Indian sub-continent and we have increasing presence in
USA, Africa, South-East Asia and Europe. These customers are large distributors or organized retailers
in their respective countries and our products are well accepted by these customers because of high
quality. Our exports business constitutes 17.20% and 11.51% of sales in the Fiscal 2021 and six months

152

a
period ended September 30, 2021 respectively and has grown 17.30% CAGR over last 11 years. As of
March 31, 2021 and September 30, 2021, we have sold our products in 21 and 17 countries respectively
in spite of the impact due to the pandemic.

Institutional sales to select large players

Due to our emphasis on product quality and efficient manufacturing at competitive pricing, select
players from the end-user industry have relied upon our Company to procure adhesives for their
markets. This business opportunity has helped us to develop larger customer base for our products. We
have business relationship with large PVC pipe companies in this segment for over a decade. These
products carry a co-branding/ private label strategy further strengthening our market position even in
our own channel. These large customers are generally PVC pipe companies whose validation creates
additional brand strength for us.

Synergy of young and experienced management team with a committed employee base

We have a strong management team with considerable industry experience. Our Promoters, Mrs.
Anjana Haresh Motwani and Mr. Karan Haresh Motwani have been instrumental in the growth of our
business. Our Promoters have, between themselves, over four decades of experience in the adhesives
industry. Mr. Karan Motwani, who joined the business in 2007, has 14 years of experience in this
industry and has played a key role in introducing new product categories and expanding distribution
network across the country while continuing to strengthen the presence in international markets. We
are backed by a synergized crew of experienced and young support team which has been built up over
the years and has been contributory in achieving the goals of our Company.

Our key business functions like sales, production, finance, HR and supply chain play key role in
efficient day-to-day operations of the Company. We endeavour to maintain a balance of highly
experienced and young professionals in the team. Our Board of Directors includes a combination of
Management executives and independent members who bring in significant business expertise
including in the areas of administration and management, manufacturing, finance, compliance and
audit.

As we are a fast growing organization, our team size has increased considerably in the last few years,
particularly our sales team. We have a well-defined organization structure including our sales team.
We have a cordial relationship with our employee base across offices, sales depots and manufacturing
location.

Efficient manufacturing set-up with scope for expansion

Our manufacturing facility is located at Village Narangi, Raigad, Maharashtra which is at a distance
of about 80 kms from Mumbai, Maharashtra. The land where our manufacturing facility has been
established is owned by our Promoters and the same has been licensed out to our Company. Over last
few years, we have expanded our manufacturing capacities by making incremental additions to our
equipment with growth in our business. We have also made consistent investments in automation of
our manufacturing facility which has in turn helped us in increased productivity.

Weare also in the process of expanding by setting up an additional unit having a proposed construction
area admeasuring about 4,532.57 sq. mtrs. (built-up) area on the adjacent plot. Our Company has
entered into a Leave and License Agreement dated July 9, 2021 between Mrs. Anjana Motwani and
Mr. Karan Motwani (as "Licensors”) and HP Adhesives Limited (as "the Licensee”) for occupying and
using the land located at 7/18, Village Narangi, Taluka Khalapur, Dist. Raigad — 410203 for a period
of 36 months, with a provision for automatic renewal for a further period of 24 months. Our
manufacturing facility is strategically located within proximity to JNPT port from where we receive
key raw material supplies.

153
Effective quality checks thereby reducing batch failure

We have developed rigorous quality control processes. We inspect all the raw materials we receive as
well as work-in-progress and final products. We have implemented internal procedures to ensure
quality control at various stages of production, from procurement of raw material, production to
inventory storage. Our manufacturing facility has personnel responsible for monitoring the parameters
of equipment, stability of materials, reporting any irregularities in the manufacturing process and
making adjustments accordingly. These levels of quality checks ensure maintenance of our brand value
for quality of products.

R&D set up for constant product improvement and new product development

Our Company has extensive research and development experience. We focus on developing cost
effective manufacturing processes as well as new and cost- efficient products. Our Company has a
dedicated team of research and development personnel which is continuously engaged in developing
new products and processes.

Strategy

Continue to introduce new product categories

As a growth strategy, our Company is focused to introduce new product categories to cater to more
end-users. This helps in strengthening the relationship with existing distribution network as they have
a larger product basket to offer to their customers, at the same time, we onboard new distributors in
untapped segments and regions. Identifying and developing new products and product categories is a
continuous exercise that the management team engages into as we believe that the market opportunity
is immense for high quality, competitively priced products in the Indian market.

Further expand our distribution network across India and globally

Over the last several years, our Company has constantly expanded the distribution network across the
country and this continues to be one of the core strategies of the Company to further expand the
distribution network. Having a wider product portfolio and an established brand presence in existing
products, provides confidence to new distributors to engage with our Company. While we believe in
growing the distribution network, proper area marking and financial credibility check is done before
appointing a distributor to ensure a good service and reputation in the market without hurting our
existing channel. Profile of every distributor that is on-boarded is matched with our well-established
criteria and the relationship with every new distributor is gradually built upon.

Further strengthen brand image

Over last several years, our Company has made consistent efforts to strengthen the brands “Strong
Weld”, “HP” and now in newer product categories like “Strong Seal” (for silicone sealant) and “Strong
Fix” (for PVA and synthetic rubber adhesives) by undertaking several marketing and promotion
initiatives. Our Company organises dealer and distributor meets, plumber meets in order to promote
the brand but no specific Brand promotion policy has been adopted. The promotion expenses incurred
by our Company in Fiscal 2018-19, 2019-20 and 2020-21 and six months periods ended September
30, 2020 and 2021 were % 42.44 Lakhs, = 314.45 Lakhs, = 11.75 Lakhs, = 2.03 Lakhs and 2 5.63 Lakhs,
respectively. Going forward, our Company will strive to further bolster this brand image by
undertaking marketing initiatives which will not only increase the visibility in the market but also
create a strong brand recall. Though the bigger product category of PVC, cPVC and uPVC solvent
cement has helped us establish in the market, increasing marketing and sales promotion activities for
newer product categories going forward will take our brand image to the next level.

Expansion of manufacturing facility

We are in the process of carrying out capacity expansion plans at our existing manufacturing facility
at Village Narangi, Raigad, Maharashtra to aid our growth efforts and pan-India presence. We intend
154
to use a part of the Net Proceeds towards expansion of our manufacturing facility. For further details
on the expansion, please refer to the chapter titled “Objects of the Offer” beginning on page 94 of this
Prospectus.

Increasing the size of the field staff will help secondary penetration

Our key focus is to increase our penetration in the markets where we currently operate by replicating
the same proposition that has helped us grow in the past. There is significant untapped opportunity in
rural and semi-urban areas that can be capitalized by expanding our sales team. As of September 30,
2021, we had a strength of 198 sales team members and intend to keep growing the team.

The sales team of our Company consists of VP — Sales and Marketing, Product Heads, Deputy General
Managers, depot heads, area sales managers and frontline sales officers. Generally, the depot heads,
area sales managers and frontline sales officers are graduates, Product Heads, Deputy General
Managers are post graduates with relevant industry experience and the VP — Sales and Marketing is a
post graduate in business and marketing with experience of over 22 years in sales & marketing,
business development, product promotion and client relationship management in pharmaceuticals,
paint and adhesives industries. The entire sales team is permanent feature of our business operations.
The expense ratio of sales team to total employee expense for FY 2018-19, 2019-20, 2020-21 and six
months period ended September 30, 2021 is 36%, 43%, 49% and 61% respectively.

Enhancing demand by incentivizing the product end- user i.e., applier

Our sales are driven by the appliers that are typically plumbers, carpenters, masons and glazing
contractors. We offer incentives to these appliers through additional gifts on a select range of products.
We also incentivize the distributors based on purchase volumes and payment practices. We intend to
continue the marketing of our products through incentivization for the appliers which will help to
ensure more loyalty.

Plant automation to improve productivity

We intend to automize the process of manufacturing and packaging. The plant & machinery at the
facility under expansion is targeted to be more automated to reduce human intervention and thus
decreasing the scope of human error. The entire activity will lead to higher efficiency and production
output.

Technology integration for all business functions

We believe that through investments in our technology infrastructure, we have been able to increase
our operational efficiencies and achieve economies of scale. We also believe that such initiatives will
drive cost efficiencies, improve customer service, reduce manual workload and integrating our
business functions thereby improving our business processes.

Continue to drive business based on people-centric policies and practices

We believe members of our workforce are a key part of our business success and therefore we maintain
people-centric policies and practices. While our management leads us ably in achieving our growth
and expansion goals, identification and retention of key talent is crucial to our business. We will
continue to strive to provide a positive, safe and collaborative working environment to our employees
and invest in structured training and upskilling programs for them. All upskilling programs are
conducted on need based by our Company through its VP — Sales and Marketing or Product Heads or
Deputy General Managers for imparting training to its junior staff which includes both classroom
training and on-field training. These trainings cover subjects like product knowledge, improving sale
techniques, improving dealer loyalty techniques, market intelligence gathering techniques, etc. This
will promote a culture of meritocracy and diversity and drive them give their best output.

155
Business Operations

Product Portfolio
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The portfolio of our products comprises of PVC, cPVC and uPVC solvent cement, synthetic rubber
adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants and PVC pipe
lubricant. Majority of our products are sold under the brand names “HP”, “Strong Weld”, “Strong
Seal” and “Strong Fix”.

The below mentioned table sets out the production sales turnover of our primarily manufactured
products for the periods indicated:

 

 

 

 

 

(Rs. in Lakhs)
Product Category Fiscal 2019 Fiscal Fiscal Six months period
2020 2021 ended September
30, 2021
Sales Sales Sales Sales Turnover
Turnover Turnover | Turnover
Consumer and Bazaar 6,798.17 7,355.79 9,082.68 4,852.45
Adhesives
- PVC, cPVC and uPVC
Solvent Cement
- Synthetic Rubber
Adhesive
- PVA Adhesive
Consumer and Bazaar Sealants 100.18 590.96 1,021.12 668.88
- Silicone and allied
sealants
- Other sealants
PVC Pipe Lubricant 170.90 209.95 182.89 91.61

 

 

 

 

 

 

 

Our Manufactured Products
Consumer and Bazaar Adhesives

PVC, cPVC and uPVC solvent cement

156
PVC, cPVC and uPVC Solvent Cement is a solution of solvents and additives combined with resins.
A more common way to distinguish solvent cement is by viscosity. Solvent cement viscosity can be
classified into the following three categories:

a Regular bodied (RD)
(ii) Medium bodied (MD)
(iii) Heavy bodied (HD)

PVC, cPVC and uPVC solvent cement is broadly used in PVC, cPVC pipes, uPVC pipes, electrical
piping systems. We manufacture the solvent cement in all three viscosity categories in different colours
including clear, yellow, orange, blue, grey and purple. The following table elaborates our product
portfolio of solvent cement:

 

Product Brand Name Type Application/ End Use

 

- PVC pipes and fittings for
irrigation, sewage and
drainage

- Electrical piping system

PVC

 

cPVC pipes and fittings for
PVC, cPVC and - HP cPVC hot and cold plumbing

uPVC Solvent - STRONG WELD system
Cement

 

uPVC pipes and fittings for
uPVC high pressure plumbing
system

 

Primer & Cleaner All Purpose

 

 

 

 

 

 

Synthetic Rubber Adhesives

Synthetic Rubber (SR) adhesives provide the advantage of high initial tack. They are based on
adhesives that exhibit the ability to bond themselves to different surfaces. These dry surfaces bond
immediately on application of the adhesive. Once the bond has been made, it is typically pressed or
rolled to insure complete contact. The high initial tack of SR adhesives makes them ideal for a variety
of applications.

We manufacture brushable and sprayable contact adhesive in different grades in clear, yellow and
brown colours. The following table elaborates on our product portfolio of contact adhesive:

 

Product Brand Name Type Application/ End Use

 

Furniture
Footwear
Brushable Handicrafts
Automotive
STRONG PVC flooring
FIX AC ducting
Upholstery
Sprayable Foam and Mattresses
Non-woven
Thermal insulation

 

SR Adhesive

 

 

 

 

 

 

157
PVA Adhesive
Polyvinyl acetate, commonly known as wood glue or carpenter's glue, is a widely available adhesive
used for porous materials like wood, paper, cardboard and crafts.

We manufacture various grades of PVA adhesive including gold, silver and aqua. The following table
elaborates on our product portfolio of silicone sealant:

 

 

 

Product Brand Name Application/ End Use
PVA Adhesive STRONG FIX Woodworking
Other general purposes

 

 

 

 

Sealants
Silicone and Acrylic Sealant

Silicone sealant is a liquid form of adhesive, it looks, feels and acts like a thick gel. It has a different
chemical make-up from other organic polymer-based adhesives. Unlike other adhesives, silicone keeps
its elasticity and stability in both high and low temperatures. Furthermore, silicone sealant is resistant
to other chemicals, moisture, and weathering. This makes it less likely to fail when building and
repairing objects.

Acrylic sealant is a sealing material, mainly obtained from acrylic resins. Overcoat painting can be
carried out on acrylic sealant for interior and exterior decoration.

These sealants are commonly used to bind or seal surfaces such as plastic, metal and glass together.
Being resistant to high temperatures they are commonly used in automobiles, electronic devices, solar
panels, doors and windows. These are also widely used in glazing, external weather sealing general
interior sealing, bathroom and sanitary, and exterior applications in relation to construction.

We manufacture these sealants in various grades in clear, white, black, grey and customized colours.
The following table elaborates on our product portfolio of sealants:

Product Brand Name Type Application/ End Use
Automobiles
Electronic devices and
Acetoxy appliances
Glass and glazing
External weather sealing
General interior sealing
Bathroom and sanitary
UPVC and aluminum door and
window industry
ACP (aluminum composite
panel) industry

 

 

Silicon and STRONG
Acrylic Sealant SEAL Neutral

 

 

Acrylic

 

 

 

 

 

 

Other Sealants

We also manufacture gasket shellac, metal pipe-fitting sealants and PVC pipe lubricants. Gasket
shellac sealant is a slow-drying, hard setting liquid designed to coat, seal and repair most gaskets. It is
used on flanged surfaces, gaskets, threaded assemblies and hose connections. Gasket shellac are
manufactured in standard grade in black colour. Rubber lubricant is used for simple, quick, watertight
joint in drainage pipes. Metal thread sealants are used to make a leak-proof joint on threaded metal
pipes and fittings including crome plated bathroom fittings.

We sell the above products under our own brand names and also manufacture the same for select third-
party companies as per their requirements.
158
Ancillary Products
Ball Valve

A ball valve is a shut off valve that controls the flow of water by means of a rotary ball. By rotating
the ball a quarter turn (90 degrees) around its axis, the water can be blocked or released. They are
characterized by a long service life and provide a reliable sealing over the life span, even when the
valve is not in use for a long time. They are utilized the most when water needs to be shut off to carry
out cleaning or repair and maintenance of the water inlet or outlet lines. We outsource the
manufacturing of ball valves as it does not enjoy economies of scale in India. This outsourced as per
our specification and we sell them to our customers under our brand name.

Tapes

PTFE Tape

Polytetrafluoroethylene (PTFE) film tape, also known as Teflon tape or plumber's tape, is commonly
used in plumbing for sealing pipe threads. The tape is made in various widths and wound on a spool,
making it easy to wind around pipe threads. This tape lubricates allowing for a deeper seating and
unscrewing even after long periods of time.

Typically, the tape is wrapped around a pipe thread multiple times before the pipe is screwed into
place. It is commonly used commercially in applications including pressurized water systems and
central heating systems. We outsource the manufacturing of PTFE tapes and get them made in various
sizes and white and yellow colours. We sell them under our brand name.

Masking Tape

Masking tape is a type of pressure-sensitive tape made of a thin and easy-to-tear paper, and an easy
release pressure-sensitive adhesive. It is available in a variety of widths and lengths. It is used mainly
during painting, carpentry and other interior project work to protect expensive materials and surfaces
like glass, laminates and others from getting stained.

The adhesive is the key element to its usefulness, as it allows the tape to be easily removed without
leaving residue or damaging the surface to which it is applied.

We outsource the manufacturing of masking tapes in various sizes and sell in our own brand name.

FRP Products

Fiber-reinforced plastic (FRP) is a composite plastic made up of polymer that is supported with fiber
glass and polyester resins for strength. Composite plastics refers to those types of plastics that result
from bonding two or more homogeneous materials with different material properties to derive a final
product with certain desired material and mechanical properties. Fiber-reinforced plastic is useful in
terms of corrosion protection because it helps in preventing corrosion due to force application and
deformation such as stress corrosion cracking. Fiber-reinforced plastic may also be known as fiber-
reinforced polymer.

The portfolio of FRP products includes:

@ FRP Manhole Covers

(ii) FRP Water Gully Cover
(iii) FRP Recessed Cover

(iv) FRP Overhead Tank Cover
(vy) FRP Molded Gratings

159
Manufacturing Facility

We operate from our manufacturing facility in Village Narangi, Raigad, Maharashtra. Our
manufacturing facility is supported by infrastructure for storage of raw materials, manufacture of
adhesives, storage of finished goods, together with a quality control and research & development
laboratory.

We source raw materials from suppliers based on quality specifications and cost effectiveness. Easily
available materials are procured from suppliers located in close proximity to our manufacturing
facilities to minimise inward freight costs and reduce the cost of raw materials. Whereas certain
chemicals, resins and additives are imported from preferred suppliers across China, Germany, Japan,
US etc.

The power requirements for this facility are met through the local state power grid and power back-

ups to operate packaging lines and general lighting, while water is procured from the third-party water
supplier.

 

160
Capacity and Capacity utilization

The following table sets forth certain information relating to our capacity utilization of our
manufacturing facility calculated on the basis of total installed production capacity and actual
production as of for the periods indicated below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products Units | __ 1-Apr-18 to 31-Mar-19 T-Apr-i9 to 31-Mar-20 T-Apr-20 to 31-Mar-21
Capacity | Productio | Utili | Capacity | Productio | Utiliza| Capacity | Productio | Util
a zatio n tion n zatio
n n
Solvent Cement | Ltrs
(PVC 48,79,059 | 26,14,953) 54%| 48,79,059| 27,57,403| 57%] 60,98,824| 31,30,543| 51%
Adhesives)
Synthetic Rubber} K85_/ 19 49.990} 1,14,024| 6% | 18,0000] 3,11,425] 17% 18,00,000| 4,53,213| 25%
Adhesive
PVA Adhesives | Kgs 2,59,200 40,000} 15% 6,91,200 2,05,145, 30% 6,91,200 4,01,321| 58%
Silicon Sealant | Kgs 4,60,800 36,104] 8%] 4,60,800/ 2,81,430] 61%] 4,60,800] —3,85,432| 84%
Shellac Kgs | 1,03,680 7,400] 7%| — 1,03,680 6550; 6%]  1,03,680 21,032 | 20%
Other Sealant® | Kgs 2 z -| 2,18,880 10,344 5% | 2,18,880 8,124; 4%

 

*Initial trial batches of white and black sealant manufactured in solvent cement vessels only for FY19
As certified by M/s. Orbit Consultants & Valuers vide certificate dated September 15, 2021

The information relating to the installed production capacity of our manufacturing facility, as included
above and elsewhere in this Prospectus are based on various assumptions and estimates that have been
taken into account by the Chartered Engineer for calculation of our capacity. These assumptions and
estimates include the standard capacity calculation practice of the adhesives and sealants industry after
examining the calculations and explanations provided by us. The assumptions and estimates taken into
account include the following: (i) Number of working days in the FY: 288; and (ii) Batch per day is
considered on 8 hour working of the plant per day.

Actual production levels and utilization rates may vary from the capacity information of our
manufacturing facility included in this Prospectus and undue reliance should not be placed on such
information. Please see Risk Factor No. 37“Information relating to the installed manufacturing
capacity and capacity utilization of our manufacturing facilities included in this Prospectus are based
on various assumptions and estimates and future production and capacity may vary.” on page 37 of
this Prospectus.

Proposed Expansion Plans

In order to meet the growing demand for adhesives and sealants, we propose to expand our facility to
increase capacities for manufacturing our existing products and also begin manufacturing Epoxy
Adhesives and Spray Paint to further expand our market base.

This proposed expansion shall be on a land parcel that is owned by our Promoters and taken on Leave
and License basis by us, which is adjacent to our existing manufacturing unit. The unit is being set-up
for the purpose of manufacturing our existing products PVC, cPVC and uPVC Solvent Cement,
Synthetic Rubber Adhesive, PVA Adhesives, Silicone Sealant, Gasket Shellac, PVC pipe Lubricants
as well as begin manufacturing of new products such as epoxy adhesives and spray paint. Consistent
with past practice, we will look to add capacity in a phased manner to ensure that we utilize our capacity
at optimal levels.

Post completion of our proposed expansion plans, the expansion unit is expected to have an estimated
installed capacity of 8,265.60 KLPA of solvent cement and 11,908.40 MTPA of other adhesives and
sealants MTPA of other adhesives and sealants and is expected to be operational during Fiscal 2024.
Please also see the chapter titled “Objects of the Offer” beginning on page 94 of this Prospectus.

161

 
Given below are some of the material approvals which are required for the proposed Additional Unit
with their current status:

(a) License for expansion under the Factories Act, 1948: To be applied

(b) Consent to establish under Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention
and Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management and
Transboundary Movement) Rules, 2016 for manufacturing Silicon Sealant upto 150 MT/ month:
Obtained

(c) Consent to Operate under the Water (Prevention & Control of Pollution) Act 1981, Air (Prevention
& Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management and
Transboundary Movement) Rules, 2016 : Applied

The information on our proposed expansion plans are indicative and remain subject to the potential
problems and uncertainties that construction projects face including cost overruns or delays. We are in
the process of obtaining various consents, approvals and acknowledgements from regulatory
authorities that are routine in nature in relation to the proposed expansion at the Facility.

Also see, Risk Factor No. 1 “Our proposed capacity expansion plans relating to our manufacturing
facility are subject to the risk of unanticipated delays in implementation and cost overruns.” on page
29, and “Government and Other Approvals - Approvals applied for but not received ” beginning on
page 302 of this Prospectus.

Procurement of Raw Materials

The primary raw materials used in the manufacture of adhesives include solvents like acetone, methyl
ethyl ketone, cyclohexanone, toluene and resins and other additives. Primary raw materials for sealants
include silicon polymers, silicone oil, silica and catalysts. In Fiscal 2019, 2020 and 2021 the cost of
raw materials and components consumed represented 65.34%, 65.13% and 68.74%, respectively, of
our revenue from operations. Raw materials are primarily transported to the manufacturing facilities
by road. We source raw materials from a number of suppliers mainly based in and around the states in
which we have our manufacturing facilities. We also import a few raw materials including resins,
polymer and others from Japan, China, Germany and USA. The share of imported raw material as %
to total production for the FY 2020-21 and six months period ended September 30, 2021 is
approximately 17.1% and 26.99% respectively.

Manufacturing Process

Adhesives

 

Sica g Ae 7 beter and
Pa neeh6 fee Eri sd » Betty > Sg
MB Tey ia ati s

Inspection of Raw Materials: The incoming materials are inspected upon delivery pursuant to quality
control specifications. Raw materials are accepted and stored only after they have passed the relevant
quality control tests.

 

Mixing: Relevant solvents are selected and weighed pursuant to the product codes for each batch of
product to be manufactured. Solvents are then loaded and mixed. For PVA adhesives, water is mixed
with polymers and other raw materials are added in the mixer and mixed. Temperature controls are to

162
be followed as per the defined process to get the optimum output from the batch. Colour, as per the
requirement, is added after the mixture is mixed and the required viscosity levels are achieved.

Testing: Samples of the batches made are tested and inspected pursuant to the quality control
requirements and the product specifications in respect of density, viscosity, adhesion, flexibility, level
of drying and colour (if any).

Packaging and Storing or Transportation: After passing quality control tests, the solvents and
adhesives manufactured are packed, labelled and transported to the depots as per the inventory

management system.

Sealants

naam se Vessel Packaging and

Myatt g , storing or

Raw Material Transportation

Bdga reves

    

Inspection of Raw Materials: The incoming materials are inspected upon delivery pursuant to quality
control specifications. Raw materials are accepted and stored only after they have passed the relevant
quality control tests.

Vessel Preparation: Vessel is prepared along with the required raw materials in accordance with the
specifications of the product manufacturing norms.

Mixing: The prepared vessel is attached to the mixer for mixing, other additives are gradually added
to this mixture. Temperature is kept under check as per the manufacturing norms. Colour, as per the
requirement, is added after the mixture is mixed and the required viscosity levels are achieved.

Testing: Samples of the batches made are tested and inspected pursuant to the quality control
requirements and the product specifications in respect of density, viscosity, adhesion, flexibility, level
of drying and colour (if any).

Packaging and Storing or Transportation: After passing quality control tests, the sealants
manufactured are packed, labelled and transported to the depots as per the inventory management
system.

 

163
Inventory Management

Our finished products are stored on- site at our manufacturing facility and at our depots. We produce
a quantity of finished products that is determined based on a combination of confirmed and expected
orders.

Distribution Network and Sales

Our distribution network and infrastructure comprises depots operated by us, distributors that we
engage with and the appliers community in India. For the year ended March 2021 and six months
period ended September 30, 2021, we distributed our products across 23 states and 4 union territories
in India and we had depots located across 4 states in India.

Our depots operate as primary freight destination points and secondary freight origin points. Finished
products are dispatched from our manufacturing facilities to our depots and are subsequently
dispatched from our depots to individual distributors.

We supply our products to the distributors based on purchase orders issued. Each of our depots
comprises a depot head, area sales managers and frontline sales officers. The frontline sales officers
and area sales managers operate in the field and collect orders from distributors in their respective
areas, which are then posted on the CRM software. Upon receipt of orders, the products are dispatched
from the inventory maintained at the depot after due verification of the credit cycle of the distributor.
Inventory at the depot is replenished on arrival of products from the manufacturing facility, based on
the prevailing sales trends and demand forecast by the sales team.

Our Company’s international distributors sell our products under its brand names HP, Strong Weld and
others. These products are sold through their existing channel of customers where the responsibility of
promoting, selling, distribution and payment collection lies solely with such distributors. Our Company
supplies goods to its overseas distributors on cash against document (“CAD”) basis or letter of credit
(“LC”) or in some cases, on credit basis.

The domestic distributors sell our Company’s products under its brand names. These products are sold
through their existing channel of customers as well as new customers created by the secondary
marketing efforts by the Company’s sales team. Here the responsibility of promoting the products is
shared between the Company and our Company’s distributors whereas the responsibility for selling,
distribution and payment collection in the domestic market lies solely with the distributors. The
Company supplies goods to its domestic distributors on advance basis or in some cases, on credit basis.
The distributor agreements are for varied periods as per the understanding and relationship between the
Company and the distributor.

Engagements with distributors and the applier community

Our distributor network is well integrated with our marketing and promotional activities and helps in
strengthening our brand image. For instance, some of our distributors display advertising boards for
our products at their outlets to attract consumers. We also consistently engage with our distributors
and the appliers community by distributing branded merchandise and conducting a range of activities
such as carpenters’ meets and plumbers’ meets. We also incentivize distributors based on purchase
volumes and payment practices. See “Pricing” on page 164 of this Prospectus. Appliers are
incentivised through additional gifts on a select range of products. These engagements help us improve
our brand image, sales and applier’s loyalty.

Pricing

All materials are pre- printed with a prescribed Maximum Retail Price (“MRP”) which includes all
applicable taxes. A separate Distributor Price List (“DPL”) is circulated to all the distributors
indicating the amount for the products billed after standard discount. Distributors are offered various

164
types of discounts and incentives based on the volumes purchased and payment practices followed.
We offer turnover discounts to distributors on the basis of volume of business with select distributors
over a period of time. These discounts and incentives are typically in the form of credit notes at the
end of each Fiscal Year.

Logistics

Our raw materials and finished products are primarily transported by road. Our suppliers directly
deliver our raw materials to our manufacturing facility. We outsource the delivery of our products to
third-party logistics companies. We rely on freight forwarders to deliver our products from our
manufacturing facility to our depots and onwards to distributor outlets. We do not have long-term
contractual relationships with our freight forwarders.

Utilities

Our business operations require use of power. Our power requirement for our manufacturing facility
is sourced from the state power grid. Our manufacturing processes require uninterrupted supply of
power in order to ensure that we are able to manufacture quality products. To ensure uninterrupted
supply of power we have also installed back-up diesel generators at our manufacturing facility. We
require minimal amounts of water for our manufacturing activities and rely on third party water
supplier for the supply of water. Also see “ — Manufacturing Facilities” on page 160 of this Prospectus.

Brand building & Marketing

We have invested significantly in the promotion of the brands “HP” and “Strong Weld” and our sales
promotion expenses in Fiscal 2018-19, 2019-20, 2020-21 and six months periods ended September 30,
2020 and 2021 were % 42.44 Lakhs, = 314.45 Lakhs, = 11.75 Lakhs, 2.03 Lakhs and 25.63 Lakhs,
respectively representing 0.48%, 3.29%, 0.09%, 0.05% and 0.08% respectively of our revenue from
operations in such periods. We believe this investment in the promotion of our brand is one of the key
factors that has enabled us to build awareness, grow our network of distributors across multiple regions,
we will continue to benefit from the same historical investments in the brand as we execute our future
growth plans.

We utilise a number of avenues to promote our brand and products, including our network of
distributors and our relationship with the end- use appliers.

Technical Collaborations
We do not have any technical collaborations as on the date of this Prospectus.
Information technology

We believe that an appropriate information technology infrastructure is important in order to support
the growth of our business. Our IT infrastructure enables us to track procurement of raw materials, sale
of finished goods and orders from distributors. We utilize accounting and CRM software which covers
sales, purchase, inventory and financial reporting, across all our depots and the manufacturing facility.

Field Assist is a CRM software accessible through mobile and tablets on the Android platform, it is
used to track multiple areas of secondary marketing like field staff movement, geo tagging their visits
to retail dealers, punching their orders into the field assist system which are directly transferred to the
distributors. These distributors then dispatch the same material and acknowledge the same on the Field
Assist application. This gives us complete tracking of our sales team and the distributors dispatch
performance. We are also able to better anticipate the change in demand and trends as we are in a
position to analyse the retail product movement. Successfully completing all these processes
automatically generates primary order between the Company and distributors which are punched in
Field Assist application. As all primary orders are entered into this application, the use of this
application minimizes human errors at the time of placing orders.
165

a
Competition

The Indian adhesives and sealants industry has historically been dominated by few major players and
presents significant entry barriers. The major player of the industry is Pidilite Industries Limited. These
market entry barriers include the development of an extensive distribution network through long-term
relationships with distributors, marketing cost and activities and the establishment of a distinct brand
to gain product acceptance. We compete with such players on the strength of our distribution network,
quality, brand recognition and ability to leverage our distributor relationships to connect with the end-
use appliers.

We believe we are well-positioned to compete with these companies given our differentiated strategy
where we seek to fulfil unmet product requirements, while at the same time offering a wide range of
adhesive products across India. A significant amount of investment is required for the establishment
of brand reputation and to penetrate into the sales network in India. With over three decades of
operating history and the quality of our products, our product development capability and our range of
adhesives for different applications, we believe that we have the competitive strengths in the adhesives
market in India. For further information on the competition we face in the markets in which we operate,
please see the chapter titled “/ndustry Overview” beginning on page 132 of this Prospectus.

Quality Control

We place significant emphasis on quality control. Our quality management system with respect to our
manufacturing facility has been certified to conform to ISO 9001:2015 and NSF/ANSI 14
requirements, subject to periodic audits conducted by ISO and NSF.

We inspect the raw materials we receive, work-in-progress and final products. We have implemented
internal procedures to ensure quality control at various stages of production, from procurement of raw
material, production to inventory storage. Our manufacturing facility has personnel responsible for
monitoring the parameters of equipment, stability of materials, reporting any irregularities in the
manufacturing process or the final output and making adjustments accordingly. There is no formal
Return Policy adopted by our Company. However, as a good business practice, any products which
are not in usable condition due to any manufacturing defect before the stipulated expiry date are
accepted as returned goods by the Company.

Health and Safety

Our activities are subject to pollution control laws and various regulations which govern, among other
matters, the storage and handling of flammable substances. For further information, please refer to the
chapter titled “Key Industry Regulations and Policies” beginning on page 170 of this Prospectus. We
continue to ensure compliance with applicable health and safety regulations and other requirements in
our operations. There have been no instances of penalties levied under the relevant pollution control
laws or any other laws.

We have complied, and will continue to comply, with all applicable laws, rules and regulations. We
have obtained, or are in the process of obtaining or renewing, all material consents and licenses from
the relevant governmental agencies that are necessary for us to carry on our business. For further
information, please see the chapter titled “Government and Other Approvals” beginning on page 302
of this Prospectus.

Insurance

We have purchased insurance in order to manage the risk of losses from potentially harmful events,
including: (i) insurance policy covering fire, damage to buildings, plant and machinery, stocks (raw
materials and finished goods); (ii) motor insurance policies covering the vehicles and (iii) policy

covering damage to stocks at our depots. These insurance policies are renewed periodically to ensure

166
oy

that the coverage is adequate. Our insurance covers our manufacturing facility and all of our
operational depots. These covers are as described under:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. | Industrial = All | The New | Material Damage | Village May 9, 2022 5050.00
Risk Policy India Narangi
Assurance Business 4400.00
Co. Ltd Interruption
Insurance
2. | Fire and Special | The New | Stock, Furniture & | Bengaluru | February 28, | 203.50
Perils Policy India Fixtures, Office 2022
Assurance Equipment
Burglary Policy | Co. Ltd February 28, | 223.85
2022
3. | ICICI Lombard | ICICI Storage in godown | Delhi August 29, | 252.00
Sookshma Lombard or warehouse 2022
Udyam Suraksha | General
Insurance Stock, Furniture & August 29, | 252.00
Burglary Policy | Company Ltd | Fixtures, Office 2022
Equipment
4. | ICICI Lombard | ICICI Storage in godown | Indore October 15, | 54.00
Sookshma Lombard or warehouse 2022
Udyam Suraksha | General
Insurance October 13, | 54.00
Burglary Policy | Company Ltd | Stock, Furniture & 2022
Fixtures, Office
Equipment
5. | Fire and Special | National Stock, Furniture & | Kolkata January 14, | 78.49
Perils Policy Insurance Co. | Fixtures, Office 2022
Ltd. Equipment
Burglary Policy January 14, | 78.00
2022
6. | Marine Cargo — | ICICI Transportation of | - November 10, | Per location:
Open Policy Lombard finished — goods/ 2022 500.00
General semi-finished
Insurance goods/ raw Per transit:
Company Ltd | materials from 500.00
anywhere to
anywhere in India
and across the
world
Employees

As of September 30, 2021, we had an employee base of 364 employees. The following table sets forth

a breakdown of our employees by function :

 

 

 

 

 

Management 03 12.30
Administration 21 4.62
Accounts & Finance 07 5.35

 

 

167
a

 

 

 

 

 

 

 

 

 

 

 

 

Function No. of Employees | Cost to the Company for the month
of September 2021 (Rs. in Lakhs)

Sales 198 73.79
Research & Development 08 3.13
Design & Production 82 14.84
Stores & Dispatch 24 4.35
Human Resource 03 1.23
Maintenance 14 2.97
Purchase 04 1.99
Total 364 124.58

 

In addition, we contract with third- party manpower and services firms for the supply of contract labour
for certain services at our manufacturing facility. The number of contract labourers varies from time
to time based on the nature and extent of workload.

Intellectual Property

oe
As on December 03, 2021 we had 22 trademarks including ‘ *e
(# STRONG FIX), § Zz and other brands registered in the name of our Company and M/s. HP
International. We are in the process of transferring some of these trademarks from ‘M/s. HP
International’ to ‘HP Adhesives Limited’. Additionally, as on December 03, 2021 we had 22
applications pending under the Trademarks Act, 1999 to register additional trademarks in the name of
our Company.

We have also registered the domain name www.hpadhesives.com.
Property

Our Registered Office located at 11, Unique House, Chakala Cross Road, Andheri East, Mumbai —
400 099, Maharashtra, India and Administrative office located at 213, Unique House, Chakala Cross
Road, Andheri East, Mumbai — 400 099, Maharashtra, India have been taken on leave and license basis
from our Promoters. As of September 30, 2021, we operated 4 depots, all of which were held on rental
or leave and license basis. As of the date of this Prospectus, we operate one manufacturing facility at
Village Narangi, Raigad (Maharashtra). The factory land has been taken by our Company on leave and
license basis. The details of the properties taken on lease or leave and license or rental basis are as
follows:

 

 

 

 

 

 

 

 

 

 

Sr. | Details of Name of the Location Validity Use
No. the Licensor/
Agreement Landlord
1. | Leave &J| Mrs. Anjana H. | Survey No. 7/14/A/1, | 36 months with | Existing
License Motwani 7/14/B/1, 7/14/B/2, | provision for | Facility
dated July | Mr. Karan H. | Village Narangi, Taluka | automatic renewal
15, 2021 Motwani Khalapur, District | by further 24
Raigad months
2. Leave &| Mrs. Anjana H.| Survey No. 7/18, | 36 months with | Additional
License Motwani Village Narangi, Taluka | provision for | Unit
dated July| Mr. Karan H. | Khalapur, District | automatic renewal
9, 2021 Motwani Raigad by further 24
months
3: Leave &| Mrs. Anjana H.| 11, Unique House, | 36 months with | Registered
License Motwani Chakala Road, Andheri | provision for | Office
automatic renewal

 

 

168

 
 

 

 

 

 

 

 

 

 

 

 

Sr. | Details of Name of the Location Validity Use
No. the Licensor/
Agreement Landlord
dated July | Mr. Karan East, Mumbai — 400] by further 24
9, 2021 Motwani 049 months
4. Leave &| Mrs. Anjana H. | 213, Unique House, | 36 months with | Administrat
License Motwani Chakala Road, Andheri | provision for | ive Office
dated July | Mr. Karan East, Mumbai — 400 | automatic renewal
9, 2021 Motwani 049 by further 24
months
5. | Lease Mrs. Shardamma | Survey No. 24/2, | 3 years Depot
Agreement Maruthi Farm,
dated May Domrahalli,
8, 2019 Lakshmipura Post,
Bangalore North -562
162
6. | Lease Deed | Mrs. Priya Ralhan | C-1, Shri Ganpaty Plaza | 11 months Depot
dated July No. 1, Block C, Temple
1, 2021 Colony, Auchandi
Road, Samayapur,
Delhi — 110 042
7. | Tenancy Mahadev Ground Floor, Turner | 33 months Depot
Agreement | Enterprises Road, Cossipur,
dated Kolkata — 700 002
March 1,
2020
8. Rent Mrs. Brijlata | Industrial Shed, | 59 months Depot
Agreement | Mantri Municipal No. 4-A,
dated Khandelwal Nagar,
September Village Chitawad,
20, 2019 Indore

 

 

 

 

In addition, we hold commercial premises No. 501 admeasuring about 3745.20 square feet (carpet) on
the 5" Floor of the building known as “Business Square” in Wing-C, CTS No. 131/A, Andheri East,
Mumbai — 400 093, Maharashtra, India on ownership basis acquired by our Company vide Agreement
for Sale dated November 09, 2020 from Glitorium (India) Private Limited. These premises are
currently under renovation and are proposed to be operational by end of 2021.

We have recently in July 2021, entered into Leave & License Agreements with our Promoters in
respect of factory premises, registered office and administration office. Prior to this, our Company did
not have any formal written arrangement with our Promoters in respect of the aforesaid premises and
consequently no rent/ license fee was being paid by us. A comparative analysis of the material
commercial terms (pre and post execution of the agreements) and prevailing market rates in respect of
such premises is given below:

 

 

 

 

 

 

 

 

 

 

 

Sr. No. Particulars Monthly License Fee (per sq. ft.) Approx. Prevailing
Pre July 2021 Post July 2021 Market Rental Rate

‘1 Registered Office Nil Rs. 125/- Rs. 120/- to 140/-

2. Administrative Office Nil Rs. 100/- Rs. 120/- to 140/-

3: Existing Facility Nil Rs. 5.05/- Rs. 6/- to 10/-

4. Additional Unit Nil Rs. 5.05/- Rs. 6/- to 10/-

 

169

 
KEY INDUSTRY REGULATIONS AND POLICIES

The following description is an overview of certain laws and regulations in India, which are relevant
to our Company. The information in this section has been obtained from various legislations, including
rules, regulations and policies promulgated by regulatory and statutory bodies, which are available
in the public domain. The description of laws, regulations and policies set out below is not exhaustive
and is only intended to provide general information to investors and is neither designed nor intended
to be a substitute for professional legal advice. The statements below are based on the current
provisions of Indian law and the judicial and administrative interpretations thereof, which are subject
to change or modification by subsequent legislative, regulatory, administrative or judicial decisions.

Legal Metrology Act, 2009 (the “Legal Metrology Act”)

The Legal Metrology Act, 2009, as amended aims to establish and enforce standards of weights and
measures, regulate trade and commerce in weights, measures and other goods which are sold or
distributed by weight, measure or number and for matters connected therewith or incidental thereto.
Any transaction/contract relating to goods/class of goods or undertakings shall be as per the
weight/measurement/numbers prescribed by the Metrology Act. The specifications with respect to the
exact denomination of the weight of goods to be considered in transactions are contained in rules by
each state.

Labour Laws
Factories Act, 1948

The Factories Act, 1948, as amended (the “Factories Act”), defines a “factory” to cover any premises
which employs 10 or more workers on any day of the preceding 12 months and in which a
manufacturing process is carried on with the aid of power or any premises where at least 20 workers
are employed, and where a manufacturing process is carried on without the aid of power. Each state
government has enacted rules in respect of the prior submission of plans and their approval for the
establishment of factories and registration/licensing thereof. The Factories Act provides for imposition
of fines and imprisonment of the manager and occupier of the factory in case of any contravention of
the provisions of the Factories Act.

In addition to the Factories Act, the employment of workers, depending on the nature of activity, is
regulated by a wide variety of generally applicable labour laws. The following is an indicative list of
labour laws which may be applicable to our Company due to the nature of the business activities:

(ji) Industrial Disputes Act, 1947.

(ii) Minimum Wages Act, 1948 and Minimum Wages (Gujarat) Rules, 1961.

(iii) | Payment of Bonus Act, 1965.

(iv) Payment of Gratuity Act, 1972.

(v) Payment of Wages Act, 1936.

(vi) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

(vii) | Employees’ State Insurance Act, 1948.

(viii) The Industrial Employment Standing Orders Act, 1946.

(ix) Maternity Benefit Act, 1961.

(x) Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.

(xi) Contract Labour (Regulation and Abolition) Act, 1970.

(xii) | The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979.

(xiii) Employees’ Compensation Act, 1923.

(xiv) The Child Labour (Prohibition and Regulation) Act, 1986.

170
(xv) — The Equal Remuneration Act, 1976.

(xvi) The Trade Unions Act, 1926 and the Trade Union (Amendment) Act, 2001.

(xvii) Building and Other Construction Workers Regulation of Employment and Conditions of
Service Act, 1996.

The Code on Wages, 2019

The Code on Wages, 2019 received the assent of the President of India on August 8, 2019 and proposes
to subsume four existing laws namely, the Payment of Wages Act, 1936, the Minimum Wages Act,
1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The provisions of this
code will be brought into force on a date to be notified by the Central Government.

The Occupational Safety, Health and Working Conditions Code, 2020

The Occupational Safety, Health and Working Conditions Code, 2020 received the assent of the
President of India on September 28, 2020 and proposes to subsume certain existing legislations,
including the Factories Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1970, the Inter-
State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 and the
Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,
1996. The provisions of this code will be brought into force on a date to be notified by the Central
Government. The Central Government has issued the draft rules under the Occupational Safety, Health
and Working Conditions Code, 2020. The draft rules provide for operationalization of provisions in
the Occupational Safety, Health and Working Conditions Code, 2020 relating to safety, health and
working conditions of the dock workers, building or other construction workers, mines workers, inter-
state migrant workers, contract labour, journalists, audio-visual workers and sales promotion
employees.

The Industrial Relations Code, 2020

The Industrial Relations Code, 2020 received the assent of the President of India on September 28,
2020 and it proposes to subsume three existing legislations namely, the Industrial Disputes Act, 1947,
the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946. The
provisions of this code will be brought into force on a date to be notified by the Central Government.

The Code on Social Security, 2020

The Code on Social Security, 2020 received the assent of the President of India on September 28, 2020
and it proposes to subsume certain existing legislations including the Employee's Compensation Act,
1923, the Employees’ State Insurance Act, 1948, the Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952, the Maternity Benefit Act, 1961, the Payment of Gratuity Act, 1972, the Building
and Other Construction Workers’ Welfare Cess Act, 1996 and the Unorganised Workers’ Social
Security Act, 2008. The provisions of this code will be brought into force on a date to be notified by
the Central Government. The Central Government has issued the draft rules under the Code on Social
Security, 2020. The draft rules provide for operationalization of provisions in the Code on Social
Security, 2020 relating to employees’ provident fund, employees’ state insurance corporation, gratuity,
maternity benefit, social security and cess in respect of building and other construction workers, social
security for unorganised workers, gig workers and platform workers.

Environmental Laws

We are subject to various environment regulations as the operation of our establishments might have

an impact on the environment in which they are situated. The basic purpose of the statutes given below

is to control, abate and prevent pollution. In order to achieve these objectives, Pollution Control Boards

(“PCBs”), which are vested with diverse powers to deal with water and air pollution, have been set up

in each state and in the Centre. The PCBs are responsible for setting the standards for maintenance of
171
clean air and water, directing the installation of pollution control devices in industries and undertaking
inspection to ensure that industries are functioning in compliance with the standards prescribed. These
authorities also have the power of search, seizure and investigation. All industries are required to obtain
consent orders from the PCBs, which are required to be periodically renewed.

Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”)

The Water Act prohibits the use of any stream or well for the disposal of polluting matter, in violation
of the standards set down by the State Pollution Control Board (“State PCB”). The Water Act also
provides that the consent of the State PCB must be obtained prior to establishing any industry,
operation or process or any treatment and disposal system, opening of any new outlets or making any
new discharges, which are likely to discharge sewage or effluent.

Air (Prevention and Control of Pollution) Act, 1981 (“Air Act”)

The Air Act requires that all persons responsible for emitting smoke or gases must apply in a prescribed
form and obtain consent from the State PCB prior to establishing or operating any industrial plant in
an air pollution control area. The State PCB is required to grant, or refuse, consent within four months
of receipt of the application. The consent may contain conditions relating to, inter-alia, specifications
of pollution control equipment to be installed.

Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016
(“Hazardous Waste Rules”)

The Hazardous Waste Rules define the term ‘hazardous waste’ to include any waste which by reason
of physical, chemical, biological, reactive, toxic, flammable, explosive or corrosive characteristics
cause danger or is likely to cause danger to health or environment, whether alone or in contact with
other wastes or substances including waste specified in the schedules to the Hazardous Waste Rules.
In terms of the Hazardous Waste Rules, occupiers, being persons who have control over the affairs of
a factory or premises or any person in possession of hazardous or other waste, have been, inter alia,
made responsible for safe and environmentally sound management of hazardous and other wastes
generated in their establishments and are required to obtain license/ authorisation from the respective
State PCB for handling, generation, collection, storage, packaging, transportation, usage, treatment,
processing, recycling, recovery, pre-processing, co-processing, utilising, selling, transferring or
disposing hazardous or other waste.

Regulations Related to Foreign Trade

The foreign policy of India is governed and regulated by the Foreign Trade (Development and
Regulation) Act, 1992 (the “Foreign Trade Act”). The Foreign Trade Act has empowered the Central
Government to make provisions for the development as well as regulation of foreign trade by the way
of facilitating imports into as well as augmenting exports from the country and in all the other matters
related to foreign trade. It authorises the government to formulate as well as announce the export and
import policy and to keep amending the same on a timely basis. The government has also been given
a wide power to prohibit, restrict and regulate the exports and imports in general as well as specified
cases of foreign trade. The Foreign Trade Act provides for certain appointments especially that of the
Director-General to advise the Central Government in formulating import and export policy and to
implement the same. Further, the Foreign Trade Act requires every importer as well as exporter to
obtain a code number called the Importer Exporter Code Number (IEC) from the Director-General or
the authorised officer.

The Foreign Trade Act provides the balancing of all the budgetary targets in terms of imports and

exports. The principal objectives here include the facilitation of sustain growth as to the exports of the

country, the distribution of quality goods and services to the domestic consumer at internationally
172
registration from the assessing authority in the prescribed manner. Every person liable to pay tax under
these Acts (other than a person earning salary or wages, in respect of whom the tax is payable by the
employer), shall obtain a certificate of enrolment from the assessing authority.

Shops and establishments legislations in various states

Under the provisions of local shops and establishments legislations applicable in the states in which
establishments are set up, establishments are required to be registered. Such legislations regulate the
working and employment conditions of the workers employed in shops and establishments including
commercial establishments and provide for fixation of opening and closing hours, daily and weekly
working hours, rest intervals, overtime, holidays, leave, health and safety measures, termination of
service, wages for overtime work, maintenance of shops and establishments and other rights and
obligations of the employers and employees. There are penalties prescribed in the form of monetary
fine or imprisonment for violation of the legislations.

The Trademarks Act, 1999 (“Trademarks Act”)

Under the Trademarks Act, a trademark is a mark capable of being represented graphically and which
is capable of distinguishing the goods or services of one person from those of others used in relation
to goods and services to indicate a connection in the course of trade between the goods and some
person having the right as proprietor to use the mark. A ‘mark’ may consist of a device, brand, heading,
label, ticket, name signature, word, letter, numeral, shape of goods, packaging or combination of colors
or any combination thereof. Section 18 of the Trademarks Act requires that any person claiming to be
the proprietor of a trade mark used or proposed to be used by him, must apply for registration in writing
to the registrar of trademarks. The trademark, once applied for and which is accepted by the Registrar
of Trademarks (“the Registrar”), is to be advertised in the trademarks journal by the Registrar.
Oppositions, if any, are invited and, after satisfactory adjudications of the same, a certificate of
registration is issued by the Registrar. The right to use the mark can be exercised either by the registered
proprietor or a registered user. The present term of registration of a trademark is 10 (ten) years, which
may be renewed for similar periods on payment of a prescribed renewal fee.

Other Regulations
Apart from the aforementioned enactments which is inclusive in nature and not exhaustive -general
laws such as the Transfer of Property Act, 1882, Registration Act, 1908, Indian Contract Act 1872,

Specific Relief Act 1963, Negotiable Instrument Act 1881, Information Technology Act, 2000, etc.
are also applicable to our Company.

174

ey
competitive prices, stimulation of sustained economic growth by providing access to essential raw
materials as well as enhancement of technological strength, industry as well as services and
improvement of their competitiveness to meet all kinds of requirement of the global markets.

Foreign Investment Regulations

Foreign investment in India is governed by the provisions of Foreign Exchange Management Act,
1999, as amended, along with the rules, regulations and notifications made by the Reserve Bank of
India thereunder, and the consolidated FDI Policy, effective from October 15, 2020, issued by the
DPIIT, and any modifications thereto or substitutions thereof, issued from time to time (the
“Consolidated FDI Policy”).

Customs Act, 1962 (“Customs Act”)

The Customs Act, as amended, regulates import of goods into and export of goods from India by
providing for levy and collection of customs duties on goods in accordance with the Customs Tariff
Act, 1975. Any Company requiring to import or export goods is first required to get registered under
the Customs Act and obtain an Importer Exporter Code under FTDR. Customs duties are administrated
by Central Board of Indirect Tax and Customs under the Ministry of Finance.

Tax Related Legislations

The Goods and Services Tax (“GST”) is levied on supply of goods or services or both jointly by the
Central Government and State Governments. GST provides for imposition of tax on the supply of
goods or services and will be levied by the Central Government and by the state government including
union territories on intra-state supply of goods or services. Further, Central Government levies GST
on the inter-state supply of goods or services. The GST is enforced through various acts viz. Central
Goods and Services Act, 2017 (“CGST”), relevant state’s Goods and Services Act, 2017 (“SGST”),
Union Territory Goods and Services Act, 2017 (“UTGST”), Integrated Goods and Services Act, 2017
(“IGST”), Goods and Services (Compensation to States) Act, 2017 and various rules made thereunder.

Further, the Income-tax Act, 1961 (the “Income Tax Act”) is applicable to every company, whether
domestic or foreign whose income is taxable under the provisions of the Income Tax Act or rules made
there under depending upon its “Residential Status” and “Type of Income” involved. The Income Tax
Act provides for the taxation of persons resident in India on global income and persons not resident in
India on income received, accruing or arising in India or deemed to have been received, accrued or
arising in India. Every company assessable to income tax under the Income Tax Act is required to
comply with the provisions thereof, including those relating to tax deduction at source, advance tax,
minimum alternative tax, etc. In 2019, the Government has also passed an amendment act pursuant to
which concessional rates of tax are offered to a few domestic companies and new manufacturing
companies.

Professional Tax and the rules framed thereunder

The professional tax slabs in India are applicable to those citizens of India who are either involved in
any profession or trade. The State Government of each State is empowered with the responsibility of
structuring as well as formulating the respective professional tax criteria and is also required to collect
funds through professional tax. The professional taxes are charged on the incomes of individuals,
profits of business or gains in vocations. The professional tax is charged as per the List II of the
Constitution. The professional taxes are classified under various tax slabs in India. The tax payable
under the State Acts by any person earning a salary or wage shall be deducted by his employer from
the salary or wages payable to such person before such salary or wages is paid to him, and such
employer shall, irrespective of whether such deduction has been made or not when the salary and wage
is paid to such persons, be liable to pay tax on behalf of such person and employer has to obtain the

173

a
HISTORY AND CERTAIN CORPORATE MATTERS

History and background

Our Company was originally formed as a partnership firm under the name and style of “M/s. H.P.
International” pursuant to a deed of partnership dated January 01, 1987, executed by and between late
Mr. Haresh Motwani (husband of our Promoter Mrs. Anjana Haresh Motwani) and one Mrs. Seema
Abhichandani. The said partnership deed has been amended and restated from time to time pursuant
to admission and retirement of partners. Our Promoter Mrs. Anjana Haresh Motwani was admitted to
the partnership in October 2001. Pursuant to the demise of Mr. Haresh Motwani, the Partnership Deed
dated July 12, 2007 was executed between Mrs. Anjana Haresh Motwani, Mr. Karan Haresh Motwani
and Dhanraj Motwani HUF. Dhanraj Motwani HUF has retired as partner of the partnership firm on
vide Retirement Deed dated August 8, 2009. The partnership firm, M/s. HP International was thereafter
converted into a private limited company “HP Adhesives Private Limited” on May 07, 2019, pursuant
to the provisions of Chapter XXI of the Companies Act, 2013. Subsequently, our Company has been
converted into a public limited company and the name of our Company changed to “HP Adhesives
Limited” pursuant to a special resolution passed at the Extra-Ordinary General Meeting of our
Company held on June 23, 2021 and a fresh Certificate of Incorporation dated July 01, 2021 issued by
the RoC. The Corporate Identity Number of our Company is U24304MH2019PLC325019.

Corporate profile of our Company

For information on our Company’s business profile, activities, services and managerial competence,
please refer to the chapters titled “Our Management”, “Our Business” and “Industry Overview”
beginning on pages 179 , 97 and 132, respectively of this Prospectus.

Changes in the Registered Office of our Company since incorporation

The registered office of our Company is situated at 11, Unique House, Chakala Cross Road, Andheri
East, Mumbai — 400 099, Maharashtra, India. There has been no change in the registered office of our
Company since the date of its incorporation.

Key events and milestones

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Key Events/ Milestone/ Achievements

1987 Partnership Firm in the name and style of M/s. H.P. International founded
by Mr. Haresh Dhanraj Motwani and Mrs. Seema Abhichandani

1988 Established manufacturing plant at Andheri East, Mumbai

2001 Reconstitution of partnership firm, M/s. H.P. International with Mr. Haresh
Dhanraj Motwani and his wife, Mrs. Anjana Haresh Motwani as partners

2004 Launch of our brand ‘Strong Weld’

2004 Shifted our manufacturing facility to Village Padghavalli, Raigad,
Maharashtra for manufacturing of PVC solvent cement

2007 Mr. Karan Haresh Motwani, our Promoter, admitted as a Partner to the
partnership firm, M/s. H.P. International

2012 Shifted our manufacturing facility to Village Narangi, Raigad, Maharashtra

2011 Received NSF International Certification for manufacturing solvent
cements

2018 Commenced manufacturing synthetic rubber adhesives and PVA adhesives

2019 Commenced manufacturing of silicone sealants and gasket shellac

2019 Conversion of our business from partnership firm to private limited
company

2019 Started trading in Ball Valves, PTFE and Masking Tape

2021 Conversion of our Company from private limited to public limited company

 

 

 

175
Awards, accreditation & recognitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | Certification/A | Issuing Authority | Certificate No. Date of Validity
No. wards Issue
1. ISO 9001:2008 | BSI FM 548372 March 31, | May 22, 2015
Certification 2009
2. |Certificate for | NSF International C00522-9 - 01 September N.A.
NSF/ ANSI 14 09, 2011
compliance
3. | Registration EEPC India 201/M26042 September March 31,
cum 16, 2014 2015
Membership
Certificate
4. | Authorised Central Board of | INAAAFHO809C_ | December December
Economic Indirect Taxes and | 1F189 21, 2018 20, 2021
Operator T1 | Customs
Certificate
5. | Membership Bombay Chamber of | BC/6947/0/2015 | December N.A.
Certificate Commerce and 2015
Industry
6. |ISO 9001:2015 |AQC Middle East | 18IQCO30/R1 September September
Certification Fze 07, 2018 20, 2021
7. |Certificate — of | Ministry of | 030121000228 May 12, | May 12, 2026
Recognition as | Commerce & 2021
One Star Export | Industry
House
8. Certificate for | NSF International C00522-7 - 02 October 28, N.A.
NSF/ ANSI 14 2019
compliance
9. Certificate for | NSF International C00522-7 - 03 August 17, N.A.
NSF/ ANSI 14 2021
compliance
10. |ISO 9001:2015 |) BMG Quality | 21ZQCM2406Q _ | September September
Certification Certification 27, 2021 26, 2024
11. |ISO 14001:2015 | BMG Quality | 1ZQCM2407E September September
Certification Certification 27, 2021 26, 2024
12. |ISO 45001:2015 | BMG Quality | 21ZQCM24080 __ | September September
Certification Certification 27, 2021 26, 2024

 

 

 

 

 

Main objects of our Company

The main objects of our Company as set forth in the Memorandum of Association of our Company are
as follows:

Manufacturers, Dealers, Traders, Exporters, Importers, Merchant Exporters Of Chemicals, Plastics,
Colours, Solvent Cement, Adhesives, Sealants, Paints and Coatings, Coatings compositions,
Elastomers, Binders, Varnishes, Lacquers, Construction Chemicals, Primers and Putties, Lubricants,
Synthetic Rubber Glue, Synthetic Rubber Adhesives, White Glue, Shellac, Pvc Fittings, Teflon Tapes
and other Tapes, Hardware Tools and Architectural and Hardware fittings, Packaging Material, Facade
solutions, Cleaning Chemicals and Accessories, Car Cleaners, Polish, Wax & Car Care Accessories,
Manholes, Manhole Covers, Surface Drain Channels, Underground Drain Channels, And Other
Drainage Equipment, FRP products for Electrical and other applications, and/or such other business
or businesses as may be required.

176
Changes in Memorandum of Association:

Except as stated below, there has been no change in the Memorandum of Association of our Company,
in the last ten years:

 

Sr. Date of

 

- Effective Date
No. Particulars of Amendment General at Amendinent
Meeting
ds Alteration of the Capital Clause:

Increase in Authorized share capital of our Company
from = 1,00,000/- comprising of 10,000 Equity Shares June 21, 2019 June 21, 2019
of 210/- each to 2 13,00,00,000/- comprising of
1,30,00,000 Equity Shares of = 10/- each

 

2. Alteration of the Capital Clause:

Increase in Authorized share capital of our Company
from % 13,00,00,000/- comprising of 1,30,00,000 April 13, 2021 | April 13, 2021
Equity Shares of = 10/- each to % 20,00,00,000/-
comprising of 2,00,00,000 Equity Shares of = 10/- each

 

3s Alteration of the Name Clause:
Conversion from Private Limited Company into Public June 23, 2021 | July 01, 2021
Limited Company

 

 

 

 

 

4. Alteration of the Main Objects Clause: September 28
Clause III(A) of the MOA was amended to the existing July 06, 2021 PI 2021 :
sub-clause

 

 

Details regarding acquisition of business/ undertakings, mergers, amalgamation, revaluation of
assets etc.

There are no mergers, amalgamation, revaluation of assets etc. with respect to our Company in the last
10 (ten) years.

Defaults or rescheduling of borrowing with financial institutions/ banks

There have been no defaults or rescheduling of borrowings with any financial institutions/ banks as on
the date of the Prospectus.

Number of shareholders of our Company

Our Company has 9 (nine) shareholders as on the date of filing of this Prospectus.

Shareholders agreement and other agreements

Our Company has not entered into any shareholders agreements and other agreements, other than the
agreements entered into by it in ordinary course of its business as on the date of this Prospectus. There
are no inter-se agreements/ arrangements between the shareholders of the Company. Further, there are
no other inter se agreements/ arrangements and clauses / covenants which are material and which needs
to be disclosed and that there are no other clauses / covenants which are adverse/ pre-judicial to the
interest of the minority / public shareholders. Further, there are no other agreements, deed of
assignments, acquisition agreements, shareholders agreements, inter-se agreements, agreements of like
nature other than disclosed in the Prospectus.

Non-Compete agreement

Our Company has not entered into any Non-compete Agreement as on the date of filing this Prospectus.

Agreements with strategic partners, joint venture partners and/ or financial partners and other
agreements
177
There are no existing material agreements with strategic partner, joint venture and/or financial partners
or other material agreements entered into by our Company.

Details of holding company

As on the date of this Prospectus, our Company does not have any holding company.

Details of subsidiary or associate company

As on the date of this Prospectus, our Company does not have any subsidiary or associate company.
Time and cost overruns in setting-up projects

There have been no instances of time and cost over-runs in respect of our business operations.

Launch of key products or services, entry or exit in new geographies

For details of launch of key products or services, entry in new geographies or exit from existing
markets, please refer to the chapter “Our Business” on page 150 of this Prospectus.

Lock-out or strikes

There have been no lock-outs or strikes in our Company since inception.

Changes in the activities of our Company during the last five years

There has been no change in the business activities of our Company during the last five years from the
date of this Prospectus which may have had a material effect on the profits and loss account of our

Company, including discontinuance of lines of business, loss of agencies or markets and similar
factors.

Changes in the management

For details of change in Management, please see the section ‘Changes in our Board during the last
three years’ in the chapter titled “Our Management” on page 186 of this Prospectus.

Changes in accounting policies in last three (3) years

There have been no changes in accounting policies of our Company in last three years.

Guarantees provided by our Promoters

Except as disclosed in the chapter titled “Financial Indebtedness” on page 291 of this Prospectus our
Promoters and Selling Shareholder have not given any guarantees to third parties that are outstanding
as on the date of filing of this Prospectus.

Special Rights

None of the special rights available to the Promoters/ Shareholders (except for nominee/ nomination
rights and information rights) would survive post listing of the Equity Shares of the Company and
same shall cease to exist or shall expire/ waived off immediately before or on the date shares are
allotted to public shareholders in IPO, without requiring any further action.

178
oy

OUR MANAGEMENT

Our Company currently has five directors on its Board comprising of including three independent
directors and two executive directors. One of our five directors is woman director. For details on the
strength of our Board, as permitted and required under the Articles of Association, see “Main
Provisions of Articles of Association” on page 361 of this Prospectus.

Our Board

The following table sets forth details regarding our Board of Directors as on the date of filing of this
Prospectus:

 

 

Anjana Haresh Motwani 65 Public Limited
Companies:
Designation: Executive Director &
Chairperson HP International Limited
Address: 13, Udadhi Tarang, Juhu Road, Private Limited
Juhu, Mumbai — 400 049, Maharashtra, Companies:
India.
HDM Estates Private
Occupation: Business Limited
Date of Appointment: May 07, 2019 Foreign Companies:
Period of Directorship: Director since Nil
May 07, 2019
Limited Liability
Nationality: Indian Partnerships:
Term: Liable to retire by rotation HP Composites LLP
Date of Birth: March 15, 1956
DIN: 02650184
Karan Haresh Motwani 36 Public Limited
Companies:
Designation: Managing Director
HP International Limited
Address: 12/A, Udadhi Tarang, Juhu Tara
Road, Next to J.W Marriot, Juhu, Mumbai Private Limited
— 400 049, Maharashtra, India. Companies:
Occupation: Business HDM Estates Private
Limited
Date of Original Appointment: May 07,
2019 Foreign Companies:
Date of appointment at current Nil
designation: May 01, 2021
Limited Liability

 

 

 

179

 
   

  

Period of Directorship: Director since
May 07, 2019

Nationality: Indian

Term: 5 years w.e.f. May 1, 2021 and
liable to retire by rotation

Date of Birth: September 09, 1985

DIN: 02650089

Partnerships:

HP Composites LLP

 

 

 

Surendra Kumar Mehta 58 NIL

Designation: Non-executive Independent

Director

Address: Flat No.701, Tirupati Balaji

Towers, Sarojini Road, Santacruz (West),

Mumbai — 400054.

Occupation: Professional

Date of Appointment: June 23, 2021

Period of Directorship: Director since

June 23, 2021

Nationality: Indian

Term: 5 years w.e.f. June 23, 2021

Date of Birth: October 06, 1963

DIN: 09211358

Rajendra Kumar Jain 55 Public Limited
Companies:

Designation: Non-executive Independent

Director =" GR Infraprojects
Limited

Address: 5-A-25, R.C. Vyas Colony,
Bhilwara, Rajasthan — 311001.

Occupation: Professional
Date of Appointment: July 5, 2021

Period of Directorship: Director since July
5, 2021

Nationality: Indian

 

 

Private Limited
Companies:

Corporate Global
Services Private Limited

Foreign Companies:
Nil

Limited Liability

 

180

 
  

   

 

Term: 5 years w.e.f. July 5, 2021 Partnerships:
Date of Birth: July 5, 1966 = Nil

DIN: 00144095

Ajeet Anant Walavalkar 65 NIL

Designation: Non-executive Independent
Director

Address: Kumar Peninsula CHS, Baner-
Pashan Link Road, Near HDFC Bank,
Pashan, Pune — 411021.

Occupation: Professional

Date of Appointment: July 5, 2021

Period of Directorship: Director since July
5, 2021

Nationality: Indian
Term: Up to July 4, 2026
Date of Birth: February 26, 1956

DIN: 09226644

 

 

 

 

 

Brief profiles of our Directors

Anjana Haresh Motwani, with over 40 years of experience in the adhesive industry, currently
designated as the Executive Director and Chairperson of our Company. She holds a bachelors’ degree
in Arts (Special) and diploma in Administrative Management from University of Bombay and a
diploma in Export Business Management from Indian International Trade Center, Bombay. In 1979,
she founded M/s. Hindustan Plastics, sole proprietorship concern, for manufacturing solvent cement.
Subsequently, she was admitted as a partner to M/s. HP International in 2001. Post 2007, she has been
leading the operations of M/s. HP International. She has been instrumental in the growth and
development of our Company.

Karan Haresh Motwani currently holds the position of Managing Director of our Company. He has
completed Bachelor of Management Studies from Narsee Monjee Institute of Management Studies,
Mumbai and the Post Graduate Programme in Management from S.P. Jain Institute of Management &
Research, Mumbai. He was admitted to the partnership M/s. HP International in 2007 and has since
played a key role in growing the business including introducing new products and expansion of
distribution network. He plays a crucial role in devising our growth strategy and executing our vision.

Surendra Kumar Mehta is a Non-executive and Independent Director of our Company. He has is a
qualified chartered accountant and company secretary. He has over three decades of cross-functional
experience in manufacturing, service and IT industry. He has served as an Arbitrator on the Arbitration

181
Panel of BSE Limited. He has worked with ACC Limited as Head — Business Excellence, iGATE as
Vice President — Finance, IGE (India) Limited as Chief Financial Officer and Company Secretary,
Gontermann Peipers India Limited as General Manager — Projects. He has been a director on our Board
since June 23, 2021.

Rajendra Kumar Jain is a Non-executive and Independent Director of our Company. He holds a
bachelor’s degree in commerce from Rajasthan University and a master’s degree in commerce
(specializing in business administration) from Maharshi Dayanand Saraswati University, Ajmer. He is
a fellow member of The Institute of Company Secretaries of India. He also holds law degree from
University of Ajmer. Presently, he is action as the Secretary General of Mewar Chamber of Commerce
& Industry since 2017 (a recognized divisional chamber of south Rajasthan). He has over 17 years of
experience as a practicing company secretary. He is a director on our Board since July 05, 2021.

Ajeet Anant Walavalkar is a Non-executive and Independent Director of our Company. He holds a
bachelor’s degree in engineering of electrical from University of Poona. Previously he has worked
with Siemens India Limited as project engineer. He currently holds the position of as General Manager
(Corporate) of Electrical Operations to Bahwan Engineering Co. LLC. Previously, he also worked with
Siemens India Limited as Project Engineer. He has been a director on our Board since July 05, 2021.

Family Relationships between the Directors

None of the directors are related to each other in terms of the definition of 'relative’ under Section 2
(77) of the Companies Act, except as set out below:

 

Name Relationship
Mrs. Anjana Haresh Motwani and Mother — Son
Mr. Karan Haresh Motwani

 

 

 

 

 

Remuneration details of our Directors
Remuneration details of our Executive Directors

1. Anjana Haresh Motwani is the Promoter and Executive Director of our Company. She is a director
on our Board since incorporation. Pursuant to a resolution passed by our Board of Directors on
July 05, 2021, Mrs. Motwani has been appointed as the Chairperson of the Board.

Mrs. Motwani has entered into an employment agreement dated May 08, 2019 which includes details
of her remuneration. The significant terms of her remuneration, as appraised as on May 01, 2021, are
set out below:

 

 

 

 

 

 

 

 

 

 

Particulars Remuneration (%)
Salary < 36.93 Lakhs p.a.*
[Basic Salary & 1,20,000 per month
[House Rent Allowance < 60,000 per month
\Conveyance Allowance 1,600 per month
Special Allowance < 1,18,400 per month
[Remuneration paid for F-Y. 2020-21 <18.60 Lakhs
Other benefits like Gratuity, Provident Fund, Leave, Medical Insurance etc. as applicable to the
employees of the company

 

 

*Annual increments are not automatic and will be granted solely at the discretion of the Management,
after confirmation.

2. Karan Haresh Motwani is the Promoter and Managing Director of our Company. He was
appointed as our Executive Director with effect from the date of incorporation i.e., May 07, 2019.

182
He was re-designated as the Managing Director of our Company for a period of 5 (five) years
commencing from May 01, 2021.

The significant terms of his remuneration are set out below:

 

 

 

 

 

 

 

 

 

 

 

Particulars Remuneration (2)
Salary & 85.85 Lakhs p.a.*
[Basic Salary = 2,80,000/- per month
[House Rent Allowance = 1,40,000/- per month
\Conveyance Allowance & 1,600/- per month
Special Allowance & 2,78400/- per month
[Remuneration paid for F.-Y. 2020-21 27.91 Lakhs
Other benefits like Gratuity, Provident Fund, Leave, Medical Insurance etc. as applicable to the
employees of the company

 

 

* Annual increments are not automatic and will be granted solely at the discretion of the Management,
after confirmation.

Remuneration details of our non-executive directors and independent directors

Pursuant to the resolution of our Board dated July 07, 2021, our non-executive directors and
independent directors are entitled to receive a sitting fee of = 35,000/- and = 25,000/- for attending
each meeting of our Board and a Committee, respectively, as may be decided by the Board. As there
were no non-executive or independent directors on our Board till FYE 2020-21, our Company has not
paid any sitting fees since incorporation.

Payment or benefits to officers of our Company (non-salary related)
Except as stated under “Remuneration details of our executive directors” and “Remuneration details
of our non-executive directors and independent directors”, no amount or benefit has been paid or given

in the last two (2) years preceding the date of this Prospectus to any officer of our Company including
our Directors and key management personnel.

For further details, please refer to the chapter titled “Financial Information- Annexure XXV - Related
Party Transactions” on page 208 of this Prospectus.

Bonus or profit-sharing plan for the directors and Key Managerial Personnel (“KMP”)

Other that the performance-linked variable component of their remuneration, there is no bonus or
profit-sharing plan for the Directors and Key Management Personnel of our Company.

Shareholding of our directors

Except as mentioned below, none of the directors hold equity shares in our Company as on the date of
this Prospectus:

 

 

 

 

 

Pre- Offer
Particulars Number of Shares Percentage (%) holding
Anjana Haresh Motwani 71,97,335 50.56
Karan Haresh Motwani 63,70,000 44.75
Total 1,35,67,335 95.31

 

 

 

 

 

183
 

Service contracts with directors

There are no service contracts entered into with any of our directors which provide for any benefit
upon termination of employment.

Arrangements with major shareholders, customers, suppliers or others

There are no arrangements or understanding between major shareholders, customers, suppliers or
others pursuant to which any of the directors or KMPs were selected as a director or KMP or member
of a senior management as on the date of this Prospectus

Appointment of relatives of our directors to any office or place of profit

Except Ms. Nidhi Haresh Motwani holding the position of Vice President — Operations of our
Company, none of the relatives of our directors currently hold any office or place of profit in our
Company.

Interest of our directors
Our Directors are interested in our Company in the following manner:

(i) Our Promoter Directors namely Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani,
may be deemed to be interested in the promotion of our Company.

(ii) Our Directors may be deemed as interested in our Company to the extent of the equity shares held
by them or any equity shares that may be subscribed by or allotted to them from time to time. For
further details, please refer to chapter titled "Our Management — Shareholding of directors in our
Company" and "Capital Structure" beginning on pages 179 and 82 respectively of this Prospectus.
Our Directors may also be deemed to be interested to the extent of any dividend, if any, payable
and other distributions in respect of the equity shares held by them

(iii) Our non-executive directors and independent directors may be deemed to be interested in our
Company to the extent of fees payable to them for attending meetings of our Board or committees
thereof and reimbursement of expenses payable pursuant to our Articles of Association

(iv) Our executive directors may be deemed to be interested in our Company to the extent of
remuneration payable to them and reimbursement of expenses payable pursuant to our Articles of
Association

(v) Mrs. Anjana Haresh Motwani, Promoter and Executive Director, and Mr. Karan Haresh Motwani,
Promoter and Managing Director have extended personal guarantees and given their personal
assets as collateral security (as provided below) in favor of ICICI Bank Limited and IndusInd Bank
Limited to secure the loans of up to Rs. 1949.86 Lakhs and Rs. 2200 Lakhs availed by the
Company and may deemed to be interested to that extent:

 

 

Sr.No. | Name of Owner Description of Collateral Security
1. Mrs. Anjana Motwani and Mr. Karan Survey No. 7, Hissa No. 7/14/A/1, 7/14/B/1,
Motwani 7/14/B/2, Village Narangi, Taluka Khalapur, District
Raigad, Maharashtra

 

 

 

 

184
a

 

Sr.No. | Name of Owner Description of Collateral Security

 

Di HP Trading — Mr. Karan Motwani Flat No 102, Usha Kunj Building, Santacruz West,

Juhu Tara Road, Mumbai, Maharashtra

 

 

 

 

 

(vi) All the Directors may be deemed to be interested in the contracts, agreements/ arrangements
entered into or to be entered into by our Company with any company in which they hold
directorships or shareholdings as declared in their respective declarations;

(vii) Our Directors, Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani have accorded
consent to our Company for use and occupation of the premises situated at:

a. 11, Unique House, Chakala Cross Road, Andheri East, Mumbai — 400 099, India and owned
by them as our registered office and shall be deemed to be interested up to that extent;

b. 213, Unique House, Chakala Cross Road, Andheri East, Mumbai — 400 099, India and owned
by them as our administrative office and shall be deemed to be interested up to that extent;

c. Survey No. 7, Village Narangi, Taluka Khalapur, District Raigad, Maharashtra, India and
owned by them as our factory premises and shall be deemed to be interested up to that extent;

Except as disclosed above, our Directors have no interest in any property acquired or proposed to
be acquired by our Company two (2) years prior to the date of this Prospectus

(viii) None of our Directors have availed any loan from our Company. None of the beneficiaries of

loans, advances and sundry debtors are related to the Directors of our Company.

Director’s association with the securities market

We confirm that none of our directors are associated with the securities market.

Confirmations

None of the abovementioned Directors are debarred from accessing the capital market by the SEBI nor

are they promoter or director of any other company which is debarred from accessing the capital market

by SEBI.

None of the abovementioned Directors are on the RBI list of Wilful Defaulters as on the date of filing
of this Prospectus.

None of the abovementioned Directors have been declared a Fugitive Economic Offender under
section 12 of the Fugitive Economic Offender Act, 2018.

Our Directors are not and were not, during the five years preceding the date of this Prospectus, been
on the board of any listed company whose shares have been or were suspended from being traded on
the BSE or NSE during their term of directorship in such company.

None of our Directors were or are directors on the board of listed companies which have been or were
delisted from any stock exchange(s) during their term of directorship in such company.

No consideration, either in cash or shares or in any other form have been paid or agreed to be paid to

any of our directors or to the firms, trusts or companies in which they have an interest in, by any person,
either to induce him to become or to help him qualify as a director, or otherwise for services rendered

185
by him or by the firm, trust or company in which he is interested, in connection with the promotion or
formation of our Company.

Neither our Company nor the Directors and our Promoters/ Promoter Group have been declared as
"Fraudulent Borrowers" by the lending banks or financial institutions or consortium, in terms of RBI
master circular dated July 01, 2016.

Changes in our Board during the last three years

The changes in our Board during the three years immediately preceding the date of this Prospectus are
as follows:

 

 

 

 

 

 

 

Name of Director Date of Change Reason for Change

Anjana Haresh Motwani May 07, 2019 Appointment as Executive Director on
incorporation

Karan Haresh Motwani May 07, 2019 Appointment as Executive Director on
incorporation

Karan Haresh Motwani May 01, 2021 Redesignation as Managing Director

Surendra Kumar Mehta June 23, 2021 Appointment as Independent Director

Rajendra Kumar Jain July 05, 2021 Appointment as Independent Director

Ajeet Anant Walavalkar July 05, 2021 Appointment as Independent Director

 

 

 

 

 

Borrowing Powers

The Articles, subject to the provisions of the Companies Act, 2013, authorize the Board to raise,
borrow or secure the payment of any sum or sums of money for the purposes of our Company. The
shareholders have, pursuant to a resolution passed at the general meeting held on September 28, 2020
authorized the Board to borrow, enhance and grant facility for the general, working capital and such
other corporate purposes, from time to time as the board may think fit, any sum or sums of money
which together with the monies already borrowed by the Company (apart from temporary loans
obtained from the Company’s Bankers in the ordinary course of business) may exceed the aggregate
of the paid-up share capital of the Company and its free reserves that is to say reserves not set apart
for any specific purpose, provided that the total amount of money so borrowed shall not at any time
exceed the limit of 100,00,00,000/- (Rupees One Hundred Crores only) on such terms and conditions
as the Board may deem fit.

Further the Board has been authorized to mortgage/ charge/ hypothecate all or any of the immoveable
or moveable properties of the Company including under hire purchase scheme both present and future
and/ or whole or substantially the whole of the undertaking or undertakings of the Company on such
terms and conditions as the Board may deem fit, for securing any loans and/or advances already
obtained or that may be obtained from bank(s), financial institution(s), others, entities or any
combination thereof from time to time and at any time and in one or more tranches. However, the total
underlying charge created/to be created shall not exceed 2100,00,00,000/- (Rupees One Hundred
Crores only) at any time.

Corporate Governance

The provisions of Listing Agreement to be entered into with the Stock Exchange(s) and the applicable
regulations of SEBI LODR Regulations with respect to corporate governance will be applicable to us
immediately upon the listing of our Equity Shares with the Stock Exchanges. We believe we are in
compliance with the requirements of the applicable regulations, including the Listing Agreement with
Stock Exchange(s), the SEBI LODR Regulations, the SEBI ICDR Regulations and the Companies Act
in respect of corporate governance including constitution of the Board and committees thereof. The

186
corporate governance framework is based on an effective independent Board, separation of the board’s
supervisory role from the executive management team and constitution of the Board committees, each
as required under law.

Our Board of Directors is constituted in compliance with the Companies Act, 2013 and the SEBI
LODR Regulations. The Board functions either as a full board or through various committees
constituted to oversee specific functions. Our executive management provides our Board detailed
reports on its performance periodically.

Currently, our Board has 5 (five) directors. In compliance with the requirements of the Companies Act
& Regulation 17 of the SEBI LODR Regulations, we have 2 (two) executive directors, one of whom
is also the Managing Director of our Company and 3 (three) non-executive independent directors 1
(one) of our directors is a woman director.

Committee of the Board in accordance with the SEBI LODR Regulations and other applicable laws:

In terms of the SEBI LODR Regulations and the provisions of the Companies Act, 2013 or other
applicable laws, our Company has constituted the following Board-level committees:

(i) Audit Committee;

(ii) Nomination and Remuneration Committee;

(iii) Stakeholders’ Relationship Committee.

For the purposes of the IPO, the Board has also constituted an IPO Committee.

Audit Committee

The Audit Committee currently consists of:

 

 

 

 

Name Position in the Committee Designation
Mr. Surendra Kumar Mehta Chairman Non-Executive Independent Director
Mr. Rajendra Kumar Jain Member Non-Executive Independent Director
Mr. Karan Haresh Motwani Member Managing Director

 

 

 

 

 

Our Audit Committee was constituted by a resolution of our Board dated July 07, 2021, in compliance
with the Companies Act, 2013 and SEBI LODR Regulations. The role of the Audit Committee shall
be in accordance with section 177 of the Companies Act, 2013 and as per Regulation 18 and Part C of
Schedule II of SEBI LODR Regulations. The role of the Audit Committee include the following:

1. oversight of the Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and credible;
2. recommendation for appointment, remuneration and terms of appointment of auditors of the
Company;
3. approve payment to statutory auditors for any other services rendered by the statutory auditors;
4. review, with the management, the annual financial statements and auditor's report thereon before
submission to the board for approval, with particular reference to:
a) matters required to be included in the director’s responsibility statement to be included in the
board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act,
2013;
b) changes, if any, in accounting policies and practices and reasons for the same;
c) major accounting entries involving estimates based on the exercise of judgment by
management;
d) — significant adjustments made in the financial statements arising out of audit findings;
e) compliance with listing and other legal requirements relating to financial statements;

187
10.

11.

12.

13.

14,

15.

16.

17.

18.

19.

20.

21.

225

23.

24,

f) disclosure of any related party transactions;
g) modified opinion(s) in the draft audit report;

review, with the management, the quarterly financial statements before submission to the board
for approval;

review, with the management, the statement of uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes
other than those stated in the offer document / prospectus / notice and the report submitted by the
monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making
appropriate recommendations to the board to take up steps in this matter;

review and monitor the auditor’s independence and performance, and effectiveness of audit
process;

Subject to and conditional upon approval of our Board, approval of related party transactions or
subsequent modifications thereto. Such approval can be in the form of omnibus approval of related
party transactions, subject to conditions not inconsistent with the conditions specified in
Regulation 23(2) and Regulation 23(3) of the SEBI LODR Regulations;

Subject to review by our Board, review on quarterly basis, of related party transactions entered
into by our Company pursuant to each omnibus approval given pursuant to 6 above;

Explanation: The term “related party transactions” shall have the same meaning as provided in
Clause 2(zc) of the SEBI LODR Regulations and/or the applicable Accounting Standards and/or
the Companies Act, 2013.

scrutinize inter-corporate loans and investments;

valuation of undertakings or assets of the Company, wherever it is necessary;

evaluation of internal financial controls and risk management systems;

review, with the management, performance of statutory and internal auditors, adequacy of the
internal control systems;

review the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure
coverage and frequency of internal audit;

discussion with internal auditors of any significant findings and follow up there on;

review the findings of any internal investigations by the internal auditors into matters where there
is suspected fraud or irregularity or a failure of internal control systems of a material nature and
reporting the matter to the board;

discussion with statutory auditors before the audit commences, about the nature and scope of audit
as well as post-audit discussion to ascertain any area of concern;

to look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;

to review the functioning of the whistle blower mechanism;

Oversee the procedures and processes established to attend to issues relating to the maintenance
of books of accounts, administrations procedures, transactions and other matters having a bearing
on the financial position of our company, whether raised by the auditors or by any other person;
Act as a compliance committee to discuss the level of compliance in our Company and any
associated risks and to monitor and report to the Board on any significant compliance breaches;
Approve the appointment of chief financial officer (ie the whole-time Finance Director or any
other person heading the finance function or discharging that function) after assessing the
qualifications, experience and background, etc. of the candidate;

Oversee the vigil mechanism established by our Company and the chairman of audit committee
shall directly hear grievances of victimization of employees and directors, who use vigil
mechanism to report genuine concerns; and

Carrying out any other function as is mentioned in the terms of reference of the audit committee
and any other terms of references as may be decided by the board of directors of our company or
specified/provided under the Companies Act, 2013 or by the SEBI LODR Regulations or by any
other regulatory authority.

188
The Audit Committee shall mandatorily review the following information:

a)
b)

5)
d)
°)

f)

management discussion and analysis of financial condition and results of operations;

statement of significant related party transactions (as defined by the audit committee), submitted
by management;

management letters / letters of internal control weaknesses issued by the statutory auditors;
internal audit reports relating to internal control weaknesses; and

the appointment, removal and terms of remuneration of the chief internal auditor shall be subject
to review by the audit committee.

statement of deviations:

quarterly statement of deviation(s) including report of monitoring agency, if applicable,
submitted to stock exchange(s) in terms of Regulation 32(1).

annual statement of funds utilized for purposes other than those stated in the offer
document/prospectus/notice in terms of Regulation 32(7).

The powers of the Audit Committee are as mentioned below:

sw

to investigate any activity within its terms of reference;

to seek information from any employee of our Company;

to obtain outside legal or other professional advice; and

to secure attendance of outsiders with relevant expertise, if it considers necessary.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee currently consists of:

 

 

 

 

 

Name Position in the Committee Designation
Mr. Surendra Kumar Mehta Chairman Non-Executive Independent Director
Mr. Rajendra Kumar Jain Member Non-Executive Independent Director
Mr. Ajeet Anant Walavalkar Member Non-Executive Independent Director

 

 

 

 

The Nomination and Remuneration Committee was constituted by a resolution of our Board dated July
07, 2021, in compliance with Section 178 of the Companies Act, 2013 and as per Regulation 19 of
SEBI LODR Regulations.

The role of the Nomination and Remuneration shall be in accordance with Section 178 of the
Companies Act and as per Regulation 19 of SEBI LODR Regulations The terms of reference of the
Nomination and Remuneration Committee include the following:

a)

b)

@)
)
)

Formulating and recommending to the Board of Directors for its approval and also to review from
time to time, a nomination and remuneration policy or processes, as may be required pursuant to
the provisions of the Companies Act;

formulation of the criteria for determining qualifications, positive attributes and independence of
a director and recommend to the board of directors a policy relating to, the remuneration of the
directors, key managerial personnel and other employees;

identifying persons who are qualified to become directors and persons who may be appointed in
senior management position in accordance with the criteria laid down, and recommend to the
Board their appointment and removal;

Determining whether to extend or continue the term of appointment of the independent director,
on the basis of the report of performance evaluation of independent directors.

formulation of criteria for evaluation of performance of independent directors and the board of
directors;

recommending to the board, all remuneration, in whatever form, payable to senior management.

189
8)

h)

D

recommending to the Board, qualifications, appointment, remuneration and removal of Directors,
key management personnel and persons in senior management positions in accordance with the
nomination and remuneration policy;

devising a policy on diversity of board of directors;

carrying out performance evaluation of every Director in accordance with the nomination and
remuneration policy;

considering grant of stock options to the eligible Directors, formulating detailed terms and
conditions of employee stock option scheme and administering and exercising superintendence
over employee stock option schemes;

k) engaging the services of any consultant/professional or other agency for the purpose of

recommending compensation structure / policy;

1) performing such other activities as may be delegated by the Board or specified or provided under
the Companies Act, 2013 or the SEBI LODR Regulations, and the rules and regulations made
thereunder or other applicable law, including any amendments thereto as may be made from time
to time.

Stakeholders’ Relationship Committee

The Stakeholders’ Relationship Committee currently comprises:

 

 

 

 

 

 

 

Name Position in the Designation
Committee
Mr. Surendra Kumar Mehta Chairman Non-Executive Independent Director
Mr. Rajendra Kumar Jain Member Non-Executive Independent Director
Mr. Ajeet Anant Walavalkar Member Non-Executive Independent Director

 

 

Our Stakeholders’ Relationship Committee was constituted by a resolution of our Board dated July 07,
2021, in compliance with Section 178 of the Companies Act.

The Stakeholders Relationship Committee shall oversee all the matters pertaining to investors of our
Company. The scope and function of the Stakeholders Relationship Committee and its terms of

re
a)

b)

5)

qd)

e)

8)

h)

ference shall include the following:

Consider and resolve the grievances of security holders of the Company including Investors’
Complaints;

Allotment, transfer of shares including transmission, splitting of shares, changing joint holding
into single holding and vice versa, issue of duplicate shares in lien of those torn, destroyed, lost or
defaced or where the cages in the reverse for recording transfers have been fully utilized;
Redressing of shareholders and investors complaints such as non-receipt of declared dividend,
annual report, transfer of Equity shares and issue of duplicate / split / consolidated share
certificates;

Monitoring transfers, transmissions, dematerialization, remateralization, splitting and
consolidation of Equity Shares and other securities issued by our Company, including review of
cases for refusal of transfer / transmission of shares and debentures;

Reference to statutory and regulatory authorities regarding investor grievances;

To otherwise ensure proper and timely attendance and redressal of investor queries and grievances;
and

Any other power specifically assigned by the Board of Directors of the Company from time to
time by way of resolution passed by it in a duly conducted meeting.

To do all such acts, things or deeds as may be necessary or incidental to the exercise of the above
powers.

190
@

(Executive Director, Chairperson)

Other committees

Internal Complaints Committee for redressal of sexual harassment complaints

ay

In addition to the committees of our Board detailed above, our Board may, from time to time, constitute

committees for various functions.

Management Organization Structure

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INES Cec Peo ue | Ru err cue)

  

  
 
    
    
 
  
 
  

(Managing Director) (Independent Director)

  
   

ene ics

aero

 

Pet)

   

Neto
(Cheif Financial Officer)

   

 
    
  

oD Jyoti Nikunj Chawda

 
  

CTE rs as

development) Fmeanvaoy

 
 

Key Management Personnel

Coconino

(Independent Director)

Pyera Ura nero
(Independent Director)

 

Mr. Karan Motwani, our Managing Director, Mr. Mihir Suresh Shah, our chief financial officer, and
Ms. Jyoti Nikunj Chawda, our company secretary & compliance officer are the Key Managerial
Personnel of our Company as defined in Section 2(51) of the Companies Act, 2013.

All the Key Management Personnel are permanent employees of our Company. The details of key

management personnel as on the date of this Prospectus are as follows:

Brief profiles of our Key Management Personnel

For a brief profile of Mr. Karan Motwani, see “Our Management - Brief Profiles of our Directors”

beginning on page 179 of this Prospectus.

The details of our other Key Management Personnel as of the date of this Prospectus are set forth

below:

Mr. Mihir Shah, aged 38 years, is the chief financial officer of our Company. He has been associated
with our Company since May 2021 and has been appointed as the chief financial officer of the
Company w.e.f. July 05, 2021. He holds a bachelor’s degree in commerce from Narsee Monjee College
of Commerce & Economics, Mumbai and master’s degree in management studies from Jamnalal Bajaj
Institute of Management Studies, Mumbai. He has an overall experience of nearly 15 years in
investment banking. Prior to joining our Company, he has worked with Acquizon Advisory Private
Limited as Director, Investment Banking from April 2017 until May 2021. He has also worked with
Ladder-up Corporate Advisory Private Limited as Vice President — Investment Banking, Money

191
Matters Financial Services Limited as Vice President — Investment Banking and Kotak Mahindra
Capital Company Limited as Associate — Special Situations team. He was not associated with our
Company during the last financial year and therefore, no remuneration has been paid to him for such
period. He is entitled to a remuneration of = 36 Lakhs p.a. salary for the FY 2021-22.

Ms. Jyoti Nikunj Chawda, aged 32 years, is the Company Secretary & Compliance Officer of our
Company. She has been appointed as the Company Secretary & Compliance Officer w.e.f. July 5,
2021. She is commerce and law graduate from the University of Mumbai and is an associate member
of the Institute of Company Secretaries of India (ICSI). She has an overall experience of nearly 7 years
in secretarial and compliance functions. Prior to joining our Company, she has worked with Man
Industries (India) Limited as Assistant Manager — Secretarial, Kridhan Infra Limited as Company
Secretary and Innergize Solutions Private Limited as Assistant Company Secretary. She was not
associated with the Company during the last financial year and hence, no remuneration has been paid
to her for such period. She is entitled to a remuneration of = 9,00,006/- for the FY 2021-22.

Brief Profiles of our Senior Management Personnel:

Ms. Nidhi Haresh Motwani is the Vice President — Operations of our Company, She has been
associated with our Company since February, 2016. She holds a master’s degree in Global Business
(Contemporary Marketing) from SP Jain School of Global Management, Mumbai and bachelor’s
degree in business administration from Narsee Monjee Institute of Management Studies, Mumbai. She
has an overall experience of 10 years in the fields of branding, marketing and sales. She handles the
operations and marketing activities of our Company. Previously she has worked with India Philip
Morris as Brand Connector, Suzlon Energy Limited as Team Leader and Godfry Philips India Limited
as Brand Connector.

Mr. Saurabhraj Bhatt is the Vice President — Sales and Marketing, of our Company. He has been
associated with our Company since September 2020. He holds a master’s degree in Marketing
Management from the University of Mumbai and bachelor’s degree in Commerce from Gujarat
University. He has an overall experience of about 22 years in sales & marketing, business development,
product promotion and client relationship management across various industries including
pharmaceuticals, paint and adhesives. He handles the product promotion, branding, sales and
marketing functions of our Company. He has worked with SRF Limited as Deputy General Manager,
Pidilite Industries Limited as Regional Sales Manager, Tidal Laboratories Private Limited as Regional
Business Manager, Sigma Laboratories Private Limited as District Sales Manager and Sun
Pharmaceutical India Limited as Medical Representative.

Mr. K. P. Unnikrishnan is the Assistant Vice President — New Product Development of our
Company. He has been associated with our Company since May 2017. He holds master’s degree in
commerce from Osmania University, bachelor’s degree in commerce from University of Calicut and
post-graduate in marketing management from Jamnalal Bajaj Institute of Management, University of
Bombay. He has a multi-functional experience of 36 years in sales & marketing, business development,
product management in the manufacturing sector.

Mr. Sabrinath Gopalkrishnan Nair is the Senior Manager — Purchase of our Company. He has been
associated with our Company since September 2015. He holds bachelor’s degree in commerce from
Osmania University, diploma in business management from Prin. L. N. Welingkar Institute of
Management Development & Research and has completed trainings in finance management and SAP
— Supply Chain Management. He has an experience of over 28 years in accounts, inventory control
and logistics operations.

192

a
a

 

Name

Date of Change

Reasons for Change

 

Mihir Suresh Shah

July 05, 2021

Appointed as Chief Financial Officer

 

Jyoti Nikunj Chawda

 

 

July 05, 2021

 

Appointed as Company Secretary & Compliance
Officer

 

 

Payment or benefit to officers of our Company

Except statutory entitlements for benefits upon termination of their employment in our Company or
retirement, no officer of our Company, including our Directors, Key Management Personnel, is entitled
to any benefits upon termination of employment under any service contract entered into with our

Company.

Except as stated otherwise in this Prospectus and any statutory payments made by our Company, no
amount or benefit has been paid or given, in the two years preceding the date of this Prospectus or is
intended to be paid or given to any of our Company’s officers except remuneration for services
rendered as Directors, officers or employees of our Company.

Employee stock option plan and employee stock purchase plan

Our Company has not issued any shares pursuant to employee stock option scheme.

194
Relationship among Key Management Personnel and among Key Management Personnel and
Directors

Other than as described below, our Key Management Personnel are neither related to each other nor
related to any of the directors:

 

 

 

 

Name Relationship
Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani Mother — Son
Mrs. Anjana Haresh Motwani and Ms. Nidhi Haresh Motwani Mother — Daughter
Mr. Karan Haresh Motwani and Ms. Nidhi Haresh Motwani Brother — Sister

 

 

 

 

There is no arrangement or understanding with the major shareholders, customers, suppliers or others,
pursuant to which any of our Key Management Personnel have been appointed.

Bonus or profit-sharing plan for the Key Management Personnel

Other that the performance-linked variable component of their remuneration, there is no bonus or
profit-sharing plan for the Key Management Personnel of our Company.

Shareholding of Key Management Personnel

Except as disclosed under ‘Our Management — Shareholding of directors in our Company’, none of
our Key Management Personnel hold any equity shares as on the date of this Prospectus.

Interest of Key Management Personnel

Other than as disclosed in this Offer Document, none of the Key Management Personnel of our
Company have any interests in our Company other than to the extent of the remuneration or benefits
to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred

by them during the ordinary course of business

No loans have been availed by the Key Management Personnel from our Company as on date of this
filing of this Prospectus.

Except Mr. Karan Haresh Motwani, Promoter of our Company, and Ms. Nidhi Haresh Motwani,
member of Promoter Group, none of our other KMPs have any interest in the promotion of our
Company other than in ordinary course of business.

Contingent and deferred compensation payable to Key Management Personnel

There is no contingent or deferred compensation payable to our Key Management Personnel.

Changes in Key Management Personnel during the last three years

Changes in our Key Management Personnel during the three years immediately preceding the date of
this Prospectus are set forth below.

 

 

 

 

 

 

 

 

Name Date of Change Reasons for Change
Karan Haresh Motwani May 07, 2019 Appointment as Executive Director
Kirti Agrawal October 19, 2019 Appointed as Company Secretary
Karan Haresh Motwani May 01, 2021 Re-designated as Managing Director
Kirti Agrawal June 30, 2021 Resigned as Company Secretary

 

 

193
Our Promoter

OUR PROMOTER AND PROMOTER GROUP

Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani are the Promoters of our Company. As
on the date of this Prospectus, our Promoters hold 1,35,67,335 equity shares which constitutes 95.31%
of the pre- Offer issued and paid-up equity share capital of our Company.

 

Mrs. Anjana Haresh Motwani, aged 65 years, is the Promoter,
Chairperson and Executive Director of our Company. For a
complete profile of Mrs. Anjana Haresh Motwani i.e., date of
birth, residential address, educational —_qualification,
professional experience, positions held in the past and other
directorships, special achievements, please refer to section
titled "Our Management” beginning on page 179 of this
Prospectus.

Driving License Number: Not applied
PAN: AANPM5804B
Aadhar No.: 9140 2872 6169

 

 

 

 

Mr. Karan Haresh Motwani, aged 36 years, is the Promoter and
Managing Director of our Company. For a complete profile of
Mr. Karan Haresh Motwani, i.e., date of birth, residential
address, educational qualification, professional experience,
positions held in the past and other directorships, special
achievements, please refer to section titled "Our Management”
beginning on page 179 of this Prospectus.

Driving License Number: MH02 20033033685
PAN No.: ANHPM5141Q
Aadhar No.: 7334 1908 1781

 

 

Our Company confirms that the details of the PAN, Bank Account Number(s) and Passport Number of
our Promoters shall be submitted to the Stock Exchange(s) at the time of filing the Prospectus.

Our Promoters, Mrs. Anjana Haresh Motwani and Mr. Karan Haresh Motwani are also involved in
other ventures and business activities in different capacities as listed below:

Mrs. Anjana Haresh Motwani

 

 

 

 

 

 

 

 

 

S. No. ‘Name of entity Nature of interest/ | CIN/ Registration No. of the
Position Entity

i: HP Composites LLP Designated Partner AAM-8532
HP International Shareholder and U26940MH2004PLC145530
Limited Director

3. HDM Estates Private Shareholder and U45202MH2015PTC261564
Limited Director

4. M/s. Hindustan Plastics Proprietor N.A.

 

Mr. Karan Haresh Motwani

195

 
a

 

 

 

 

 

 

 

 

 

 

 

Ss. Name of entity Nature of _ interest/ CIN/ Registration No. of the
No. position Entity
1. HP Composites LLP Designated Partner AAM-8532
2. HP International Limited Shareholder and Director U26940MH2004PLC145530
3. HDM Estates _ Private Shareholder and Director U45202MH2015PTC261564
Limited
4. M/s. Advance Solvent Proprietor N.A.
Adhesives
5. M/s. HP Sales Corporation Proprietor N.A.
6. M/s. HP Trading Proprietor N.A.
ye M/s. Hindustan Products Proprietor N.A.
8. Karan Motwani HUF HUF N.A.
9. Haresh Motwani HUF HUF N.A.

 

 

 

 

 

Interests of our Promoters

Our Promoters are interested in our Company in the following manner:

(a) Our Promoters are interested in our Company to the extent of the promotion of our Company and

to the extent of their respective equity shareholding in our Company and any dividend distribution
that may be made by our Company with respect to their equity shares in the future. Below
mentioned are the details pertaining to our Promoters’ shareholding:

 

 

 

 

 

 

 

 

 

 

Sr. No. Name of the Shareholder Number of Equity % of the paid up
Shares capital
4; Anjana Motwani 71,97,335 50.56
2, Karan Motwani 63,70,000 44.75
Total 1,35,67,335 95.31
(b) Our Promoters are also interested to the extent that they are Directors of our Company. Mrs.

(c

(a

Anjana Haresh Motwani is interested to the extent of any remuneration and reimbursement of
expenses payable to her by virtue of being Executive Director of our Company and Mr. Karan
Haresh Motwani is interested to the extent of remuneration and reimbursement of expenses
payable to him by virtue of being Managing Director of our Company. For further information,
please refer to chapter titled "Our Management" beginning on page 179 of this Prospectus.

Our Promoters are also interested to the extent of rent payable to them by the Company for the
registered office, admin office and factory premises given by them on leave and license basis to
the Company. For further details, please refer to chapter titled “Our Management” and
“Annexure- XXV- Related Party Transactions” beginning on pages 179 and 208 respectively of
this Prospectus.

Except as stated under "Annexure- XXV- Related Party Transactions" on page 208 of this
Prospectus, our Company has not entered into any contract, agreements or arrangements during
the preceding two (2) years from the date of this Prospectus or proposes to enter into any such
contract in which our Promoters are directly or indirectly interested and no payments have been
made to them in respect of the contracts, agreements or arrangements which are proposed to be
made with them.

196
(e) Except as stated otherwise in this Prospectus, our Promoters do not have any interest in any
property acquired by our Company in the preceding three (3) years of the date of this Prospectus
or proposed to be acquired by it or in any transaction in acquisition of land or any construction of
building or supply of machinery.

Our Promoters are not related to any sundry debtors of our Company except as disclosed in
“Annexure— XXV - Related Party Transactions” on page 208 of this Prospectus.

Our Promoters are not interested as a member of a firm or company, and no sum has been paid or
agreed to be paid to our Promoters or to such firm or company in cash or shares or otherwise by any
person for services rendered by him or by such firm or company in connection with the promotion or
formation of our Company except as disclosed in “Annexure— XXV - Related Party Transactions” on
page 208 of this Prospectus.

Promoter Group of our Company

(a) Individual Promoter Group of our Promoter

 

Relationship with

 

 

 

 

 

 

 

Mrs. Anjana Haresh Motwani Mr. Karan Haresh Motwani
Promoters
Father Late Mr. Thakorlal Zaverchand Shah Tate Mr: Haresh ~Dhanraj

Motwani

Mother Late Mrs. Hansa Thakorlal Shah Mrs. Anjana Haresh Motwani
Brother Late Mr. Jawahar Thakorlal Shah

Late Mr. Yogesh Thakorlal Shah -
Sister Mrs. Bharati Kishor Shah Ms. Nidhi Haresh Motwani
Spouse Late Mr. Haresh Dhanraj Motwani Mrs. Neha Karan Motwani
Daughter Ms. Nidhi Haresh Motwani -
Son Mr. Karan Haresh Motwani :

 

Spouse’s mother

Late Mrs. Savitri Dhanraj Motwani

Late Mrs. Meena Mahendra
Velani

Mrs. Shahbanu
Velani (stepmother)

Mahendra

 

Spouse’s father

Late Mr. Dhanraj Nechaldas Motwani

Mr. Mahendra
Velani

Valjibhai

 

Spouse’s Brother

Mr. Uttam Dhanraj Motwani

Mr. Anand Dhanraj Motwani

Late Mr. Kishanraj Dhanraj Motwani
Late Mr. Gulab Dhanraj Motwani

Mr. Manish Mahendra Velani

 

 

Spouse’s sister

 

Mrs. Geeta Nanik Mankani

 

Mrs. Tejal Shailesh Chamadia

 

(b) Entities forming a part of Promoter Group

As on the date of filling of this Prospectus, the following entities form part of our Promoter Group:

 

 

 

 

 

 

 

 

 

 

 

 

Sr. No. Name of Entities PAN
1. HP Composites LLP AALFH4967N
2. HP International Limited AABCH6674H
3. HDM Estates Pvt. Ltd. AADCH8715P
4. M/s. Hindustan Plastics AANPM5804B
oe M/s. Advance Solvent Adhesives ANHPM5141Q
6. M/s. HP Sales Corporation ANHPM5141Q
7. M/s. HP Trading ANHPM5141Q
8. M/s. Hindustan Products ANHPM5141Q

 

197

 

 
 

 

 

 

 

 

 

 

 

 

 

Sr. No. Name of Entities PAN

9. M/s. HP Marketing BCAPM1284K
10. M/s. HP International AAMFH1795B
11. M/s. Fabricast AACPMO0047P

12. Motwani Fabricast Pvt. Ltd. AAACM5064B
13. Fabricast Trading LLC N.A.

14. Dhanraj Motwani HUF AAAHD1922J

15. M/s. Maharashtra Pipe Fitting Stores AAAPV5487G
16. Karan Motwani HUF AAKHKS5706R
17. Haresh Motwani HUF AABHH7100P

 

 

 

 

Other than as disclosed above, our Company has no other companies or entities that form part of our

P.

Ss

F

romoter Group.
shareholding of the Promoter Group in our Company

or details of shareholding of members of our promoter group as on the date of this Prospectus

please see chapter titled “Capital Structure” on page 82 of this Prospectus.

Confirmations

The Company hereby confirms that:

oO

oO

Our Promoters have not been declared as Wilful Defaulters.

Our Promoters/ Promoter Group have not been declared as "Fraudulent Borrowers" by the lending banks
or financial institutions or consortium, in terms of RBI master circular dated July 01, 2016.

Our Promoters and members of the Promoter Group have not been prohibited from accessing the capital
markets under any order or direction passed by SEBI or any other regulatory or governmental authority.

Our Promoters have not been declared as fugitive economic offender under section 12 of the Fugitive
Economic Offender Act, 2018.

Our Promoters are not promoter, directors or person in control of any other company which is prohibited
from accessing the capital markets under any order or direction passed by SEBI or any other regulatory or
governmental authority.

Related Party Transactions

F

‘or details of related party transactions entered into by our Promoters, Promoter Group and our

Company during the last financial year, the nature of transactions and the cumulative value of
transactions, please refer to “Annexure— XXV - Related Party Transactions” on page 208 of this
Prospectus.

P.

E

ayment or benefits to the Promoters

xcept as stated otherwise under " Annexure- XXV- Related Party Transactions" on page 208 of this

Prospectus about the related party transactions entered into during the last two (2) Financial Years as
per IND AS 24 and in "Interest of our Promoters" in this Chapter, there has been no other payment or
benefit to our Promoters or Promoter Group nor is there any intention to pay or give any benefit to our
Promoters or Promoter Group as on the date of this Prospectus.

198
Disassociation by the Promoters from entities in last three (3) years

Except as stated below, our Promoter has not disassociated itself from any company or firm in the
three years immediately preceding the date of this Prospectus:

Fitternity Health E- Resignation as Director
| Solution Private January 23, 2020 due to change in
Anjana Haresh | Limited management

 

Motwani
Kisan Mouldings

Limited

Resignation as Director

August 10,2018 due to other engagements

 

Resignation from the

Fitternity Capital post of Designated

February 20, 2021

 

 

 

 

 

Management LLP Partner due to change in
Karan Haresh management
Motwant Fitternity Health E- Resignation as Director
Solution Private January 23, 2020 due to change in
Limited management

 

 

Change in the management and control of our Company

There has been no change in management and control of our Company during the last five years
immediately preceding the date of filing of this Prospectus.

Material Guarantees

There are no material guarantees given to third parties by the promoters with respect to specified
securities of the issuer.

Outstanding Litigation

For details of legal and regulatory proceedings involving our Promoters, please refer chapter titled
“Outstanding Litigation and Material Developments” beginning on page 293 of this Prospectus.

199
OUR GROUP COMPANIES

In accordance with the SEBI ICDR Regulations, for the purpose of identification of Group Companies,
our Company has considered companies with which there were related party transactions, during the
period for which financial information is disclosed in the Prospectus, as covered under the applicable
Indian Accounting Standards i.e., IND-AS 24 with whom our Company has had related party
transactions during the six months period ended September 30, 2021 and financial years ended March
31, 2021, March 31, 2020 and March 31, 2019 and also other companies as considered material by the
Board as per the materiality policy adopted by the Board pursuant to its resolution dated July 07, 2021
(the “Materiality Policy on Group Companies”) for the purpose of disclosure in the offer document in
connection with the Offer.

In terms of the Materiality Policy on Group Companies apart from the companies with which there
have been related party transactions during the period for which financial information has been
disclosed under this Prospectus, a company is considered to be a material Group Company as under:

(i) company in which the investment in the form of equity or voting power or debt or debt
instruments by our Company exceeds 25% of the net worth of our Company for the last audited
financial year; and

(ii) where our Company has entered into one or more transactions with such company in the last
audited financial year, cumulatively exceeding 5% of the total revenues of our Company for the
last audited financial
year.

Accordingly, based on the parameters outlined above, our Company does not have any Group
Company as on the date of this Prospectus.

200
DIVIDEND POLICY

Under the Companies Act, our Company can pay dividends upon a recommendation by our Board of
Directors and approval by a majority of the shareholders at the Annual General Meeting. The
shareholders of our Company have the right to decrease but not to increase the amount of dividend
recommended by the Board of Directors. The dividends may be paid out of profits of our Company in
the year in which the dividend is declared or out of the undistributed profits or reserves of previous
fiscal years or out of both. The Articles of Association of our Company also gives the discretion to our
Board of Directors to declare and pay interim dividends.

The declaration and payment of dividend will be recommended by our Board of Directors and
approved by the shareholders of our Company at their discretion and will depend on a number of
factors, including the results of operations, earnings, capital requirements and surplus, general financial
conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered
relevant by our Board of Directors.

Our Company has not declared any dividends in the last two fiscals and the period between last audited
period and the date of filing of this Prospectus.

For further details, please refer to section titled ‘Financial Information’ beginning on page 202 of this
Prospectus.
ey

SECTION V — FINANCIAL INFORMATION

RESTATED FINANCIAL STATEMENTS

Independent Auditor's Examination report on the Restated Ind AS Financial Information of
HP Adhesives Limited

To,

The Board of Directors

HP Adhesives Limited

11 Unique house, Chakala cross road,
Andheri East, Mumbai City MH 400099

Independent Auditors examination report on the Restated Ind AS Statement of Assets and Liabilities as at September 30,
2021, September 30, 2020, March 31, 2021, March 31, 2020, March 31, 2019; the Restated Ind AS Statement of Profit
and Loss (including other comprehensive income), the Restated Ind AS Cash Flow Statement, Restated Summary of
Statement of Changes in Equity, the Summary Statement of Significant Accounting Policies, and other explanatory
information of HP Adhesives Limited (formed by conversion of Partnership firm M/s HP International to Private Limited
company subsequently converted to Public Limited Company "HP Adhesives Limited") for the six month ended September
30,2021 and September 30, 2020 and for each year ended March 31, 2021, March 31, 2020 and March 31, 2019;
(collectively, the "Restated Ind AS Summary Statements").

Dear Sirs / Madam,

We have examined the attached Restated Ind AS Financial Information of HP Adhesive Limited (the
“Company”) as at and for the six months ended September 30, 2021 and September 30, 2020 and for each year
ended March 31, 2021, March 31, 2020 and March 31, 2019 annexed to this report and prepared by the Company
for the purpose of inclusion in, RHP & Prospectus (collectively the “offer documents”) proposed to be filed with
the Securities and Exchange Board of India (“SEBI”), BSE Limited and National Stock Exchange of India Limited
(collectively, the “Stock Exchanges”); & any other document of the Company in connection with its proposed
Initial Public Offer of equity shares (“IPO”), prepared in terms of the requirements of :

a) Section 26(1) of Part I of Chapter III of the Companies Act, 2013 (the “ Act”);

b) Relevant provisions of The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended ("ICDR Regulations"); and

c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of
Chartered Accountants of India (“ICAI”), (the “Guidance Note”).

Management's Responsibility for the Restated Ind As Summary Statements

1. The Company's Board of Directors is responsible for the preparation of the Restated Ind AS Financial
Information for the purpose of inclusion in the offer documents to be filed with Securities and
Exchange Board of India, BSE Limited, National Stock Exchange of India Limited and Registrar of
Companies, Mumbai in connection with the proposed IPO. The Restated Ind AS Financial
Information have been prepared by the management of the Company on the basis of preparation
stated in paragraph 2.1 of Annexure IV (A) to the Restated Ind AS Financial Information. The
respective Board of Directors of the Company included in the Group are responsible for designing,
implementing and maintaining adequate internal control relevant to the preparation and presentation
of the Restated Ind AS Financial Information. The respective Board of Directors are responsible for
identifying and ensuring that the Group complies with the Act, ICDR Regulations and the Guidance
Note.

202
a

Auditors' Responsibilities
2. We have examined such Restated Ind As Financial Information taking into consideration:

The terms of reference and terms of our Master Engagement Agreement dated August 23,
2021 (As Amended on Oct 25, 2021) for the purpose of inclusion in the RHP & Prospectus &
any other document of the Company in connection with its proposed Initial Public Offer of
equity shares (“IPO”);

b. The Guidance Note. The Guidance Note also requires that we comply with ethical
requirements of the Code of Ethics issued by the ICAT;

c. Concepts of test checks and materiality to obtain reasonable assurance based on the
verification of evidence supporting the Restated Ind As Financial Information; and

d. The requirements of Section 26 of the Act and the ICDR Regulations. Our work was
performed solely to assist you in meeting your responsibilities in relation to your compliance
with the Act, ICDR Regulations in connection with the IPO.

Restated Ind AS Summary Statements as per Audited Financial Statements
3. The Restated Summary Statements of the Company have been complied & extracted by the
management from:

a.

Audited Interim Condensed Financial statements of the Company as at and for the six months
period ended September 30, 2021 and September 30, 2020 prepared in accordance with the
Indian Accounting Standard 34 -“Interim Financial Reporting” as prescribed under Section
133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended
and other accounting principles generally accepted in India, which have been approved by
the Board of Directors at their meeting held on November 15, 2021.

The Audited Financial Statements of the Company for the financial years ended on March 31,
2021 which includes the comparative Ind AS financial statements as at and for the year ended
March 31, 2020 and March 31, 2019 (previously proforma subsequently restated under IND
AS issued dated 27/11/2021) prepared in accordance with Ind AS as prescribed under Section
133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended,
and other accounting principles generally accepted in India, which have been approved by
the Board of Directors at their meeting held on July 14, 2021 subsequently approved wide
meeting held on November 27,2021. The Comparative Ind AS financial statements as at and
for the year ended March 31, 2020 have been prepared by making Ind AS adjustments to the
audited financial statements as at and for the year ended March 31, 2020, prepared in
accordance with the accounting standards notified under the section 133 of the Companies
Act, 2013, which was approved by the Board of directors at their meeting held on December
31, 2020.

The Audited Ind AS Financial Statements for the period ended March 31, 2021 prepared in
accordance with Indian Accounting Standard (Ind AS) 101 " First Time Adoption " specified
under section 133 of the Act and other accounting principles generally accepted in India which
have been approved by the Board of Directors at their meeting held on July 14, 2021
considering the adoption date as May 7, 2019.

203
a
d. The Restated Financial Information also contains the Ind AS financial information as at and
for the year ended March 31, 2019 (previously proforma subsequently restated under IND AS
issued dated 27/11/2021). These Ind AS financial information have been prepared by making
Ind AS adjustments to the special purpose Indian GAAP Financial statements of Erstwhile
Partnership of Converted Company as at and for the year ended March 31, 2019 and also for
the period for April 01,2019 to May,07,2019 as described in Note 2 to the Restated Financial
Information.

4. For the purpose of our examination, we have relied on Auditors“ Report issued by us on the Ind AS
Financial Statements as at and for each of the year ended March 31, 2021, March 31, 2020 (Restated
under IND AS) issued dated 14/07/2021 along with Audited Financials under Indian GAAP of
Erstwhile partnership firm for the year ended March 31, 2019 approved & audited as per Partnership
Act on September 27, 2019 (previously proforma subsequently restated under IND AS issued dated
27/11/2021) and Condensed Interim Financial Statements for the period ended on 30 September, 2021
issued dated 15/11/2021.

5. Based on our examination and according to the information and explanations given to us, we report
that Restated Ind AS Summary Statements:

A. Have been prepared after incorporating adjustments for the changes in accounting policies and

regrouping/reclassifications retrospectively in the financial years ended March 31, 2021, March

31, 2020 and March 31, 2019 (Restated under IND AS) and six months period ended September

30, 2020 to reflect the same accounting treatment as per the accounting policies and

grouping/ classifications followed as at and for the six months period ended September 30, 2021;

B. Our Audit Report on the Financial statements for the year ended March 31,2021, March 31,2020
& March,31, 2019 includes an Emphasis of matter that has been reproduced as follows:
I. For the year ended March, 31, 2021 which includes the comparative Ind AS financial
statements as at and for the year ended March 31, 2020 prepared in accordance with Ind
AS:
a) “Effect of Transition to Ind AS Accounting framework: The Company has adopted Ind
AS from 1st April 2020 with an effective date of 7th May 2019 for such transition for
periods upto and including the year ended 31 March 2020, the Company had prepared
and presented its financial statements in accordance with the erstwhile generally
accepted accounting principles in India (Indian GAAP). To give effect of the transition
to Ind AS, these financial statements for the year ended 31 March 2021, together with
the comparative financial information for the previous year ended 31 March 2020 and
the transition date Balance Sheet as at 7th May 2019 have been prepared under Ind AS.
b) Impairment of Financial Assets (Expected Credit loss) framework: Ind AS 109 requires
company to recognise impairment loss allowance towards its financial assets
(designated at amortised cost and fair value through other comprehensive income)
using the expected credit loss approach considering the guiding principles of Ind AS
109
c) Defined Benefit Plans: Company has first time Estimated Defined Benefit Plan. The
Estimation of retirement benefit obligation is based on significant assumptions and
judgments as disclosed in notes, small changes in assumptions can have material
impact on the valuation of benefit obligation.

204
IL.

Il.

Iv.

a

d) “We draw attention to the Ind AS Financial Statements which describes the

management's assessment of the COVID-19 pandemic on the results and the extent to
which it will impact the Company's operations is dependent upon future
developments, which remain uncertain.

Our opinion is not modified in respect of this matter.”

For the year ended Year ended March,31, 2020:

Have been prepared after incorporating adjustments for the changes in accounting
policies, material errors and regrouping/reclassifications retrospectively in the
financial years ended 31 March 2020 to reflect the same accounting treatment as per
the accounting policies and grouping/classifications followed as at March,31, 2021;
along with incorporating Ind AS adjustments to the audited Audited financial
statements of Partnership Firm Period for April,01,2019 to May,07,2019 as described in
Note IV(A) to the Restated Financial Information;

“We draw attention to the Ind AS Financial Statements which describes the
management's assessment of the COVID-19 pandemic on the results and the extent to
which it will impact the Company's operations is dependent upon future
developments, which remain uncertain.

Our opinion is not modified in respect of this matter.”

For the period ended March 31, 2019 (Previously proforma subsequently restated under
IND AS issued dated 27/11/2021):

Have been prepared after incorporating Ind AS adjustments to special purpose Indian

GAAP Financial statements of Erstwhile Partnership Firm of Converted Company as

at and for the year ended March 31, 2019 as described in Note IV(A) to the Restated

Financial Information;

a) does not contain any qualifications requiring adjustments; and

b) have been prepared in accordance with the Act, ICDR Regulations and the
Guidance Note.

For all the period’s as stated above including for the six months ended Sept 30, 2021 and
Sept 30, 2020 and as at and for the year ended March 31, 2021, March 31, 2020 and March
31, 2019 period:

a)

b)

does not contain any qualifications requiring adjustments in the audited financial
statements; and

have been prepared in accordance with the Act, ICDR Regulations and the Guidance
Note.

6. Inaccordance with the requirements of Part I of Chapter III of Act including rules made therein, ICDR

Regulations, Guidance Note and Engagement Letter, we report that:

i.

The “Restated Summary Statement of Assets and Liabilities” as set out in Annexure I to this
report, of the Company for the six months ended as on September 30, 2021 & September 30,
2020 and years ended as at March 31, 2021, March 31, 2020 & March 31, 2019 are prepared by
the Company and approved by the Board of Directors. These Restated Summary Statement of
Assets and Liabilities, have been arrived at after making such adjustments and regroupings
to the individual financial statements of the Company, as in our opinion were appropriate and
more fully described in Significant Accounting Policies, Notes on Adjustment made for Rested
Financial Statements & Other Notes on Restated Accounts are set out in Annexure IV (A) to
this report.

205
ii.

iii.

a

The “Restated Summary Statement of Profit and Loss” as set out in Annexure II to this report,
of the Company for the for the six months period ended as on September 30, 2021 & September
30, 2020, and years ended as at March 31, 2021, March 31, 2020 & March 31, 2019 are prepared
by the Company and approved by the Board of Directors. These Restated Summary Statement
of Profit and Loss have been arrived at after making such adjustments and regroupings to the
individual financial statements of the Company, as in our opinion were appropriate and more
fully described in Significant Accounting Policies, Notes on Adjustment made for Rested
Financial Statements & Other Notes on Restated Accounts are set out in Annexure IV (A) to
this report.

The “Restated Summary Statement of Cash Flow” as set out in Annexure III to this report, of
the Company for the six months ended as on September 30, 2021 & September 30, 2020 and
years ended the years ended as at March 31, 2021, March 31, 2020 & March 31, 2019 are
prepared by the Company and approved by the Board of Directors. These Restated Summary
Statement of Cash Flow, have been arrived at after making such adjustments and regroupings
to the individual financial statements of the Company, as in our opinion were appropriate and
more fully described in Significant Accounting Policies, Notes on Adjustment made for Rested
Financial Statements & Other Notes on Restated Accounts are set out in Annexure IV (A) to
this report.

7. Based on the above and also as per the reliance placed by us on the Audited Interim/ Condensed
Financial Statements of the Company and report thereon for the for the six months ended as on
September 30, 2021 & September 30, 2020 and years ended as at March 31, 2021, March 31, 2020 &
March 31, 2019 we are of opinion that:

a)

b)

The Restated Summary Statements have been made after incorporating adjustments for the
changes in accounting policies retrospectively in respective financial period/years to reflect the
same accounting treatment as per the changed accounting policy for all reporting periods, if any;
The Restated Summary Statements have been made after incorporating adjustments for prior
period any other material error if any , in the respective financial years/period to which they
relate and there are no qualifications which they relate and there are no qualification which
require adjustments;

Extra-ordinary items that needs to be disclosed separately in the accounts has been disclosed
wherever required;

There were no qualifications in the Audit Reports issued in Statutory Audit Report / Interim
Condensed Financial statements for the six months ended as on September 30, 2021 & September
30, 2020 and years ended as at March 31, 2021 ,March 31, 2020 & March 31, 2019 which would
require adjustments in this Restated Financial Statements of the Company;

Profits and losses have been arrived at after charging all expenses including depreciation and after
making such adjustments/restatements and regroupings as in our opinion are appropriate and
are to be read in accordance with Significant Accounting Policies, Notes on Adjustment made for
Rested Financial Statements & Other Notes on Restated Accounts are set out in Annexure IV (A)
to this report.

Adjustments in Restated Summary Statements have been made in accordance with the correct
accounting policies, which includes the impact of provision of gratuity made on actuarial basis in
the Restated Summary Statements;

206
10.

11.

a

g) There was no change in accounting policies subject to as mentioned in notes on adjustments made
for restated financial statements set out in Annexure IV(A) to the report, which needs to be
adjusted in the Restated Financial Statements;

h) There was no Revaluation Reserves, which need to be disclosed separately in the Restated
Financial Statements;

i) The Company has not paid any dividend on its equity shares till March 31,2021 & six months
ended September 30, 2021.

We have not audited any financial statements of the Company as of any date or for any period
subsequent to September 30, 2021. Accordingly, we express no opinion on the financial position,
results of operations, cash flows and statement of changes in equity of the Company as of any date or
for any period subsequent to September 30, 2021. The Restated Ind AS Summary Statements does not
reflect the events that occurred subsequent to the respective dates of the reports on the Ind AS
financial statements mentioned in paragraph 4 above.

We have also examined the following other financial information relating to the Company prepared
by the Management and as approved by the Board of Directors of the Company and annexed to this
report relating to the Company for the financial year ended on March 31, 2021, March 31, 2020 &
March 31, 2019(Restated under IND AS) and six months period ended on 30 September, 2021 & 30
September, 2020, proposed to be included in the RHP & Prospectus & any other document of the
Company in connection with its proposed Initial Public Offer of equity shares (“IPO”).

Annexure of Restated Financial Statements of the Company :-

 

 

 

 

 

 

 

 

Sr. No | Particulars Annexure

1. Restated Ind AS summary statement of Assets and | Annexure I
Liabilities

2, Restated Ind AS summary statement of Profit and | Annexure II
Loss

Be Restated Ind AS Summary statement of Cash flows | Annexure III

4. Notes to the Restated Ind AS financial information - | Annexure IV (A)
Significant Accounting policies

Be Reconciliation of Restated Profit Annexure IV (B)

6. Reconciliation of Restated Equity /Net Worth Annexure IV (C)

Fe Notes to the Restated Ind AS financial statements Annexure V - XXXI

 

 

 

 

 

. We, Priya Choudhary & Associates LLP, have been subjected to the peer review process of the
Institute of Chartered Accountants of India (“ICAI”) and hold a valid peer review certificate issued
by the “Peer Review Board” of the ICAI.

The preparation and presentation of the Financial Statements referred to above are based on the
Audited Financial Statements of the Company and are in accordance with the provisions of the Act
and ICDR regulations. The Financial Statements and information referred to above is the
responsibility of the management of the Company.

207
ey

12. This report should not in any way be construed as a re-issuance or re-dating of any of the previous
audit reports issued by us nor should this report be construed as a new opinion on any of the financial
statements referred to therein.

13. We have no responsibility to update our report for events and circumstances occurring after the date
of the report.

14. In our opinion, the above financial information contained in Annexure V to XXVII of this report read
with the respective Significant Accounting Policies and Notes to Accounts as set out in Annexure
IV(A) are prepared after making adjustments and regrouping as considered appropriate and have
been prepared in accordance with the Act, ICDR Regulations, Engagement Letter and Guidance Note.

15. Our report is intended solely for use of the Board of Directors for inclusion in the RHP & Prospectus
& any other document of the Company in connection with its proposed Initial Public Offer of equity
shares (“IPO”) to be filed with Securities and Exchange Board of India, National Stock Exchange of
India Limited, BSE Limited and Registrar of Companies, Maharashtra in connection with the
proposed IPO of the Company. Our report should not be used, referred to or distributed for any other
purpose except with our prior consent in writing. Accordingly, we do not accept or assume any
liability or any duty of care for any other purpose or to any other person to whom this report is shown
or into whose hands it may come without our prior consent in writing.

For Priya Choudhary & Associates LLP
Chartered Accountants
(FRN- 011506C/C400307)

Vaibhav Choudhary

(Partner)

(M.No. 407543)

Place: Mumbai(Mah)

Date: 27/11/2021

UDIN No: 21407544A AAAGT6167

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HP ADHESIVES LIMITED
RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES ANNEXURE I
@ in Lakh)
Particulars Annexure As at 30th As at Asat As at 31st As at 31st
Sept, 2021 30th 31st March, March,
Sept, March, 2020** 2019**
2020 2021
ASSETS
Non-current assets
Property, plant and equipment Xi 1,696.49 934.17 1,865.82 950.41 874.82
Capital work-in-progress 1,085.69 124.18 652.03 119.91 -
Right of Use Assets xill 476.33 62.33 38.26 114.94 3.13
Goodwill
Other intangible assets xl 19.19 19.31 17.18 14.76 0.51
Financial assets
Other financial assets XIV 69.04 53.45 39.71 88.53 33.24
Deferred tax asset (net) 129.81 246.78 171.98 242.69 165.81
Other non-current assets XIV 15.88 15.88 15.88 15.88 150.44
Total non-current assets 3,492.43 1,456.10 2,800.85 1,547.10 1,227.95
Current assets
Inventories XV 3,369.53 2,052.46 3,239.69 1,852.03 1,452.38
Financial assets
Investments
Trade receivables xvi 2,880.79 1,937.71 2,286.61 1,979.85 2,240.84
Cash and cash equivalents XVII 68.30 102.07 83.10 75.65 190.95
Loans XVIII 108.71 124.73 116.65 122.51 82.29
Current tax assets (net) XVIII - - - 15.30 292.66
Other current assets XVIII 571.29 442.66 450.97 88.69 184.67
Total current assets 6,998.61 4,659.63 6,177.03 4,134.03 4,443.79
TOTAL ASSETS 10,491.04 6,115.73 8,977.89 5,681.12 5,671.74
EQUITY AND LIABILITIES
EQUITY
Equity share capital Vv 1,423.49 1,300.00 1,300.00 1,300.00 1,300.00
Other equity vl 2,332.58 (739.51) (34.12) (1,051.56) 166.23
Total equity 3,756.08 560.49 1,265.88 248.44 1,466.23
LIABILITIES
Non-current liabi
Financial liabilities
Borrowings Vil 805.76 525.34 854.69 77.72 104.98
Lease Liabilities IX (C) 337.16 24.15 14.52 73.61 5.08
Other non current liabilities = # * * *
Provisions IX (B) 105.75 115.76 119.18 101.26 55.38
Total non-current liabilities 1,248.66 665.25 988.39 252.59 165.44
Current liabilities
Financial liabilities
Borrowings Xl 1,924.76 2,367.33 2,283.83 3,328.26 2,253.35
Lease Liabilities Xl 141.21 37.85 24.24 38.75 5.49
Trade payables

 

 

 

209

 

 

 

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Annexure As at 30th Asat As at As at 31st As at 31st
Sept, 2021 30th 31st March, March,
Sept, March, 2020** 2019**
2020 2021
(i) Total outstanding dues of
micro enterprises and small
enterprises x 1,338.24 625.79 396.01 - -
(ii) Total outstanding dues of
creditors other than micro and
small enterprises x 1,276.92 805.35 2,193.02 1,526.79 1,457.36
Other financial liabilities Xl 446.69 837.62 1,422.48 277.97 71.60
Other current liabilities XI 142.59 161.58 127.30 8.32 245.37
Provisions Xi 53.78 = 141.66 “ 6.90
Current tax liabilities (net) Xi 162.11 54.48 135.07 - -
Total current liabilities 5,486.30 4,889.99 6,723.61 5,180.09 4,040.07
TOTAL LIABILITIES 6,734.96 5,555.24 7,712.00 5,432.69 4,205.51
TOTAL EQUITY AND
LIABILITIES 10,491.04 6,115.73 8,977.89 5,681.12 5,671.74
Significant accounting policies
and Key accounting estimates
and judgements IV (A)
See accompanying notes to the
financial statements IV(B) - XXXI(H)
** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019
As per our report of even date attached For and on behalf of the Board of Directors
For Priya Choudhary & Associates LLP HP ADHESIVES LIMITED
Chartered Accountants
Firm's Registration No : 011506C/C400307
KARAN HARESH
ANJANA HARESH MOTWANI MOTWANI

Vaibhav Choudhary
(Partner)

Membership No: 407543
Place: Mumbai
Date: 27/11/2021

(Chairman)
DIN: 02650184

MIHIR SURESH
SHAH

(Chief Financial
Officer)

Place: Mumbai
Date: 27/11/2021

210

(Managing Director)
DIN: 02650089

JYOTI NIKUNJ CHAWDA

Company Secretary
(Mem No.: 40074)
Date: 27/11/2021

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HP ADHESIVES LIMITED
RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS ANNEXURE-II
(& in Lakh)
Particulars Annexure Six Six For the For the For the
Month Month Year Year Year
Period Period Ended Ended Ended
ended ended 31st 31st 31st
Sept Sept March, March, March,
30th, 30th, 2021 2020 ** 2019**
2021 2020
INCOME
Revenue from operations XIX 7,051.58 4,492.92 11,816.16 9,547.93 8,741.75
Other income XX 221.65 181.97 571.80 242.82 55.89
Total 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
EXPENSES
Cost of Material Consumed XXI 4,337.20 3,127.40 9,708.36 6,588.30 6,063.06
Changes in inventories of finished goods
(including stock-in-trade) and work-in-
progress Xx! 794.07 (69.33) (1,586.07) (369.78) (350.90)
Employee benefits expenses XXIl 774.76 626.45 1,473.58 1,269.33 938.04
Other expenses XXIV 632.83 382.97 1,023.41 1,610.95 1,277.35
Total 6,538.85 4,067.49 10,619.29 9,098.80 7,927.55
Earning before Interest, Tax, Depreciation 734.38 607.40 1,768.67 691.95 870.09
and Amortisation (EBITDA)
Finance costs XXIIL 172.41 110.89 255.31 294.68 390.64
Depreciation and amortisation expense XiIL 141.00 104.34 190.34 189.62 73.54
Total 313.40 215.23 445.65 484.30 464.18
Profit / (Loss) before exceptional items and
tax 420.98 392.17 1,323.02 207.66 405.91
Exceptional items - - - 743.71 -
Profit / (Loss) before tax 420.98 392.17 1,323.02 (536.06) 405.91
Tax expense
Current tax XXVII (77.04) (104.78) (250.22) : :
Deferred tax (expense) / income IX (A) (33.69) 6.03 (66.84) 69.00 (5.84)
Total (110.73) (98.75) (317.06) 69.00 (5.84)
Profit / (Loss) for the year 310.24 293.42 1,005.96 (467.05) 400.07
Other comprehensive income
(A) Items that will not be reclassified to
profit or loss
(i) Re-measurement gains / (losses) on
defined benefit plans 33.68 7.68 15.35 (21.39) 10.13
(ii) Income tax relating to items that will not
be reclassified to profit or loss (8.48) (1.93) (3.86) 5.38 (3.13)
Total amount not to be re-classified to
profit or loss (Net of tax) 25.21 5.74 11.49 (16.00) 7.00
(B) Items that will be reclassified to profit or - - - - -
loss
Other comprehensive income for the year,
net of tax 25.21 5.74 11.49 (16.00) 7.00
Total comprehensive income for the year Vi 335.45 299.17 1,017.45 (483.06) 407.07
Earnings per Equity Share
Basic Earnings / (loss) per Equity Share 2.22 2.26 7.74 (3.59) 3.08
(not annualised for period ended 30 Sept
2021 and 30 Sept 2020)
Diluted Earnings / (loss) per Equity Share 2.22 2.26 7.74 (3.59) 3.08
Significant accounting policies and Key
accounting estimates and judgements Iv (A)

 
See accompanying notes to the financial
statements

IV(B) -
XXXI(H)

** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019

As per our report of even date attached
For Priya Choudhary & Associates LLP
Chartered Accountants

Firm's Registration No : 011506C/C400307

Vaibhav Choudhary
(Partner)

Membership No: 407543
Place: Mumbai
Date: 27/11/2021

For and on behalf of the Board of Directors
HP ADHESIVES LIMITED

ANJANA HARESH MOTWANI
(Chairman)
DIN: 02650184

KARAN HARESH MOTWANI
(Managing Director)
DIN: 02650089

MIHIR SURESH SHAH
(Chief Financial
Officer) Company Secretary
Place: Mumbai (Mem No.: 40074)
Date: 27/11/2021 Date: 27/11/2021

JYOTI NIKUNJ CHAWDA

212
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HP ADHESIVES LIMITED
RESTATED SUMMARY STATEMENT OF CASH FLOW ANNEXURE-IIT
(&in Lakh)
Particulars SixMonth | Six Month For the For the For the
Period Period Year Year Year
ended ended Ended Ended Ended

Sept Sept Bist 31st 31st
30th, 30th, March, March, March,
2021 2020 2021 2020** 2019**

Cash flow from operating activities

dt BrOnt / (lose) bitors taxation 420.98 392.17 | 1,323.03 | __ (536.07) 405.91

Adjustments for:

Depreciation and amortization expenses s4i-00 aonas 190.33 assi62) wane

mincncereat 172.41 110.89 255.31 294.68 390.64

Operating Profit / (Loss) before working capital changes 73638 07:40 | 4,768.67, (61.77) 870.08.

Changes in working capital

(Decrease)/ increase in trade payables 26-13 (95:65) | 1062.24 Boras Ta6.49)

Diberenke/ (iniereasey in inventories (129.83) | (200.43) | (1,387.66) | __ (399.65) | __ (653.05)

Decrease/ (increase) in trade receivables 394.28) szae | (306.78) 260/99) 5035

(Decrease)/ increase in other current financial liabilities (536.19) 509.29 | 1,129.99 206.37 25.53

(Decrease)/ increase in other current and non financial

liabilities 15.29 153.26 118.97 | (237.05) 177.89

(Decrease)/ increase in provisions (40-58) 76.65 31000 22.97 _—

Decrease/ (increase) in loans 72 (2.22) ese (40.22) (27.24)

Decrease/ (increase) in other current and non current

financial assets : 15.30 48.82 (55.29) (25.69)

Decrease/ (increase) in other current and non current

non financial assets (149.65) | (318.89) | (362.29) 230.54 | (192.36)

Other Equity Adjustments (0.24) 12.89 - - -

Cash generated from operating activities (665,93) GS0.72 | 288184 b34 363:91,

income tax paid (7.04) | (104.78) | (234.92) 277.36 | (134.96)

Net cash generated from operating activities (743.97) 694.95 | 2,152.92 283.70 228.95

(A)

Cash flow from Investing activities

Payment for property, plant and equipment and

intangible assets (1,000.67) (44.32) | (1,640.28) | (399.37) | (354.26)

Proceeds from sale/ disposal of property, plant and

equipment 155.27 , 2 2 :

Interest received . . ASE (992) Go)

Net cash used in Investing activities (B) (845/40) (44.32) | (4,622.70) | (409.36) | (358.90)

Cash flow from Financing activities

Proceeds from Issue of Share Capital 2,154.98 . : =

Proceeds from long-term borrowings (48.93) | 447.61 776.87 | (27.26) | (44.46)

Proceeds from Contribution to Partners (Net) : : =| (742.61) 167.49

*

Proceeds / (Repayment) of borrowings from related parties = =| (874.40) 532.13 342.27

Movement in short-term borrowings from banks (net) (359.07) | (960.93) | (170.03) ane BB:03

Financetost (172.41) | (110.89) | (255.31) | __ (294.68) | __ (390.64)

Net Cash used in Financing Activities (C) apres? | “Me2dzd) | 2277) aad abn08

 

 

 

 

 

 

 

213

 
a

 

Particulars

 

 

Net increase in cash and cash equivalents (A+B+C)

Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the
year

Cash and cash equivalents comprise
Balances with banks
On current accounts
Fixed deposits with maturity of less than 3 months

Cash on hand

Total cash and cash equivalents at end of the year

 

 

 

 

Six Month | Six Month For the For the For the
Period Period Year Year Year
ended ended Ended Ended Ended

Sept Sept 31st 31st 31st
30th, 30th, March, March, March,
2021 2020 2021 2020** 2019**

(14.80) 26.42 7.46 | (115.30) 12.74
83.10 75.65 75.65 190.95 178.21
68.30 102.07 83.10 75.65 190.95
26.94 58.27 58.40 49.55 123.57
21.87 27.52 10.39 6.11 49.64
19.50 16.28 14.30 19.99 17.74
68.30 102.07 83.10 75.65 190.95

 

 

 

 

 

 

** Restated financials includes period of Partnership Firm from 01/04/2018 to 07/05/2019

As per our report of even date attached
For Priya Choudhary & Associates LLP
Chartered Accountants

Firm's Registration No : 011506C/C400307

Vaibhav Choudhary
(Partner)

Membership No: 407543
Place: Mumbai

Date: 27/11/2021

For and on behalf of the Board of Directors
HP ADHESIVES LIMITED

ANJANA HARESH MOTWANI
(Chairman)
DIN: 02650184

KARAN HARESH MOTWANI
(Managing Director)
DIN: 02650089

MIHIR SURESH SHAH
(Chief Financial Officer)

JYOTI NIKUNJ CHAWDA
Company Secretary
(Mem No.: 40074)
Date: 27/11/2021

Place: Mumbai
Date: 27/11/2021

214

 
HP ADHESIVES LIMITED

Restated Financial Information
ANNEXURE-IV (A)
1 Company overview

Company was converted from a Private limited company to a Public limited Company, pursuant to a special resolution
passed by our Shareholders at the EGM held on June 23, 2021 and the name of our Company was changed to ‘HP
Adhesive Limited’. Consequently, a fresh certificate of incorporation was issued by the RoC on July 1, 2021

HP Adhesives Limited (“Company”) is a public limited company domiciled and incorporated in India under the
Companies Act, 2013. The registered office of Company is located at 11 Unique House, Chakala Cross Road, Andheri
East, Mumbai(MH) 400099 bearing CIN No : U24304MH2019PLC325019.

The Company was formed by conversion of a partnership firm, under the provisions of Chapter XXI of Companies Act,
2013. The Firm was formed and registered as a partnership firm under the provisions of Indian Partnership Act, 1932,
pursuant to a deed of partnership, as amended and supplemented from time to time. The Firm was converted to a
private limited company on May 7, 2019 and subsequently converted to public limited company.

Company is engaged in Manufacturing and distribution of adhesives and sealants alongwith other ancillary products.
The Company's Restated Ind AS Summary Statements for the period/year ended 30 Sept 2021, 30 Sept 2020, 31 March
2021, 31 March 2020 and 31 March 2019 were approved for issue in accordance with a resolution of the directors on
27/11/2021.

2. SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies adopted by the Company are as under:
2.1 Basis of Preparation of Financial Statements

The Restated Financial Information of the Company comprises Restated Ind AS Statement of Assets and Liabilities
as at September 30, 2021, September 30, 2020, March 31, 2021, March 31, 2020, March 31, 2019; the Restated
Ind AS Statement of Profit and Loss (including other comprehensive income), the Restated Ind AS Cash Flow
Statement, Restated Summary of Statement of Changes in Equity, the Summary Statement of Significant
Accounting Policies, and other explanatory information for the six month ended September 30,2021 and
September 30, 2020 and for each year ended March 31, 2021, March 31, 2020 and March 31, 2019; (collectively,
the "Restated Ind AS Summary Statements"), as approved by the Board of Directors of the Company at their
meeting for the purpose of inclusion in the Red Herring Prospectus (“RHP”) & Prospectus & any other document
of the Company in connection with its proposed Initial Public Offer of equity shares (“IPO”) .

These Statements have been prepared by the Management of the company in accordance with the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time
to time, issued by the Securities and Exchange Board of India ('SEBI') on 11 September 2018, in pursuance of the
Securities and Exchange Board of India Act, 1992 ("ICDR Regulations") for the purpose of inclusion in the Red
Herring Prospectus (‘RHP’) in connection with its proposed initial public offering of equity shares of face value of
Rs. 1 each of the Company comprising a fresh issue of equity shares and an offer for sale of equity shares held by
the selling shareholder (the “Offer”), prepared by the Company in terms of the requirements of:

a. Section 26 of Part | of Chapter III of the Companies Act, 2013 (the "Act");

b. Relevant provisions of The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements)

Regulations, 2018, as amended (“ICDR Regulations”); and

c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered
Accountants of India (“ICAI”), as amended (the “Guidance Note”).

The Restated Ind AS Summary Statements have been compiled from:

Audited Condensed Standalone Interim Ind AS financial statements of the Company as at and for six months
ended 30 Sept 2021 prepared in accordance with the Indian Accounting Standard 34 “Interim Financial Reporting”
(referred to as "Ind AS"), as prescribed under Section 133 of the Act read with Companies (Indian Accounting
Standards) Rules 2015, as amended and other accounting principles generally accepted in India, which have been
approved by the Board of Directors at their meeting held on 27 November 2021.

215
(b)

ey

Audited Condensed Standalone Interim Ind AS financial statements of the Company as at and for six months
ended 30 Sept 2020 prepared in accordance with the Indian Accounting Standard 34 “Interim Financial Reporting”
(referred to as “Ind AS”), as prescribed under Section 133 of the Act read with Companies (Indian Accounting
Standards) Rules 2015, as amended and other accounting principles generally accepted in India, which have been
approved by the Board of Directors at their meeting held on 27 November 2021.

Audited Ind AS financial statements of the company as at and for year ended 31 March 2021 prepared in
accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under Section 133 of the
Act read with Companies (Indian Accounting Standards) Rules 2015, as amended and other accounting principles
generally accepted in India, which have been approved by the Board of Directors at their meeting held on July
14, 2021.

The Financial statements for the year ended 31 March 2021 are the first financial Statements that the Company
has prepared in accordance with Ind AS. The date of transition is O07 May 2019. The transition to Ind AS has been
carried out from accounting standards notified under section 133 of the Act read with Companies (Accounts)
Rules 2014 (as amended), which is considered as the previous GAAP, for purposes of Ind AS 101.

Company’s Financial statements for the financial period ended 2018-19 & 2019-20 were as per Indian GAAP while
Financial statements for the Financial year 2020-21 are prepared in accordance with IND AS. Hence the figures
are restated pursuant to Retrospective Adoption of Ind AS 101 First Time Adoption (as referred in Para No. 3
below)

The management of the Company has adjusted financial information for the year ended March 31, 2021, March
31, 2020 and March 31, 2019 included in such Indian GAAP financial statements, using recognition and
measurement principles of Ind AS, on its first time adoption of Ind AS as on the transition date April 1, 2018. Refer
Note to Restated Ind AS Summary Statements for detailed information on how the company Transitioned to Ind
AS."

These Restated Ind AS Summary Statements have been prepared for the Company as a going concern on the
basis of relevant Ind AS that are effective as at 30 Sept 2021. The accounting policies are applied consistently to
all the periods presented in the Restated Ind AS Summary Statements.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous
year except as otherwise stated.

Basis of Measurement

The restated financial statements of the company are prepared in accordance with Indian Accounting Standards
(Ind AS), under the historical cost convention on the accrual basis as per the provisions of the Companies Act,
2013 (“the Act”), except for:

- Financial instruments — measured at fair value;
- Plan assets under defined benefit plans — measured at fair value;
- Asset & liabilities recognised under Ind AS 116

Classification into current and non-current:

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset is classified as current when it satisfies any of the following criteria:

* It is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
* It is held primarily for the purpose of being traded;

* It is expected to be realised within 12 months after the reporting date; or

* It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
12 months after the reporting date.

* All other assets are classified as non-current.

* A liability is classified as current when it satisfies any of the following criteria:

* It is expected to be settled in the Company's normal operating cycle;

* It is held primarily for the purpose of being traded

* It is due to be settled within 12 months after the reporting date; or the Company does not have an unconditional
right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that
could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect
its classification.

216
2.2

ey

All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current only.

The Restated Financial Statements have been presented in Indian Rupees (INR), which is the Company's
functional currency. All financial information presented in INR has been rounded off to the nearest two decimals
of Lakh, unless otherwise stated.

Property, plant and equipment

Property, plant and equipment, are stated at cost of acquisition or construction less accumulated depreciation
and impairment losses, if any. Cost of property, plant and equipment comprises its purchase price net of any
discounts and rebates, any import duties and other taxes (other than those subsequently recovered from the tax
authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental
expenses, decommissioning costs, if any, and interest on borrowings attributable to acquisition of qualifying asset
up to the date the asset is ready for its intended use.

It includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the
Company’s accounting policy based on Ind AS 23 — Borrowing costs. Such properties are classified to the
appropriate categories of PPE when completed and ready for intended use.

Assets in the course of construction are capitalised in the assets under construction account. At the point when
an asset is operating at management’s intended use, the cost of construction is transferred to the appropriate
category of property, plant and equipment and depreciation commences. Costs associated with the
commissioning of an asset and any obligatory decommissioning costs are capitalised where the asset is available
for use but incapable of operating at normal levels until a year of commissioning has been completed. Revenue
generated from production during the trial period is capitalised.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit and
Loss during the year in which they are incurred.

Property, plant and equipment’s residual values and useful lives are reviewed at each Balance Sheet date and
changes, if any, are treated as changes in accounting estimate.

Depreciation methods, estimated useful lives

The estimate of the useful life of the assets has been assessed based on technical advice which considers the
nature of the asset, the usage of the asset. expected physical wear and tear, the operating conditions of the asset,
anticipated technological changes, manufacturers warranties and maintenance support, etc. Based on
management's evaluation, the Company uses straight-line method and has used following useful lives to provide
depreciation of different class of its property, plant and equipment:

 

 

Assets Category - Estimated Useful Life
Building 30 years
Plant & Machinery 15 years
Furniture & Fixtures 10 years
Vehicles 10 years
Computer & Software 3/6 years
Office Equipments 5 years

 

Based on Management's assessment of Useful life relied upon the technical advice of expert on the same, on
event of conversion of Partnership firm to Private limited, depreciation has been provided on SLM Basis on WDV
as on date of conversion to be depreciated on remaining useful life of the assets. Management believes that such
estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to
be used.

Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of
acquisition. Depreciation on sale/deduction from property plant and equipment is provided up to the date
preceding the date of sale, deduction as the case may be. Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are included in Statement of Profit and Loss under ‘Other
Income’.

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Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and
adjusted prospectively, as appropriate.

Residual value of Plant & Machinery is considered as 5% of the cost and for other assets as Rs.100.

Refer Para No 3 on Adjustments related to Restated Financial Year 2018-19 below.

Gain and losses on disposal of Assets are determine by comparing net disposal proceeds with carrying amount of
the asset. These are included in Profit and loss under other Income.

Intangible Assets

Intangible assets are stated at acquisition cost, net of accumulated amortization.

The Company amortize intangible assets over their estimated useful lives using the straight line method. The
estimated useful lives of intangible assets are as follows:

 

Intangible assets Estimated Useful Life

 

Trade Mark 5 years

 

Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite
useful life are reviewed at least at each financial year end.

Capital work in progress

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising
direct cost and related incidental expenses.

Impairment

At the end of each reporting year, the Company reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest company of cash-generating units for which
a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in the Statement of Profit and Loss.

Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net
realisable value. Cost of raw materials and traded goods comprises cost of purchases.

Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure. Fixed overheads are allocated on the basis of normal
operating capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their
present location and condition. Cost includes the reclassification from equity of any gains or losses on qualifying
cash flow hedges relating to purchases of raw material. Costs are assigned to the individual items in a company
of inventories on the basis of weighted average cost basis. Costs of purchased inventory are determined after
deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs necessary to make the sale.

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ry

Costs of inventories are determined on First in First out (FIFO) basis. Net realisable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Cost of
inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax
authorities) and all other costs incurred in bringing the inventory to their present location and condition.
Revenue recognition

Sale of goods

Revenue is measured at the fair value of the consideration received or receivable. The Company recognises
revenues on sale of products, net of discounts, sales incentives, rebates granted, returns, sales taxes/GST and
duties when the products are delivered to customer or when delivered to a carrier for export sale, which is when
title and risk and rewards of ownership pass to the customer. Export incentives are recognised as income as per
the terms of the scheme in respect of the exports made and included as part of export turnover. Revenue from
sales is recognised when control of the products has transferred, being when the products are delivered to the
customer, the customer has full discretion over the channel and price to sell / consume the products, and there
is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the
products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to
the customer, and either the customer has accepted the products in accordance with the sales contract or the
acceptance provisions have lapsed.

Company has 3 main streams of revenue:

i. Sale of goods to distributors - Company recognize revenue when the goods are delivered to its customer since
the customer does not have right to return material unless it has confirmation from the Company.
ii. Sale of goods to OEM

. Export sales — Company recognize revenue when the goods are delivered on FOB basis; since the customer
does not have right to return material unless it has confirmation from the Company.

Revenue is measured net of discounts, incentives, rebates etc. given to the customers on the Company's sales.
The Company's presence across different marketing regions within the country and the competitive business
makes the assessment of various type of discounts, incentives and rebates as complex and judgemental.

Di

 

lend & Interest income

Dividend income from investments if any to be recognised only when the shareholder’s right to receive payment
has been established (provided that it is probable that the economic benefits will flow to the Company and the
amount of income can be measured reliably).

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net
carrying amount on initial recognition.

Leases

Asa lessee

The company recognises a Right-of-use (ROU) Asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-
measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, company’s incremental borrowing rate. Generally, the company uses its incremental borrowing rate
as the discount rate. The lease liability is measured at amortised cost using the effective interest method.

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In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment
of an option to purchase the underlying asset.

 

Foreign exchange translation

The functional currency of the Company is Indian Rupees which represents the currency of the primary economic
environment in which it operates.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are
generally recognised in profit or loss. Monetary balances arising from the transactions denominated in foreign
currency are translated to functional currency using the exchange rate as on the reporting date. Any gains or loss
on such translation, are generally recognised in profit or loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of
Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement
of Profit and Loss on a net basis within other gains/(losses).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.

Income taxes

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as
reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax
rates and laws that have been enacted or substantively enacted by the end of the reporting period. Provision for
current tax is made after taken into consideration benefits admissible under the provisions of Section 115BAA of
the Income Tax Act, 1961.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from
the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in Other Comprehensive Income or directly in equity.

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Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle ona
net basis, or to realise the asset and settle the liability simultaneously.

Minimum Alternate Tax (MAT)

Provisions of MAT are not applicable as company has opted to pay tax under section 115 BAA of Income Tax Act,
1961.

Current and deferred tax expense is recognised in the Statement of Profit and Loss, except when they relate to
items that are recognised in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognised in other comprehensive income or directly in equity respectively.

2.11 Borrowing costs

Borrowing costs, if any, general or specific, that are directly attributable to the acquisition or construction of
qualifying assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial
period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and
Loss.

The Company determines the amount of borrowing costs eligible for capitalisation as the actual borrowing costs
incurred on that borrowing during the year less any interest income earned on temporary investment of specific
borrowings pending their expenditure on qualifying assets, to the extent that an entity borrows funds specifically
for the purpose of obtaining a qualifying asset. In case if the Company borrows generally and uses the funds for
obtaining a qualifying asset, borrowing costs eligible for capitalisation are determined by applying a capitalisation
rate to the expenditures on that asset.

Borrowing cost includes exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the finance cost.

2.12 Provisions & Contingencies

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.

Provisions for restructuring are recognised by the Company when it has developed a detailed formal plan for
restructuring and has raised a valid expectation in those affected that the Company will carry out the
restructuring by starting to implement the plan or announcing its main features to those affected by it.

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, it’s carrying amount is the
present value of those cash flows (when the effect of the time value of money is material). The measurement of
provision for restructuring includes only direct expenditures arising from the restructuring, which are both
necessarily entailed by the restructuring and not associated with the on going activities of the Company.

Adisclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,
but probably will not require an outflow of resources embodying economic benefits or the amount of such
obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of
which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is
made.

2.13 Employee Benefits

(a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within
12 months after the end of the year in which the employees render the related service are recognized in respect
of employees’ services up to the end of the year and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

 

 

(b) Other long-term employee benefit obligations
ey

Provident Fund: The Company’s contributions to statutory provident fund in accordance with the Employees
Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan, are charged to the
Statement of Profit and Loss in the period of accrual. The Company has no obligation, other than the contribution
payable to the provident fund.

(i) Defined contribution plan

Superannuation Fund: Employees of the Company above a prescribed grade are entitled to receive retirement
benefits under the Company's superannuation fund scheme. The contributions made by the Company to the
approved Employees’ Superannuation Fund Scheme under the scheme administered and managed by a trust,
towards defined contribution plan for eligible employees are charged to Profit and Loss in the period of accrual.

(ii) Defined benefit plans

The Company provides for retirement benefits in the form of Gratuity. Benefits payable to eligible employees of
the Company with respect to gratuity is accounted for on the basis of an actuarial valuation as at the Balance
Sheet date. The present value of such obligation is determined by the projected unit credit method and adjusted
for past service cost and fair value of plan assets as at the balance sheet date through which the obligations are
to be settled.
Remeasurements, comprising of actuarial gains and losses and the return on plan assets (excluding net interest)
is reflected immediately in the balance sheet with a charge/credit recognised in Other Comprehensive Income
("OCI") in the period in which they occur.

Remeasurements recognised in OCI is reflected immediately in retained earnings and is not reclassified to profit
or loss in subsequent periods.

(iii) | Other employee benefits

Compensated absences which accrue to employees and which can be carried to future periods but are excepted
to be encashed/ availed within twelve months immediately following the year end are reported as expenses
during the year in which employees perform the services that the benefit covers and the liabilities are reported
at the undiscounted amount of the benefits. Where the availment or encashment is otherwise not excepted to
wholly occur within the next twelve months, the liability on account of the benefit is actuarially determined using
the projected unit credit method.

2.14 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

(a) Financial assets
(i) Initial recognition and measurement

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or
b) at fair value through other comprehensive income; or
c) at fair value through profit or loss.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.

Business model assessment

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The company determines its business model at the level that best reflects how it manages Company's of financial
assets to achieve its business objective.

The company business model is not assessed on an instrument-by-instrument basis, but at a higher level of
aggregated portfolios and is based on observable factors such as:

(i) How the performance of the business model and the financial assets held within that business
model are evaluated and reported to the entity's key management personnel
(ii) The risks that affect the performance of the business model (and the financial assets held

within that business model) and, in particular, the way those risks are managed

(iii) How managers of the business are compensated (for example, whether the compensation is
based on the fair value of the assets managed or on the contractual cash flows collected)

(iv) he expected frequency, value and timing of sales are also important aspects of the Company’s
assessment

The business model assessment is based on reasonably expected scenarios without taking ‘worst
case' or 'stress case’ scenarios into account. If cash flows after initial recognition are realised in a way
that is different from the Company's original expectations, the Company does not change the
classification of the remaining financial assets held in that business model, but incorporates such
information when assessing newly originated or newly purchased financial assets going forward.

The Solely payments of Principal and Interest test

As a second step of its classification process the Company assesses the contractual terms of financial to identify
whether they meet the SPPI test.

The most significant elements of interest within a lending arrangement are typically the consideration for the
time value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers
relevant factors such as the currency in which the financial asset is denominated, and the period for which the
interest rate is set.

In contrast, contractual terms that introduce a more than de minimise exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash
flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial
asset is required to be measured at FVTPL.

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortized cost. Interest income from these financial
assets is included in finance income using the effective interest rate method (EIR).

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash
flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and
interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and
foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset
is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement
of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included
in other income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured
at fair value through profit or loss. Interest income from these financial assets is included in other income.

Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments
which are held for trading and contingent consideration recognised by an acquirer in a business combination to
which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present in other comprehensive income subsequent changes in the fair value. The
Company makes such election on an instrument- by-instrument basis. The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L,
even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in
the profit and loss.

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In accordance with Ind AS 109, Financial Instruments, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on financial assets.

(iii) Impairment of financial assets

For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether
there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there
is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing
impairment loss allowance based on 12 month ECL.

Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a
financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the year end.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the
contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR.
When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument
(including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases
when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use
the remaining contractual term of the financial instrument.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the
statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is presented as
an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance
reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce
impairment allowance from the gross carrying amount.
Company measures the loss allowance at an amount equal to lifetime expected credit losses for Trade receivables
(i.e. ‘simplified approach’).
Trade receivables are written off when there is no reasonable expectation of recovery.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
a) the rights to receive cash flows from the financial asset is transferred or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if
substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has
not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset
is not derecognized.
(b) Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and
at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of
directly attributable transaction costs.

(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

Loans and borrowings

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After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are
derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization
is included as finance costs in the Statement of Profit and Loss. Presently Company has not included transaction
costs based on materiality.

The Company's Financial liabilities include Trade and other payables, loans and borrowings including Bank
overdrafts, and Bank Term Loans.

(iii) Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognized in the Statement of Profit and Loss as finance costs.

2.15 Cash & cash equivalents

Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short term deposits with
an original maturity of three months or less, which are subject to insignificant risk of changes in value.

2.16 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary

shares and share options and buyback of ordinary shares, if any are recognized as a deduction from equity, net
of any tax effects.

Equity shares are classified under Equity. Company has deferred the transactional / pre-ipo costs (classified under
Other Current Assets) till the allotment of share in the proposed IPO & the same will be added to the Equity of
the company.
2.17 Offsetting financial instrument

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle financial asset and
liability on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the Company or the counterparty.

2.18 Segments reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief

operating decision maker. Chief Financial Officer assesses the financial performance and position of the Company
and makes strategic decisions. Chief Financial Officer has been identified as Chief Operating Decision Maker.

2.19 Earnings per share
Basic earnings per share
Basic earnings per share is computed by dividing the net profit after tax by weighted average number of equity
shares outstanding during the period. The weighted average number of equity shares outstanding during the year
is adjusted for treasury shares, bonus issue, bonus element in a rights issue to existing shareholders, share split
and reverse share split (consolidation of shares).

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit after tax after considering the effect of interest and
other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the
weighted average number of equity shares considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares including the treasury shares held by the Company to satisfy the exercise of the share options by the
employees.

2.20 Measurement of EBITDA

The Company has opted to present earnings before interest (finance cost), tax, depreciation and amortisation
(EBITDA) as a separate line item on the face of the Statement of Profit and Loss for the period. The company
measures EBITDA based on profit/(loss) from continuing operations.

2.21 Uncertainty relating to the global health pandemic on COVID-19 -
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In assessing the recoverability of receivables including unbilled receivables, contract assets and contract costs,
goodwill, intangible assets, certain investments, the Company has considered internal and external information
up to the date of approval of these financial statements including credit reports and economic forecasts. The

company has performed sensitivity analysis on the assumption used herein. Based on the current indicators of
future economic conditions, the Company expects to recover the carrying amount of these assets

3 NOTES ON ADJUSTMENTS FOR RESTATED FINANCIAL STATEMENTS
First-time adoption of Ind AS

3.1 The Company is formed under Chapter XXI of Companies Act, 2013 by conversion of erstwhile firm “H P
International” on May 7, 2019 whereby all assets and liabilities of the said firm are termed as assets and liabilities
of the Company at book value from the conversion date

1 Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain
requirements under Ind AS. The company has applied the following exemptions:
a. Deemed cost:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant
and equipment as recognised in the financial statements as at the date of the transition to Ind AS, measured as
per the previous GAAP and use as its deemed cost as at the date of transition after making necessary adjustments
for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38
‘Intangible Assets’.
Accordingly, the company has elected to measure all its property, plant and equipment, intangible assets and
investment property at their previous GAAP carrying value.
b. Share-based payments
Ind AS 101 allows the first time adopter to not apply Ind AS 102 'Share-based payment' to equity instruments that
vested before date of transition to Ind AS. Accordingly, the company has not applied Ind AS 102 to equity
instruments in share-based payment transactions that vested before 1 April 2018.

I Exception
a. Estimates:
The estimates at 1 April 2018 and at 31 March 2019 are consistent with those made for the same dates in
accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from
impairment of financial assets based on expected credit loss model where application of Indian GAAP did not
require estimation. The estimates used by the company to present these amounts in accordance with Ind AS
reflect conditions at 1 April 2018, the date of transition to Ind AS and as of 31 March 2021.

b. Classifi

The company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and
circumstances that exist at the date of transition to Ind AS.

 

‘ion and measurement of financial assets:

3.2 For Incorporation of Financial Information of FY 2018-19 and period from 01.04.2019 to 07.05.2019 of erstwhile
firm M/s HP International, IND AS financials have been prepared by making adjustments to existing final accounts
of Partnership firm. We have made following adjustment to adhere to requirements of Sec 26 of Part | of Chapter
Ill of Companies Act,2013 along with SEBI ICDR Regulation and Guidance Note on Report of Company Prospectus
(Revised 2019) issued by ICAI.

Accounts head appearing in erstwhile firm Accounts head appearing in Restated
Financial Statement

1. Partner's Capital Account Share Capital

2. Remuneration to Partners Director's Remuneration

3. Interest to Partners Finance Cost

4. Considering the Opening WDV as on 01.04.2018, depreciation has been charged on balance remaining useful
life of assets as per Companies Act,2013 for consistency in presentation & comparison in Restated Financial
Statements for FY 2018-19. As pervious charged as per Income Tax Act provisions erstwhile Partnership firm.

5. Effects of changes in method & rates of depreciation has been adjusted under Partner's Capital Reserves
incorporated under Other Equity in Restated Financial Statements.

226
ey

6. Effects of Change in WDV of Assets due of change in depreciation as per Companies Act in Restated Financial
Statements of FY 2018-19 has been adjusted under Other Equity and carry forward effects of the same are not
considered in further periods’ for FY 07th May,2019 to 31.03.2020 & FY 2020-21 onwards, which are already been
adjusted as per IND AS provisions on First Time Adoption of IND AS with an effective date of 1 April, 2018 for such
transition, after incorporating all adjustments for the changes in accounting policies, material errors and
recompanying/reclassifications retrospectively in the financial years ended 31 March 2020 to reflect the same
accounting treatment as per the accounting policies and companying/classifications followed as at March,31,
2021 as in our opinion were appropriate and comparable.

7. Closing WDV appearing in books of erstwhile firm as on 01.04.2019 was taken as the Opening Gross Block of
assets as on 07.05.2019.

4 Significant accounting judgments, estimates and assumptions
The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future years.
The preparation of Restated Ind AS Summary Statements in conformity with Ind AS requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities
and the accompanying disclosures, and the disclosure of contingent liabilities, at the end of the reporting period. Such
judgments, estimates and associated assumptions are evaluated based on historical experience and various other
factors, including estimation of the effects of uncertain future events, which are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects
both current and future periods.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in future periods.
The following are the critical judgements and estimations that have been made by the management in the process of
applying the accounting policies and that have the most significant effect on the amount recognised in the
financial statements and/or key sources of estimation uncertainty that may have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.

  

Determining the lease term of contracts with Renewal and Termination options -the Company as lessee

The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate
the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal
or termination
The company included the renewal period as part of the lease term for leases of property with shorter non-cancellable
period (i.e., 3 to 5 years). The company typically exercises its option to renew for these leases because there will be a
significant negative effect on business if a replacement by way of alternate property is not readily available. The
renewal periods for leases of property with longer non-cancellable periods (i.e., 6 to 10 years) are not included as part
of the lease term as these are not reasonably certain to be exercised. Furthermore, the periods covered by termination
options are included as part of the lease term only when they are reasonably certain not to be exercised. Such Lease
has been revalued as per revised terms and increased rental value.
41 Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising that are beyond the control
of the Company. Such changes are reflected in the assumptions when they occur.

227
(a)

(c)

(f)

42

ey

Useful lives of property, plant and equipment and intangible assets

As described in the significant accounting policies, the Company reviews the estimated useful lives of property,
plant and equipment and intangible assets at the end of each reporting period. Company has determined useful
life assets based on expert opinion. Useful lives of intangible assets is determined on the basis of estimated
benefits to be derived from use of such intangible assets. These reassessments may result in change in the
depreciation /amortisation expense in future periods.

In the restated financials, there is change in the method of depreciation, which was previously followed under
WDV method of Income Tax Act, now it has been changed to SLM method as per Companies Act 2013.

 

Fair value measurements and valuation processes

Some of the Company's assets and liabilities are measured at fair value at each balance sheet date or at the time
they are assessed for impairment. In estimating the fair value of an asset or a liability, the Company uses market-
observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third
party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs
used in determining the fair value of various assets and liabilities require estimates to be made by the
management and are disclosed in the notes to the financial statements.

Actuarial Valuation

The determination of Company’s liability towards defined benefit obligation to employees is made through
independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit
and Loss and in Other Comprehensive Income. Such valuation depend upon assumptions determined after taking
into account discount rate, salary growth rate, expected rate of return, mortality and attrition rate. Information
about such valuation is provided in notes to the financial statements.

Impairment of trade receivables

As per Ind AS 109 impairment allowance has been determined based on Expected Credit Loss Method.

The Company uses a simplified approach to determine impairment loss allowance on the portfolio of trade
receivables. This is based on its historically observed default rates over the expected life of the trade receivable
and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between
historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of
ECLs is sensitive to changes in circumstances and of forecast economic conditions. The company’s historical credit
loss experience and forecast of economic conditions may not be representative of customer’s actual default in
the future

Income taxes

Significant judgments are involved in determining the provision for income taxes including judgment on whether
tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues,
which can only be resolved over extended time periods.

Revenue from Contracts with Customers

The Company has applied judgments that significantly affect the determination of the amount and timing of
revenue from contracts with customers.

Effective interest rate

For the requirement of Ind AS 109 and Ind AS 116, company has used incremental borrowing rate as the rate for
discounting and amortising. This incremental borrowing rate reflects the rate of interest that the company would
have to pay to borrow over a similar term, with a similar security, the funds necessary to obtain an asset of a
similar nature and value in a similar economic environment. Determination of the incremental borrowing rate
requires estimation.

Standards / Amendments issued:

The Ministry of Corporate Affairs (MCA) vide Notification dated 18 June 2021 notified the new Companies (Indian
Accounting Standard) Amendment Rules, 2021. The notification has made amendments to various Ind AS. Some
of the key amendments are:

Ind AS 116 — Leases

The practical expedient relating to rent concessions arising as a result of COVID-19 allowed lessees to not consider
COVID-19 related rent concessions to be a lease modification provided the lease payments were originally due
on or before 30 Sept, 2021. The relief provided by the practical expedient has now been extended and is
applicable to all lease payments originally due on or before 30 June 2022. The said amendment is applicable for
annual reporting periods beginning on or after 1 April 2021.

  

228
ey

The amendment states that to qualify for recognition as part of applying the acquisition method, the identifiable
assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Framework for
the Preparation and Presentation of Financial Statements in accordance with Indian Accounting Standards issued
by the Institute of Chartered Accountants of India at the acquisition date. Therefore, the acquirer does not
recognise those costs as part of applying the acquisition method. Instead, the acquirer recognises those costs in
its post combination financial statements in accordance with other Ind AS. This amendment has no impact on the
Restated Ind AS Summary Statements.

Amendment to Ind AS 105, Ind AS 16 and Ind AS 28

The definition of “Recoverable amount” is amended such that the words “the higher of an asset’s fair value less
costs to sell and its value in use” are replaced with “higher of an asset’s fair value less costs of disposal and its
value in use”. The consequential amendments are made in Ind AS 105, Ind AS 16 and Ind AS 28. This amendment
has no impact on the Restated Ind AS Summary Statements.

Ind AS 103 — Business Combination

Interest Rate Benchmark Reform — Phase 2

This amendment relates to ‘Interest Rate Benchmark Reform — Phase 2 (Amendments to Ind AS 104, Ind AS 107,
Ind AS 109 and Ind AS 116)' which addresses issues that might affect financial reporting after the reform of an
interest rate benchmark, including its replacement with alternative benchmark rates. Some of the key
amendments arising from the interest rate benchmark are:

i. Ind AS 109: New guidance has been included on changes in the basis for determining the contractual cash flows
as a result of interest rate benchmark reform. An entity should apply the amendments for annual reporting
periods beginning on or after 1 April 2021.

ii. Ind AS 107: Additional disclosures related to nature and extent of risks to which the entity is exposed arising
from financial instruments subject to interest rate benchmark reform and how the entity manages these risks.

iii. An entity should apply the amendments when it applies amendments to Ind AS 109, Ind AS 104 or Ind AS 116.

Company has adopted its incremental borrowing rate as the discount rate. Managements excepts that the
adoption of the amendments did not have any material impact on its financial statements.

Amendments to Ind AS consequential to Conceptual Framework under Ind AS

The amendments relating to Ind AS 102, Share-based Payment; Ind AS 103, Business Combinations; Ind AS 106,
Exploration for and Evaluation of Mineral Resources; Ind AS 114, Regulatory Deferral Accounts; Ind AS 1,
Presentation of Financial Statements; Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors;
Ind AS 34, Interim Financial Reporting; Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets; Ind AS
38, Intangible Assets, are consequential due to changes in the Conceptual Framework under Ind AS, made in
August 2020. The revised Conceptual Framework introduced some new concepts and clarifications along with
revision in definitions and changes in recognition criteria of assets and liabilities under Ind AS. The Company does
not expect the consequential amendments to have any significant impact in its Restated Ind AS Summary
statements.

The company has considered the amendments to Schedule Ill of the Companies Act 2013 notified by Ministry of
Corporate Affairs (“MCA”) via notification dated 24 March 2021 in the restated Ind AS Summary Statements
disclosures, wherever applicable.

229
a

HP ADHESIVES LIMITED

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF RESTATED INCOME ANNEXURE-IV (B)
(Rin Lakh)
As at As at As at As at As at
fe Sept Sept March March March
Particul:
cae 30th, 30th, 31st, 31st, 3ist,
2021 2020 2021 2020 2019
Net profit/(loss) after tax as per audited statement of profit 335.45 299.17 1,017.45 (210.93)
and loss 447.06
Adjustments for:
(3.01)
Impact on account of application of Ind AS 116 (net) (Note 1) - 1.50
Impact of Expected loss provisioning as per Ind AS 109
(Note 2) - - - (145.38) (74.46)
Impact on account of application of Ind AS 109 on Security
deposits given (Note 3) - - - (0.18) (0.04)
Impact of recognition of Gratuity expense as per Ind AS 19
(Note 4) y 2 : (33.59) (4.74)
Impact of above adjustments on deferred taxes - - = 43.14 (5.84)
Impact of Other Adjustments on Partner's Capital A/c (Net)
(Note 5) 43.59
Prior period adjustment (133.11)
Total Comprehensive income as restated 335.45 299.17 1,017.45 (483.06) 407.07

 

 

 

 

 

 

Explanatory Notes to the above restatements made in Audited Financial Statements of Company for the respective years/period.

Adjustments having impact on Profit:

Note 1
As the restated financials are made as per Ind AS, hence following the guidance of Ind AS 116, finance charge and depreciation on
ROU asset has been recognised and lease rent has been reversed, corresponding adjustments in the deferred tax have been made.

Note 2

As the restated financials are made as per Ind AS, hence following the guidance of Ind AS 109, provision has been made for Expected
credit loss on trade receivables and impairment loss on the same is provided, further corresponding adjustments in the deferred
tax have been made.

Note 3

As the restated financials are made as per Ind AS, hence following the guidance of Ind AS 109, finance income and amortization of
prepaid expenses has been recognised for security deposits given.

Note 4

As the restated financials are made as per Ind AS, hence following the guidance of Ind AS 19 Employee benefits, DBO expense
(Gratuity) has been recognised in P&L and remeasurement gain/loss has been recognised in OCI.

Note 5

As the restated financials are made as per Ind AS after incorporating all adjustments for the changes in accounting policies, material
errors and regrouping/reclassifications in the retrospectively in period from 01.04.2019 to 07.05.2019 and Financial year ended as
on 31st March, 2019 to reflect the same accounting treatment as per the accounting policies and grouping/classifications followed
subsequently which in our opinion were appropriate and comparable.

Effects of changes in method & rates of depreciation has been adjusted under Partner's Capital Reserves incorporated under Other
Equity in Restated Financial Statements.

230

 
HP ADHESIVES LIMITED
RECONCILIATION OF RESTATED EQUITY/NET WORTH

a

ANNEXURE IV (C)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Rin Lakh)

As at As at As at As at As at
Particulars Sept Sept March March March

30th, 30th, 31st, 2021 31st, 2020 31st,

2021 2020 2019
Shareholders’ equity as per Audited Financials 3,756 560.4

.08 9 1,265.90 1,089.08 1,948.48
Adjustments for:
Lease adjustments as per Ind AS 116

= = - (2.25) (10.57)
Expected credit loss adjustment in trade
receivables as per Ind AS 109 . . . (814.08) (668.70)
Adjustment in security deposit given as per Ind AS
109 - - - (0.22) (3.17)
Recognition of DBO (Gratuity provision) (101.25)

: : 2 (62.28)
Deferred tax on adjustment 210.28

© © z 165.81
Recognisation of ROU - - . - 3.13
Cumulative Impact on account of Depreciation
and recognisation of Intangible Asset 93.58
Prior period error rectified (133.11)

3,756 560.4
Shareholders’ equity as restated 08 9 1,265.90 248.44 1,466.23

 

 

 

 

 

 

Explanatory Notes to the above restatements made in Audited Financial

years/period
To give Explanatory Notes regarding adjustments

Statements of Company for the respective

Appropriate adjustments have been made in the restated financial statements, wherever required by classification of the
corresponding items of income, expenses, assets and liabilities, in order to bring them in line with the groupings as per the
Audited financials of the Company for all the years and the requirements of the Securities and Exchange Board of India (Issue

of Capital and Disclosures) Regulations 2018 and management's judgments.

DETAILS OF SHARE CAPITAL AS RESTATED

 

 

 

 

 

 

 

 

 

 

ANNEXURE V
Statement of Share Capital
(Rin Lakh)
Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
(a) Authorised
2,00,00,000 Equity Shares of
Rs. 10/- each. 2,000.00 1,300.00 1,300.00 1,300.00 1,300.00
(b) Issued
1,42,34,947 Equity Shares of
Rs. 10/- each. 1,423.49 1,300.00 1,300.00 1,300.00 1,300.00
(c) Subscribed and fully paid
up
1,42,34,947 Equity Shares of
Rs. 10/- each. 1,423.49 1,300.00 1,300.00 1,300.00 1,300.00
TOTAL 1,423.49 1,300.00 1,300.00 1,300.00 1,300.00

 

 

 

 

 

 

231

 
a

Rights, Preferences and Restrictions attached to equity shares:

Equity Shares are issued consequent to conversion of Partnership firm to Company formed as per provisions of Part | of
Company XX! of Companies Act,2013. Wherein Partners of firm has subscribed to Equity Shares of the Company.

The Company has one class of equity shares having a par value of Rs.10 each. The Shareholders are entitled to receive
dividend in proportion to the amount of paid up equity shares held by them. The Company has not declared any dividend
during the year. Each shareholder is entitled to vote in proportion to his share of paid up equity share capital of the Company,
except in case of voting by show of hands where each shareholder present in person shall have one vote only. Voting rights
cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid. In the event
of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the
Company after distribution of all preferential amounts. The distribution will be in proportion of the number of shares held
by the shareholders.

Shares held by Holding/Ultimate Holding/Subsidiaries and Associates of Holding & Ultimate Holding Companies: The
Company does not have any holding or ultimate holding Company as at 30th September, 2021.

 

 

 

 

 

 

 

Reconciliation of Shares outstanding at the beginning and at the end of the period

Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019

No. of Share outstanding at

the beginning of the 1,30,00,00

period/year 0 1,30,00,000 1,30,00,000 1,30,00,000 1,30,00,000

No. of Share issued 12,34,947 - - - -

No. of Share forfeited/ Buy

back 2 = * =

No of Share outstanding at 1,42,34,94

the end of the period/year 7 1,30,00,000 1,30,00,000 1,30,00,000 1,30,00,000

 

 

 

 

 

 

Details of shareholders holding more than 5% of aggregate shares capital (In terms of number of shares)

 

 

 

 

 

Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
Number of
Sess of stares / Name:of shares Number of Number of Number of Number of
held shares held shares held shares held shares held
Anjana Haresh Motwani 71,97,335 66,30,000 66,30,000 66,30,000 66,30,000
Karan Haresh Motwani 63,70,000 63,70,000 63,70,000 63,70,000 63,70,000
Total 1,35,67,335 1,30,00,000 1,30,00,000 1,30,00,000 1,30,00,000

 

Details of shareholders holding more than 5% of aggregate shares capital (In terms of number of % holding)

 

 

 

 

 

 

 

 

 

 

Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019

Class of shares / Name of
shareholder % Holding % Holding % Holding % Holding % Holding
Anjana Haresh Motwani 50.56% 51.00% 51.00% 51.00% 51.00%
Karan Haresh Motwani 44.75% 49.00% 49.00% 49.00% 49.00%
Total 95.31% 100.00% 100.00% 100.00% 100.00%

 

 

* During the period Sept-2021, shareholding of Anjana Haresh Motwani has decreased by 0.44% and Karan Haresh Motwani
has decreased by 4.25%.

232

 

 
a
Notes :

1. The figures disclosed above are based on the restated summary of assets and liabilities of the company.

2. The above statement should be read with the notes to restated summary statements of assets and liabilities, profits and
losses and cash flows appearing in Annexure I, II and Ill.

 

Reconciliation of Opening Reserve Retained
Earnings

 

The details of adjustments to Retained Earnings as on 01.04.2018 as below to give the
effect of Ind AS adjustments

 

 

Balance as on 01.04.18 87.00
Application of ECL under Ind AS (594.24)
ROU Assets and Lease liability recognised as per Ind AS 116 (15.20)
Provision for Gratuity as per Ind AS 19 (57.54)
Deferred Tax Assets recognised as per Ind AS 12 171.65

(408.33)
Notes :

1. The figures disclosed above are based on the restated summary of assets and liabilities of the company.

2. The above statement should be read with the notes to restated summary statements of assets and liabilitie
and cash flows appearing in Annexure |, Il and Ill.

234
Details of promoters holding shares

a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
Class of shares / Name of Numb % | Numbe % | Numbe % | Numbe % Numb %
shareholder er of | Hold rof | Holdi rof| Hol rof) Hol er of | Holdin
share ing | shares ng shares | ding shares | ding | shares g
s held held held held held
71,97, | 50.5 | 66,30,0 | 51.00 | 66,30,0 | 51.0 | 66,30,0 | 51.0 | 66,30, 51.00
Anjana Haresh Motwani 335 6% | 00 % | 00 0% | 00 0% | 000 %
63,70, | 44.7 | 63,70,0 | 49.00 | 63,70,0 | 49.0 | 63,70,0 | 49.0 | 63,70, 49.00
Karan Haresh Motwani 000 5% | 00 % | 00 0% | 00 0% | 000 %
1,35,6 | 95.3 | 1,30,00 | 100.0 | 1,30,00, | 100. | 1,30,00, | 100. | 1,30,0 | 100.00
Total 7,335, 1% | ,000 0% | 000 00% | 000 00% | 0,000 %
* Promoters do not hold any class of shares other than stated above.
HP ADHESIVES LIMITED
DETAILS OF OTHER EQUITY AS RESTATED ANNEXURE VI
(Rin
Lakh)
oe As at 30°" As at 31st Asat3ist | Asat 31st
Particulars Sept, Sept, March, March, March,
2021 2020 2021 2020 2019
(A) Securities Premium
Opening balance - - - - -
Add: Premium received on issue of shares 2,031.49 - - - -
Less: Premium utilised for buy-back of shares - - - - -
Closing balance 2,031.49 - - - -
(B) Surplus / (Deficit) in the Statement of
Profit and Loss
Opening balance (34.12) (1,051.56) (1,051.56) 166.23 (408.33)
Add / (Less): Transactions in Capital Accounts **| - - (734.74) 167.49
Add / (Less): transfer on Conversion on LLP to
Company *** - - - -
Add: Adjustment of Ind AS of previous years 13.69 = “i e
(34.12) (1,037.87) (1,051.56) (568.51) (240.84)
Add: Total Comprehensive Income for the
year 335.45 299.17 1,017.45 (483.06) 407.07
Less: Other Adjustments
(0.24) (0.80)
Less: Re-measurement (gain)/loss on post
employment benefit obligation (net of tax) - - -
Less: Transfer on Conversion on Firm to
Company ** - - -
Closing balance 301.09 (739.51) (34.12) (1,051.56) 166.23
TOTAL 2,332.58 (739.51) (34.12) (1,051.56) 166.23

 

 

 

 

 

 

** The transactions in Partners Capital Accounts other than transfer of Profits have been shown in Adjustment in statement

of Profit and Loss to make the Ind AS statements comparable.

*** On Conversion of Firm to Company, the Balance in Capital Accounts have been transferred to Loan Accounts of the

Directors (erstwhile Partners)

233

 

 
Personal Guarantee of Directors - Karan Motwani & Anjana Motwani.
Collateral Charge of Industrial Land & Building (owners Karan Motwani & Anjana Motwani).

HP ADHESIVES LIMITED
NATURE OF SECURITY AND TERMS OF REPAYMENT OF LONG TERM BORROWINGS INCLUDING CURRENT MATURITIES

 

 

 

 

 

ANNEXURE VIII
s. Lender Nature Sanction ‘Amount Rate Repayment Principle terms
no of Amount o/s as at of terms & conditions
facility Sept 30, Intere
2021 st
BMW Financial Vehicle 60 Months EMI
1 Services Loans 45,00,000 31,48,241 8.75% Rs.92,868/- NA
Daimler Financial
Services India Vehicle 60 Months EMI
2 Pvt.Ltd, Loans 55,00,000 50,32,265 6.99% Rs.1,08,902/- NA
ECLGS LOAN A/C- Term 2,13,31,18
3 Icicl loan 2,39,97,588 9 8.25% 48 Months NA
HDFC Bank (Tata
Truck Vehicle 60 Months EMI
4 Loan)53302196 Loans 8,49,703 63,069 8.51% Rs.21,322/- NA

 

Icicl BANK NEW
Car Loan MG

 

Hector Plus-
LAMUM00042267 Vehicle 36 Months EMI
5 658 Loans 18,75,000 15,80,410 7.80% Rs.37,766/- MG Hector Car
6 Icicl New Term Term 10,00,00,000 3,34,00,00 8.00% 6 Years EMI Rs. Against
Loan A/c loan 0 4,63,889/-. Collateral charge
564751634001001 of Resi property

Flat No.201, 2nd

Flr, Mahran
CHSL, Plot
No.16, Juhu

Scheme,Mumbai
-400049 of Nidhi

Motwani &
comm. property
S NO. 7/18,

Narangi Taluka
Khalapur, Raigad

 

 

 

 

 

 

 

 

 

 

 

of Anjana
Motwani.
ICICl Tempo Loan
Lvmum000411127 Vehicle 48 Months EMI
7 28 Loans 12,99,500 7,95,399 9.26% Rs.32,748/- NA
Term Loan - FRP
Project
506000451618- Term 7.5 Years EMI
8 Indusind Bank loan 33,25,714 14,54,090 8.70% Rs.3,11,937/- Factory Land
Indusind Term 1,24,00,00
9 Machinery Loan Loan 1,24,00,000 0 8.00% 5 Years Machinery
10 IND - Loans 2,57,00,000 2,57,00,00 9.25% | 48 Months NA
570000009911 repayabl 0
ECLGS LOAN e on
demand

 

 

 

NA- Not Applicable

236
a

HP ADHESIVES LIMITED
DETAILS OF LONG TERM BORROWINGS AS RESTATED
ANNEXURE VII

(Rin Lakh)

 

As at 30th As at
Sept, 30th
2021 Sept,

2020

As at 31st | Asat31st | As at 31st
March, March, March,
2021 2020 2019

Particulars

 

Borrowings measured at Amortised Cost
Secured
Loan from Bank

[A) TERM LOANS
(a) Term Loan from ICICI Bank 296.89 - 334.00 - -

(b) Term Loan from Indusind Bank - 15.02 33.26 33.20 90.46
(c) Machinery Loan from Indusind Bank 124.00 - - - -

[B) LOANS REPAYABLE ON DEMAND
(a) ECLGS Loan from ICICI Bank 133.32 213.31 179.98 = =
(Repayable in 48 monthly instalments)
(b) ECLGS Loan from Indusind Bank 171.33 257.00 | 214.17 - -
(Repayable in 48 monthly instalments)

(C) VEHICLE LOANS
(a) Vehicle Loan from BMW Financial Services 22.74 31.42 27.15 35.19 -
(Repayable on 60 EMI of Rs.92,868/-)

(b) Vehicle Loan from Daimler Financial Services
India Pvt.Ltd. 40.46 45.48 - 2
(Repayable on 60 EMI of Rs.108,902/-)

(c) Vehicle Loan HDFC Bank - 0.63 0.20 2.15 6.26
(Repayable on 60 EMI of Rs.21,322/-)
(d) Vehicle Loan HDFC Bank - - - 2.06 8.26
(Repayable on 36 EMI of Rs.31,869/-)
(e) Vehicle Loan ICICI Bank 12.38 - 14.13 - -
(Repayable on 36 EMI of Rs.37,766/-)
(f) Vehicle Loan ICICI Bank 4.62 7.95 6.33 5.13 =
(Repayable on 48 EMI of Rs.32,748/-)
(g) Vehicle Loan ICICI Bank - - - - -
(Repayable on 48 EMI of Rs.32,748/-)
(h) Vehicle Loan ICICI Bank - - - - -
(Repayable on 48 EMI of Rs.32,748/-)

 

 

Total 805.76 525.34 854.69 77.72 104.98

 

 

 

 

 

 

 

 

 

Terms and conditions:

Secured Loan

* ICICI Bank

Against Hypothecation of company's entire stock of Raw Material, semi finished & Finished goods, consumable Stores &
Spares and such other movable current assets including book debts, bills whether documentary or clean, outstanding
monies, receivables, both present and future, in a form and manner satisfactory to the bank.

Personal Guarantee of Directors - Karan Motwani & Anjana Motwani and Relative - Nidhi Motwani.

Collateral Charge of Residential Property of Karan Motwani (Director).

# Indusind Bank

Against Hypothecation of company's entire current Assets.

235
HP ADHESIVES LIMITED
DETAILS OF DEFERRED TAX LIABILITIES AS RESTATED

a

ANNEXURE IX (A)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2 in Lakh)
Particulars Asat Asat
30th 30th As at March
Sept, Sept, 31st, 2021
2021 2020
Depreciation as per Companies Act 141.00 104.34 190.33
Depreciation as per Income Tax Act 118.49 102.57 205.13
Difference in Depreciation 22.51 1.78 (14.80)
Reversal of Expected Credit Loss (159.10) - (110.13)
Prior Period Items - - (177.88)
Difference due to Ind-AS 116 - - (0.25)
Gratuity Provision 20.25 22.18 33.27
MSME Interest Provision 10.94 & 7.21
Preliminary Expense allowed as per IT Act (28.46) : (3.00)
Total Timing Difference (133.86) 23.95 (265.58)
Tax Rate as per Income Tax Act 25.17% 25.17% 25.17%
Net (DTL)/DTA for the year (33.69) 6.03 (66.84)
OTHER NON CURRENT PROVISIONS AS RESTATED ANNEXURE IX (B)
(2in Lakh)
Particulars As at Asat Asat As at
30th 30th 31st 31st As at 31st
Sept, Sept, March, March, March, 2019
2021 2020 2021 2020
Provisions for gratuity 105.75 115.76 119.18 101.26 55.38
Total 105.75 115.76 119.18 101.26 55.38
OTHER NON CURRENT LIABILITIES AS RESTATED ANNEXURE IX (C)
(in Lakh)
Particulars Asat As at Asat Asat
30th 30th 31st 31st As at 31st
Sept, Sept, March, March, March, 2019
2021 2020 2021 2020
Lease Liability 337.16 24.15 14.52 73.61 5.08
Total 337.16 24.15 14.52 73.61 5.08
DETAILS OF TRADE PAYABLES AS RESTATED ANNEXURE X
(Rin Lakh)
Particulars As at 30th As at 30th As at 31st As at 31st
Sept, Sept, 2020 March, March, rahe
2021 2021 2020 #
Total outstanding dues of micro, small 1,338.24 625.79 396.01 - -
and medium enterprises*
Total outstanding dues of creditors 1,276.92 805.35 2,193.02 1,526.79 1,457.36
other than micro, small and medium
enterprises
Total 2,615.16 1,431.14 2,589.04 1,526.79 1,457.36

 

 

 

 

 

237
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DETAILS OF FIXED ASSETS AS RESTATED ANNEXURE XIII
(® in Lakh)
Particulars Building Plant & Furniture} Vehicle Office Comp Total
equipm & Fixture| s equip uters
ent ment
Gross block :
As at April 1, 2018 183.64 673.60 41.00 111.32 19.17 37.87 1,066.60
Addition/(Deletion) 25.72 234.08 7.14 77.13 2.00 5.06 351.13
As at March 31, 2019 209.36 907.68 48.14 188.45 21.17 42.93 1,417.73
As at April 1, 2019 209.36 907.68 48.14 188.45 21.17 42.93 1,417.73
Addition/(Deletion) = 187.82 59.55 0.74 1.28 12.58 261.97
As at March 31, 2020 209.36 1,095.50 107.69 189.19 22.44 55.51 1,679.70
As at April 1, 2020 209.36 1,095.50 107.69 189.19 22.44 55.51 1,679.70
Addition a 26.47 = 0.05 1.68 5.33 33.54
(Deletion) - - - - - - -
As at Sept 30, 2020 209.36 1,121.98 107.69 189.24 24.12 60.84 1,713.23
As at Sept 30, 2020 209.36 1,121.98 107.69 189.24 24.12 60.84 1,713.23
Addition 739.12 166.32 0.33 75.80 1.11 14.17 996.86
(Deletion) - - - -8.30 - - -8.30
As at March 31, 2021 948.49 1,288.30 108.02 256.74 25.23 75.01 2,701.79
As at March 31, 2021 948.49 1,288.30 108.02 256.74 25.23 75.01 2,701.79
Addition 10.00 27.51 0.10 12.34 0.41 8.23 58.59
(Deletion) * = -191.28 : = = - -191.28
As at Sept 30, 2021 958.49 1,124.54 108.12 269.08 25.64 83.24 2,569.10
Accumulated depreciation
As at April 1, 2018 64.19 289.36 21.76 54.26 8.83 30.96 469.37
Addition/(Deletion) 5.00 44.87 1.86 17.13 1.59 3.09 73.54
As at March 31, 2019 69.19 334.23 23.62 71.39 10.42 34.05 542.91
As at April 1,2019 69.19 334.23 23.62 71.39 10.42 34.05 542.91
Addition/(Deletion) 4.99 45.06 4.37 26.38 7.27 4.79 92.85
Adjustments 8.76 81.28 0.45 1.49 0.40 1.15 93.53
As at March 31, 2020 82.95 460.57 28.43 99.26 18.09 39.99 729.29
As at April 1, 2020 82.95 460.55 28.44 99.27 18.09 39.99 729.29
Addition 2.33 25.38 2.22 14.59 2.07 3.19 49.77
(Deletion) - - - - - - -
As at Sept 30, 2020 85.28 485.93 30.65 113.86 20.16 43.18 779.06
As at Sept 30, 2020 85.28 485.93 30.65 113.86 20.16 43.18 779.06
Addition 11.50 29.22 2.19 11.40 0.75 4.75, 59.80
(Deletion) -2.89 -2.89
As at March 31, 2021 96.78 515.14 32.84 122.37 20.91 47.93 835.97
As at March 31, 2021 96.78 515.14 32.84 122.37 20.91 47.93 835.97
Addition 14.03 35.27 2.22 13.79 1.15 6.19 72.66
(Deletion) -36.01
As at Sept 30, 2021 110.82 514.41 35.07 136.16 22.06 54.11 872.62
Net Block
As at March 31, 2019 140.17 573.45 24.52 117.05 10.75 8.87 874.82
As at March 31, 2020 126.42 634.93 79.25 89.93 4.36 15.52 950.41

 

 

 

 

 

 

 

 

239

 
a

* The disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 have been made in respect of such
vendors to the extent they could be identified as micro and small enterprises on the basis of information available with the

 

 

 

 

Company.
DETAILS OF OTHER CURRENT LIABILITIES AS RESTATED ANNEXURE XI
(in Lakh)

Particulars As at Asat Asat Asat eee ee
30th 30th 31st 31st March
Sept, Sept, March, March, Bois
2021 2020 2021 2020

Borrowings

Loan repayable on demand

Secured

Cash credit 1,463.53 1,858.87 1,804.58 1,786.42 -

Bank Overdraft -0.06 -0.06 -0.06 16.48 1,698.22

Packing Credit 239.05 223.73 210.76 234.60 212.86

Letter of Credit = = 16.14 58.57 =

Working capital Demand Loan 222.24 284.80 252.41 357.79 -

Unsecured

Loan from Related Parties m 5 874.40 342.27

Total 1,924.76 2,367.33 2,283.83 3,328.26 2,253.35

Lease liabilities

Lease liability 141.21 37.85 24.25 38.77 5.49

Total 141.21 37.85 24.25 38.77 5.49

Other Financial liabilities

Current maturity of long term loans* 243.29 501.44 1,081.92 55.08 -

Security deposits 1.00 1.00 1.00 - -

Payable to Employees 126.36 151.84 132.21 126.52 66.10

Payable towards services received 36.71 79.53 10.30 - -

Payable towards stores, spares and 39.33 103.80 197.05 96.37 5.50

consumables

Total 446.69 837.62 1,422.48 277.97 71.60

Other Current liabilities

Statutory dues payable 27.92 15.26 20.95 8.32 50.69

Advances received from customers 114.66 146.32 106.35 = 194.68

Total 142.59 161.58 127.30 8.32 245.37

 

 

 

 

 

 

 

* Includes Interest Free Loan taken from Directors - Karan Motwani & Anjana Motwani as of 31-Mar-21.

It has been repaid as of 30-Sep-2021.

 

 

 

 

DETAILS OF SHORT TERM PROVISIONS AS RESTATED ANNEXURE XII
(in Lakh)
Particulars Asat As at As at Asat IAS at aiet
30th 30th 31st 31st March
Sept, Sept, March, March, 2019

2021 2020 2021 2020
Provision for employee benefits 53.78 - 35.02 - 6.90
Provision for expenses - - 106.64 - -
Provision of Income Tax (Net of Advance Tax) 162.11 54.48 135.07 - -
Total 215.89 54.48 276.72 6.90

 

 

 

 

 

 

238

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Building Plant & Furniture} Vehicle Office Comp Total
equipm & Fixture| s equip uters
ent ment

As at Sept 30, 2020 124.08 636.05 77.03 5.38 3.96 17.66 934.17
As at March 31, 2021 851.70 773.16 75.17 134.38 4.32 27.08 1,865.82
As at Sept 30, 2021 847.67 610.14 73.05 132.93 3.58 29.12 1,696.49
* Machineries related to FRP Division has been disposed off by the company during the period ended Sept-21.
DETAILS OF ROU ASSETS

Particulars (Rin Lakh)
Cost
As at 31st March, 2019 3.45
Additions 206.98
Disposals/Adjustments -
As at 31st March, 2020 210.44
Additions .
Disposals/Adjustments :
As at 30th Sept, 2020 210.44
Additions fe
Disposals/Adjustments -
As at 31st March, 2021 210.44
Additions 504.12
Disposals/Adjustments -
As at 30th Sept, 2021 714.56
Amortisation
As at 31st March, 2019 0.32
Amortisation recognised 95.17
As at 31st March, 2020 95.50
Amortisation recognised 2.46
As at 30th Sept, 2020 97.96
Amortisation recognised 74.22
As at 31st March, 2021 172.18
Amortisation recognised 66.05
As at 30th Sept, 2021 238.22
Net book value
As at 30th Sept, 2021 476.33
As at 31st March, 2021 38.26
As at 30th Sept, 2020 112.48
As at 31st March, 2020 114.94
As at 31st March, 2019 3.13
Amortisation includes impact of Incremental Rent and additional Lease agreement executed during the relevant period.
DETAILS OF INTANGIBLE ASSETS

Particulars (8 in Lakh)
Cost
As on 1st April, 2018 2.14
Additions =
Disposals/Adjustments -
As at 31st March, 2019 2.14

 

 

 

240

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions 15.85
Disposals/Adjustments -
As at 31st March, 2020 17.99
Additions 6.51
Disposals/Adjustments -
As at 30th Sept, 2020 24.50
Additions =
Disposals/Adjustments -
As at 31st March, 2021 24.50
Additions 4.30
Disposals/Adjustments -
As at 30th Sept, 2021 28.80
Amortisation

As on 1st April, 2018 1.46
Amortisation recognised 0.17
As at 31st March, 2019 1.63
Amortisation recognised 1.60
As at 31st March, 2020 aa
Amortisation recognised 1.96
As at 30th Sept, 2020 5.19
Amortisation recognised mas
As at 31st March, 2021 7:22
Amortisation recognised 2.29
As at 30th Sept, 2021 9.61
Net book value

As at 30th Sept, 2021 19.19
As at 31st March, 2021 17.18
As at 30th Sept, 2020 19.31
As at 31st March, 2020 14.76
As at 31st March, 2019 0.51

 

 

 

DETAILS OF OTHER NON CURRENT ASSETS

ANNEXURE XIV

 

 

 

 

 

 

 

 

(in Lakh)
Particulars Asat As at Asat Ag atSiet Asataiet
30th 30th 31st
March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021
Financial Assets
Security deposits 69.04 53.45 aos 88.53, 33.24
Total 69.04 53.45 39.71 88.53 33.24
Other non current assets
Demand paid under Protest* 15.88 15.88 15.88 15.88 150.44
Total 15.88 15.88 15.88 15.88 150.44

 

 

 

 

 

 

*For VAT and CST litigation matters

241

 
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DETAILS OF INVENTORIES AS RESTATED ANNEXURE XV
(in Lakh)
Particulars Asat As at Asat Ag atSiet Asataiet
30th 30th 31st
March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021
Raw materials and components 1,561.71 967.32 1,281.05 836.22 806.35
Work-in-progress 182.74 86.22 201.79 59.67 -
Finished goods 1,625.08 998.93 1,756.85 956.14 646.03
Total 3,369.53 2,052.46 3,239.69 1,852.03 1,452.38
DETAILS OF TRADE RECEIVABLES AS RESTATED ANNEXURE XVI
(in Lakh)
Particulars Asat Asat Asat Asat 31st As at 31st
30th 30th 31st
March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021
Receivables considered good - Unsecured 2,880.79 1,937.71 2,286.61 1,979.85 2,240.84
Receivables considered doubtful - Unsecured 544.85 814.08 703.95 814.08 668.70
Less:
Impairment for Trade Receivable under
expected credit loss (544.85) (814.08) (703.95) (814.08) (668.70)
Total 2,880.79 1,937.71 2,286.61 1,979.85 2,240.84
Notes:
1. Trade receivables has been taken as certified by the management of the company.
2. Provisioning for expected credit loss has been done as per the guidance of Ind AS 109.
3. For details of Trade Receivables with related party, refer note no. XXV Related Party disclosure.
4. Trade receivables are generally non interest bearing.
5. Movement in expected credit loss allowance of trade receivable
Particulars Asat Asat As at AS at Set Ret ee
30th 30th 31st
March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021
Balance at the beginning of the period/year 703.95 814.08 814.08 668.70 -
Additions during the period/year (159.10) - (110.13) 145.38 668.70
544.85 814.08 703.95 814.08 668.70
DETAILS OF CASH & CASH EQUIVALENTS AS RESTATED ANNEXURE XVII
(in Lakh)
Particulars As at Asat As at As at 3ist Agatgia
30th 30th 31st
March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021
Balances with banks:
On current accounts 26.94 58.27 58.40 49.55 123.57
Fixed deposits with maturity of less than 3
months 21.87 27.52 10.39 6.11 49.64
Cash on hand 19.50 16.28 14.30 19.99 17.74
Total 68.30 102.07 83.10 75.65 190.95

 

 

 

 

 

 

242

 

 
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DETAILS OF SHORT TERM LOANS & ADVANCES AS RESTATED ANNEXURE XVIII
(in Lakh)

Particulars Asat Asat Asat As at 31st As at 31st
30th 30th 31st March, March,
Sept, Sept, March, 2020 2019
2021 2020 2021

Loan

Loan to staff 108.71 124.73 116.65 122.51 82.29

Total 108.71 124.73 116.65 122.51 82.29

 

 

Current Tax assets (Net)

 

Advance Income Tax (Net of Provisions) - - - 15.30 292.66

 

Total - - - 15.30 292.66

 

 

Other Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Capital Advances 157.75 17.39 23.19 - -
(b) In Fixed Deposit Accounts with maturity
3-12 months 58.68 “ 40.15 42.00 S
(c) Advances other than capital Advances
Prepaid expenses 33.35: 19.40 24.87 10.93 -
GST Receivable / Refund 12.78 39.43 79.84 21.34 5.44
VAT Receivable / Refund 3.42 4.56 3.42 6.20 6.20
TDS Receivable 7.79 8.07 9.24 6.28 :
TCS Receivable 4.16 - 3.43 2 .
Advances to vendors 148.83 353.81 223.54 1.94 163.13
Other advances 2.25 2.23 - 9.90
Share Issue Expenses 142.30 - 15.00 - -
Insurance Claim Receivable 26.06 - m
Total 571.29 442.66 450.97 88.69 184.67
DETAILS OF REVENUE FROM OPERATIONS AS RESTATED ANNEXURE XIX
(Rin Lakh)
Particulars Six Six For the For the year ended 2020 For the
Month Month year 8th Total year
Period Period ended ase Apr May ended
ended ended 2021 #019 2019 2019
Sept Sept to7th | to 31st
30, 30, May Mar
2021 2020 2019 2020
Revenue from Operations 7,051.5 4,492.9 11,816.1 1,096.7 8,451.2 9,547.9 8,741.7
(Net) 8 2 6 0 3 3 5
7,051.5 4,492.9 11,816.1 1,096.7 8,451.2 9,547.9 8,741.7
Total 8 2 6 0 3 3 5

 

 

 

 

 

 

 

 

243

 

 
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DETAILS OF OTHER INCOME AS RESTATED ANNEXURE XX
(8 in Lakh)
Particulars Six Six For For the year ended 2020 For
Mont Mont the Ist Apr 8th Total the
h h year 2019 to May year
Perio Period ended 7th 2019 to ended
d ended 2021 May 31st 2019
ended Sept 2019 Mar
Sept 30, 2020
30, 2020
2021
(a) Interest Income
Interest Income on Fixed deposits
with banks = 0.71 2.97 4.91 7.88 8.18
Interest on Staff Loan 0.01 0.06 0.11 3 0.12 0.12 =
Interest on MSME 3.10 4.09 4.09 " = " *
Other interest income 1.34 2.48 3.37 0.18 5.12 5.30 0.52
(b) Other Non-operating Income
Rental income on Non - 6.00 6.00 13.00 a 11.00 11.00 =
Residential Property
Renting Machinery And Equipments - - - 84.00 84.00 -
Jobwork Charges = 148.72 346.76 = 70.00 70.00 3.57
(c) Other Gains and Losses
Net Foreign exchange gain 30.88 4.87 36.11 5.96 33.24 39.20 22.91
Excise Excess Duty Refund - - 0.09 - 3.35 3.35 -
Duty Drawback Refund 10.42 9.43 21.75 1.64 19.42 21.06 19.51
Freight/Transportation Charges
Recovered 0.51 1.42 - 0.91 0.91 0.75
Provision for expected credit loss
no longer required written back 159.1 - 110.1 - - - -
0 3
Scrap sale of Packing material - 0.22 0.22 - - - -
Discount received : 5.59 7.98 3 = 3 =
Sundry Balance written off - - 0.00 - - - 0.40
Miscellaneous income 10.81 ® 26.06 + s + 0.05
Total 221.6 181.9 571.8 10.75 232.07 242.8 55.89
5 7 0 2

 

 

 

 

 

 

 

 

244

 
DETAILS OF COST OF MATERIAL CONSUMED AND

CHANGE IN INVENTORIES AS RESTATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEXURE XXI
(2 in Lakh)
Particulars Six Six For the For the year ended 2020 For the
Month Month year Ist Apr 8th May Total year
Period Period ended 2019 to 2019 to ended
ended ended 2021 7th May 31st 2019
Sept 30, Sept 30, 2019 Mar
2021 2020 2020
Cost of material
consumed
Raw materials at the 637.81 836.22 836.22 - - 806.35 504.21
beginning of the period
Add : Purchases 5,261.10 3,258.50 9,509.96 6,618.17 6,365.20
744.64 5,873.53
Less : Raw materials at 1,561.71 967.32 637.81 - - 836.22 806.35
the end of the period
Total 4,337.20 3,127.40 9,708.36 6,588.30 | 6,063.06
Change in inventories
Inventories at the 2,601.89 1,015.81 1,015.81
beginning of the year 646.03 295.13
Less: Inventories at the 1,807.82 1,085.15 2,601.89 1,015.81 646.03
end of the year
Net (increase) / decrease 794.07 (69.33) (1,586.07) (369.78) (350.90)
in inventories
DETAILS OF EMPLOYEE BENEFIT EXPENSES AS RESTATED
ANNEXURE XXII
(Rin Lakh)
Particulars Six Six For the For the year ended 2020 For the
Month Month year 1st Apr 8th May Total year
Period Period ended 2019 to 2019 to ended
ended ended 2021 7th May 31st 2019
Sept 30, Sept 30, 2019 Mar
2021 2020 2020
Salaries and wages 679.84 558.26 1,376.3 155.12 1,012.23 1,167.3 873.07
8 5
Directors Remuneration/
Partners' Salary 55.75 23.26 46.53 50.00 50.00 50.10
Gratuity expense 20.25 22.18 33.27 - I7:89 17.59 14.87
Bonus 18.92 22.74 17.41 - 34.39 34.39 =
Total 774.76 626.45 1,473.5 155.12 1,114.21 1,269.3 938.04
8 3

 

 

 

 

 

 

 

 

245

 

 
a

DETAILS OF FINANCE COSTS AS RESTATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEXURE XXIII
(Rin Lakh)
Particulars Six Six For the For the year ended 2020 For the
Month Month year 1st Apr 8th May Total year
Period Period ended 2019 to 2019 to ended
ended ended 2021 7th May 31st 2019
Sept 30, Sept 30, 2019 Mar
2021 2020 2020
Interest on — secured 128.22 104.98 209.47 15.66 44.80 60.46 147.98
borrowing
Interest on un-secured - . 3.83 = 18.14 18.14 41.14
borrowing
Loan Processing Charges 13.27 -4.12 - 0.84 10.85 11.69 25.45
Interest to Partners = 7 z 18.66 a 18.66 174.89
Interest on OD = 0.61 0.61 se 152.21 152.21 7
LC Charges 0.53 0.64 2.56 & 2.96 2.96 =
Interest expenses on 18.51 3.92 6.26 - 7.16 7.16 1.18
financial liabilities
measured at amortised
cost*
Interest on Delay of
MSME Creditors 10.94 - 7.21 = = = -
payment
Bank Charges & 0.93 4.86 25.37 - 23.41 23.41 -
Commission
Total 172.41 110.89 255.31 35.16 259.52 294.68 390.64
*Lease Liability includes impact of Incremental Rent and additional Lease
agreement executed during the relevant period.
DETAILS OF OTHER EXPENSES AS RESTATED
ANNEXURE XXIV
(8 in Lakh)
Particulars Six Six For the For the year ended 2020 For the
Month Month year Ist Apr 8th May Total year
Period Period ended 2019 to 2019 to ended
ended ended 2021 7th May 31st 2019
Sept 30, Sept 30, 2019 Mar
2021 2020 2020
Production expenses 152.01 98.68 269.69 16.73 233.52 250.25 164.85
Telephone and
communication charges 5.74 4.28 18.54 1.02 26.95 27.97 13.05
Printing & Stationery 2.06 2.17 8.33 0.75 22.63 23.38 13.65
Repairs _& Maintenance
expenses
Machinery 34.75 16.90 45.06 6.35 45.37 $1.72 39.14
Conveyance and
travelling expenses 81.91 7.74 128.33 18.93 279.82 298.75 21ad2
Net impairment loss - - - - 145.38 145.38 74.46
(ECL)
Insurance charges 22.24 16.16 28.99 6.57 13.99 20.56 23.48

 

 

 

 

 

 

 

 

246

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business promotion 5.63 2.03 Tits Aik 313.28 314.45 42.44

expenses

Legal & professional 42.41 38.77 61.73 11.22 56.75 67.97 159.40

charges **

Lease Rent & License 15.34 3.89 2.25 5.06 26.18 31.24 28.33

Fees

Rates & Taxes - 4.13 5.86 - 12.80 12.80 1.04

Inspection and_ testing - - 16.90 - 19.70 19.70 -

expenses

Membership & 0.88 1.55 2.37 0.12 0.70 0.82 3.30

subscription

Auditor's Remuneration* - - 21.28 - 18.68 18.68 -

Computer consumables,

software & maintenance 1.83 0.70 3.90 0.22 5.10 5.32 5.19

charges

Marketing & _ selling 187.51 177.30 380.60 28.49 252.56 281.05 333.78

expenses

Bad-Debts 59.77 1.95 2.05 - 1.88 1.88 101.29

Discount Allowed - - - - - - -

Donation 7 7 m 3.00 3.00 5

Miscellaneous expenses 20.75 6.73 15.78 4.05 32.00 36.05 60.83

Total 632.83 382.97 1,023.4 100.68 1,510.28 1,610.9 1,277.3
1 6 5

 

 

 

 

 

 

 

 

**Legal & Professional Fees of Rs. 127.30 Lakhs has not been recognised as it pertains to IPO expenses which will be
recovered from Selling shareholder/adjusted from Securities premium later.

*Note : The following is the break-up of Auditor's remuneration (excluding input

credit of service tax / GST availed, if any)

 

 

 

 

 

 

 

 

 

Particulars Six Six For the For the year ended 2020 For the
Month Month year Ist Apr 8th May Total year
Period Period ended 2019 to 2019 to ended
ended ended 2021 7th May 31st 2019
Sept 30, Sept 30, 2019 Mar
2021 2020 2020
Statutory Audit Fee - - 15.00 - 4.60 4.60 -
Taxation Matters/Tax - - 2.00 - 1.98 1.98 -
Audit
Certification Fees . . 2.00 m 2.31 2.31 5
For reimbursement of : 5 2.28 - : a =
Expenses
Other Professional = = 7 = 9.79 9.79 =
Services*
Total = S 21.28 = 18.68 18.68 =

 

 

 

 

 

 

 

 

* Reclassified from Legal Charges

247

 

 
DETAILS OF RELATED PARTY TRASANCTIONS AS RESTATED

oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEXURE XXV
(& in Lakh)
Name Nature of Transaction Amount Amount Amount Amount Amount
Relatio Transacti Receiva | Transacti Receiva | Transacti Receiva | Transacti Receiva | Transacti| Receiva
nship ons For ble / ons For ble / ons For ble / ons For ble / ons For ble /
the | (payable the | (payable the | (payable the | (payable the | (payable
Period ) as at Period )asat Period ) as at Period )asat Period ) as at
Ended 30th Ended 30th Ended 31st Ended 31st Ended 31st
30th Sept 30th Sept 31st March 31st March 31st March
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
2021 2020 2021 2020 2019
Business Transactions - 417.29 = 109.52 449.16 =
Sale 20.10
Business Transactions - 183.22 -
He Director Sale of Assets
COMPOSI | Is Business Transactions - | 78.61 598.71 396.57 612.19 62.13 154,07 | 15405 - .
TES LLP Partner Purchase
Rental Services Given 6.00 6.00 13.00 165.00 z
Job-Work Services Given - 148.72 346.76 = =
Loan Taken 163.39 193.45 938.84. 1,338.46 100.22
Loan Repaid 949.80 499.44 675.77 814.92 114.23
AANA Interest On _ Partners - - - - 117.62
MOTWA Director ee Profits ~ - ~ (199.05) ~ (786.41) (523.54) 125.31 er
NI Remuneration Paid 17.30 2.00 14.60 20.00 10.10
Rent Paid 30.00 = = =
Bonus Paid - - 4.01 « .
Loan Taken 750.09 0.14 166.58 807.11 47.40
Loan Repaid 915.00 4.67 168.76 640.01 51.97
KARAN Interest On Partners - - - - 57.27
MOTWA Director Capital : (165.26) (164.91) (167.10) (640.57)
NI Share of Profits - - = = 41.77
Remuneration Paid 38.45 3.00 21.90 30.00 40.00
Rent Paid 30.00 = : “ =

 

 

248

 

 

 

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Nature of Transaction Amount Amount Amount Amount Amount
Relatio Transacti Receiva | Transacti| Receiva | Transacti Receiva | Transacti Receiva | Transacti| Receiva
nship ons For ble / ons For ble / ons For ble / ons For ble / ons For ble /

the | (payable the | (payable the | (payable the | (payable the | (payable
Period ) as at Period )asat Period ) as at Period )asat Period ) as at
Ended 30th Ended 30th Ended 31st Ended 31st Ended 31st
30th Sept 30th Sept 31st March 31st March 31st March
Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
2021 2020 2021 2020 2019

HARESH

MOTWA

NI HUF)

ADVANCE Director Business Transactions - 3.11 1.36 3.14 ce 5.27

SOLVENT Sale

ADHEsIv | ProP- Business Transactions - | - 18.67 378 1552 “J 952 8.97

ES Purchase

Note -

Loan taken from Directors - Karan Motwani & Anjana Motwani are unsecured repayable on

demand and are interest free.

Factory land has been taken from Directors on Long-
term Lease basis.
All other transactions with related parties disclosed above are made on terms equivalent to those that prevail in arm’s length transactions subject to transactions with HP Composites LLP

as being non-comparable, hence not commented upon.
Related parties taken as identified by management.

250

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name Nature of Transaction Amount Amount Amount Amount Amount
Relatio Transacti Receiva | Transacti Receiva | Transacti Receiva | Transacti Receiva | Transacti| Receiva
nship ons For ble / ons For ble / ons For ble / ons For ble / ons For ble /

the | (payable the | (payable the | (payable the | (payable the | (payable

Period ) as at Period )asat Period ) as at Period )asat Period ) as at

Ended 30th Ended 30th Ended 31st Ended 31st Ended 31st

30th Sept 30th Sept 31st March 31st March 31st March

Sept, 2021 Sept, 2020 March, 2021 March, 2020 March, 2019
2021 2020 2021 2020 2019
Bonus Paid 7 * 6.02 : :
Interest Paid on 3 = = 18.14 41.14

NIDHI Director Unsecured Loans

MOTWA Daught Loan Taken - (1.55) 75.00 (56.24) 286.00 * 756.41 (183.74) 1,106.50 (342.27)

NI er Loan Repaid i 202.50 469.74 572.68 805.36

Salary Paid 13.80 9.00 21.60 4.00 z
. Business Transactions - - - - 63.20 -
HP Director sale
TRADING oe Business Transactions - - ° - IBaT = An-T2 132.50 aoa 17.54 al
Purchase
m Business Transactions - - - - 21.97 -

HP SALES Director Sale

CORPOR Prop. - 8 4 = 3 28.40

ATION Firm Business Transactions - - @ = 21.97 =

Purchase
Director Business Transactions - 3 = - - e

HP Daught Sale

MARKETI 5 = 22.17 = = 21.40
er Prop. Business Transactions - - - - - 71.30

NG i
Firm Purchase

HP. Business Transactions - 7 = a . = . a 1.80

PLASTIC . Rent Paid

HUF Director

(HARESH ae - (3.60)

MOTWA

NI HUF)

HP Loan Taken = : . = 5.50

PLASTIC Director Loan Repaid « . = . ~ . # . 5.50 .

KHM HUF

(KARAN

 

 

 

 

 

 

 

 

 

 

 

 

 

249

 
CAPITALIZATION STATEMENT AS RESTATED AS AT SEPTEMBER 30, 2021

oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEXURE XXVI
(2 in Lakh)
Particulars Pre-issue Post-issue
Borrowings
Short term debt (A) 2,168.05 2,168.05
Long term debt (B) 805.76 805.76
Total debts (C) 2,973.81 2,973.81
Shareholders’ funds
Share capital 1,423.49 1,837.49
Other equity 2,332.58 13,262,18
Total shareholders’ funds (D) 3,756.08 15,099.67
Note -

1. The figures disclosed are based on Restated statement of Assets and Liabilities of the company as on September

30, 2021.

2. Lease Liability not considered in Long Term & Short Term Debts.

DETAILS OF TAX SHELTERS AS RESTATED

 

 

 

 

 

 

 

 

ANNEXOURE XXVII
(in Lakh)
Particulars As at 30th As at 30th As at 31st
Sept, 2021 Sept, 2020 March, 2021
Profit before tax as restated 420.98 392.17 1,323.02
Add
Depreciation Debited in P&L A/c 141.00 104.34 190.34
Non deductible expenditure 50.34 45.10 78.32
Disallowance due to Sec 43B (Bonus) 18.92 22.74 35.02
Interest on late payment on TDS 0.23 0.18 0.31
Non Deduction of TDS on expenses - Hotel Expenses - - 1.46
MSME Interest 10.94 * 7.21
Non Deduction of TDS on expenses - Car Loan Interest - - 1.04
Gratuity 20.25 22.18 33.27
612.31 541.61 1,591.68
Less
Allowable Expenditure 306.21 125.31 350.59
Expenses Allowed u/s 43B 0.15 22.74 32.33
Reversal of Expected Credit Loss 159.10 - 110.13
Preliminary 28.46 - 3.00
Depreciation as per Chart u/s 32 118.49 102.57 205.13
306.10 416.30 1,241.09
Brought Forward Business Loss Set off “ ® 100.37
Brought Forward Depreciation Set off - - 146.54
Gross Total Income 306.10 416.30 994.18
Tax Due @ 22% (Company has opted for Sec 115 BAA) 67.34 91.59 218.72
Surcharge @ 10% 6.73 9.16 21.87
74.08 100.75 240.59
Health & Education Cess @ 4.00% 2.96 4.03 9.62
Currentilax; 77.04 104.78 250.22

 

 

 

 

Note :-

 

Provisions of MAT are not applicable as company has opted to pay tax under Sec 115 BAA of IT Act, 1961.

251

 

 
OTHER FINANCIAL INFORMATION AS RESTATED

ANNEXURE XXVIII

oP

(& in Lakh)

1. Reconciliation of restated net worth and return on restated net worth & Reconciliation of net asset value

per equity share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the six | For the six h
Fort
months months For the year ads For the year
ended Sept | ended Sept | ended March March ended March
30th, 2021 | 30th, 2020
31st, 2021 31st, 2020 31st, 2019
Restated PAT as per
statement of profit & loss
(Rs. In lacs) (For Basic EPS
purpose) (A) 310.24 293.42 1,005.96 -467.05 400.07
Restated Earnings before
Interest, Tax, Depreciation
and Amortisation (Rs. In lacs) 734.38 607.40 1,768.67 691.95 870.09
Weighted average number
of equity shares at the end of
the year/period (B) 1,39,79,966 | 1,30,00,000 1,30,00,000 | 1,30,00,000 1,30,00,000
No. Of Equity shares at the
end of the year/period 1,42,34,947 | 1,30,00,000 1,30,00,000 | 1,30,00,000 1,30,00,000
(Absolute number) (C)
Net Worth as restated (D)
(Rs. In lacs) 3,756.08 560.49 1,265.88 248.44 1,466.23
Earnings per Share
Basic or Diluted earnings per
share (A)/(B)*1045 # 2.22 2.26 7.74 -3.59 3.08
Return on Net Worth (%)
(A)/(D)# 8% 52% 79% -188% 27%
Net Asset Value per Equity
share (D)/(C)*1045 26.39 4.31 9.74 1.91 11.28
Nominal value per equity
share (in Rs.) 10 10 10 10 10
# not annualised for period ended 30 Sept 2021 and 30 Sept 2020)
2. Reconciliation of Profit/(loss) for the period/year to our EBITDA
Particulars For the For the ae
six six For the ie For the
months months year ete _ year
ended ended ended merit ended
Sept Sept March ie March
30th, 30th, Bist, 2021 : 0 31st, 2019
2021 2020
Restated profit/(loss) for the 310.24 293.42 1,005.96 (467.05) 400.07
period/year attributable to
equity shareholders (I)
Add:
Finance Cost (II) 172.41 110.89 255.31 294.68 390.64
Total Tax 110.73 98.75 317.06 (69.00) 5.84
Expense/(income) (III)
Depreciation (IV) 141.00 104.34 190.34 189.62 73.54
Exceptional items - - - 743-71, -
Less:
Other Income (VI) - - - - -
EBITDA (VII=I+11+11I+1V+V-VI) 734.38 607.40 1,768.67 691.95 870.09

 

 

 

 

 

 

252

 
3. Reconciliation of EBITDA margin

a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the For the
six six For the For the For the
year
months months year year
ended ended ended oes ended
Sept Sept March bs March
30th, 30th, Bist, 2021 aaas Bist, 2019
2021 2020
EBITDA (I) 734.38 607.40 1,768.67 691.95 870.09
Revenue from Operations (II) 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
EBITDA margin (I/II) 10.10% 12.99% 14.28% 7.07% 9.89%
4. Reconciliation of Gross Profit and Gross Profit margin
Particulars For the For the For the
six six For the For the
year
months months year erici year
ended ended ended coe ended
Sept Sept March aa March
30th, 30th, Bist, 2021 ae Bist, 2019
2021 2020
Revenue from operations (1) 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
(5,131.2 (3,058.0 (8,122.29) (6,218.5 (5,712.16)
Less: Cost of goods sold (Il) 6) 7) 2)
3,572.2
Gross Profit (III=I+I!) 2,141.97 1,616.82 4,265.66 3 3,085.48
Gross Profit margin (IV=III/I) 29.45% 34.59% 34.43% 36.49% 35.07%
(in %)
5. Reconciliation of cost of goods sold (& in Lakh)
Particulars For the For the
six six For the For the For the
months months year eel year
ended ended ended oes ended
Sept Sept March ma March
30th, 30th, Bist, 2021 oazn Bist, 2019
2021 2020
Cost of Material consumed(I) 4,337.20 3,127.40 9,708.36 6,588.30 6,063.06
Purchase of Traded goods (I!) : - - : :
Changes in Finished goods 794.07 (69.33) (1,586.07) (369.78) (350.90)
and stock-in-trade (II)
Cost of goods sold 5,131.26 3,058.07 8,122.29 6,218.5
(IV=t+I14I1) 2 5,712.16
6. Reconciliation of Total Income to our revenue from sale of products (Rin Lakh)
Particulars For the For the
six six For the Fouthe For the
year
months months year ae year
ended ended ended SEAR ended
Sept Sept March Bist March
30th, 30th, Bist, 2021 sant Bist, 2019
2021 2020
Total Income 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
Less:

Other Income - - - - -
Revenue from Operations 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
(Ul=1411)

Less:

Sale of Services (IV) * * * ®

Other Operating Revenue (221.65) (181.97) (571.80) (242.82) (55.89)
(v)

Revenue from sale of 7,051.58 4,492.92 11,816.16 9,547.9 8,741.75
products (VI=IIIHV+V) 3

 

 

 

 

 

 

253

 
7. Sale of Other Operating Revenue

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Particulars For the For the Forthe
six six For the = For the
months months year ci A year
ended ended ended err ended
Sept Sept March —_ March
30th, 30th, 31st, 2021 oak 31st, 2019
2021 2020
Rental income on Non - 6.00 6.00 13.00 11.00 .
Residential Property
Renting Machinery And - - - 84.00 -
Equipments
Jobwork Charges - 148.72 346.76 70.00 3.57
Interest Income 4.45 6.64 8.28 13.30 8.70
Net Foreign exchange gain 30.88 4.87 36.11 39.20 22.91
Excise Excess Duty Refund 5 os 0.09 3.35 2
Duty Drawback Refund 10.42 9.43 21.75 21.06 19.51
Freight/Transportation m 0.51 1.42 0.91 0.75
Charges Recovered
Provision for ECL no longer 159.10 os 110.13 2 Es
required written back
Scrap sale of Packing = 0.22 0.22 Zi a
material
Discount received * 5:59. 7.98 “ #
Sundry Balance written off ® i 0.00 0.40
Miscellaneous income 10.81 aa 26.06 = 0.05
Other Operating Revenue 221.65 181.97 571.80 242.82 55.89
8. Reconciliation of Capital
Turnover Ratio
Particulars oe Financia oe
Financial a Financial
Year 2021 2020 Year 2019
Equity Share capital as per Restated Ind AS financial 1,300.00 1,300.00 1,300.00
statements (I)
Securities Premium as per Restated Ind AS financial m = z
statements (II)
Revenue from Operations (II) 12,387.96 9,790.75 8,797.64
Capital Turnover Ratio {IV=III/(I+II)} 9.53 7.53 6.77
9. Total Borrowings
Particulars As at As at As at 31st As at As at 31st
30th 30th 31st
March, March,
Sept, Sept, 2021 March, 2019
2021 2020 2020
Non Current Liabilities - 1,049.05 1,026.78 1,936.61 132.80 104.98
Borrowings (I)
Current Liabilities = 1,924.76 2,367.33 2,283.83 3,328.26 2,253.35
Borrowings (II)
Total Borrowings (IlI=I+Il) 2,973.81 3,394.11 4,220.44 3,461.0 2,358.33
6

 

 

 

254

 
Reconciliation of Total borrowings/Equity attributable to

oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity holders ratio (in Lakh)
Particulars As at As at As at 31st As at Acataist
30th 30th 31st
March, March,
Sept, Sept, Saat March, Suis
2021 2020 2020
Total Borrowings (III=I+II) 2,973.81 3,394.11 4,220.44 3,461.06 2,358.33
Equity attributable to equity 3,756.08 560.49 1,265.88 248.44 1,466.23
holders
Total borrowings/Equity 0.79 6.06 3.33 13.93 1.61
attributable to equity
holders ratio
10. Reconciliation of
Restated Profit/(Loss)
margin
Particulars For the For the
; ‘ For the
six six For the For the
months months year ra year
ended ended ended are ended
Sept Sept March pai March
30th, 30th, 31st, 2021 Sane Bist, 2019
2021 2020
Restated Profit/(loss) for the 310.24 293.42 1,005.96 (467.05) ‘400.07
period/year (I)
Revenue from Operations (II) 7,273.23 4,674.89 12,387.96 9,790.75 8,797.64
Restated Profit/(Loss) 4.27% 6.28% 8.12% 4.77% 4.55%
margin (IlI=1/1I) (in%)
RESTATED CONTINGENT LIABILITIES AND COMMITMENTS
ANNEXURE XXIX
(& in Lakh)
A- Contingent Liabilities
Particulars As at Asat As at As at As at 31st
30th 30th 31st 31st March,
Sept, Sept, March March 2019
2021 2020 , 2021 , 2020
1. Letter of comfort issued to banks
2. Claim against the company not
acknowledged as debt
(i) Tax matter dispute under appeal (MVAT & 144.30 144.30 144.30 144.30 144.30
csT)*
(ii) Income Tax matter dispute under 2.70 2.70 2.70 2.70 2.70
appeal (AY 14-15)
(ii) Demand raised under Central Excise - - - - 2,822.86
“Order in original cum Show Cause Notice".#
(iv) Others- Uncrystilized effect of Bank 51.25 $1.25 51.25 $1.25 #
Guarantee's given by company to Deputy
Commissioner, Central Excise Anti Evasion
Wing, Mumbai #
(V) Demand raised against short duty paid 2.06 - - - -
Under Sec. 11A(10) of Central Excise Act, 1944
(Appeal Filed In Tribunal , Appeal No.
£/86416/2021)
Total 200.31 198.25 198.25 198.25 2,969.86

 

 

 

 

 

 

 

* Amount paid under protest Rs. 15.87 Lacs included in Other

Non-current Assets

# Company has already settled the Excise duty dues under Sab Ka Vishwas Legacy Dispute Resolution

Scheme in FY 2019-20.

25

5

 
oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES
ANNEXURE XXX
(in Lakh)
Particulars As at | As at| As at] As at/ As at
30th 30th 31st 31st 31st
Sept, Sept, March, | March, | March,
2021 2020 2021 2020 2019
(A) | Deferred tax relates to the following:
Deferred tax assets
On Unabsorbed depreciation - - - - -
On property, plant and equipment - - - - -
On provision for employee benefits - OCI - - - - -
On Others 10.19 2 10.19 2 2
On Gratuity 5.10 5.58 - - -
On MSME Interest 2.75 2 = = 2
On fair valuation of financial instruments - 7 = 7
204.8
On Expected credit loss on trade receivable 137.13 9 | 177.17 | 204.89 | 168.30
On prior period errors -| 44.77 = 44.77 2
On Leases 0.69 0.76 0.69 0.76 5
255.9
155.86 9 | 188.05 | 250.41 | 168.30
Deferred tax liabilities
On Depreciation 7.49 | 12.66 13.11 13.11 -
On OCI - actuarial gain / loss 6.96 | (3.45) (1.52) (5.38) 2.51
On revaluation of Investment at amortised cost
to fair value = 2 - = 2
On amortisation of goodwill for tax purposes - - - - -
Interest expenses on financial _ liabilities
measured at amortised cost - 4 - a 4
On amortisation of transaction cost on
borrowings # 5 = = 5
On others 11.64 2 4.48 2 2
Financial Guarantee - - - - -
26.09 9.21 16.07 7.73 2.51
246.7
Deferred tax asset, net 129.77 8 | 171.98 | 242.69 | 165.79
(B) Income tax expense
Particulars Asat Asat Asat Asat Asat
30th 30th 31st 31st 31st
Sept, Sept, | March | March | March
2021 2020 | ,2021 | ,2020 | , 2019
(104. (250.2
- Current tax taxes (77.04) 78) 2) - -
- Adjustments in respect of current income tax
of previous year - - - - -
- Deferred tax (charge) / income (33.69) 6.03 | (66.84) 69.00 (5.84)

256

 

 
(c)

(D)

(E)

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Particulars As at | As at/ As at| As at| As at
30th 30th 31st 31st 31st
Sept, Sept, March, | March, | March,
2021 2020 2021 2020 2019
Income tax expense reported in the statement (98.7 | (317.0
of profit or loss (110.73) 5) 6) 69.00 | (5.84)
Income tax expense charged to OCI
Particulars Asat | Asat Asat As at Asat
30th 30th 31st 31st 31st
Sept, Sept, March Marc Marc
2021 | 2020 | ,2021 h, h,
2020 2019
Net loss/(gain) on remeasurements of defined
benefit plans (8.48) (1.93) | (3.86) 5.38 (5.84)
Income tax charged to OCI (8.48) (1.93) | (3.86) 5.38 (5.84)
Reconciliation of tax Expense and the Accounting profit for
the year as under
392.1 | 1,323.0 | (536.0
Profit before tax 420.98 z: 3 7) | 405.91
25.17% | 25.17 | 25.17% | 25.17% | 30.90%
Tax Rate %
(134.9
Income tax expense at tax rates applicable 105.95 | 98.70 | 332.98 2) | 125.43
Tax effects on non deductible expenditure 4.78 0.05} 46.22 | 203.92 -
Effect of change in Tax rate - - - - -
Earlier year adjustment - - - -
= - | (62.14) -| (125.4
Others (Tax effect of brought forward 3)
Losses/unabsorbed depreciation of current year
on which no deferred tax asset is recognised
Income tax (expense) / income 110.73 | 98.75 | 317.06 69.00 -
Unrecognised Deferred tax assets (in Lakh)
Particulars Asat | Asat Asat Asat Asat
30th 30th 31st 31st 31st
Sept, Sept, | March, | March | March
2021 2020 2021 | ,2020| ,2019
Deferred tax asset
Deferred tax asset on business losses
Deferred tax asset on unabsorbed depreciation
Other Unrecognised deferred tax asset
On unwinding of interest on borrowings from
related parties - - - - -
On Fair valuation of Security deposits given - - - - -
Deferred tax liability
On Fair valuation of interest free borrowings - . . . -
from related parties
Total - 2 = = =

 

 

 

 

257

 

 
OTHER ADDITIONAL ANNEXURES

EARNINGS/ LOSS PER SHARE

oP

ANNEXURE XXxXI(A)- XXXI(H)
(in Lakh)

XXXI(A)

Basic earnings /(loss) per share amounts are calculated by dividing the profit/loss for the year
attributable to equity holders by the weighted average number of equity shares outstanding during the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

year.
The following reflects the income and share data used in the basic and diluted EPS computations:
(8 in Lakh)
Particulars For Six | For Six | For the | For the For the
Month | Month Year | Period Year
Period | Period| Ended | Ended Ended
ended | ended 31st 31st 31st
30th 30th | March, | March, March,
Sept,| Sept,| 2021| 2020 2019
2021 2020
Ordinary equity shareholders
Profit/(Loss) attributable to ordinary equity holders 310.24 | 293.42 | 1,005.9 |(467.05) 400.07
6
Weighted average number of equity shares for basic |1,39,79, |1,30,00, |1,30,00, |1,30,00, |1,30,00,00
EPS 966 000 000 000 O
Face Value per share 10 10 10 10 10
Basic Earnings / (Loss) per share (INR) * 2.22 2.26 7.74| (3.59) 3.08
Diluted Earnings / (Loss) per share (INR) * 2.22 2.26 7.74| (3.59) 3.08
*(not annualised for period ended 30 Sept 2021 and 30 Sept 2020)
DISCLOSURE UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, XXXI(
2006 ARE PROVIDED AS UNDER TO THE EXTENT THE COMPANY HAS RECEIVED B)
INTIMATION FROM THE "SUPPLIERS" REGARDING THEIR STATUS UNDER THE ACT.
Particulars Asat As at Asat Asat| Asat 31st
30th 30th 31st 31st March,
Sept,|  Sept,| March,| March, 2019
2021 2020 2021 2020
(i) Principal amount and the Interest due thereon remaining
unpaid to each supplier at the end of each accounting year.
Principal amount due to micro and small enterprise* 1,327.30 | 625.79] 391.21
Interest due on above** 10.94 * ‘had
(ii) Interest paid by the company in terms of Section 16 of
the Micro, Small and Medium Enterprises Development
Act, 2006, along with the amount of the payment made to
the supplier beyond the appointed day during the period
(iii) Interest due and payable for the period of delay in
making payment (which have been paid but beyond the
appointed day during the period) but without adding
interest specified under the Micro, Small and Medium
Enterprises Act, 2006
{iv) The amount of Interest accrued and remaining unpaid
at the end of each accounting year
(v) Interest remaining due and payable even in the
succeeding years, until such date when the interest dues as
above are actually paid to the small enterprises
1,338.24 | 625.79 | 398.43 -

 

 

 

 

 

 

 

258

 
oP

Dues to Micro and Small Enterprises have been determined to the extent such parties have been
identified on the basis of information collected by the Management. This has been relied upon by the
auditors.

* includes Rs. 2.33 Lacs payable towards other financial liabilities

** includes Rs. .08 Lacs payable towards interest on other financial liabilities

For the FY 2018-19 & 2019-20,company has not received any information from the Suppliers regarding
their status under MSME Act. Thus in absence of relevant information, trade payables are classified as
other than MSME Trade Payables.

EMPLOYEE BENEFITS

 

 

 

XXXI(C)
Defined Contribution Plans
During the year, the Company has recognized the following amounts in
the Statement of Profit and Loss —
Particulars For Six | For Six | For the | For the For the
Month | Month Year Year Year
Period | Period| Ended | Ended Ended
ended | ended 31st 31st 31st
30th 30th | March, | March, March,
Sept, Sept, 2021 2020 2019
2021 2020
Employers’ Contribution to Recognised Provident 18.62 8.47} 21.01] 14.71
Fund -

 

 

 

 

 

 

 

 

Defined benefit pl

As per the payment of Gratuity Act, 1972, the Company has a defined benefit gratuity plan. Every
employee who has completed five years or more of service gets a gratuity on departure at 15 days’
salary (last drawn salary) for each completed year of service. The scheme of the Company is funded with
an insurance company in the form of a qualifying insurance policy. Management aims to keep annual
contribution relatively stable at such a level such that no plan deficits will arise. The Company has
purchased an insurance policy, which is a year-on-year cash accumulation plan in which the interest
rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as
part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to
sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a
cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus,
the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates,
which should result in an increase in liability without corresponding increase in the asset).

i) Actuarial assumptions

 

 

 

 

 

 

 

 

 

Particulars Asat| Asat/ Asat| Asat/Asat 31st
30th 30th 31st 31st March,
Sept, Sept, | March, | March, 2019
2021 2020 2021 2020

Discount rate (per annum) 6.80% | 6.80% | 6.80%] 6.90% 6.90%

Rate of increase in Salary 7.00% | 7.00%} 7.00%} 7.00% 7.00%

 

259
ii) Changes in the present value of defined benefit obligation

oP

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Asat| Asat/ Asat| Asat/Asat 31st
30th 30th 31st 31st March,
Sept, Sept, | March, | March, 2019
2021 2020 2021 2020

Present value of obligation at the 119.18 | 101.26 | 101.26] 62.28 57.54

beginning of the year

Interest cost 3.89 7.68 6.70 4.50 3.85

Past service

cost

Current service 16.36) 14.50] 26.58) 13.09 11.02

cost

Curtailments

Settlements

Benefits paid

Actuarial (gain)/ loss on obligations - Due to change in

Demographic Assumptions

Actuarial (gain)/ loss on obligations - Due to change in - 0.69 1.38 8.40 (0.70)

Financial Assumptions

Actuarial (gain)/ loss on obligations (33.68) | (8.37) | (16.73) 12.98 (9.43)

- Due to experience

Present value of obligation at the 105.75 | 115.76 | 119.18] 101.26 62.28

end of the year*

*Included under employee benefits (Refer Ann XXII)

iii) Change in the fair value of plan assets: (in Lakh)

Particulars Asat| Asat/ Asat/ Asat/Asat 31st

30th 30th 31st 31st March,
Sept, Sept, | March, | March, 2019
2021 2020 2021 2020

 

Opening fair value of

plan assets

Adjustment to opening fair value
of Plan asset

Expected return on plan

assets

Contributions

by employer

Benefits paid

Interest

Income

Return on plan assets excluding
interest income

Closing fair value of plan

assets

 

 

 

 

 

 

 

 

 

260
iv) Expense recognized in the Statement of Profit
and Loss

oP

 

 

 

 

 

 

 

 

 

 

 

Particulars For Six | For Six | For the | For the For the
Month | Month Year Year Year
Period | Period| Ended | Ended Ended
ended | ended 31st 31st 31st
30th 30th | March, | March, March,
Sept, Sept, 2021 2020 2019
2021 2020
Current service cost 16.36) 14.50} 26.58) 13.09 11.02
Interest cost 3.89 7.68 6.70 4.50 3.85
Total expenses recognized in the Statement Profit 20.25) 22.18) 33.27) 17.59 14.87
and Loss*
v) Expense recognized in Other comprehensive
income
Particulars For Six | For Six | For the | For the For the
Month | Month Year Year Year
Period | Period| Ended | Ended Ended
ended | ended 31st 31st 31st
30th 30th | March, | March, March,
Sept, Sept, 2021 2020 2019
2021 2020
Actuarial (gain) / loss on Obligation for the period
changes in __ financial - 0.69 1.38 8.40 (0.69)
assumptions
changes in demographic (0.01)
assumptions
experience adjustment (33.68) | (8.37) | (16.73) 12.98 (9.43)
Net actuarial (gains) / losses recognised in OCI (33.68) | (7.68) | (15.35) | 21.39 (10.13)
vi) Assets and liabilities recognized in the Balance
Sheet:
Particulars Asat| Asat/ Asat| Asat/Asat 31st
30th 30th 31st 31st March,
Sept, Sept, | March, | March, 2019
2021 2020 2021 2020
Present value of unfunded obligation as at 105.75 | 115.76 | 119.18] 101.26 62.28
the end of the year
Fair Value of Plan Assets at the end of the year
Funded Status (Surplus / (Deficit)
Net asset / (liability) recognized in Balance Sheet* 105.75 | 115.76 | 119.18 | 101.26 62.28

 

 

 

 

 

 

 

 

*Included in provision for employee benefits (Refer note XX)

261
vii) A quantitative sensitivity analysis for significant assumption as at 31st March, 2018 is

as shown below:

oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact on defined benefit obligation For Six | For Six | For the | For the For the
Month | Month Year Year Year
Period | Period| Ended | Ended Ended
ended | ended 31st 31st 31st
30th 30th | March, | March, March,
Sept, Sept, 2021 2020 2019
2021 2020
Discount rate
0.5% increase 99.63 56.26 | 112.53 = 59.01
0.5% decrease 112.45 63.23 | 126.47 = 65.85
Rate of increase in salary
0.5% increase 112.19 63.21) 126.42 € 65.86
0.5% decrease 99.65 56.26 | 112.51 = 58.98
viii) Maturity profile of defined benefit obligation
Year As at As at As at As at | As at 31st
30th 30th 31st 31st March,
Sept, Sept, | March, | March, 2019
2021 2020 2021 2020
Expected Outgo First 6.79 - 9.36 - 6.90
Expected Outgo Second 4.34 - 7.30 - 2.57
Expected Outgo Third 6.15 - 5.29 - 3.16
Expected Outgo Fourth 7.38 - 9.94 - 4.26
Expected Outgo Fifth 6.67 - 5.55 - 3.21
Expected Outgo Six to Ten years 28.68 - 30.92 - 18.80
XXXI(D
LEASES )
Operating leases where Company is a lessee:
The table below provides details regarding the contractual maturities of lease liabilities as at
various closing dates on an undiscounted basis
Particulars Asat | Asat | Asat| Asat| As at
30th | 30th | 31st) 31st) 31st
Sept, | Sept, | Marc | Marc | March
2021 | 2020 h, h,| , 2019
2021 | 2020
Within one year 141.21 | 41.63 | 26.57 | 79.87 | 16.20
After one year but not more than five years 437.28 | 25.97 |15.46 | 42.03 | 33.75
More than five years

 

 

 

 

 

 

 

Future minimum rentals receivables under non-cancellable operating

leases are, as follows: NA

262
oP

SEGMENT REPORTING XXXI(E)
The Company operates primarily in adhesives & sealants segment. Considering the nature of Company’s
business and operations, as well as based on review of operating results by the chief operating decision
maker to make decision about resource allocation and performance measurement, there is only one
reportable business segment viz. “Adhesives & Sealants Products”. Accordingly no separate disclosures
has been made for segment reporting under Ind AS 108.

FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES XXXI(F)

The fair value of other current financial assets, cash and cash equivalents, trade receivables, trade
payables, commission payable and other financial liabilities (including creditors for expense etc.)
approximate the carrying amounts because of the short term nature of these financial instruments.
The amortized cost using effective interest rate (EIR) of non-current financial - term deposits is not
significantly different from the carrying amount.

The amortized cost using effective interest rate (EIR) of Borrowing (non current and current) is not
significantly different from the carrying amount, based on management estimate that interest rates has
not changed materially.

Financial assets that are neither past due nor impaired include cash and cash equivalents, security
deposits, term deposits, and other financial assets.

The impact of fair value on such portion is not material and therefore not considered for above
disclosure. Similarly, carrying values of non-current security deposits and non-current term deposits are
not significant and therefore the impact of fair value is not considered for above disclosure.

 

 

 

 

Fair value measurement of assets and liabilities (8 in Lakh)
Particulars As at 30th As at 30th As at 31st As at 31st As at 31st
Sept 2021 Sept 2020 March 2021 March 2020 March
2019
Carrying | Fair |Carrying Fair Carrying Fair |Carrying Fair Carrying | Fair
Value | Value} Value} Value| Value Value} Value| Value| Value | Value
FINANCIAL
ASSETS
Trade 12,880.79 | 2,880. |1,937.71 |1,937.7 [2,286.61 | 2,286.61 |1,979.85 |1,979.85 | 2,240.8 |2,240.
receivables 79 1 4 84
Cash and 68.30 | 68.30 | 102.07 | 102.07 83.10 83.10 75.65, 75.65 | 190.95 | 190.9
cash 5
equivalents
Loans 108.71 | 108.7) 124.73 | 124.73] 116.65 116.65) 122.51] 122.51 82.29 | 82.29
1
Security 69.04 | 69.04 53.45] 53.45 39.71 39.71 88.53 88.53 33.24) 33.24
Deposits
FINANCIAL
LIABILITIES
Borrowings _|2,973.81 |2,973. [3,394.11 |3,394.1 [4,220.44 | 4,220.44 |3,461.06 |3,461.06 | 2,358.3 |2,358.
81 1 3 33
Trade 12,615.16 | 2,615. |1,431.14 |1,431.1 [2,589.04 | 2,589.04 |1,526.79 |1,526.79 | 1,457.3 |1,457.
payables 16 4 6 36
Employee
benefit 126.36 | 126.3) 151.84] 151.84] 132.21 132.21) 126.52] 126.52 66.10 | 66.10
payable 6

 

 

 

 

 

 

 

 

 

 

 

263

 
As at 30th Sept, 2020
FINANCIAL ASSETS

(a) Financial assets measured at fair
value through profit or loss
Financial assets measured at amortized
cost

|Trade receivables

(Cash and cash equivalents
Loans
Security Deposits
FINANCIAL LIABILITIES
Financial liabilities measured at amortized cost
Borrowings and Lease Liabilities
|Trade payables
Employee benefit payable

124.73
53.45

3,394.11

1,937.71
102.07

1,431.14
151.84

 

(2 in Lakh)

 

Particulars

Level 1

Level 2

Level 3

 

As at 31st March, 2020
FINANCIAL ASSETS

Financial assets measured at amortized cost

Trade receivables
(Cash and cash equivalents
Loans
Security Deposits
(Others.
FINANCIAL LIABILITIES

Financial liabilities measured at amortized cost

Borrowings
|Trade payables
(Others.

|Advance received against sale of Property

122.51
88.53

3,461.06

1,979.85
75.65

1,526.79
126.52

 

 

Particulars

Level 1

Level 2

Level 3

 

As at 31% March, 2019
FINANCIAL ASSETS
Financial assets measured at amortized cost
Trade receivables
(Cash and cash equivalents
Bank balances other than cash and cash equivalent
Loans
Security Deposits
Investment in debentures

Investment in preference shares

 

265

 

 

82.29
33.24

 

 
oP

FAIR VALUE HIERARCHY

The following is the hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a
recurring basis:

 

Particulars Level 1 Level 2 Level 3

 

As at 30th Sept, 2021
FINANCIAL ASSETS

(a) Financial assets measured at fair value through profit or loss

Financial assets measured at amortized cost

\Trade receivables - 2,880.79 -
(Cash and cash equivalents - 68.30 -
Loans a 108.71 =
Security Deposits - 69.04 -

FINANCIAL LIABILITIES
Financial liabilities measured at amortized cost - - s

 

 

Borrowings and Lease Liabilities - 2,973.81 -
Trade payables - 2,615.16 -
Employee benefit payable - 126.36 -
Particulars Level 1 Level 2 Level 3

 

As at 31st March, 2021

FINANCIAL ASSETS

(a) Financial assets measured at fair value
{through profit or loss
Financial assets measured at amortized cost

\Trade receivables - 2,286.61 -
(Cash and cash equivalents - 83.10 -
Loans a 116.65 =
Security Deposits - oo7 4 -

FINANCIAL LIABILITIES

Financial liabilities measured at amortized cost - - -

 

 

Borrowings and Lease Liabilities - 4,220.44 -
Trade payables - 2,589.04 -
Employee benefit payable - 132.21 -
Particulars Level 1 Level 2 Level 3

 

 

 

 

 

 

264
(Other assets = = =

FINANCIAL LIABILITIES

Financial liabilities measured at amortized cost - - Fi

Borrowings - 2,358.33 -
rade payables - - -

(Others. i = -

dvance received against sale of Property - - =

 

There have been no transfers between Level 1 and Level 2 during the period subject to
rectification of prior period errors.

The carrying amount of cash and cash equivalents, trade receivables, fixed deposits, trade payables, other
payables are considered to be the same as their fair values. The fair values of security deposits were
calculated based on cash flows discounted using a current lending rate which are similar to the incremental
borrowing rate on the date of the deposit discounting initial recognition.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES XXXI(G)

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk
and liquidity risk. The Company's risk management is coordinated by the Board of Directors and focuses on
securing long term and short term cash flows. The Company does not engage in trading of financial assets
for speculative purposes.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and
other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk
include borrowings.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company exposure to the risk of changes in market
interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that

portion of loans and borrowings. With all other variables held constant, the Company’s profit before tax is
affected through the impact on floating rate borrowings, as follows:

(2 in Lakh)

266
a

 

 

 

 

 

 

 

 

 

 

 

Years Outstanding Increase/ Impact on
Borrowing Amount decrease | profit before
in basis tax
points

Sep-21

INR Variable Interest Rate Borrowings 2,734.82 (Rin Lakh +100 27.35,
-109 (27.35

USD Variable Interest Rate Borrowings 239.05 (Sin ‘000! +100 2.39
-109 (2.39

Mar-21,

INR Variable Interest Rate Borrowings 2,582.07 (Rin Lakh +100 25.82
-109 (25.82

USD Variable Interest Rate Borrowings 210.76 — ($ in ‘000! +100 2.11]
-100, (2.11

Sep-20

INR Variable Interest Rate Borrowings 2,749.89 (Rin Lakh +100 27.50,
-109 (27.50

USD Variable Interest Rate Borrowings 223.72 (Sin ‘000! +100 2.24
-100, (2.24

Mar-20

INR Variable Interest Rate Borrowings 1,894.67. (Rin Lakh +100 18.95,
-109 (18.95

USD Variable Interest Rate Borrowings 234.60  ($ in ‘000! +100 2.35,
-100, (2.35

Mar-19

INR Variable Interest Rate Borrowings 1,675.45 (Rin Lakh +100 16.75,
-109 (16.75.

USD Variable Interest Rate Borrowings 302.78 (Sin ‘000! +100 3.03,
-10q (3.03

 

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company’s operating activities (when revenue or expense is
denominated in a different currency from the Company’s functional currency).

 

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the foreign currency
exchange rate, with all other variables held constant, of the Company’s profit before tax (due to changes
in the fair value of monetary assets and liabilities). The Company's exposure to foreign currency changes

for all other currencies is not material.

Amt in $

267
oP

 

 

 

 

 

 

 

 

 

 

 

 

fears Outstanding Foreign | Increase/ Impact on
currency Amount | decrease _ |profit before
in basis tax
points
ISep-21 3,26,976 45% 16,348.80
-5% (16,348.80)
IMar-21 4,27,175 45% 21,358.75
5% (21,358.75)
ISep-20 5,44,736 45% 27,236.80
5% (27,236.80)
IMar-20 2,00,255 45% 10,012.75
-5% (10,012.75)
IMar-19 5,00,954 +5% 25,047.70
-5% (25,047.70)
Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The maximum exposure to credit risk is equal to the carrying value
of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial
assets. The Company assesses the credit quality of the counterparties, taking into account their financial

position, past experience and other factors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks
and institutions and retaining sufficient balances in bank accounts required to meet a month’s operational
costs. The Management reviews the bank accounts on regular basis and fund drawdown's are planned to
ensure that there is minimal surplus cash in bank accounts. The Company does not foresee any credit risks
on deposits with regulatory authorities and lease deposits and/or any other financial assets.

 

 

 

 

 

 

 

 

268

Receivables Gross Expected | Expected Carrying
Ageing Carrying {loss rate | credit losses amount of
amount (as (loss trade
on 30 Sep allowance _ [receivables (net
2021) provision) __| of impairment)
Not 2,390.08 5% 107.34 2,282.74
due
0-30 385.74 9% 35.19 350.54
days
30-60 118.82 16% 18.91 99.91
days
60-90 51.79 27% 13.95 37.84
days
90-120 days 7.57 27% 2.04 5.53
120-150 days 82 43% 35 46.55
150-180 days 7 60% 4 2.98
More than 180 383 86% 328 54.69
days
Carrying amount of trade receivables (net of 3,425.63 2.72 544.85 2,880.78
impairment)
Total (INR 2,880.78
lacs)

 

 

 
oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables Gross |Expected Expected Carrying

Ageing Carrying | loss rate | credit losses jamount of trade

amount (as (loss | receivables (net

on 31 March allowance | of impairment)

2021) provision)

Not due 1,354.24 5% 65.24 1,289.00

0-30 618.67 10% 60.02 558.65
days

30-60 263.11 17% 43.55 219.56
days

60-90 97.24 28% 26.98 70.25
days

90-120 days 46.37 28% 12.87 33.50

120-150 days 55 44% 24 31

150-180 days 11 60% 6 4

More than 180 545 85% 465 80
days

Carrying amount of trade receivables (net of 2,990.56 2.76 703.95 2,286.61

impairment)
Total (INR 2,286.61
lacs)

Receivables Gross |Expected Expected Carrying

Ageing Carrying | loss rate | credit losses amount of

amount (as (loss trade

on 30 Sep allowance |receivables (net

2020) provision) | of impairment)

Not due 1,016.45 6% 60.86 955.59

0-30 569.09 11% 63.65 505.44
days

30-60 273.90 19% $1.11 222.79
days

60-90 143.46 31% 43.84 99.62
days

90-120 days \ 32.90 31% 10.05 22.84

120-150 days 28 47% 13 14.60

150-180 days 46 62% 29 17.26

More than 180 626 84% 526 99.56
days

Carrying amount of trade receivables (net of 2,735.26 2.90 797.55 1,937.71

impairment)
Total (INR 1,937.71
lacs)

269

 

 
oP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables Gross |Expected Expected Carrying

Ageing Carrying | loss rate | credit losses jamount of trade

amount (as (loss | receivables (net

on 31 March allowance | of impairment)

2020) provision)

Not due 980.62 6% 58.28 922.34

0-30 590.89 12% 69.73 521.16
days

30-60 310.87 20% 61.91 248.96
days

60-90 105.13 33% 34.57 70.56
days

90-120 days 114.39 33% 37.61 76.78

120-150 days 50.28 50% 25.14 25.14

150-180 days 18.84 64% 11.96 6.88

More than 180 622.94 83% 514.86 108.08
days

Carrying amount of trade receivables (net of 2,793.97 2.99 814.08 1,979.89

impairment)
Total (INR 1,979.89
lacs)

Receivables Gross |Expected Expected Carrying

Ageing Carrying | loss rate | credit losses jamount of trade

amount (as (loss | receivables (net

on 31st allowance | of impairment)

March provision)
2019)*

Not due 1,616.18 5% 82.98 1,533.21

0-30 436.00 13% 56.11 379.89
days

30-60 118.17 21% 25.28 92.90
days

60-90 65.90 35% 23.14 42.76
days

90-120 days 56.36 35% 19.79 36.57

120-150 days 68.85 51% 34.93 33.92

150-180 days 49.53 61% 30.39 19.15

More than 180 498.54 79% 396.09 102.45
days

Carrying amount of trade receivables (net of 2,909.54 3.01 668.70 2,240.84

impairment)
Total (INR 2,240.84
lacs)

* Gross figures considered above are without effects of On-Account

Receipts and Discounts.

 

The following table summarizes the changes in loss allowances measured using life time expected credit loss

model -

270

 
oP

 

 

 

 

Particulars Asat| Asat As at Asat Asat
30th) 31st 31st 31st 31st
Sept, | Sept,| March, | March, Mar,
2021 | 2020 2021 2020 2019
Opening Provision 703.94 | 814.07 | 814.07] 668.69] 594.24
Add: Adjustments during the year (159.10) -| (110.13) ] 145.38 74.45
Closing provision 544.84 | 814.07 | 703.94] 814.07] 668.69

 

 

 

 

 

 

(C) Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due.
The table below summarizes the maturity profile of the Company’s financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Less than | 1 yearto | More Total
lyear| Syears| than
5 years
As at 30th Sept, 2021
Borrowings
Term Loans (Including Vehicle Loans) 243.29 731.54 | 74.22] 1,049.05
Short term borrowings 1,762.86 161.90 -| 1,924.76
Lease liabilities (Undiscounted) 141.21 437.28 - 578.49
Trade payables 2,598.88 15.70 -| 2,614.58
4,746.24 | 1,346.42 | 74.22] 6,166.88
As at 31st March, 2021
Borrowings
Term Loans (Including Vehicle Loans) 238.50 994.36 4.64] 1,237.50
Short term borrowings (Incl. Promoter Loan) 2,982.94 - -| 2,982.94
Lease liabilities (Undiscounted) 26.57 15.46 - 42.03
Trade payables 2,589.04 - -| 2,589.04
5,837.05 | 1,009.81 4.64| 6,851.50
As at 30th Sept, 2020
Borrowings
Term Loans (Including Vehicle Loans & Related Party 501.44 - - 501.44
Loans)
Short term borrowings 2,145.08 222.25 -| 2,367.33
Lease liabilities (Undiscounted) 41.63 25.97 - 67.60
Trade payables 1,431.14 - -| 1,431.14
4,119.29 248.22 -| 4,367.51
As at 31st March, 2020
Borrowings
Term Loans (Including Vehicle Loans & Related Party 141.52 334.10 - 475.63
Loans)
Short term borrowings 2,970.47 - -| 2,970.47
Lease liabilities (Undiscounted) 79.87 42.03 - 121.90
Trade payables 1,526.79 - -| 1,526.79
4,718.65 376.13 -| 5,094.78
As at 31st March, 2019

271

 

 

 

 

 

 
oP

 

 

 

Particulars Less than | 1 yearto | More Total
lyear| Syears| than
5 years
Borrowings -
Term Loans (Including Vehicle Loans & Related Party 43.82 61.16 - 104.98
Loans)
Short term borrowings 2,233.54 - -| 2,233.54
Lease liabilities (Undiscounted) 6.15 121.90 - 128.05
Trade payables 1,457.36 - -| 1,457.36
3,740.87 183.06 -| 3,923.93

 

 

 

 

 

 

 

(D) Risk due to outbreak of COVID 19 pandemic

The outbreak of COVID 19 pandemic globally and in India has severely impacted businesses and
economies. There has been disruption to regular business operations due to the measures taken
to curb the impact of the pandemic. The Company’s plants, warehouses and offices were shut
post announcement of nationwide lockdown. Most of the operations have resumed post lifting of
lockdown. The Company has considered external and internal information in assessing the impact
of COVID 19 on various elements of its financial statements, including recoverability of its assets

as at the Balance Sheet date.

CAPITAL MANAGEMENT

XXXI(H)

 

For the purpose of the Company’s capital management, capital includes issued equity capital and all other
equity reserves attributable to the equity holders. The primary objective of the Company’s capital
management is to maximize the shareholder value and to ensure the Company's ability to continue as a
going concern.

The Company has not distributed any dividend to its shareholders. The Company monitors net debt i.e.
total debt net off cash and cash equivalent. Total debt comprises of non-current and current borrowings.
The Company manages the capital structure and makes adjustments to it in the light of changes in

 

 

 

 

 

 

 

 

 

 

economic conditions and the risk characteristics of the underlying assets.
Particulars As at 30th | As at 30th Asat 31st] Asat 31st} As at 31st
Sept, 2021 | Sept, 2020] March, 2021 March, March,
2020 2019
Equity (i) | 3,756.08 560.49 1,265.88 248.44 1,466.23
Borrowings 2,973.81 3,394.11 4,220.44 3,461.06 2,358.33
Less: cash and cash equivalents (68.30) (102.07) (83.10) (75.65) (190.95)
Net debt (ii) | 2,905.51 | 3,292.03 4,137.34|  3,385.41| 2,167.38
Net Debt to equity ratio (ii)/ (i) 77% 587% 327% 1363% 148%

 

 

 

No changes were made in the objectives, policies or processes for managing capital during the years ended
31st March, 2021, 31st March, 2020 and 31st March , 2019 subject to conversion of Partnership firm to
company.

 

Expenditure towards corporate social responsibility (CSR) Activities ;

The Company has to make provision & expenditure on CSR Activities which management estimates to
incur till end of the financial year 2021-22 . Corporate Social responsibility (CSR) as prescribed under
Section 135 of the Companies Act, 2013. prescribed CSR expenditure required to be spent in the FY 21-22
as per the Companies Act, 2013 is Rs. 7.87 Lacs .

 

Social Security Code

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-
employment benefits received Presidential assent in September 2020. The Code has been published in the
Gazette of India. However, the date on which the Code will come into effect has not been notified. The
Group will assess the impact of the Code when it comes into effect and will record any related impact in
the period the Code becomes effective.

272
oP

Previous period figures for the six months ended 30 Sept 2020 are not comparable with those of the six
months ended 30 Sept 2021, because of difference in magnitude of impact of COVID-19 on both the
quarters.

The financial statements of the company were authorised for issued in accordance with a resolution of the
directors on November 27, 2021.

As per our report of even date attached For and on behalf of the Board of Directors
For Priya Choudhary & Associates LLP HP ADHESIVES LIMITED
Chartered Accountants
Firm's Registration No:
011506C/C400307
ANJANA HARESH KARAN HARESH
MOTWANI MOTWANI
(Chairman) (Managing Director)
DIN: 02650184 DIN: 02650089
Vaibhav Choudhary
JYOTI NIKUNJ
(Partner) MIHIR SURESH SHAH CHAWDA
Membership No: 407543 (Chief Financial Officer) Company Secretary
Place: Mumbai Place: Mumbai (Mem No.: 40074)
Date: 27/11/2021 Date: 27/11/2021 Date: 27/11/2021

273
OTHER FINANCIAL INFORMATION

OTHER FINANCIAL INFORMATION AS RESTATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the For the
six six For the For the For the
months months year year year
ended ended ended ended ended
Sept Sept March March March
30th, 30th, | 31st, 2021 | 31st, 2020 | 31st, 2019
2021 2020
Restated PAT as per statement of profit
& loss (Rs. In lacs) (For Basic EPS
purpose) (A) 310.24 293.42 1,005.96 -467.05 400.07
Restated Earnings before Interest, Tax,
Depreciation and Amortisation (Rs. In
lacs) 734.38 607.40 1,768.67 691.95 870.09
Weighted average number of equity 1,39,79,96 | 1,30,00,00 | 1,30,00,00 | 1,30,00,00 | 1,30,00,00
shares at the end of the year/period (B) 6 0 0 0 0
No. Of Equity shares at the end of the 1,42,34,94 | 1,30,00,00 | 1,30,00,00 | 1,30,00,00 | 1,30,00,00
year/period 7 0 0 0 0
(Absolute number) (C)
Net Worth as restated (D) (Rs. In lacs) 3,756.08 560.49 1,265.88 248.44 1,466.23
Earnings per Share
Basic or Diluted earnings per share
(A)/(B)*1045 # 2:22 2.26 7.74 -3.59 3.08
Return on Net Worth (%) (A)(D)# 8% 52% 79% -188% 27%
Net Asset Value per Equity share
(D)/(C)*1045 26.39 4.31 9.74 1.91 11.28
Nominal value per equity share (in Rs.) 10 10 10 10 10

 

# not annualised for period ended 30 Sept 2021 and 30 Sept 2020)

Notes -

1 The ratios have been computed as per the following formulas -

(i) Basic Earning per Share :

Restated Profit after Tax available to equity shareholders
Weighted average number of equity shares at the end of the year/period

(ii) Diluted Earning per Share :

Restated Profit after Tax available to equity shareholders
Weighted average number of equity shares at the end of the year/period + diluted shares at the end of

the year/period

(iii) Net Asset Value per Equity Share :

Restated Net worth of equity shareholders
No. Of equity shares outstanding at the end of the year/period

(iv) Return on Net Worth (%) :

Restated Profit after Tax available to equity shareholders
Restated Net worth of equity shareholders

274

 
wy

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in
conjunction with our Restated Financial Statements on page 202 of this Prospectus. This Prospectus
may include forward-looking statements that involve risks and uncertainties, and our actual financial
performance may materially vary from the conditions contemplated in such forward- looking
statements as a result of various factors, including those described below and elsewhere in this
Prospectus. For further information, see “Forward-Looking Statements” on page 18. Also read
“Risk Factors” and “- Qualitative Factors Affecting our Results of Operations and Financial
Condition” on pages 28 and 125, respectively, for a discussion of certain factors that may affect
our business, financial condition or results of operations.

Unless otherwise indicated or the context otherwise requires, the financial information for six months
periods ended September 30, 2021 and 2020 and Fiscal 2021, 2020 and 2019 included herein is
derived from the Restated Financial Statements, included in this Prospectus, which have been
derived from our audited financial statements and restated in accordance with the SEBI ICDR
Regulations and ICAI Guidance, which differ in certain material respects from IFRS, U.S. GAAP
and GAAP in other countries. For further information, see “Restated Financial Statements” on page
202 of this Prospectus.

Our Company’s Fiscal commences on April 1 and ends on March 31 of the immediately subsequent
year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular
year. In this section, unless the context otherwise requires, any reference to “our Company”, “we”,
“us” or “our” is a reference to HP Adhesives Limited.

Unless otherwise indicated, industry and market data used in this section has been derived from
industry publications, in particular, the report titled “Assessment of the Adhesives and Sealants
market in India” of November 2021 (the “CRISIL Report”), prepared and issued by CRISIL Limited
and commissioned by us. Unless otherwise indicated, all financial, operational, industry and other
related information derived from the CRISIL Report and included herein with respect to any
particular year refers to such information for the relevant calendar year.

OVERVIEW

We are a fast-growing multi-product, multi-category consumer adhesives and sealants company. We
manufacture a wide range of consumer adhesives and sealants such as PVC, cPVC and uPVC solvent
cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac,
other sealants and PVC pipe lubricant which are sold across India, through an extensive distribution
network of distributors, and exported also to several countries, through network of distributors and
direct customers. We also manufacture these products for select third-parties on order basis. Apart
from the above products, we also provide ancillary products like ball valves, thread seal and other
tapes and FRP products for drainage and architectural solutions that are distributed along with our
products to the end- customers through our distribution network.

PRESENTATION OF FINANCIAL INFORMATION
Our Company was converted into a private limited company on May 07, 2019, pursuant to the
provisions of Chapter XXI of the Companies Act. Thus, restated financial information for the

financial year 2018-19 and for the period from April 01, 2019 to May 07, 2019 have been restated
as per SEBI (ICDR), 2018 only for the purpose of the inclusion in this addendum and in subsequent

275
iii.
iv.
vi.
vii.

a

offer documents of the Company to be filed with SEBI, NSE, BSE, ROC and any other regulatory
authority.

Our restated Ind AS summary statements of assets and liabilities as at September 30, 2021, September
30, 2020, March, 2021, March 31, 2020 and March 31, 2019, restated Ind AS summary statement of
profit and loss (including other comprehensive income), cash flows and changes in equity for the six
month period ended September 30, 2021 & September 30, 2020 and for the year ended March 31, 2021,
March 31, 2020 and March 31, 2019 together with the summary of significant accounting policies
and explanatory information thereon (collectively, the “Restated Financial Statements”), have been
derived from our audited financial statements as at and prepared in accordance with Ind AS 34, and
our audited financial statements as at and for the six month period ended September 30, 2021 & September
30, 2020 and for the year ended March 31, 2021, March 31, 2020 and March 31, 2019 each restated in
accordance with Ind AS, and restated in accordance with the SEBI ICDR Regulations and the ICAI
Guidance Note.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

Except as disclosed in this Prospectus, to our knowledge no circumstances have arisen since
September 30,2021, that could materially and adversely affect or are likely to affect, our operations
or profitability, or the value or our ability to pay our material liabilities within the next 12 months.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section
titled “Risk Factors” beginning on page 28 of this Prospectus. Our results of operations and financial
conditions are affected by numerous factors including the following:

Cost of raw materials consumed, and outward freight costs;

Capacity utilization and capacity expansion;

Employee and sales promotion expenses;

Entering new markets and growing our network of dealers;

Changes in laws and regulations applicable to our Industry;

Company’s inability to successfully implement its growth and expansion plans;

The economic environment, regulatory intervention and impact of COVID-19 outbreak

SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled
“Restated Financial Statements” beginning on page 202 of the Prospectus.

CHANGES IN ACCOUNTING POLICIES
The audited financial statements for the financial year ended 2018-19 and 2019-20 were prepared as
per Indian GAAP and for the Financial year 2020-21 and six months ended September 2021 it is prepared

in accordance with the IND AS. But, in Restated financial statements financials for the reported
periods it has been prepared in accordance with the IND AS.

276
PRINCIPAL COMPONENTS OF INCOME AND EXPENSES

Revenue and Expenses
Our revenue and expenses are reported in the following manner:

Total Revenue

Our Total Revenue comprises of revenue from operations and other income.

Revenue from operations:

Our principal component of revenue from operations is from manufacturing and selling of various
adhesive and sealants alongwith few ancillary products which are either manufactured or traded by
us. For ancillary products which do not enjoy economies of scale in India, we engage in sourcing the
same from third party OEMs predominantly from outside India.

Other Income:

Our other income includes Job work charges, renting of machinery and equipments, rental income
on non-residential property, net foreign exchange gain, net impairment gain- reversal of ECL, duty
drawback refund, miscellaneous income, etc.

Expenses

Our expenses comprise of cost of material consumed, Changes in inventories of finished goods and
work in progress, Employee Benefit Expenses, Finance Cost, Depreciation Expenses, Other
Expenses.

Direct Expenditure

Our direct expenditure includes cost of material consumed, Changes in inventories of Raw material
and packing material, work in progress and finished goods.

Employee benefit expenses:

Our employee benefit expenses which includes Salaries and Wages, Directors Remuneration,
gratuity and Bonus.

Finance costs:

Our finance costs include interest on secured and unsecured loans, borrowing costs, Interest on delay
of MSME creditors payments.

Depreciation and amortization expenses:

Our depreciation expenses majorly comprise of depreciation on Equipment, Vehicles and other fixed
assets.

Other expenses:
Our other expenses mainly include Business promotion expenses, Marketing & selling expenses,
production expenses (factory), travelling & conveyance expenses, Bad debts, legal and professional

charges, repairs to plant and machinery, insurance charges, telephone and communication charges,
inspection and testing charges, etc.

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a

Our Results of Operations

The following table sets forth detailed total income data from our restated consolidated statement of
profit and loss for the six month period ended September 30,2021 and September 30 2020 and for
the Financial Years 2019, 2020 and 2021, the components of which are also expressed as a
percentage of Total Income for such periods:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six month period ended Financial Year ended March 31,
Particulars Sept 30th, 2021 Sept 30th, 2020 2021 2020 2019
Rs in eal Rsin eel Rsin ees Rs. in pel Rs.in | % of Total
Lakhs Lakhs Lakhs Lakhs Lakhs | Income
Income Income Income Income

INCOME
Revenue from | 795158 | 96.95 | 4,492.92 96.11 11,816.16 | 95.38 | 9,547.93 | 97.52 | 8741.75 99.36
operations
Other income [221.65 3.05 181.97 3.89 571.80 4.62 242.82 2.48 55.89 0.64
fre 7,273.23 | 100.00 | 4674.89 | 100.00 | 12,387.96 | 100.00 | 9,790.75 | 100.00 | 8797.64 | 100.00
EXPENSES
Cost of material | 433790 | 59.63 | 3,127.40 66.90 9,708.36 78.37 | 6,588.30 | 67.29 | 6063.06 68.92
consumed

Changes in
inventories of
finished goods

(including 794.07 | 1092 | (69.33) | (1.48) | (1,586.07) | (2.80) | (369.78) | (3.78) | (350.90) | (3.99)
stock-in-trade)

and work-in-

progress

Employee

benefits 774.76 | 10.65 | 626.45 1340 | 147358 | 1190 | 1,269.33 | 12.96 | 938.04 10.66
expenses

Other 632.83 8.70 82.97 8.19 1,023.41 | 8.26 | 1,61095 | 16.45 | 1277.35 14.52
expenses

BEDE 734.38 | 10.10 | 607.40 12.99 | 1,768.67 | 14.28 | 691.95 7.07 870.09 9.89
Finance costs_|_172.41 2.37 110.89 2.37 255.31 2.06 294.68 3.01 390.64 4.44
Depreciation

and 141.00 1.94 104.34 2.23 190.33 1.54 189.62 1.94 73.54 0.84
amortisation

expense

Total 6852.25 | 431 | 4282.72 460 | 11,064.92 | 9.32 | 9,583.10 | 97.88 | 8,391.73 | 95.39
Profit / (Loss)

before 420.98 5.79 392.17 8.39 1,323.03 | 10.68 207.65 2.12 405.91 4.61
exceptional

items and tax

Excepuenel 2 s “ 2 2 2 743.71 | 7.60 “ 8
items’
Profit/ (Loss) | 49,98 5.79 392.17 8.39 1,323.03 | 10.68 | -536.06 | -5.48 | 405.91 4.61
before tax
‘Tax expense

Current tax | (77-04) | (2.06) } (104.78) | 2.24) | (250.22) | (2.02) - ss = 8
Deferred tax

(expense) / (33.69) | (0.46) 6.03 0.13 (66.84) | (0.54) 69 0.70 (5.84) (0.07)
income
Total Tax

peste (110.73) | (1.52) | (98.75) | (2.41) | (317.06) | (2.56) 69 0.70 (5.84) (0.07)
Profit/ (Loss) | 319.04 4.27 293.42 6.28 1,005.97 8.12 (467.06) | (4.77) | 400.07 455
for the year

 

 

 

 

 

 

 

 

 

 

 

278

 

 

 

 

 
wy

*Other expenses for the financial year 2019-20 include business promotional expenses of Rs. 313.28

Lakhs.
**In financial year 2019-2020, in order to settle disputed excise tax demand of Rs, 1,405.82 Lakhs for
the period January 2012 to July 2015 and aggregate disputed sales tax demand of Rs. 116.40 Lakhs
for Assessment Years 2012-13 and 2013-14, our Company paid a sum of Rs. 688.17 Lakhs towards
Sabka Vishwas Legacies Dispute Resolutions Scheme and Rs. 55.54 Lakhs towards Mahavat Amnesty
Scheme, 2019, respectively and thereby has incurred an aggregate expenditure of Rs.743.71 Lakhs in
FY 2019-20.

Six month period ended September 30, 2021 compared with the Six month period ended
September 30, 2020

Total Income

Our total Income increased by % 2,598.34 lacs, or by 55.58%, from = 4,674.89 lacs for the six month
period ended September 30, 2020, to = 7,273.23 lacs for the six month period ended September 30,
2021. This was primarily due to an increase in our revenue from operations on account of higher
sales across product categories.

Revenue from Operations

Our revenue from operations increased 2,558.66 lacs, or by 56.95%, from 2 4,492.92 lacs for the
six month period ended September 30, 2020, to = 7,051.58 lacs for the six month period ended
September 30, 2021. This increase was primarily driven by volume increase as well as better
realisations across product categories

Other Income

Our other income increased by % 39.68 lacs, or by 21.80%, from = 181.97 lacs for the six month
period ended September 30, 2020, to = 221.65 lacs for the six month period ended September 30,
2021. The increase was partly due to increase in net foreign exchange gain and reversal of expected
credit loss provisions but this increase was offset to a certain an extent by nil job work charges in
relation to FRP products in six month period ended September 30, 2021.

Total Expenditure

Total expenses increased by & 2,569.53 lacs, or by 60.00%, from % 4,282.72 lacs for the six month
period ended September 30, 2020, to % 6,852.25 lacs for the six month period ended September 30,
2021. This increase was primarily driven by = 1,209.80 lacs or by 38.68% increase in cost of
materials consumed, % 249.86 lacs or by 65.24% increase in other expenses, = 61.52 lacs or by
55.48% increase in finance cost, = 148.31 lacs or by 23.68% increase in employee benefit, over the
six month period ended September 30, 2020 due to factors mentioned below:

Cost of materials consumed
Cost of materials consumed increased by = 1,209.80 lacs or by 38.68% from % 3,127.40 lacs for the
six month period ended September 30, 2020, to % 4,337.20 lacs for the six month period ended

September 30, 2021. This was due to higher sales resulting in higher purchases of raw materials as
well as high prices of raw materials.

279
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Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods and work-in-progress increased by 1245.32% from =
(69.33) lacs for the six month period ended September 30, 2020, to = 794.07 lacs for the six month
period ended September 30, 2021.

Employee benefits expense

Employee benefits expense increased by = 148.31 lacs or by 23.68% from % 626.45 lacs for the six
month period ended September 30, 2020, to = 774.76 lacs for the six month period ended September
30, 2021. This was primarily due to increase in the salaries and wages, including bonus, paid to our
employees, which resulted from an increase in the number of employees due to general growth in
our business operations as well as annual increment to employees.

Finance costs

Finance costs increased by % 61.52 lacs or by 55.48% from = 110.89 lacs for the six month period
ended September 30, 2020 to = 172.49 lacs for the six month period ended September 30, 2021. This
increase in finance costs was primarily on account of higher utilisation of borrowings due to
increased business operations as well as increase in interest cost expenses due to higher lease
liabilities accounted for in the six months ended September 30, 2021.

Depreciation and amortisation expense

Our depreciation and amortization expense increased by 2 36.66 lacs, or 35.13%, from % 104.34 lacs
for the six month period ended September 30, 2020 to = 141.00 lacs for the six month period ended
September 30, 2021. The increase in depreciation was primarily due to increase in RoU assets on
account of lease liabilities towards factory and office rent in the six months ended September 30,
2021.

Other expenses

Other expenses increased by % 249.86 lacs or by 65.24% from % 382.97 lacs for the six month period
ended September 30, 2020 to % 632.83 lacs for the six month period ended September 30, 2021. This
was primarily due to an increase of i) = 53.33 lacs in production expenses, as well as (ii) = 74.17
lacs in Conveyance and travelling expenses, due to increased business operations and also due to
increase of (iii) = 57.83 lacs in Bad Debts.

Profit before tax

In light of above discussions, our profit before tax increased by % 28.81 lacs or by 7.35% from 2
392.17 lacs for the six month period ended September 30, 2020 to = 420.98 lacs for the six month
period ended September 30, 2021. This increase is primarily due to higher revenues from operations.
Tax expense

Our total tax expense increased by = 11.98 lacs from = 98.75 lacs for the six month period ended
September 30, 2020 to = 110.73 lacs for the six month period ended September 30, 2021. This was

primarily due to higher profit before tax in six months ended September 30, 2021 over September
30, 2020.

280
a
Profit

For the various reasons discussed above, we recorded an increase in our profit by = 16.82 lacs or by
5.73% from % 293.42 Lakhs for the six month period ended September 30, 2020 to % 310.24 lacs for
the six month period ended September 30, 2021.

FINANCIAL YEAR 2020-21 COMPARED WITH FINANCIAL YEAR 2019-20
Key Developments in FY2021:

We started construction of new facility spread over 8,000 Sq. Mtrs adjoining our existing
manufacturing plot.

Expansion of sales and marketing activities has led to substantial increase in revenue from operation
overcoming the negative impacts of COVID-19.

Total Revenue

Our total revenue increased by 26.53% to Rs. 12,387.96 lakhs for the financial year 2020-21 from
Rs. 9,790.75 lakhs for the financial year 2019-20 due to the factors described below:

Revenue from operations

Our revenue from operations increased to 23.76% to Rs. 11,816.16 lakhs for the financial year 2020-
21 from Rs. 9,547.93 lakhs for the financial year 2019-20. Our entire product portfolio has performed
well in FY21 including the recently introduced product categories of Silicone Sealants, Rubber
adhesives and PVA adhesives. Various factors contributed to this growth — key factors being
expansion of our distribution network supported by increased sales force and business promotion
expenses like channel partner meets, etc. done in previous year which showed results in FY21.

Other income

Our other income increased by 135.49% to Rs. 571.80 lakhs for the financial year 2020-21 from Rs.
242.82 lakhs for the financial year 2019-20. Primary component of Other income is job work charges
in relation to FRP.

Total Expenses

Our total expenses increased by 15.46% to Rs. 11,064.92 lakhs for the financial year 2020-21 from
Rs. 9,583.10 lakhs for the financial year 2019-20, due to the factors described below:

Cost of Materials Consumed:

Our Purchase of raw materials and packing material increased by 47.36% to Rs. 9,708.36 lakhs for
the financial year 2020-21 from Rs. 6,588.30 lakhs for the financial year 2019-20. It was mainly due
to increase in sales and specifically for certain items which had imported raw materials and therefore
had to maintain higher inventory levels.

Changes in inventories of finished goods and work in progress:

Our changes in inventories increased by 328.92% to Rs. (1,586.06) lakhs for the financial year 2020-
21 from Rs. (369.78) lakhs for the financial year 2019-20.

281
Employee benefits expenses

Our employee benefit expenses increased by 16.09% to Rs. 1,473.58 lakhs for the financial year
2020-21 from Rs. 269.33 lakhs for the financial year 2019-20. The increase was mainly due to
increase in the number of employees/ workers.

Finance costs

Our finance costs decreased by 13.36% to Rs. 255.31 lakhs for the financial year 2020-21 from Rs.
294.68 lakhs for the financial year 2019-20. The finance cost decreased inspite of increased sales
and expenses due to better monitoring and controlled usage of working capital credit facilities.

Depreciation expense
There was minor increase in our depreciation and amortization expense by 0.37% to Rs. 190.33 lakhs
for the financial year 2020-21 from Rs. 189.62 lakhs for the financial year 2019-20.

Other expenses

Our other expenses decreased by 36.47% to Rs. 1,023.41 lakhs for the financial year 2020-21 from
Rs. 10.95 lakhs for the FY 2019-20. When compared to FY 2019-20, due to effect of Covid-19 the
business & promotional expenses reduced drastically by Rs. 302.69 Lakhs, conveyance and
travelling expenses came down by Rs. 170.42 Lakhs, Printing & Stationery decreased by 15.06
Lakhs, miscellaneous expenses decreased by 20.27 Lakhs lease rent & license fees by Rs. 28.99
lakhs. Also, there was no net impairment loss (ECL) in the FY 2020-21 as compared to Rs. 145.38
in the FY 2019-20.

Profit before tax

Our profit before tax increased by 537.13% to Rs. 1,323.03 lakhs for the financial year 2020-21 from
Rs. 207.65 lakhs for the financial year 2019-20. The substantial increase was primarily due to
increase in revenue from operations.

Exceptional Items

Exceptional Items

In financial year 2019-2020, in order to settle disputed excise tax demand of Rs, 1,405.82 Lakhs for
the period January 2012 to July 2015 and aggregate disputed sales tax demand of Rs. 116.40 Lakhs
for Assessment Years 2012-13 and 2013-14, our Company paid a sum of Rs. 688.17 Lakhs towards
Sabka Vishwas Legacies Dispute Resolutions Scheme and Rs. 55.54 Lakhs towards Mahavat
Amnesty Scheme, 2019, respectively and thereby has incurred an aggregate expenditure of
Rs.743.71 Lakhs in FY 2019-20.

Tax expenses

Since 2019-2020 was first financial year of the company (earlier it was partnership firm), there was
introduction of current tax in FY 2020-21 of Rs. (250.22) and our deferred tax expense for the
financial year 2020-21 amounted to Rs. 66.84 lakhs as compared to tax benefit of Rs. 69.00 Lakhs
in the FY 2019-20.

Profit after tax
Our profit after tax increased by 315.39% to Rs. 1,005.97 lakhs for the financial year 2020-21 from
loss of Rs. (467.06) lakhs in the financial year 2019-20. The substantial increase was primarily due

to increased revenue and to exceptional items of Rs. 743.71 Lakhs, the company reported losses of
Rs. (467.06) in the FY 2019-20.

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In order to settle disputed excise tax demand of Rs, 1,405.82 Lakhs for the period January 2012 to
July 2015 and aggregate disputed sales tax demand of Rs. 116.40 Lakhs for Assessment Years 2012-
13 and 2013-14, our Company paid a sum of Rs. 688.17 Lakhs towards Sabka Vishwas Legacies
Dispute Resolutions Scheme and Rs. 55.54 Lakhs towards Mahavat Amnesty Scheme, 2019,
respectively and thereby has incurred an aggregate expenditure of Rs.743.71 Lakhs in FY 2019-20.
Though, on operational front, Company had performed well during the FY 19-20 as well.

For FY 20-21, due to increased Revenue, Company reported substantial increase in the profit after
tax to Rs. 1005.98 Lakhs in FY 2020-21.

Earning Per Share (“EPS)

Earning per share increased from Rs. (3.59) in the FY 2020 to Rs. 7.74 in the FY 2021 due to increase
in the profit to Rs. 1005.98 lakhs in the FY 2021.FINANCIAL YEAR 2019-20 COMPARED WITH
FINANCIAL YEAR 2018-19

Key Developments in FY2020:

Our Company was converted into a private limited company on May 07, 2019, pursuant to the provisions of
Chapter XXI of the Companies Act, 2013.

Total Revenue
Our total revenue increased by 11.29% to Rs. 9,790.75 lakhs for the financial year 2019-20 from Rs. 8,797.64
lakhs for the financial year 2018-19 due to the factors described below:

Revenue from operations

Our revenue from operations increased to 9.22% to Rs. 9,547.93 lakhs for the financial year 2019-20 from Rs.
8741.75 lakhs for the financial year 2018-19. Our key product category of solvent cement did well alongwith
our recently introduced products like Silicone Sealants, Rubber adhesives and PVA adhesives which showed
good acceptance in the market. Key factors of growth were distribution network expansion as well as increase
in sales force during the year FY20.

Other income

Our other income increased by 334.45% to Rs. 242.82 lakhs for the financial year 2019-20 from Rs. 55.89
Jakhs for the financial year 2018-19. Increase is mainly on account of increase in job work charges by Rs. 66.43
Lakhs and introduction of income from renting machinery and equipments of FRP business to HP Composites
LLP of Rs. 84.00 Lakhs as post the conversion of partnership firm into Pvt. Ltd., FRP business is being done
by HP Composites which earlier in financial year 2018-19 was done in erstwhile partnership firm M/s HP
International

Total Expenses
Our total expenses increased by 14.20% to Rs. 9,583.10 lakhs for the financial year 2019-20 from Rs. 8,391.73
lakhs for the financial year 2018-19, due to the factors described below:

Cost of Materials Consumed:

Our Consumption of raw materials and packing material increased by 8.66% to Rs. 6,588.30 lakhs for the
financial year 2019-20 from Rs. 6,063.06 lakhs for the financial year 2018-19. It was mainly due to increase
in Revenue.

Changes in inventories of finished goods and work in progress:
Our changes in inventories increased by 5.38% to Rs. (369.78) lakhs for the financial year 2019-20 from Rs.
(350.90) lakhs for the financial year 2018-19.

Employee benefits expenses

Our employee benefit expenses increased by 35.32% to Rs. 1,269.33 lakhs for the financial year 2019-20 from
Rs. 938.04 lakhs for the financial year 2018-19. The increase was mainly due to increase in the number of
employees.

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Finance costs

Our finance costs decreased by 24.57% to Rs. 294.68 lakhs for the financial year 2019-20 from Rs. 390.64
lakhs for the financial year 2018-19. The increase was mainly because the finance cost in financial year 2018-
19 includes Interest paid on Partners Capital to the tune of Rs. 174.89 lakhs which came down to Rs. 18.66
Jakhs in financial year 2019-20 as that was only for the period from 1-Apr-19 to 7-May-19 when the partnership
firm was in existence. From the date of conversion of partnership firm into Company, there is no amount paid
as Interest on Partners Capital.

Depreciation & Amortization expense

There was major increase in our depreciation and amortization expense by 157.85% to Rs. 189.62 lakhs for the
financial year 2019-20 from Rs. 73.58 lakhs for the financial year 2018-19. This increase was mainly because
of increase in Amortization of Right of Use Assets for the year FY2019-20 by Rs. 95.17 lakhs.

Other expenses

Our other expenses increased by 26.12% to Rs. 1,610.95 lakhs for the financial year 2019-20 from Rs. 1,277.35
lakhs for the FY 2018-19. Increase was mainly due to increase in business promotion expenses by Rs. 272.01
Lakhs, increase in production expenses by Rs. 85.40 Lakhs, increase in travelling and conveyance expenses by
Rs. 85.63 Lakhs and increase in telephone and communication charges by Rs. 14.92 Lakhs. Also, there was
decrease in legal & professional charges by Rs. 91.43 Lakhs and bad debts by Rs. 99.41 Lakhs.

Profit before tax

Our profit before tax decreased by 48.84% to Rs. 207.65 lakhs for the financial year 2019-20 from Rs. 405.91
lakhs for the financial year 2018-19. The substantial decrease was primarily due to increase in business
promotion expenses by Rs. 272.01 Lakhs in the FY 2019-20.

Exceptional Items

In financial year 2019-2020, in order to settle disputed excise tax demand of Rs, 1405.82 Lakhs for the period
January 2012 to July 2015 and aggregate disputed sales tax demand of Rs. 116.40 Lakhs for Assessment Years
2012-13 and 2013-14, our Company paid a sum of Rs. 688.17 Lakhs towards Sabka Vishwas Legacies Dispute
Resolutions Scheme and Rs. 55.54 Lakhs towards Mahavat Amnesty Scheme, 2019, respectively and thereby
has incurred an aggregate expenditure of Rs.743.71 Lakhs in FY 2019-20.

Tax expenses

Company incorporated on May 07, 2019 and thus there was no current tax in the FY 2019-20. Company had
tax benefit of Rs. 69.00 Lakhs in the FY 2019-20 as compared to deferred tax expense of Rs. 5.84 Lakhs in the
FY 2018-19.

Profit after tax

Our profit after tax decreased by 216.74% to Rs. (467.06) lakhs for the financial year 2019-20 from profit of
Rs. 400.07 lakhs in the financial year 2018-19. The substantial decrease was primarily due to increase in
business promotion expense and exceptional items of Rs. 743.71 Lakhs.

Due to exceptional items of Rs. 743.71 Lakhs, the company reported losses of Rs. (467.06) in the FY 2019-20.
In order to settle disputed excise tax demand of Rs, 1,405.82 Lakhs for the period January 2012 to July 2015
and aggregate disputed sales tax demand of Rs. 116.40 Lakhs for Assessment Years 2012-13 and 2013-14, our
Company paid a sum of Rs. 688.17 Lakhs towards Sabka Vishwas Legacies Dispute Resolutions Scheme and
Rs. 55.54 Lakhs towards Mahavat Amnesty Scheme, 2019, respectively and thereby has incurred an aggregate
expenditure of Rs.743.71 Lakhs in FY 2019-20. Though, on operational front, Company had performed well
during the FY 19-20 as well.

Earning Per Share (“EPS)

Earning per share decreased to Rs. (3.59) in the FY 2020 from Rs. 3.08 in the FY 2019 due to loss of Rs.
(467.05) lakhs in the FY 2020.

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Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the financial
year 2021,2020 and 2019:

 

 

 

 

 

 

(Rs. In lakhs)
Net cash (used in)/ generated from operating) (743.97)| 694.95 2152.92 283.70 228.90
activities
Net cash (used in)/ generated from investing (1,622.70)} (409.36) (358.90)
activities (845.40)| (44.32)
Net cash (used in)/ generated from financing] 1,574.57 (522.77) 10.37 142.69
activities (624.21)
Net increase/ (decrease) in cash and cash (14.80) 26.42 7.46) (115.30) 12.74
equivalents
Cash and Cash Equivalents at the beginning of 83.10 75.65 75.65 190.95 178.21
the period
Cash and Cash Equivalents at the end of the 68.30| 102.07 83.10 75.65 190.95
period

 

 

 

 

 

 

Selected Balance Sheet Items:
Total equity (Net worth)

Our total equity increased by 570.14% from Rs. 560.49 lakhs for the six month period ended September 30, 2020
to Rs. 3,756.08 lakhs for the six month period ended September 30, 2021. Primary reason for increase in Net
worth was internal accruals as well as raising of equity by way of Right issue in May and June 2021. For the FY
2021 it increased by 409.56% from Rs. 248.43 lakhs for the financial year 2021 to Rs. 1,265.89 Lakhs for the
financial year 2020. The increase is on account of comprehensive income for the financial year 2021 which is
Rs. 1,017.46 Lakhs. For the FY 2020 it decreased by 83.06% to Rs. 248.44 Lakhs from Rs. 1,466.23 Lakhs in
the FY 2019, decrease was on account of loss of Rs. 467.05 Lakhs in the FY 2020 and impact of Transactions in
Capital accounts other than transfer of Profits which have been shown in adjustment in Profit and Loss as part
of Other Equity in FY2020 to make the Ind AS statements comparable between FY2018-19 and FY2019-20.

Total Current Assets

Our total current assets increased by 50.20% from Rs. 4659.63 Lakhs for the six month period ended September
30, 2020 to Rs. 6998.61 Lakhs for the six month period ended September 30, 2021. The increase is primarily
due to increase in inventory from Rs. 2052.46 lakhs as of September 30, 2020 to Rs. 3369.53 lakhs as of
September 30, 2021 and increase in Trade Receivables from Rs. 1937.71 lakhs as of September 30, 2020 to Rs.
2880.79 lakhs as of September 30, 2021. For the FY 2021 it increased by 49.42% to Rs. 6,177.03 lakhs for the
financial year 2021 from Rs. 4,134.02 Lakhs for the financial year 2020. The increase is primarily on account of
increase in inventories from Rs. 1852.03 lakhs in FY 2020 to Rs. 3239.69 in the FY 2021 and other current assets
from Rs. 88.69 lakhs in FY 2020 to Rs. 450.97 in the FY 2021. For the Financial year 2020 it decreased by
6.97% to Rs. 4,134.02 Lakhs from Rs. 4,443.79 Lakhs in the FY 2019, decrease was on account of decrease in
trade receivables by Rs. 260.99 Lakhs.

Total Non-Current Assets

Our total non-current assets increased by 81.04% from Rs. 1456.10 lakhs for the six month period ended
September 30, 2020 to Rs. 3492.43 lakhs for the six month period ended September 30, 2021. This increase is
primarily on account of increased net block of Property, plant and equipment and also increased capital work-
in-progress. For the FY 2021 it increased by 81.04% to Rs. 2,800.86 lakhs for the financial year 2021 from Rs.
1,547.10 Lakhs for the financial year 2020. The increase is primarily on account of i) increase in property, plant
and equipment from Rs. 950.41 lakhs in FY 2020 to Rs. 1865.82 in the FY 2021, this increase was due to the
purchase of new corporate office of Rs. 739.12 Lakhs and addition of Rs. 192.80 Lakhs to the plant and

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equipments. ii) Increase in capital work in progress from Rs. 119.91 Lakhs in the FY 2020 to Rs. 652.03 in the
FY 2021. For the Financial year 2020 it increased by 25.99% to Rs. 1,547.10 Lakhs from Rs. 1,227.94 Lakhs in
the FY 2019, increase was on account of increase in property, plant and equipment from Rs. 874.82 lakhs in FY.
2019 to Rs. 950.41 in the FY 2020 and addition of capital work in progress as of end of FY20 which was Nil as
of FY2018-19.

Total Current Liabilities

Our total current liabilities increased by 12.19% from Rs. 4889.99 lakhs for the six month period ended
September 30, 2020 to Rs. 5486.30 lakhs for the six month period ended September 30, 2021. This increase is
primarily due to higher Trade payables on account of increasing business operations. For the FY 2021 it increased
by 29.80% to Rs. 6,723.61 lakhs for the financial year 2021 from Rs. 5,180.11 Lakhs for the financial year 2020.
The increase is primarily on account of increase in trade payables from Rs. 1526.79 lakhs in FY 2020 to Rs.
2589.04 in the FY 2021. For the Financial year 2020 it increased by 28.22% to Rs. 5,180.11 Lakhs from Rs.
4,040.07 Lakhs in the FY 2019, increase was on account of increase in current borrowings from Rs. 2253.35
lakhs in FY 2019 to Rs. 3328.26 in the FY 2020.

Borrowings

Our total borrowings which include current borrowings, non-current borrowings and current portion of long term
borrowings decreased by 12.38% to Rs. 2973.81 lakhs for the six month period ended September 30, 2021 from
Rs. 3394.11 lakhs for the year ended September 30, 2020. For the FY 2021 it increased by 21.94% to 24,220.44
lakhs for the financial year 2021 from % 3,461.06 Lakhs for the financial year 2020. The increase is primarily on
account of increase in current portion of long-term borrowings from Rs. 1081.92 lakhs in FY 2020 to Rs. 55.08
in the FY 2021. For the Financial year 2020 it increased by 46.76% to Rs. 3,461.06 Lakhs from Rs. 2,358.33
Lakhs in the FY 2019, increase was primarily on account of increase in current borrowings from Rs. 2253.35
lakhs in FY 2019 to Rs. 3328.26 in the FY 2020.

Financial Indebtedness

Our Company avails credit facilities in the ordinary course of our business. Pursuant to our Articles
of Association, subject to applicable laws, our Board is authorised to borrow sums of money for the
purpose of our Company, with or without security, upon such terms and conditions as the Board may
think fit which, together with the monies borrowed by the Company (apart from the temporary loans
obtained or to be obtained by the Company’s banker in the ordinary course of business) shall not
exceed upto Rs.100 Crores exceeding the aggregate of paid-up share capital and free reserves of our
Company.

As on October 31, 2021, we have outstanding borrowings of Rs. 3737.90 lakhs. Set forth below is a
brief summary of our aggregate sanctioned limits and outstanding borrowings as on October 31,
2021.

(Rs. in Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Category of borrowings anctioned amount as Outstanding amount
it October 31, 2021* jas at October 31,
2021*
Secured Loans
Fund based facilities
Term loans
- IndusInd Bank 949.62 690.22
- ICICI Bank 1239.97 540.95
Vehicle Loan 140.24 103.95
Working Capital Limits
- Cash Credit
- IndusInd Bank 975.00 649.45
- ICICI Bank 1200.00 1185.74
- EPC (indusInd Bank) 250.00 239.75
- Bank Overdraft (IndusInd Bank) 549.20 328.16
Non Fund based facilities Nil Nil
Unsecured Loans Nil
Total 5304.04 3737.90

 

 

 

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Related Party Transactions

Related party transactions with certain of our promoters, directors and their entities and relatives
primarily relates to remuneration, loans & advances given and taken and Issue of Equity Shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

Transactions
(Sales,

1] purchaseand | 105.42 | 1.21 | 1,007.87] 11.93 | 1,084.61 9.18 ee 10.61 Pee 188
: 23 5 0
job work of
goods and
rental services)

Financial
transactions
2 | (oan taken and | 2,452.72 | 28.06 | 4,947.72 | 5854 | 2,705.70 22.90 see 25.91 a 8h aut
: 6.96 9 1
repaid and
interest paid
Remuneration

3 | &BonusPaid | oi7is | 248 | 5400 0.64 68.13 0.58 69.5 0.99 14.00 0.31
and Share of 5
Profits paid

2,64 1541. | 343
Total 2,775.32 | 31.75 | 6,009.59) 71.11 | 3,858.43} 32.65 aa 3751 ra 3

 

For further details of such related parties under AS-18 (IND AS 24), refer “Annexure- XX V — Details
of Related Party Transaction as restated” under the chapter “Restated Financial Statements”
beginning on page 208 of this Prospectus.

Contingent Liabilities

As on September 30, 2021, our Company have contingent liabilities amounting to Rs. 200.31 lakhs.

Age analysis of Trade creditors for the six month period ended September 30, 2021 and September 30,
2020 and for the Financial year ended March 31, 2019, 2020 and 2021:

Creditors’ ageing

 

 

 

 

0 to 30 713.50 487.80 1139.10 162.90 197.52
31 to 60 316.00 422.80 726.60 97.70 21.22
61 to 90 244.60 221.70 431.50 17.77 1.86

 

 

 

 

 

 

 

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91 to 120 9.60 269.10 41.70 7.44 0.68
121 to 180 1.40 99.40 4.20 0.45 0.00
Above 181 Days 16.50 94.70 159.70 129.63 68.34
Not Due / Advances 155.70 -68.70 86.20 1,015.24 2,325.54
Grand Total 1457.40 1526.80 2589.00 1,431.14 2,615.16

 

 

 

 

 

 

MSME Creditors’ ageing

 

 

 

 

 

 

 

 

 

 

 

0 to 30 74.40
31 to 60 3.55
61 to 90 1.04
91 to 120 0.75
121 to 180 0.02
Above 181 Days 43.38
Not Due 1215.10
Grand Total 1,338.24
Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other
relationships with any entity that have been established for the purposes of facilitating off-balance
sheet arrangements.

QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk.
We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service
obligations and our access to funds.

Effect of Inflation

We are affected by inflation as it has an impact on the investing and leading to demotivated clients
and lessor projects etc. In line with changing inflation rates, we rework our margins so as to absorb
the inflationary impact.

Credit Risk

We are exposed to credit risk on monies owed to us by our clients for services rendered. If our clients
do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

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Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled “Financial Information” beginning on page 202 of this
Prospectus, there have been no reservations, qualifications and adverse remarks.

Details of Default, if any, Including Therein the Amount Involved, Duration of Default and Present
Status, in Repayment of Statutory Dues or Repayment of Debentures or Repayment of Deposits or
Repayment of Loans from any Bank or Financial Institution

For the FY 2019-20 and FY 2020-21 there has been default in deducting tax at source by Rs. 3.71
Lakhs and Rs. 0.06 Lakhs respectively.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company
since incorporation.

Unusual or Infrequent Events or Transactions

During the periods under review there have been no transactions or events, which in our best
judgment, would be considered unusual or infrequent.

Significant Economic Changes that Materially Affected or are Likely to Affect Income from
Continuing Operations

Indian rules and regulations as well as the overall growth of the Indian economy have a significant
bearing on our operations. Major changes in these factors can significantly impact income from
continuing operations.

There are no significant economic changes that materially affected our Company’s operations or are
likely to affect income from continuing operations except as described in chapter titled “Risk
Factors” beginning on page 28 of this Prospectus.

Known Trends or Uncertainties that have had or are expected to have a Material Adverse Impact
on Revenue or Income from Continuing Operations

Other than as described in the section titled “Risk Factors” beginning on page 28 of this Prospectus
and in this chapter, to our knowledge there are no known trends or uncertainties that are expected to
have a material adverse impact on revenues or income of our Company from continuing operations.

Future Changes in Relationship between Costs and Revenues, in Case of Events Such as Future
Increase in Labour or Material Costs or Prices that will Cause a Material Change are known other
than as described in chapter titled “Risk Factors” beginning on page 28 of this Prospectus and in this
section, to our knowledge there are no known factors that might affect the future relationship between
cost and revenue.

Total turnover of each major industry segment in which we operate

Total turnover of the Company relates to single business segment i.e. manufacturing and selling of
various adhesive and sealants alongwith other ancillary products.

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Competitive Conditions

We operate in a competitive environment. See “Our Business”, “Industry Overview” and “Risk
Factors” beginning on pages 150, 132 and 28, respectively, for further details on competitive
conditions that we face across our various business segments.

Increase in income

Our entire product portfolio has performed well in FY21 including the recently introduced product
categories of Silicone Sealants, Rubber adhesives and PVA adhesives. Various factors contributed
to this growth — key factors being expansion of our distribution network supported by increased sales
force and business promotion expenses like channel partner meets, etc. done in previous year which
showed results in FY21.

Status of any Publicly Announced New Products or Business Segments

Except as disclosed in the Prospectus, we have not announced and do not expect to announce in the
near future any new products or business segments which may have a material impact on our business
prospects, results of operations or financial condition.

Seasonality of Business

Considering the trend of business of the Company for past several years, sale of products will be
higher in the second half of the financial year in comparison to first half year caused due to various
factors such as rainy season and delay in the approval of budgets of the customers in the first half.

Significant dependence on a single or few suppliers or customers

Given the nature of our business operations, we do not believe our business is dependent on any
single or a few customers as well as suppliers.

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ay
FINANCIAL INDEBTEDNESS

Our Company avails loans in the ordinary course of business, primarily for the purposes of meeting
our working capital requirements.

Set forth below is a brief summary of our aggregate borrowings on a consolidated basis as on October
31, 2021:
(Rs. in Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Category of borrowings anctioned amount as Outstanding amount
it October 31, 2021* me October 31,
Secured Loans
Fund based facilities
Term loans
- IndusInd Bank 949.62 690.22
- ICICI Bank 1239.97 540.64
Vehicle Loan 140.24 103.95
Working Capital Limits
- Cash Credit
- IndusInd Bank 975.00 649.45
- ICICI Bank 1200.00 1185.74
- EPC (IndusInd Bank) 250.00 239.75
- Bank Overdraft (IndusInd Bank) 549.20 328.16
Non Fund based facilities Nil Nil
Unsecured Loans Nil
Total 5304.04 3737.90

 

 

 

* As certified by the management pursuant to their certificate dated November 22, 2021

There have been no defaults in repayment of borrowings with any financial institutions/ banks as on
the date of the Prospectus. We have taken necessary approvals from the concerned lenders for the
proposed Offer.

For further information, see “Risk Factor - Our business is working capital intensive. If we experience
insufficient cash flows from our operations or are unable to borrow to meet our working capital
requirements, it may materially and adversely affect our business and— results of operations” and
“Risk Factor - We have incurred borrowings from commercial banks and an inability to comply with
repayment and other covenants in our financing agreements could adversely affect our business and
financial condition” on pages 43 and 34, respectively.

Principal terms of the borrowings availed by us:

A summary of the principal terms of our borrowings are as set out below. The details provided below
are indicative and there may be additional terms, conditions and requirements under the various
borrowing arrangements entered into by us:

1. Tenor: The working capital facilities are either repayable on demand or have a tenor of upto 60
months.

2. Interest: The interest rate applicable to our borrowing facilities is typically tied to the respective
lender’s lending rate prevailing at the time, as applicable and which may vary for each facility.

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3. Security: In terms of our borrowings where security needs to be created, we are typically required to:
a. create a pari passu charge by way of hypothecation on the current assets and fixed assets of the
Company;
b. charge / mortgage on the personal properties of our Promoters and Promoter Group Members
namely, Mrs. Anjana Haresh Motwani, Mr. Karan Haresh Motwani and Nidhi Haresh Motwani;
c. personal guarantee by our Promoters and Promoter Group Members namely, Mrs. Anjana
Haresh Motwani, Mr. Karan Haresh Motwani and Nidhi Haresh Motwani.

This is an indicative list and there may be additional requirements for creation of security under the
various borrowing arrangements entered into by us.

4. Prepayment: We have the option to prepay the lenders, subject to a prior notice being given to the
lender.

5. Events of default: The terms of our borrowings contain certain standard events of default, including:
a. failure and inability to pay amounts on the due date;
b. failure in performance of any covenant, condition or agreement;
c. cessation of operations/ prolonged strikes/ lock outs;
d. breach of financial covenants.

6. Consequences of event of default: Upon the occurrence of an event of default, certain lenders are
entitled to, among other things:

a. accelerate payments/ initiate recall of the loans;

b. suspend further access/ drawls, either in whole or in part, of the facility;
c. charge excess interest depending upon the extent of default;

d. exercise such other right, power or remedy permitted by law.

7. Restrictive Covenants: The borrowing arrangements entered into by us require the relevant lender’s
prior written consent and/or we are required to intimate the relevant lender, as applicable, for
carrying out certain actions, including:

a. for availing fresh credit facility from any other bank or financial institution;

b. for giving fresh loans and advances to associate concerns, directors, shareholders and other
non-trade purposes;

c. for opening/ maintaining new bank accounts;
d. for issuing corporate guarantee on behalf of its subsidiary/ group concerns;

e. property mortgaged to the Bank not be used by persons other than promoters/ relatives, during
the currency of working capital facilities

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SECTION VI —- LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Except as stated in this section, there are no:

A. (i) Criminal proceedings; (ii) actions by statutory or regulatory authorities; (iii) claims relating to direct
and indirect taxes; or (iv) Material Litigation (as defined below) involving our Company, its Subsidiary,
Directors or Promoters; (v) outstanding dues to MSMEs and creditors; (vi) Material Dues (as defined below)
to creditors;

In relation to (iv) above, our Board, at its meeting held on July 07, 2021 has determined Material
Litigation as:

a. the aggregate amount involved in such individual litigation exceeds 5% of the consolidated
profit after tax of the Company, as per the last audited annual financial statements; or where
the decision in one litigation is likely to affect the decision in similar litigations, even though
the amount involved in such single litigation individually may not 5% of profit after tax of the
Company as per the last consolidated audited annual financial statements, if similar
litigations put together collectively exceed 5% of the consolidated profit after tax of the
Company;

b. any such litigation wherein the monetary liability is not quantifiable but which is expected to
be material from the perspective of the Company's business, operations, prospects or
reputation.

Except as stated in this section, there are no outstanding litigation involving our Group Companies,
the outcome of which would have a material impact on our Company.

In relation to (vi) above, our Board, at its meeting held on July 07, 2021 has determined ‘Material
Dues' as:

a. Consolidated information on outstanding dues to Micro Small & Medium Enterprises
(MSME), separately giving details of number of cases and amount involved if the same
exceeds the threshold limit of Rs. 1 lakh and the credit period of up to 45 days;

b. Complete details about outstanding dues to other creditors (excluding banks and financial
institutions from whom the Company has availed of financing facilities) if the amount due to
any one of them exceeds 5% of the total outstanding trade payables of the Company as per
the last audited financial statements.

It is clarified that for the purposes of the above, pre-litigation notices received and issued by our
Company, Directors and Promoters shall, unless otherwise decided by the Board, not be considered
as litigation until such time that our Company or any of its Directors or Promoters, as the case may
be, is impleaded as a defendant in litigation before any judicial forum.

Except as disclosed herein, our Company, its Directors and Promoters are not Willful Defaulters
and there have been no violations of securities laws in the past or pending against them.

293
11.

1.2.

1.3.

1.3.1.

LITIGATION INVOLVING OUR COMPANY

Litigation against our Company
Civil

NIL

Criminal

NIL

Taxation

Direct Tax Proceedings

 

Pursuant to the assessment order dated June 28, 2017 passed under
section 271(1)(c) of the Income Tax Act, 1961 against M/s. HP
International, a notice of demand dated June 28, 2017 under section
156 the Income Tax Act, 1961 has been issued against M/s. HP
International for a sum of Rs. 2.70 Lakhs.

M/s. HP International has preferred an appeal (no. CIT (A) 36,
Mumbai/10104/2017-18) before CIT(A) challenging the aforesaid
assessment order, which proceedings are pending as on the date of this
Prospectus.

2014-15

 

1.3.2.

i,

Indirect Tax Proceedings

VAT Proceedings

 

Pursuant to an assessment order (no. ASO/MUM-VAT-E-637/17
18/10020034) dated July 19, 2017 passed by the Deputy Commissioner
of Sales Tax, Mumbai, Maharashtra under section 23 of the MVAT
Act, 2002 against M/s. HP International, a demand notice dated March
26, 2018 has been issued against M/s. HP International for a sum of Rs.
73.60 Lakhs.

An appeal (no. JC/APP-IV/MUM/VAT-37/2018-19) has been
preferred by M/s. HP International before Joint Commissioner of Sales
Tax (Appeal), Mumbai, Maharashtra challenging the said assessment
order. Pending final disposal of the said Appeal, our stay application
filed before the Joint Commissioner of Sales Tax (Appeal) has been
allowed pursuant to part payment of Rs. 4.44 Lakhs having been made
by us.

2014-15

 

294
Pursuant to an assessment order (no. ASO/MUM-VAT-E-637/18-
19/27520252638V) dated January 02, 2018 passed by the Deputy
Commissioner of Sales Tax, Mumbai, Maharashtra under section 23 of
the MVAT Act, 2002 against M/s. HP International, a demand notice
dated May 31, 2018 has been issued against M/s. HP International for
asum of Rs. 23.22 Lakhs.

An appeal (no. JC/APP-IV/MUM/VAT-311/2018-19) has been
preferred by M/s. HP International before Joint Commissioner of Sales
Tax (Appeal), Mumbai, Maharashtra challenging the said assessment
order. Pending final disposal of the said Appeal, our stay application
filed before the Joint Commissioner of Sales Tax (Appeal) has been
allowed pursuant to part payment of Rs. 1.46 Lakhs having been made
by us.

2015-16

 

 

 

Pursuant to assessment order no. MUM-VAT-E-
637/27520252638V/MVAT/231/2020-21/3553845 dated March 4,
2021, a demand of Rs. 2,66,168/- was raised against our Company
which amount has been paid by our Company on March 9, 2021 and
the matter thus, stands closed.

 

2016-17

 

ii.

CST Proceedings

Pursuant to an assessment order (no. ASO/MUM-VAT-E-637/17
18/10020172) dated July 19, 2017 passed by the Deputy Commissioner
of Sales Tax, Mumbai, Maharashtra under section 23 of the CST Act,
1956 against M/s. HP International, a demand notice dated May 02,
2018 has been issued against M/s. HP International for a sum of Rs.
35.63 Lakhs.

An appeal (no. JC/APP-IV/MUM/CST-38/2018-19) has been
preferred by M/s. HP International before Joint Commissioner of Sales
Tax (Appeal), Mumbai, Maharashtra challenging the said assessment
order. Pending final disposal of the said Appeal, our stay application
filed before the Joint Commissioner of Sales Tax (Appeal) has been
allowed pursuant to part payment of Rs. 2.19 Lakhs having been made
by us.

2014-15

 

 

 

Pursuant to an assessment order (no. ASO/MUM-VAT-E-637/18-
19/27520252638C) dated January 02, 2018 passed by the Deputy
Commissioner of Sales Tax, Mumbai, Maharashtra under section 23 of
the CST Act, 1956 against M/s. HP International, a demand notice
dated May 31, 2018 has been issued against M/s. HP International for
a sum of Rs. 11.84 Lakhs.

An appeal (no. JC/APP-IV/MUM/CST-312/2018-19) has been
preferred by M/s. HP International before Joint Commissioner of Sales

 

2015-16

 

295

 

 
 

S.
No.

Particulars Financial
Year

 

Tax (Appeal), Mumbai, Maharashtra challenging the said assessment
order. Pending final disposal of the said Appeal, our stay application
filed before the Joint Commissioner of Sales Tax (Appeal) has been
allowed pursuant to part payment of Rs. 7.79 Lakhs having been made
by us.

 

Pursuant to assessment order no. MUM-VAT-E- 2016-17
637/27520252638C/CST/CST/2020-21/3553960 dated March 4,
2021, a demand of Rs. 2,79,195/- was raised against our Company
which amount has been paid on March 9, 2021 and the matter thus,
stands closed.

 

 

 

Pursuant to assessment order dated March 30, 2017 passed by Deputy 2012-13
Commissioner of Sales Tax, Mumbai u/s. 23(2) of the Central Sales
Tax Act, 1956, a sum of Rs. 49.67 Lakhs was determined as payable
by M/s. HP International for AY 2012-13 towards Central Sales Tax
and a sum of Rs. 18.43 Lakhs had been levied towards interest under
section 9(2) of the Central Sales Tax Act, 1956.

Further, pursuant to assessment order dated February 12, 2018 passed
by Deputy Commissioner of Sales Tax, Mumbai u/s. 23(2) of the
Central Sales Tax Act, 1956, a sum of Rs. 66.74 Lakhs was determined
as payable by M/s. HP International for AY 2013-14 towards Central
Sales Tax and a sum of Rs. 19.66 Lakhs had been levied towards
interest under section 9(2) of the Central Sales Tax Act, 1956.

In order to settle the aggregate disputed sales tax liability of Rs. 116.40
Lakhs for Assessment Years 2012-13 and 2013-14, our Company has
paid a sum of Rs. 55.54 Lakhs under the Maharashtra Settlement of
Arrears of Tax, Interest, Penalty or Late Fee Ordinance, 2019
(Amnesty Scheme, 2019). The matter thus, stands closed.

 

 

iii.

1.

Excise Proceedings

By an order in original (no. Raigad/Div-V/AC/23(19)(RK)/2019-20) dated March 11, 2020,
the Assistant Commissioner of CGST &CX, Division V, Raigad Commissionerate had
confirmed the demand of Rs.2,05,514/- against our Company under Section 11A(10) of the
Central Excise Act, 1944, ordered recovering interest at the appropriate rate under rule 14
of the Cenvat Credit Rules. 2004 read with section 11AA of the Central Excise Act, 1944
and imposed penalty of Rs. 2,05,514/- under rule 15(2) of the Cenvat Credit Rules. 2004
read with section 11AC(1)(c) of the Central Excise Act, 1944.

Our Company had filed an appeal before the Office of Commissioner of Central Tax
(Appeals), Raigad against the aforesaid order in original. By an order in appeal dated June
17, 2021, the said Commissioner of Central Tax (Appeals), Raigad has rejected our appeal
and upheld the aforesaid order in original.

Our Company has on August 12, 2021 filed an appeal (Excise 86416/2021) before the

Hon'ble CESTAT challenging aforesaid order in appeal dated June 17, 2021. The matter
is pending before the Hon'ble CESTAT.

296

 
oP

2. By an order in original (No. 64-65/NVK/COMMR/RGD/2018-19) dated June 7, 2018
passed by the Commissioner CGST Central Excise, Raigad Commissionerate against inter
alia M/s. HP International, Mrs. Anjana Motwani and Karan Haresh Motwani as partners
of M/s. HP International, Mrs. Anjana Motwani as mandatee of M/s HP Marketing, Karan
Motwani as proprietor of M/s HP Trading and others, the said Commissioner CGST Central
Excise has inter alia:

i. confirmed the demand of Rs. 14,05,82,276/- under Section 11A(10) of the Central
Excise Act, 1944;
ii. appropriated an amount of Rs. 16,46,821/- against the said demand confirmed above;
iii. ordered recovery of appropriate interest u/s. 11AA of the Central Excise Act, 1944;
iv. imposed penalty of Rs. 14,05,82,276/- on M/s. HP International u/s. 11AC of the
Central Excise Act, 1944
v. imposed a penalty of Rs. 1,00,00,000/- each on Mrs. Anjana Motwani and Mr. Karan

Motwani as partners of M/s. HP International under Rule 26 of Central Excise Rules,
2002;

vi. imposed a penalty of Rs. 20,00,000/- each on Mrs. Anjana Motwani, mandatee of
M/s. HP Marketing and Mr. Karan Motwani, proprietor of M/s. HP Trading;

vii. ordered the confiscation of goods seized from, amongst others, the following
premises in terms of Rule 25 of the Central Excise Rules, 2002 and given an option
to pay fine in lieu of confiscation as below:

 

 

 

 

Sr. Name & addresses of the premises, Value of Redemption

No. where goods have been seized under seized goods fine (Rs.)
panchanama (Rs.)

l, M/s. HP International, Khalapur, Raigad 2,30,70,045/- 27,68,000/-
M/s. HP Trading, New Delhi 2,04,98,881/- 24,60,000/-

 

 

 

 

 

M/s. HP International and others had filed their respective appeals before the Hon'ble
CESTAT under Section 35B of the Central Excise Act, 1944. In order to settle the disputed
tax liability, our Company has, pending disposal of the said appeals, made a payment of
Rs. 688.17 Lakhs under Sabka Vikas (Legacy Dispute Resolution) Scheme Rules, 2019
pursuant to which Discharge Certificate (Form SVLDRS-IV) has been issued in favour of
M/s. HP International, M/s HP Trading, Mr. Karan Haresh Motwani, Mrs. Anjana Motwani
and M/s. HP Marketing.

Subsequently, our Company has received a notice dated July 29, 2021 issued by the Deputy
Commissioner, CGST & CX, Div-V, Raigad. Vide the said notice, the said Commissioner
has demanded that the sum of redemption fine (Rs.27,68,000/-) be paid by our Company
within seven days of the receipt of the said notice, failing which recovery under section 11
of the Central Excise Act read with section 79 of the CGST Act, 2017 will be initiated. Our
Company has on November 17, 2021 filed a writ petition (Lodging No. WPL/26710/2021)
against Union of India and Ors. before the Hon’ble High Court of Judicature at Bombay to
inter alia set aside and quash the recovery letter dated July 29, 2021.

3. Our Company had filed an application for seeking refund of Rs. 21,85,047/- in terms of the
CESTAT (‘Customs Excise and Service Tax Appellate Tribunal”) order dated April 04,
2018 passed in Appeal (No. A/88472/2018).

By an order in original dated November 11, 2019, the Assistant Commissioner. CGST &

CX, Division-V has allowed the refund of the said amount to our Company in terms of
Section 11B of the Central Excise Act, 1944 and the matter thus, stands closed.

297
2.

2.1.

2.2.

2.201,

11.

1.2.

1.3.

wy

Litigation by our Company
Civil

Our Company has filed an Admiralty Suit no. COMAS/23/2018 on February 23, 2018
before the Hon’ble High Court of Bombay against one Maersk Line India Private Limited,
Safmarine Division (the defendant) for seeking relief inter alia in the nature of return of the
goods handed over to the defendant for export, or in the alternative, the defendant be directed
to pay a sum of Rs. 1095.00 Lakhs to our Company being the value of the goods involved
as at the time of handing over. The said suit is pending before the Hon’ble High Court.

Criminal

Our Company has lodged a criminal complaint dated 18" March 2016 before the Senior Police
Inspector, Khalapur Police Station, Raigad, Maharashtra against the Sarpanch of Narangi
Village, Uddhav Deshmukh and his son Sandesh Deshmukh for having committed inter alia
offense of criminal intimidation, unauthorized entry in the Company’s factory premises,
coercing the Company’s employees to change water suppliers in addition to bad mouthing the
reputation of the Company. Pursuant to the aforesaid criminal complaint, a Non-Cognizable
Offence Information Report dated March 18, 2016 has been entered/ recorded against the
accused for allegedly committed offence of criminal intimidation by an anonymous
communication under section 507 of the Indian Penal Code, 1860. There has been no further
development in the matter.

Our Company has lodged a criminal complaint dated September 17, 2014 before the Senior
Police Inspector, Khalapur Police Station, Raigad, Maharashtra against M/s. Karnataka Tubes
and Fittings, a partnership firm having its office at 4" Cross, Lalbagh Road, No. 49/3,
Bengaluru — 560 027, for having committed offenses of cheating, duplication of the Company’s
products without consent and delay/default in payment of our dues thereby committing offence

under section 420 of the Indian Penal Code, 1860. There has been no further development in
the matter

LITIGATION INVOLVING THE DIRECTORS (Other than Promoters)

Litigation against our Directors
Civil

NIL
Criminal

NIL

Taxation

1.3.1.Direct Tax Proceedings

298
i. Mr. Ajeet Anant Walavalkar

 

1. A demand notice dated June 13, 2014 has been issued 2013-14 130/-
under section 156 of the Income Tax Act, 1961
against our Director, Mr. Ajeet Anant Walavalkar.

 

ii. Mr, Surendra Kumar Mehta

 

1; A demand notice dated October 18, 2021 has been 2020-21 0.60
issued under section 143(1)(a) of the Income Tax Act,
1961 against our Director, Mr. Surendra Kumar
Mehta.

 

1.3.2.Indirect Tax Proceedings

NIL
2. Litigation by our Directors
21. Civil

NIL

2:2, Criminal

NIL

Cc. LITIGATION INVOLVING OUR PROMOTERS

1. Litigation against Promoters
1.1. Civil
NIL

1.2. Criminal

NIL

1.3, Taxation

1.3.1. Direct Tax Proceedings

299
oP

Mr. Karan Haresh Motwani

 

 

Sr. Particulars Assessment Amount
No. Year (Rs. in Lakhs)
Ts A demand notice dated December 21, 2017 2012-13 1.25

has been issued under section 156 of the
Income Tax Act, 1961 against our Promoter,
Mr. Karan Haresh Motwani.

 

 

 

 

 

 

25 Litigation by Promoters
2.1, Civil
NIL

2:2, Criminal

Our Promoter, Mrs. Anjana Motwani had lodged a First Information Report dated October 13,
2016 before the Khalapur Police Station, Raigad Maharashtra against Uddhav Namdev
Deshmukh and 11 others, for having allegedly committed offences of assembling unlawfully
and creating a riot in our Company’s factory premises, criminal intimidation and threatening
the employees of the Company with the intention to create fear and injury thereby committing
offenses under sections 143, 147, 149, 385, 323, 506, 451 of the Indian Penal Code, 1860 and
sections 37(1) and 135 of the Bombay Police Act, 1959. Pursuant to the aforesaid FIR dated
October 13, 2016, a Criminal Case (Regular) No.89 of 2017 came to be filed against the accused
before the 5" Civil Judge, Judicial Magistrate First Class, Khalapur, Raigad Maharashtra. The
said matter is pending before the said Magistrate for hearing and disposal.

SITE INSPECTION REPORTS FROM STATUTORY AND REGULATORY
AUTHORITIES

In addition to the above, we also receive site inspection/ visit reports from the concerned authorities
under the Factories Act, 1948 and from Maharashtra Pollution Control Board during the course of
our ordinary business. Pursuant to such reports, the concerned authorities provide their observations
on compliance by our Company with the provisions of applicable legislation. There has been no
development subsequently.

NON-PAYMENT OF STATUTORY DUES

Other than as stated below, our Company has no outstanding defaults in relation to statutory dues
consisting of service tax, value added tax, professional tax, employee state insurance, provident fund
and tax deducted, dues payable to holders of any debentures (including interest) or dues in respect
of deposits (including interest) or any defaults in repayment of loans from any bank or financial
institution (including interest):

a. Tax Deducted at Source

 

 

 

 

 

Sr. No. Particulars Amount (Rs. in Lakhs)
1. Default in FY 2019-20 1.85
Default in FY 2020-21 0.23
3s Default in FY 2021-22 0.03
Total 2.11

 

 

 

 

 

300
oP

DISCIPLINARY ACTION AGAINST OUR PROMOTERS IN THE LAST FIVE
FINANCIAL YEARS

There are no disciplinary actions pending or taken by SEBI or the stock exchange(s) against the
Promoters during the last five years immediately preceding the year of the issue of the Prospectus

OUTSTANDING DUES TO CREDITORS
As per the Materiality Policy, our Board has approved the following:

a. Consolidated information on outstanding dues to Micro Small & Medium Enterprises (MSME),
separately giving details of number of cases and amount involved if the same exceeds the
threshold limit of Rs. 1 lakh and the credit period of up to 45 days;

b. Complete details about outstanding dues to other creditors (excluding banks and financial
institutions from whom the Company has availed of financing facilities) if the amount due to any
one of them exceeds 5% of the total outstanding trade payables of the Company as per the last
audited financial statements.

As of September 30, 2021, our Company, in its ordinary course of business, has an aggregate amount
of Rs. 2,615.16 Lakhs, which is due towards sundry and other creditors. Consolidated information
on material dues to creditors and outstanding dues to MSMEs and other creditors, giving details of
number of creditors and aggregate amount for such dues is as under:

 

 

 

 

 

Particulars Number of Creditors Amount Outstanding
(Rs. in Lakhs)
Material Dues to Creditors 5 1325.40
Outstanding dues to MSMEs 1 516.84
Outstanding dues to creditors 4 808.56

 

 

 

 

The details pertaining to material dues to creditors as per the Restated Financial Statements for the
most recent financial year is available on the website of our Company www.hpadhesives.com.

DISCLOSURES PERTAINING TO WILFUL DEFAULTERS

Neither our Company, our Promoters nor our Directors are or have been classified as a willful defaulter
by a bank or financial institution or a consortium thereof in accordance with the guidelines on willful
defaulters issued by RBI.

MATERIAL DEVELOPMENTS

Except as disclosed in the chapter titled “Management's Discussion and Analysis of Financial
Condition and Results of Operations” beginning on page 275 of this Prospectus, in the opinion of our
Board, there have not arisen, since September 30, 2021, any circumstances that materially or adversely
affect or are likely to affect our profitability or the value of our consolidated assets or our ability to pay
material liabilities within the next 12 months.

301
a

GOVERNMENT AND OTHER APPROVALS

Our Company is in receipt of the necessary consents, licenses, registrations, permissions and
approvals from the Government of India and various governmental agencies required to undertake
this Issue and carrying on our present business activities. Our Company undertakes to obtain all
material approvals and licenses and permissions required to operate our present business activities.
Unless otherwise stated, these approvals and licenses are valid as on the date of this Prospectus and
in case of licenses and approvals which have expired; we have either made application for renewal
or are in the process of making an application for renewal. In order to operate our business, we
require various approvals and/or licenses under various laws, rules and regulations.

The main objects clause of Memorandum of Association and objects incidental to the main objects
enable our Company to undertake its existing business activities.
Following statement sets out the of licenses, permissions and approvals obtained by the Company

under various central and state legislations for carrying out its business activities.

I, COMPANY RELATED APPROVALS

 

1. Certificate of | Registrar of | U24304MH2019PTC325019 May 07, | N.A.
Incorporation Companies, 2019
in the name of | Central
“HP Registration
Adhesives Centre
Private
Limited”

2. Fresh Registrar of U24304MH2019PLC325019 July 01, | N.A.
Certificate of | Companies, 2021
Incorporation Central
consequent Registration

upon change | Centre
of name to HP
Adhesives

Limited on
conversion to
public limited
company

 

 

 

 

 

 

 

 

II. APPROVALS FOR THE OFFER

For details regarding the approvals and authorizations obtained by our Company in relation to
the Offer, see “Other Regulatory and Statutory Disclosures - Authority for the Offer” on page
313.

Ill. (i) Tax related approvals

302
 

 

 

 

 

 

 

 

 

Permanent Income Tax AAECH9038A April 12, N.A.
Account Department 2019

Number , Gol

(PAN)

Tax Deduction Income MUMH18966D May 07, N.A.
Account Department 2019

Number , Gol

(TAN)

Certificate of Governmen 27AAECH9038A1ZR May 10, N.A.
Registration for tof India 2019

Goods and

Service Tax

(Maharashtra)

Certificate of Governmen 29AAECH9038A1ZN May 27) N.A.
Registration for tof India 2019

Goods and

Service Tax

(Karnataka)

Certificate of Governmen 07AAECH9038A1ZT June 01, N.A.
Registration for tof India 2019

Goods and

Service Tax

(New Delhi)

Certificate of Governmen 23AAECH9038A1ZZ October 15, N.A.
Registration for tof India 2019

Goods and

Service Tax

(Madhya

Pradesh)

Certificate of Governmen 19AAECH9038A1ZO June 07, N.A.
Registration for tof India 2019

Goods and

Service Tax

(West Bengal)

Certificate of Governmen 26AAECH9038A1ZT August 01, N.A.
Registration for tof India 2020

Goods and

Service Tax

(Dadra &

Nagar Haveli)

Certificate of Governmen O8AAECH9038A1ZR June 18, N.A.
Registration for tof India 2019

Goods and
Service Tax
(Rajasthan)

 

 

 

 

 

303

 
 

 

 

 

 

 

 

 

 

Importer- Foreign 0388056061 August 29, | N.A.
Exporter Code Trade 2021
(IEC) Developme
nt Officer,
Ministry of
Commerce
Certificate of Maharashtr 27471687635P May 16, N.A.
Registration a Sales Tax 2019
under the Department
Maharashtra
State Tax on
Professions,
Trades,
Callings and
Employment
Act, 1975
Certificate of Maharashtr 99683282224P April 01, N.A.
Enrolment a Sales Tax 2019
under the Department
Maharashtra
State Tax on
Professions,
Trades,
Callings and
Employment
Act, 1975
(ii) Business related approvals
Factory Directorate 122002395900376 January 16, | Decembe
Registration and | of Industrial 2020 r 31, 2025
Factory Safety and
Operation Health
License (Labour
Department),
Government
of
Maharashtra
Udyam Ministry of | UDYAM-MH-18- September N.A.
Registration Micro, Small 0013539 26, 2020
Certificate as | and Medium
Medium Enterprises,
Enterprise Government
of India

 

 

 

 

 

 

304

 

 
 

 

 

 

Certificate of | Deputy GOI/MH/2020/453 August 13, | N.A.
Registration Director, 2020

under the Legal | Department

Metrology of Consumer

(Packaged Affairs,

Commodities) Government

Rules, 2011 of India

License to | Joint Chief | P/WC/MH/15/2331(P25 August 29, | Decembe
Import and Store | Controller of | 2968) 2019 r31, 2027
Petroleum in an | Explosives

Installation, upto | West Circle,

100 kilo litres of | Mumbai

Class A in bulk

Consent to | Regional MBCB/ROR/15/07840 July 15, | March 31,
Operate under | Office, 2015 2017
the Water | Maharashtra

(Prevention & | Pollution

Control of | Control

Pollution) Act | Board

1981, Air

(Prevention &

Control of

Pollution) Act,

1981 and

Authorization/

Renewal of

Authorization

under Rule 5 of

Hazardous

Wastes

(Management,

Handling &

Transboundary

Movement)

Rules, 2008 for

manufacturing

PVC Cement

upto S MIT/

month and FRP

Products upto 1

MT/ month

(existing

manufacturing

facility)

Consent to | Regional MBCB/ROR/Amend/17 November March 31,
Operate under | Office, 1117FTS0201 17, 2017 2027
the Water | Maharashtra

(Prevention & | Pollution

 

 

 

 

 

305

 
 

 

Control of | Control
Pollution) Act | Board

1981, Air

(Prevention &

Control of

Pollution) Act,

1981 and

Authorization/

Renewal of

Authorization

under Rule 5 of

Hazardous

Wastes

(Management,

Handling &

Transboundary

Movement)

Rules, 2008 for

manufacturing

PVC Cement

upto 50 MT/

month and FRP

Products upto 50

MT/ month

(existing

manufacturing

facility)

Consent to | Regional RO- March 08, | March 31,
Operate under | Office, Raigad/Consent/170500 2021 2027
the Water | Maharashtra 1105/Amend/210300001
(Prevention & | Pollution 2
Control of | Control
Pollution) Act | Board

1981, Air

(Prevention &

Control of

Pollution) Act,

1981 and

Hazardous and
Other Wastes (M
& TM) Rules,
2016 for
manufacturing

PVC Cement
upto 50 MT/
month and FRP
Products upto 50
MT/ month

 

 

 

 

 

306

 
 

 

 

 

 

 

 

 

(existing

manufacturing

facility)

Consent to | Regional Format 1.0/BO/RO | July 15, | Upto
Establish under | Office, Raigad/UAN No. 2021 Commiss
the Water | Maharashtra 0000117342/E- ioning of
(Prevention & | Pollution 2107000880 the unit or
Control of | Control upto 5
Pollution) Act | Board years,
1981, Air whicheve
(Prevention & ris earlier
Control of

Pollution) Act,

1981 and

Hazardous and

Other Wastes (M

& TM) Rules,

2016 for

manufacturing

Adhesives and

Sealants upto

450 MT/ month

(existing

manufacturing

facility)

Consent to | Regional Format 1.0/BO/RO | May 17, | Upto
Establish for | Office, Raigad/UAN No. 2021 Commiss
Expansion under | Maharashtra 0000109349/E- ioning of
the Water | Pollution 2105000651 the unit or
(Prevention & | Control upto 5
Control of | Board years,
Pollution) Act whicheve
1981, Air r is earlier
(Prevention &

Control of

Pollution) Act,

1981 and

Hazardous and

Other Wastes (M

& TM) Rules,

2016 for

manufacturing

Silicon Sealant

upto 150 MT/

month

(Additional Unit)

Provisional Fire | Directorate MFS/51/2021/208 June 12, | NA.
NOC of 2021

 

307

 
 

 

 

 

 

 

Maharashtra
Fire
Services,
Government
of
Maharashtra
Registration Chief 820162467/ KE Ward/ | June 15; N.A.
Certificate under | Inspector, COMMERCIAL II 2021
the Maharashtra | Shops &
Shop and | Establishme
Establishments nts, Mumbai
(Regulations of
Employment and
conditions of
Service) Act,
2017 (registered
office)
Registration Chief 820176467/ KE Ward/ | August 30, | N.A.
Certificate under | Inspector, COMMERCIAL II 2021
the Maharashtra | Shops &
Shop and | Establishme
Establishments nts, Mumbai
(Regulations of
Employment and
conditions of
Service) Act,
2017
(administration
office)
Registration Senior 27/DH-/CE/0030/2021 July 14, | Decembe
Certificate of | Labour 2021 r31, 2025
Establishment Inspector,
under the | Department
Karnataka Shops of Labour,
and Commercial | Government
Establishments of Karnataka
Act, 1961
Registration Inspector, C/1159853 October 10, | N.A.
Certificate of | Office of 2019
Establishment District
under the | Labour,
Madhya Pradesh | Indore,
Shops and | Madhya
Establishments Pradesh
Act, 1958
Registration Department 2021145330 September N.A.
Certificate of | of Labour 02, 2021
Establishment

 

 

 

 

 

308

 
 

 

 

 

 

 

 

 

 

 

under the Delhi | Government
Shops and | of National
Establishments Capital
Act, 1954 Territory of
Delhi
Registration Registering KL03912N2021000006 July 26, | N.A.
Certificate of | Authority 2021
Establishment under the
under the West | West Bengal
Bengal Shops | Shops and
and Establishme
Establishments nts Act, 1963
Act, 1963
Exemption Deputy SB-6/MRD/2018/14796 July 27, | NA.
Certificate under | Director of 2018
the Boiler Act, | Steam
1923 Boilers,
Government
of
Maharashtra
(iii) | Labour and Commercial approvals
Employees’ State Regional 35000530680000 | January N.A.
Insurance Office, 399 22, 2021
Registration Employees’
Certificate State Insurance
(registered office) Corporation
Employees’ State Regional 34350530680010 | February N.A.
Insurance Office, 399 08, 2021
Registration Employees’
Certificate State Insurance
(manufacturing unit) Corporation
Employee’s Office of the KDMAL1527679 | October N.A.
Provident Fund Regional 10, 2016
Registration Provident fund
commissioner,
Maharashtra

 

 

 

 

 

 

309

 

 
(iv) Intellectual Property

oP

As on December 03, 2021, we had 22 registered trademarks in the name of our Company and
M/s. HP International as mentioned below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. Trademark Category Class of Application Valid Upto
No. Name Trademark No:

a Strong Device 17 1877281 October 28, 2029
Weld*

2. HP* Device 17 1877282 October 28, 2029

3. o* Device 17 1907872 January 12, 2030

4. HP Device 1 2781997 July 28, 2024
International*

Be U- WELD* Device 1 2781998 July 28, 2024

6. Utility* Device 1 2781999 July 28, 2024

& C- WELD* Device 1 2782000 July 28, 2024

8. P- WELD* Device 1 2782002 July 28, 2024

9. Titesol* Device 1 2782003 July 28, 2024

10. C- WELD* Device 19 2782007 July 28, 2024

11, U- WELD* Device 19 2782008 July 28, 2024

12. Aqua Plus* Device 17 2782010 July 28, 2024

13. Hp* Device 1 2835967 November 03,

2024

14. LOW Voc* Device 1 2887524 January 22, 2025

15. STRONG Device 17 3009358 July 16, 2025
DRAIN*

16. STRONG Device 19 3009359 July 16, 2025
DRAIN*

17. STRONG Device 1 3026658 August 07, 2025
GRIP*

18. NEOBOND* Device 17 3601564 July 28, 2027

19. NEOBOND* Device 1 3601563 July 28, 2027

20. STRONG Device 1 4051550 January 09, 2029
FIX*

21. con worl 1 4934650 April 06, 2031

22. een Device 35 5000761 June 10, 2031

 

* registered in the name of M/s. HP International
* registered in the name of our Company

We are in the process of transferring some of the aforesaid trademarks from ‘M/s. HP
International’ to ‘HP Adhesives Limited’.

Additionally, as on December 03, 2021 we had 22 applications pending under the Trademarks
Act, 1999 to register the following trademarks in the name of our Company:

310

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sr. | Trademark Category | Class of| Application/ | Date of | Status
No. | Name Trademark | CC No. Application
1. STRONG Word
BOND Maik 1 4240305 July 19, 2019] Refused
2; STRONG Word
BOND Mark 17 4240306 July 19, 2019] Refused
3 STRONG Word *
WELD Mark 1 4240307 July 19, 2019] Objected
4. STRONG Word .
WELD Mark 17 4240308 July 19, 2019] Objected
5 | FIBERX Wore 17 4240309 July 19, 2019] Objected
6. | EIBERX ion 19 4240310 July 19, 2019] Refused
7. Word Accepted &
HP Mark 1 4251510 July 31, 2019} Advertised
8. | up Word 17 4251511 July 31, 2019} Objected
Mark WAhe i
9: Word December
FIBRE ONE Male 1 4779127 11, 2020 Opposed
10. Word December Accepted &
FIBRE.ONE Mark a BLIS126 11, 2020 Advertised
U1. | pBREONE | Device | 35 4890263 March 04) objected
12. Word April 06; .
STRONG COL Mark 17 4934651 2021 Objected
13. | STRONG . June 10, 2021) .
WELD Device 19 5000760 Objected
14. HP Device 19 5000758 June 10, 2021| Accepted &
Advertised
15. | HP Device 35 5000759 June 10, 2021) Opposed
16. | STRONG FIX ven 1 5039655 July 10, 2021) Ob acted
17. | sTRONG FIX Word 17 5039656 July 10, 2021) Ob ected
18. | STRONG Word July 10, 2021 ‘
SEAL Mark 1 5039653 Objected
19. | STRONG Word July 10, 2021 .
SEAL Mark 17 5039654 Objected
20. STRONGTITE | Device 1 5215978 November | Formalities Check
19, 2021 Pass
2A. 5 November | Formalities Check
STRONGTITE | Device 2 5215979 19, 2021 —
22. STRONGTITE | Device 17 5215980 November | Formalities Check
19, 2021 Pass

 

Iv.

Approvals applied for but not received

As on the date of this Prospectus, there are no approvals that have been applied for by our
Company but not received save and except the following:

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wy

1. Consent to Operate under the Water (Prevention & Control of Pollution) Act 1981, Air
(Prevention & Control of Pollution) Act, 1981 and Hazardous and Other Wastes
(Management and Transboundary Movement) Rules, 2016 (for Existing Facility and
Additional Unit).

2. Permission for use of land for Non-Agricultural (N.A.) purpose from the office of
Collector, Raigad, Maharashtra in respect of the Additional Unit.

Approvals expired and renewals to be applied for

As on the date of this Prospectus, there are no approvals that have expired but have not been
renewed by our Company.

Approvals required but not obtained or applied for
As on the date of this Prospectus, there are no approvals which our Company was required to
obtain or apply for, but which have not been obtained or been applied for save and except the

following:

(a) Final No Objection Certificate from fire safety authorities in respect of factory premises.
(b) License for expansion under the Factories Act, 1948 in respect of our Additional Unit.

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OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Offer
Our Board has approved the Fresh Issue pursuant to the resolution passed at its meeting held on July
05, 2021. Further, our Shareholders have approved the Fresh Issue pursuant to a special resolution
passed on July 06, 2021 under Section 62(1)(c) of the Companies Act, 2013. Further, our Board has
taken on record the consent of the Selling Shareholder to participate in the Offer for Sale pursuant to a

resolution passed at its meeting held on July 05, 2021.

The Offer for Sale has been authorised by the Selling Shareholder as follows:

 

 

Sr. Name of the Selling | Maximum Date of Selling | Date of corporate
No. | Shareholder number of | Shareholder’s | authorisation/

Offered Shares | Consent Letter | board resolution
iL. Mrs. Anjana Haresh Motwani 4,57,200 July 05, 2021 July 05, 2021

 

 

 

 

 

 

 

Our Company has obtained in-principle approval from BSE and NSE for the listing of the Equity Shares
pursuant to letters dated August 09, 2021 and September 03, 2021, respectively.

Prohibition by SEBI or any other regulatory authorities

We confirm that our Company, our Promoters, Promoter Group, our directors and the Selling
Shareholder have not been prohibited from accessing the capital market for any reason or debarred
from buying, selling or dealing in securities, under any order or directions by the SEBI or any other
securities market regulator in any other jurisdiction or any other authority/ court as on the date of this
Prospectus.

There are no violations of securities laws committed by any of them in the past or pending against
them, nor have any companies with which our Company, our Promoters or directors are or were
associated as a promoter, director or person in control, been debarred or prohibited from accessing the
capital markets under any order or direction passed by SEBI or any other regulatory authority.

None of our directors are associated with the securities market and there has been no action taken by
the SEBI against the directors or any other entity with which our directors are associated as promoters
or director.

Neither our Company nor the Directors and our Promoters/ Promoter Group have been declared as
"Fraudulent Borrowers" by the lending banks or financial institutions or consortium, in terms of RBI

master circular dated July 01, 2016.

Further, none of our Promoters or directors have been declared as fugitive economic offender under
Fugitive Economic Offenders Act, 2018.

Compliance with the Companies (Significant Beneficial Ownership) Rules, 2018
Our Company, our Promoters and the members of the Promoter group are in compliance with the

Companies (Significant Beneficial Ownership) Rules, 2018, to the extent in force and applicable, as
on the date of this Prospectus.

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The Selling Shareholder, severally and not jointly, has confirmed that she is in compliance with the
Companies (Significant Beneficial Owners) Rules, 2018, as amended, to the extent applicable to it, as
on the date of this Prospectus.

Eligibility for the Offer

Our Company is eligible for the Offer in accordance with Regulation 6(2) of the SEBI ICDR
Regulations, which states as follows:

“An issuer not satisfying the condition stipulated in sub-regulation (1) shall be eligible to make an
initial public offer only if the issue is made through the book-building process and the issuer
undertakes to allot at least seventy-five per cent. of the net offer to qualified institutional buyers and
to refund the full subscription money if it fails to do so.”

The Selling Shareholder has confirmed that she has held its respective portion of Offered Shares for a
period of at least one year prior to the date of this Prospectus and that it is in compliance with
Regulation 8 of the SEBI ICDR Regulations.

Our Company is an “unlisted issuer” in terms of the SEBI ICDR Regulations; and this Offer is an
“Initial Public Offer” in terms of the SEBI ICDR Regulations 2018.

We are eligible to undertake the Offer as per Rule 19(2)(b) of the SCRR read with Regulations 6(2) of
the SEBI ICDR Regulations. Accordingly, in accordance with Regulation 32(2) of the SEBI ICDR
Regulations we are required to allocate not less than 75% of the Net Offer to QIBs. Further, not more
than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional
Bidders and not more than 10% of the Net Offer shall be available for allocation to RIBs in accordance
with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. In
the event we fail to do so, the full application money shall be refunded to the Bidders.

Further, in terms of Regulation 49(1) of the SEBI ICDR Regulations, our Company shall ensure that
the number of Allottees shall not be less than 1,000.

Further, our Company confirms that it is in compliance with the conditions specified in Regulation 7(1)
of the SEBI ICDR Regulations, to the extent applicable, and has ensured compliance with the
conditions specified in Regulation 7(2) of the SEBI ICDR Regulations, to the extent applicable.

Also, our Company confirms that it is not ineligible to make the Offer in terms of Regulation 5 of the
SEBI ICDR Regulations, to the extent applicable. The details of our compliance with Regulation 5 of
the SEBI ICDR Regulations are as follows:

(a) None of our Company, our Directors or the Selling Shareholder are debarred from accessing the
capital markets by the SEBI.

(b) None of our Directors are promoters or directors of companies which are debarred from accessing
the capital markets by the SEBI.

(c) None of our Company, the Selling Shareholder and our Directors have been categorized as a wilful
defaulter.

(d) None of our Directors have been declared a fugitive economic offender.

Our Company has facilitated trading in demat securities and has entered into agreement with both the
depositories. The Company has entered into an agreement for registration with the Central Depositary

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Services Limited (CDSL) dated August 02, 2021 and National Securities Depository Limited (NSDL)
dated July 30, 2021 for establishing connectivity.

DISCLAIMER CLAUSE OF SEBI

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED
HERRING PROSPECTUS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA
(SEBI) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME
HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR
THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE
CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE
DRAFT OFFER DOCUMENT. THE BOOK RUNNING LEAD MANAGER, UNISTONE
CAPITAL PRIVATE LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN
THE DRAFT OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN
CONFORMITY WITH THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2018 IN FORCE FOR THE TIME BEING. THIS
REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION
FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE
OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS,
THE BOOK RUNNING LEAD MANAGER, UNISTONE CAPITAL PRIVATE LIMITED IS
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS
THIS PURPOSE, THE BOOK RUNNING LEAD MANAGER, UNISTONE CAPITAL
PRIVATE LIMITED HAS FURNISHED TO STOCK EXCHANGE A DUE DILIGENCE
CERTIFICATE DATED JULY 18, 2021 IN THE FORMAT PRESCRIBED UNDER
SCHEDULE V(A) OF THE SEBI ICDR REGULATIONS 2018.

THE FILING OF THIS DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER,
ABSOLVE OUR COMPANY FROM ANY LIABILITIES UNDER THE COMPANIES ACT,
2013 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY AND/ OR
OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE
PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY
POINT OF TIME, WITH THE BRLM ANY IRREGULARITIES OR LAPSES IN THE DRAFT
RED HERRING PROSPECTUS.”

Disclaimer from our Company our Directors, the Selling Shareholder and the Book Running
Lead Manager

Our Company, our Directors, the Selling Shareholder and the Book Running Lead Manager accept no
responsibility for statements made otherwise than those contained in the Prospectus or in any
advertisements or any other material issued by or at our Company’s instance and anyone placing
reliance on any other source of information including our Company’s website www.hpadhesives.com,
or the respective websites of the members of the Promoter Group and affiliates, would be doing so at
his or her own risk.

Each of the Selling Shareholder, their affiliates and associates accept or undertake no responsibility for

any statements other than those specifically undertaken or confirmed by such Selling Shareholder in
relation to itself and its respective portions of the Offered Shares.

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The BRLM accepts no responsibility, save to the limited extent as provided in the Offer Agreement and
the Underwriting Agreement, to be executed between the Underwriters and our Company.

All information shall be made available by our Company, the Selling Shareholder (to the extent that the
information pertain to her and her respective portions of the Offered Shares) and the BRLM to the
public and investors at large and no selective or additional information would be available for a section
of the investors in any manner whatsoever, including at road show presentations, in research or sales
reports, at Bidding Centres or elsewhere.

None among our Company, the Selling Shareholder or any member of the Syndicate is liable for any
failure in (i) uploading the Bids due to faults in any software or hardware system or otherwise; and (ii)
the blocking of Bid Amount in the ASBA Account on receipt of instructions from the Sponsor Bank on.
account of any errors, omissions or non-compliance by various parties involved in, or any other fault,
malfunctioning or breakdown in, or otherwise, in the UPI Mechanism.

Investors who Bid in the Offer will be required to confirm and will be deemed to have represented to
our Company, the Selling Shareholder, the Underwriters and their respective directors, officers, agents,
affiliates, and representatives that they are eligible under all applicable laws, rules, regulations,
guidelines and approvals to acquire the Equity Shares and will not issue, sell, pledge, or transfer the
Equity Shares to any person who is not eligible under any applicable laws, rules, regulations, guidelines
and approvals to acquire the Equity Shares. Our Company, the Selling Shareholder, the Underwriters
and their respective directors, officers, agents, affiliates, and representatives accept no responsibility or
liability for advising any investor on whether such investor is eligible to acquire the Equity Shares.

The BRLM and its respective associates and affiliates may engage in transactions with, and perform
services for, our Company, the Selling Shareholder, the Promoters and their respective directors and
officers, group companies, affiliates or associates or third parties in the ordinary course of business and
have engaged, or may in the future engage, in commercial banking and investment banking transactions
with our Company, the Promoters and their respective directors and officers, group companies, affiliates
or associates or third parties, for which they have received, and may in the future receive, compensation.

Disclaimer of CRISIL Limited

CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing
CRISIL Report based on the information obtained by CRISIL from sources which it considers reliable
(Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data /
Report and is not responsible for any errors or omissions or for the results obtained from the use of
Data / Report. CRISIL Report is not a recommendation to invest / disinvest in any company covered
in the Report. CRISIL especially states that it has no financial liability whatsoever to the subscribers/
users/ transmitters/ distributors of this Report. CRISIL Research operates independently of and does
not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and
Infrastructure Solutions Limited (CRIS), which may, in their regular operations, obtain information of
a confidential nature. The views expressed in this Report are that of CRISIL Research and not of
CRISIL’s Ratings Division / CRIS. No part of this Report may be published / reproduced in any form
without CRISIL’s prior written approval.

Disclaimer in Respect of Jurisdiction

Any dispute arising out of this Offer will be subject to jurisdiction of the competent court(s) in Mumbai
only.

316
Bidders eligible under Indian law to participate in the Offer

This Offer is being made in India to persons resident in India (who are competent to contract under the
Indian Contract Act, 1872, including Indian nationals resident in India, HUFs, companies, other
corporate bodies and societies registered under the applicable laws in India and authorised to invest in
shares, domestic Mutual Funds registered with the SEBI, Indian financial institutions, commercial
banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable
trust law and who are authorised under their constitution to hold and invest in equity shares, multilateral
and bilateral development financial institutions, state industrial development corporations, insurance
companies registered with IRDAI, provident funds (subject to applicable law) and pension funds,
National Investment Fund, insurance funds set up and managed by army, navy or air force of Union of
India, insurance funds set up and managed by the Department of Posts, Gol, systemically important
NBEFCs registered with the RBI) and permitted Non-Residents including FPIs and Eligible NRIs, AIFs,
FVCIs (under Schedule I of the FEMA Rules) and other eligible foreign investors, if any, provided that
they are eligible under all applicable laws and regulations to purchase the Equity Shares.

This Prospectus does not, however constitute an invitation to subscribe to shares offered hereby in any
jurisdiction, other than India to any person to whom it is unlawful to make an offer or invitation in such
jurisdiction. Any person into whose possession the Prospectus comes is required to inform himself or
herself about, and to observe, any such restrictions. Invitations to subscribe to or purchase the Equity
Shares in the Offer is being made only pursuant to the Prospectus if the recipient is in India or the
preliminary offering memorandum for the Offer, which comprises the Prospectus and the preliminary
international wrap for the Offer, if the recipient was outside India.

Bidders are advised to ensure that any Bid from them does not exceed investment limits or the
maximum number of Equity Shares that can be held by them under applicable law.

Eligibility and Transfer Restrictions

The Equity Shares have not been, and will not be, registered under the U.S. Securities Act 1933, as
amended (the "Securities Act") or any state securities laws in the United States and may not be offered
or sold within the United States or to, or for the account or benefit of, "U.S. persons” (as defined in
Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws.
Accordingly, the Equity Shares have been offered and sold (i) within the United States only to persons
reasonably believed to be “qualified institutional buyers” (as defined in Rule 144A under the U.S.
Securities Act and referred to in this Prospectus as “U.S. QIBs”) in transactions exempt from, or not
subject to, the registration requirements of the U.S. Securities Act, and (ii) outside the United States in
offshore transactions in compliance with Regulation S under the U.S. Securities Act and the applicable
laws of the jurisdiction where those offers and sales are made. For the avoidance of doubt, the term
“U.S. QIBs” does not refer to a category of institutional investors defined under applicable Indian
regulations and referred to in this Prospectus as “QIBs”.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and were not offered or sold, and Bids were not made by persons in any such
jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Until the expiry of 40 days after the commencement of this Offer, an offer or sale of Equity Shares
within the United States by a dealer (whether or not it is participating in this Offer) may violate the
registration requirements of the U.S. Securities Act if such an offer for sale is made otherwise than in
compliance with Section 4(a)(2) or Rule 144A or another available exemption from registration under
the U.S. Securities Act.

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Disclaimer Clause of BSE

As required, a copy of the Draft Red Herring Prospectus has been submitted to BSE. The disclaimer
clause as intimated by BSE to our Company is as follows:

BSE Limited (“the Exchange”) has given vide its letter dated August 09, 2021 permission to this
Company to use the Exchange’s name in this offer document as one of the stock exchanges on which
this company’s securities are proposed to be listed. The Exchange has scrutinized this offer document
for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this
Company. The Exchange does not in any manner: -

a) warrant, certify or endorse the correctness or completeness of any of the contents of this offer
document; or

b) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

c) take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this offer document has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities
of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not
have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such
person consequent to or in connection with such subscription/acquisition whether by reason of anything
stated or omitted to be stated herein or for any other reason whatsoever.

Disclaimer Clause of NSE

As required, a copy of the Draft Red Herring Prospectus has been submitted to NSE. The disclaimer
clause as intimated by NSE to our Company is as follows:

As required, a copy of this Offer Document has been submitted to National Stock Exchange of India
Limited (hereinafter referred to as NSE). NSE has given vide its letter Ref.: NSE/LIST/1102 dated
September 03, 2021 permission to the Issuer to use the Exchange’s name in this Offer Document as
one of the Stock Exchanges on which this Issuer’s securities are proposed to be listed. The Exchange
has scrutinized this draft offer document for its limited internal purpose of deciding on the matter of
granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid
permission given by NSE should not in any way be deemed or construed that the offer document has
been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness
or completeness of any of the contents of this offer document; nor does it warrant that this Issuer’s
securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility
for the financial or other soundness of this Issuer, its promoters, its management or any scheme or
project of this Issuer

Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so
pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription /acquisition whether by reason of anything stated or omitted to be
stated herein or any other reason whatsoever.

Listing

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The Equity Shares of our Company are proposed to be listed on BSE and NSE. Applications have been
made to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares. NSE
will be the Designated Stock Exchange, with which the Basis of Allotment will be finalized for the
Offer.

If the permissions to deal in, and for an official quotation of, the Equity Shares are not granted by any
of the Stock Exchanges mentioned above, our Company will forthwith repay, without interest, all
monies received from the Bidders in pursuance of the Red Herring Prospectus and each of the Selling
Shareholder will be liable to reimburse our Company for such repayment of monies, on its behalf, with
respect to its respective portion of the Offered Shares. If such money is not repaid within the prescribed
time, then our Company, the Selling Shareholder and every officer in default shall be liable to repay
the money, with interest, as prescribed under applicable law. Any expense incurred by our Company
on behalf of any of the Selling Shareholder with regard to interest on such refunds will be reimbursed
by such Selling Shareholder in proportion to its respective portion the Offered Shares or in the manner
as may be mutually agreed upon between the Selling Shareholder. For the avoidance of doubt, subject
to applicable law, a Selling Shareholder shall not be responsible to pay interest for any delay, except
to the extent that such delay has been caused by any act or omission solely attributable to such Selling
Shareholder and to the extent of its respective portion the Offered Shares.

Our Company shall ensure that all steps for the completion of the necessary formalities for listing and
commencement of trading at the Stock Exchanges are taken within six Working Days from the Bid/
Offer Closing Date. Further, each of the Selling Shareholder confirms that it shall provide reasonable
assistance to our Company, and the Book Running Lead Manager(s), with respect to its respective
portion of the Offered Shares, for the completion of the necessary formalities for listing and
commencement of trading at the Stock Exchanges within six Working Days from the Bid/ Offer
Closing Date, to the extent of the Offered Shares.

If our Company does not Allot Equity Shares pursuant to the Offer within six Working Days from the
Bid/ Offer Closing Date or within such timeline as prescribed by SEBI, it shall repay, without interest,
all monies received from Bidders, failing which interest shall be due to be paid to the Bidders at the
rate of 15% per annum for the delayed period.

Except for listing fees which shall be solely borne by our Company, all Offer expenses will be shared,
upon successful completion of the Offer, between our Company and each of the Selling Shareholder
on a pro-rata basis, in proportion to the (i) Equity Shares issued and allotted by our Company in the
Fresh Issue and (ii) Equity Shares sold by each of the Selling Shareholder in the Offer for Sale or in
the manner as may be mutually agreed upon between the Selling Shareholder. However, in the event
that the Offer is withdrawn by our Company or not completed for any reason whatsoever, all the Offer
related expenses will be solely borne by our Company. Upon successful completion of the Offer, any
payments by our Company in relation to the Offer expenses on behalf of any of the Selling Shareholder
shall be reimbursed by such Selling Shareholder, in proportion to its respective portion the Offered
Shares or in the manner as may be mutually agreed upon between the Selling Shareholder, to our
Company inclusive of taxes.

Consents

Consents in writing of Selling Shareholder, our Promoters, our Directors, our Company Secretary and
Compliance Officer, Legal Advisor to the offer, the Book Running Lead Manager, Statutory & Peer
Review Auditor, the Registrar to the Offer, Banker to the our Company, independent chartered
engineer, Syndicate Members, Share Escrow Agent, Monitoring Agency, Escrow Collection Bank(s),
Banker to the Offer(s)/Public Offer Bank(s)/Refund Bank(s) and Sponsor Bank have been obtained
and has been filed along with a copy of the Red Herring Prospectus with the RoC as required under the

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Companies Act, 2013 and such consents shall not be withdrawn up to the time of delivery of the
Prospectus for filing with the RoC.

Experts to the Offer
Except as stated below, our Company has not obtained any expert opinions:

Our Company has received written consent dated November 27, 2021, from M/s. Priya Choudhary &
Associates, LLP, Chartered Accountants, to include their name as required under section 26 (1) of the
Companies Act, 2013 read with SEBI ICDR Regulations, in this Prospectus and as an “expert” as
defined under section 2(38) of the Companies Act, 2013 to the extent and in their capacity as our
Statutory Auditors, and in respect of their (i) examination report, dated November 27, 2021 on our
Restated Financial Statements; and (ii) their report dated November 27, 2021 on the statement of
possible special tax benefits in this Prospectus and such consent has not been withdrawn as on the date
of this Prospectus. However, the term “expert” shall not be construed to mean an “expert” as defined
under the U.S. Securities Act.

Our Company has received written consent dated November 20, 2021, from the independent chartered
engineer namely, M/s. Orbit Consultants and Valuers, to include his name in this Prospectus and as an
“expert” as defined under Section 2(38) of the Companies Act, 2013, to the extent and in his capacity
as a chartered engineer, in relation to his certificate dated September 15, 2021, certifying the capacity
utilisation of the manufacturing facility and such consent has not been withdrawn as on the date of this
Prospectus.

Capital issue during the previous three years by our Company

Except as disclosed in “Capital Structure — Notes to the capital structure” on pages 82 of this
Prospectus, our Company has not made any capital issues during the previous three years.

Particulars regarding public or rights issues during the last five (5) years

Except as stated in the chapter titled “Capital Structure” beginning on page 82 of this Prospectus, we
have not made any previous rights issue during the five (5) years preceding the date of the Prospectus.
Our Company has not made any public issues during the last five years.

Commission and brokerage on previous issues

Since this is an Initial Public Offer of the Equity Shares by our Company, no sum has been paid or has
been payable as commission or brokerage for subscribing to or procuring or agreeing to procure
subscription for any of our Equity Shares in the last five (5) years.

Capital issue during the previous three years by listed Group-Companies/ subsidiaries/ associates
of our Company

As on the date of this Prospectus, our Company does not have any subsidiary, associate or Group
Companies.

Performance vis-a-vis objects — Public/ rights issue of our Company
Except as stated under chapter titled "Capital Structure" beginning on page 82 of the Prospectus, our

Company has not undertaken any previous rights issue. Further, this Offer is an “Initial Public Offer”
in terms of SEBI ICDR Regulations and our Company has not undertaken any previous public issue.

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Performance vis-a-vis objects - Last one Public Issue/ Rights Issue of Subsidiaries/ Listed
Promoters

Except as disclosed under chapter titled "Capital Structure" beginning on page 82 of the Prospectus,
our Company has not undertaken any rights issue in the five years preceding the date of this Prospectus.
Our Company has not made any public issues in the five years preceding the date of this Prospectus.
Stock Market Data of the Equity Shares

This being the initial public offering of the Equity Shares of our Company, the Equity Shares are not

listed on any stock exchange as on the date of this Prospectus, and accordingly, no stock market data
is available for the Equity Shares.

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Price Information and track record of past issued handled by the Book Running Lead Manager

Unistone Capital Private Limited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S | Issue Name Issue Is Listing date Ope +/-% change in +/-% change in +/-% change in
r Size (in su ning closing _ price,[+/- closing _ price,[+/- closing _ price,[+/-
5 Lacs) e price % change in % change in % change in
N Pp on closing closing closing
0 ri listin benchmark]- benchmark]- benchmark]-
ce g 30th calendar 90th calendar 180th calendar
date days from listing days from listing days from listing
1 Kapston Facilities Management 2119.68 92 April 4,2018 92.50 3.26%,[4.84%] 3.91%, [5.64%] 1.09%, [8.69%]
Limited
2 Supreme Engineering Limited 1777.68 27 September 6, 27.10 -4.59%,[-10.58%] -19.27%,[- 6.54%] -11.93%, [-4.76%]
2018
3 Likhitha Infrastructure Limited 6120.00 12 October 15, 2020 136.6 16.14%, [10.22%] 41.43%, [23.74%] 170.87%, [24.84%]
0 0
4 Siddhika Coatings Limited 469.68 Bz April 7, 2021 56.95 0.88%, [0.02%] 21.05%, [7.18%] 62.72%,[20.05%]
5 Bombay Metrics Supply Chain 428.54 93 October 12, 2021 103.2 28.35%, [0.62%] - -
Limited 0
6 Sigachi Industries Limited 12,542.8 16 November 15, 575 - - -
5 3 2021

 

For details regarding the track record of the LM, as specified in Circular reference CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please see the
website www.unistonecapital.com

Notes:
(a)
(b)
(©)

Source: www.nseindia.com for the price information
Wherever 30th/90th/180th calendar day from the listing day is a holiday, the closing data of the next trading day has been considered.
The Nifty 50 index is considered as the benchmark index.

 
a

Summary statement of price information of past public issues handled by Unistone Capital Private Limited

 

 

 

 

 

 

 

Nos. of IPOs trading at Nos. of IPOs trading at Nos. of IPOs trading at Nos. of IPOs trading at
Tota Total discount- 30th calendar premium- 30th calendar discount- 180th calendar premium- 180th calendar
es | 1 no. Funds days from listing days from listing days from listing days from listing
Financia -
year of Raised Less Less Less Less
IPO (Rs. In Ove Betwee tha Ove Betwee tha Ove Betwee tha Ove Betwee tha
s Lakh) r n 25- n r n 25- n r n 25- n r n 25- n
50% 50% 25 50% 50% 25 50% 50% 25 50% 50% 25
%. % % %
te 201s 2 3897.36 - - 1 - - 1 - - 1 - - 1
FY 2019-
20 . - . - . - . - - - - - - -
ee 2020- 2 6589.68 - - 1 - - 1 - - 1 1 - -
FY 2021-| 44 | 129713 - = - - 1 - : :
22 a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*The information is as on the date of the document. The information for each of the financial years is based on issues listed during such financial year.
** Sigachi Industries Limited listed as on November 15, 2021

Track record of past issues handled by the Book Running Lead Manager

For details regarding the track record of the BRLM, as specified in Circular reference CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please see
the website www.unistonecapital.com

Mechanism for Redressal of Investor Grievances

The Agreement between the Registrar to the Offer and our Company provides for retention of records with the Registrar to the Offer for a period of at least
three years from the last date of dispatch of the letters of allotment, or demat credit or where refunds are being made electronically, giving of unblocking
instructions to the clearing system, to enable the investors to approach the Registrar to the Offer for redressal of their grievances.
wy

All grievances relating to the Bidding process may be addressed to the Registrar to the Offer with a
copy to the Designated Intermediary to whom Bid cum Application Form was submitted, giving full
details such as name of the sole or first Bidder, address of the applicant, UPI ID (if applicable), Bidder
DP ID, Client ID,UPI ID, PAN, date of submission of Bid cum Application Form, application number,
number of Equity Shares applied for, amount paid on application, Depository Participant and the bank
branch or collection centre where the application was submitted.

Further, the Bidder shall also enclose a copy of the Acknowledgment Slip duly received from the
concerned Designated Intermediary in addition to the information mentioned hereinabove.

The Registrar to the Offer shall obtain the required information from the SCSBs and Sponsor Bank for
addressing any clarifications or grievances of ASBA Bidders. Our Company, the Book Running Lead
Manager and the Registrar to the Offer accept no responsibility for errors, omissions, commission or
any acts of SCSBs including any defaults in complying with its obligations under SEBI ICDR
Regulations. Investors can contact our Company Secretary and Compliance Officer or the Registrar to
the Offer in case of any post- Offer related problems such as non-receipt of letters of Allotment, non-
credit of allotted Equity Shares in the respective beneficiary account, non-receipt of refund intimations
and non-receipt of funds by electronic mode.

In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22, dated February 15, 2018, any
ASBA Bidder whose Bid has not been considered for Allotment, due to failure on the part of any SCSB,
shall have the option to seek redressal of the same by the concerned SCSB within three months of the
date of listing of the Equity Shares. SCSBs are required to resolve these complaints within 15 days,
failing which the concerned SCSB would have to pay interest at the rate of 15% per annum for any
delay beyond this period of 15 days.

Disposal of Investor Grievances by our Company

Our Company has constituted a Stakeholders’ Relationship to review and redress the shareholders and
investor grievances such as transfer of Equity Shares, non-recovery of balance payments, declared
dividends, approve subdivision, consolidation, transfer and issue of duplicate shares. For details, please
refer to the chapter titled “Our Management” beginning on page 179 of this Prospectus.

Our Company estimates that the average time required by our Company or the Registrar to the Offer
for the redressal of routine investor grievances shall be Ten (10) Working Days from the date of receipt
of the complaint. In case of complaints that are not routine or where external agencies are involved,
our Company will seek to redress these complaints as expeditiously as possible.

Our Company has appointed Ms. Jyoti Chawda, as the Company Secretary & Compliance Officer to
redress complaints, if any, of the investors participating in the Offer. Contact details for our Company
Secretary and Compliance Officer are as follows:

Ms. Jyoti Nikunj Chawda

HP Adhesives Limited

11 Unique House, Chakala Cross Road,
Andheri East, Mumbai — 400 099, Maharashtra.
Telephone: 022 - 68196300

Website: www.hpadhesives.com

Email id: cs@hpadhesives.com

Investors can contact the Compliance Officer or the Registrar to the Offer in case of any pre- Offer or
post- Offer related problems such as non-receipt of letters of Allotment, non-credit of allotted Equity

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Shares in the respective beneficiary account, non-receipt of refund intimations and non-receipt of funds
by electronic mode.

Pursuant to the press release no. PR. No. 85/2011 dated June 8, 2011, SEBI has launched a centralized
web-based complaints redress system “SCORES”. This would enable investors to lodge and follow up
their complaints and track the status of redressal of such complaints from anywhere. For more details,
investors are requested to visit the website www.scores.gov.in

The Company has obtained authentication on the SCORES and complied with the SEBI circular no.
CIR/OIAE/1/2013 dated December 18, 2014 in relation to redressal of investor grievances through
SCORES.

As on the date of this Prospectus there are no pending investor complaints. Our Company has not
received any investor complaint in the three years prior to the filing of this Prospectus.

Impersonation

Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of
the Companies Act, 2013 which is reproduced below:

Any person who-

(a) Makes or abets making of an application in a fictitious name to a company for acquiring, or
subscribing for, its securities; or

(b) Makes or abets making of multiple applications to a company in different names or in different
combinations of his name or surname for acquiring or subscribing for its securities; or

(c) Otherwise induces directly or indirectly a company to allot, or register any transfer of,
securities to him, or to any other person in a fictitious name, shall be liable to action under
section 447 of the Companies, Act 2013.

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SECTION VII - OFFER RELATED INFORMATION
TERMS OF THE OFFER

The Equity Shares being offered and Allotted pursuant to this Offer shall be subject to the provisions
of the Companies Act, 2013, SEBI ICDR Regulations, SCRA, SCRR, the MoA, the AoA, SEBI Listing
Regulations, the terms of the Red Herring Prospectus, Red Herring Prospectus, the Abridged
Prospectus, the Bid cum Application Form, the Revision Form, the CAN/Allotment Advice and other
terms and conditions as may be incorporated in the Allotment Advices and other documents/certificates
that may be executed in respect of the Offer. The Equity Shares shall also be subject to laws as
applicable, guidelines, rules, notifications and regulations relating to the issue of capital and listing and
trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchanges,
the RBI, RoC and/or other authorities, as in force on the date of the Offer and tothe extent applicable or
such other conditions as may be prescribed by the SEBI, the Government of India, the Stock Exchanges,
the RoC and/or any other authorities while granting their approval for the Offer.

Ranking of Equity Shares

The Equity Shares being Allotted pursuant to the Offer shall rank pari passu in all respects with the
existing Equity Shares including in respect of the right to receive dividend. The Allottees upon
Allotment of Equity Shares in the Offer, will be entitled to dividend and other corporate benefits, if any,
declared by our Company after the date of the Allotment. For further details, see “Main Provisions of
Articles of Association” beginning on page 361.

Mode of Payment of Dividend

Our Company shall pay dividends, if declared, to the Shareholders in accordance with the provisions
of the Companies Act, 2013 the Memorandum of Association and the Articles of Association and
provisions of the SEBI Listing Regulations and any other guidelines or directions which may be issued
by the Government in this regard. Dividends, if any, declared by our Company after the date of
Allotment (pursuant to the transfer of Equity Shares from the Offer for Sale), will be payable to the
Bidders who have been Allotted Equity Shares in the Offer, for the entire year, in accordance with
applicable laws. For further details, in relation to dividends, see “Dividend Policy” and “Main
Provisions of Articles of Association” beginning on pages 201 and 361respectively.

Face Value, Offer Price and Price Band

The face value of each Equity Share is = 10/- and the Offer Price at the lower end of the Price Band is
= 262/- per Equity Share and at the higher end of the Price Band is = 274/- per Equity Share. The Anchor
Investor Offer Price is = 274/- per Equity Share.

The Offer Price, Price Band and the minimum Bid Lot, will be decided by our Company and the Selling
Shareholder, in consultation with the Book Running Lead Manager, and advertised in all editions of
Financial Express, an English national daily newspaper, all editions of Jansatta, a Hindi national daily
newspaper and Mumbai edition of Navshakti, a Marathi newspaper, Marathi being the regional
language of Maharashtra, where our Registered Office is located, each with wide circulation, at least
two Working Days prior to the Bid/ Offer Opening Date and shall be made available to the Stock
Exchanges for the purpose of uploading the same on their websites. The Price Band, along with the
relevant financial ratios calculated at the Floor Price and at the Cap Price, shall be pre-filled in the Bid
cum Application Forms available on the respective websites of the Stock Exchanges.

At any given point of time, there shall be only one denomination of Equity Shares.

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The Offer

The Offer comprises a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholder.
Expenses for the Offer shall be shared amongst our Company and each of the Selling Shareholder in
the manner specified in “Objects of the Offer — Offer Expenses” on page 94 of this Prospectus.

Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and our Articles of Association, our
Shareholders shall have the following rights:

Right to receive dividends, if declared;

Right to attend general meetings and exercise voting rights, unless prohibited by law;

Right to vote on a poll either in person or by proxy and e-voting, in accordance with the
provisions of the CompaniesAct, 2013;

Right to receive offers for rights shares and be allotted bonus shares, if announced;

Right to receive surplus on liquidation, subject to any statutory and preferential claim being
satisfied;

Right of free transferability of the Equity Shares, subject to applicable laws; and

Such other rights, as may be available to a shareholder of a listed public company under the
Companies Act, 2013 theSEBI Listing Regulations and our Memorandum of Association and
Articles of Association.

For a detailed description of the main provisions of the Articles of Association of our Company relating
to voting rights, dividend, etc., see “Main Provisions of Articles of Association” beginning on page
361.

Allotment only in dematerialised form
Pursuant to Section 29 of the Companies Act, 2013 and the SEBI ICDR Regulations, the Equity Shares
shall be allotted only indematerialised form and trading of the Equity Shares shall also only be in

dematerialised form. In this context, two agreements have been signed amongst our Company, the
respective Depositories and the Registrar to the Offer:

e Tripartite agreement dated July 30, 2021 amongst our Company, NSDL and the Registrar to
the Offer.

e Tripartite agreement dated August 02, 2021 amongst our Company, CDSL and the Registrar to
the Offer.

Market Lot and Trading Lot
Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share.
Allotment in this Offer will be only in electronic form in multiples of 50 Equity Share subject to a
minimum Allotment of 50 Equity Shares.
Joint holders
Where two or more persons are registered as the holders of the Equity Shares, they will be deemed to

hold such Equity Shares as joint holders with benefits of survivorship.

Nomination facility to investors

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In accordance with Section 72 of the Companies Act, 2013, and the rules framed thereunder, the sole
Bidder, or the first Bidderalong with other joint Bidders, may nominate any one person in whom, in the
event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may
be, the Equity Shares Allotted, if any, shall vest. A person, being a nominee, entitled to the Equity
Shares by reason of the death of the original holder(s), shall be entitled to the same advantages to which
he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the
nominee is a minor,the holder(s) may make a nomination to appoint, in the prescribed manner, any
person to become entitled to Equity Share(s) in the event of his or her death during the minority. A
nomination shall stand rescinded upon a sale/transfer/alienation of Equity Share(s) by the person
nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh
nomination can be made only in the prescribed form available on request at our Registered Office or to
the Registrar and Transfer Agent of our Company.

Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act,
2013 shall upon the production of such evidence as may be required by our Board, elect either:

a) to register himself or herself as the holder of the Equity Shares; or
b) to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, the Board may, at any time, give notice requiring any nominee to choose either to be registered
himself or herself or totransfer the Equity Shares, and if the notice is not complied with within a period
of 90 days, the Board may thereafter withhold payment of all dividends, interests, bonuses or other
moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied
with.

Since the Allotment of Equity Shares in the Offer will be made only in dematerialised mode, there is no
need to make a separate nomination with our Company. Nominations registered with respective
Depository Participant of the Bidder would prevail. If the Bidder wants to change the nomination, they
are requested to inform their respective Depository Participant.

Withdrawal of the Offer

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Manager,
reserve the right not to proceed with the Fresh Issue, and each of the Selling Shareholder reserves the
right not to proceed with the Offer for Sale, in whole or in part thereof, to the extent of their respective
portion of the Offered Shares, after the Bid/ Offer Opening Date but before the Allotment. In such an
event, our Company would issue a public notice in the newspapers in which the pre-Offer
advertisements were published, within two days of the Bid/ Offer Closing Date or such other time as may
be prescribed by SEBI, providing reasons for not proceeding with the Offer. The Book Running Lead
Manager, through the Registrar to the Offer, shall notify the SCSBs and the Sponsor Bank (in case of
RIBs using the UPI Mechanism), to unblock the bank accounts of the ASBA Bidders and the Escrow
Collection Bank to release the Bid Amounts to the Anchor Investors, within one Working Day from the
date of receipt of such notification. Our Company shall also inform the same to the Stock Exchanges on
which the Equity Sharesare proposed to be listed.

Notwithstanding the foregoing, this Offer is also subject to obtaining (i) the final listing and trading
approvals of the Stock Exchanges, which our Company shall apply for after Allotment; and (ii) filing
of the Prospectus with the RoC. If our Company or the Selling Shareholder, in consultation with the
Book Running Lead Manager withdraw the Offer after the Bid/ Offer Closing Date and thereafter
determine that they will proceed with public offering of the Equity Shares, our Company shall file a
fresh draft red herring prospectus with SEBI and the Stock Exchanges.

328
 

 

 

 

 

 

Bid/ Offer Programme

IBID/ OFFER OPENS ON [December 15, 2021*

IBID/ OFFER CLOSES ON [December 17, 2021**

+ Our Company may, in consultation with the Selling Shareholder and the Manager, consider

participation by Anchor Investors. The Anchor Investor Bid/ Offer Period will be one Working
Day prior to the Bid/ Offer Opening Date in accordance with the SEBI ICDR Regulations.

es Our Company may, in consultation with the Selling Shareholder and the Manager, consider
closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/ Offer Closing Date
in accordance with the SEBI ICDR Regulations

The Anchor Investor Bid/Offer Period will be one Working Day prior to the Bid/Offer Opening Date
ie, December 14, 2021, in accordance with the SEBI ICDR Regulations.

An indicative timetable in respect of the Offer is set out below:

 

[Event Indicative Date

 

Finalisation of Basis of Allotment with the Designated Stock Exchange On or about Wednesday, December 22, 2021

 

 

linitiation of refunds (if any, for Anchor Investors) / unblocking of funds from | On or about Thursday, December 23, 2021
|ASBA Account

 

|Credit of Equity Shares to demat accounts of Allottees On or about Friday, December 24, 2021

 

 

 

{Commencement of trading of the Equity Shares on the Stock Exchanges On or about Monday, December 27, 2021

 

 

The above timetable is indicative and does not constitute any obligation or liability on our
Company, the Selling Shareholder or the Book Running Lead Manager.

Whilst our Company shall ensure that all steps for the completion of the necessary formalities for
the listing and the commencement of trading of the Equity Shares on the Stock Exchanges are
taken within six Working Days from the Bid/Offer Closing Date or such period as may be
prescribed, with reasonable support and co-operation of each of the Selling Shareholder, as may
be required in respect of its respective portion of the Offered Shares, the timetable may change
due to various factors, any delay in receiving the final listing and trading approval from the Stock
Exchanges. The commencement of trading of the Equity Shares will be entirely at the discretion
of the Stock Exchanges and in accordance with the applicable laws. Each of the Selling
Shareholder, severally and not jointly, confirms that it shall extend such reasonable support and
co-operation in relation to its respective portion of the Offered Shares for completion of the
necessary formalities for listing and commencement of trading of the Equity Shares at the Stock
Exchanges withinsix Working Days from the Bid/ Offer Closing Date or such other period as may
be prescribed by SEBI.

In terms of the UPI Circulars, in relation to the Offer, the Book Running Lead Manager will submit
reports of compliance withT+6 listing timelines and activities, identifying non-adherence to timelines
and processes and an analysis of entities responsiblefor the delay and the reasons associated with it.

In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked
through the UPI Mechanism)exceeding four Working Days from the Bid/Offer Closing Date, the Bidder
shall be compensated at a uniform rate of = 100 perday or 15% of the application amount, whichever is
higher, for the entire duration of delay exceeding four Working Days from the Bid/Offer Closing Date
in terms of the UPI Circulars. For details, please see ‘Offer Procedure’ beginning on page 335 of this
Prospectus.

Submission of Bids (other than Bids from Anchor Investors):

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Bid/ Offer Period (except the Bid/ Offer Closing Date)
Submission and Revision in Bids nly between 10:00 a.m. and 5:00 p.m. Indian Standard Time
“IST”)

 

 

Bid/ Offer Closing Date
Submission and Revision in Bids Only between 10:00 a.m. and 3:00 p.m. IST

 

 

 

 

On the Bid/ Offer Closing Date, the Bids were uploaded until:
(i) 4:00 p.m. IST in case of Bids by QIBs and Non-Institutional Bidders, and

(ii) until 5:00 p.m. IST or such extended time as permitted by the Stock Exchanges, in case of Bids
by RIBs.

On Bid/ Offer Closing Date, extension of time may be granted by Stock Exchanges only for uploading
Bids received by Retail Individual Bidders after taking into account the total number of Bids received
and as reported by the Book Running Lead Manager to the Stock Exchanges.

It is clarified that Bids not uploaded on the electronic bidding system or in respect of which the
full Bid Amount is not blocked by SCSBs or not blocked under the UPI Mechanism in the relevant
ASBA Account, as the case may be, would be rejected.

Due to limitation of time available for uploading the Bids on the Bid/Offer Closing Date, Bidders were
advised to submit their Bids one day prior to the Bid/Offer Closing Date. Any time mentioned in this
Prospectus is IST. Bidders are cautioned that, in the event a large number of Bids are received on the
Bid/Offer Closing Date, some Bids may not get uploaded due to lack of sufficient time. Such Bids that
cannot be uploaded will not be considered for allocation under this Offer. Bids and any revision in Bids
will be accepted only during Working Days.

In case of discrepancy in data entered in the electronic book vis-a-vis data contained in the Bid cum
Application Form for a particular Bidder, the details as per the Bid file received from the Stock
Exchanges shall be taken as the final data for the purpose of Allotment.

None among our Company and the Selling Shareholder or any member of the Syndicate is liable for
any failure in uploading the Bids due to faults in any software/ hardware system or the blocking of Bid
Amount in the ASBA Account on receipt of instructions from the Sponsor Bank on account of any
errors, omissions or non-compliance by various parties involved in, or any other fault, malfunctioning
or breakdown in, or otherwise, in the UPI Mechanism.

Our Company in consultation with the Selling Shareholder and the Book Running Lead Manager,
reserves the right to revise the Price Band during the Bid/ Offer Period. The revision in the Price Band
shall not exceed 20% on either side, i.e., the Floor Price can move up or down to the extent of 20% of
the Floor Price and the Cap Price will be revised accordingly. The Floor Price shall not be less than the
face value of the Equity Shares.

In case of revision in the Price Band, the Bid/ Offer Period shall be extended for at least three additional
Working Days after such revision, subject to the Bid/ Offer Period not exceeding 10 Working Days. In
cases of force majeure, banking strike or similar circumstances, our Company may, for reasons to be
recorded in writing, extend the Bid/ Offer Period for a minimum of three Working Days, subject to the
Bid/ Offer Period not exceeding 10 Working Days. Any revision in Price Band, and the revised Bid/
Offer Period, if applicable, shall be widely disseminated by notification to the Stock Exchanges, by
issuing a press release and also by indicating the change on the websites of the Manager and at the
terminals of the Syndicate Members and by intimation to the Designated Intermediaries.

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Minimum Subscription

If our Company does not receive the minimum subscription in the Offer as specified under Rule 19(2)(b)
of the SCRR or the minimum subscription of 90% of the Fresh Issue on the Bid/Offer Closing Date; or
subscription level falls below aforesaid minimum subscription after the Bid/Offer Closing Date due to
withdrawal of Bids or technical rejections or any other reason; orin case of devolvement of
Underwriting, aforesaid minimum subscription is not received within 60 days from the date of Bid/
Offer Closing Date or if the listing or trading permission is not obtained from the Stock Exchanges for
the Equity Shares in the Offer, our Company shall forthwith refund the entire subscription amount
received in accordance with applicable law including the SEBI circular bearing no.
SEBI/HO/CFD/DIL1/CIR/P/2021/47 dated March 31, 2021. If there is a delay beyond four days after
our Company becomes liable to pay the amount our Company and our Directors, who are officers in
default, shall pay interest at the rate of 15% per annum.

In the event of achieving aforesaid minimum subscription, however, there is under-subscription in
achieving the total Offer size,the Equity Shares will be Allotted in the following order:

(i) such number of Equity Shares will first be Allotted by our Company such that 90% of the
Fresh Issue portion is subscribed;

(ii) upon (i), all the Equity Shares held by the Selling Shareholder and offered for sale in the Offer
for Sale will be Allotted(in proportion to the Offered Shares being offered by each Selling
Shareholder); and

(iii)once Equity Shares have been Allotted as per (i) and (ii) above, such number of Equity Shares
will be Allotted by ourCompany towards the balance 10% of the Fresh Issue portion;

No liability to make any payment of interest or expenses shall accrue to any Selling Shareholder unless
the delay in making anyof the payments/refund hereunder or the delay in obtaining listing or trading
approvals or any other approvals in relation to the Offer is caused solely by, and is directly attributable
to, an act or omission of such Selling Shareholder, to the extent of its portionof the Offered Shares or in
the manner as may be mutually agreed upon between the Selling Shareholder. Further, in terms of
Regulation 49(1) of the SEBI ICDR Regulations, our Company shall ensure that the number of Bidders
to whom the Equity Shares will be Allotted will be not less than 1,000.

Arrangements for disposal of odd lots

Since our Equity Shares will be traded in dematerialised form only and the market lot for our Equity
Shares will be one Equity Share, no arrangements for disposal of odd lots are required.

Restrictions, if any on transfer and transmission of Equity Shares

Except for the lock-in of the pre-Offer Equity Share Capital of our Company, lock-in of the Promoters’
contribution and the Anchor Investor lock-in as provided in “Capital Structure” beginning on page 82
and except as provided under the Articles of Association, there are no restrictions on transfer of the
Equity Shares. Further, there are no restrictions on transmission of the Equity Shares of our Company
and on their consolidation or splitting, except as provided in the Articles of Association. For details, see
“Main Provisions of Articles of Association” beginning on page 361.

New Financial Instruments

Our Company is not issuing any new financial instruments through this Offer.

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OFFER STRUCTURE

oP

Initial Public Offer of up to 45,97,200 Equity Shares for cash at a price of = 274/- per Equity Share
(including a premium of % 264/- per Equity Share) aggregating to = 12,596.33 Lakhs comprising of a
Fresh Issue of up to 41,40,000 Equity Shares aggregating up to = 11,343.60 Lakhs by our Company
and an Offer for Sale of up to 4,57,200 Equity Shares aggregating up to = 1,252.73 Lakhs by the Selling
Shareholder. The Offer shall constitute 25.02% of the post-Offer paid-up Equity Share capital of our
Company. The Offer is being made through the Book Building Process.

 

Particulars of the
Offer

Qualified Institutional Non-
Buyers? Institutional
Bidders

Retail Individual
Bidders

 

Number of Equity
Shares available for
allocation/
allotment*®

Not more than 34,47,900 Equity
Shares

Up to 6,89,580
Equity Shares

Up to 4,59,720
Equity Shares

 

Percentage of Offer
Size available for
allocation/
allotment

Not less than 75% of the Offer
was available for allocation to
QIB Bidders. However, up to 5%
of the Net QIB Portion was
available for allocation
proportionately to Mutual Funds
only. Mutual Funds participating
in the Mutual Fund Portion will
also be eligible for allocation in
the remaining QIB Portion. The
unsubscribed portion in the
Mutual Fund Portion will be
added to the Net QIB Portion

Not more than
15% of the Net
Offer was
available for
allocation

Not more than
10% of the Net
Offer was
available for
allocation

 

Basis of Allotment/
Allocation if
respective category
is oversubscribed*

Proportionate as follows
(excluding the Anchor Investor
Portion):

(a) Upto 1,72,395 Equity Shares
was available for allocation on a
proportionate basis to Mutual
Funds only; and

(b) 12,06,765 Equity Shares was
available for allocation on a
proportionate basis to all QIBs,
including Mutual Funds
receiving allocation as per (a)
above.

Up to 20,68,700 Equity Shares
was allocated on a discretionary
basis to Anchor Investors of
which one-third was available
for allocation to Mutual Funds
only

Proportionate

Proportionate
subject to
minimum lot as
explained in the
chapter titled
“Offer
Procedure”
beginning on page
335 of _ this
Prospectus.

 

Mode of Bid

ASBA only (except for Anchor In

vestors)®

 

Minimum Bid

 

 

Such number of Equity Shares
in multiples of 50 Equity Shares
such that the Bid Amount
exceeds % 2.00 Lakhs

Such number of
Equity Shares in
multiples of 50
Equity Shares
such that the Bid

 

 

50 Equity Shares

 

332

 
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Particulars of the Qualified! institucional Non Retail Individual
Buyers' Institutional 5
Offer s Bidders
Bidders
Amount exceeds
% 2.00 Lakhs

 

Maximum Bid

Such number of Equity Shares
in multiples of 50 Equity Shares
not exceeding the size of the
Offer, subject to limits as
applicable to each Bidder

 

Such number of
Equity Shares in
multiples of 50
Equity Shares not
exceeding the
size of the Offer
(excluding the
QIB Portion),
subject to limits
applicable to
Bidder

 

Such number of
Equity Shares in
multiples of 50
Equity Shares
such that the bid
amount does not
exceed 2 2.00
Lakhs.

 

Mode of Allotment

Compulsorily in dematerialized form.

 

 

 

 

Bid Lot 50 Equity Shares and in multiples of 50 Equity Shares thereafter

Allotment Lot A minimum of 50 Equity Shares and in multiples of one Equity Shares
thereafter

Trading Lot One Equity Share

Who can apply“ Public financial institutions as | Resident Indian | Resident Indian

specified in Section 2(72) of the
Companies Act 2013, scheduled
commercial banks, multilateral
and bilateral © development
financial institutions, mutual
funds registered with SEBI,
FPIs other than individuals,
corporate bodies and family
offices, VCFs, AIFs, FVCIs,
state industrial development
corporation, insurance company
registered with IRDAI,
provident fund with minimum
corpus of = 250 million, pension
fund with minimum corpus of =
250 million, National
Investment Fund set up by the
Government, insurance funds
set up and managed by army,
navy or air force of the Union of
India, insurance funds set up and
managed by the Department of
Posts, India and Systemically
Important NBFCs

 

Individuals,
Eligible NRIs,
HUFs (in the
name of Karta),
companies,
corporate bodies,
scientific
institutions,
societies, family
offices and trusts
for Equity Shares
such that the Bid
Amount exceeds
% 2.00 Lakhs in
value.

 

individuals,

HUFs (in the
name of Karta)
and Eligible NRIs
applying for
Equity Shares
such that the Bid
Amount does not
exceed 2% 2.00
Lakhs in value.

 

 

Terms of Payment

 

In case of Anchor Investors: Full Bid amount shall be payable by the
Anchor Investors at the time of submission of their Bids.

 

 

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Particular: of the Semen onriadaaes in to nay | Retail Individual
Offer meee ae Bidders

 

 

 

In case of all other Bidders: Full Bid amount shall be blocked by the
SCSBs in the bank account of the ASBA Bidder, or by the Sponsor Bank
through the UPI Mechanism, that is specified in the ASBA Form at the
time of submission of the ASBA Form

 

 

 

 

*Assuming full subscription in the Offer

(1) Our Company and the Selling Shareholder, in consultation with the Book Running Lead Manager, allocated
up to 60% of the QIB Category to Anchor Investors at the Anchor Investor Offer Price, on a discretionary basis,
subject to there being (i) a maximum of two Anchor Investors, where allocation in the Anchor Investor Portion is
up to = 10 Crore, (ii) minimum of two and maximum of 15 Anchor Investors, where the allocation under the
Anchor Investor Portion is more than # 10 Crore but up to # 250 Crore under the Anchor Investor Portion,
subject to a minimum Allotment of 5 Crore per Anchor Investor, and (iii) in case of allocation above = 250
Crore under the Anchor Investor Portion, a minimum of five such investors and a maximum of 15 Anchor Investors
for allocation up to # 250 Crore, and an additional 10 Anchor Investors for every additional 250 Crore or
part thereof will be permitted, subject to minimum allotment of # 5 Crore per Anchor Investor. An Anchor Investor
will make a minimum Bid of such number of Equity Shares, that the Bid Amount is at least = 100 million. One-
third of the Anchor Investor Portion will be reserved for domestic Mutual Funds, subject to valid Bids being
received at or above the price at which allocation is made to Anchor Investors.

(2) Subject to valid Bids being received at or above the Offer Price. This is an Offer in terms of Rule 19(2)(b) of
the SCRR and Regulation 6(2) of the SEBI ICDR Regulations.

(3) Anchor Investors were not permitted to use the ASBA process.

(4) In case of joint Bids, the Bid cum Application Form should contain only the name of the first Bidder whose
name should also appear as the first holder of the beneficiary account held in joint names. The signature of only
such first Bidder would be required in the Bid cum Application Form and such first Bidder would be deemed to
have signed on behalf of the joint holders. Our Company reserves the right to reject, in its absolute discretion, all
or any multiple Bids, except as otherwise permitted, in any or all categories. Further, a Bidder Bidding in the
Shareholders Reservation Portion (subject to the Bid Amount being up to 200,000) may also Bid in the Retail
Portion under the Net Offer and such Bids shall not be treated as multiple Bids;

(5) Full Bid Amount shall be payable by the Anchor Investors at the time of submission of the Anchor Investor
Application Forms provided that any difference between the Anchor Investor Allocation Price and the Anchor
Investor Offer Price shall be payable by the Anchor Investor Pay-In Date as indicated in the CAN.

Bidders will be required to confirm and will be deemed to have represented to our Company, the Selling
Shareholder, the Underwriters, their respective directors, officers, agents, affiliates and representatives
that they are eligible under applicable law, rules, regulations, guidelines and approvals to acquire the
Equity Shares.

Subject to valid Bids being received at or above the Offer Price, undersubscription, if any, in any
category except the QIB Portion, would be met with spill-over from the other categories or a
combination of categories at the discretion of our Company, in consultation with the Book Running
Lead Manager and the Designated Stock Exchange. For further details, please see the chapter titled
“Terms of the Offer” beginning on page 326 of this Prospectus.

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OFFER PROCEDURE

All Bidders should read the General Information Document which highlights the key rules, processes
and procedures applicableto public issues in general in accordance with the provisions of the
Companies Act, 2013 the SCRA, the SCRR and the SEBI ICDR Regulations which is part of the
abridged prospectus accompanying the Bid cum Application Form. The General Information
Document is available on the websites of the Stock Exchanges and the Book Running Lead Manager.
Please referto the relevant provisions of the General Information Document which are applicable to
the Offer especially in relation to the process for Bids by RIBs through the UPI Mechanism.

Additionally, all Bidders may refer to the General Information Document for information in relation
to (i) category of investorseligible to participate in the Offer; (ii) maximum and minimum Bid size;
(iii) price discovery and allocation; (iv) payment instructions for ASBA Bidders; (v) issuance of
Confirmation of Allocation Note (“CAN”) and Allotment in the Offer; (vi) general instructions
(limited to instructions for completing the Bid cum Application Form); (vii) designated date; (viii)
disposal of applications; (ix) submission of Bid cum Application Form; (x) other instructions (limited
to joint bids in cases of individual, multiple bids and instances when an application would be rejected
on technical grounds); (xi) applicable provisions of Companies Act, 2013 relating to punishment for
fictitious applications; (xii) mode of making refunds; and (xiii) interest in caseof delay in Allotment
or refund.

SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018 read with
its circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, has introduced an alternate
payment mechanism using Unified Payments Interface (“UPI”) and consequent reduction in
timelines for listing in a phased manner. From January 1, 2019, the UPI Mechanism for RIBs
applying through Designated Intermediaries was made effective along with the existing process and
existing timeline of T+6 days. (“UPI Phase I”). The UPI Phase I was effective till June 30, 2019.

With effect from July 1, 2019, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated
June 28, 2019, read with circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July
26, 2019 with respect to Bids by RIBs through Designated Intermediaries (other than SCSBs), the
existing process of physical movement of forms from such Designated Intermediaries to SCSBs for
blocking of funds has been discontinued and only the UPI Mechanism for such Bids with existing
timeline of T+6 days was mandated for a period of three months or launch of five main board public
issues, whichever is later (“UPI Phase II”). Subsequently, however, SEBI vide its circular no.
SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 202 extended the timeline for implementation
of UPI Phase II till further notice. However, given the prevailing uncertainty due to the COVID-19
pandemic, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020, has
decided tocontinue with the UPI Phase II till further notice. The final reduced timeline of T+3 days
be made effective using the UPI Mechanism for applications by RIBs (“UPI Phase III”), as may be
prescribed by SEBI. The Offer will be undertaken pursuant to the processes and procedures under
UPI Phase II, subject to any circulars, clarification or notification issued by the SEBI from time to
time. Further, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March
16, 2021 read with circular no. SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 2, 2021, has
introduced certain additional measures for streamlining the process of initial public offers and
redressing investor grievances. This Circular has come into force for initial public offers opening on
or after May 1, 2021 and the provisions of this circular are deemed to form part of this Prospectus

In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked
through the UPI Mechanism) exceeding four Working Days from the Bid/Offer Closing Date, the
Bidder shall be compensated at a uniform rate of =100 per day for the entire duration of delay

335
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exceeding four Working Days from the Bid/Offer Closing Date by the intermediary responsible for
causing such delay in unblocking. The BRLMs shall, in their sole discretion, identify and fix the
liability on such intermediary or entity responsible for such delay in unblocking.

Our Company, the Selling Shareholder and the Book Running Lead Manager do not accept any
responsibility for the completeness and accuracy of the information stated in this section and are not
liable for any amendment, modification or change in the applicable law which may occur after the
date of the Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus. Bidders
were advised to make their independent investigations and ensure that their Bids are submitted in
accordance with applicable laws and did not exceed the investment limits or maximum number of the
Equity Shares that can be held by them under applicable law or as specified the Draft Red Herring
Prospectus, the Red Herring Prospectus and the Prospectus.

Further, our Company, the Selling Shareholder and the Book Running Lead Manager are not liable
for any adverse occurrences consequent to the implementation of the UPI Mechanism for application
in this Offer.

Book Building Procedure

The Offer has been made in terms of Rule 19(2)(b) of the SCRR, through the Book Building Process
in accordance with Regulation 6(2) of the SEBI ICDR Regulations, wherein not less than 75% of the
Net Offer shall be allocated on a proportionate basis to QIBs, provided that our Company and the
Selling Shareholder may, in consultation with the Book Running Lead Manager, allocate up to 60%
of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR.
Regulations, of which one-third shall be reserved for domestic Mutual Funds, subject to valid Bids
being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price.
Further, 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for
allocation on a proportionate basis only to Mutual Funds, and the remainder of the QIB Portion shall
be made available for allocation on a proportionate basis to all QIBs (other than Anchor Investors),
including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not
more than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-
Institutional Bidders and not more than 10% of the Net Offer shall available for allocation to Retail
Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being
received at or above the Offer Price.

Subject to valid Bids being received at or above the Offer Price, under-subscription, if any, in any
category except in the QIB Portion, would be allowed to be met with spill-over from any other
category or combination of categories, at the discretion of our Company and the Selling Shareholder,
in consultation with the Book Running Lead Manager, and the Designated Stock Exchange and
subject to applicable laws.

The Equity Shares, on Allotment, shall be traded only in the dematerialised segment of the Stock
Exchanges.

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Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in
dematerialised form. The Bid cum Application Forms which do not have the details of the
Bidders’ depository account, including DP ID, Client ID, PAN and UPI ID (in case of RIBs using
the UPI mechanism). Eligible Employees Bidding in the Employee Reservation Portion Bidding
using the UPI Mechanism, shall be treated as incomplete and will be rejected. Bidders will not
have the option of being Allotted Equity Shares in physical form. However, they may get the
Equity Shares rematerialised subsequent to Allotment of the Equity Shares in the Offer, subject
to applicable laws.

Phased implementation of Unified Payments Interface

SEBI has issued the UPI Circulars in relation to streamlining the process of public issue of inter alia,
equity shares. Pursuant tothe UPI Circulars, the UPI Mechanism has been introduced in a phased
manner as a payment mechanism (in addition to mechanism of blocking funds in the account
maintained with SCSBs under ASBA) for applications by RIBs through DesignatedIntermediaries
with the objective to reduce the time duration from public issue closure to listing from six Working
Days to up tothree Working Days. Considering the time required for making necessary changes to
the systems and to ensure complete and smooth transition to the UPI payment mechanism, the UPI
Circulars have introduced the UPI Mechanism in three phases in thefollowing manner:

Phase I: This phase was applicable from January 1, 2019 until March 31, 2019 or floating of five
main board public issues, whichever was later. Subsequently, the timeline for implementation of
Phase I was extended till June 30, 2019. Under this phase,an RIB had the option to submit the ASBA
Form with any of the Designated Intermediary and use his/ her UPI ID for the purposeof blocking of
funds. The time duration from public issue closure to listing continued to be six Working Days.

Phase II: This phase has become applicable from July 1, 2019. SEBI vide its circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019 had extended the timeline for
implementation of UPI Phase II till March 31, 2020. Further, SEBI vide its circular no.
SEBI/HO/CFD/DIL2/CIR/P/2020 dated March 30, 2020 decided to continue Phase II of UPI with
ASBA until further notice. Under this phase, submission of the ASBA Form by RIBs through
Designated Intermediaries (other than SCSBs)to SCSBs for blocking of funds has been discontinued
and is replaced by the UPI Mechanism. However, the time duration frompublic issue closure to listing
would continue to be six Working Days during this phase.

Phase III: The commencement period of Phase III is yet to be notified. In this phase, the time duration
from public issue closureto listing is proposed to be reduced to three Working Days.

The Offer will be made under UPI Phase II of the UPI Circular, unless UPI Phase III of the UPI
Circular becomes effective and applicable on or prior to the Bid/Offer Opening Date. If the Offer is
made under UPI Phase III of the UPI Circular, the same will be advertised in all editions of Financial
Express, Jansatta and Mumbai editions of Navshakti (which are widely circulated English daily,
Hindi daily and Marathi daily newspapers, respectively, Marathi also being the regional language of
Maharashtra, where our registered office is located) on or prior to the Bid/ Offer Opening Date and
such advertisement shall also be made available to the Stock Exchanges for the purpose of uploading
on their websites.

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All SCSBs offering the facility of making applications in public issues shall also provide the facility
to make application using UPI. The Company will be required to appoint one of the SCSBs as a
Sponsor Bank to act as a conduit between the Stock Exchanges and NPCI in order to facilitate
collection of requests and/ or payment instructions of the RIBs using the UPI.

For further details, refer to the General Information Document available on the websites of the Stock
Exchanges and the Book Running Lead Manager.

Bid cum Application Form

Copies of the Bid cum Application Form / ASBA Form and the abridged prospectus were made
available with the Designated Intermediaries at the Bidding Centres, and at our Registered Office.
An electronic copy of the ASBA Form will also be made available for downloadon the websites of
NSE (www.nseindia.com) and BSE (www.bseindia.com) at least one day prior to the Bid/Offer
Opening Date.

Copies of the Anchor Investor Application Form will be available with the Book Running Lead
Manager.

All Bidders (other than Anchor Investors) shall be mandatorily required to participate in the Offer
only through the ASBA process. All ASBA Bidders must provide either, (i) bank account details and
authorisation to block funds in the ASBA Form; or (ii) the UPI ID (in case of RIBs), as applicable,
in the relevant space provided in the ASBA Form and the ASBA Forms that do not contain such
details will be rejected. Applications made by the RIBs using third party bank account or using third
party linked bank account UPI ID are liable for rejection.

RIBs bidding using the UPI Mechanism must provide the valid UPI ID in the relevant space provided
in the Bid cum ApplicationForm and the Bid cum Application Form that does not contain the UPI ID
are liable to be rejected.

Investors must ensure that their PAN is linked with Aadhar and are in compliance with CBDT
notification dated February 13, 2020 and press release dated June 25, 2021.

ASBA Bidders shall ensure that the Bids are made on ASBA Forms bearing the stamp of the
Designated Intermediary, submitted at the Bidding Centres only (except in case of electronic ASBA.
Forms) and the ASBA Forms not bearing such specified stamp will be liable to be rejected. RIBs
using UPI Mechanism, shall submit their ASBA Forms with the Syndicate, Sub-Syndicate members,
Registered Brokers, RTAs or CDPs. RIBs authorising an SCSB to block the Bid Amount in the
ASBA Account shall submit their ASBA Forms with the SCSBs. ASBA Bidders are also required
to ensurethat the ASBA Account has sufficient credit balance as an amount equivalent to the full Bid
Amount which can be blocked by the SCSB or by Sponsor Bank under the UPI Mechanism, as
applicable at the time of submitting the Bid.

Anchor Investors are not permitted to participate in the Offer through the ASBA process.
The prescribed colour of the Bid cum Application Form for the various categories is as follows:

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Category Colour of Bid
cumApplication

Form*

Resident Indians, including resident QIBs, Non-Institutional Bidders, Retail Individual White

Bidders and Eligible NRIsapplying on a non-repatriation basis

Non-residents including Eligible NRIs, FVCIs, FPIs and registered bilateral and Blue

multilateral institutions applyingon a repatriation basis

Anchor Investors White

 

» Excluding electronic Bid cum Application Forms Notes:

a) Electronic Bid cum Application forms and the abridged prospectus shall be made available for
download on the website of NSE (www.nseindia.com) and BSE (www.bseindia.com)

(2) Bid cum Application Forms for Anchor Investors shall be made available at the offices of the Book
Running Lead Manager

In case of ASBA Forms, Designated Intermediaries shall be required to upload the relevant bid
details in the electronic bidding system of the Stock Exchanges.

Subsequently, for ASBA Forms (other than RIBs using UPI Mechanism), Designated Intermediaries
(other than SCSBs) shall be required to submit / deliver the ASBA Forms to the respective SCSB
where the Bidder has an ASBA bank account and shall not submit it to any non-SCSB bank or any
Escrow Collection Bank. Stock Exchanges shall validate the electronic bids with the records of the
CDP for DP ID/Client ID and PAN, on a real time basis and bring inconsistencies to the notice of
the relevant Designated Intermediaries, for rectification and re-submission within the time specified
by Stock Exchanges. Stock Exchanges shall allow modification of either DP ID/Client ID or PAN
ID, bank code and location code in the Bid details already uploaded.

For RIBs using UPI Mechanism, the Stock Exchanges shall share the Bid details (including UPI ID)
with the Sponsor Bank on a continuous basis through API integration to enable the Sponsor Bank to
initiate UPI Mandate Request to RIBs for blocking of funds. The Sponsor Bank shall initiate request
for blocking of funds through NPCI to RIBs, who shall accept the UPI Mandate Request for blocking
of funds on their respective mobile applications associated with UPI ID linked bank account. The
NPCI shall maintain an audit trail for every Bid entered in the Stock Exchanges bidding platform,
and the liability to compensate RIBs (Bidding through UPI Mechanism) in case of failed transactions
shall be with the concerned entity (i.e. the Sponsor Bank, NPCIor the issuer bank) at whose end the
lifecycle of the transaction had come to a halt. The NPCI shall share the audit trail of all disputed
transactions/ investor complaints to the Sponsor Banks and the issuer bank. The Sponsor Banks and
the Bankers to the Offer shall be required provide the audit trail to the Book Running Lead Manager
for analysing the same and fixing liability.

The processing fees for applications made by Retail Individual Bidders using the UPI Mechanism
may be released to the remitter banks (SCSBs) only after such banks provide a written confirmation
on compliance with SEBI Circular No: SEBI/HO/CFD/DIL2/P/CIR/2021/570 dated June 02, 2021
read with SEBI Circular No: SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021.

Electronic registration of Bids

(a) The Designated Intermediary may register the Bids using the on-line facilities of the Stock
Exchanges. The Designated Intermediaries can also set up facilities for off-line electronic
registration of Bids, subject to the condition that they may subsequently upload the off-line data

339
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file into the on-line facilities for Book Building on a regular basis before the closure of the Offer.

(b) On the Bid/ Offer Closing Date, the Designated Intermediaries may upload the Bids till such time
as may be permitted by the Stock Exchanges and as disclosed in the Red Herring Prospectus.

(c) Only Bids that are uploaded on the Stock Exchanges Platform are considered for
allocation/Allotment. The Designated Intermediaries are given till 1:00 pm on the next Working
Day following the Bid/ Offer Closing Date to modify select fields uploaded in the Stock Exchange
Platform during the Bid/ Offer Period after which the Stock Exchange(s) send the bid information
to the Registrar to the Offer for further processing.

Participation by Promoters and members of the Promoter Group of our Company, the Book
Running Lead Manager and the Syndicate Member

The Book Running Lead Manager and the Syndicate Member shall not be allowed to purchase Equity
Shares in this Offer in any manner, except towards fulfilling their underwriting obligations. However,
the associates and affiliates of the Book Running Lead Manager and the Syndicate Member may Bid
for Equity Shares in the Offer, either in the QIB Portion or in the Non- Institutional Portion as may
be applicable to such Bidders, where the allocation is on a proportionate basis and such subscription
may be on their own account or on behalf of their clients. All categories of investors, including
associates or affiliates of the Book Running Lead Manager and Syndicate Member, shall required to
be treated equally for the purpose of allocation to be made on a proportionate basis.

Except as stated below, neither the Book Running Lead Manager nor any associates of the Book
Running Lead Manager can apply in the Offer under the Anchor Investor Portion:

@ mutual funds sponsored by entities which are associate of the Book Running Lead Manager;

(ii) insurance companies promoted by entities which are associate of the Book Running Lead
Manager;

(iii) ATFs sponsored by the entities which are associate of the Book Running Lead Manager; or

(iv)  FPIs (other than individuals, corporate bodies and family offices) sponsored by the entities
which are associate of theBook Running Lead Manager.

Further, the Promoters and members of their respective Promoter Groups shall not participate by
applying for Equity Shares in the Offer. Further, persons related to the Promoters and their respective
Promoter Group shall not apply in the Offer under the Anchor Investor Portion. For the purposes of
the above, a QIB who has the following rights was deemed to be a person related to our Promoters
or Promoter Group:

(i) _ rights under a shareholders’ agreement or voting agreement entered into with our Promoters
or Promoter Group;

(ii) veto rights; or

(iii) right to appoint any nominee director on the Board.

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Further, an Anchor Investor was deemed to be an associate of the Book Running Lead Manager, if:
(a) either of them controls,directly or indirectly through its subsidiary or holding company, not less
than 15% of the voting rights in the other; or (b) eitherof them, directly or indirectly, by itself or in
combination with other persons, exercises control over the other; or (c) there is a common director,
excluding a nominee director, amongst the Anchor Investor and the Book Running Lead Manager.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be
lodged along with the Bid cum Application Form. Failing this, our Company and the Selling
Shareholder, in consultation with the Book Running Lead Manager, reserve the right to reject any
Bid without assigning any reason thereof.

Bids made by asset management companies or custodians of Mutual Funds shall specifically state
names of the concerned schemes for which such Bids are made.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund
registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not
be treated as multiple Bids provided that the Bids clearly indicated the scheme concerned for which
the Bid has been made.

No Mutual Fund scheme could invest more than 10% of its net asset value in equity shares or equity
related instruments of any single company provided that the limit of 10% was not applicable for
investments in case of index funds or sector or industry specific schemes. No Mutual Fund under all
its schemes should own more than 10% of any company’s paid-up share capital carrying voting
rights.

Bids by Eligible NRIs

Eligible NRIs can obtain copies of Bid cum Application Form from the Designated Intermediaries.
Only Bids accompanied by payment in Indian Rupees or freely convertible foreign exchange shall
be considered for Allotment. Eligible NRI Bidders bidding on a repatriation basis by using the Non-
Resident Forms should authorise their respective SCSB or confirm or accept the UPI Mandate
Request (in case of RIBs Bidding through the UPI Mechanism) to block their Non-Resident External
(“NRE” accounts, or Foreign Currency Non-Resident (“FCNR”) Accounts, and eligible NRI Bidders
bidding on a non-repatriation basis by using Resident Forms should authorise their respective SCSB
or confirm or accept the UPI Mandate Request (in case of RIBsBidding through the UPI Mechanism)
to block their Non-Resident Ordinary (“NRO”) accounts for the full Bid Amount, at the time of the
submission of the Bid cum Application Form. Participation of Eligible NRIs in the Offer shall be
subject to the FEMA Regulations.

Eligible NRIs will be permitted to apply in the Offer through Channel I or Channel II (as specified
in the SEBI UPI Circulars). Further, subject to applicable law, Eligible NRIs may use Channel IV
(as specified in the SEBI UPI Circulars) to apply in the Offer, provided the UPI facility is enabled
for their NRE/NRO accounts.

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Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form
for residents (white in colour). Eligible NRIs Bidding on a repatriation basis are advised to use the
Bid cum Application Form meant for Non- Residents (blue in colour).

For details of investment by NRIs, see “Restrictions on Foreign Ownership of Indian Securities” on
page 359.

Bids by HUFs

Bids by Hindu Undivided Families or HUFs, will be required to be made in the individual name of
the Karta. The Bidder shall specify that the Bid is being made in the name of the HUF in the Bid
cum Application Form/Application Form as follows: “Name of sole or first Bidder: XYZ Hindu
Undivided Family applying through XYZ, where XYZ is the name of the Karta”. Bids by HUFs shall
be considered at par with Bids from individuals.

Bids by FPIs

In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI including its investor
group (which means the same multiple entities having common ownership directly or indirectly of
more than 50% or common control) must be below 10% of our post-Offer Equity Share capital.
Further, in terms of the FEMA Regulations, the total holding by each FPI, of an investor group, shall
be below 10% of the total paid-up Equity Share capital of our Company on a fully diluted basis and
the total holdings of all FPIs could be up to 100%, being the sectoral cap, of the paid-up Equity Share
capital of our Company on afully diluted basis.

In case of Bids made by FPIs, a certified copy of the certificate of registration issued under the SEBI
FPI Regulations was required to be attached to the Bid cum Application Form, failing which our
Company reserves the right to reject any Bid withoutassigning any reason. FPIs who wish to
participate in the Offer were advised to use the Bid cum Application Form for Non- Residents (Blue
in colour).

In terms of the FEMA Regulations, for calculating the aggregate holding of FPIs in a company,
holding of all registered FPIs shall be included.

With effect from April 1, 2020, the aggregate limits for FPI investments are the sectoral caps
applicable to our Company (i.e. upto 100% under the automatic route).

The FEMA (Non-Debt Instruments) Rules, 2019 were enacted on October 17, 2019, in supersession
of the Foreign Exchange Management(Transfer or Issue of Security by a Person Resident Outside
India) Regulations, 2017, except as respects things done or omitted to be done before such
supersession. FPIs are permitted to participate in the Offer subject to compliance with conditions and
restrictions which may be specified by the Government from time to time.

To ensure compliance with the above requirement, SEBI, pursuant to its circular dated July 13, 2018,
has directed that at the time of finalisation of the Basis of Allotment, the Registrar shall (i) use the
PAN issued by the Income Tax Department of Indiafor checking compliance for a single FPI; and (ii)

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obtain validation from Depositories for the FPIs who have invested in the Offerto ensure there is no
breach of the investment limit, within the timelines for issue procedure, as prescribed by SEBI from
time totime.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals
in terms of the SEBI FPI Regulations, an FPI, may issue, subscribe to or otherwise deal in offshore
derivative instruments (as defined under the SEBI FPIRegulations as any instrument, by whatever
name called, which is issued overseas by a FPI against securities held by it in India,as its underlying)
directly or indirectly, only in the event (i) such offshore derivative instruments are issued only by
persons registered as Category I FPIs; (ii) such offshore derivative instruments are issued only to
persons eligible for registration as Category I FPIs; (iii) such offshore derivative instruments are
issued after compliance with ‘know your client’ norms; and (iv) such other conditions as may be
specified by SEBI from time to time.

In case the total holding of an FPI increases beyond 10% of the total paid-up Equity Share capital,
ona fully diluted basis or 10% or more of the paid-up value of any series of debentures or preference
shares or share warrants issued that may be issued by our Company, the total investment made by the
FPI will be re-classified as FDI subject to the conditions as specified by SEBIand RBI in this regard
and our Company and the investor will be required to comply with applicable reporting requirements.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals
in terms of the SEBI FPI Regulations, an FPI is permitted to issue, subscribe to, or otherwise deal in
offshore derivative instruments, directly or indirectly, only if it complies with the following
conditions:

a) such offshore derivative instruments are issued only by persons registered as Category I FPIs;

b) such offshore derivative instruments are issued only to persons eligible for registration as
Category I FPIs;

c) such offshore derivative instruments are issued after compliance with the ‘know your
client’ norms as specified bySEBI; and

d) — such other conditions as may be specified by SEBI from time to time.

An FPI is required to ensure that the transfer of an offshore derivative instruments issued by or on
behalf of it, is subject to

(a) the transfer being made to persons which fulfil the criteria provided under the SEBI FPI
Regulations (as mentioned above from points (a) to (d)); and (b) prior consent of the FPI is obtained
for such transfer, except in cases, where the persons to whomthe offshore derivative instruments are to
be transferred, are pre-approved by the FPI.

Bids by following FPIs, submitted with the same PAN but with different beneficiary account
numbers, Client IDs and DP IDs will not be treated as multiple Bids:

. FPIs which utilise the multi investment manager (“MIM”) structure;

. Offshore derivative instruments which have obtained separate FPI registration for ODI and
proprietary derivativeinvestments;

. Sub funds or separate class of investors with segregated portfolio who obtain separate FPI
registration;

. FPI registrations granted at investment strategy level/sub fund level where a collective

investment scheme or fund has multiple investment strategies/sub-funds with identifiable
differences and managed by a single investment manager;
. Multiple branches in different jurisdictions of foreign bank registered as FPIs;

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. Government and Government related investors registered as Category 1 FPIs; and
. Entities registered as collective investment scheme having multiple share classes.

The Bids belonging to any of the above mentioned seven structures and having same PAN will be
collated and identified as a single Bid in the Bidding process. The Equity Shares allotted in the Bid
shall be proportionately distributed to the applicant FPIs (with same PAN). In order to ensure valid
Bids, FPIs making multiple Bids using the same PAN, and with different beneficiary account
numbers, Client IDs and DP IDs, will be required to provide a confirmation along with each of their
Bid cum Application Forms that the relevant FPIs making multiple Bids utilize any of the above-
mentioned structures and indicate the name of their respective investment managers in such
confirmation. In the absence of such confirmation from the relevant FPIs, such multiple Bids will be
liable to be rejected.

The FPIs who wish to participate in the Offer are advised to use the Bid cum Application Form for
non-residents.

Bids by SEBI registered VCFs, AIFs and FVCIs

The SEBI VCF Regulations as amended, inter alia prescribe the investment restrictions on VCFs,
registered with SEBI. The SEBI AIF Regulations prescribe, amongst others, the investment
restrictions on AIFs. The SEBI FVCI Regulations prescribe theinvestment restrictions on FVCIs.

Accordingly, the holding in any company by any individual VCF or FVCIs (under Schedule I of the
FEMA Rules) registered with SEBI in one venture capital undertaking should not exceed 25% of the
corpus of the VCF orFVCI. Further, VCFs and FVCIs can invest only up to 33.33% of the investible
funds by way of subscription to an initial publicoffering.

Category I and II AIFs cannot invest more than 25% of their respective corpus in one investee
company. A category III AIF cannot invest more than 10% of its corpus in one investee company. A
VCF registered as a category I AIF, as defined in the SEBI AIF Regulations, cannot invest more than
one-third of its investible funds by way of subscription to an initial public offering of a venture capital
undertaking. Additionally, the VCFs which have not re-registered as an AIF under the SEBI AIF
Regulations shall continue to be regulated by the SEBI VCF Regulations until the existing fund or
scheme managed by the fundis wound up.

Further, the shareholding of VCFs, category I AIFs or category II AIFs and FVCIs holding equity
shares of a company prior toan initial public offering being undertaken by such company, shall be
exempt from lock-in requirements, Provided that such equity shares shall be locked in for a period of
at least one year from the date of purchase by the venture capital fund or alternativeinvestment fund
or foreign venture capital investor.

There is no reservation for Eligible NRI Bidders, AIFs, FPIs and FVCIs. All Bidders were
treated on the same basis with other categories for the purpose of allocation.

All non-resident investors should note that refunds (in case of Anchor Investors), dividends and
other distributions, if any, will be payable in Indian Rupees only and net of bank charges and
commission.

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Our Company, the Selling Shareholder or the Book Running Lead Manager will not be responsible
for loss, if any, incurred by the Bidder on account of conversion of foreign currency.

Bids by limited liability partnerships

In case of Bids made by limited liability partnerships registered under the Limited Liability
Partnership Act, 2008, as amended,a certified copy of certificate of registration issued under the
Limited Liability Partnership Act, 2008, as amended, shall be required to be attached to the Bid cum
Application Form. Failing this, our Company and the Selling Shareholder, in consultation with the
Book Running Lead Manager reserves the right to reject any Bid without assigning any reason
thereof.

Bids by banking companies

In case of Bids made by banking companies registered with RBI, certified copies of: (i) the certificate
of registration issued by RBI, and (ii) the approval of such banking company’s investment committee
shall be required to be attached to the Bid cum Application Form, failing which our Company and
the Selling Shareholder, in consultation with the Book Running Lead Manager reserve the right to
reject any Bid without assigning any reason thereof.

The investment limit for banking companies in non-financial services companies as per the Banking
Regulation Act, 1949, as amended, (“Banking Regulation Act”), and the Master Directions - Reserve
Bank of India (Financial Services provided by Banks) Directions, 2016, as amended, is 10% of the
paid-up share capital of the investee company, not being its subsidiary engaged in non-financial
services, or 10% of the banking company’s paid-up share capital and reserves, whichever is lower.

However, a banking company would be permitted to invest in excess of 10% but not exceeding 30%
of the paid-up share capitalof such investee company if (i) the investee company is engaged in non-
financial activities permitted for banking companies in terms of Section 6(1) of the Banking
Regulation Act;, (ii) the additional acquisition is through restructuring of debt, or to protect the
banking company’s interest on loans/investments made to a company; (iii) hold along with its
subsidiaries, associates or jointventures or entities directly or indirectly controlled by the bank; and
mutual funds managed by asset management companies controlled by the bank, more than 20% of
the investee company’s paid up share capital engaged in non-financial services. However, this cap
doesn’t apply to the cases mentioned in (i) and (ii) above.

Further, the aggregate investment by a banking company in all its subsidiaries and other entities
engaged in financial services and non-financial services, including overseas investments, cannot
exceed 20% of the banking company’s paid up share capitaland reserves. The banking company is
required to submit a time-bound action plan for disposal of such shares within a specifiedperiod to
RBI. A banking company would require a prior approval of RBI to make investment in a non-
financial services company in excess of 10% of such investee company’s paid-up share capital as
stated in para (i) above.

Bids by SCSBs

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SCSBs participating in the Offer were required to comply with the terms of the SEBI circulars (Nos.
CIR/CFD/DIL/12/2012 andCIR/CFD/DIL/1/2013) dated September 13, 2012 and January 2, 2013.
Such SCSBs shall be required to ensure that for making applications on their own account using
ASBA, they should have a separate account in their own name with any other SEBI registered
SCSBs. Further, such account shall be used solely for the purpose of making application in public
issues and clear demarcated funds should be available in such account for such applications.

Bids by insurance companies

In case of Bids made by insurance companies registered with the IRDAI, a certified copy of
certificate of registration issued byIRDAI shall be required to be attached to the Bid cum Application
Form. Failing this, our Company and the Selling Shareholder in consultation with the Book Running
Lead Manager reserve the right to reject any Bid without assigning any reason thereof.

The exposure norms for insurers are prescribed under the Insurance Regulatory and Development
Authority (Investment) Regulations, 2016, as amended (“IRDAI Investment Regulations”), based
on investments in the equity shares of a company, the entire group of the investee company and the
industry sector in which the investee company operates. Bidders are advised torefer to the IRDA
Investment Regulations for specific investment limits applicable to them.

Bids by provident funds/pension funds

In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum
corpus of 2250 million, a certified copy of a certificate from a chartered accountant certifying the
corpus of the provident fund/pension fund shall be requiredto be attached to the Bid cum Application
Form. Failing this, our Company and the Selling Shareholder, in consultation with the Book Running
Lead Manager reserves the right to reject any Bid, without assigning any reason thereof.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies,
registered societies, FPIs, AIFs, Mutual Funds, NBFC — SI, insurance companies, insurance funds set
up by the army, navy or air force of the India, insurance funds set up by the Department of Posts,
India or the National Investment Fund and provident funds with a minimum corpus of

%250 million (subject to applicable law) and pension funds with a minimum corpus of 2250 million, a
certified copy of the powerof attorney or the relevant resolution or authority, as the case may be,
along with a certified copy of the memorandum of association and articles of association and/or bye
laws shall be required to be attached with the Bid cum Application Form. Failing this, our Company
and the Selling Shareholder, in consultation with the Book Running Lead Manager reserve the right
to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof.

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Manager in
their absolute discretion,reserve the right to relax the above condition of simultaneous lodging of the
power of attorney along with the Bid cum Application Form subject to the terms and conditions that
our Company and the Selling Shareholder, in consultation with the Book Running Lead Manager
may deem fit.

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Bids by Systemically Important Non-Banking Financial Companies

In case of Bids made by Systemically Important NBFCs registered with RBI, certified copies of: (i)
the certificate of registrationissued by RBI, (ii) certified copy of its last audited financial statements
ona standalone basis and a net worth certificate from itsstatutory auditor, and (iii) such other approval
as may be required by the Systemically Important NBFCs, shall be required to be attached to the Bid
cum Application Form. Failing this, our Company and the Selling Shareholder, in consultation with
the Book Running Lead Manager, reserves the right to reject any Bid without assigning any reason
thereof. Systemically Important NBFCs participating in the Offer shall comply with all applicable
regulations, guidelines and circulars issued by RBI from time to time.

The investment limit for Systemically Important NBFCs shall be as prescribed by RBI from time to
time.

The above information is given for the benefit of the Bidders. Our Company, the Selling
Shareholder and the Book Running Lead Manager are not liable for any amendments or
modification or changes in applicable laws or regulations, which may occur after the date of this
Prospectus. Bidders are advised to make their independent investigations and ensure that any
single Bid from them does not exceed the applicable investment limits or maximum number of
the Equity Shares that can be held by them under applicable law or regulation or as specified in
the Red Herring Prospectus or as specified in this Prospectus.

In accordance with existing regulations issued by the RBI, OCBs have not participated in this Offer.

Information for Bidders

The relevant Designated Intermediary can enter a maximum of three Bids at different price levels
opted in the Bid cum Application Form and such options are not considered as multiple Bids. It is
the Bidder’s responsibility to obtain the acknowledgment slip from the relevant Designated
Intermediary. The registration of the Bid by the Designated Intermediary does not guarantee that the
Equity Shares shall be allocated/Allotted. Such Acknowledgement Slip will be non-negotiable and
by itself will not create any obligation of any kind. When a Bidder revises his or her Bid, he /she is
required to surrender the earlier Acknowledgement Slip and request for a revised acknowledgment
slip from the relevant Designated Intermediary as proof of his or her having revised the previous Bid.

In relation to electronic registration of Bids, the permission given by the Stock Exchanges to use
their network and software of the electronic bidding system should not in any way be deemed or
construed to mean that the compliance with various statutory and other requirements by our
Company, the Selling Shareholder and/or the Book Running Lead Manager are cleared or approved
by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or
completeness of compliance with the statutory and other requirements, nor does it take any
responsibility for the financial or other soundness ofour Company, the management or any scheme
or project of our Company; nor does it in any manner warrant, certify or endorsethe correctness or
completeness of any of the contents of the Red Herring Prospectus and this Prospectus; nor does it
warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges.

General Instructions

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11.

12;

13.

14.

15.

16.

17.

18.

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Ensure that you request for and receive a stamped acknowledgement counterfoil or
acknowledgment specifying the application number as a proof of having accepted Bid cum
Application Form for all your Bid options from the concerned Designated Intermediary;

Ensure that the name(s) given in the Bid cum Application Form is/are exactly the same as
the name(s) in which the beneficiary account is held with the Depository Participant. In case
of joint Bids, the Bid cum Application Form shouldcontain only the name of the First Bidder
whose name should also appear as the first holder of the beneficiary accountheld in joint
names. Ensure that the signature of the First Bidder is included in the Bid cum Application
Forms;

RIBs bidding in the Offer to ensure that they shall use only their own ASBA Account or only
their own bank account linked UPI ID (only for RIBs using the UPI Mechanism) to make an
application in the Offer and not ASBA Account or bank account linked UPI ID of any third
party;

Ensure that you submit the revised Bids to the same Designated Intermediary, through whom
the original Bid was placed and obtain a revised acknowledgment;

Ensure that you have correctly signed the authorisation/undertaking box in the Bid cum
Application Form, or have otherwise provided an authorisation to the SCSB or Sponsor Bank,
as applicable, via the electronic mode, for blockingfunds in the ASBA Account equivalent to
the Bid Amount mentioned in the Bid cum Application Form, as the case may be, at the time
of submission of the Bid. In case of RIBs submitting their Bids and participating in the Offer
throughthe UPI Mechanism, ensure that you authorise the UPI Mandate Request, including
in case of any revision of Bids, raised by the Sponsor Bank for blocking of funds equivalent
to Bid Amount and subsequent debit of funds in case of Allotment;

Except for Bids (i) on behalf of the Central or State Governments and the officials appointed
by the courts, who, in terms of the SEBI circular no. MRD/Dop/Cir-20/2008 dated June 30,
2008, may be exempt from specifying their PANfor transacting in the securities market, (ii)
submitted by investors who are exempt from the requirement of obtaining/specifying their
PAN for transacting in the securities market, and (iii) Bids by persons resident in the state of
Sikkim, who, in terms of a SEBI circular no. MRD/DoP/SE/Cir- 8 /2006 dated July 20, 2006,
may be exempted from specifying their PAN for transacting in the securities market, all
Bidders should mention their PAN allotted under the IT Act. The exemption for the Central
or the State Government and officials appointed by the courts and for investors residing in
the State of Sikkim is subject to (a) the Demographic Details received from the respective
depositories confirming the exemption granted to the beneficiary owner by a suitable
description in the PAN field and the beneficiary account remaining in “active status”; and
(b) in the case of residents of Sikkim, the address as per the Demographic Details evidencing
the same. All other applications in which PAN is not mentioned are liable to be rejected;

Ensure that the Demographic Details are updated, true and correct in all respects;

Ensure that thumb impressions and signatures other than in the languages specified in the
Eighth Schedule to the Constitution of India are attested by a Magistrate or a Notary Public
or a Special Executive Magistrate under official seal;

Ensure that the category and the investor status is indicated in the Bid cum Application Form
to ensure proper upload of your Bid in the electronic Bidding system of the Stock Exchanges;

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Please note that QIBs and Non-Institutional Investors are not permitted to withdraw their Bid(s) or
lower the size of their Bid(s)(in terms of quantity of Equity Shares or the Bid Amount) at any stage.
Retail Individual Investors can revise their Bid(s) during the Bid/Offer Period and withdraw their
Bid(s) until Bid/ Offer Closing Date. Anchor Investors are not allowed to withdraw or lower the size
of their Bids after the Anchor Investor Bid/ Offer Period.

Do’s:

I. Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under
applicable law, rules, regulations, guidelines and approvals. All Bidders (other than Anchor
Investors) should submit their Bids through the ASBA process only;

2. Ensure that you have Bid within the Price Band;

3. Read all the instructions carefully and complete the Bid cum Application Form in the
prescribed form;

4, Ensure that you (other than the Anchor Investors) have mentioned the correct details of
ASBA Account (i.e. bank account number or UPI ID, as applicable) in the Bid cum
Application Form if you are not an RIB bidding using the UPI Mechanism in the Bid cum
Application Form and if you are an RIB using the UPI Mechanism ensure that you have
mentioned the correct UPI ID (with maximum length of 45 characters including the handle),
in the Bid cum ApplicationForm;

5. RIBs using UPI Mechanism through the SCSBs and mobile applications shall ensure that the
name of the bank appearsin the list of SCSBs which are live on UPI, as displayed on the SEBI
website. RIBs shall ensure that the name of the appand the UPI handle which is used for
making the application appears in Annexure ‘A’ to the SEBI circular no.
SEBI/HO/CFD/DIL2/COR/P/2019/85 dated July 26, 2019;

6. Ensure that your Bid cum Application Form bearing the stamp of a Designated Intermediary
is submitted to the Designated Intermediary at the Bidding Centre within the prescribed time.
RIBs using UPI Mechanism, may submit their ASBA Forms with Syndicate, sub-Syndicate
Members, Registered Brokers, RTA or CDP;

Te Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with
the SCSB, before submitting the ASBA Form to any of the Designated Intermediaries.
Ensure that you use only your own bank account linked UPI ID (only for RIBs using the UPI
Mechanism) to make an application in the Offer;

8. If the first Bidder is not the bank account holder, ensure that the Bid cum Application Form
is signed by the account holder. Ensure that you have an account with an SCSB and have
mentioned the correct bank account number in the Bidcum Application Form (for all Bidders
other than RIBs bidding using the UPI Mechanism);

9. Ensure that the signature of the First Bidder in case of joint Bids, is included in the Bid cum
Application Forms;

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19.

20.

21.

22,

23.

24,

25.

26.

27.

wy

Ensure that in case of Bids under power of attorney or by limited companies, corporates,
trust, etc., relevant documents are submitted;

Ensure that Bids submitted by any person resident outside India is in compliance with
applicable foreign and Indian laws;

Since the Allotment will be in demat form only, ensure that the Bidder’s depository account
is active, the correct DP ID, Client ID, the PAN, UPI ID, if applicable, are mentioned in their
Bid cum Application Form and that the name of the Bidder, the DP ID, Client ID, the PAN
and UPI ID, if applicable, entered into the online IPO system of the Stock Exchanges by the
relevant Designated Intermediary, as applicable, matches with the name, DP ID, Client ID,
PAN andUPI ID, if applicable, available in the Depository database;

Ensure that when applying in the Offer using UPI, the name of your SCSB appears in the list
of SCSBs displayed on the SEBI website which are live on UPI. Further, also ensure that the
name of the app and the UPI handle being used for making the application is also appearing
in Annexure ‘A’ to the SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July
26, 2019;

RIBs who wish to revise their Bids using the UPI Mechanism, should submit the revised Bid
with the Designated Intermediaries, pursuant to which RIBs should ensure acceptance of the
UPI Mandate Request received from the Sponsor Bank to authorise blocking of funds
equivalent to the revised Bid Amount in the RIB’s ASBA Account;

Ensure that you have accepted the UPI Mandate Request received from the Sponsor Bank
prior to 12:00 p.m. of the Working Day immediately after the Bid/ Offer Closing Date;

FPIs making MIM Bids using the same PAN, and different beneficiary account numbers,
Client IDs and DP IDs, wererequired to submit a confirmation that their Bids are under the
MIM structure and indicate the name of their investmentmanagers in such confirmation
which were required to be submitted along with each of their Bid cum Application Forms.
In the absence of such confirmation from the relevant FPIs, such MIM Bids are liable to be
rejected;

RIBs shall ensure that details of the Bid are reviewed and verified by opening the attachment
in the UPI Mandate Request and then proceed to authorise the UPI Mandate Request using
his/her UPI PIN. Upon the authorisation of the mandate using his/her UPI PIN, an RIB may
be deemed to have verified the attachment containing the application details of the RIB in
the UPI Mandate Request and have agreed to block the entire Bid Amount and authorised
the Sponsor Bank to block the Bid Amount mentioned in the Bid Cum Application Form;
and

Ensure that while Bidding through a Designated Intermediary, the Bid cum Application Form
(other than for Anchor Investors and RIBs bidding using the UPI Mechanism) is submitted
to a Designated Intermediary in a Bidding Centre and that the SCSB where the ASBA
Account, as specified in the ASBA Form, is maintained has named at least one branch at that
location for the Designated Intermediary to deposit ASBA Forms (a list of such branches is
available onthe website of SEBI at www.sebi.gov.in).

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The Bid cum Application Form shall be liable to be rejected if the above instructions, as applicable,
are not complied with. Application made using incorrect UPI handle or using a bank account of an
SCSB or SCSBs which is not mentioned in the Annexure ‘A’ to the SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 is liable to be rejected.

Don’ts:

10.

Ad,

12.

13.

14.

15.

Do not Bid for lower than the minimum Bid lot;

Do not Bid for a Bid Amount exceeding = 200,000 (for Bids by Retail Individual Bidders);

Do not pay the Bid Amount in cheques, demand drafts or by cash, money order, postal order
or by stock invest;

Do not send Bid cum Application Forms by post; instead submit the same to the Designated
Intermediary only;

Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);

Do not instruct your respective banks to release the funds blocked in the ASBA Account under
the ASBA process;

Do not submit the Bid for an amount more than funds available in your ASBA account;

Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms
or on Bid cum ApplicationForms in a colour prescribed for another category of a Bidder;

If you are a RIB and are using UPI mechanism, do not submit more than one Bid cum
Application Form for each UPI ID;

Anchor Investors should not Bid through the ASBA process;

Do not submit the ASBA Forms to any Designated Intermediary that is not authorised to
collect the relevant ASBA Forms or to our Company;

Do not Bid on a Bid cum Application Form that does not have the stamp of the relevant
Designated Intermediary;

Do not submit the GIR number instead of the PAN;

Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID, if applicable, or
provide details for a beneficiary account which is suspended or for which details cannot be
verified by the Registrar to the Offer;

Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable
Jaw or your relevant constitutional documents or otherwise;

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17.

18.

19:

20.

21.

22.

23.

24,

25.

26.

21,

28.

29,

30.

wy

Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other
than minors having valid depository accounts as per Demographic Details provided by the
depository);

Do not submit a Bid/revise a Bid Amount, with a price less than the Floor Price or higher than
the Cap Price;

Do not submit a Bid using UPI ID, if you are not a RIB;

Do not Bid on another Bid cum Application Form or the Anchor Investor Application Form,
as the case may be, after you have submitted a Bid to any of the Designated Intermediaries
after you have submitted a Bid to the Designated Intermediary;

Do not Bid for Equity Shares more than what is specified by respective Stock Exchange for
each category;

If you are a QIB, do not submit your Bid after 3 p.m. on the QIB Bid/Offer Closing Date;

Do not fill up the Bid cum Application Form such that the Equity Shares Bid for, exceeds
the Offer size and/or investment limit or maximum number of the Equity Shares that can be
held under applicable laws or regulations or maximum amount permissible under applicable
Jaws or regulations, or under the terms of the Red Herring Prospectus;

Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity
Shares or the Bid Amount)at any stage, if you are a QIB or a Non-Institutional Bidder. Retail
Individual Bidders can revise or withdraw their Bidson or before the Bid/Offer Closing Date;

Do not submit Bids to a Designated Intermediary at a location other than Specified Locations.
If you are RIB and are using UPI Mechanism, do not submit the ASBA Form directly with
SCSBs.;

If you are an RIB which is submitting the ASBA Form with any of the Designated
Intermediaries and using your UPI ID for the purpose of blocking of funds, do not use any
third party bank account or third party linked bank account UPIID; and

Do not Bid if you are an OCB;
RIBs Bidding through the UPI Mechanism using the incorrect UPI handle or using a bank
account of an SCSB and/ ormobile applications which is not mentioned in the list provided

on the SEBI website is liable to be rejected;

Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0
certified by the NPCI in case of Bids submitted by RIBs using the UPI Mechanism.

Do not submit the Bid cum Application Forms to any non-SCSB bank; and

Do not submit a Bid cum Application Form with third party ASBA Bank Account or UPI ID

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(in case of Bids submittedby RIB Bidder using the UPI Mechanism).

The Bid cum Application Form shall be liable to be rejected if the above instructions, as applicable,
are not complied with.

Grounds for Technical Rejection

In addition to the grounds for rejection of Bids on technical grounds as provided in the GID, Bidders
are requested to note that Bids maybe rejected on the following additional technical grounds:

Bids submitted without instruction to the SCSBs to block the entire Bid Amount;
Bids which do not contain details of the Bid Amount and the bank account details in the ASBA Form;
Bids submitted on a plain paper;

Bids submitted by RIBs using the UPI Mechanism through an SCSBs and/or using a mobile
application or UPI handle, not listed on the website of SEBI;

Bids under the UPI Mechanism submitted by RIBs using third party bank accounts or using a third
party linked bank account UPI ID (subject to availability of information regarding third party account
from Sponsor Bank);

ASBA Form submitted to a Designated Intermediary does not bear the stamp of the Designated
Intermediary;

Bids submitted without the signature of the First Bidder or sole Bidder;

The ASBA Form not being signed by the account holders, if the account holder is different from the
Bidder;

ASBA Form by the RIBs by using third party bank accounts or using third party linked bank account
UPI IDs;

Bids by persons for whom PAN details have not been verified and whose beneficiary accounts are
“suspended for credit” in terms of SEBI circular CIR/MRD/DP/ 22 /2010 dated July 29, 2010;

GIR number furnished instead of PAN;

Bids by RIBs with Bid Amount of a value of more than Rs.2.00 Lakhs (net of Retail Discount);

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Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules,
regulations, guidelines and approvals;

Bids accompanied by stock invest, money order, postal order or cash; and

Bids uploaded by QIBs after 4.00 pm on the QIB Bid/ Offer Closing Date and by Non-Institutional
Bidders uploaded after 4.00 p.m. on the Bid/ Offer Closing Date, and Bids by RIBs uploaded after
5.00 p.m. on the Bid/ Offer Closing Date, unless extended by the Stock Exchanges.

Further, in case of any pre-Offer or post Offer related issues regarding share certificates/demat
credit/refund orders/unblocking etc., investors shall reach out to the Company Secretary and
Compliance Officer. For details of the Company Secretary and Compliance Officer, see “General
Information” beginning on page 74 of this Prospectus.

In accordance with SEBI circular dated March 16, 2021, for IPOs opening subsequent to May 1,
2021 (or any other date as prescribed by SEBI) in case of (i) any delay in unblocking of amounts in
the ASBA Accounts (including amounts blocked through the UPI Mechanism) for cancelled/
withdrawn/deleted ASBA Forms, the Bidder shall be compensated by the SCSB at a uniform rate of
2100 per day or 15% per annum of the Bid Amount, whichever is higher from the date on which the
request for cancellation/ withdrawal/ deletion is placed in the Stock Exchanges bidding platform until
the date on which the amounts are unblocked; (ii) any blocking of multiple amounts for the same
ASBA Form (for amounts blocked through the UPI Mechanism), the Bidder shall be compensated
by the SCSB at a uniform rate 7100 per day or 15% per annum of the total cumulative blocked
amount except the original application amount, whichever is higher from the date on which such
multiple amounts were blocked till the date of actual unblock; (iii) any blocking of amounts more
than the Bid Amount, the Bidder shall be compensated by the SCSB at a uniform rate of 7100 per
day or 15% per annum of the difference in amount, whichever is higher from the date on which such
excess amounts were blocked till the date of actual unblock; (iv) any delay in unblocking of non-
allotted/ partially allotted Bids, exceeding four Working Days from the Bid/ Offer Closing Date, the
Bidder shall be compensated by the SCSB at a uniform rate of 2100 per day or 15% per annum of
the Bid Amount, whichever is higher for the entire duration of delay exceeding four Working Days
from the Bid/ Offer Closing Date till the date of the actual unblock.

Names of entities responsible for finalising the basis of allotment in a fair and proper manner

The authorised employees of the Designated Stock Exchange, along with the Book Running Lead
Manager and the Registrar, shall ensure that the basis of allotment is finalised in a fair and proper
manner in accordance with the procedure specified in SEBI ICDR Regulations.

Method of allotment as may be prescribed by SEBI from time to time

Our Company will not make any Allotment in excess of the Equity Shares offered through the Offer
through this Prospectus except in case of oversubscription for the purpose of rounding off to make
Allotment, in consultation with the Designated StockExchange. Further, upon oversubscription, an
Allotment of not more than 1% of the Net Offer to public may be made for the purpose of making
Allotment in minimum lots.

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The allotment of Equity Shares to Bidders other than to the Retail Individual Bidders and Anchor
Investors shall be on a proportionate basis within the respective investor categories and the number
of securities allotted shall be rounded off to the nearest integer, subject to minimum allotment being
equal to the minimum application size as determined and disclosed.

The allotment of Equity Shares to each Retail Individual Bidders shall not be less than the minimum
bid lot, subject to the availability of shares in Retail Individual Bidders Portion, and the remaining
available shares, if any, shall be allotted on a proportionate basis.

Payment into Escrow Account(s) for Anchor Investors

Our Company and the Selling Shareholder shall, in consultation with the Book Running Lead
Manager, in their absolute discretion, decide the list of Anchor Investors to whom the CAN will be
sent, pursuant to which the details of the Equity Shares allocated to them in their respective names
will be notified to such Anchor Investors. For Anchor Investors, the payment instruments for
payment into the Escrow Account(s) should be drawn in favour of:

(a) In case of resident Anchor Investors: “HP Adhesives Limited -IPO Anchor Investor — R”
(b) In case of non-resident Anchor Investors: “HP Adhesives Limited -IPO Anchor Investor - NR”

Anchor Investors should note that the escrow mechanism is not prescribed by SEBI and has been
established as an arrangementbetween our Company, the Selling Shareholder and the Syndicate, the
Escrow Collection Bank and the Registrar to the Offer to facilitate collections of Bid amounts from
Anchor Investors.

Pre-Offer Advertisement

Our Company has, after filing the Red Herring Prospectus with the RoC, published a pre-Offer
advertisement, in the form prescribed by the SEBI ICDR Regulations, in all editions of Financial
Express, an English national daily newspaper, all editions of Jansatta, a Hindi national daily
newspaper and Mumbai edition of Navshakti, a Marathi newspaper, Marathi being the regional
language of Maharashtra, where our Registered Office is located, each with wide circulation.

In the pre-Offer advertisement, we have stated the Bid/Offer Opening Date and the Bid/Offer Closing
Date. This advertisement, subject to the provisions of Section 30 of the Companies Act, 2013, was
in the format prescribed in Part A of Schedule X of theSEBI ICDR Regulations.

The above information is given for the benefit of the Bidders. Our Company, the Selling
Shareholder and the Book Running Lead Manager are not liable for any amendments or
modification or changes in applicable laws or regulations, which may occur after the date of this
Prospectus.

Bidders are advised to make their independent investigations and ensure that the number of
Equity Shares Bid for did not exceed the prescribed limits under applicable laws or regulations.

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Signing of the Underwriting Agreement and the RoC Filing

(a)

(b)

Our Company, the Selling Shareholder and the Underwriters intend to enter into an Underwriting
Agreement after the finalisation of the Offer Price.

After signing the Underwriting Agreement, an updated Red Herring Prospectus is being filed
with the RoC in accordancewith applicable law, which is being termed as the ‘Prospectus’. The
Prospectus will contain details of the Offer Price, the Anchor Investor Offer Price, Offer size,
and underwriting arrangements and will be complete in all material respects.

Undertakings by our Company

Our Company undertakes the following:

adequate arrangements shall be made to collect all Bid cum Application Forms;

the complaints received in respect of the Offer shall be attended to by our Company
expeditiously and satisfactorily;

all steps for completion of the necessary formalities for listing and commencement of trading
at all the Stock Exchangeswhere the Equity Shares are proposed to be listed shall be taken in
consultation with the Book Running Lead Manager within such period as may be prescribed
under applicable law;

if Allotment is not made within the prescribed time period under applicable law, the entire
subscription amount receivedwill be refunded/unblocked within the time prescribed under
applicable law. If there is delay beyond the prescribed time, our Company shall pay interest
prescribed under the Companies Act, 2013, the SEBI ICDR Regulations and applicable law
for the delayed period;

the funds required for making refunds/unblocking (to the extent applicable) as per the
mode(s) disclosed shall be made available to the Registrar to the Offer by our Company;

where refunds (to the extent applicable) are made through electronic transfer of funds, a
suitable communication shall be sent to the Bidder within the time prescribed under applicable
law, giving details of the bank where refunds shall be credited along with amount and expected
date of electronic credit of refund;

compliance with all disclosure and accounting norms as may be specified by SEBI from time
to time;

Promoters’ contribution, if any, shall be brought in advance before the Bid/Offer Opening
Date and the balance, if any,shall be brought in on a pro rata basis before calls are made on
the Allottees; and

No further issue of the Equity Shares shall be made till the Equity Shares offered through this
Prospectus are listed or until the Bid monies areunblocked in ASBA Account/refunded on

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account of non-listing, under-subscription, etc.
Undertakings by the Selling Shareholder

The Selling Shareholder undertakes, severally and not jointly in respect of itself as a Selling
Shareholder and its respectiveportion of the Offered Shares that:

Is the Equity Shares offered by it in the Offer for Sale are eligible for being offered in the Offer
for Sale in terms of the SEBI ICDR Regulations and shall be in dematerialized form at the
time of transfer;

Ds it shall not offer, lend, pledge, charge, transfer or otherwise encumber, sell, dispose of any
of its respective Offered Shares being offered pursuant to the Offer until such time that the
lock-in (if applicable) remains effective save and except as may be permitted under the SEBI
ICDR Regulations;

3. it shall provide such reasonable assistance to our Company and the Book Running Lead
Manager in redressal of such investor grievances in relation to its respective Offered Shares and
statements specifically made or confirmed by it in relation to itself as a Selling Shareholder;

4. it shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or
kind or services or otherwise to the Bidder for making a Bid in the Offer, and shall not make
any payment, direct or indirect, in the nature of discounts, commission, allowance or
otherwise to any person who makes a Bid in the Offer;

Bi it shall provide such reasonable cooperation to our Company in relation to its respective
portion of the Offered Shares, (a) for the completion of the necessary formalities for listing
and commencement of trading at the Stock Exchanges, and/ or (b) refund orders (if
applicable); and

6. it shall not have recourse to the proceeds of the Offer until final approval for trading of the
Equity Shares from the StockExchanges has been received.

Only the statements and undertakings in relation to each of the Selling Shareholder and its portion of
the Equity Shares offeredin the Offer for Sale which are specifically “confirmed” or “undertaken” by
it in the Prospectus, shall be deemed tobe “statements and undertakings specifically confirmed or
undertaken” by such Selling Shareholder. All other statements and/or undertakings in the Prospectus
shall be statements and undertakings made by our Company even if the same relates to the Selling
Shareholder.

Utilisation of Offer Proceeds

Our Board certifies and declares that:

. all monies received out of the Fresh Issue shall be credited/transferred to a separate bank
account other than the bank account referred to in sub-section (3) of Section 40 of the
Companies Act;

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. details of all monies utilised out of the Offer shall be disclosed, and continue to be disclosed
till the time any part of theFresh Issue proceeds remains unutilised, under an appropriate head
in the balance sheet of our Company indicating thepurpose for which such monies have been
utilised; and

. details of all unutilised monies out of the Fresh Issue, if any shall be disclosed under an
appropriate separate head in the balance sheet indicating the form in which such unutilised
monies have been invested.

Impersonation

Attention of the Bidders is specifically drawn to the provisions of sub-section (1) of Section 38 of
the Companies Act which is reproduced below:

“Any person who—

(a)makes or abets making of an application in a fictitious name to a company for acquiring, or
subscribing for, its securities;or

(b)makes or abets making of multiple applications to a company in different names or in
different combinations of his name orsurname for acquiring or subscribing for its securities; or

(c) otherwise induces directly or indirectly a company to allot, or register any transfer of,
securities to him, or to any otherperson in a fictitious name,

shall be liable for action under Section 447.”

The liability prescribed under Section 447 of the Companies Act, 2013 for fraud involving an amount
of at least = 10 Lakhs or 1% of the turnover of the company, whichever is lower, includes
imprisonment for a term which shall not be less than six monthsextending up to 10 years and fine of
an amount not less than the amount involved in the fraud, extending up to three times suchamount
(provided that where the fraud involves public interest, such term shall not be less than three years.)
Further, where the fraud involves an amount less than % 1 million or one per cent of the turnover of
the company, whichever is lower, and does not involve public interest, any person guilty of such
fraud shall be punishable with imprisonment for a term which may extend to five years or with fine
which may extend to 7 50 Lakhs or with both.

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Foreign investment in Indian securities is regulated through the FDI Policy of the Government of
India and FEMA and the circulars and notifications issued thereunder. While the FDI Policy
prescribes the limits and the conditions subject to which foreign investment can be made in different
sectors of the Indian economy, FEMA regulates the precise manner in which such investment may
be made. The Government has from time to time made policy pronouncements on foreign direct
investment (“FDI”) through press notes and press releases.

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

The Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry,
Government of India (“DPIIT”), formerly known as Department of Industrial Policy and Promotion
issued the Consolidated FDI Policy Circular of 2020 (“FDI Policy”) by way of circular bearing
number DPIIT file number 5(2)/2020-FDI Policy dated October 15, 2020, which with effect from
October 15, 2020, consolidates and supersedes all previous press notes, press releases and
clarifications on FDI issued by the DPIIT that were in force and effect as on October 15, 2020. The
FDI Policy will be valid until the DPIIT issues an updated circular. Up to 100% foreign investment
under the automatic route is currently permitted in the “Manufacturing” sector. For details, see “Key
Industry Regulations and Policies” on page 170.

The transfer of shares between an Indian resident and a non-resident does not require the prior
approval of the RBI, provided that (i) the activities of the investee company are under the automatic
route under the FDI Policy and transfer does not attract theprovisions of the Takeover Regulations;
(ii) the non-resident shareholding is within the sectoral limits under the FDI Policy; and (iii) the
pricing is in accordance with the guidelines prescribed by the SEBI/RBI.

Further, in accordance with Press Note No. 3 (2020 Series), dated April 17, 2020 issued by the DPIIT
and the Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2020 which
came into effect from April 22, 2020, any investment, subscription, purchase or sale of equity
instruments by entities of a country which shares land border with India or where the beneficial
owner of an investment into India is situated in or is a citizen of any such country (“Restricted
Investors”), will require prior approval of the Government, as prescribed in the Consolidated FDI
Policy and the FEMA Rules. Further, in the event of transfer of ownership of any existing or future
foreign direct investment in an entity in India, directly or indirectly, resulting in the beneficial
ownership falling within the aforesaid restriction/ purview, such subsequent change in the beneficial
ownership will also require approval of the Government. Furthermore, on April 22, 2020, the
Ministry of Finance, Government of India has also made a similar amendment to the FEMA Rules.
Each Bidder should seek independent legal advice about its ability to participate in the Offer. In the
event such prior approval of the Government of India is required, and such approval has been
obtained, the Bidder shall intimate our Company and the Registrar in writing about such approval
along with a copy thereofwithin the Offer Period.

As per the existing policy of the Government, OCBs could not participate in this Offer.

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The Equity Shares offered in the Offer have not been and will not be registered under the U.S.
Securities Act or any otherapplicable law of the United States and, unless so registered, may
not be offered or sold within the United States, except pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the U.S. Securities Act and
applicable state securities laws. Accordingly, the Equity Shares are only being offered and
sold (i) within the United States only to persons reasonably believed to be “qualified
institutional buyers” (as defined in Rule 144A under the Securities Act and referred to in
this Prospectus as “U.S. QIBs”) in transactions exempt from, or not subject to, the
registration requirements of the U.S. Securities Act, and (ii) outside the United States in
offshore transactions in compliance with Regulation S under the U.S. Securities Act and the
applicable laws of the jurisdiction where those offersand sales occur. For the avoidance of
doubt, the term “U.S. QIBs” does not refer to a category of institutional investors defined
under applicable Indian regulations and referred to in this Prospectus as “QIBs”.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in
any other jurisdiction outsideIndia and may not be offered or sold, and Bids may not be made
by persons in any such jurisdiction, except in compliancewith the applicable laws of such
jurisdiction.

For further details, see “Offer Procedure” beginning on page 335 of this Prospectus.

The above information is given for the benefit of the Bidders. Our Company and the Book Running
Lead Manager are not liablefor any amendments or modification or changes in applicable laws or
regulations, which may occur after the date of this Prospectus. Bidders are advised to make their
independentinvestigations and ensure that the number of Equity Shares Bid for did not exceed the
applicable limits under laws or regulations.

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SECTION VIII — MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article
No.
TABLE ‘F’ EXCLUDED
1 (D The regulations contained in the Table marked ‘F’ | TABLE Bo
in Schedule I to the Companies Act, 2013 shall not EXCLUDED
apply to the Company, except in so far as the same
are repeated, contained or expressly made
applicable in these Articles or by the said Act.

(2) The regulations for the management of the | Company to
Company and for the observance by the members | governed by
thereto and their representatives, shall, subject to Articles
any exercise of the statutory powers of the
Company with reference to the deletion or
alteration of or addition to its regulations by
resolution as prescribed or permitted by the
Companies Act, 2013, be such as are contained in
these Articles.

2 Interpretation
(9) In these Articles:
(a) “Act” means the Companies Act, 2013 or any | “Act”
statutory modification or re-enactment thereof
for the time being in force and the term shall be
deemed to refer to the applicable section
thereof which is relatable to the relevant Article
in which the said term appears in these Articles
and any previous company law, so far as may
be applicable.
(b) “Articles” means these articles of association Articles
of the Company or as altered from time to time.
(c) “Board of Directors” or “Board”, means the Board a of
collective body of the directors of the Directors or
Board
Company.
(d) “Company” means “HP Adhesives Limited” “Company”
(e) “Rules” means the applicable rules for the “Rules”
time being in force as prescribed under
relevant sections of the Act.
“Seal”
(f) “seal”? means the common seal of the
Company.
(2) Words importing the singular number shall include | Number and
the plural number and words importing the | Gender

 

 

masculine gender shall, where the context admits,
include the feminine and neuter gender.

 

 

 

361
 

Article
No.

Sub
Article

Sub Heading

Heading

 

 

(3)

Unless the context otherwise requires, words or
expressions contained in these Articles shall bear the
same meaning as in the Act or the Rules, as the case
may be

Expressions in the
Articles to bear the
same meaning as
in the Act

 

Share capital and variation of rights

 

A. Subject to the provisions of the Act and these
Articles, the shares in the capital of the
Company shall be under the control of the Board
who may issue, allot or otherwise dispose of the
same or any of them to such persons, in such
proportion and on such terms and conditions and
either at a premium or at par and at such time as
they may from time to time think fit.

Shares under
control of Board

 

B. The option or right to call of shares shall not be
given to any person or persons without the
sanction of the Company in General Meeting.

 

Subject to the provisions of the Act and these
Articles, the Board may issue and allot shares in the
capital of the Company on payment or part payment
for any property or assets of any kind whatsoever
sold or transferred, goods or machinery supplied or
for services rendered to the Company in the
conduct of its business and any shares which may
be so allotted may be issued as fully paid-up or
partly paid-up otherwise than for cash, and if so
issued, shall be deemed to be fully paid-up or partly
paid-up shares, as the case may be.

Directors may allot
shares otherwise
than for cash

 

The Company may issue the following kinds of
shares in accordance with these Articles, the Act,
the Rules and other applicable laws:

(a) Equity share capital:

(i) with voting rights; and / or

(ii) with differential rights as to dividend, voting or
otherwise in accordance with the Rules; and

(b) Preference share capital

Kinds of Share
Capital

 

 

 

a

 

Every person whose name is entered as a member
in the register of members shall be entitled to
receive within two months after allotment or within
one month from the date of receipt by the Company
of the application for the registration of transfer or
transmission or within such other period as the
conditions of issue shall provide -

 

Issue of certificate

 

362

 
 

 

Article
No.

Sub
Article

Sub Heading

Heading

 

(a) one certificate for all his shares without payment
of any charges; or

(b) several certificates, each for one or more of his
shares, upon payment of such charges as may be
fixed by the Board for each certificate after the first.

 

(2)

Every certificate shall be under the seal and shall
specify the shares to which it relates and the amount
paid-up thereon

Certificate to bear
Seal

 

(3)

In respect of any share or shares held jointly by
several persons, the Company shall not be bound to
issue more than one certificate, and delivery of a
certificate for a share to one of several joint holders
shall be sufficient delivery to all such holders.

One certificate for
shares held jointly

 

A person subscribing to shares offered by the
Company shall have the option either to receive
certificates for such shares or hold the shares in a
dematerialised state with a depository. Where a
person opts to hold any share with the depository,
the Company shall intimate such depository the
details of allotment of the share to enable the
depository to enter in its records the name of such
person as the beneficial owner of that share.

Option to receive
share certificate or
hold shares with
depository

 

If any share certificate be worn out, defaced,
mutilated or torn or if there be no further space on
the back for endorsement of transfer, then upon
production and Surrender thereof to the Company,
a new certificate may be issued in lieu thereof, and
if any certificate is lost or destroyed then upon
proof thereof to the satisfaction of the Company
and on execution of such indemnity as the Board
deems adequate, a new certificate in lieu thereof
shall be given. Every certificate under this Article
shall be issued on payment of fees for each
certificate as may be fixed by the Board.

Issue of new
certificate in place
of one defaced,
lost

or destroyed

 

The provisions of the foregoing Articles relating to
issue of certificates shall mutatis mutandis apply to
issue of certificates for any other securities
including debentures (except where the Act
otherwise requires) of the Company.

Provisions as to
issue of certificates
to apply mutatis
mutandis to
debentures, etc.

 

10

()

The Company may exercise the powers of paying
commissions conferred by the Act, to any person in
connection with the subscription to its securities,
provided that the rate per cent or the amount of the
commission paid or agreed to be paid shall be
disclosed in the manner required by the Act and the
Rules.

Power to pay
commission in
connection with
securities issued

 

 

 

(2)

 

The rate or amount of the commission shall not
exceed the rate or amount prescribed in the Rules.

 

Rate of
commission in

 

363

 
oP

 

Article
No.

Sub
Article

Sub Heading

Heading

 

accordance with
Rules

 

(3)

The commission may be satisfied by the payment
of cash or the allotment of fully or partly paid
shares or partly in the one way and partly in the
other.

Mode of payment
of commission

 

11

a

If at any time the share capital is divided into
different classes of shares, the rights attached to any
class (unless otherwise provided by the terms of
issue of the shares of that class) may, subject to the
provisions of the Act, and whether or not the
Company is being wound up, be varied with the
consent in writing, of such number of the holders of
the issued shares of that class, or with the sanction
of a resolution passed at a separate meeting of the
holders of the shares of that class, as prescribed by
the Act.

Variation of
members’ rights

 

(2)

To every such separate meeting, the provisions of
these Articles relating to general meetings shall
mutatis mutandis apply.

Provisions as to
General meetings
to apply mutatis
mutandis to each
meeting

 

12

The rights conferred upon the holders of the shares
of any class issued with preferred or other rights
shall not, unless otherwise expressly provided by
the terms of issue of the shares of that class, be
deemed to be varied by the creation or issue of
further shares ranking pari passu therewith.

Issue of further
shares not to affect
tights of existing
members

 

13

Subject to the provisions of the Act, the Board shall
have the power to issue or re-issue preference
shares of one or more classes which are liable to be
redeemed, or converted to equity shares, on such
terms and conditions and in such manner as
determined by the Board in accordance with the
Act.

Power to issue
redeemable
preference shares

 

 

14

 

@

 

The Board or the Company, as the case may be,
may, in accordance with the Act and the Rules,
issue further shares

to -

(a) persons who, at the date of offer, are holders of
equity shares of the Company; such offer shall be
deemed to include a right exercisable by the person
concerned to renounce the shares offered to him or
any of them in favour of any other person; or

(b) employees under any scheme of employees’
stock option; or

(c) any persons, whether or not those persons
include the persons referred to in clause (a) or
clause (b) above.

 

Further issue of
share capital

 

 

364
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

 

(2)

A further issue of shares may be made in any
manner whatsoever as the Board may determine
including by way of preferential offer or private
placement, subject to and in accordance with the
Act and the Rules.

Mode of further
issue of shares

 

Lien

 

15.

()

The Company shall have a first and paramount lien
(a) on every share (not being a fully paid share), for
all monies (whether presently payable or not)
called, or payable at a fixed time, in respect of that
share; and (b) on all shares (not being fully paid
shares) standing registered in the name of a
member, for all monies presently payable by him or
his estate to the Company: Provided that the Board
may at any time declare any share to be wholly or
in part exempt from the provisions of this clause.

Company’s lien on
Shares

 

(2)

The Company’s lien, if any, on a share shall extend
to all dividends or interest, as the case may be,
payable and bonuses declared from time to time in
respect of such shares for any money owing to the
Company.

Lien to extend to
dividends, etc.

 

(3)

Unless otherwise agreed by the Board, the
registration of a transfer of shares shall operate as a
waiver of the Company’s lien.

Waiver of lien in
case of registration

 

16

The Company may sell, in such manner as the
Board thinks fit, any shares on which the Company
has a lien:

Provided that no sale shall be made—

(a) unless a sum in respect of which the lien exists
is presently payable; or

(b) until the expiration of fourteen days after a
notice in writing stating and demanding payment of
such part of the amount in respect of which the lien
exists as is presently payable, has been given to the
registered holder for the time being of the share or
to the person entitled thereto by reason of his death
or insolvency or otherwise.

As to enforcing
lien by sale

 

17

a

To give effect to any such sale, the Board may
authorise some person to transfer the shares sold to
the purchaser thereof.

Validity of sale

 

(2)

The purchaser shall be registered as the holder of
the shares comprised in any such transfer.

Purchaser to be
registered holder

 

 

 

(3)

 

The receipt of the Company for the consideration
(if any) given for the share on the sale thereof shall
(subject, if necessary, to execution of an instrument
of transfer or a transfer by relevant system, as the
case may be) constitute a good title to the share and

 

Validity of
Company’s receipt

 

365

 
 

Article
No.

Sub
Article

Sub Heading

Heading

 

the purchaser shall be registered as the holder of the
share.

 

(4)

The purchaser shall not be bound to see to the
application of the purchase money, nor shall his
title to the shares be affected by any irregularity or
invalidity in the proceedings with reference to the
sale.

Purchaser not
Affected

 

18

(1)

The proceeds of the sale shall be received by the
Company and applied in payment of such part of
the amount in respect of which the lien exists as is
presently payable.

Application of
proceeds of sale

 

(2)

The residue, if any, shall, subject to a like lien for
sums not presently payable as existed upon the
shares before the sale, be paid to the person entitled
to the shares at the date of the sale

Payment of
residual money

 

19

In exercising its lien, the Company shall be entitled
to treat the registered holder of any share as the
absolute owner thereof and accordingly shall not
(except as ordered by a court of competent
jurisdiction or unless required by any statute) be
bound to recognise any equitable or other claim to,
or interest in, such share on the part of any other
person, whether a creditor of the registered holder
or otherwise. The Company’s lien shall prevail
notwithstanding that it has received notice of any
such claim.

Outsider’s lien not
to affect
Company’s lien

 

20

The provisions of these Articles relating to lien
shall mutatis mutandis apply to any other securities
including debentures of the Company.

Provisions as to
lien to apply
mutatis mutandis

to debentures, etc.

 

Calls on shares

 

21

(1)

The Board may, from time to time, make calls upon
the members in respect of any monies unpaid on
their shares (whether on account of the nominal
value of the shares or by way of premium) and not
by the conditions of allotment thereof made payable
at fixed times.

Board may make
calls

 

(2)

Each member shall, subject to receiving at least
fourteen days’ notice specifying the time or times
and place of payment, pay to the Company, at the
time or times and place so specified, the amount
called on his shares.

Notice of call

 

 

 

(3)

 

The Board may, from time to time, at its discretion,
extend the time fixed for the payment of any call in
respect of one or more members as the Board may
deem appropriate in any circumstances.

 

Board may extend
time for payment

 

366

 
oP

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article

No.

(4) A call may be revoked or postponed at the | Revocation or
discretion of the Board. postponement of

call
22 A call shall be deemed to have been made at the | Call to take effect
time when the resolution of the Board authorising | from date of
the call was passed and may be required to be paid | ;esolution
by instalments.
23) The joint holders of a share shall be jointly and | Liability of joint
severally liable to pay all calls in respect thereof. holders of shares
24 (9) If a sum called in respect of a share is not paid | When interest on
before or on the day appointed for payment thereof | call or instalment
(the “due date’), the person from whom the sum is | payable
due shall pay interest thereon from the due date to
the time of actual payment at such rate as may be
fixed by the Board.
(2) The Board shall be at liberty to waive payment of | Board may waive
any such interest wholly or in part Interest
25 (D Any sum which by the terms of issue of a share | Sums deemed to be
becomes payable on allotment or at any fixed date, | calls
whether on account of the nominal value of the
share or by way of premium, shall, for the purposes
of these Articles, be deemed to be a call duly made
and payable on the date on which by the terms of
issue such sum becomes payable.

(2) In case of non-payment of such sum, all the relevant | Effect of non-
provisions of these Articles as to payment of | payment of sums
interest and expenses, forfeiture or otherwise shall
apply as if such sum had become payable by virtue
of a call duly made and notified.

26 The Board - Payment in
(a) may, if it thinks fit, receive from any | anticipation of
member willing to advance the same, all or | calls may carry
any part of the monies uncalled and unpaid | interest
upon any shares held by him; and
(b) upon all or any of the monies so advanced,
may (until the same would, but for such
advance, become presently payable) pay
interest at such rate as may be fixed by the
Board. Nothing contained in this clause
shall confer on the member (a) any right to
participate in profits or dividends or (b) any
voting rights in respect of the moneys so
paid by him until the same would, but for
such payment, become presently payable by
him.
27 If by the conditions of allotment of any shares, the | Instalments on

 

 

whole or part of the amount of issue price thereof
shall be payable by instalments, then every such
instalment shall, when due, be paid to the Company
by the person who, for the time being and from time

 

shares to be duly
paid

 

 

367
 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article
No.
to time, is or shall be the registered holder of the
share or the legal representative of a deceased
registered holder.

28 All calls shall be made on a uniform basis on all | Calls on shares of
shares falling under the same class. same Class to be on
Explanation: Shares of the same nominal value on | uniform basis
which different amounts have been paid-up shall
not be deemed to fall under the same class.

29) Neither a judgment nor a decree in favour of the | Partial payment
Company for calls or other moneys due in respect | not to preclude
of any shares nor any part payment or satisfaction | forfeiture
thereof nor the receipt by the Company of a portion
of any money which shall from time to time be due
from any member in respect of any shares either by
way of principal or interest nor any indulgence
granted by the Company in respect of payment of
any such money shall preclude the forfeiture of
such shares as herein provided.

30 The provisions of these Articles relating to calls | Provisions as to
shall mutatis mutandis apply to any other securities | calls to apply
including Debentures of the Company. mutatis mutandis

to debentures, etc.

31 (D The instrument of transfer of any share in the | Instrument of
Company shall be duly executed by or on behalf of | transfer to be
both the transferor and transferee. executed by

transferor and
transferee
(2) The transferor shall be deemed to remain a holder
of the share until the name of the transferee is
entered in the register of members in respect
thereof.

32 The Board may, subject to the right of appeal | Board may refuse
conferred by the Act decline to register - to register transfer
(a) the transfer of a share, not being a fully paid
share, to a person of whom they do not approve; or
(b) any transfer of shares on which the Company
has a lien.

33 In case of shares held in physical form, the Board | Board may decline

 

 

may decline to recognise any instrument of transfer
unless -

(a) the instrument of transfer is duly executed and
is in the form as prescribed in the Rules made under
the Act;

(b) the instrument of transfer is accompanied by the
certificate of the shares to which it relates, and such
other evidence as the Board may reasonably require
to show the right of the transferor to make the
transfer; and

 

to recognise
instrument of
Transfer

 

368

 
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

(c) the instrument of transfer is in respect of only
one class of shares.

 

34

On giving of previous notice of at least seven days
or such lesser period in accordance with the Act and
Rules made thereunder, the registration of transfers
may be suspended at such times and for such
periods as the Board may from time to time
determine:

Provided that such registration shall not be
suspended for more than thirty days at any one time
or for more than forty five days in the aggregate in
any year.

Transfer of shares
when suspended

 

35

The provisions of these Articles relating to transfer
of shares shall mutatis mutandis apply to any other
securities including debentures of the Company.

Provisions as to
transfer of shares
to apply mutatis
mutandis to
debentures, etc.

 

Transmission of shares

 

36

a

On the death of a member, the survivor or survivors
where the member was a joint holder, and his
nominee or nominees or legal representatives
where he was a sole holder, shall be the only
persons recognised by the Company as having any
title to his interest in the shares.

Title to shares on
death of a member

 

(2)

Nothing in clause (1) shall release the estate of a
deceased joint holder from any liability in respect
of any share which had been jointly held by him
with other persons.

Estate of deceased
member liable

 

37

a

Any person becoming entitled to a share in
consequence of the death or insolvency of a
member may, upon such evidence being produced
as may from time to time properly be required by
the Board and subject as herein after provided,
elect, either -

(a) to be registered himself as holder of the share;
or

(b) to make such transfer of the share as the
deceased or insolvent member could have made.

Transmission
Clause

 

(2)

The Board shall, in either case, have the same right
to decline or suspend registration as it would have
had, if the deceased or insolvent member had
transferred the share before his death or insolvency.

Board’s right
unaffected

 

(3)

The Company shall be fully indemnified by such
person from all liability, if any, by actions taken by
the Board to give effect to such registration or
transfer.

Indemnity to the
Company

 

 

38

 

(1)

 

If the person so becoming entitled shall elect to be
registered as holder of the share himself, he shall

 

Right to election of
holder of share

 

369

 
a

 

Article
No.

Sub
Article

Sub Heading

Heading

 

deliver or send to the Company a notice in writing
signed by him stating that he so elects.

 

(2)

If the person aforesaid shall elect to transfer the
share, he shall testify his election by executing a
transfer of the share.

Manner of
testifying election

 

(3)

All the limitations, restrictions and provisions of
these regulations relating to the right to transfer and
the registration of transfers of shares shall be
applicable to any such notice or transfer as
aforesaid as if the death or insolvency of the
member had not occurred and the notice or transfer
were a transfer signed by that member.

Limitations
applicable to
notice

 

39

A person becoming entitled to a share by reason of
the death or insolvency of the holder shall be
entitled to the same dividends and other advantages
to which he would be entitled if he were the
registered holder of the share, except that he shall
not, before being registered as a member in respect
of the share, be entitled in respect of it to exercise
any right conferred by membership in relation to
meetings of the Company:

Provided that the Board may, at any time, give
notice requiring any such person to elect either to
be registered himself or to transfer the share, and if
the notice is not complied with within ninety days,
the Board may thereafter withhold payment of all
dividends, bonuses or other monies payable in
respect of the share, until the requirements of the
notice have been complied with.

Claimant to be
entitled to same
advantage

 

40

The provisions of these Articles relating to
transmission by operation of law shall mutatis
mutandis apply to any other Securities including
debentures of the Company.

Provisions as to
transmission to
apply mutatis
mutandis to
debentures, etc.

 

Forfeiture of Shares

 

41

If a member fails to pay any call, or instalment of a
call or any money due in respect of any share, on
the day appointed for payment thereof, the Board
may, at any time thereafter during such time as any
part of the call or instalment remains unpaid or a
judgement or decree in respect thereof remains
unsatisfied in whole or in part, serve a notice on him
requiring payment of so much of the call or
instalment or other money as is unpaid, together
with any interest which may have accrued and all
expenses that may have been incurred by the
Company by reason of non-payment.

If call or
instalment not
paid notice must be
given

 

 

42

 

 

The notice aforesaid shall:

 

Form of notice

 

 

370
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

(a) name a further day (not being earlier than the
expiry of fourteen days from the date of service of
the notice) on or before which the payment required
by the notice is to be made; and

(b) state that, in the event of non-payment on or
before the day so named, the shares in respect of
which the call was made shall be liable to be
forfeited.

 

43

If the requirements of any such notice as aforesaid
are not complied with, any share in respect of which
the notice has been given may, at any time
thereafter, before the payment required by the
notice has been made, be forfeited by a resolution
of the Board to that effect.

In default — of
payment of shares
to be forfeited

 

Neither the receipt by the Company for a portion of
any money which may from time to time be due
from any member in respect of his shares, nor any
indulgence that may be granted by the Company in
respect of payment of any such money, shall
preclude the Company from thereafter proceeding
to enforce a forfeiture in respect of such shares as
herein provided. Such forfeiture shall include all
dividends declared or any other moneys payable in
respect of the forfeited shares and not actually paid
before the forfeiture.

Receipt of part
amount or grant of
indulgence not to
affect forfeiture

 

45

When any share shall have been so forfeited, notice
of the forfeiture shall be given to the defaulting
member and an entry of the forfeiture with the date
thereof, shall forthwith be made in the register of
members but no forfeiture shall be invalidated by
any omission or neglect or any failure to give such
notice or make such entry as aforesaid.

Entry of forfeiture
in register of
members

 

46

The forfeiture of a share shall involve extinction at
the time of forfeiture, of all interest in and all claims
and demands against the Company, in respect of
the share and all other

rights incidental to the share.

Effect of forfeiture

 

47

(1)

A forfeited share shall be deemed to be the property
of the Company and may be sold or re-allotted or
otherwise disposed of either to the person who was
before such forfeiture the holder thereof or entitled
thereto or to any other person on such terms and in
such manner as the Board thinks fit. Forfeited
shares may be sold, etc.

Forfeited shares
may be sold, etc.

 

 

 

(2)

 

At any time before a sale, re-allotment or disposal
as aforesaid, the Board may cancel the forfeiture on
such terms as it thinks fit.

 

Cancellation — of
Forfeiture

 

371

 
oP

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading

No. Article

No.

48 (D A person whose shares have been forfeited shall | Members still
cease to be a member in respect of the forfeited | liable to pay
shares, but shall, notwithstanding the forfeiture, | money owing at
remain liable to pay, and shall pay, to the Company | the time of
all monies which, at the date of forfeiture, were | forfeiture
presently payable by him to the Company in respect
of the shares.

(2) All such monies payable shall be paid together with | Member still liable
interest thereon at such rate as the Board may | to pay money
determine, from the time of forfeiture until payment | owing at time of
or realisation. The Board may, if it thinks fit, but | forfeiture and
without being under any obligation to do so, | interest
enforce the payment of the whole or any portion of
the monies due, without any allowance for the value
of the shares at the time of forfeiture or waive
payment in whole or in part.

(3) The liability of such person shall cease if and when | Ceaser of liability
the Company shall have received payment in full of
all such monies in respect of the shares.

49 (9) A duly verified declaration in writing that the | Certificate of
declarant is a director, the manager or the secretary | Forfeiture
of the Company, and that a share in the Company
has been duly forfeited on a date stated in the
declaration, shall be conclusive evidence of the
facts therein stated as against all persons claiming
to be entitled to the share;

(2) The Company may receive the consideration, if | Title of purchaser
any, given for the share on any sale, re-allotment or | and transferee of
disposal thereof and may execute a transfer of the | forfeited shares
share in favour of the person to whom the share is
sold or disposed of;

(3) The transferee shall thereupon be registered as the | Transferee to be
holder of the share; and registered as

holder

(4) The transferee shall not be bound to see to the | Transferee not
application the purchase money, if any, nor shall his | affected
title to the share be affected by any irregularity or
invalidity in the proceedings in reference to the
forfeiture, sale, re-allotment or disposal of the
share.

50 Upon any sale after forfeiture or for enforcing alien | Validity of sales

 

 

in exercise of the powers hereinabove given, the
Board may, if necessary, appoint some person to
execute an instrument for transfer of the shares sold
and cause the purchaser’s name to be entered in the
register of members in respect of the shares sold
and after his name has been entered in the register
of members in respect of such shares the validity of
the sale shall not be impeached by any person.

 

 

 

372
oP

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article
No.

51 Upon any sale, re-allotment or other disposal under | Cancellation — of
the provisions of the preceding Articles, the | share certificate in
certificate(s), if any, originally issued in respect of | respect of forfeited
the relative shares shall (unless the same shall on | Shares
demand by the Company has been previously
surrendered to it by the defaulting member) stand
cancelled and become null and void and be of no
effect, and the Board shall be entitled to issue a
duplicate certificate(s) in respect of the said shares
to the person(s) entitled thereto.

52 The Board may, subject to the provisions of the Act, | Surrender of share
accept a surrender of any share from or by any | certificates
member desirous of surrendering them on such
terms as they think fit.

53 The provisions of these Articles as to forfeiture | Sums deemed to be
shall apply in the case of non-payment of any sum | calls
which, by the terms of issue of a share, becomes
payable at a fixed time, whether on account of the
nominal value of the share or by way of premium,
as if the same had been payable by virtue of a call
duly made and notified

54 A. The provisions of these Articles relating to | Provisions as to

forfeiture of shares shall mutatis mutandis apply | forfeiture of shares
to any other securities including debentures of | to apply mutatis
the Company. mutandis to
debentures, etc.

B. No unclaimed Dividend shall be forfeited by the
Board unless the claim thereto becomes barred
by law and the Company shall comply with the
provision of Sections 124 and 125 of the Act in
respect of all unclaimed or unpaid dividends.

Alteration of capital

55 Subject to the provisions of the Act, the Company | Power to alter

 

 

may, by ordinary resolution -

(a) increase the share capital by such sum, to be
divided into shares of such amount as it thinks
expedient;

(b) consolidate and divide all or any of its share
capital into shares of larger amount than its existing
shares: Provided that any consolidation and
division which results in changes in the voting
percentage of members shall require applicable
approvals under the Act;

(c) convert all or any of its fully paid-up shares into
stock, and reconvert that stock into fully paid-up
shares of any denomination;

 

share capital

 

 

373
 

Article
No.

Sub
Article

Sub Heading

Heading

 

(d) sub-divide its existing shares or any of them into
shares of smaller amount than is fixed by the
memorandum;

(e) cancel any shares which, at the date of the
passing of the resolution, have not been taken or
agreed to be taken by any person.

 

56

(a)

Where shares are converted into stock: the holders
of stock may transfer the same or any part thereof
in the same manner as, and subject to the same
Articles under which, the shares from which the
stock arose might before the conversion have been
transferred, or as near thereto as circumstances
admit:

Provided that the Board may, from time to time, fix
the minimum amount of stock transferable, so,
however, that such minimum shall not exceed the
nominal amount of the shares from which the stock
arose;

Shares may be
converted into
stock

 

(>)

the holders of stock shall, according to the amount
of stock held by them, have the same rights,
privileges and advantages as regards dividends,
voting at meetings of the Company, and other
matters, as if they held the shares from which the
stock arose; but no such privilege or advantage
(except participation in the dividends and profits of
the Company and in the assets on winding up) shall
be conferred by an amount of stock which would
not, if existing in shares, have conferred that
privilege or advantage;

Right of
stockholders

 

(c)

such of these Articles of the Company as are
applicable to paid-up shares shall apply to stock and
the words “share” and “shareholder”/“member”
shall include

“stock” and “stock-holder” respectively.

 

57

The Company may, by resolution as prescribed by
the Act, reduce in any manner and in accordance
with the provisions

of the Act and the Rules, —

(a) its share capital; and/or

(b) any capital redemption reserve account; and/or
(c) any securities premium account; and/or

(d) any other reserve in the nature of share capital.

Reduction of
capital

 

Joint Holders

 

 

58

 

 

Where two or more persons are registered as joint
holders (not more than three) of any share, they
shall be deemed (so far as the Company is
concerned) to hold the same as joint tenants with
benefits of survivorship, subject to the following
and other provisions contained in these Articles:

 

Joint-holders

 

374

 
oP

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article

No.

(a) The joint-holders of any share shall be liable | Liability of Joint
severally as well as jointly for and in respect of all | holders
calls or instalments and other payments which
ought to be made in respect of such share.

(b) On the death of any one or more of such joint- | Death of one or
holders, the survivor or survivors shall be the only | more joint-holders
person or persons recognized by the Company as
having any title to the share but the Directors may
require such evidence of death as they may deem
fit, and nothing herein contained shall be taken to
release the estate of a deceased joint-holder from
any liability on shares held by him jointly with any
other person.

(c) Any one of such joint holders may give effectual | Receipt of one
receipts of any dividends, interests or other moneys | Sufficient
payable in respect of such share.

(d) Only the person whose name stands first in the | Delivery of
register of members as one of the joint-holders of | certificate and
any share shall be entitled to the delivery of | giving of notice to
certificate, if any, relating to such share or to | first named holder
receive notice (which term shall be deemed to
include all relevant documents) and any notice
served on or sent to such person shall be deemed
service on all the joint-holders.

(e) (i) Any one of two or more joint-holders may vote | Vote of joint
at any meeting either personally or by attorney or | holders
by proxy in respect of such shares as if he were
solely entitled thereto and if more than one of such
joint holders be present at any meeting personally
or by proxy or by attorney then that one of such
persons so present whose name stands first or
higher (as the case may be) on the register in respect
of such shares shall alone be entitled to vote in
respect thereof.

ii) Several executors or administrators of a] Executors or
deceased member in whose (deceased member) | administrators as
sole name any share stands, shall for the purpose of | joint holders

this clause be deemed joint-holders.

() The provisions of these Articles relating to joint | Provisions as to
holders of shares shall mutatis mutandis apply to | joint holders as to
any other securities including debentures of the | shares to apply
Company registered in joint names. mutatis mutandis

to debentures, etc.
Capitalisation of profits
59 (D The Company by ordinary resolution in general | Capitalisation

 

 

meeting may, upon the recommendation of the
Board, resolve —

 

 

 

375
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

(a) that it is desirable to capitalise any part of the
amount for the time being standing to the credit of
any of the Company’s reserve accounts, or to the
credit of the profit and loss account, or otherwise
available for distribution; and

(b) that such sum be accordingly set free for
distribution in the manner specified in clause (2)
below amongst the members who would have been
entitled thereto, if distributed by way of dividend
and in the same proportions.

 

(2)

The sum aforesaid shall not be paid in cash but shall
be applied, subject to the provision contained in
clause (3) below, either in or towards :

(A) paying up any amounts for the time being
unpaid on any shares held by such members
respectively;

(B) paying up in full, unissued shares or other
securities of the Company to be allotted and
distributed, credited as fully paid-up, to and
amongst such members in the proportions
aforesaid;

(C) partly in the way specified in sub-clause (A)
and partly in that specified in sub-clause (B).

Sum how applied

 

(3)

A securities premium account and a capital
redemption reserve account or any other
permissible reserve account may, for the purposes
of this Article, be applied in the paying up of
unissued shares to be issued to members of the
Company as fully paid bonus shares;

 

(4)

The Board shall give effect to the resolution passed
by the Company in pursuance of this Article.

 

60

a

Whenever such a resolution as aforesaid shall have
been passed, the Board shall -

(a) make all appropriations and applications of the
amounts resolved to be capitalised thereby, and all
allotments and issues of fully paid shares or other
securities, if any; and

(b) generally do all acts and things required to give
effect thereto

Powers of the
Board for
capitalisation

 

 

 

(2)

 

The Board shall have power—

(a) to make such provisions, by the issue of
fractional certificates/coupons or by payment in
cash or otherwise as it thinks fit, for the case of
shares or other securities becoming distributable in
fractions; and

(b) to authorise any person to enter, on behalf of all
the members entitled thereto, into an agreement

 

Board’s power to
issue fractional
certificate/ coupon
etc.

 

376

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article

No.
with the Company providing for the allotment to
them respectively,
credited as fully paid-up, of any further shares or
other securities to which they may be entitled upon
such capitalisation, or as the case may require, for
the payment by the Company on their behalf, by the
application thereto of their respective proportions
of profits resolved to be capitalised, of the amount
or any part of the amounts remaining unpaid on
their existing shares.

(3) Any agreement made under such authority shall be | Agreement
effective and binding on such members binding on

members
Buy Back of Shares
61 Notwithstanding anything contained in these | Buy Back of
Articles but subject to all applicable provisions of | Shares
the Act or any other law for the time being in force,
the Company may purchase its own shares or other
specified securities.
General meetings
62 All general meetings other than annual general | Extraordinary
meeting shall be called extraordinary general | general meeting
meeting.
63 The Board may, whenever it thinks fit, call an | Powers of Board to
extraordinary general meeting. call extraordinary
general meeting
Proceedings at general meetings
64 (DY No business shall be transacted at any general | Presence of
meeting unless a quorum of members is present at | Quorum
the time when the meeting proceeds to business.

(2) No business shall be discussed or transacted at any | Business confined
general meeting except election of Chairperson | to election of
whilst the chair is vacant. Chairperson whilst

chair vacant

(3) The quorum for a general meeting shall be as | Quorum for
provided in the Act. general meeting

65 The Chairperson of the Company shall preside as | Chairperson of the
Chairperson at every general meeting of the | meetings
Company.

66 If there is no such Chairperson, or if he is not | Directors to elect a
present within fifteen minutes after the time | Chairperson
appointed for holding the meeting, or is unwilling
to act as chairperson of the meeting, the directors
present shall elect one of their members to be
Chairperson of the meeting.

67 If at any meeting no director is willing to act as | Members to elect a

 

 

Chairperson or if no director is present within
fifteen minutes after the time appointed for holding
the meeting, the members present shall, by poll or

 

Chairperson

 

377

 
 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article

No.
electronically, choose one of their members to be
Chairperson of the meeting.

68 On any business at any general meeting, in case of | Casting vote of
an equality of votes, whether on a show of hands or | Chairperson at
electronically or on a poll, the Chairperson shall | general meeting
have a second or casting vote.

69 (DY The Company shall cause minutes of the | Minutes of
proceedings of every general meeting of any class | proceedings of
of members or creditors and every resolution | meetings and
passed by postal ballot to be prepared and signed in | resolutions passed
such manner as may be prescribed by the Rules and | by postal ballot
kept by making within thirty days of the conclusion
of every such meeting concerned or passing of
resolution by postal ballot entries thereof in books
kept for that purpose with their pages consecutively
numbered.

(2) There shall not be included in the minutes any | Certain matters not
matter which, in the opinion of the Chairperson of | to be included in
the meeting - Minutes
(a) is, or could reasonably be regarded, as
defamatory of any person; or
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the Company.

(3) The Chairperson shall exercise an absolute | Discretion of
discretion in regard to the inclusion or non- | Chairperson in
inclusion of any matter in the minutes on the | relation to Minutes
grounds specified in the aforesaid clause.

(4) The minutes of the meeting kept in accordance with | Minutes to be
the provisions of the Act shall be evidence of the | evidence
proceedings recorded therein.

70 (DY The books containing the minutes of the | Inspection of
proceedings of any general meeting of the | minute books of
Company or a resolution passed by postal ballot | general meeting
shall:

(a) be kept at the registered office of the Company;
and
(b) be open to inspection of any member without
charge, during 11.00 a.m. to 1.00 p.m. on all
working days other than Saturdays.
70 (2) Any member shall be entitled to be furnished, | Members may

 

 

within the time prescribed by the Act, after he has
made a request in writing in that behalf to the
Company and on payment of such fees as may be
fixed by the Board, with a copy of any minutes
referred to in clause (1) above: Provided that a
member who has made a request for provision of a
soft copy of the minutes of any previous general

 

obtain copy of
minutes

 

378

 
 

Article
No.

Sub
Article

Sub Heading

Heading

 

of hands or on a poll, by his committee or other
legal guardian, and any such committee or guardian
may, on a poll, vote by proxy. If any member be a
minor, the vote in respect of his share or shares shall
be by his guardian or any one of his guardians.

 

77

Subject to the provisions of the Act and other
provisions of these Articles, any person entitled
under the Transmission Clause to any shares may
vote at any general meeting in respect thereof as if
he was the registered holder of such shares,
provided that at least 48 (forty eight) hours before
the time of holding the meeting or adjourned
meeting, as the case may be, at which he proposes
to vote, he shall duly satisfy the Board of his right
to such shares unless the Board shall have
previously admitted his right to vote at such
meeting in respect thereof.

Votes in respect of
shares of deceased
or insolvent
members, etc.

 

78

Any business other than that upon which a poll has
been demanded may be proceeded with, pending
the taking of the poll.

Business may
Proceed pending
poll

 

79

No member shall be entitled to vote at any general
meeting unless all calls or other sums presently
payable by him in respect of shares in the Company
have been paid or in regard to which the Company
has exercised any right of lien.

Restriction on
voting rights

 

80

A member is not prohibited from exercising his
voting on the ground that he has not held his share
or other interest in the Company for any specified
period preceding the date on which the vote is
taken, or on any other ground not being a ground
set out in the preceding Article.

Restriction on
exercise of voting
rights in other
cases to be void

 

81

Any member whose name is entered in the register
of members of the Company shall enjoy the same
rights and be subject to the same liabilities as all
other members of the same class.

Equal rights of
Members

 

Proxy

 

82

a

Any member entitled to attend and vote at a general
meeting may do so either personally or through his
constituted attorney or through another person as a
proxy on his behalf, for that meeting.

Member may vote
in person or
otherwise

 

 

 

(2)

 

The instrument appointing a proxy and the power-
of attorney or other authority, if any, under which it
is signed or a notarised copy of that power or
authority, shall be deposited at the registered office
of the Company not less than 48 hours before the
time for holding the meeting or adjourned meeting
at which the person named in the instrument

 

Proxies when to be
deposited

 

380

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading

No. Article

No.
meeting held during the period immediately
preceding three financial years, shall be entitled to
be furnished with the same free of cost.

71 The Board, and also any person(s) authorised by it, | Powers to arrange
may take any action before the commencement of | security at
any general meeting, or any meeting of a class of | meetings
members in the Company, which they may think fit
to ensure the security of the meeting, the safety of
people attending the meeting, and the future orderly
conduct of the meeting. Any decision made in good
faith under this Article shall be final, and rights to
attend and participate in the meeting concerned
shall be subject to such decision.

Adjournment of meeting

72 (D The Chairperson may, suo moto, adjourn the | Chairperson may
meeting from time to time and from place to place. | adjourn the

meeting

(2) No business shall be transacted at any adjourned | Business at
meeting other than the business left unfinished at | adjourned meeting
the meeting from which the adjournment took
place.

(3) When a meeting is adjourned for thirty days or | Notice of
more, notice of the adjourned meeting shall be | adjourned meeting
given as in the case of an original meeting.

(4) Save as aforesaid, and save as provided in the Act, | Notice of
it shall not be necessary to give any notice of an | adjourned meeting
adjournment or of the business to be transacted at | not required
an adjourned meeting.

Voting rights

73 Subject to any rights or restrictions for the time | Entitlement to vote
being attached to any class or classes of shares on show of hands
(a) on a show of hands, every member present in | and on poll
person shall have one vote; and
(b) on a poll, the voting rights of members shall be
in proportion to his share in the paid-up equity share
capital of the company.

74 A member may exercise his vote at a meeting by | Voting through
electronic means in accordance with the Act and | electronic means
shall vote only once.

75 (D In the case of joint holders, the vote of the senior | Vote of joint
who tenders a vote, whether in person or by proxy, | holders
shall be accepted to the exclusion of the votes of the
other joint holders.

(2) For this purpose, seniority shall be determined by | Seniority of names
the order in which the names stand in the register of
members.

76 A member of unsound mind, or in respect of whom | How members non

 

 

an order has been made by any court having
jurisdiction in lunacy, may vote, whether on a show

 

compos mentis and
minor may vote

 

379

 
 

 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading

No. Article

No.
proposes to vote, and in default the instrument of
proxy shall not be treated as valid.

83 An instrument appointing a proxy shall be in the | Form of proxy
form as prescribed in the Rules.

84 A vote given in accordance with the terms of an | Proxy to be valid
instrument of proxy shall be valid, notwithstanding | notwithstanding
the previous death or insanity of the principal orthe | death of the
revocation of the proxy or of the authority under | principal
which the proxy was executed, or the transfer of the
shares in respect of which the proxy is given:

Provided that no intimation in writing of such
death, insanity, revocation or transfer shall have
been received by the Company at its office before
the commencement of the meeting or adjourned
meeting at which the proxy is used.

Board of Directors

85 Unless otherwise determined by the Company in | Board of Directors
general meeting, the number of directors shall not
be less than 3 (three) and shall not be more than 14
(fourteen).

86 (9) The Board shall have the power to determine the | Directors not liable
directors whose period of office is or is not liable to | to retire by rotation
determination by retirement of directors by
rotation.

(2) The same individual may, at the same time, be | Same _ individual
appointed as the Chairperson of the Company as | may be
well as the Managing Director or Chief Executive | Chairperson
Officer of the Company. and Managing

Director/ Chief
Executive Officer

87 (D The remuneration of the directors shall, in so far as | Remuneration of
it consists of a monthly payment, be deemed to | directors
accrue from day-to-day.

(2) The remuneration payable to the directors, | Remuneration to
including any managing or whole-time director or | require members’
manager, if any, shall be determined in accordance | consent
with and subject to the provisions of the Act by an
ordinary resolution passed by the Company in
general meeting.

(3) In addition to the remuneration payable to them in | Travelling and

 

 

pursuance of the Act, the directors may be paid all
travelling, hotel and other expenses properly
incurred by them—

(a) in attending and returning from meetings of the
Board of Directors or any committee thereof or
general meetings of the Company; or

(b) in connection with the business of the Company.

 

other expenses

 

381

 
 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading

No. Article

No.

88 All cheques, promissory notes, drafts, hundis, bills | Execution of
of exchange and other negotiable instruments, and | negotiable
all receipts for monies paid to the Company, shall | Instruments
be signed, drawn, accepted, endorsed, or otherwise
executed, as the case may be, by such person and in
such manner as the Board shall from time to time
by resolution determine.

89 (D Subject to the provisions of the Act, the Board shall | Appointment — of
have power at any time, and from time to time, to | additional
appoint a person as an additional director, provided | Directors
the number of the directors and additional directors
together shall not at any time exceed the maximum
strength fixed for the Board by the Articles.

(2) Such person shall hold office only up to the date of | Duration of office
the next annual general meeting of the Company | of additional
but shall be eligible for appointment by the | director
Company as a director at that meeting subject to the
provisions of the Act.

90 (D The Board may appoint an alternate director to act | Appointment of
for a director (hereinafter in this Article called “the | alternate director
Original Director”) during his absence for a period
of not less than three months from India. No person
shall be appointed as an alternate director for an
independent director unless he is qualified to be
appointed as an independent director under the
provisions of the Act.

(2) An alternate director shall not hold office for a | Duration of office
period longer than that permissible to the Original | of alternate
Director in whose place he has been appointed and | director
shall vacate the office if and when the Original
Director returns to India.

(3) If the term of office of the Original Director is | Re-appointment
determined before he returns to India the automatic | provisions
reappointment of retiring directors in default of | applicable to
another appointment shall apply to the Original | Original Director
Director and not to the alternate director.

91 (D If the office of any director appointed by the | Appointment of
Company in general meeting is vacated before his | director to fill a
term of office expires in the normal course, the | casual vacancy
resulting casual vacancy may, be filled by the
Board of Directors at a meeting of the Board.

(2) The director so appointed shall hold office only up | Duration of office
to the date up to which the director in whose place | of Director
he is appointed would have held office if it had not | appointed to fill
been vacated. casual vacancy
Powers of Board

92 The management of the business of the Company | General powers of

 

 

shall be vested in the Board and the Board may
exercise all such powers, and do all such acts and

 

the Company
vested in Board

 

382

 
 

Article
No.

Sub
Article

Sub Heading

Heading

 

things, as the Company is by the memorandum of
association or otherwise authorized to exercise and
do, and, not hereby or by the statute or otherwise
directed or required to be exercised or done by the
Company in general meeting but subject
nevertheless to the provisions of the Act and other
laws and of the memorandum of association and
these Articles and to any regulations, not being
inconsistent with the memorandum of association
and these Articles or the Act, from time to time
made by the Company in general meeting provided
that no such regulation shall invalidate any prior act
of the Board which would have been valid if such
regulation had not been made

 

Proceedings of the Board

 

93

()

The Board of Directors may meet for the conduct
of business, adjourn and otherwise regulate its
meetings, as it thinks fit.

When meeting to
be convened

 

(2)

The Chairperson or any one Director with the
previous consent of the Chairperson may, or the
company secretary on the direction of the
Chairperson shall, at any time, summon a meeting
of the Board

Who may summon
Board meeting

 

(3)

The quorum for a Board meeting shall be as
provided in the Act.

Quorum for Board
meetings

 

(4)

The participation of directors in a meeting of the
Board may be either in person or through video
conferencing or audio visual means or
teleconferencing, as may be prescribed by the Rules
or permitted under law.

Participation at
Board meetings

 

94

()

Save as otherwise expressly provided in the Act,
questions arising at any meeting of the Board shall
be decided by a majority of votes.

Questions at Board
meeting how
decided

 

(2)

In case of an equality of votes, the Chairperson of
the Board, if any, shall have a second or casting
vote.

Casting vote of
Chairperson at
Board meeting

 

95

The continuing directors may act notwithstanding
any vacancy in the Board; but, if and so long as their
number is reduced below the quorum fixed by the
Act for a meeting of the Board, the continuing
directors or director may act for the purpose of
increasing the number of directors to that fixed for
the quorum, or of summoning a general meeting of
the Company, but for no other purpose.

Directors not to act
when number falls
below minimum

 

 

96

 

@

 

The Chairperson of the Company shall be the
Chairperson at meetings of the Board. In his
absence, the Board may elect a Chairperson of its
meetings and determine the period for which he is
to hold office.

 

Who to preside at
meetings of the
Board

 

383

 
a

 

 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article

No.

(2) If no such Chairperson is elected, or if at any | Directors to elect a
meeting the Chairperson is not present within | Chairperson
fifteen minutes after the time appointed for holding
the meeting, the directors present may choose one
of their number to be Chairperson of the meeting.

97 (D The Board may, subject to the provisions of the Act, | Delegation of
delegate any of its powers to Committees | powers
consisting of such member or members of its body
as it thinks fit.

(2) Any Committee so formed shall, in the exercise of | Committee to
the powers so delegated, conform to any | conform to Board
regulations that may be imposed on it by the Board. | regulations

(3) The participation of directors in a meeting of the | Participation at
Committee may be either in person or through | Committee
video conferencing or audio visual means or | Meetings
teleconferencing, as may be prescribed by the Rules
or permitted under law.

98 (DY A Committee may elect a Chairperson of its | Chairperson of
meetings unless the Board, while constituting a | Committee
Committee, has appointed a Chairperson of such
Committee.

(2) If no such Chairperson is elected, or if at any | Who to preside at
meeting the Chairperson is not present within | meetings of
fifteen minutes after the time appointed for holding | Committee
the meeting, the members present may choose one
of their members to be Chairperson of the meeting.

99 (3) A Committee may meet and adjourn as it thinks fit. | Committee to meet

(2) Questions arising at any meeting of a Committee | Questions at
shall be determined by a majority of votes of the | Committee
members present. meeting how

decided

(3) In case of an equality of votes, the Chairperson of | Casting vote of
the Committee shall have a second or casting vote. | Chairperson at

Committee
meeting
100 All acts done in any meeting of the Board or of a | Acts of Board or
Committee thereof or by any person acting as a | Committee valid
director, shall, notwithstanding that it may be | notwithstanding
afterwards discovered that there was some defect in | defect of
the appointment of any one or more of such | appointment
directors or of any person acting as aforesaid, or
that they or any of them were disqualified or that
his or their appointment had terminated, be as valid
as if every such director or such person had been
duly appointed and was qualified to be a director.
101. Save as otherwise expressly provided in the Act, a | Passing of
resolution in writing, signed, whether manually or | resolution by
by secure electronic mode, by a majority of the | circulation

 

 

 

 

 

384
 

Article
No.

Sub
Article

Sub Heading

Heading

 

members of the Board or of a Committee thereof,
for the time being entitled to receive notice of a
meeting of the Board or Committee, shall be valid
and effective as if it had been passed at a meeting
of the Board or Committee, duly convened and
held.

 

Chief Executive Officer, Manager, Company
Secretary and Chief Financial Officer

 

102

(a)

Subject to the provisions of the Act,—.

A chief executive officer, manager, company
secretary and chief financial officer may be
appointed by the Board for such term, at such
remuneration and upon such conditions as it may
think fit; and any chief executive officer, manager,
company secretary and chief financial officer so
appointed may be removed by means of a
resolution of the Board; the Board may appoint one
or more chief executive officers for its multiple
businesses.

Chief Executive
Officer, etc.

 

(b)

A director may be appointed as chief executive
officer, manager, company secretary or chief
financial officer.

Director may be
chief executive
officer, etc.

 

Registers

 

103

The Company shall keep and maintain at its
registered office all statutory registers namely,
register of charges, register of members, register of
debenture holders, register of any other security
holders, the register and index of beneficial owners
and annual return, register of loans, guarantees,
security and acquisitions, register of investments
not held in its own name and register of contracts
and arrangements for such duration as the Board
may, unless otherwise prescribed, decide, and in
such manner and containing such particulars as
prescribed by the Act and the Rules. The registers
and copies of annual return shall be open for
inspection during 11.00 a.m. to 1.00 p.m. on all
working days, other than Saturdays, at the
registered office of the Company by the persons
entitled thereto on payment, where required, of
such fees as may be fixed by the Board but not
exceeding the limits prescribed by the Rules.

Statutory registers

 

 

104

 

(a)

 

The Company may exercise the powers conferred
on it by the Act with regard to the keeping of a
foreign register; and\ the Board may (subject to the
provisions of the Act) make and vary such
regulations as it may think fit respecting the
keeping of any such register.

 

Foreign register

 

385

 
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

0)

The foreign register shall be open for inspection and
may be closed, and extracts may be taken there
from and copies thereof may be required, in the
same manner, mutatis mutandis, as is applicable to
the register of members.

 

The Seal

 

105

@

The Board shall provide for the safe custody of the
seal.

The seal, its
custody and use

 

The seal of the Company shall not be affixed to any
instrument except by the authority of a resolution
of the Board or of a Committee of the Board
authorised by it in that behalf, and except in the
presence of at least one director or the manager, if
any, or of the secretary or such other person as the
Board may appoint for the purpose; and such
director or manager or the secretary or other person
aforesaid shall sign every instrument to which the
seal of the Company is so affixed in their presence.

Affixation of seal

 

Dividends and Reserve

 

106

The Company in general meeting may declare
dividends, but no dividend shall exceed the amount
recommended by the Board but the Company in
general meeting may declare a lesser dividend.

Company in
general meeting
may declare
dividends

 

107

Subject to the provisions of the Act, the Board may
from time to time pay to the members such interim
dividends of such amount on such class of shares
and at such times as it may think fit.

Interim dividends

 

108

()

The Board may, before recommending any
dividend, set aside out of the profits of the
Company such sums as it thinks fit as a reserve or
reserves which shall, at the discretion of the Board,
be applied for any purpose to which the profits of
the Company may be properly applied, including
provision for meeting contingencies or for
equalising dividends; and pending such application,
may, at the like discretion, either be employed in
the business of the Company or be invested in such
investments (other than shares of the Company) as
the Board may, from time to time, think fit.

Dividends only to
be paid out of
profits

 

(2)

The Board may also carry forward any profits
which it may consider necessary not to divide,
without setting them aside as a reserve.

Carry forward of
profits

 

 

109

 

(1)

 

with special rights as to dividends, all dividends
shall be declared and paid according to the amounts
paid or credited as paid on the shares in respect
whereof the dividend is paid, but if and so long as
nothing is paid upon any of the shares in the
Company, dividends may be declared and paid
according to the amounts of the shares.

 

Division of profits

 

386

 
 

 

 

 

 

 

 

 

 

 

 

 

Article | Sub Sub Heading Heading
No. Article
No.
(2) No amount paid or credited as paid on a share in | Payments in
advance of calls shall be treated for the purposes of | advance
this Article as paid on the share.
(3) All dividends shall be apportioned and paid | Dividends to be
proportionately to the amounts paid or credited as | apportioned
paid on the shares during any portion or portions of
the period in respect of which the dividend is paid;
but if any share is issued on terms providing that it
shall rank for dividend as from a particular date
such share shall rank for dividend accordingly.

110 (9) The Board may deduct from any dividend payable | No member to
to any member all sums of money, if any, presently | Receive dividend
payable by him to the Company on account of calls | whilst indebted to
or otherwise in relation to the shares of the | the Company and
Company. Company’s right

to reimbursement
there from
(2) The Board may retain dividends payable upon | Retention of
shares in respect of which any person is, under the | dividends
Transmission Clause hereinbefore contained,
entitled to become a member, until such person
shall become a member in respect of such shares.

111 (D Any dividend, interest or other monies payable in | Dividend how
cash in respect of shares may be paid by electronic | remitted
mode or by cheque or warrant sent through the post
directed to the registered address of the holder or,
in the case of jointholders, to the registered address
of that one of the joint holders who is first named
on the register of members, or to such person and
to such address as the holder or joint holders may
in writing direct.

(2) Every such cheque or warrant shall be made | Instrument of
payable to the order of the person to whom it is sent. | payment
(3) Payment in any way whatsoever shall be made at | Discharge to
the risk of the person entitled to the money paid or | Company
to be paid. The Company will not be responsible for
a payment which is lost or delayed. The Company
will be deemed to having made a payment and
received a good discharge for it if a payment using
any of the foregoing permissible means is made

112 Any one of two or more joint holders of asharemay | Receipt of one
give effective receipts for any dividends, bonuses | holder sufficient
or other monies payable in respect of such share.

113 No dividend shall bear interest against the | No interest on
Company. Dividends

114 The waiver in whole or in part of any dividend on | Waiver of
any share by any document (whether or not under | dividends

 

 

seal) shall be effective only if such document is
signed by the member (or the person entitled to the

 

 

387

 
 

Article
No.

Sub
Article
No.

Sub Heading

Heading

 

share in consequence of the death or bankruptcy of
the holder) and delivered to the Company and if or
to the extent that the same is accepted as such or
acted upon by the Board.

 

Accounts

 

115

(1)

The books of account and books and papers of the
Company, or any of them, shall be open to the
inspection of directors in accordance with the
applicable provisions of the Act and the Rules.

Inspection
Directors

by

 

(2)

No member (not being a director) shall have any
right of inspecting any books of account or books
and papers or document of the Company except as
conferred by law or authorised by the Board.

Restriction
inspection
members

on
by

 

Winding up

 

116

Subject to the applicable provisions of the Act and
the Rules made there under -

Winding up
Company

 

(a)

If the Company shall be wound up, the liquidator
may, with the sanction of a special resolution of the
Company and any other sanction required by the
Act, divide amongst the members, in specie or kind,
the whole or any part of the assets of the Company,
whether they shall consist of property of the same
kind or not.

 

(b)

For the purpose aforesaid, the liquidator may set
such value as he deems fair upon any property to be
divided as aforesaid and may determine how such
division shall be carried out as between the
members or different classes of members.

 

The liquidator may, with the like sanction, vest the
whole or any part of such assets in trustees upon
such trusts for the benefit of the contributories if he
considers necessary, but so that no member shall be
compelled to accept any shares or other securities
whereon there is any liability.

 

Indemnity and Insurance

 

117

(a)

Subject to the provisions of the Act, every director,
managing director, whole-time director, manager,
company secretary and other officer of the
Company shall be indemnified by the Company out
of the funds of the Company, to pay all costs, losses
and expenses (including travelling expense) which
such director, manager, company secretary and
officer may incur or become liable for by reason of
any contract entered into or act or deed done by him
in his capacity as such director, manager, company
secretary or officer or in any way in the discharge
of his duties in such capacity including expenses.

 

 

 

(b)

 

Subject as aforesaid, every director, managing
director, manager, company secretary or other

 

 

388

 
officer of the Company shall be indemnified against
any liability incurred by him in defending any
proceedings, whether civil or criminal in which
judgement is given in his favour or in which he is
acquitted or discharged or in connection with any
application under applicable provisions of the Act
in which relief is given to him by the Court.

 

()

The Company may take and maintain any insurance
as the Board may think fit on behalf of its present
and/or former directors and key managerial
personnel for indemnifying all or any of them
against any liability for any acts in relation to the
Company for which they may be liable but have
acted honestly and reasonably.

 

General Power

 

 

118

 

 

Wherever in the Act, it has been provided that the
Company shall have any right, privilege or
authority or that the Company could carry out any
transaction only if the Company is so authorized by
its articles, then and in that case this Article
authorizes and empowers the Company to have
such rights, privileges or authorities and to carry out
such transactions as have been permitted by the
Act, without there being any specific Article in that
behalf herein provided.

 

General power

 

389

 
wy

SECTION IX - OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts not being contracts entered into in the ordinary course of business carried on
by our Company or contracts entered into more than two (2) years before the date of filing of this
Prospectus which are or may be deemed material have been entered or are to be entered into by our
Company. These contracts, copies of which will be attached to the copy of the Red Herring Prospectus,
has been delivered to the RoC for registration and also the documents for inspection referred to
hereunder, may be inspected on Working Days from 10.00 a.m. to 5.00 p.m. at the Registered Office
of our Company located at HP Adhesives Limited, 11, Unique House, Chakala Cross Road, Andheri
East, Mumbai — 400 099, Maharashtra, India., and was available on our website www.hpadhesives.com
from the date of the Red Herring Prospectus till the Offer Closing Date.

Any of the contracts or documents mentioned in this Prospectus may be amended or modified at any
time if so required in the interest of our Company or if required by the other parties, without reference
to the shareholders, subject to compliance of the provisions contained in the Companies Act and other
applicable laws.

Material Contracts:
1) Offer Agreement dated July 15, 2021 between our Company and the BRLM.

2) Registrar Agreement dated July 07, 2021 between our Company and the Registrar to the Offer.
3) Underwriting Agreement dated December 20, 2021 between our Company the BRLM and

Underwriter.

4) Tripartite agreement among the NSDL, our Company and Registrar to the Offer dated July 30,
2021.

5) Tripartite agreement among the CDSL, our Company and Registrar to the Offer dated August
02, 2021.

6) Cash Escrow and Sponsor Bank Agreement dated November 30, 2021 amongst our Company,
the Selling Shareholder, the Registrar to the Offer, the BRLM, the Syndicate Members, the
Escrow Collection Bank(s), Sponsor Bank(s), Public Offer Account Bank(s) and the Refund
Bank

7) Share Escrow Agreement dated November 27, 2021 amongst our Company, the Selling
Shareholder and the Share Escrow Agent.

8) Monitoring Agency Agreement dated November 30, 2021 amongst our Company and the
Monitoring Agency.

9) Syndicate Agreement dated November 30, 2021 amongst our Company, the Selling Shareholder
and the Syndicate Member.

Material Documents

1) Certified true copy of the Memorandum and Articles of Association of our Company as amended
from time to time;

2) Certificate of incorporation dated May 07, 2019 and fresh certificate of incorporation consequent
upon conversion into public limited company dated July 01, 2021;

3) Board resolution and special resolution passed pursuant to Section 62 (1)(c) of the Companies
Act, 2013 by the Board and shareholders of our Company approving the Offer, at their meetings
held on July 05, 2021 and July 06, 2021 respectively;

4) Copies of annual reports of our Company for the preceding two Fiscals;

5) | Agreement dated May 07, 2021 for the reappointment of Mr. Karan Haresh Motwani as the
Managing Director of the Company;

390
6)

7)
8)

9)

10)

11)
12)
13)

14)

15)

16)

wy

Resolution of the Board of Directors of our Company dated July 16, 2021 and IPO Committee
dated July 18, 2021 dated August 28, 2021 approving this Draft Red Herring Prospectus and
Addendum to the DRHP respectively;

Resolution of the Board of Directors of our Company dated December 03, 2021 approving the
Red Herring Prospectus;

Resolution of the IPO Committee of our Company dated December 20, 2021 approving this
Prospectus;

Consent dated November 27, 2021, from the statutory & peer review auditor, M/s. Priya
Choudhary & Associates, LLP, Chartered Accountants, to include their name as an “expert” as
defined under section 2(38) of the Companies Act, 2013 to the extent and in their capacity as the
Statutory Auditors and in respect of the: (i) Restated Financial Statements and their examination
report dated November 27, 2021 on the Restated Financial Statements; and (ii) the statement of
Special tax benefits dated November 27, 2021 included in this Prospectus and such consent has
not been withdrawn as on the date of this Prospectus;

Consents of Promoters, Selling Shareholder, Directors, Company Secretary & Compliance
Officer, Chief Financial Officer, Banker to the Company, Legal Advisor to the Offer, Book
Running Lead Manager, Underwriter, Registrar to the Offer, and Bankers to the Offer/ Public
Offer Bank/ Refund Banker, Sponsor Banker, and Share Escrow Agent to include their names
in the Prospectus and to act in their respective capacities.

Report titled “Assessment of Adhesives and Sealants market in India” dated November 2021
(the “CRISIL Research”) prepared and issued by CRISIL Limited.

Consent to act as an expert pursuant to a certificate dated September 15, 2021 issued by M/s.
Orbit Consultants and Valuers, Chartered Engineer.

Certificate of Eligibility dated August 28, 2021 issued by the statutory & peer review auditor,
M/s. Priya Choudhary & Associates, LLP, Chartered Accountants.

SEBI interim clarifications bearing reference number
SEBI/HO/CFD/DIL1/RG/NKM/OW/P/18551/2021 dated August 9, 2021 and final observation
letter bearing reference number SEBI/HO/CFD/DIL2/RG/NKM/OW/P/29480/2021 dated
October 22, 2021.

Copy of In-principle Approval from the NSE vide letter dated September 03, 2021 and from
BSE vide letter dated August 09, 2021 to use their names in this Offer Document for listing of
Equity Shares on the National Stock Exchange of India Limited and BSE Limited.

Due Diligence Certificate dated July 18, 2021 from the Book Running Lead Manager.

Any of the contracts or documents mentioned in this Prospectus may be amended or modified at any
time if so required in the interest of our Company or if required by the other parties subject to
compliance of the provisions contained in the Companies Act and other relevant statutes.

391
 

 

DECLARATION

We hereby certify and declare that all relevant provisions under the Companies Act and the rules,
tegulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement rade in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. We further certify that all disclosures made in this Prospectus are true and correct.

SIGNED BY THE DIRECTORS OF THE COMPANY

eee

          

a rr

a" pb gt Ss aCe

Anjana Haresh Motwani ; ™ a
Chairperson and Executive director x

Karan Haresh Motwani
ier
Surendra Kumar Mehta
Non-Executive and Independent Director

es

 

     

SIGNED BY THE KEY MANAGERIAL PERSONNEL OF THE COMPANY
Jyoti Nikunj Chawda

Company Secretary & Compliance Officer

Mihir Suresh Shah

Chief Financial Officer my, |

 

 

Place: Mumbai
Date: 90\19\o094
DECLARATION

Thereby certify and declare that all relevant provisions of the Companies Act, 2013 and the rules,
Buidelines and regulations issued by the Government of India and the guidelines or regulations issued
by the SEBI, established under Section 3 of the SEBI Act, as the case may be, have been complied with
and no statement made in this Prospectus is contrary to the provisions of the Companies Act, 2013, the

SIGNED BY THE DIRECTOR OF THE COMPANY

Vr
Rajendra Kumar Jain
Non-Executive and Independent Director

Place: Rajasthan
Date: 99|19| 902
DECLARATION

' hereby certify and declare that all relevant provisions of the Companies Act, 2013 and the rules,
guidelines and regulations issued by the Government of India and the guidelines or regulations issued
by the SEBI, established under Section 3 of the SEBI Act, as the case may be, have been complied with
and no statement made in this Prospectus is contrary to the provisions of the Companies Act, 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation) Rules, 1937 and the
SEBI Act of the rules made or guidelines or regulations issued thereunder, as the case mnay be I further
certify that all statements made in this Prospectus are true and correct.

SIGNED BY THE DIRECTOR OF THE COMPANY

fH asel he

Aject Anant Walavalkar
Non-Executive and Independent Director

Place: Pune
Date: 2011212091
 

DECLARATION BY SELLING SHAREHOLDER

1, Anjana Haresh Motwani, acting as Selling Shareholder, hereby certify that all statements, disclosures and
undertakings made or confirmed by me in this Prospectus about or in relation to myself and the Equity
Shares being offered by me in the Offer for Sale are true and correct. | assume no responsibility, as the
Selling Sharcholder, for any other statements, disclosures and undertakings including any of the statements
made or confirmed by or relating to the Company or any other person(s) in this Prospectus.

SIGNED BY SELLING SHAREHOLDER

a

Anjana Haresh Motwani

Place: Mumbai
Date: 29 |19\209}
